Hey but HOW do I make my organization customer-centric?

My good friend, Marketing Director at a global consumer brand asks me casually. A simple question, which begs for a solid answer. Because it is so fundamental if you want to build a truly progressive company. Customer-centricity, I reflect, is similar to Big Data and the other buzz words and teenage sex (everybody talks about it, few really know how to do it, etc etc). 

I know the answer is in Clayton Christensen’s 'Competing Against Luck', the book about what causes growth and how to create it. For a while I want to summarize and share, and Clay's passing away triggers me to do it. So here, a stab at passing on his learnings, borrowing many of his phrases. But first, a few words on the WHY and WHAT.

Let's be brief about the WHY. 

It is to see something others have missed, and then run your company to nail fulfilling that need. Avoid competition. Or, be damned hard to copy, as you create the experiences that customers seek purchasing and using the product or service, then deliver through reliable processes every time, better than others. That is competitive advantage, hard to copy. Why Uber won, and former competitor Taxi Magic's founder starts his keynote speech with:

"I could have been a billionaire".

Let's leave it at that. 

OK, more on the WHY, as corporate performance will be so much better, because you will:

• Inspire employees as they see how their work enables real people to make real progress in their lives

• Enable fast, distributed decision-making (problem solving, customer service)

• Align resources against what matters most and free resources for what does not

• Stop conflicting arguments, as 'what customers hire the company to do' will always be common ground for opposing teams

No need to debate the WHAT either.

Jeff Bezos talks in his famous 2016 shareholder letter about 'True Customer Obsession'. So does the rest of us. The word 'customer-centric' can be found in almost any strategy paper or annual report we come across (just as 'innovation', 'disrupt', 'digital transformation',  soon replaced by 'AI' and 'Carbon Neutral'). But there is also nuance. The founder of one other of the '4 trillion-dollar club' vowed against customer research (you know who). So did Sony's Akio Morita in another decade, when overruling market research against the Walkman. For a good reason, as Scott Anthony, Christensen's life-long colleague and friend points out: 

"The customer deceives. Existing customers often serve as poor guides to the future, as they tell companies to provide them better, cheaper versions of what they currently providing"

 SO REALLY, HOW? 

There are 3 essential steps becoming a truly customer-centric organization. Each with concrete actions. Not an overnight feat, but a do-able transformational journey.

Step 1: Uncover and bring to life the most important customer 'jobs to be done' your organization exists to solve. Then, create the desired experiences 

The customer ‘job to be done’, is the progress the customer is struggling to achieve in a particular circumstance. "Help me to quickly and conveniently serve high-quality coffee @home and impress my friends", something which was hard, perhaps impossible, before Nespresso. It forces to think in problems to solve, not products. Introducing jobs to be done as a common language will help people understand what causes the consumer (B2C), or customer (B2B) to 'hire' your company's product or service.

Airbnb for example uncovered the job of "having a place to stay allows customers to be someplace so they can participate in something in which they want to be part —and offer a more authentic local experience". Then, the company identified and storyboarded 45 emotional moments for hosts and guests.

Understanding the job will not only help you decide what should be in / out the product or service, it will also help you to communicate in the customers' language, not jargon (remember iPod's 1000 songs in your pocket?), and help you find new sales channels.

Sounds easy, yet you will stumble upon a skill that is rare at corporates (which is one key reason why corporates 'get disrupted'). Having worked with the world's largest consumer goods companies, banks, and chemical companies, I noticed that many do not have an overview of customer jobs ready, prioritized, and fully understood in terms of circumstances of the struggle, the barriers, alternatives (not just direct competitors!) and what defines performance choosing one over the other. Running an ideation session for new propositions, or validate new products, will feel like pulling teeth. During one such session I facilitated, the team brought in a new drinks device. With huge potential, IF we were to apply it to the right unmet customer job to be done. Unfortunately, the team did not let go of the internal job of increasing on-the-go consumption, thereby excluding interesting unmet customer jobs in for example home or bar circumstances. Institutionalized is the use of (quantified) market research, asking 'what customers want', whereas it should be known by now that customers cannot articulate what caused them to buy something. This 'detective' skill, of investigating, piecing together a complicated story, with all its emotional richness, is often absent. When sharing my frustration after one of those pulling teeth sessions with this FMCG’s Innovation Leader, he readily acknowledged

"Our marketeers have forgotten how to do real marketing"

So, take the following 5 actions to identify and live key customer jobs:

Revamp your consumer insight by training or hiring people with jobs to be done methods (see the Milkshake story, and http://jobstobedone.org). Then, review your current research with a job to be done lens, after which, go out, investigate, and develop an even richer 'job spec' which make you understand, fundamentally, what causes customers to buy your product (or not). This is a tedious, but hugely rewarding activity, the key to all the benefits described above

1. Define the corresponding experiences (customer journeys), addressing the pains & gains and the forces compelling & opposing the customer's change to the new solution

2. Consistently communicate the most important customer jobs, and lead by example. When engaging with customers and employees, ask the questions to continuously uncover the full customer job spec and corresponding experiences

3. Bring to life the jobs and journeys in office (think of the Airbnb storyboards, customer stories, etc.) and conduct sessions to ensure key jobs are broadly understood

4. Adjust your (unit's) mission statement, internal & external communications to ensure the customer job is included

Step 2: Maintain your organization structure, but re-shape your processes and KPIs to fulfil the customer experience and nail the job  

The good news: You will not need a large-scale reorg, as traditional structures, your silos, do have value. So avoid the org chart trap of spending countless debates and 6-figure consulting fees of re-drawing boxes and lines. What matters most is processes: How different parts of the organization interact to systematically deliver the experience which nails the customer jobs to be done. Moreover, what get measured gets done, use KPIs that matter for the customer. "We always start with the customer and look at all the metrics that matter for the customer", says Amazon's VP of International Retail Diego Piacentini. Finally, as lubricant to the processes, adjust your culture, using symbols and behaviour to promote desired behaviours.

At C&A Brazil for example, where campaigns with Gisele Bündchen (Poderosas) ensure a #1 position in the Brazilian apparel market, a chair (or throne) for 'Ella' (her) is reserved at all cross-functional team tables. To remind we create an experience for her to be acknowledged, for the strong woman with economic power in Brazilian society that she is. 

So, take the following 3 actions to align your organization to the job:

1. Set up and integrate the right processes, no need to change structure

2. Adjust your process KPIs to measure what matters for the customer, as what gets measured gets done 

3. Embed jobs centricity in your culture over time, actively changing highly visible symbols and behaviour

Step 3: Keep a clear eye on the job by changing business review meeting agendas and metrics input, avoid the 'data trap' 

Simon Sinek in ‘Start with Why’ points at a typical phenomenon in any large company. He calls it 'the split', when the organization veers off the Why, and starts to focus on the What.

The split is almost unavoidable. Once products are launched a faucet is opened with product, customer, financial and competitor data.  This data is loud. Managers feel an understandable sense of reassurance when they ship their attention from the hazy contours of a story of struggle (the customer job) to the to the crisp precision of a spreadsheet. That is where the attention goes, not the customer job. And then there is the problem that data has an annoying way of conforming itself to support whatever point of view we want to support. We all learn this at the first (or perhaps second) statistics course, yet goes neglected. The risk is only getting bigger with the rapidly increasing availability of transaction data from Direct-to-Consumer business and advanced BI systems.

Simon Sinek thus understandably advocates to create customer-job related data, by implementing metrics for progress against the company's mission, purpose or cause. To keep the eye on the job. Heidrick Consulting's Scott Snyder points at Waze for example:

"Waze gives people time back in their lives, it celebrates how well - roughly 60 hours per year per customer"

What you do want to do with the data, is to signal anomalies, in particular the positive ones, as a useful trigger point to start investigating what causes the unexpected. This will provide clues about different uses and therefore growth opportunities, as Peter Drucker famously mentioned "the customer rarely buys what the company thinks it's selling him”.

Besides the data risk, companies typically follow the path of least resistance to grow existing customers, solving a broader set of jobs. As opposed to staying focused on solving the core job better. This leaves them vulnerable to others who focus on a single job, and do it well. Rings a bell in any industry that is currently being disrupted, banking for example, anyone?

So 3 actions to take to keep a clear eye on the job in business reviews:

• Redesign your typical business review meeting agendas, rebalancing the time spend between typical retro-active and forecast ‘business review’, and actively discovering and prioritizing ways to serve the customer jobs better (using data anomalies as a trigger point)

• Change your KPIs & dashboards to balance data (qualitative and quantitative) between company performance and customer job fulfilment

• Question (in strategy sessions) whether your company focuses enough on serving the single job better, as opposed to wrongfully pursuing (short-term) growth by fulfilling multiple jobs for existing customers

That’s it. A view on the HOW of customer-centricity. I am sure this can be sharpened further, for example with other excellent sources such as ‘ The Customer Centricity Playbook’ by Fader and Toms. As we are all in learning modus for the perfect answer in different circumstances, I welcome your feedback and stories to share! 

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BUILDING TRULY PROGRESSIVE COMPANIES

My drive is to help leaders build truly progressive companies, as today, too many corporates and smaller companies are not, they stagnate. More positive impact on people, planet, profit is within our reach. The organizational and psychological paths of least resistance leading to stagnation, and ways to break these, are all codified yet not known enough. True progress will come from higher awareness, broader application.

(*) Progressive -- Cambridge English Dictionary

Adjective -- Progressive ideas or systems are new and modern, encouraging change in society or in the way that things are done

Noun -- Glasses with special lenses that let you see things clearly at different distances.

DISCLAIMER

The points in this article are drawn from ‘Competing against Luck’, by Clayton Christensen, and work by Peter Drucker and Simon Sinek, and personal experiences as an entrepreneur and consultant. They do not represent official viewpoints of the firm employing the author, neither does the author own any stocks or financial instruments of companies mentioned. 

GREEDY FOR NEW THINGS

Ikea is no longer just a furniture company, according to fastcodesign.com. The company is partnering with Adidas, Lego, and Sonos to sell you everything.

Well, the latter point may be overstated, it did trigger a thought or two about SURVIVAL: RENEWAL is the key. Our human bodies survive through cell renewal. We as professionals survive by learning new skills, dropping the old. Companies survive, stay relevant by constantly renewing themselves, as Management guru Peter Drucker advocated, becoming "Greedy for new things", which includes a policy of systemic abandonment (which by the way, speaks for the much feared ZBB cost management, another topic).

A few weeks back at Transformamus, the Business Transformation conference in Zurich, Philipp Welte, Vorstand Hubert Burda Media, a successfully transforming print-to-digital media company, mentioned a seemingly arbitrary yet fundamental change in his working style. He adopted the standing table, to which he shared a quote not to forget:

“When man sitzt bleibt man stehen” (when you sit you stand still).

This reminded me of encountering Anders Dahlvig, former CEO of IKEA in his “office” in 2008 – at a standing table in the middle of the open office space. This company truly is different and DESIGNED TO SURVIVE

1. Purpose-led: "To create a better everyday life for the many people"

2. Consumer jobs to be done focused: The products above for example are meant “to make it even easier to throw an impromptu party.”

3. Confident and driven to timely experiment to remain vital and relevant.

There is an increasing awareness of the code for being "designed to survive", well laid-out by Peter Drucker and later Clayton Christensen in their respective work. A number of founders create DNA similar to IKEA for when it will be no longer founder-led, and CEOs are increasingly readying their company for innovation at scale. Good times ahead!

Criminals have means motive and opportunity - Innovators do too.

A former colleague once lightened up the arduous appraisal meeting presenting a critical 'up or out' evaluation as a criminal case: Did that person have the means motive and the opportunity to do what we expect?

Bigger, more disruptive ideas are expected these days.

Finding new sources of growth is a must, to close the growth gap for shareholder value, or, to survive. Depending on the life stage one is in. However, in conversation with clients we hear that their organization "just generates incremental ideas".

There is a huge gap between aspiration, and the reality.

Companies are in hyper-activity mode: Everyone wants to work with a startup and sends innovation scouts to the Silicon Valley. Corporate VCs, hackathons and start-up competitions pop-up left and right. The innovation theater in full swing. But no results. Real innovation is different. Moving forward big ideas can be irritating and confronting. Going against established policies and wide-held believes infuriates people, as did Galileo Galilei’s heliocentric models. True innovation will be questioned, even from your closest kin. It can be painful, scary, messy, full of dead ends. Should we start a riot with uncertain outcomes? No, innovation is focused and structured creativity of the kind architects apply when envisioning landmark buildings.

So, how do you create co-conspirators in your innovation coup? Give people the means motive and opportunity to act with you, for you. Here is how.

MEANS

1. Hand out the tools to find unmet customer problems.

It may sound trivial, but for many companies, in B2B in particular, having a dialogue with the customer about their job to be done does not happen. To quote Theodore Levitt, “People don’t want to buy a quarter-inch drill, they want a quarter-inch hole." The right questions need to be asked (5x Why). New words are to be learned to even express what we’ve learned: Jobs. Circumstances. Hiring criteria. Workarounds. Barriers to consumption. All critical to explore the land of unsolved needs.

It was the biggest revelation from a participant during a joint session hosted by Clayton Christensen in Boston last summer. Crudely summarizing Clayton: "...In B2B, it is simple, your customer’s job is to make money. Ask him how he can make more money" The participant, a former global Key Account Manager, then revealed that the question was never asked at his company.

A structured approach to overcoming this, is the working backwards process as applied by Amazon. Employees submitting an idea need to file a one-page press release describing the customer problem and how it is solved in such a way that it is understood by ordinary people. This forces tech-savvy engineers to ask the right questions, to listen and observe and find how they can be of superior service to the unmet needs of their customers. It drives people into falling in love with the problem, not one specific solution.

2. Teach people to tell a captivating story

Start with a common innovation language. Once language is set, master the art of storytelling. Not long ago I met with engineers from one of the world’s leading oil exploration companies. They were full of brilliant ideas. The ideas rarely received management approval. Business opportunities were lost. The engineers described technically ingenious details and held lengthy presentations on all potential risks. A different tack was required. All great stories have a well-known formula: The situation outlines the environment of your plot. Enter the villain providing the complication, the customer problem to be solved. This is then resolved by the white – or black – knight, your solution. Three simple steps to build the story, done.

MOTIVE

3. Inspire by purpose

Organizations transforming the world explicitly state their mission to do so. It is the source back in the day at NASA, where a janitor confided to John F. Kennedy “I work here Mr. President to put a man on the moon”. And would Tesla ever be shaking up the established automotive industry without the ambitious vision to “accelerate the world’s transition to sustainable energy”? And how about Dove's "inner beauty", triggering the tear-jerking Dove Beauty Sketches? A clear motive calibrates the compass needle to pull peoples’ thoughts and activities to a distant vision. It is what gets people to do the impossible. Oh, and this is not just ‘a millennial thing’

“That business purpose and business mission are so rarely given adequate thought is perhaps the most important cause of business frustration and failure”

Peter Drucker, 1973

4. Guide by well-defined search fields.

Would you know where to search if your lighthouse is called “block-chain”, or “digital disruption”? This may sound trivial, but I regularly see teams struggle with this. Instead, as I observed at a chemicals manufacturer, define the sources of future growth as loosely quantified Strategic Opportunity Areas: the intersection of a large customer group, a customer problem worth solving, and a potential technology and/or business model pointing at a possible.

5. Encourage not discourage.

Build an atmosphere that honors the hard work necessary to succeed in the stony, iterative approach to real transformational ideas. The following three components build such inspiring environment:

• Provide clear goals & boundaries ensuring teams work on problems and solutions that are on strategy and avoid the pursuit of fruitless paths. I once sat through a day of project reviews on which people directed their entire energy over the past six months. Half of those presented were shut down by Management for reasons that could have been clear from the get-go. Some tears, opportunity lost. Define therefore, what is desirable, what is off the table, and what can be discussed.

• Promote de-risking of critical assumptions and expect setbacks that can be corrected by high-velocity decision making correcting for mistakes before they become hurtful. Jeff Bezos in his 2016 Shareholder Letter explains it all.

• Show from the top that innovation is about “to keep learning and improving” as Microsoft’s Satya Nadella shared per email to his company, immediately after a AI team had to shut down an out of-control chat bot.

OPPURTUNITY

5. Review explicit, and implicit idea prioritization criteria active at your company.

Most managers follow a set of values, including their own incentive schemes, that result is short-term margin oriented thinking. The idea does not make it to the CEO who might have a different perspective. Thus, the present cost structure determines business cases and limits opportunities to take on exponential growth journeys. I find this a great insight in how companies operate, as vividly described in Clayton Christensen's 'The Innovator's Solution'. Also, it is safer, cheaper, and requires less efforts to just come up with incremental improvements, than game changing products. An appliances executive confined to me recently that:

“ Only troubled BUs come up with really new ideas as they have nothing to lose – all others continue to develop the next version”.

Another example: The CMO of leading Consumer Goods company mentioned that re-balancing financial, NPV driven thinking versus consumer job orientation is one of the critical challenges facing the company today.

6. Enable interaction with strangers.

The magic happens at the intersections of different, driven people searching for new endeavors. Companies pursuing strategies to become agile radically redesign their office layouts to encourage seemingly random meetings. Classic examples are Steve Job’s famous Pixar Studios, designed for people to meet spontaneously, or the Impact Hub network where entrepreneurs can co-work and sharpen their emerging business plans. GE merged these ideas and invites university staff and students alongside with entrepreneurs to visit and collaborate on inspiring ideas at GE FirstBuild.

***

Following these ideas, your colleagues become partners-in-crime to spark truly disruptive innovation ideas.

Concluding with a quote within the theme:

“You know my methods. Apply them,” - Sherlock Holmes.