Innovation

Today’s Customer Is Not Going To Be The Same As Tomorrow’s Customer

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There’s an old Wayne Gretzky quote that I love, “I skate to where the puck is going to be, not to where it has been”. Similarly, an organization must focus the business around tomorrow’s customer, not today’s customer. The organization must continually learn from its customers to guide the business. It is imperative that the organization considers where, why and how the customer will be using the product.

For example, consider the evolution of the personal banking user experience. Traditionally, the bank’s customers would ask the teller at the bank to complete their transaction. Banks optimized this by creating ATM banking machines. ATMs were revolutionary because the banks could place the units in any retail space, providing the same core services to customers, at a greater convenience and less cost (fewer tellers needed) towards the organization. Banks have continued to optimize the experience for their customer by introducing internet banking and now, mobile banking.

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Banks valued evolution over optimization. If they continued to optimize the tellers’ workflow, the banks would have highly efficient tellers without many customers entering the bank. If your organization don’t continually evolve, another organization will.

Predicting the future is not easy. If it were, I would be in the stock market. However, there are certain processes change agents can implement in an organization to guide the product:

  • Customer Councils: Regular meetings with customers to discuss the product
  • Active User Community: Having an online presence where the users can interact with each other and your organization’s employees. Building active user communities will retain customers who may have been looking at other options.

Organizations that focus on maximizing ROI will inevitably fail. The organization fixates on the receiving the highest margin possible at the cost of losing sight of the customer. Instead, I suggest that the organization should focus on customer value, as satisfied customers will continue to buy the organization’s product thereby generating more ROI. This is a win-win for both parties.

David Dame

 

tomorrow's customer

At the end of the day, organizations need to transition from operational to strategic. They must take risks to predict and target where the customer is going, not just where it is today.

Organizational Innovation requires Guts and Investment

We all have heard those stories of people on their death bed saying that their biggest regret in life was not taking more chances… I'm sure that there are companies that are no longer around echoing those same words.

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Medium to large organizations are good at putting out fires or dealing with crisis as death is imminent.

Complacency is the silent organization killer.  It is not in immediate death, rather a slow death by bleeding slowly until there is no more life in the organization to innovate and compete.

Organizations are always striving to improve their efficiency and productivity.  They put all of their time and effort into continuously improving their current processes and practices.  This is good to do, but it will only give you marginal gains. We see minimal benefit to this as people don't want to seem to put the effort in because the see a low return on their investment.

However, to achieve the biggest gains, organizations need to invest hugely in new and bold ways to do things.  They need to have the guts and take a chance to be able to embrace a managed disruptive environment to the current status quo.  They need to put an investment of time and resources independent from the ones that are running current operations to introduce out-of-the-box thinking that will totally innovate the way they deliver their products and services today.  They need a lot of courage to have a substantial return on investment.  

One Person with Courage Has Success, Others Afraid Fail

 

Referencing Dr. John Kotter's change model, as an organizational coach, you need to work with the leadership and create that sense of urgency.

Organizations (like people), have a threshold for handling change.  As an organizational coach, you need to be aware of what your organization's upper boundary is to change.  Although we strive to get them to be confident to handle the operational innovation disruption, you do not want to create an anxiety that cripples the company from functioning.  Working with them over time, you get to improve their confidence to embrace change and you also have a pulse on the upper boundary limit to which they can handle the disruption.

How can you manage this organizational risk effectively?  Use the scrum framework as a tool in leading these organizational change initiatives.  Establish a good time boxed cadence and leverage the built-in inspect and adapt component of the framework will help provide transparency to allow the organization to pivot to move toward their goal.

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Your continuous improvement strategy needs to incorporate both  operational innovation initiatives  as well as continuous improvement of current processes.  These two things working in concert will help your organization to have a balanced portfolio to be able to lead and compete to an ever-changing environment to support their customers in the ever changing marketplace.

Organizations need to fully invest time & money to get a dedicated guiding coalition.

When companies go through a major organizational transformation (like bringing in agile).  The organizations that do not staff this change appropriately struggle in their agile adoption.  Asking employees to lead major operational innovations but still having to do there regular day-to-day job will stifle the innovation initiative.  Those organizations that staff  properly by either re-shifting internal resources, hiring new full-time resources, or by engaging in external consultants or change agents have had greater success in their organizational transformation.  

How do you create this sense of urgency and get the investment needed?

Develop a Change Vision.

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If you can visualize it, you can make it real.  You need to have a vision.  More importantly you need to communicate this vision effectively.  If you can't make this vision easily consumable to the organizational leadership team, its stakeholders, the people affected by this innovation, it will not get traction.  People already have a fear of change..  An effective vision will mitigate the fear of the unknown.  Jason Little, one of the most brilliant organizational change agent peers that I've come across has an awesome strategy on how to map this vision out.  You can review the slides here.

You can't compete in tomorrow's world with what you're doing today.  Instead of putting all your resources in trying not to fall, spend that time to be courageous enough to have your organization to succeed  Don't just say you want to do it… Put the resources into making this happen.

I rather talk about the success I have had from the mistakes that I learned from than the regret of not taking chances that might have helped me succeed.  

David Dame