Ouch.

Atop the jabs of late night comedians, the media expressed shock at Apple’s solution: giving out pieces of soft plastic to wrap around the iPhone 4 antenna to protect its signal. Sure, technically it worked—but wasn’t this a missed opportunity to delight customers?

To figure this out, we have to understand “customer happiness” and the features driving it.
Those features fall into four categories:

1.    Non-factors: These are features that most consumers are indifferent to, often added by engineers as vanity projects. Example: The ability to play MP3s on a GPS using a compact flash card. No one would miss the feature if it was not there, and not many are impressed by its addition.

2.    Table stakes: Having these doesn’t differentiate your product, but missing these creates dissatisfaction. Example: cup holders in cars; phone service in phones.

3.    Incrementals: Customer satisfaction varies with these features, and people pay more to get more. Example: storage space; processor speed; USB ports on computers.

4.    Delighters: Differentiating features create satisfaction when they're added, but not dissatisfaction when they're missing, since the feature is usually kind of novel. Example: video conferencing was a delighter as the iPhone 4 shipped, but as competitors catch up, they’ll eventually become incrementals, or even table stakes.

You can assess these buckets quickly using mockups, interviews, and surveys. Just have a couple of satisfaction questions. Once you have the data, here's what we think you should do: Drop your non-factors; meet your table-stakes; include incrementals to meet your price point; add your delighters to differentiate yourself, and win fans.

For the iPhone 4, people being able to make calls was table stakes. Apple couldn’t do better than meet expectations. They issued a pragmatic fix, but pressed on marketing its delighters—FaceTime and the Retina Display. The result: Despite reported call quality issues, Apple’s sales, profits and stock price continued rising, led by the iPhone 4.

I don’t mean to speculate on Apple’s decision.

I just hope the four bucket framework (called a “Kano Analysis,” after its inventor Noriaki Kano) might help teams make better decisions to delight customers in the long run.
It doesn’t mean I’m any less annoyed by dropped calls.
 

A first step in tackling this question is to understand what happiness means. But herein lies the problem. Our understanding of what happiness is (and how to get it) is often misaligned with what really drives it. Indeed, research by Dan Gilbert and his colleagues show that we tend to go looking for happiness in a lot of the wrong places. If you disagree, you can check out the lead story on Entertainment Tonight on any given day.

Indeed, being a multimillionaire with all the picket fences, fur sinks, and electric dog polishers that money can buy will not bring us the contentment we seek. What will? Meaning. Research shows we’ll feel more fulfilled if we donate a couple of hours each week to a cause we care about than if we donate a large chunk of our wages to a charity we know little about. Further, donating time instead of money is associated with greater feelings of connection to the organization you’re helping. This, in turn, boosts otherwise elusive feelings of balance and purpose that so many of us seek.

Consider the simple question: Where are you spending your time? Answering this question might lead to more clarity about what is personally meaningful, and with that insight, you may be better able to design for happiness.

These insights are playing out in organizations (Zappos), websites and blogs (We Feel Fine), and how marketing campaigns are designed (Coke). In The Dragonfly Effect, we discuss which companies have done a particularly good job of harnessing principles of happiness and applying them to their businesses. We observe how people use social technology to make changes in the world—but what we’re really talking about is something more fundamental and human. The Dragonfly Effect is about creating a single focused goal, based on meaning and happiness, and designing a campaign that allows the goal to spread. And with the social web, it’s often not about donating those dollars: It can also be about donating yourself—your time, your connections, your commitment, and your talent—to spread passion and awareness and affect the outcomes of the things you believe in. Just as so many seemingly pointless YouTube videos go viral, so too can a campaign for change.
 
To get a better idea of how that can work, here is a excerpt from The Dragonfly Effect: Quick, Effective, Powerful Ways to use Social Media to Drive Social Change:

Focus on the person you are trying to help. Don’t rush in with a solution to a problem, test alternatives and be prepared to return to square one several times. Also, focus on the person you need help from. What are their goals and dreams? How can you help them achieve them? Who are you to them? Where are your leverage points in terms of causing them to act? Match your appeal to the medium (e.g. short bursts for Twitter, logical discourse for blogs, emotional envelopment on YouTube).

Interested in more insight on how to design organizations, websites, and even movements based on principles of happiness and emotional contagion, peruse dragonflyeffect.com, the research stream associated with The Dragonfly Effect, or the research on time, money, and happiness by Sanford DeVoe, Jeff Pfeffer, Cassie Mogilner, and Wendy Liu.
 

“I put explosives around my farm,” said my aunt in Chinese. A retired nurse from Taiwan with college age kids, she now lives in Toronto, “Anyone tries to steal my vegetables, I’ll blow them up.”

A few questions later, I found out she took community college lessons on email, instant messaging, and through Facebook. That led to playing online games from China, including one where you grow crops on a virtual farm and steal crops from friends (which necessitates said explosives).

I was shocked. She seldom reads English and chides me repeatedly about my bad posture and poor eyesight from using computers—I didn’t even know she owned a PC. All this I learned during a class assignment at Stanford where we interviewed “mothers communicating with their children online.” The exercise helps MBA students heighten our sense of empathy: the ability to embody the needs and values of others.

Consider that as companies mature statistics can outweigh personal customer relationships—disconnecting products and people. Consider how fallen leaders like MySpace and AOL reacted far too slowly to changing user needs, despite the mass quantities of data available to them.

After a couple quarters working with Stanford’s new design school, it’s become clear that making “data-driven decisions” without the right framework is like asking an alcoholic for wine pairing recommendations—experience is necessary, but not sufficient to produce skills.

The design process at Stanford draws from an array of fields, including social science, anthropology, and art, to offer tools and processes helping develop skill. One such tool is an Empathy Map, as described in Stanford’s design thinking primer. It helps turn observations into insights by breaking down user feedback into four categories:

•    SAY: How users express themselves
•    DO: User actions and behaviors
•    THINK: What users believe
•    FEEL: Emotions users experience

Applying the process to my internet-mom interview, a story emerged: the motivation of defense and retaliation (FEEL) drive players to credit card purchases of “virtual goods”, such as explosives (DO) to defend their property by injuring others (THINK). They justify their actions in the context of the game’s mechanics (SAY).

Now that we understand the story’s components, we can re-imagine it.

Suppose instead of creating defensiveness and retaliation (FEEL) driving the purchase of explosives (DO), we use the motivation of social status (FEEL) to incent gifting (DO). It’s through changes and experiments, inspired by deep user understanding, that let companies like Zynga create ultra-compelling online games that drive tens of millions of players to their site, after less than 3 years in the market.

Empathy gets us out of “I don’t understand, I’d never do that” box to see things through new eyes. Consider the Sweet Seeds for Haiti campaign launched by the social game Farmville, which in three weeks raised $487,500 (half its sales revenue) for the children of Haiti devastated by a catastrophic earthquake. Empathy let Farmville serve user needs to contribute to society while growing its business and bringing about material social benefit.

Indeed, there’s a lot to be gained from the right mindset and tools. Though I’d known my aunt my whole life, in 20 minutes I uncovered insights about her I would otherwise never venture to find—and insights open new opportunities to think about the world, and make a difference in it.

However alien ideas may seem to outsiders, designers employing empathy seem to work wonders in creating experiences people love, simply by stepping into other people’s shoes.

Even when they’re packing explosives.

For more on the evolving role of design in business, check out What Businesses Can Learn From Designers

Instructors for the Power of Social Technology curriculum at the Stanford Graduate School of Business unpack social media concepts

It's not clear how design and business mix. However, in the last decade, there has been a growing fascination with how they might. Recent articles on design thinking proliferate—ranging from those that highlight its potential to those that warn of it’s impending decline.

But despite its waxing and waning in the press, the case for adopting a design thinking approach to business in general—and on the social web in particular—is actually quite simple. Design thinking helps creators get over unintentional biases and misconceptions.  Time and again, initiatives falter because they’re developed with the brand, organization, or cause—rather than individuals’ needs—foremost in mind. When deep empathy doesn’t guide the decision-making, fear of failure influences decision processes, and rapid prototyping is rarely used to solicit quick and early feedback. Design thinking offers tools to address these challenges, get into other peoples’ heads and hearts, understand their needs, and iteratively test to determine how best to address those needs. Working with the Hasso Plattner School of Design, we encourage adopting a design mindset in the Power of Social Technology class at the Stanford Graduate School of Business.

Why? Three big reasons.

1. Empathy is on the decline. A recent analysis of 72 studies performed on nearly 14,000 college students between 1979 and 2009 showed a sharp decline in the empathy trait over the last 10 years. How do we change this trajectory? By fostering processes and mindsets that cultivate a radical focus on listening to others and understanding them before we build solutions. Design thinking is one such process.

2. Corporations need to (re)focus on trust and improving effectiveness. Recent data suggests that American consumers view nonprofits as warm and inspirational but less effective than for-profits, which are seen as competent but greedy. Changing these stereotypes will require a focus on processes that encourage both inspiration and impact.  Such an approach was taken by The Montana Meth Project, an effort bankrolled by billionaire Montana resident Tom Siebel. Built on meth “customer” empathy, the campaign  targeted youth, touched on the strong sense of regret addicts feel, and reflected addicts' desperate desire not to let a younger sibling end up like them. The campaign was incredibly effective in reducing meth-related crimes.

3. Social media is an important part of business strategy. And social media tools make a design thinking approach extremely easy to adopt. Consider rapid prototyping: With the availability of tools such as Google AdWords, Twitter, and Wordpress, it is simple for even a non-technical person to prototype every part of a social media campaign. These tools allow you to treat feedback not as an identification of what you did wrong but as a key part of your understanding of what makes your target tick. Look at the Old Spice Guy sensation—it involved shooting, producing, and posting 84 videos in one day. Real-time prototyping and feedback defined the campaign.

How have you used design thinking to solve problems that seemed unsolvable? Share your thoughts in the comments section.

Illustration by Will Etling.

The Power of Social Technology class at the Stanford Graduate School of Business unpacks social media concepts.

Stanford Graduate School of Business offers a class called the Power of Social Technology, the goal of which is to arm entrepreneurial business students with social media tools that create social good. The class has also spurred research on the “ripple effect”—the idea that small acts of goodness can create big change—and has welcomed speakers from Pixar, Facebook, Twitter, FourSquare, Groupon, and Google to talk about how students can harness social good in a way that goes hand-in-hand with profit-making.

But when we talk about creating “social good,” what do we even mean? Most define it as a good or service that benefits the largest number of people in the largest possible way. Classic examples include improving literacy, as well as access to clean air, clean water, and health care. But sometimes seeking to bring about this type of "social good" feels like an elusive, unreachable goal—too big and grand to be within reach. "Change the world? Sounds a bit out of my league. I think I’ll just get back to checking my e-mail."

And yet it is becoming increasingly clear that the work of making big changes in the world is not limited to massive nonprofits or peacekeeping missions; it can come from anywhere, from an individual with a YouTube account all the way to a big-budget business. We live in a world increasingly connected through social networks  that make it possible for all of us to make those big changes the world really needs. You can even use those e-mails or tweets to make a difference.

What if we step away from traditional views of social good and instead define social good as the benefit a social network creates for those outside its constituents? For these purposes, let's define a social network as an entity connected by bonds of computer-aided communications. Constituents of that network act on it, influence it, but it’s under no single constituent’s control—akin to neurons in a brain. When that network acts to benefit others—manifesting the collective will of its parts—a “good” is created at speed and scale unprecedented in human history.

Indeed, in today’s world, the rules are rewritten: small acts can create big change; actions can have ripple effects far beyond their original scope; and profit can be used for good.

We like to think of three key concepts as important to keep in mind, each an important piece of the social good puzzle in our socially networked world:

Focus on others. Research shows that when people simply focus on creating good for others (vs. simply focusing on the self), positive consequences result. And ironically, those positive consequences don’t just result for the others who received the good, but for the person how created and spread the good. For example, Liz Dunn, Lara Aknin, and Mike Norton conducted a study where they examined the manner in which employees at a Boston-based company spent a profit-sharing bonus impacted their long-term happiness. The results show that when people spent that money prosocially on others (giving gifts to friends, donating to charities), greater happiness resulted.

Make ripples. Small acts can create big change. Every long journey starts with a first step. Consider the story of Alex’s Lemonade Stand, Alex was a young girl who put together a lemonade stand in her front yard to raise money, 50 cents at a time, for cancer research, after she was diagnosed with the disease. Fast forward years later, and Alex’s Lemonade Stand has become a national organization which has raised over $20 million for cancer research projects, with the help of people who were inspired by Alex's story. The small act of taking life’s lemons and making some lemonade became a multimillion-dollar organization. Why? Because one act of good can inspire dozens, hundreds, or even thousands of others to tackle similarly small goals that when combined yield disproportionate success.

Big business can be a force for change. There is an emerging realization that social good does not need to be divorced from profit making motives; in fact, for-profit corporations can have some of the most powerful impact in perpetuating social change, in part because profitable business strategies can be effectively applied to generating social good. Consider Toms Shoes, Google, and Whole Foods. Corporations with goals other than solely being profitable often end up more profitable. Give, and you shall receive.

Social good is within reach for everyone—whether you are a CEO of a large scale corporation or a young girl with some posterboard and a batch of lemonade. What have you done to promote social good in your own house, your own community, and beyond?

Share your thoughts in the comments section.
 

Through its new curriculum, Stanford Business School connects students with opportunities to create social good through online conversations. Topics range from the definition of “social good” to the use of design process and empathy techniques in developing social media, to the art of storytelling and the engineering of virality. The community includes experts such as Facebook’s Randi Zuckerberg, blogger Robert Scoble, MC Hammer, Dave McClure of 500Hats.com, and Kiva.org’s Jessica Jackley.

Illustration by Joelle Leung.

MBA students discuss their firsthand experiences from the Power of Social Technology curriculum at the Stanford Graduate School of Business.

“Let’s talk about purpose,” says MC Hammer, “how do you define “social good'?"

He looks straight at me. The class falls silent. Heads turn my way.

Holy cats, did MC Hammer just serve me a pop quiz?

Stanford GSB invited Hammer—Twitter-savvy pop icon adored by millions—to co-teach Social Media for Social Good, a class in which Stanford MBA and design students are enrolled. I am one of them.

Strikingly, halfway through the course, everyone still holds different definitions of “social good.” To some it means any kind of charity (like Zynga donation campaigns), to others, serving the underserved (as defined by Investopedia). To others still, it's a buzzword to spin in framing commercial interests (greenwashing, anyone?).

My classmates shift nervously, wondering how I’ll reply. To me, "social good” is intuitive—like the punch line of a joke we get, but can’t explain. I think through an example: Embrace. The nonprofit founded by Stanford students, recently featured in TED aims to save low-birth-weight babies in the developing world who die because of a lack of access to incubators. Embrace produces infant-sized sleeping bags with re-usable heating units that maintain the life-saving temperature of 98.6°F for four-hour stretches. The units cost $25 and Embrace aims to raise $1.5 million to launch the company beyond its current mandate in rural India.

How did I hear about all this? Three MBA classmates chose Embrace for their class project, producing an online video that raised $4,000 in its first 10 days. They also persuaded the Rotary Club of Bangalore to adopt Embrace for their annual fundraising project, and inspired Gaurang Shah, CEO of Digital Signage Networks of India, to run the video on his billboards.

Though they are on opposite sides of the planet, this network appears to be linked by an invisible force that seems to bounce across Mumbai and Palo Alto, each action begetting another, and building spontaneously.

But how to phrase this to my class?

“Social good,” I reply, “is about how we help others.”

Hammer thinks a moment, then he nods. He gets it.

Through its new curriculum, Stanford Business School connects students with opportunities to create social good through online conversations. Topics range from the use of design process and empathy techniques in developing social media, to the art of storytelling and the engineering of virality. The community includes Facebook’s Randi Zuckerberg, blogger Robert Scoble, MC Hammer, Dave McClure of 500Hats.com, and Kiva.org’s Jessica Jackley.

Illustration by Joelle Leung.