Part I: Google's secret weapon: simplicity

How do you make your company's products simpler? You can start by simplifying your company.

In the late 1990s, Royal Philips Electronics was a slow-footed behemoth whose products, from medical diagnostic imaging systems to electric shavers, were losing traction in the marketplace. By 2002, a new CEO, Gerard Kleisterlee, determined that the company urgently needed to address the dynamic global marketplace and become more responsive to consumers' changing needs.

Philips deployed researchers in seven countries, asking nearly 2,000 consumers to identify the biggest societal issue that the company should address. The response was loud and urgent. "Almost immediately, we hit on the notion of complexity and its relationship to human beings," says Andrea Ragnetti, Philips's chief marketing officer. Consumers told the researchers that they felt overwhelmed by the complexity of technology.

Some 30% of home-networking products were returned because people couldn't get them to work. Nearly 48% of people had put off buying a digital camera because they thought it would be too complicated.

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Strategists recognized a huge opportunity: to be the company that delivered on the promise of sophisticated technology without the hassles. Philips, they said, should position itself as a simple company. Ragnetti was dumbstruck.

"I said, 'You must be joking. This is an organization built on complexity, sophistication, brainpower.' " But he and Kleisterlee responded with an even more audacious plan. Rather than merely retooling products, Philips would also transform itself into a simpler, more market-driven organization.

That initiative has been felt from the highest rungs of the organization to the lowest. Instead of 500 different businesses, Philips is now in 70; instead of 30 divisions, there are 5.

Even things as prosaic as business meetings have been nudged in the direction of simplicity: The company now forbids more than 10 slides in any PowerPoint presentation. Just enough, they decided, was more.

The campaign, christened "Sense and Simplicity," required that everything Philips did going forward be technologically advanced--but it also had to be designed with the end user in mind and be easy to experience.

That ideal has influenced product development from conception--each new product, like the ShoqBox, an MP3 mini-boom box, must be based on a user need that's tested and validated--to packaging. Philips invited 15 customers to its Consumer Experience Research Centre in Bruges, Belgium, to see how they unpacked and set up a Flat TV.

After watching people struggle to lift the heavy set from an upright box, designers altered the packaging so the TV could be removed from a carton lying flat on the ground.

While many of the new products have yet to hit the market, early results of the business reorganization, particularly in North America, have been dramatic. Sales growth for the first half of 2005 was up 35%, and the company was named Supplier of the Year by Best Buy and Sam's Club.

Philips's Ambilight Flat TV and GoGear Digital Camcorder won European iF awards for integrating advanced technologies into a consumer-friendly design, and the Consumer Electronics Association handed the company 12 Innovation Awards for products ranging from a remote control to a wearable sport audio player.

Maeda, who, as a member of Philips's Simplicity Advisory Board has had a front-row seat for this transformation, is impressed. "The best indication of their sincerity is that they're embracing the concept at a management level," says Maeda. "It isn't just marketing to them. That's quite a radical thing."

Designing products that are easy to use is nothing new for Intuit, the big tax- and business-software company. Indeed, it's been the mantra since founder Scott Cook developed Intuit's first product, Quicken, back in 1983 after listening to his wife complain about writing checks and managing bills.

But even by Intuit's standards, Simple Start, a basic accounting package that debuted in September 2004, was a leap. For one thing, the target market was tiny businesses that used no software at all.

"These were people who said, 'I have a simple business, and I don't want the complexity of having to learn this. I don't want to use the jargon, I don't want the learning curve, and besides, I'm afraid of it,' " says project manager Terry Hicks.

But the potential was huge: some 9 million microbusiness owners that Intuit wasn't reaching with its current line. So Hicks's team first tried a knockoff of Intuit's QuickBooks Basic, with a bunch of features turned off. Then they confidently took the product out for a test-drive with 100 potential customers.

And it bombed. It was still too hard to use, still riddled with accounting jargon, still too expensive. They realized they had to start from scratch. "We had to free ourselves and say, 'Okay, from an engineering point of view, we're going to use this code base, but we need to design it from a customer's point of view,' " says Lisa Holzhauser, who was in charge of the product's user interface.

The designers followed more customers home. They heard more complaints about complexity, but also anxiety that things in their business might be falling through the cracks.

So the team distilled two themes that would guide their development: The product had to be simple, and it had to inspire confidence. Terms such as "aging reports" and "invoicing" were edited out, and the designers drew on the experience of the SnapTax division, which had hired an editor from People magazine to help translate accountant-speak into real-world language.

Accounts receivable became "Money In," accounts payable, "Money Out." They pared back 125 setup screens to three, and 20 major tasks to six essentials. They spent days worrying about the packaging, knowing that to this audience, something labeled "Simple Accounting" was an oxymoron.

Above all, they subjected their work to the demanding standards of Intuit's usability lab, run by Kaaren Hanson. To get a product by her, users must be able, 90% of the time, to accomplish the tasks deemed most critical.

It's a draconian standard. But "if our goal was to make it 'as easy as we can,'" Hanson says, "we wouldn't be as successful as if we had set a concrete number."

The Simple Start team thought they had nailed the user-interface problem after their third iteration of the product got rave reviews for its look and feel. But task completion results from the lab were dismal.

The launch was delayed for months while the team reengineered the tools until they measured up.

The additional time was worth it. Simple Start--a product with 15 years of sophisticated QuickBooks code lurking behind an interface even a Luddite could love--sold 100,000 units in its first year on the market.

Even better, reviews from target customers indicate that Intuit hit the mark. Ken Maples, owner of a tiny flight-instruction school in Cupertino, California, summed it up: "It's easy to use. It's got everything I need and nothing more."

Ah . . . just enough. Good. Somewhere, Milton Glaser is smiling.

Linda Tischler is a Fast Company senior writer. Jennifer Reingold contributed to this story.

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