Does anyone take seriously that poster about customer centricity hanging over the copier?
“Centricity” implies focusing your attention on someone and responding in a relationship-nurturing way.
That ex you dated in school and who demanded your attention all the time didn’t work out. Most of us have to divide our attention among our siblings, spouses, children, in laws, bosses, colleagues…and customers.
So, when someone hangs a poster in the copy room that says, “We are Customer Centric,” I have an out of body experience. I envision myself standing in a Dilbert cartoon.
This brings me to my first point.
No one can be customer centric all the time.
If you were, you’d get fired.
Our job descriptions tell us how we fit in the organization. Customer centricity might be mentioned. But, the bulk of our job responsibilities consist of responding to colleagues, bosses and deadlines. Not customers.
Imagine a coworker in marketing, IT, accounting or production who is customer centric all the time. You’ve repeatedly asked him for that report. He’s not actually ignoring you. It’s just that he’s customer centric. Not you-centric. His boss gets the same treatment.
How long do you think it would take for this guy to be voted off the island?
The only exceptions might be sales people and customer service reps. If I have to borrow someone’s watch, I’ll hunt around for a Timex in sales or customer service. Those employees deal with customers every day and know the most about what they go through.
Back to our job descriptions…
We have to schedule client executives for slivers of customer centricity one to three months in advance. That’s because executives’ calendars are chock full of organization centric meetings, projects, emails and reports.
It takes weeks to schedule a workshop. This brings me to my second point.
Customer centricity happens for a few, rare moments. You have to make the most of them.
If this were easy, everyone could do it. I’d be out of a job. It’s not easy. It’s hard because we have limited time to make progress at each step.
We also need to apply several skills simultaneously: customer experience research, change management, strategic planning and business process design, for example…which brings me to my last point.
Delegating customer centricity to people who can’t advance innovation efforts in compressed time frames won’t get your organization very far.
Often, customer centricity is assigned to a functional area with a deep, narrow portfolio of skills. Marketing research, customer service or human resources are common assignees. The new “customer centricity department” will put more meetings on your calendar. They may hang nice posters in your copy rooms. They may report on their heroic efforts, which will delight your executive team.
But, their chances of marshaling organizational resources to innovate anything meaningful to customers are remote…possibly near Pluto.
Customer centricity is a momentary, shared state of empathy with customers. Creating and leveraging these moments depends on unique combinations of skills and methods. They also require that the highest levels of leadership be engaged and energized by rapid progress.
If you’re committed to customer centricity as inspiration for improving your customer experience, please contact me…when you can find a minute.
In the Cleveland Plain Dealer this Sunday, Mary Doria Russell writes about Imagine, a new book by Jonah Lehrer about how creativity really works.
Lehrer writes that creation isn’t a linear process. Innovators are ordinary people who encounter predictable walls. Rather than beating their heads against them, they quit. They find ways to go around them.
Everyone encounters barriers.
Successful innovators who’ve hit walls have something in common: They quit.
They didn’t quit their jobs. They gave up on unproductive lines of reasoning. “They really, truly gave up, often howling in frustration,” Lehrer says.
That’s when innovators “go forward by stepping sideways.” They quiet the linear, rule-constrained left side of the brain. Then, they unleash the conceptual, imaginative, right side. Your right brain soars with your best ideas when you’re just dozing or standing in the shower. The right brain makes unexpected connections. “Suddenly, you just know.”
Another Sunday paper described a painter who abandoned the conventional rules of the art game and built a $100 million a year business. His name is Thomas Kinkade, “painter of light.” Kinkade’s works hang in one out of 20 American homes.
The Sunday New York Times describes how Kinkade imagined a new path to success. He ignored the art critics, targeted consumers who rarely bought art and bypassed art gallery distribution channels. He chose instead to sell his sentimental, mass-produced paintings directly to consumers. He marketed his works through franchise galleries, cable television and online.
If you’re not advancing on the path you’re on, quit. Imagine another route to connecting with customers.
Successful innovation is about connecting with buyers. Kinkade’s lateral thinking coincided with reconnecting with his faith and others who shared it. He said, “People who put my paintings on their walls are putting their values on their walls: faith, family, home, a simpler way of living…they beckon you into this world that provides an alternative to your nightly news broadcast.”
Thomas Kinkade was one man who thought differently. What about when you’re one manager among a team of managers?
Getting managers to agree on a lateral route to innovation requires a special combination of skills.
After you have your eureka moment, how do you get others to follow along? Chances are that others have similar ideas. But, for reasons related to decision making processes or office politics, those ideas don’t get a fair hearing.
Others with different ideas probably feel similarly frustrated. This isn’t a deliberate or even conscious stifling of creative thought. It’s a natural outcome of diverse people working in one organization. There’s a lot of pressure on company leaders to keep everyone’s oars in the water, rowing in the same direction.
As a result, most leadership teams’ approaches to innovation could be described as “satisficing”. They suffice to satisfy key influencers within their organizations. Satisficing usually results in tweaks that customers don’t perceive or don’t care about.
Has satisficing happened in your organization?
Satisficing is a normally occurring barrier to company innovativeness. It has its own inertia. It usually needs to be acted upon by an outside force to change it.
In upcoming posts, I’ll talk about how leadership teams have acquired and applied three critical skills to overcome satisficing and get innovative in ways customers care about:
inhabiting their customer’s frame of reference
Identifying lateral innovation opportunities
orchestrating the delivery of powerful customer experiences
What do you think? Could more companies stimulate innovative thinking? What’s holding some back?
Using a variety of discovery methods, Whyze Group identified sixteen opportunities to improve the customer experience.
A customer experience management audit revealed that managers knew what skus were moving and at what margins, but little about what drives positive customer experiences.
Whyze Group performed in-store cue scans at our client’s and competitors’ stores. We also conducted interviews with customers, store employees and corporate staff.
Many of the most valuable insights we garnered were through metaphor analysis. Metaphor analysis enabled customers to use images and photos describing their deepest emotions about buying and giving gifts. One key finding was that men and women differ in their gift shopping and giving habits.Through metaphor analysis, our clients discovered several meaningful opportunities to enhance the gift giving experience at relatively low costs.
In addition, our client identified numerous opportunities to improve customer experiences through revamped store layouts, staff training, compensation and return policies.
We helped managers prioritize those opportunities that would most quickly and cost-effectively enhance customer experiences and repeat business.
Cleveland, Ohio (PRWEB) June 22, 2009 — The U.S. economy may be under-performing by hundreds of billions of dollars annually due to companies that squander customer information, botch innovation and miss global market opportunities, according to a report published by Whyze Group.
The report, titled Bridging the Research-Innovation Gap, describes eleven factors that determine executives’ effectiveness in leading their companies from the mountains of customer information they collect to innovation pay dirt. It provides ways for managers at all levels to diagnose innovation challenges and implement solutions.
The report comes in the midst of an economic crisis that has raised public skepticism of many company executives. U.S. taxpayers are on the hook for trillions of dollars in bailouts to companies that, among other faults, have failed to innovate products customers want. GM’s former CEO, Rick Wagoner, was ousted by an Obama administration calling for more accountability.
Whyze Group president, Jason M. Sherman, says, “This report gives U.S. managers, investors and employees the tools to recognize barriers to innovation in organizations and respond accordingly.”
Sherman adds, “It’s in our collective interest to assure that everyone who depends on the continued prosperity of the United States participate in making us more innovative and competitive. This report is a primer for those who will make that happen.”
‘Bridging the Research-Innovation Gap’ is the culmination of eight years of analysis of Fortune 500 companies. Whyze Group audited hundreds of strategy documents and conducted thousands of interviews with executives, employees and customers. The report integrates data from the U.S. Commerce Department and observations from thought leaders at top business schools.
The report includes an analysis of how management teams waste billions of dollars on market research each year. Companies use only half of the customer information they acquire. Some customer information is misapplied.
As a result, there is little association between how much companies spend on research and their relative financial performance. Company performance is influenced more by how effectively managers apply what they learn.
‘Bridging the Research-Innovation Gap’ identifies eleven factors that determine how effectively managers apply what they learn. One example is the degree to which executives carve out fiefdoms to the detriment of their organizations. In some companies, managers try to manipulate information for their own personal gain. In others, executives openly share information and work in ways that are more aligned with the interests of customers, employees and shareholders.
Other factors that determine how companies apply what they learn are management teams’ abilities to
- Correctly identify their own blind spots
- Stimulate innovation among employees
- Identify and champion the most promising ideas
The report describes seven additional factors that determine companies’ abilities to bridge the research-innovation gap. Descriptions of each factor are followed by strategies executives can use to make their companies more innovative.
Customer experience holds the promise of profound benefits for executives who understand what the term, “customer experience,” really implies:
Your company doesn’t have a customer experience. Customers do.
The customer experience does not begin and end with your company’s “touchpoints”. Competitors’ actions, expectations set by other industries, life changes, and changes in customers’ economic, technological, and political situations all influence the customer experience.
Customers filter their experiences through their associated memories, mental models, values, perceptions, cognition and emotions.
Whether you manage it or not, your customers are having an experience with your company.
20th century management methods assure that customers will have disjointed experiences delivered by discreet silos that regard customers as “targets” (marketing), “users” (product development), “audience members” (advertising), “prospects” (sales), or “callers” (customer service).
21st century customer experience research methods, many developed by Whyze Group, surface meaningful insights into customer experiences, in accordance with the time frames and contexts in which experiences form.
The mental models of managers who spend 20 years in an industry are almost always misaligned with the mental models of customers, who may spend as little as 20 seconds dealing with you.
An authentic, deep understanding of the customer experience shifts executives’ mental models into closer alignment with those of customers and accelerates their innovations of experiences that matter.
Successfully innovating the customer experience builds on an orchestrated delivery across your company.
Sustaining a compelling experience requires that you focus on monitoring the consistency with which customers achieve their desired outcomes, not the consistency of company processes.
Whyze Group has a combined 60 years experience helping executive teams innovate and deliver compelling customer experiences. Our approach has resulted in more efficient customer acquisition, higher customer retention, lower operating costs and greater profitability. Learn more.
Many managers speak these words with the vacant demeanor of a politician regurgitating their party’s least credible talking points. They haven’t bought in, but not because they don’t want to.
Privately, they all express doubts. If you too are harboring doubts, you’re in abundant company.
Here are the two things that managers say most often undermine the journey to Customer CentriCity and what to do about them…
1. The way to Customer CentriCity is through your boss. There are a plethora of excellent writings about the influences of leadership on employee behavior and innovativeness. Your boss determines your job stability, promotability and income, not the customer. So, when the boss starts talking about moving to Customer CentriCity, subordinates quickly begin calculating the vectors between what their boss wants and what the customer wants.
Enlightened leaders create an innovation space where subordinates can gain an unimpeded view of the customer. Subordinates can collaborate, research, ideate, prioritize and design (click on each link to learn more) freely in this space. If you’ve got a good relationship with your boss, then you should mutually define this space. If not, then strap on your hip waders and wait for your boss to come up with the next great customer centric idea.
2. No firm can be exclusively customer-centric. That’s because the customer’s job is to demand the greatest value for the lowest price. Your company’s ROI has to be factored into any new products, services or customer experience that you innovate and commercialize. The optimal location for innovation is between Customer CentriCity and ROI land. Finding that location is part of the prioritization process.
We welcome your reactions, points of view and criticisms.
In this article, we examine the prevailing management belief that more research leads to more innovation.
What’s the relationship between research spend, innovation and business performance?
The Fortune 500 are by far the biggest marketing research spenders in the U.S., consuming the majority of $7 billion in research services annually. Several years ago, we hypothesized that companies among the Fortune 500 would remain preeminent from decade to decade given their advantage of large research budgets. So, we tracked them…
We started with the Fortune 500 list for the year 1990 and then looked at the list ten years later. We expected to see some churn, but not at the level we found. In those ten years, about forty percent of the firms on the 1990 list disappeared. About 200 firms had been displaced, absorbed or tanked at the hands of competitors. In the next four years, between 2000 and 2004, twenty-five percent of the Fortune 500 had churned. These were household names; GTE, Hasbro, Ingersoll Rand, Nabisco Holdings, Paine Weber and Ralston Purina. (Whyze Group internal research, 2005).
While our findings weren’t conclusive, it raised challenges to the notion that more research leads to meaningful innovation and business results.
Later in 2005, Booz Allen completed a study of the top 1,000 R&D spenders among public companies globally. Based on Booz Allen’s analysis, they concluded, “Contrary to conventional assumptions, R&D spending levels within the Global Innovation 1000 had no apparent impact on sales growth, gross profit, operating profit, enterprise profit, market capitalization, or total shareholder return.” (Bordia, R., Dehoff, K., Jurelzekski, B., “The Booz Allen Hamilton Global Innovation 1000: Money Isn’t Everything”, Strategy + Business, Winter 2005, p. 5)
The belief that there is a relationship between research spend and business performance persists, but a growing body of empirical evidence runs contrary to this perception. Another question we asked is, “What’s missing when research fails to improve business performance?”
Why Doesn’t More Research Produce Better Business Results?
We asked managers in client organizations and colleagues in a variety of research firms to give us their perspectives. Among the questions we asked was, “What percentage of marketing research findings are actually applied?” While the answers varied, the most common response from research suppliers and clients alike was, “fifty percent”.
This is consistent with what we see at nearly every client organization that has asked us to facilitate our Customer Experience Management Audit with their management teams.
Most corporate libraries contain reams of well-executed marketing research studies. Most contain nuggets of insight that seem valuable on the surface. To understand the value of these studies, we needed get a view of the context in which these studies were commissioned.
What we found when interviewing managers at these firms is that these research reports often misaddressed key issues that managers were wrestling with at the time. In some instances, we found that the research was misapplied, leading to dangerous actions.
One example was a company that had commissioned dial testing of its new TV advertisements. Dial testing shows how viewers are responding to audio-visual advertisements on a second-by-second basis. It shows emotional high and low points as the ad is being absorbed. What it doesn’t show, and what managers needed to know at the time, was how well this ad positioned the company against its competitors. The dial testing showed high points in the ads where managers wanted them and company made significant media buys. The ad tanked and was pulled at a cost of millions of dollars to this company.
Malcolm Baldrige Stocks Return 300% More than the S&P: Suggests Application of Findings is Key
Our convictions about how customer data translate into improved customer experiences and business performance coalesced further when we looked at the performance of Malcolm Baldrige National Quality Award winners.
Malcolm Baldrige winners achieve superior business results. During a ten-year period, the portfolio of Malcolm Baldrige winners’ stocks outperformed the S&P 500 by a margin of 3-to-1. The graph below compares the 10-year returns on investments of $5,291 in the S&P and in the portfolio of Baldrige award winners.
The Malcolm Baldrige Award isn’t given to companies that conduct the most customer research. It’s awarded to companies that excel at applying what they learn.
There are hundreds of questions in the Malcolm Baldrige application that pertain to how companies apply what they learn. An example of the questions that Malcolm Baldrige applicants answer is, “How do you use voice-of-the-customer information and feedback to become more customer-focused, to better satisfy customer needs and desires, and to identify opportunities for innovation?”
We even interviewed Rick Kolster, Quality Manager at Solectron, a Malcolm Baldrige winner. Rick gave us a ton of insights into what made Solectron a leader in its field. In short, there was a process by which managers were imbued not only with customer intelligence, but a means of applying it over and over again.
Over the last decade, we at Whyze Group have evolved our thinking and our services. This journal is an opportunity for us to continue learning and to share perspectives with our colleagues around the world. This particular article serves as foundation for a more expansive white paper on the subject of organizational learning and innovation.
We welcome your reactions, points of view and criticisms.
Last night, CNBC’s Jim Cramer said that Apple has become the bellwether stock that drove yesterday’s 900 point stock market rally. If that’s true, then Apple’s preeminence as a stock worthy of investor attention emanates from its strong customer experience fundamentals.
I recently bought my first Mac. So, my customer experience management audit of Apple’s customer experience is based on the experience of one–me–and my pre-purchase research about how consumers rate various PC brands and Macs.
This isn’t our complete customer experience management audit. However, it illustrates the kind of evidence we present to management teams deciding where to invest to improve customer experiences. Just like with stocks, a cogent presentation of the evidence can make your choices so much more obvious…
Computer users rate reliability, ease of use, compatability, speed and computing power among the most important infuences on their computer and software purchase decisions.
On these measures, Apple rates superior to most or all competitors.
Customer loyalty, satisfaction and likelihood to refer are higher for Apple users than for other providers. Apple users are raving fans.
PC users are defecting to Apple due to their frustrations with software bugs, vulnerability to viruses, incompatible software, system crashes and lost productivity. Consumers’ complaints about Microsoft’s Vista operating system have contributed to consumer resistance to upgrades under the Microsoft brand.
Apple store staff I interviewed confirm that roughly a third of new Apple computer buyers had never owned a Mac.
Apple stores provide local market presences, user-friendly product displays and highly trained staff. Live, in-store training sessions are provide for a nominal fee. These bolster customers’ confidence that their transitions from PCs to Macs will be short and successful.
Apple store staff are well prepared to answer customers questions about transferring files and software compatibility. Staff positively differentiate Apple by describing how Apple designs their software and hardware to work together and why Apple’s software is less prone to bugs and hacks. Store staff introduced me to two ex-PC users in the store who testified to Apple’s superiority.
Apple’s product lines, including Macs, iPods and iPhones, are literally made for each other and are 100% compatible.
Post-purchase, the same Apple store staff who sold the Mac called to assure that I was satisfied with my purchase and to answer any questions.
Computing consumption, in the form of desktops, laptops, software, entertainment and other products will continue to grow globally. New market entrants in the U.S. are mainly younger users who favor Apple in disproportionately higher percentages than Apple’s current overall market share. This presages likely increases in sales and market share for Apple.
According to stock market expert, Jim Cramer, if you were determined to invest in technology stocks, Apple would have to be near the top of your list. Choosing where to invest in improving your company’s customer experience is similar to choosing stocks. It’s not a mysterious process. With a robust review of the evidence in a customer experience management audit, the choices become clear.
Are best practices useful or merely pabulum? This question comes up frequently at Whyze Group. We’ve have never used “best practices” in our literature.
We’ve even advised our clients to exercise skepticism when presented with anything labeled as “best practices”. What works well at one company is often counterproductive at another.
Today, I received an email from a prominent market research company promoting its intellectual capital through an email with this document attached, “Developing the High Peformance Market Research Function: Study Excerpt”.
The document provides no criteria against which the best practices were evaluated. The report is a derivative of research performed by the sponsor on behalf of its clients.
This begs the following question. Why would client firms knowingly hand over proprietary secrets (their best practices) for publication to the world?
Casting my skepticism aside, I opened the attachment and began to smile as I read the best practices cited in this report. Here’s one. “Benchmark partners were aligned in their aspirations to turn market data into intelligence that can grow the business.”
As I read other best practices, I began imagining myself in a Dilbert cartoon. Here’s another, paraphrased…when companies invest tens of thousands of dollars in focus groups someone from the company should attend them.
There are no market research practices in this report that deviate from those uttered decades ago or common sense. If there were genuinely valuable secrets, the sources of those secrets risked being sued for disclosing trade secrets.
Hence, are best practices–meaning, “the practices that the best 1% are using to outperform you”–really available? Even if they were, would they apply to your organization? Of course, if your company’s capabilities and opportunities were identical to the company you’d be emulating, then they might.
As catalysts of strategic adaptation and innovation, we have a sacrosanct obligation to our colleagues, employees, our shareholders and our customers to get it right. This is our reason for being.
Getting it right starts with an honest heart, an open mind and critical thinking. If we’re really honest with ourselves, aren’t these the only starting points for figuring out what’s truly best?
Background for this post consists of 18 years working with tens of clients and doing hundreds of qualitative interviews. There are links below that will deepen readers’ understanding of qualitative research. Additionally, many pages in this site place qualitative research in its proper context within the innovation process.
Anyone can moderate a qualitative research discussion.
When I sense that someone is entertaining this notion, a scene from “A Fish Called Wanda” flashes on the anterior wall of my cranium…
Kevin Kline: “Apes don’t read philosophy.”
Jamie Lee Curtis: “Yes, they do Otto, they just don’t understand it.”
An ape can lead a focus group. It’s just a conversation. An ape can ask questions and get answers. And, that’s how high the bar is for some people who have seenfocus groups and, thus, think they can lead them.
Each year, hundreds of focus groups and in-depth interviews are moderated by…we’ll call them dilettantes to be more polite.
But, they don’t know they’re dilettantes. After all, they didn’t have to avoid losing a legal arguments or a patient. They only thing they had to avoid was inducing stoney silence among their research subjects.
A focus group costs $55 per minute. That includes facility rental, recruiting participants, moderation, analysis, report writing and M&Ms for everyone in the observation room. But, the cost of poorly conducted interviews pale in comparison to opportunity costs of lost wisdom and business opportunities, which typically amount to millions over several years.
Yes, dilettantes will continue to ask, “What would make you buy?”, of their research subjects and they’ll continue to get answers. But, for so many reasons that we don’t have time to address here, they’ll be useless and misleading answers.
So, the next time you hear someone suggest that they’ll do qualitative research interviews themselves, suggest that they take this not-so-tongue-in-cheek, “Qualitative Research Dilettante Self-Test”:
Name five characteristics that differentiate a run-of-the-mill qualitative researcher from a great one. (Read more here.)