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Are you a customer innovation pioneer?
Chris Lawer, Founder & CEO, The OMC Group
 In most firms, there is rarely a collective demand or recognition amongst managers for “radical” customer innovation. Instead, many senior executives tend to be “suffocated” by “defensive routine”, focused on maximizing efficiency from existing operations and resources rather than looking at big market opportunities and new concepts to create breakthrough customer value.
More often, it is the enlightened or maverick individual who has a personal motive, passion or vision to create radical change. These outsiders are typically driven by intuition and gut-feel and are often influenced by a unique combination of past experiences that powers their visionary zeal — “Novelty Addicts” as Gary Hamel calls them.
A good crisis changes everything
Yet despite a lack of zest for more radical forms of innovation, the need for organizational renewal can and often does arise when there is a “crisis” — typically in the form of a big failure in the established business model or a pressing need to address a deep-seated structural weakness (think IBM in the 1980s or Marks and Spencer in the 1990s for example).
It may come as a surprise that a crisis in the early 1990s sent Tesco spiralling (upwards) into its now decade long period of spectacular growth. Back then, the world of UK grocery retail was a different place and Tesco was suffering badly. It had falling underlying sales, slowing profit growth and many worried shareholders. To make matters worse, it was also under threat from a new breed of discounting food retailers entering the UK from continental Europe.
A decade on, the story of the transformation of Tesco from a “pile-it-high, sell-it-cheap” value-oriented UK grocery chain into one of the world’s most admired and respected retailers is both highly compelling and hugely instructive to senior managers thinking about innovation. It is a story of how an obsessive focus on customer value and on customer-based change, combined with a relentless emphasis on operational efficiency and carefully planned expansion, can generate spectacular growth. For Tesco management today, the crisis of the 1990s must seem like ancient history.
Old Henry Ford yet again
In the other “maverick, entrepreneurial and visionary" domain of innovation, there are some important yet often neglected lessons for “defensive” managers from Henry Ford. So often, history remembers Ford as the “any colour as long as its…” you know what guy, who succeeded because he was the first to invent the mass production assembly line in 1909. Yet many readers may not be aware that as early as the 1880s, Ford had started to build his first gas-powered car in a rented garage in Detroit.
Although his ingenuity took the assembly line method of production to new heights of efficiency, he was first and foremost a visionary and an obsessive, an individual who implicitly foresaw the opportunity to create a mass market for affordable, family transportation. But, he did this only after experimenting with the design, build and testing of his own vehicle. (As an aside, his first car was too big to get through the garage door and he had to knock the walls down with an axe to get it out!)
A spot of role-play
Ford and his achievements provide some important lessons for managers thinking about why they should create new value for their customers — and critically, how they might define, describe and sell the benefits of their idea. Now, to explore this point further, I’d like you to indulge in a spot of historical role-playing. How? By putting yourself into the shoes of the great man Henry Ford himself (which were most probably black by the way...)
Imagine you are Henry Ford and you are at a party at the weekend. You have had a hard week and have decided to take some time off from building the car (and repairing the garage wall) in order to relax with a few friends. One such friend, who you haven’t seen for some time, comes up to you and asks, “Henry, great to see you! What are you up to old chap?”
(Now for the role play). What do you think Ford might have said in response to this question from his old friend?
Well, I doubt he would have answered that “I am creating the means for mass market production”, or “I am going to fill the personal transportation value gap by setting up the world’s first mass production assembly line as long as I can get the right capabilities and management team in place first”. I question too whether he would have said that “I am developing a low-risk model with 8-10 per cent ROI that utilises a new, integrated process for assembling individual component parts for reliable and flexible transportation”.
Instead, what he would have most likely have said is that, “well actually, I am creating a car for the great multitudes, now pass me a beer please.”
The endgame not the obstacles
The point of this little role-play exercise is to show how Ford’s mindset contrasts with that of many managers in a lot of larger organisations. Right up until the first Model T rolled off the production line in Detroit, Ford never once lost sight of the endgame of his idea. He tried hard not to concern himself with the many barriers that he would have to overcome to realise his vision. As he once famously said (for real this time), “Obstacles are those frightful things you see when you take your eyes off your goal”.
Yet by contrast, many managers tend to dwell on the very obstacles that prevent them from submitting or discussing the idea in the first place! They worry about the how rather than the endgame. They are concerned with “strategic fit” and the market’s reaction to their change. They may even fret over their superior’s rejection of their idea. They consternate over potential cannibalisation and they may even use market research to invalidate the idea. As Henry Ford also once famously said, “If I’d listened to customers, I’d have given them a faster horse”.
If however, managers followed Ford and focused on the endgame and not the obstacles, they may better envision the future free of these defensive attitudes. They might even discover new domains and types of customer and business model value.
Some customer innovation questions
To overcome this dominant mindset, I propose a set of initial questions that managers might ask of themselves and their organisation to help them begin to envision and articulate new forms of customer-based value and innovation. These are as follows:
1. What alternative scenarios for future customer value could exist in our market or in other markets we could enter?
2. What assumptions do we make or does our industry make about the ways we provide customer value and how customers access our products and services?
3. Which of these assumptions and their underlying rules can we question and change?
4. What forms of personalised and context-specific customer value will be available in the future?
5. What will our products and services look like if we placed them in these new scenarios for personalised, context-based customer value?
6. What new types of customer value will originate from the experiences customers have by accessing our product rather than from the product itself?
7. What latent, unmet needs do our customers not know they have? What forms of intangible value are important to them or other market segments not served by us?
8. Using media other than the written word, how can we better express and communicate our future customer value scenarios?
These are just some of the different questions you might ask to begin to define a picture of the customer value endgame in your market or even in new markets. Importantly, the latter question may help you present the scenarios (and how they are manifest in real life) without a dependency on a written business plan which - lets face it - most managers do not have time to write, let alone read.
By answering some or certainly all of the above, managers in innovation-adverse organisations might find new ways to explore the “what” and the “why”, and then the “how” to shift from their defensive “zone of comfort” to a new “zone of opportunity”.
Go on, be a customer innovation pioneer
If you want to be a customer innovation pioneer, only by envisioning and articulating the endgame — Ford’s "a car for the great multitude" vision for example — can you start to overcome your own, your peer’s and your superior’s resistance to new possibilities.
Failing that, you could always pretend there is a crisis in your organisation. Now, that would be an interesting role-play experiment…
| Chris is founder and CEO of The OMC Group, a customer innovation think-tank and consultancy. Chris can provide you with innovative thinking, methodologies and support on key problem issues concerning new customer innovation concepts, brand and marketing performance and perspectives, customer value creation and the use of customer knowledge for market innovation and renewal. He can be contacted at chris.lawer@theomcgroup.com
Company: The OMC Group
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