(Bloomberg) -- A few months ago, senior executives at Vodafone's Irish division sat down with a 16-year-old boy to ask him about his daily routine and, specifically, how he uses his smartphone.
The kid told them that the first thing he does in the morning is check Snapchat. On the way to school, Snapchat. On the way home, Snapchat. Sometimes he stops by an ice-cream shop, picks up frozen yogurt bars and uses the free Wi-fi to upload videos onto, yes, Snapchat. No, he didn't know what network he used and had never seen a Vodafone commercial (because young people don't watch TV). Only his mom calls or texts him. What about contacting friends? Snapchat.
The meeting's hosts, a team from International Business Machines Corp.'s services division, watched their guests' befuddled expressions and judged the workshop a resounding success.
IBM had been hired to help guide a digital transformation at Vodafone Ireland and wanted the wireless carrier's senior management to get the unvarnished truth from a flesh-and-blood customer who didn't care about their brand (or their feelings). Later, IBM would use insights from the kid and other customers to build products that—hopefully—people actually want to use.
The Vodafone executives had just received a crash course in "design thinking," a philosophy embraced wholesale by the tech services industry, which is struggling to avoid being disrupted by slick, intuitive apps from Slack and Salesforce even as its traditional business managing corporate IT goes away.
Design thinking sounds like a slogan concocted by a management consultant. In fact, it's a problem-solving approach used by designers for decades. And it's hard to argue with the goal, which boils down to knowing what your customers want. That's not a skill that comes naturally to the engineers who build software for big corporations. But in a world filled with user-friendly smartphone apps, clunky enterprise software is no longer tenable.
So to shake up the status quo, IBM, Cognizant, Infosys and others have been racing to hire thousands of designers who once would have taken more specialized jobs—at an ad agency, say, or an industrial-design shop. At IBM, they team up with engineers and consultants and embed with a multiplicity of clients. Besides providing customer insights, the teams encourage constant feedback and tweak products as they're built—a process aimed at getting them out faster. It's how successful Silicon Valley startups operate but radical for the IT services industry.
"Everyone is thinking about how to infuse design thinking more effectively into offerings,'' says Phil Fersht, who founded HfS Research and focuses on the industry. "It's about reimagination.'' By next year, he says, most technology service contracts will include design thinking, often at clients' behest.
IBM Chief Executive Officer Ginni Rometty has bet the future of the services division on design thinking. She badly needs the strategy to work if her company is to reverse 17 consecutive quarters of falling revenue and adapt to a cloud-based world. In the past few years, the company has recruited about 1,250 designers, built a global network of design studios (31 and counting) and is training employees (yes, that includes engineers) to incorporate design thinking into almost everything they do.
By the end of this year, the company says, about a third of the 377,000-strong workforce will have been retrained. The goal is to build a customer-centric, startup-esque culture—and then persuade clients to do the same.
Brian Corish never planned on joining a big corporation like Vodafone; the serial entrepreneur and brand expert was used to working at startups where knowing what the customer wanted was baked into the DNA. But when the head of Vodafone’s Irish operations came calling for help enhancing the company's online presence, Corish saw an opportunity to teach the startup ethos to a company with lots of unused information about its customers. His new bosses didn't say precisely what they meant by the digital transformation—possibly because they themselves weren't entirely sure—but Corish soon concluded he needed to reorganize the entire culture around its customers.
As a big, established company, he says, Vodafone hadn't bothered providing the best consumer experience because it already had a massive customer base and was making money building products and selling them the way it always had. "It's really hard for a massive organization doing things one way to figure out that actually you've got to reorganize everything," he says. "It took me a while to get my head around that people couldn't see this problem.''
Corish decided to bring in outside help but was underwhelmed when all the consulting firms talked up previous projects rather than focusing on the challenge at hand. IBM sent its team back for a second try. This time they set up in a hotel around the corner from Vodafone's Dublin-area offices and ran design thinking exercises with 30 or so attendees.
A lot of the discussions centered on actual customers, what they didn't want and what they wanted more of. Darren Gerry, an IBM designer who helped run the workshop, says Vodafone attendees were shocked at the revelations, having never thought about customer needs and desires in those ways. "It was very clear they weren't a very empathetic company, not really listening to or feeling empathy toward customers," he says.
To start, IBM was asked to build a self-service portal that would let employees working for Vodafone's enterprise clients order phones and other work-related gadgets themselves. Gerry put together a seven-person group of designers, engineers and consultants and moved into Vodafone's office, where they set up a space to look like an IBM studio, with post-its and whiteboards filled with charts and ideas. As at many startups, the team held daily "story-time'' meetings at 3:15 p.m. to check in and discuss the project. Vodafone employees were welcome to drop in any time and participate.
Gerry says his team developed a close relationship with the client, keeping the project transparent and demonstrating to Vodafone how design thinking works. "I was pleasantly surprised with how adoptive and how enthusiastic everybody was," he says. "Everyone started to pay attention, and it really reverberated around the company." Corish, keen to teach as many people as possible about design thinking, helped facilitate the indoctrination, starting at the top; that's when senior management met the Snapchat-obsessed teenager.
Traditional enterprise software projects can drag on for years before bearing fruit. IBM delivered the first version of Vodafone's self-service portal in six weeks. Corish says his colleagues were astounded how quickly the job got done. "The rest of the organization went, 'Oh, you really can do this,'" he says. "It doesn't have to take five years.'"
Before the self-service portal was built, enterprise clients had to call Vodafone to order a new device, often spending days getting it configured. Now they can use their own logins to order a phone or tablet, which arrives in a couple of days and works right out of the box. "If we don't focus on the customer," Corish says, "we'll be irrelevant." Much the same could be said about IBM.
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