Jared Spool: Let’s start with a little history. A lot of user experience stuff that’s come into organizations has always been grassroots. It’s always been a bunch of folks who were down at the bottom of the food chain saying, “You know, we could make this better. We could make this operation more efficient, we could make customers more satisfied, we could grow this.”
Occasionally organizations say, “We want to have great design.” There are these natural tensions in organizations. Design and user experience, particularly when you’re doing it for the very first time, is not cheap and it’s not fast.
It’s an investment. You have to get people who know how to do this work, you have to slow down the work in order to make sure you’re doing the right thing. You have to change your processes, which over time have evolved to produce faster and faster, but with no real notion of a great experience behind them, so they’ve been ignoring that.
You may have created a lot of what would be known in the trade as legacy debt. You have these systems that don’t make it easy to do things. If you were a large travel agency, someone in the travel business, you’d probably have this massive reservation system that was built in the ’70s or the ’80s that was always intended to be used by employees.
Never was it conceived that you would actually let consumers do things with travelers—passengers book their own travel. Now, you have to do that and you’ve got these problems like the descriptions for the hotel rooms are in this internal jargon that makes perfect sense to a travel agent, to someone on the customer support line, but when you show that jargon to the customer, they don’t know what that means.
Now, you have to translate all that content into something that is not just a description of the hotel room, but actually sells the hotel room. You’ve got all of this investment that you have to make. All the internal codes, all the internal software, all the internal processes were geared to a system that was intentionally trying not to be a great customer experience, but instead just to be serviceable by a trained employee.
To undo that, to actually shift that around, the organization has to make a huge investment. Until recently, most organizations weren’t ready to make that investment, instead they did the opposite. They kept piling more stuff into these systems that eventually created so much debt that now they have to stop what they’re doing and reinvent themselves.
To do that requires massive executive support. This isn’t just the executive saying, “Yes. This is the year that design’s important, we’re all going to focus on design,” and then you ever hear about it again.
These are executives that are making decisions like, “No, that thing that we would have shipped last year is no longer acceptable and we’re not going to ship it this year. We’re going to undo what we did and take the hit and rejigger everything, in order to get something that is a better customer experience out.” This is really the big crux of things, because companies that start today don’t have this problem.
The textbook example is to compare Airbnb to, say, Hyatt hotels. The interesting thing about Airbnb and Hyatt hotels is that Hyatt’s been around for 40 years and Airbnb has been around for less than 3. The thing is that Airbnb is making a dent.
There was a memo circulated around the hotel industry recently that stated that in cities like New York there are 35,000 rental spaces available in Airbnb. The hotel industry is getting hit. Their occupancies are dropping.
What used to be 90 percent occupancies in cities like Chicago, New York, and LA are now running at on average 80 percent. They’re attributing a lot of this to Airbnb. How does a company like Hyatt become competitive against Airbnb?