Innovation and focus on the customer

In a period of upheaval, few things appear to be safe in the business field and its management.  One of the few ideas that experts agree on is that: innovation is more important than  ever. Without innovation nowadays any leading company may disappear in less than a year. Time has sped up and the market has changed and therefore the future belongs to companies that are able to adapt to change and innovate. Both principles go hand in hand: adaptability (resilience, sensitivity to change) and innovation (the ability to reinvent).

Indeed, in most of the companies and in most of the markets the main source of innovation is their own employees. It stands to reason: no one is more in touch with the processes and products of a company that its employees.

Many companies strive to set up a communication channel with the customer and it is highly recommended to do so, provided they do not forget their main source of ideas. In addition, employees have an advantage over their customers as possible innovation generators: they can be specifically trained for this purpose.

In his last book “What matters now”, Gary Hamel explains a paradoxical situation in many companies: incentives are offered to employees to innovate but they are not provided with any efficient training tool. Hamel depicts this by using a very expressive analogy: so it is with a novice in golf being provided a club to whom an award of $100 is offered for every ball hit into the holes. If nothing else is provided to this novice (no lessons and no videos of a trainer at all), it is predictable that he will achieve very poor results and also, that he will not learn how to play golf.

The same occurs in many companies: a lack of know how to turn any employee into a potential innovator. Hamel’s thesis is simple besides being common sense: anyone can innovate; the question is to give him the right tools.

There is another previous consideration: the inner desire in each person to build, create, collaborate on a big project. If the creative technicians of Apple were asked about the reason why they wake up every morning, it would not be surprising that anyone answered “the money they pay me”. Fortunately, mankind wishes much more than purely materialistic things, and upon the chance of participating in building something important, beautiful or useful, for many, financial motivation is among the least important.

In other words, one could say that it is not so difficult to innovate: it is good enough to have suitable channels to guide the ideas and a general method that employees could put into practice to generate these ideas. Gary Hamel proposes 4 points on which to focus for potential innovations:

• Challenge orthodoxies or traditional procedures: it cannot be a valid argument to do something “because it’s always been done”. Even less when one tries to adjust to the times, and above all, to the customer. Nobody is more prepared to detect these issues than the employees who cope daily with the company criteria and procedures. Stimulating a certain critical view can shed much light on what can be changed and improved.
• Identifying trends that have gone unnoticed: winds of change always blow, the question is where. Identifying which trends have an identity to set oneself in the market and changing it grants undeniable competitive benefits. Hence, an attentive and motivated employee going beyond his “duties” is in the best position to identify new trends and tendencies among users.
• To get comfortable with competences and underused resources: it consists of identifying opportunities already existing within the company, from human resources to procedures or scale and can provide important competitive advantages.
• Identify unsatisfied customer needs: it is clearly here where employees are more able to discover innovative market niches.

This last point reveals the importance of a customer-centric mindset. When it comes to innovation, we tend to think about revolutionary products or about completely new processes and one may forget that a company can become innovative simply by focusing its business and production model on the customer.

The focus on the customer as a source of innovation

When Steve Jobs introduced the iPod in 2001, he explained pedagogically the reasons for which they had opted to develop that product. Paraphrasing what he said: “We love music. Music will always belong to our lives and to that of our customers. If we observe digital music market, no company has made the difference in this new industry.” Nowadays we find it hard to imagine a world without mp3, without players with more than 8GB and laughable sizes. At the time when Steve Jobs made this announcement, the iPod was entering in competition against the CD player or against giant mp3 players. What made the difference in the Apple approach then? Two key factors: the focus on the client and identifying a market niche/trend that was not being met by anyone. The product was great since it provided an answer to a future trend and because they thought that was what the customers wanted.

Innovation tools

One may ask: what are the suitable tools that I provide my employees with so they can generate such innovative ideas as the iPod? One of them corresponds to certain aspects of human psychology that although we observe in practice every day, rarely stop to consider them in depth. In Apple they take a lot into account that one can gain the customer’s loyalty both through the heart and head. In the chart below, we can see how the different product or service features have a stronger bearing on the heart or on the head. The issue is to assess the products we develop positioning them on this graphic. When an employee does this exercise with any of the products or services, he has already one advantage: he is conscious of the reactions generated by every product or service and he knows to draw the grid reference in the graphic more easily than anybody else.

The latter analysis must focus on two aspects:

• Is the head-heart combination of my products/services the most desirable?
• What features could I improve or add in order to make a deeper impact?

Another tool to “position” the provided products or services consists of setting a product-customer relationship and assigning for every stage the emotion which is perceived or transmitted by the customer. A complement to this procedure could also be to gather from the customer the most valuable information to be drawn: why they bought what they bought and what factor mix has been responsible for the “wow impact” upon a product or service (ours, the competitor’s…)

Too many things seemed to have to be taken into account. However, if deeply observed, they only require committed customers and a minimum of control of some aspects (control that can be managed with some provided training).

There is another aspect favoring innovation through customer service: we all have an inborn talent to detect other people feelings, interpreting their gestures, their faces, what they say. A very efficient tool for innovation would be to register somehow the awaken emotions in the customer’s mind by a company’s products. It is necessary for that reason to count on attentive employees and a tool willing to “map” our products. The following diagram allows us to position a product experience in its different stages, matching emotions with every product stage. Doing this positioning exercise could help us raise awareness of the strengths and weaknesses of the customer experience within a company.

 

As we have been saying all along, committed employees within the company, equipped with these tools can act as real forces of innovation within a company. This, coupled with suitable channels to guide initiatives and suggestions, could turn any traditional company into an innovative one.

In conclusion and returning to the example of Apple, we can highlight Steve Jobs conviction (drawn and supported by Tim Cook) that the true strength of Apple lies in every person going to work every morning to his company, proud of belonging to a company that has changed the world in so many ways.

 

BIBLIOGRAPHY

• HAMEL, G. “What matters now”
• HUETE, L. “Clienting” (IESE Business School teaching material)