Til forsiden

Source: The author - Bruce Temkin - is vice president and principal analyst at Forrester Research, with a focus on customer experience.

Despite the economic difficulties in 2009, we’ve seen a significant uptick in real customer experience efforts. What do I mean by real? Efforts which address systemic issues like poorly designed interactions, broken processes, outdated business rules, insufficient customer insight and cultures that are far from customer-centric.　

2010 will likely be an even more active year for customer experience. While many companies will make substantial progress, others will falter. Here is some advice for keeping your customer experience efforts on track:

1. Drop the executive commitment facade.

It’s very easy for executives to say "customer experience is important." But it’s much more difficult for them to dedicate the time and energy required to make it a real priority. So in 2010, executives should either get actively involved in customer experience transformation or drop it from their agendas.

Start here: Develop a customer experience dashboard and manage the results with the same energy that you manage financial results.

2. Acknowledge that you don’t know your customers.

When market research teams require long lead times and expensive projects to answer questions about customers, too many organizations go without this insight. But the path to customer experience success requires significantly deeper customer insight. So in 2010, companies need to develop voice of the customer programs that provide ongoing and continuous access to customer insights.

Start here: Create a voice-of-the-customer program with a cross-functional team that focuses on four "LIRM" components: listening to customers, interpreting the feedback, reacting to the insights and monitoring results from actions over time.

3. Keep from getting too distracted by social media.

Twitter, Facebook and other social media sites may seem sexy, but they aren’t the only channels for customer feedback. Other channels like comments on surveys and calls into the call center can often provide even richer insight. So in 2010, companies need to learn from social media feedback, but not overreact to it.

Start here: Treat social media as one of many listening posts in a comprehensive voice-of-the-customer program that examines both structured and unstructured feedback.

4. Stop squeezing the life out of customer service.

My research shows that consumers care more about good customer service than they do low prices. It also turns out that many customer service interactions are critical "moments of truth" that drive customer loyalty. But companies often treat customer service as an unwanted stepchild, focusing almost exclusively on aggressive cost-cutting. So in 2010, companies need to start viewing customer service as a strategic asset.

Start here: Measure customer service organizations based on how effectively they help customers instead of efficiency metrics like average handle times.

5. Restore the purpose in your brand.

True brands are more than just color palettes, logos and marketing slogans, they’re the fabric that aligns all employees with customers in the pursuit of a common cause. They represent a firm’s raison d’être. Unfortunately, many companies have lost this sense of purpose in their brands. So in 2010, companies need to redefine their brand and embed it in the hearts and minds of all employees.

Start here: Translate your brand into promises you will make (and keep) with customers across every key touch point.

6. Don’t assume employees will get on board.

Employees are often the most critical element of any customer experience effort. But firms can’t just hope that everyone will participate in these change initiatives. So in 2010, companies need to actively focus on engaging employees at every level across the organization in their customer experience efforts.

Start here: Communicate (a lot) about "why" customer experience is important and allow employees to participate in defining "how" to make improvements.

7. Translate customer experience into business terms.

My research uncovered a strong correlation between customer experience and loyalty. An average $10 billion company can generate $284 million of additional revenues from customer experience improvements. But most companies don’t fully understand the link between customer experience and business results. So in 2010, companies need to identify how customer experience impacts their financial results.

Start here: Engage the CFO to develop a model which shows the impact that customer experience has on customer loyalty.

To the recent conversation about innovation metrics – ways of measuring and evaluating successful innovations, innovation processes, and cultures of innovation – Michael Schrage adds an interesting twist.  Schrage, best known perhaps for his 1999 book, Serious Play (about using games for group innovation and learning), recently published a fascinating article in Booz & Co.’s journal, strategy + business:  “The Metric behind the Slogan.” 

Citing numerous examples from the recent history of mostly technological innovation, Schrage puts the cart before the horse and observes that it is as important to invent the right metric as it is to invent the right solution.  The right metric is one that demonstrates the power of the solution as existing metrics do not. 

For example – and I love this, it’s so graphic – when James Watt, inventor of the steam engine, and his partner Matthew Boulton set out to market a commercial version, they selected brewmasters (makers of beer) as their initial target market.  Observes Schrage,

But 18th-century British breweries used horses — not steam — to power the turning of their mills’ grindstones. So it behooved Boulton and Watt to recalculate their steam engines’ appeal accordingly. After a period of equine observation, Watt determined that the typical coal-mine pony could pull 22,000 foot-pounds per minute. To extrapolate this finding to a large horse, Watt increased these test results by 50 percent — i.e., 33,000 foot-pounds of work per minute — and called it horsepower.

Some historians believe that Watt overstated the amount of power that a horse can deliver over a sustained period of time. Nonetheless, his comparison of steam engine output to a team of horses working together proved to be a remarkably persuasive marketing metric for prospective purchasers, whether brewers, millers, or mine owners. Horsepower became a global standard that helped build the Boulton & Watt brand and business.

Who would have known?  And we continue to use this organic, now obsolete metric to measure the productive energy-generating output of dams, automobiles, children on seesaws, and ion-drive engines in the deeps of space.  We use the same irrelevant metric to judge the leafblowers that gardeners use to waken us early in the morning, uselessly blowing dust around -- 2/3-horsepower, a fraction of a horse -- and the overpowered luxury sport cars that waste fuel and endanger the lives of everyone on the road.  The most interesting use of “horsepower” for a positive end – achieved though an awkward horsepower conversion – is the claim by peak-oil advocates a single barrel of oil is equal to 10,000 hours (about 42 years) of human labor, one reason why we are petroleum addicted.  There certainly are enough un- and underemployed people to do much of the work that we consign to petroleum-powered engines.  But who can hitch 200 horses to their automobile?

The point Schrage makes is this:

This notion of using innovative metrics — measures that gauge the unique value inherent in an innovation as a means of marketing it — goes well beyond the traditional approach of adding new “features” and “functionality” to attract consumers to products and services. By creating fresh language for the way people calibrate the worth and efficacy of a particular idea, innovative metrics have the potential to be so intrinsically compelling — or at least so creatively marketed — that they become, like horsepower, the overriding identity of a product or brand. Which means, in turn, that these metrics should be crafted with the same singular sensibility as the inventions themselves.

Though there is a potential downside to metric innovation.  Schrage notes that “with the enormous losses sustained by so many ‘innovative’ lenders, investors are likely to think twice before they trust the metrics offered by some financial-services firms to sell their novel products and services.” 

But the risk is worth it, in Schrage’s opinion: “Indeed, as many innovators are learning, oftentimes the best way to take the measure of a new market is to create a new measure for the market.”

What new metrics suit the emerging trends in innovation management?  Besides dollars and cents earned and saved, or customer satisfaction (whatever that means), there are opportunities here.  I propose these:

• Futures foreseen and anticipated (requires first delineating “futures”)
• Corporate well being and organizational tone
• Number of clear views of possible / attractive market opportunities
• Crisis-survival rate (requires first defining “crises”)
• Innovations well evaluated, implemented successfully, and productive
• Product-cycle speed and efficacy
• Idea-induction velocity across the organization and beyond its boundaries

-- Bob Jacobson, GEMBA
 

Images: surrealmuse, Creative Commons license; Iowa Horse Fair

In the current Forbes magazine, Scott Anthony and Tim Huse of Clay Christensen’s Innosight consulting firm ask a timely question: “Do Disruptors Perform in Recessionary Times?”  Christensen, a Harvard professor, in 2003 published The Innovator’s Dilemma, a business bestseller that started an ongoing debate on the fundamental historical causes and effects of innovation in the marketplace. 

Now his colleagues have situated his theory in the context of the current financial and industrial  crisis – and not surprisingly, they find it still pertinent.  So do I.

Christensen’s theorized hat it’s emerging innovative competitors that keep industries fresh.  They do this not necessarily by vanquishing existing industry leaders but simply by challenging the leaders.  Then, if the leaders react intelligently and effectively, they too will counter-innovate and from their positions of strength, crush the upstarts and in the process, advance the field.  If the leaders don’t innovate, but try to stay with their current strategies, the new firms win and their solutions become the industry’s new standards.

Anthony and Huse present convincing evidence – real-world cases – that sustain Christensen’s theory:  disruptive firms, firms that really are “game-changers,” can do well in “recessionary times.”   They report:

In 1979, 11 such companies, including Intel, Home Depot, Nucor, and Southwest fit our criteria. Their compound annual growth over the recession between 1979 and 1982 was 22%.

Between 1989 and 1991, the sample of 11 up-and-coming disruptors, which included Best Buy, Cisco, and Charles Schwab grew revenues by 33%.

Between 2000 and 2002, 23 up-and-coming disruptors such as Google, Amazon, and Research in Motion grew revenues by 32%.

They continue,

The up-and-coming disruptors have grown in good times and in bad. Notably, the disruptive companies rebounded visibly faster and stronger after each of the three recessions.

Interestingly, the gap between the revenue growth rates of these two groups of companies has been increasing over the past 30 years. … The tendency for disruptors to outperform the market is not likely to reverse any time soon -- if at all.

Of course, not every new, inventive company is disruptive, even though it might want to be.  Being considered “disruptive” is a function of established leaders reacting against the challenger.  When they ignore a new company, it may be because they’ve overlooked it – or because customers are ignoring it, too.  There’s only one way to find out if a company is disruptive or not, and that’s for the company to take its innovations to market.  As Forbes’ editors note, “If your firm is considering postponing disruptive new projects until the economy improves, you might miss great growth opportunities.”  

According to Anthony and Hume, if a firm is potentially disruptive, moving forward with its innovations is the only credible strategy, recession or no recession.  Sowing disruption is no panacea for success, but it is a necessary precursor.

Image:  Roper Resources “Mobile Disrupter Vehicle” (this is real)

As one might have expected, along about now comes a trickle of hope that grows into the fountain of good wishes that pours into a rushing stream of positive prognostications that flows into a mighty river of business articles and eventually, books on how to manage though the crisis.      

The McKinsey Quarterly informs us, in a prelude to ”Leading through uncertainty,"” its new multi-week focus on the crisis – we may all soon be calling our times, “The Crisis” – that: 

In the coming days, McKinsey & Company will explore in a series of articles by our consultants and outside contributors the managerial implications of the global financial crisis. Today we focus on strategic responses, including how to address uncertainty and structural shocks, rethinking marketing, and how global executives surveyed by the Quarterly are coping.  

The Quarterly email lists five current articles pertinent to the theme: ·        

• Leading through uncertainty·        
• Strategy in a “structural break”·        
• The downturn’s new rules for marketers·        
• A fresh look at strategy under uncertainty: An Interview·
• McKinsey Global Survey Results 

A young friend who was reading this over my shoulder reminded me that reinventing history rather than accurately recording and critically commenting on history is an almost obsessive compulsive trait among many American opinion-leaders (and those who follow) that blots out the facts.  It leads to wrack and ruin as organization’s values, self-concepts, and collective behavior become seemingly out of whack with objective realities.    

The more we think we know about the past, but don’t really understand it as precedent, the greater the dissonance between the reinvented past and the concrete reality  -- until reality asserts itself too strongly to be ignored, repealed, or restated.  Then it’s the society that has to change; and as we know from archaeology and personal experience, it may have to change very fast.  

In the near future, GEMBA may be sharing time with several strategic design firms to discuss these and similar topics in comfortable settings and an intimate, frank and forthright manner.  “Isn’t all innovation fraught with uncertainty?”  we may ask, and we’d be right.   This suggests a new role for successful innovators as leaders in their respective organizations and domains of practice, men and women for whom uncertainty has been an almost constant companion and for whom innovating one’s way out of a predicament is just in a day’s work.   

No doubt there will be more reactions to the crisis, which bodes mixed futures for innovators. 

http://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Leading_through_uncertainty_2263

Public Webinars on “New Online Research Approaches to Product Naming in the Ideation Process,” December 4, 2008

The Front End of Innovation blog (associated with the IIRUSA and PDMA “Front End of Innovation” conference held in the early part of each year, this year in Monaco and Boston) has announced two public webinars, one in Europe and one in North America, entitled “New Online Research Approaches to Product Naming in the Ideation Process.”  The webinars take place on Thursday, December 4, 2008.  You can register for the webinars here.

The blog offers this summary description of the webinars (more details are available in the blog posting):

Naming can be a particularly challenging part of the new product development process and there are different research needs depending on what stage you are at in the process, e.g., ideation, evaluation or selection. In this webinar, using case study examples, we will explore three innovative online techniques that address the different challenges in each of these stages.

IDQ, an online interactive ideation process in which consumers create and evaluate names in real time in response to a product concept.

eCollage, a highly engaging online quantitative exercise in which respondents create an online collage that communicates what a name means to them and the imagery and associations it evokes.

Configurator, a unique building platform for gaining quantitative understanding of naming options in context.

What you will learn by attending:  New, fast and effective research methodologies that address different types of research goals in naming.

Leading the webinars is Brendan Light, SVP, Research and Product Development, BuzzBack Market Research.

Also in the same series, available for recorded playback, is the webinar, “Top Quartile Practices in the Front End,” presented on November 19, 2008, by Front End of Innovation Europe Keynote Speaker Professor Steven Koen of the Stevens Institute of Technology.

New Facebook Group: Management of Serendipity

Facebook group on Serendipity Management
http://www.facebook.com/group.php?gid=6655331989

Serendipity is one of the great phenomena of human life. What is meant by it? "You are eagerly looking for something, and while looking for that, you discover something else which turns out to be much more valuable to you, than the thing you were originally looking for."

It is a fascinating thing. I have several wonderful examples of it in my life so far. I am writing a book called "Serendipity Management" and if some of you will share the great experiences you have had with serendipity in your personal or especially in your business life, please share them with us here.

We can together share tremendous positive experiences here from life-changing situations, where we have changed our lives and businesses by “being aware and having an open mind, open heart and open will,” as Otto Scharmer describes it.

Let's respect serendipity and remember that “Fortune favours a prepared mind” (Louis Pasteur).

Innovation from Constraint (the extended dance mix)

Ethan Zuckerman, My Heart’s in Accra, November 10, 2008

http://www.ethanzuckerman.com/blog/2008/11/10/innovation-from-constraint-the-extended-dance-mix/

…So let’s try a challenge based on innovating from constraint. Let’s design a cooling system for market sellers to use to keep their vegetables cold. This is an important task if you’re a small-scale farmer in a hot country - as soon as you pick your crops, they start wilting and become less valuable by the minute. If you can keep your tomatoes, cabbages and carrots cold, you’ll sell more for more money, and you’ve got a better chance of feeding your kids and sending them to school.

Lots of people try to solve this problem by looking at inexpensive electric refrigerators. After all, dorm-sized refrigerators are already pretty cheap - maybe we could scale one down, remove some parts and make an “appropriate technology” developing world version… coincidentally opening up a whole new market for Maytag or Haier.

But that’s a poor solution to the problem. Even if you can reduce the cost from $100 to $30, it’s still way to expensive for the market you’re trying to serve. Plus, your market sellers don’t have electricity either at home or at work, so you need a generator - expensive - and diesel - expensive. And even if you can line up the generator, the diesel, the fridge, none of these things are made locally. If they break, you’re shipping in parts from overseas and asking local mechanics to repair technology they’ve not often worked with.

Our constraints: no electricity, local materials, built and maintained locally, with a price point under $5.

Here’s how you do it. (Here’s how you do it if you’re an extremely creative and innovative Nigerian engineer.) Make two clay pots, one smaller than the other so it can fit inside it and leave a gap. Fill the gap between the pots with sand. Thoroughly wet the sand. Cover the top of your apparatus with a wet cloth. A couple of times a day, wet the sand and the cloth.

It won’t turn the mountains on your can of Coors Light blue, but it will keep your vegetables below 20C even if it’s 45C outside. In fact, the zeer pot works better the hotter and drier the day is. It uses the principle of evaporative cooling. As the water evaporates, the more energized, fast-moving molecules evaporate first, leaving the cooler, less-energetic ones behind. Your molecules left behind are less energetic on average, which is to say, cooler… and the vegetables inside   that inner pot will stay cooler too.

Hard times could be the best times for innovation and invention.  That’s the conclusion reached by Paul J.H. Schoemaker, research director for the Mack Center for Technological Innovation at the University of Pennsylvania’s Wharton School of Business.  In “Why an Economic Crisis Could Be the Right Time for Companies to Engage in “Disruptive Innovation,” in the November 12, 2008, issue of the Knowledge@Wharton newsletter, Schoemaker suggests that for some companies, the economic crisis can actually provide an innovation platform.

The crisis has multiple impacts.  Loss of revenue and profit will at first instill a cost cutting mentality, which is not good for innovation. If the patient is bleeding, you need to stop that first.  Then, however, a phase starts where leaders ask which parts of their business model are weak (and perhaps unsustainable) and that, in turn, can lead to restructuring and reinvention.

Schoemaker also cautions against too much caution -- over-reliance on incremental innovation versus transformative, or "disruptive," innovation. In innovation circles, the two have come to be differentiated as "little i" and "Big I" innovation.

“The largest gains in business come from more daring innovations that challenge the paradigm and the organization," Schoemaker says.

The article goes deep into disruptive innovation, its occurrence and its outcomes.  Along the way, the article throws out this little teaser: “Finland is merging its top business school, design school and technology school to create a multi-disciplinary ‘university of innovation’ next year.”  A techno-innoversity!

What makes Apple so successful as a product and service innovator, as well as a design paragon?  Not what you think, if Mark Ury, writing on The Restless Mind blog, March 12, 2008, is right.

Ury has the interesting theory:  “What makes Apple special isn’t design. Or process. Or talent. It’s fear. Fear of the man who is a riddle, wrapped in a mystery, inside an enigma. (And sheathed in titanium.)”  Ury, of course is speaking of Apple co-founder and CEO Steve Jobs, famous for his occasional…ummm…flare-ups. 

Lovers of French cinema will recognize a paradox at work. While pain is something we fear, we’re also attracted to it. Apple staff may fear humiliation from Jobs, but they’re bullish about rising above it—of not being humiliated (which is tantamount to praise at Apple). That bravado can stimulate neurons to do wonderful things.

Ury offers as an update an article in Wired magazine, April 18, 2008, by Wired news chief and Apple biographer Leander Kahney, “How Apple Got Everything Right By Doing Everything Wrong.”  Kahney observes,

… Jobs’ employees remain devoted. That’s because his autocracy is balanced by his famous charisma — he can make the task of designing a power supply feel like a mission from God. Andy Hertzfeld, lead designer of the original Macintosh OS, says Jobs imbued him and his coworkers with “messianic zeal.” And because Jobs’ approval is so hard to win, Apple staffers labor tirelessly to please him. “He has the ability to pull the best out of people,” says Ratzlaff, who worked closely with Jobs on OS X for 18 months. “I learned a tremendous amount from him.”

Innovation, the hard way.

The McKinsey Quarterly, published by the global consulting firm, is looking for a few good street-level examples of innovation.   The notice appears in the November 2008 issue of the Quarterly.

The editors take their inspiration from an interview with Doors of Perception founder John Thackara in the forthcoming McKinsey book, What Matters, a collection of short essays by cultural and business leaders on big issues (like climate change and healthcare). 

According to Thackara, “If you want to find solutions that make a difference, the best place to look may be the community center down the street.”  To which the editors respond,

So we’re inviting you to send us digital images of things that represent innovation in your part of the world. We will reproduce a broad sampling of these images in What Matters as a photo-essay and make them available online.

Please send your images to us at innovation_matters@mckinsey.com. Tell us what the innovation is in your photograph, and please limit the size of the image to 5 megabytes. 

Full details appear on the Quarterly website.