In this interview, we talk with Nancy Hensley, Chief Digital Officer of Data and AI at IBM, about how IBM is embracing making digital products more consumable.
Nancy shared with us how IBM recognized the importance of digital and the need to focus on individual consumers within the enterprise. This realization catalyzed the creation of the Chief Digital Officer office, which is responsible for making digital products more consumable.
Nancy also highlighted how IBM's team structure and functions have evolved to become more customer-focused—and how IBM's focus on the digital experience has become more holistic. Teams are now measured by NPS (Net Promoter Score), and Nancy's team, in particular, is hyper-focused on conversion—with a healthy (read: maniacal) dedication to trial-to-paid conversion.
It's truly inspiring to see IBM's commitment to providing their customers with the best possible digital experience!
You can view the full transcript from our interview with Nancy below:
Margaret Kelsey:
Welcome to Voice of the Product, an interview series with leaders of organizations who are embracing product led growth. Today we have Nancy Hensley, who is Chief Digital Officer of Data and AI at IBM, and she is here to talk with us about how IBM is embracing consumability of digital products. Nancy, welcome.
Nancy Hensley:
Thank you. Happy to be here.
Margaret Kelsey: Let's begin. You've been with IBM for about 20 years now. What does the transition look like from before IBM was sort of embracing this to kind of current day?
Nancy Hensley:
I think it was realizing that we have this very traditional route to market and that digital was something that just could not be ignored. And that also the ship to subscription. So it was a way that people were consuming software, how they were looking to try it, how they were looking to buy it, how they were looking for the ease of use in getting that aha moment almost immediately. Our software has always been best in class, super feature function rich, built for the enterprise, but the enterprise was starting to shift and we needed to focus on those individual consumers inside of the enterprise. So kind of a B to B or B to C inside of a B.
Margaret Kelsey:
I gotcha. And so, the organization itself in the last 20 years, how has sort of the team structure, the functions or even your role changed?
Nancy Hensley:
It's interesting because my role actually started off in our core product management, which we refer to as offering management. As we started to dabble more into the digital consumption, it really just became overwhelming. Because I had a product and then I was kind of doing this digital thing on the side. Then when we started to see the absolute shift happening, we carved out an actual Chief Digital Officer office, and that's where I'm a part of today. My team has literally doubled in size in the last year as we focus on consumability and the digital experience with our products.
Margaret Kelsey:
That's awesome. So even in the last year, you've seen the explosion.
Nancy Hensley:
Absolutely.
Margaret Kelsey:
Where do you think in 10 years your office will be or IBM as a whole will be?
Nancy Hensley:
I think that's an interesting question because I think right now we've got it separated out so that we could really focus on it, but I think ultimately it'll become so ingrained in what we do that there won't have to be a special office, if you will, that's focusing on it. It'll be people will wake up in the morning and think about that as a normal part of how people consume IBM software.
Margaret Kelsey:
So Nancy, I've heard you talk about user experience as really more holistic than I've heard it in the past. I've heard you talk about it through both the marketing experience into the product experience, or at least into a free trial experience. How does your position or the teams that you lead create a sort of internal alignment where the user experience can be thought of in that way from marketing into product?
Nancy Hensley:
So before we really focused on it, we had marketing was really focused on creating that up top of funnel experience; product was focused on the product experience. There was no connective tissue that looked at, well, what does the whole experience look like? Does that whole thing flow? That's what our team is really doing, is looking at it from how easy is it to search, how engaging is the content, how easy is that content to convert to a trial? What's the experience like within the trial? How easy is it to buy? How easy is it to get support? What's the post support experience look like? In fact, our customer support, our customer success team is a part of the digital team as well. We also have a team of technical specialists that used to be just regular technical specialists in the field, but now they're actually part of creating a digital experience.
So we took all of that into one group, and then that we're leading that holistic view across the teams. The way we really do this is run squads, and those squads are basically across design, development, product marketing. You name it, that lead all of this work, and it's all focused around experience. They basically start all of the squad meetings just looking at the data and amplitude to find those opportunities to optimize the experience or where we might be running experience and it didn't go so well in experiment. But they always start with the data all the time.
Margaret Kelsey:
Very cool. And so, the teams are measured in terms of specific KPIs that are cross teams or each sort of person in the pod responsible for their own metrics.
Nancy Hensley:
So everyone's really measured on NPS. So that's pretty consistent across all the teams. We're all in on NPS. My team specifically is focusing on conversion, and right now we have a maniacal focus on trial to paid conversion because knowing that we can get that experience and we can really get the customer engaged and the onboarding part is a big piece of that. That was sort of the missing link for us is really just because we had a trial doesn't mean that people were going to convert. Not understanding what that experience was like until we really delve into it, made a huge difference in our conversions. It's going to make a huge difference in our conversions in the future too.
Margaret Kelsey:
Awesome. So NPS is sort of the north star and then you'll drill into a specific product problem and there'll be more metrics around that sort of initiative itself.
Nancy Hensley:
Right. My team is specifically focused on trial to win conversion, like doubling down, heads down. Don't think about anything else except trial to win for the next six months.
Margaret Kelsey:
And I imagine that's a difficult problem to solve.
Nancy Hensley:
It's a very difficult problem to solve. Because if you don't take a step back and you look at that experience from how easy is it when you download the tool or get on the cloud and try it, how easy is it to just engage with it? I mean, as makers we're so used to it that we're ingrained with the tool. But when you're coming in as a totally new consumer to IBM, which is the goal with the digital routes to market, it's not that apparent. It's not that easy to engage with some. Even though our UIs have won awards and they're beautiful, we don't make it that easy all the time. So, onboarding has been really a key strategy to that.
So we chose SPSS Statistics as one of the first products we started with our consumability focus and digital focus on. It was the closest thing we had to a B2C product. An interesting thing about it was that the majority of the consumers of SPSS software were actually under the age of 25. So it was a lot of students and academics. And to make it even more interesting, it was the year SPSS Statistics was turning 50. So actually what I have brought with me too is, look at this, this is a typewritten manual from 1968. So if you wondered what SPSS stood for, it's Statistical Packaging for the Social Sciences. So it's a great product. It's been around for a long time. It's got name recognition.
What we saw a lot in the NPS comments was that it just wasn't as consumable and in terms of accessibility and easy to buy, easy to try. That's what we set out to change. We had a perpetual license for it, we had a special student pricing for it, but we just didn't make it easy for people to get it. When we first started just doing the research on, okay, well how easy is it to find SPSS. We did the research on how many sites we had. That was the first problem. We had about 60 sites that if you Google searched SPSS statistics, you could go a million different directions that all dead ended you and didn't really provide a great experience. And so, that was the first place we started, was making it easier to find.
The second thing was if you did find it, finding the trial was like going climbing Mount Everest. It was very difficult to find the trial and most of the time the download would actually fail. So we set out to change the trial experience next, making it extremely easy.
The other thing we heard was that clients wanted to make it easy to buy. And so, maybe they didn't want talk to an IBM salesperson to get both a software and any updates. So we knew the world is moving towards subscription, so we made it a subscription. So in our initial run, we improved the searchability of the product, we created a subscription version of it, we made the trial really easy to use. But we didn't change the product at all. It was still the same old SPSS statistics product. And so, I think there was a lot of doubt about whether that actually would create enough growth if you changed the consumability of the product, but you didn't change the product with that work. But we had a theory that it did; and in fact, it did.
So what happened in those first few months is that we started to see a decline in the way people were traditionally buying SPSS Statistics. In that same time period, we saw a 2X growth in the subscription clients. We thought, okay, well maybe people are just buying subscription instead of the other ones that were trade-in transactions. But it actually wasn't true. We had 93% net new clients buying the subscription. So we nailed the experience. We also reduced the amount of time it took to purchase the product, so we reduced that by 70%. So we made it just so much less friction in the process of buying SPSS Statistics that we enabled a ton of growth. Then after the growth skyrocketed, we actually put a lot more investment into the product. We had planned that as it was, but now we're putting lots of updates in terms of onboarding and new UIs, and it's basically a whole new product with lots of new features and functions that's easier to use and easier to try.
Margaret Kelsey:
What are the benefits of having cross-functional teams work on the larger experience of a product?
Nancy Hensley:
I think everyone brings a very valuable perspective. Marketing is bringing the perspective from the top of funnel and having the expertise from an SEO perspective as well. Design is really, really key. I mean, they just bring a point of view and looking at things from a lens that we just don't always see. So when they are either they're doing user research studies for us or heuristic studies, both of those things drive a lot of the work we do from an experimentation point of view. Because again, they see things that from our view we just don't see. Product is obviously key because we need to have the right strategy from a pricing and packaging standpoint to make sure that that part is engaging. So everybody plays a really, really key role in making it all work together for the best experience that we can give our clients.
Margaret Kelsey:
I imagine at some point with all of those teams working together, there are a lot of cooks in the kitchen. So how do you go about building cross-functional teams that work seamlessly together and are able to solve problems faster without having a slogging, lots of meetings, and lots of opinions.
Nancy Hensley:
Silos and territory.
Margaret Kelsey:
Silos, and yeah.
Nancy Hensley:
Well, there's always a little bit of that. I think that we manage that by making sure everyone is heard. Everyone contributes to the ideas from the experiments that we do. Everyone is active participant on the squad. Everyone is highly valued in their opinion. There's always going to be that little bit of healthy discussion, let's call it. But I think that's all good because those point of views are all valuable. And so, sometimes having those discussions helps us see things differently. So you have to work through it. I think having a centralized goal that we're all going after, whether it's a higher NPS score or a higher conversion rate, that's something everybody can get around and figure out how they contribute towards that from their specific role.
Margaret Kelsey:
Awesome. So the team is aligned under the common goal, but it sounds like you don't shy away from necessarily some of those spirited arguments.
Nancy Hensley:
No, because I think they're good. I think they're good, right? Because people will come in with a point of view. Honestly to me, it doesn't matter. The data is going to tell us who's right and who's wrong. So bring your point of view and then let's see what the data says. Right? Everybody's point of view matters. The data actually is the one that wins at the end.
Margaret Kelsey:
That's fair. Specifically with UX designers as they fit into a growth team, I've heard in the past from some designers that this idea of growth can be a little gross or a little icky or a little otherwise unsavory. I think product people have embraced it, marketers have embraced it. How have designers at IBM embraced this idea of growth?
Nancy Hensley:
I think they really have embraced it. They're active participants in everything we do. They're so key to us building our onboarding experience. I think that we would probably be lost without them because again, they make this beautiful more engaging experience. So I think they're all in because they see the results of it. Again, when you're really focused on the data and you see things change, that I think changes everything for everyone. And so, our design team is all in on growth. They speak the growth lingo, they talk about product market fit. So we don't have that challenge here.
Margaret Kelsey:
That's awesome. And I imagine, it sounds like there's a cross team language, almost a shared language where marketers and product people understand the design language, and then they also understand the growth sort of lingo and language. Has that been an easy thing to foster, or has there been a lot of pain to sort of create a common language?
Nancy Hensley:
There's always pain in transformation. Right? I think there's been some pain in, even in just all of us getting on the same page in terms of what we're trying to measure and what we're trying to do. But over time as these squads gel more and they get these great wins together, that just kind of eases over time. But yes, there's always pain and transformation.
Margaret Kelsey:
No way that's [inaudible 00:14:07] of that.
Nancy Hensley:
Because that's how you know you're transforming.
Margaret Kelsey:
That's true.
Nancy Hensley:
So I do have a funny story about what my inspiration was for consumability. When I was doing a lot of research on products, the same old, same old case studies would always come up. You'd get Uber and you'd get all of the same old ones that were unicorn startups: Facebook, Uber, Airbnb, that changed the industry by changing the experience. I kept thinking, but what about a product that's been around for a long time? Because we were working with SPSS and it was 50 years old. I want inspiration for a product that's been around a long time that somebody's changed the experience around.
So I came across the Jaegermeister case study, which I thought was brilliant. So Jaeger was a product, it was 80 years old. It was super complex to make. I think it took a year to make. And it just wasn't selling. In fact, I think they were collecting dust on the shelves. And so, Jaegermeister had this idea, if we change the way people consume it, then maybe we can get some growth. They created the Jaegerbomb. Of course, they went from getting dust on the shelves to 40% of the shots in the UK. And they didn't change the product. So it was kind of my foundation for, yes, you can change consumability and get growth, and that was my inspiration for SPSS
Margaret Kelsey:
During this transformation. Can you tell a specific story about a time that has been either super successful or maybe a little painful?
Nancy Hensley:
Sure. Well, I'll actually tell the story of what I told my team in an all hands call recently to talk about the importance of leading this transformation. I actually showed a picture of someone who I thought was a great transformer in the industry. They didn't recognize him, which was fine. The picture was of a gentleman named Harry Gordon Selfridge. So if you don't know who Harry Gordon Selfridge is, he was the man who started Selfridges in London. He's actually an American that married an English woman, moved to London. When he went shopping in London, it was different than shopping in America because you couldn't touch things, you couldn't interact with them. They had these things called haberdasheries where you would say, "I want socks," and they would bring you socks. You'd say, "I want blue socks?" They'd only bring you blue socks.
He thought, "Well, this is crazy." Not only that is that they had these people that kind of guarded and if you lingered too long and you didn't make your choice, they kicked you out of the store. So Harry Gordon Selfridge had made this decision he was going to change the experience of shopping. He created the Selfridges department store. He specifically would say, "Come in and touch the merchandise." He was the first person to put a public bathroom for women in a public place. Seems like a weird thing, but it was improper, I guess, considered improper for women to be out and about for long periods of time and he wanted shopping to be a sport, an experience. Right?
So he literally changed the experience of shopping, not just then, but for everybody. He's the one that invented semi-annual sales and putting the cologne on the first floor and the makeup on the first floor. All of the groundwork, he laid, changed the experience for everybody in the future. And so, I used that to say, "Look, we're basically the Harry Gordon Selfridges where we're so focused on changing the experience." His quote was, "The customer is always right." That was him. People don't know that. But if you're focused on getting the customer experience right and you focus on that alone, it's going to create positive results. That's really what we're doing in the digital team is we're focusing on changing the experience of consuming IBM software and getting it right.
Margaret Kelsey:
That's awesome. So you are the original ... you're hearkening back, and he was thinking about product led growth in that sort of way. That's really interesting.
Nancy Hensley:
He was one of the original, he had the growth mindset back then. I mean, I love those kind of examples for people to realize that something small, some small idea about changing the experience and just really focusing on that customer experience can go a really long way. And that basically this team is leading that transformation and it's important.
Margaret Kelsey:
It's nice to know that it's not a brand new idea that has come up out of the ether that all of a sudden humanity is going to start to embrace.
Nancy Hensley:
That's right.
Margaret Kelsey:
We've always wanted to have more access and to touch and to feel things and to try things before we buy them.
Nancy Hensley:
And experience them. It's always been like that back. Back to the early century shopping in London. So we're basically creating that same type of experience, making it easy to touch and feel and experience the software just like he did with shopping in London.
Margaret Kelsey:
Awesome. Well, Nancy, thank you so much for being here with us today and spending your valuable time with us.
Nancy Hensley:
Thank you. I'm always happy to talk about growth and customer experience. That usually can't stop me from talking about it, so I appreciate it. Thank you.
Margaret Kelsey:
And thank you for joining us today. Check out the product-led growth collective for more information on product led growth and have a wonderful rest of your day.
