Previously featured in issue 5, page 105
Experience matters -- now more than ever -- for E-Lab LLC, a savvy research and design consulting group with a singular insight on the consumer experience.
In October 1996, when Fast Company first talked with E-Lab cofounder and CEO Rick Robinson, the small Chicago-based firm was successfully leading a new marketing philosophy with a boldly simple approach: Understand how real people experience real products to create innovative product concepts and services. The idea challenged companies to forget conventional market research -- cancel the focus groups, scratch the consumer surveys, un-target the targeted test markets -- because a breakthrough approach has tapped into the consumer behavior patterns that drive everyday purchasing trends. E-Lab pioneered that breakthrough, and by doing so, it launched a new way to forge stronger, more lasting connections with consumers.
Now, five and a half years after E-Lab was founded, the experience-based research firm has combined forces with another success story. The Cambridge-based Sapient Corporation, an IT provider and e-services consulting group for Global 1000 companies and startups, acquired E-Lab last October. E-Lab has since become Experience Modeling, one of five strategic disciplines that Sapient has incorporated into its organization of 1,900-plus employees in offices in the United States, Australia, Italy, and the United Kingdom.
Sapient co-COO Des Varady says that the acquisition of E-Lab represents one of many strategic steps for his company. "In this market, it's not enough to be multi-disciplinary and provide all aspects necessary to create a complete Web solution under one roof," Varady says. "You need to form opinions and anticipate the market. By acquiring E-Lab, we're expecting that people will be less concerned about Web sites and distribution systems and more concerned about what consumers experience today and what they want to experience in the combined physical and digital world of the future."
Hot on the heels of its own success, E-Lab entered merger talks with four companies before teaming up with Sapient. When Sapient came along and said, "We understand what you do, and we want you to do it on the Web with us," Robinson said he was sold on the merger. "Sapient is successfully reinventing itself from what it was two and a half years ago, shifting focus from technology delivery to innovative e-services. Joining that commitment to innovation will be exciting and hilarious fun."
And the timing couldn't be better. The former E-Lab team's new online focus will presumably leverage its experience-based research in a proliferating Internet consulting market. That market is expected to grow tenfold in five years, from $7.8 billion in 1998 to $78.5 billion in 2003, according to IDC analysts.
In the following interview, Fast Company catches up with Rick Robinson, who just might have the coolest job title at Sapient these days -- Chief Experience Officer or CXO (not to be confused with CEO). As CXO, Robinson manages experience-based consumer research, helps to guide acquisition integration efforts, and positions Sapient as an organization with "clear-thought" leadership in the market. The leader of a major change effort, Robinson discusses the recent acquisition and the challenges and opportunities it presents -- and explains why experience matters now more than ever.
How does the recent acquisition of E-Lab by Sapient redefine your skill set?
The organization that was E-Lab, now called Experience Modeling, is becoming a discipline that's part of a larger organization. That discipline maintains the original purpose of E-Lab: to create really interesting pictures of user experiences. We will continue to study and develop new techniques for tracking consumer insights, but we will focus more on the online experience. Our research will stress the integration between online and offline consumer experiences -- the click-and-mortar world.
Does the merger expand or narrow your competitive field?
We're dealing with a completely different set of competitors now. While we have more competitors because of the explosion in online services, we've also narrowed our competitive marketplace to a few major players. Hundreds of shops are setting up Web sites, launching online brands, and conducting brand consulting, but they're only Web focused. While we plan to use the Web as a major tool to deliver and package our work, we're not limited to the Internet as our research lab. Our clients are still big companies who are thinking about creating entirely new products for their customers. Before, our client work consisted of "real" products -- cars, bicycles, printers, DVD players. Now, clients want us to define products in a virtual world that constantly generates new rules and redefines old ones.
How will an increased online focus change your methodology for understanding the consumer experience? How does Experience Modeling fit into the larger company framework?
The biggest change will be in the output, in our deliverables. We're focused on the Web as the delivery tool that will package a lot of our work, but that doesn't mean that we're limited to studying how people interact on the Web. We're still focused on everyday experiences and perceptions -- from lunchtime reading to finance management. But now we've combined two organizations to produce a methodological invention for understanding the Internet experience.
We stand on another marketing frontier: This time we must find a new tool to figure out what's happening on the Web. So we're integrating online marketing with real-world consumer research, plus exploring questions like what it means to conduct observational research in a chat room. Our research and design approach will stay the same. Our innovative techniques are what Sapient initially liked about us, so they are being integrated into the organization.
What is the status of the acquisition integration efforts?
On November 23 we assigned our first two joint projects. While I can't disclose specifics, the assignments focus on the financial services industry. We're also working on our first set of joint pitches, approaching clients with our combined credentials in research, Web delivery, and design work. While we're shifting gears to understand online users, we're not completely phasing out real-world consumer research because keeping a hand in the brick-and-mortar realm is indispensable. To understand the virtual experience, we must continue to grasp how the consumer experience relates to everyday life. Sapient acquired E-Lab because it wants to understand the consumer experience beyond the digital world. Everyday experience creates the core basis for understanding the increasingly sophisticated Internet relationships between companies and customers.
While the acquisition presents many new opportunities, is there a concern that sheer company size will swallow or stifle the energy and creative freedom of E-Lab? Will the purple and lime-green walls of E-Lab headquarters yield to navy blue and corporate gray?
Sapient has quickly become a flourishing success, but it's never had a cookie-cutter culture. What wowed us about Sapient was its capacity to work at scale, generate the kind of market presence we've always yearned for, and produce the right kind of creative culture. Sapient hasn't lost its striking energy and sense of community despite its immense growth. Even the company structure reflects its personal commitment to innovation and community. Unlike old-line corporations, Sapient is broken up into many manageable-sized offices. Culture isn't driven down 14 levels in a galactic organization but cultivated by many lateral team approaches to creative management.