In conversation with Tim Kobe, the iconic designer behind the original Apple Stores
Manu: Tell us a little about yourself, outside of the information that is publicly available online?
Tim: I am from California. I got started in business 25 years ago. I studied Bachelor of Science, environmental design at art center college of design, at Pasadena.
I am still a member of the board of trustees there. I have three generations of my family have graduated from that college. My oldest daughter graduated from there as well.
My mother has been an art teacher since forever; I was lucky to grow up in a household where, on one hand my father was very pragmatic and practical, you have to make everything on the planet; my mother was completely impractical, imaginative and very artistic, so I kind of had a nice training of right-left brain influences growing up.
Manu: Tell us more about Eight Inc.?
Tim: Sure. I started Eight Inc., in San Francisco. Next week, we’re opening our 12th office globally, in Dubai. We keep very small studios, 30 people per location. I don’t believe in very large offices.
But we try to keep the quality of the work very high, and the client relationships we have is at the core of our business strategy. Our focus really is around designing human experiences.
We don’t believe in narrow roles like ‘users’ or ‘consumers’, humans are far more interesting and complex. We don’t think purely ‘digital’ or ‘physical’, reality is more fluid and interconnected.
Basically, we create holistic experiences that become more than the sum of their parts. Our holistic approach has generated extraordinary value for clients like Apple, Citibank, Virgin Atlantic and Tesla.
Manu: How about your association with Crayon Data, can you tell us about your role?
Tim: I met Suresh Shankar some years ago, we were both interested in what each other was doing. I think the work Crayon has been doing around the definition of characteristics meant a lot of people to understand and connect with each other, in new ways since this is quite interesting!
So I think it was a natural affinity towards one another, the work that we were doing. As companies, I think we also have nice complimentary skill sets, so, obviously our work with Crayon is very interesting; what we are doing with data in the world.
Manu: Let me shift gears. You have worked with Steve Jobs. Can you tell us about the unique experience of working with Jobs?
Tim: So, when Steve came back to the company in 1997, he hired us originally to begin working on product launches, so we are now on our 19th year with Apple. When Steve originally came back, it was a very small team, a much-focused team.
Obviously, the company was much smaller than it is today, but we did know at that time we had a really unique opportunity. We met with him every week for 12 years since then. We had, really, both professional and personal connections with him over the years; sort of went through all the highs, and certainly the lows, with his passing.
Steve was, probably, easily the one of the greatest people we have ever worked with. His ability to think in different dimensions, I think, is what really separates him from most people, it’s what separates extraordinary people in general.
But his ability to think in an analytic manner as well as being able to shift and work off a more intuitive type of method. It made him, in some cases, really a challenge to work with, because people who are strong in analytics would struggle when switched to emotional or irrational side; and conversely, people who are really sensitive and understood the intuitive side struggled with the analytics side.
He tended to have incredibly challenging demands.
He nailed the analytics; he would still come and get you on the human intuitive side. That type of a mind is very rare. We see it only with the top people in the world. He was extraordinary in that way.
Manu: Reminds me of the quote from the Steve Jobs movie: “musicians play instruments, I play the orchestra!”
Right now you are working with Tim Cook – how is it different, the experience with Steve Jobs and now, Tim Cook?
Tim: I think Tim comes from a completely different way of approaching problems. He is trained as an engineer, so he comes from a more logic perspective. I think, he is very sensitive, he does try to strike a balance but when it comes to the business side, I think, there’s probably a big difference to the way he would approach, the rationale in terms of the market.
On the other hand, Steve, I think, kind of didn’t care what the analysts would say, he cared about what was right for the end users.
I think, In the last few years, as Apple got bigger, what used to be a tightly held thought has naturally become dispersed because of having more and more people(employees) coming from other places in the world.
And so, I think Tim is right now managing a different company, than what was when Steve was there.
Their approaches, their thought processes are very different.
Manu: Can you tell us a little bit about customer experience? There are a lot of definitions out there. I have a marketing background, and I am still confused, what exactly is customer experience and why does a customer experience matter to the end user?
Tim: It is actually the only thing that matters. The experience you have with people, the experience you have with a product, service, it all comes away with what is in it for you. It is only relevant if it matters to you, and so if you are not thinking about customer experience, you are probably leaving a lot of potential for success on the table.
It doesn’t matter to me whether it is an object or a service.
The idea that if you are not thinking about that relationship you have between the company and their values, and the people you want to connect to; if you are not thinking of that experience, you can operate and exist, but you are leaving potential on the table and are opening yourself up to competitive threats from a number of different areas.
People used to think about the term “experience” from a really functional brand ideal perspective, that is, if I am buying a computer, I need it to process things at a certain speed and rate. It is a very analytical way of thinking about things, but it takes away the part that is actually human.
Steve Jobs always taught me about the intersection of art and science; he didn’t say it was just about art or just about science. The reality is true with most people classified as genius – they tend to have the right brain-left brain thought process.
Manu: Let me focus this customer experience question on banking. Do banks really understand the power of customer experience?
Tim: I think, very few really understand it. When you say banks, you are talking about banks as an organisation as opposed to individuals within an organisation. Most banks don’t have a culture of human empathy. The idea that they are very much focused on themselves, their business, disrupts the natural connection to providing those services for people.
Banking has really struggled to even figure out where they should live. I think there are a few banks and I know there are some people who I think really do understand this, in financial industries.
But in general, I think this industry is one of the biggest misers in delivering great customer experience.
Manu: So, if they are struggling with customer experience, how can they improve it?
Tim: People talk about personalisation, and that is one thing. Fundamentally, they are living around a framework that has existed for a very long time with very little evolution. They are typically not technology leaders.
They are followers, I would consider them slow followers, if I were looking at all the categories of areas where financial disruption has occurred; technology transformation has occurred. How they can improve it, is, I think, there are lots of places.
Manu: You mentioned personalisation. How can banks deliver a personalised experience to the customer? Because I have read in a lot of articles saying that banks struggle with personalisation.
Tim: I think there are a number of ways of doing that. Part of that is the logic we still work with. If you look at the basic design of most of the websites, it is still based on a pull-down menu set, which treats everything with equal balance. This is Netscape from 25 years ago! That thought, that sort of logic, hasn’t really progressed.
The problem is that the human interface has progressed enormously, by comparison. And so, when you look at a set of offers, whether it is 10 or 20 things in a pull-down menu, and they all sorted with the same weight, as a user, it reflects your empathy on behalf of the way we engage with technology today, the kind of level of clarity and simplification that should be there.
It shouldn’t be something that I have to set 25 preferences in order to have personalisation. There’s technology there; they should understand and deliver the right thing that I am looking for.
It is not serious, it is actually quite easy to obtain, I would say, these days. You run into businesses in the financial industry in particular, where that concern for the end user is less at the forefront than it should be.
Manu: That comes to the point of digital consumer experience. I read online that banks are behind on digital consumer experience. Do you agree on that front?
Tim: Absolutely. They lag behind in both physical and digital customer experience.
Manu: How can they improve the digital customer experience? Have you worked on any digital customer experience projects that you can share with us?
Tim: Yes we’ve worked on a digital program for ANZ bank. We worked on the Smart Banking for Citibank and that was really, probably, one of the leaders in terms of trying to move into a digital space.
There were so many pressures on the business side, that it made sense for them to move forward with the program. The guys that we worked with have now been promoted to the top levels of the company. And that’s great, because they carry with them, more of that approach, than, say, their predecessors would have.
I don’t think there are many banks that value human experience. There’s a saying that great customer experience is everyone’s responsibility, but nobody’s job.
What made Apple great was Steve was the customer experience benchmark. If he felt that whatever was being delivered, wasn’t being delivered in a way that mattered to people, he would crush it.
Most banks, I would say, initially look at it from an economic perspective, from whether or not there’s a short-term gain on that particular behaviour, rather than understanding the long term benefit of building people relations.
It is this whole shift in mindset, from transactions to relationships. I think that people are probably inherently more incented to focus on short term incentives, and therefore, the relationship value is not the focus and probably, harder to quantify. But ultimately that is the difference between running a great company and an ordinary one.
Manu: So, you’re saying that they take decisions based on short-term benefits. Is there no business value on customer experience that they can see? How can we exactly quantify it?
Tim: You can quantify it in a lot of ways. First of all, business schools must start teaching that’s where the real value is.
If you look at Apple’s retail program, I wrote the white paper on the retail program and gave it to Steve. The company stock was at $13.00! It split couple of times on its way, I do not know where it is today, probably $67, I don’t know, but there was a lot of people saying, when we designed the retail program, what a mistake it was going to be for Apple to do the retail program.
The $10 million or whatever it was in the retail program, they should just give the money to the shareholders. There was a lot of noise in the system because Apple was doing something that wasn’t done by anyone else. At that time,I think people were describing it as something with an incredible amount of risk associated with it. Last year, at the flagship store in New York alone we did half a billion dollars in sales.
So, if you want to quantify things, you can look at it ultimately in the way the performance of customer-centric companies have done financially but also, in terms of being companies that people really love and admire.
If you look at all the possible companies / brands out there, I can point you out to brands that we worked with – Virgin is another one, these are companies that people feel like their leaders are doing things that matter for them, they have incredible loyal and passionate customers, and they tend to have customers who are very dedicated to the brand.
If you can continue to deliver great products through that experience model, your business is going to be better.
We took the same approach to Lincoln car company, and they asked us to look at monitoring the Lincoln program to China, couple of years ago.
The Lincoln car company was basically the last car company coming to China, and we said “well, as a last mover advantage, the first thing you should do is to get rid of sales people”.
They thought that we were insane!
But, because of the fact that people are using more technology today, when they are looking to buy cars, it has changed the car buying process without anyone changing that process.
The world changed, but people still sell cars the same old way! So, we launched this new programme in November 2014 in China; six months later, in 2015, they broke the record for the most Lincoln cars ever sold in the history of the company! And they have been breaking the record ever since!
So, here’s a very small company, relatively speaking and Lincoln’s been around for a long time, but they were pretty unknown in the market. We came in and were able to make something that delivers a different kind of relationship, a different type of posture with people, and the economic results follow that.
So, I think the people that don’t understand how to quantify that, have been looking at the wrong metrics. But, the metrics we look at are people that promote brands, so the net promoter score is important.
There’re lots of great ideas out there; ideas are not innovation. Innovation is when people adopt something.
The difference between MySpace and Facebook was a better design solution. And Facebook is more successful because people adopted it.
So, if the metrics you are looking at are companies that people want to be a part of, want to be connected to, today it’s because the value systems of those companies convey and the products they’re creating are relevant.
A lot of people, I think, just don’t spend the time on that and the energy focusing on the things that will ultimately make their company strong. They are looking at competing for this month or this week or this quarter.
Manu: They are looking at the wrong metrics and they are looking for a short gain. So, basically, it should be a part of their long term strategy. Right?
Tim: Yeah, I think, they tend to look at their feet, they need to look at the horizon.
Manu: That’s extremely clear. So, you talked about the smart banking project you worked on for Citibank. Can you tell us more about it?
Tim: Well, this was a pre-tablet era, when we started this, there were a number of business metrics.
They were trending down on innovation, trending down on relevance, trending down on personal service. All of these core bank services were in a steep 45-degree dive. Their business was not performing as well, because the model itself was based on an old paper-based world.
They had never stepped back and looked at holistically how to transform what they’re offering. Their program for that was really a shift towards much stronger digital engagement.
We find the ecosystem that branches and the different touch points the branches have, if we examine the posture that banks have with their customers, ultimately, we built for customer satisfaction.
I think we went from 57 for customer satisfaction in our part of market to first. So, when they went to first in customer satisfaction in one year, they were shocked! To me, it was just reflecting what flat line they had to slide up on, in terms of banking customer experience.
The two areas that are at the bottom of customer experience ratings are banking and car dealerships.
These are two experiences the customers usually dread having! The psychological response to both of those categories is overwhelmingly negative.
To me, those are the ones that are easiest to fix. The problem is getting around some of the cultural limitations within a bank, or within a dealership, and starting to change those engagement models.
Again, if you focus on human relationships, you tend to work around a lot of the logistic things, the typical hurdles that get thrown in the way, things like regulations – those are the common reasons people give for not providing a nice experience.
But it is fundamentally just an excuse!
Manu: I also read a magazine quote about you. It said “the experience is not just about design and style; it is about your brand and values”.
Tim: Then people ask us to make an Apple store for them! Then say, “you make a white store with tables, we’re going to be a success, right?”
And that is why I have to back up and say “it is about expressing what makes you do differently; it’s no different than a person to person relationship. I’m sure your spouse, your partner are with you because you share something in common; you share mutual values, you share common ways of living.
People connect with brands in much the same way.
Manu: That was what you told Target, right? After the success of the Apple stores, Target reached out to you, and you said the same thing to them! I read about that! So, what can banks learn from other industries about personalisation? Companies like Amazon, Google etc. are giving personalised experiences, but what can banks learn from those kind of tech companies?
Tim: I think, personalisation is a bit of an over-simplification – it is a part of it. But it is not exclusively that.
I think personalisation is a component of making experiences relevant and one part of relevance comes from personalisation.
But there are other aspects of that, come from other areas. So, I don’t think personalisation in itself is the Holy Grail. But, personalisation support is an important factor in delivering great customer experience.
Manu: Can you tell us about your 8 book publishing project? What exactly is the project about?
Tim: We’ve been working on a book that chronicles a lot of the aspects of our business, in terms of the way we think about customer experiences.
The book is going to be focused on outcome from experience, it will be focused on what we do to construct a project and think about creating a solution for companies, it is going to use business cases.
I think it is going to be as valuable a tool for designers, as it will be for business leaders that are educators.
But a lot of people are curious about what we’ve done over the years. What has been a part of the approach, I think, many people talk about ”experience design” and use these buzzwords, but they tend to not really know what these buzzwords are.
So, I don’t want this just to be something that’s a buzzword, I want people to really understand the difference.
It is fundamentally about people; I think it’s about things that sound like soft things, but turn to be very hard, economic value.
For us, it is more about value creation versus value leverage. I think, if you’re creating any kind of product or service, you need to go through some of these thoughts, to truly add value.
Manu: One final question I have is, I read an article which said that you are working on smart cities. Can you share your thoughts on smart cities?
Tim: Sure. A portion of our business is called design incubation.
So we incubate these ideas, these projects that are about one a year in the pipeline.
We’ve built say, smart offices, we’ve provided some technology and some elements that help improve SME target audiences.
The things that we are doing around Smart Nation has to do more with mobility. We are looking at solving some of the mobility challenges.
We’ve put together a team of pretty incredible companies, who have expressed an interest in being part of it. That’s ultimately where we are now – we are in conversations with some of the various other entities, we have education, we have corporates, government, and we are looking at pulling this consortium toget her, so that we can bring it to the next round of development. It’s pretty exciting area, something we are interested in doing more in as well.
Manu: This is a pretty interesting area – smart cities and the concept of IOT, etc. Really interesting.
Manu: Thanks a lot, Tim, thank you for being on the show and spending your valuable time with us.