Great design calls for a new relationship

A few months ago, one of the UK's foremost insurance companies approached us with a doozy of a problem. Their product manager put it simply: "We've got twelve weeks to make our sales funnel comply with new regulation without hitting our revenues".

Achieving this meant changing the way they work with strategic partners.

Sizing it up

In recent times the company had successfully optimised its trading figures, and short-term fluctuations in commercial performance dominated its employees daily work.

But they faced an uncertain challenge. Their painstakingly optimised sales journeys needed changing to comply with a new directive from the Financial Conduct Authority, which at that time was 500+ pages of obliquely-drafted legalese.

Those in the commercial side of the business were naturally nervous. How much would need to change? As things were going well for them the best kind of change would be no change at all.

But that wasn’t an option. Under scrutiny from the FCA, neither their brand, their compliance team, or their leadership could afford to get this one wrong. The stakes were high.

And twelve weeks felt like scant time to meet the challenge. Firstly the new directive needed interpreting, then they’d need to implement (potentially fundamental) changes that would satisfy three sets of stakeholders: the FCA, prospective customers, and the company’s shareholders.

Avoiding the ‘big four’ folly

Their risk & regulatory lead described how traditionally – like many large companies in regulated industries – their response to compliance-driven change was to go first to one of the ‘big four’ consultancies.

This would buy them an expensive report advising a very risk-averse approach that would help their compliance team (and perhaps those concerned with the Senior Manager's Regime) to sleep at night. Perversely, it would keep their proposition and commercial teams awake because it would give little consideration to the customer experience, or the resulting commercial outcomes.

This is zero-sum thinking that unnecessarily puts compliance and commercial teams at odds. However, such risk-aversion is understandable given the size of stick wielded by the FCA, and – under normal circumstances – orthodoxy may still have led them down that path.

The abnormal circumstance here was simply time. Commissioning a ‘big four’ report would take weeks without explaining how to actually make the changes, so a large and important part of the puzzle would have remained unsolved.

Step into the client’s shoes for a second and you can imagine the anxiety. The clock was ticking loudly but nobody was sure what changes needed to be made and, anyway, their digital team was tied up with other work.

They needed outside help. And fast.

Two steps to heaven?

Most large companies procure services by following a formalised process that begins with two key steps:

  1. Finding someone who can help
  2. Agreeing what they’ll do and how they’ll do it

Keep those client shoes on and we’ll take these steps together.

1. Finding someone who can help

In this situation, you might feel relieved if you could find a supplier who’d successfully navigated similar regulatory challenges before. Let's imagine you knew where to find an experience design team with deep Financial Services sector knowledge who could both interpret the directive and deliver a solution that was compliant and commercially viable. At speed.

And with that blatant plug out of the way let’s jump to step two, which is really the point of this article.

2. Agreeing what they’ll do and how they’ll do it

How much of the remaining time would you like to burn through while negotiating scope, deliverables and contracts with that supplier? Remember, you haven’t actually started solving the problem yet, no one is quite sure what changes need to be made, and the clock’s steadily ticking away. So I’m going to guess… none?

Yet here, still, many companies reach for the ‘safe’ approach that includes a competitive pitch. Procurers nervously seek specific assurances about what they’ll get from suppliers – details about deliverables and how they can be achieved within specific budgets and timeframes. Maybe your company is like that.

But there’s an elephant in the room. Successful new products and services are by nature different from those that already exist. And the process of creating new, different things is not entirely predictable. First, we'll need to figure out the right thing to make, then we'll need to make it the right way. We'll need to test our ideas, learn from the feedback and improve them.

‘Design’ is solving problems

Traditional procurement processes compel us all to pretend we believe problem-solving (which is what ‘design’ is) to be a linear activity.

To win contracts, potential vendors mask uncertainties. As we know, some recklessly absorb risks to secure the gig, then try to push that risk back onto the client once the project starts. But nobody wins when the fallacy is exposed. More prudent vendors simply make clients pay to cover their own risk by bloating their costs with hidden contingencies.

All parties are complicit in this game of bluff. It’s overly expensive and risk-laden and too often it doesn’t work out for anyone. (Although he talks about the relationship between Product and Engineering, this is essentially what Jeff Patton describes as the client-vendor anti-pattern.)

And it takes time!

At least one other major insurer struggling with the same regulatory change fell into this trap. They shared an RFP requiring a shortlist of potential suppliers to provide a fixed cost/scope proposal, which presumed that the solution was knowable in advance. The procurement process stalled, the project was delayed and the deadline missed. The competitor had to pull their products from the market.

If only there was a better way – a less risky, faster, and more cost-effective alternative.

Getting off on the right foot

Back to the story. One week after our initial meeting with this client we’d agreed to terms and started unpicking the problem. A fortnight later our combined team tested prototypes of two candidate journeys with prospective customers. A clear path forward emerged. Two weeks later, as we worked through lower priority aspects of the journey, their engineers had already begun to integrate the key steps, confident that their precious time was well spent. They knew they were making the right thing.

And because our close-knit team had coded and user-tested the UI, we knew that it was satisfying and intuitive to use. It was being made the right way. Nothing was lost in the handover between design and development teams, both value and feasibility were well understood.

Pre-launch split tests would allow further course correction where needed, but in that initial five weeks, we’d significantly de-risked the situation, giving our client the best possible chance of a successful, timely relaunch.

The client’s team could own and advocate the solution. They understood it well because we’d solved those problems together. So anxiety dropped, and the client leadership felt confident it would pull off the trick of being compliant on time without taking a commercial hit. The primary project goal was compliance, but weeks after launch the numbers showed we had also achieved a commercial uplift "beyond [their] wildest dreams".

Treating design as a collaborative problem-solving exercise, rather than a thing to be delivered, led to a fast turn around and better business performance.

Time to break the shackles

The lesson here is that great design calls for a new relationship. There was no time for protracted negotiations, so the most pragmatic response to the situation was to work as partners, not suppliers.

The focus was on the business result, not the amount of design done. We embraced something close to the original agile values:

  • Individuals and interactions over processes and tools
  • Working software over comprehensive documentation
  • Customer collaboration over contract negotiation
  • Responding to change over following a plan

These 17-year-old ideas are well proven – just peek inside any world-class tech company. Yet the trust necessary for true collaboration is often missing from traditionally-procured client-vendor relationships, especially when design is involved.

Yet as this client proved, it can work brilliantly when you work as partners, not vendors.

Stu leads a team of experience designers who solve knotty, systemic problems for our clients in Financial Services – delighting their customers and making the regulator happy.