Strategic Risks: Balancing Friction And Convenience

Critical Takeaways

  • Digital friction is the resistance created where additional steps are required for someone to start using a device or service.
  • Companies strive to reduce friction and increase convenience but this can be at the expense of security and other benefits.
  • These tradeoffs can create strategic risks and you have to be prepared to explain your decisions where these tradeoffs affect users.

 

Friction is the resistance between two objects as they move against one another. As the two objects rub together, the friction creates heat. Just like rubbing your hands together on a cold day.

In our modern, Internet-connected world, friction has another meaning: the things that stand between the users of a digital product and their goals, particularly those things that are neither intuitive nor effortless.

Users who experience too much friction in an online setting can get frustrated to the point that they may give up entirely. Signing up for an account, activating a device, ordering a product, connecting to a network or anything that the user believes should be relatively routine could be jeopardized if the process is too complicated. Too much digital friction causes heat.

However, it turns out that too little friction can also cause heat.

In April, the Washington Post’s Reed Albergotti reported that one of Nest’s smart home products had been hacked in an alarming and avoidable way:

Tara Thomas thought her daughter was just having nightmares. “There’s a monster in my room,” the almost-3-year-old would say, sometimes pointing to the green light on the Nest Cam installed on the wall above her bed.

Then Thomas realized her daughter’s nightmares were real. In August, she walked into the room and heard pornography playing through the Nest Cam, which she had used for years as a baby monitor in their Novato, Calif., home. Hackers, whose voices could be heard faintly in the background, were playing the recording, using the intercom feature in the software. “I’m really sad I doubted my daughter,” she said.

In this case, the lack of friction was the root of the problem. Nest intentionally chose not to require users to activate security features that would have prevented this type of hack due to concerns about friction. Requiring passwords, two-factor authentication, or other security measures to protect the device would have created additional steps – additional friction – for someone who wants to use the device as quickly as possible. However, this extra friction would have helped the user secure the device, avoiding this kind of issue.

In this case, Nest made a conscious decision to make it easier for users to activate their devices even though it increased the risk that hackers could gain access to the device. Nest chose more convenience and less friction over more security.

In Kith’s Reputational Risk Model, these kinds of intentional choices constitute a strategic risk. Executives have to strike a balance between convenience and friction when they determine what it’s like to start using a device or service. They have to weigh the benefits to the user of additional steps – and subsequently increased friction – compared to the cost in terms of lost sales or conversions if the user gives up because the process is too onerous.

From a reputation standpoint, the trick is to make sure that a strategic risk does not become, in the public’s eye, a preventable risk.

The public has far less tolerance for preventable risks, so the reputational consequences are much higher. In this example, Nest could have prevented hackers from gaining access to devices by requiring customers to take additional steps to ensure security. Informed customers could have made that choice themselves, but most customers did not know enough about the risks to make that decision. Instead, they followed the frictionless path Nest set out for them, requiring the minimum number of steps necessary to begin using the device. In this case, security was reduced to reduce friction.

Complexity is often why companies make decisions to reduce friction, but this complexity is also why companies fail to communicate these decisions to the public. Here we had a company’s acceptance of a tradeoff between lowering friction (not making users take extra steps to set up their devices) and security (protecting them from hackers). It doesn’t seem as though Nest communicated this tradeoff to the public, meaning that customers were probably unaware of the consequences of that decision.

A company owns its brand, but the public owns its reputation. Angry customers won’t be kind to a company when hackers gain access to devices inside their house when this could have been prevented easily.

Customers are demanding more transparency from manufacturers, service providers, and brands. Difficult though it can be, communicating the consequences of any friction-reducing measures to customers empowers them to make decisions for themselves as far as how much risk are they willing to accept. Giving them clear instructions on how to take extra steps to secure their devices lets them know how much friction they’ll encounter along the way, letting the consumer decide if it’s worth the effort.

Understand the risk of reducing friction and be prepared to defend the decision. Assume that the negative consequences of removing friction will become public, and assume that some customers, the media, or the government will become upset. Have a plan to communicate why a decision was made and how it is a net positive for consumers and the company. Hoping that no one learns about risk is not a strategy. Invariably, things get out.

Reducing friction in the user experience presents strategic risks. However, so does increasing friction. Every tradeoff made for strategic purposes could put a firm’s reputation at risk. Be prepared to defend those decisions if these negatively impact some customers. Apologize if necessary. However, also consider communicating a customer’s options up front, so he or she is well informed and has the power to make their own tradeoff between friction and risk.