From Cost Center to Strategic Asset: Redefining the Role of Design

Falguni Desai, Paul Strike at UXDX USA. Video: https://youtu.be/UExJgkiQIhI

Readable transcript: edited from the recording's captions for readability (fillers and false starts removed, punctuation and section headings added). Wording is the speaker's own. Timestamps are positions in the video. Names marked [?] could not be verified against the audio.

Introductions

[00:00:07] Paul: This is going to be a very interesting conversation. I'm Paul Strike, ex head of design for Goldman Sachs and Credential Financial[?]. I spent the last 20 odd years in the design and customer experience space. Wow, that makes me feel really old. I've loved every minute of it: the trials, the hurdles, the challenges. It's one of the most dynamically changing spaces across industry right now. Falguni.

[00:00:51] Falguni: I'm Falguni Desai. I work for Microsoft. I've been in a senior adviser role at Microsoft working with banking and capital markets firms for the last almost four years now. Prior to Microsoft I actually worked on Wall Street for 25 years. I think you could probably tell. I used to work in a bunch of corporate strategy roles for large banks. I also used to be an M&A banker at one point early in my career, and that took me into a lot of different roles around transformation, restructuring, and like I said, strategy. So I think this topic of design and strategy and so forth is a very interesting one for me.

[00:01:38] Paul: Absolutely. So we are here to discuss why, within many organizations, design is perceived as an execution focused cost center. Many designers in the room I'm sure can relate to this topic, as we see across banking, finance, healthcare, consumer technology. Hey, can you just mock it up? I just want to see what it looks like. It needs to pop. Oh, engineering needs that button, that navigation, can you mock that up for the next sprint? We've all been there. Many designers are calling out, well, there's a lot more, and we have a huge value proposition that we can bring to an organization. So why isn't that being discussed?

Why there is still ambiguity around UX versus design

[00:02:29] Paul: So the first question, Falguni, again very contentious, this is going to spur a lot of hearts and minds: why do we think there is continued ambiguity around UX versus design?

[00:02:45] Falguni: I think this term UX, and design, if I think of where the world has shifted towards, which is lots of software, tech has entered our lives in just about every aspect of our lives. We have smartphones now and apps. I think as things have become techified, the designing of software has been kind of, what we see is the screen, and the function of design gets perceived as just this flattened thing that we look at, which is the visuals of the website. I think then that leads to the misunderstanding of what does design really do. It's more than just designing the colors and buttons on a website.

[00:03:35] Paul: Absolutely. There's also a misconception, and again apologies if I offend anyone in the audience, that you can actually design an experience. Pause for uncomfortable silence. Why do I say that? If you follow anything to do with cognitive science or behavioral economics, you'll know that the clinical definition of an experience is an emotional reaction to a moment in time, informed by our memories of the past and expectations of the future. In other words, it's how you feel when you try and book that flight, transfer money, walk through the gates of Disneyland. That's yours to control. I can influence it, I might be able to shape it, but can I actually design it?

[00:04:33] Case in point: do you design the experience of riding a bike, or do you design the bike that results in the experience of flying down a hill? Now Falguni might be terrified, I might be overjoyed and excited. It's still the same product. Sure, we can change the tread on the tires, we can change the position of the handlebars, the way the brakes work, the cogs on the wheel. But they're my emotions.

[00:05:04] So we have defaulted into this category of, oh, just get the UX designers to mock it up. Oh, that's a fantastic wireframe, get the UX designers to create that. There was an article back in 2015 in Smashing Magazine that really started the blurring of the term UX versus design as it relates to the infamous wireframe. Everyone knows how to wireframe. Everybody knows what a wireframe is: a skeletal representation of information that communicates hierarchy, share of voice, functionality, not the visual aesthetics of the button, the brand, the design system.

[00:05:50] And so when designers, and I still see this to this day, can we see a mockup of the navigation? Sure. I've got a wireframe and it's got textures and colors and treatments, and the chief product officer freaks out, the chief strategy officer freaks out, that's not our brand. Those are the sorts of things that are creating added ambiguity to what we do. And so CFOs, chief strategy officers say, I don't get it, where's the value? I don't know if you've seen this in Microsoft, but it creates a false perception around what we do and what we represent.

[00:06:29] Falguni: I haven't seen this at Microsoft, not because it probably doesn't exist but just because I don't work as closely with the product teams at Microsoft. But I've seen this throughout my career, where you end up thinking of the designer as just the person designing the graphics or designing the logo, or somebody who's just going to come in at the end and design a brochure, or some marketing materials.

[00:06:56] There are a lot of different reasons around this problem statement that we're exploring, which is, how involved is that design team at the very beginning of the concept? Where do they organizationally sit in the company? Are they sitting in a very tactical part of the org structure, or are they sitting closer to the CEO's or the chief product officer's remit? I also think there's a literacy issue in companies around what design means, which you just elaborated on, which is another thing we can probably talk about. But I think there's a multitude of reasons why people think of design the way they do, instead of the fuller, richer function that design can play.

Literacy, and design as the differentiator

[00:07:47] Paul: So shifting gears for a moment. Understanding the problem space that we're in, acknowledging there is still ambiguity within organizations and amongst teams, what are some of the strategic imperatives, the strategic approaches, that design leaders and design teams can take so that they demonstrate greater influence, greater impact, that is both vertically orientated as well as horizontally oriented?

[00:08:16] Falguni: I think it starts with literacy. By literacy I mean there needs to be some education for people who are not in the design function. So if you are a chief financial officer or a chief strategy officer, or somebody who's a little bit more away from the product space, educating those executives: what does design really mean? What is the full role of that function from beginning to end? How do they need to think about that function being involved even when you're at the product concept stage, or at the market entry stage, when you're doing the planning of a new launch, a new product, a new direction for your company?

[00:09:04] I think design is important because oftentimes it's the design that becomes the differentiator of a product. If I walk into, we were just having this conversation, if I walk into a Starbucks versus a Dunkin' Donuts, I don't know if anybody's from those organizations here, but you kind of know what to expect. Without explicitly telling you, those two brands have set your expectation for the experience you're going to have: how quickly you're going to get your coffee, what you're probably going to pay for that coffee, what the chair is going to feel like when you sit down, and then how you think about those organizations going forward.

[00:09:51] It sets an expectation that is part and parcel of the entire service and product they're offering you. That cannot be left to the very end to do as a tactical thing. So I think when executives fully understand what design means, beyond just the color of the logo, then I think they begin to understand what all the roles are that a design team can play.

Framing and pre-planning as strategy

[00:10:17] Paul: Agree. I've always found that forms of framing and pre-planning before you commence any project are invaluable, to the extent that you sit down to truly articulate the core essence of strategy. Strategy is the ability to align on a set of choices by which we are all playing on an equal playing field by which we can win. So that we are articulating the what, the why, the who, the when, and most importantly the secret sauce, which is the how.

[00:11:02] What this does is it sets the stage for things like early alignment, for challenging, but also to ascertain delivery readiness. Are we set up to address the all too common principles of usability in human centered design that revolve around desirability, feasibility and viability? We've all heard those terms.

[00:11:24] That pre-planning stage, by which you frame the problem, not solve but frame the problem, from two lenses. Context as to what we as an organization are trying to achieve as it relates to our future quarterly growth trajectory, as well as what our customers desperately need in context: situation, need, motivation and so on. When those conversations are positioned with the right partners, engineering, marketing, product, you'll find your influence changes. It moves from that execution function, it moves from the aesthetic requirements, can you just mock that up, I want to see what that gradient looks like, to critical thinking, systems thinking. Is that fair to say?

[00:12:17] Falguni: I think so. I think companies probably in the last decade got a slightly better understanding of design because of this idea of design thinking. It got introduced into so many companies, and I'm sure most people here have either been to or run some type of design thinking workshop and brought in colleagues from other parts of the organization. Actually, I'd like to see a show of hands: how many people here have run or been a part of that type of workshop? Yeah, okay, just about everybody I think. So I think that served as an education for the rest of the folks in the company who were probably in finance or marketing or product or engineering. It helped this literacy issue that I talked about, but I don't think it's fully solved it.

[00:13:13] Paul: Right, absolutely. Now, I'm watching the clock tick down and I know we've taken some very broad brush strokes here. We would love to spend another 20, 30 minutes going even deeper, but we thought we'd allocate the last eight and a half minutes to any questions the audience might have, or anybody online, for myself and Falguni. Just raise your hand or just speak up. The lights are very bright, we can't see anyone.

Q&A: examples of design shifting from cost center

[00:13:52] Audience: Can you give us any examples of a company that (rest of question inaudible)?

[00:14:11] Paul: The first example I can give is a very common example, of Airbnb many many years ago during the startup phase. Even though the company was founded by designers, they positioned design as an aesthetic medium by which the photography, the layout of the website was supposed to communicate the value proposition of their business. When they brought in additional outside perspectives and added a more emotional user experience layer to the visual aesthetics, people recognized immediately that the photography was off, that the user interface around that photography wasn't engaging enough for the owners of these homes that they'd be renting out to really communicate their story.

[00:15:06] They found that through this active medium of shifting from purely aesthetics to enriched storytelling, emotional context, referencing cognitive profiling of the audience, they came up with, I think it was labeled Snow White, as it relates to the storyboards they created of the whole journey people went through as it relates to selecting the destination, selecting the home, engaging with the renters themselves, engaging with the homeowners themselves. That became a full experiential journey, and that went from merely the way things look to the way things felt. That was a huge growth trajectory for the organization, securing lots of funding that skyrocketed the business.

[00:15:57] Falguni: I don't have a specific example, but what I will say is I think the industry that I come from, banking, financial services, has often treated design to be a little bit more tactical, probably not as strategic as it could be. I think it was only because of the fintechs that started to compete, and these sort of neobanks that entered the space, that traditional banks have been forced to really reckon with, what is that experience? How am I going to design my app to be a little bit easier to use? Or what should my bank branch feel like, what should it look like? I don't think banking has gotten it right all the time, but I think there's that awareness that's starting to build, and some banks are starting to invest in it more than just think of it as a cost center.

[00:16:49] Paul: Just to get specific to that question, the ability to pivot into an experiential storytelling program of work is a fantastic opportunity for companies to really pivot and re-evaluate their design value proposition. I think I saw a hand there. Go ahead.

Q&A: making the cost case to stakeholders

[00:17:12] Audience: (question largely inaudible) ...tying our ideas.

[00:17:27] Falguni: I think it's a fabulous question. I think it goes back to almost educating your stakeholder, and helping them understand how early in the process design needs to be involved, because some of it is they're probably underestimating the cost if they're just bringing you in at the tail end of something. So I think you want to almost lay out a step by step and say, look, from the beginning of your conceptualization of this idea or product, here's the role design's going to play, here's how many people you're going to need for that, here are the dollars associated. And then go step by step and do the same thing. Help them understand what the value is.

[00:18:07] I would almost show them: if you don't involve design, here are the risks. Always point out the risks, because I think financial people tend to think in terms of risk. That resonates more in terms of, what do I get if I pay for this, but what do I miss if I don't?

[00:18:29] Paul: Use the 1 to 1000 rule. Is everyone familiar with that? The longer you take to implement a design centric model for a change, the cost amplifies tenfold, then a hundredfold, because of the amount of people that are then required to make that change, versus when you start early. Get very specific and very intentional with the data, and model that data on current state and future state predictive analysis. Tie that data to time to serve, cost to serve, opportunity modeling, that again talks the language of your business partners so that they understand the cost imperatives of starting this program of work before you actually do. Then marry it back to the various prioritized roadmaps in your organization, so that you can generate early alignment before you start anything. I cannot advocate for that enough. I know everybody is time poor and they want stuff yesterday, and still to this day organizations, especially in banking and finance, are very volume, output and KPI driven. Try and push back on that as much as possible and take a combined qualitative and quantitative approach to your design philosophy.

Q&A: is it still a battle at executive level?

[00:19:58] Paul: I think we have time for one more.

[00:20:02] Audience: Knowing that you guys are both in positions in finance, for example, how often do you have these debates, or face challenges with people at the executive level? Do you always have constant feedback from them and debates about UX and the value of UX? I'm just curious about the position you're in now. Is it still a battle or not really?

[00:20:31] Falguni: Always. I think it's always. As companies went through this, the popular buzzword before AI was transformation, and it was like every company had a chief transformation officer, and transformation was something that every bank or financial institution was going through. I think as part of those transformations, UX and design and topics like that came up. What I had found is that they had always come up in the past and kind of been pushed off. Oh, we'll do it later, we don't have budget, we'll do it later. And they kept putting it off and putting it off until something urgent, some event happened that almost made it inevitable that they had to address it.

[00:21:20] Paul: It's a constant battle of education. But where there is problem and challenge, I always take a different view as it relates to opportunity. Instead of just rushing in to solve the problem, I now take a longer-term view on people, and look at, well, who are the people behind that problem? Why are these issues happening? And how can I help them on the journey to re-educate, or help them unlearn what they think they know and retrain them on what they do know.

[00:21:53] Paul: Are there some comments popping up? We're out of time. There are no unanswered questions. Well, if there are questions, we'll be around. Yes, we can go a lot deeper. But thank you everyone.

Extra time: common themes, and AI

[00:22:11] Host: Why don't you all park it for a few minutes, because I have a couple of questions? I mean, if we run ahead of schedule online, it gets really awkward and people don't know when we have natural break points. Falguni, I'm not looking to split the chair, it's okay. That'd be super awkward. Just kind of curious, as far as the presenters that were talking earlier today and the presenters that are going to be speaking later today, do you see any common themes and/or patterns of topics that you feel you want to talk about that maybe weren't specifically addressed in your panel?

[00:22:52] Paul: AI. I mean, what conversation today isn't dominated by AI? Slow down but keep playing. The provocation around AI is very much still in experimental mode. Learn prompt engineering. There are many different ways by which you can find different prompts, play with them, contextualize them. One thing I've been doing with a couple of my colleagues is contextualizing prompts as it relates to hypothesis modeling. We all know the theme of a hypothesis from a customer perspective: as a, I need to, so I can. When you construct that into a prompt you can create some fantastic insights, especially around research synthesis.

[00:23:45] Falguni: I think Microsoft has almost become synonymous with AI now, and we definitely have a lot of offerings out there. I agree with Paul that, slow down, learn about it, play with it, but understand also that with these AI tools we are in the infancy of this, because I look at this as a 20-year journey that we're on with AI. When the internet came out we were all very early stage, if you remember those kind of gray websites, and the very beginnings of e-commerce. That's where we are with AI right now.

[00:24:25] We have these tools and models and everybody's playing around and experimenting with them, but we don't know what the next five years will bring. We don't know what the next 10 years will bring. We don't know if prompt engineering will be a thing even five or 10 years from now. So I think the best thing you can do is keep up with the space and learn, and keep figuring out where to get value, but don't get too stuck on anything. There are going to be things that work, there are going to be things that don't work so well, and keep what works and let the rest go.

How a business background frames design outcomes

[00:25:02] Host: So Paul, I think it's interesting that you give people the advice of slowing down when we're also being told, move faster and drive outcomes quicker. It sounds like what you're saying is go slow to go fast.

[00:25:18] Paul: Yeah.

[00:25:20] Host: And then Falguni, I'd love to get your perspective, and I appreciate your comments about all things Microsoft being synonymous with AI right now. Given your perspective and years of experience before you entered into the role that you're in, how do you think that your formative years in M&A banking and on the business side have framed your perspective on design outcomes?

[00:25:48] Falguni: I think when we look at companies and their products, your customer probably already knows whether you have a good product and you have a good design. When I think back on my career, when I was doing corporate strategy roles for banks or large fintechs, one of the things that I saw is that different companies put a different value on even getting feedback from clients and customers. So if you do more surveys, if you ask for feedback, you're probably already working in a company that cares about design. The company is sort of silently telling you, if you're a designer at that company, that I ask for feedback, I have people fill out surveys, I'm curious about what that experience was like for the customer. But there are other companies that don't even ask those questions, and you can kind of tell how design forward or how aware a company is.

[00:26:50] I think the market then places a better value on those companies. So when those companies are going to go up for an IPO, for example, there are a lot of fintechs that are waiting to IPO or possibly get acquired, oftentimes it's that intangible aspect of the company that is driving the valuation of that company. But I think as designers you want to be aware of where you're going. Are you working in a company that cares about those things? Because there are symbols and silent things that go on that tell you whether the company cares or doesn't care.

What a seat at the table really means

[00:27:31] Host: Awesome. Paul, I'm curious as to your perspective, and then Falguni, I'd love to hear yours as well, on a topic that's somewhat evergreen for all of us in the room, which is the seat at the table for design and how design works with the business. I know y'all spent a little bit of time coming in and out of that as a topic today. So I'd love to hear, what has it taken for both of you to advocate for design, have a seat at the table, and then maintain that seat at the table with the ebbs and flows of the business?

[00:28:11] Paul: Yeah, great question, very topical. We as designers have always said design should have a seat at the table. What does that mean? For me, having a seat at the table means, one, the ability to influence with valued impact, so that I'm helping, guiding and informing decision-making, so that when we set the train on the tracks we know we're going in the right direction. That's it.

[00:28:44] They're my partners, and I think as everyone in the room can appreciate, design today, the longevity of design today, is only as influential as the strength of its sponsorship. When you have great partners who are sponsored, invested and committed, the sky's the limit. Your trajectory is boundless. So having a seat at the table for me is about partnership, to influence those decisions, so that when I go back to my team, when I converse with product and engineering, I have a quorum. I have a coalition of active participants who want to make this happen. For me, that's what having a seat at the table means.

[00:29:35] Host: Awesome. Falguni, tough one to follow.

[00:29:39] Falguni: I'm not a designer by background, but I think it was probably at my table that some of these designers wanted to sit. I go back to, there are companies that are design forward. I think a lot has changed in the last 20 years. I don't think I ever told you this, Paul, but you were probably the first head of design that I had ever met at a bank. That title probably did not even exist in some of the banking and fintech institutions, and so I think we're still gradually making our way through understanding the value of design in the financial services industry. In other industries I think having a seat at the table probably came a little bit easier, a little earlier, because financial services has always been so transactional.

[00:30:36] So I would say, for a designer to have a seat at the table, I think your best ally in a company is probably going to be the chief strategy officer or the chief product officer. Getting close to those people, and then ultimately those people will get you into the financial office as well. People who have these hybrid responsibilities, if you're in strategy and product, you're sort of always working with a multitude, you're kind of in these cross functional roles already. Those people are going to be more likely to bring you in earlier than going straight for the CFO, for example. That's going to be a little tougher, to knock on that door. But I think working with your CPO, your CSO, is probably a good start to getting a seat at the table.

[00:31:29] Host: All the TLAs, love it. Paul and Falguni, thank you so much. It was a really fun conversation. I felt like it was a solid panel. Covered a lot of ground.