I recently had the pleasure of being interviewed by Linda Popky of L2M Associates, a Marketing Strategy Consulting firm.
It allowed me to reflect a little on what it takes to build a market-driven firm and why it remains a critical issue for any business. The reality is the only firms that will thrive now and in the future are those with a close eye on the marketplace.
A great example is Walmart that uses “business intelligence” technology to crunch its masses of data and turn it into actionable insight. The latest Economist magazine, describes the following case: “Wal-Mart peered into its mammoth databases and noticed that before a hurricane struck, there was a run on flashlights and batteries, as might be expected; but also on Pop-Tarts, a sugary American breakfast snack. On reflection it is clear that the snack would be a handy thing to eat in a blackout, but the retailer would not have thought to stock up on it before a storm.”
This is a great example of gaining customer insight from information which allows a company to take profitable action.
To listen to my interview on why customer insight and other market driven behaviors are so critical to business profitability click here
Google recently launched a new social networking service called Buzz. The launch reveals blind spots for Google that have resulted from a corporate culture focused on engineering excellent but lacking in the type of insight necessary to develop new value for existing and potential customers.
The concerns raised by users were fairly predictably related to privacy issues but were overlooked by Google. Google’s unprecedented success in its core business has given it the luxury of exploring a wide range of new business from productivity and communications software to a recent entry into the handheld device market. However, to date it has arguably failed to have any significant impact with the new businesses apart from Android which is certainly getting the attention of Apple (Apple recently sued HTC a maker of Android operating system phones).
To me this points to a need to balance Google’s product culture with a stronger emphasis on the external environment, in particular customer behavior in order to better anticipate how customers will react to new products and services.
Patrick Doyle took on the CEO role in January of this year right in the middle of a major transition…
Customer’s feedback on Domino’s was increasingly negative and Doyle has used this to great effect as a catalyst for change and reinvention of their core product offerings, making them fresher more real and less “cardboard”
This is a great example of using customer insight/feedback to reinvent an organization, shake it out of complacency and really take it to the competition in a short period of time. Time will tell if they are really delivering on the new strategy but from an outsiders point of view Mr Doyle is providing a great example of what it takes to quickly energize a company and transform its offering almost overnight….
Toyota is headline news this week for all the wrong reasons. It is accused of putting profit ahead of people, not just people but customers and their safety, the ultimate business sin. It has been described as slow moving, secretive and perceived as trying to cover up problems rather than address them head on.
It points to a number of cultural problems that appear to have developed as Toyota has grown aggressively on the back of what has been a very successful market-driven strategy which involved putting customers at the center of their business and constantly innovating and improving quality. In fact Toyota has been until very recently held up as a great example of what the Detroit manufacturers should have been doing all these years.
So what went wrong?
At some stage poor decisions have been made that have resulted in a very serious problem developing known as unintended sudden acceleration (Lawyers even have a website dedicated to the problem….). What happened at Toyota to create the environment that made those decisions possible? Was there a subtle shift in the focus from customer first to growth/be number 1 in car sales? Did this cause additional pressure to cut costs to reach price points that would drive volume?
We won’t know for sure but certainly something has gone wrong in a major way and it has been going wrong for a number of years by the many accounts from customers of these problems surfacing as long as 2006/2007 see this video testimony from a Lexus customer today
CEO, Toyoda will need to redouble efforts to revitalize Toyota’s old strong customer first culture to make sure he does not reinforce the culture that created these unprecedented (for Toyota) and very damaging customer and PR issues.
Will Toyota survive? Will it still be number 1 in US car sales? Time will tell
I have been a big fan of Tivo for a number of years but there comes a point when even great innovations fall over. From a personal point of view I have had some serious Tivo reliability problems which have meant essentially rendering my TV useless during TV events that are high value to me like the Tour de France, the Superbowl to name a few.
But hey that is reality great innovations have risks, downsides and failures when things don’t go well. This is where other things become really important like customer service.
Unfortunately as innovative as the product is, Tivo’s customer service is anything but innovative. I have spent more than 8 hours over a number of months trouble shooting problems, I paid to have a new unit sent to me (same problems) for me this displays a great lack of customer insight and a real lack of customer empathy, two critical ingredients for market-driven firms.
As a loyal customer, like most loyal customers I give companies some leeway in dealing with problems but this only extends so far and when you start feeling like you have been taken advantage of, that’s where its time to draw the line.
So long Tivo, fortunately for you competition in your space is not that aggressive (until Apple arrives).
Microsoft, without doubt is one of the great success stories of the last 25 years, they have a ubiquitous platform and have attracted some incredibly talented and hard working employees. It seems strange then, almost paradoxical, that it has not been able to really innovate since its early days.
Dick explains in his article that Microsoft struggles from significant internal competition that simply slows it down and kills internal innovation.
Ultimately this is a cultural issue, they simply are no longer as market-driven as they once were. The heads of existing businesses simply kill off any internal threats that arise by pulling funding or refusing to support them. Dick sites the example of ClearType a new font that would allow users to more clearly read text on screen and the fact it was not supported by much of the internal leaders despite its clear customer value. The result was it took 10 years to finally get to market…..
If companies like Microsoft want to compete in the future they are going to have to change this culture to allow internal innovation to flourish. Buying small innovative companies won’t work as they will ultimately get eaten up by the Microsoft culture. As we have seen with Apple you can’t buy innovation you need to create the environment for it to happen.
One our team members (Hjalte, our California-based Engagement Manager) and I have been doing a bit of research on Employee Engagement recently and found some interesting discussion from professionals on various linked in networks (see links below to follow).
It seems to me that employ engagement, although very popular with large businesses is not longer enough.
The downturn has business leaders re-examining every initiative to determine their value to driving achievement of their business goals and these employee surveys are no different.
The discussions center on employee engagement i.e. measuring the level of commitment employees have to the organization. Higher levels of commitment result in capturing discretionary effort therefore driving better productivity.
For me at least this poses the question isn’t it important to know where that discretionary effort is being directed?
Is it being directed at increased customer service? Improving customer experience? Creating better products and services that customers need? How well does the company do these important tasks?
High levels of engagement are important but we see them as a by-product of great alignment with the market. If employees really understand how they are making valuable differences to customers their engagement will increase. I believe people are motivated by using their unique skills to make a difference, obtain goals and making regular progress towards those goals.
If the purpose of business is to create value for customers then anything we do that aligns with this purpose will result in high levels of engagement. The key is gaining alignment between the behaviors in the business and customer needs.
We ran another great SVAMA Panel event this past week with a Keynote from Jeremiah Owyang, now with Altimeter Group and a great panel of practioners.
I always like to gain at least one key takeaway and for me it was understanding more about a couple of key customers in any business. The curator and the advocate.
To summarize Jeremiah, the curator is a really small % of any customer base that actually takes the time to set-up infrastructure to enable other customers to engage on topics relevant to a specific company or brand. The example given was Coke which already had over one million followers on a facebook page set-up by a customer (curator).
Rob from Exuberance asked a key question for any business person, who are your advocates? Who are the people that really love what you do and positively and passionately influence others? In his experience and in mine often the answer from clients is that they do not know… (and yet they are a crucial engine of growth for any business).
Today is a good day to start identifying them and working on a strategy to help them help your business.
I have had a very interesting start to the new year with great progress on a number of fronts mixed in with a reminder of why the work we do is so important…….
Last week my Sony Laptop crashed for the 2nd time within 3 months, as usual it could not be more poorly timed as we ramp up for the new year….
My customer experience has been nothing less than appalling, I have been trying for a week to get someone to take ownership of my problem. I have called 4 different numbers, used chat and tried to complete an online support form but have failed to get anyone to care enough to take ownership of my problem….. everyone keeps sending me somewhere else.
For companies to really prosper and grow they have to be market-driven and being market-driven from a personal point of view is taking ownership of issues that impact customer value and experience. It is so fundamental that any company that cannot meet this basic hurdle has a long way to go on their journey to being truly customer centric.
Have you seen Sony’s results lately? Unfortunately I am not surprised by the experience. See below their share price over the last 5 years, the chart below compares them with a truly market-drive company, Apple……
I had an interesting discussion last night in relation to what our company does, help senior leaders build ever alert enterprizes by raising their level of cultural sense-ability. What does that mean? essentially creating a company culture that is completely focused on creating value for customers, with every person understanding their role in how to achieve the company’s vision and mission by serving their customers better than anyone else.
Durign the discussion the topic of Apple was raised, with someone suggesting they would decline when Steve Jobs retired.
On the face of the evidence in the past when he left the company the first time you could argue that it may well lose the fire and leadership it has with him at the helm…. However things are different this time. What is different is that Steve has built a leadership team around him that share his vision, mission and values for what the company is all about and why it has become great.
Tim Cook the current COO was quoted earlier in the year on seekingalpha.com
“We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.”
This demonstrates a deep understanding of what drives success for Apple, these are the same elements we measure in our Market Responsiveness Index (MRI). So long as Apple can remain strong in its depth of understanding of customers, competitors, critical market trends and at the same time continue to foster this cross-pollination they will remain leaders, growing faster and at higher rates of profitability than every competitor they face.
