Category Archives: Competitor Insight

This is why playing it safe is the biggest risk for legacy companies

toon-1443-innovation

Making pizzas seems like a simple business. After all its been happening for centuries and it seems like almost anyone can do it. But to make a sustainable business out of it and maintain an appealing brand in today’s competitive world requires a customer centric leadership mindset.

A starting point for Domino’s change from an ailing pizza maker in 2010 to a growing food business was a leadership change. Patrick Doyle became CEO in 2010 after Domino’s had experienced several years of stagnating business and declining share price. Doyle realized that he could only revamp the business if he could lead and create a mindset change in staff – a change from an “omission bias” where people worry more about doing something different than no change and “loss aversion” where the focus is on not losing rather than winning. I remember the great American motivational writer and speaker Zig Ziglar saying “.. the fear of loss is greater than the desire for gain”. Doyle realized that playing it safe was the riskiest course of all and he needed to create a mindset in the business that change is a necessity and a learning mentality in which for staff “failure is an option”.

A Customer-Centric Leadership Mindset was Needed to Transform Domino’s Pizzas

The change in Domino’s strategy came with a big picture view and a realization that they were not only in the pizza-making business but also in the pizza-delivery business and how this fundamentally affected the experience of their customers. This meant becoming just as much a tech company as a pizza company to transform the way customers could order and monitor the status of their order using a Domino’s app. Other apps were created to enable customers to provide feedback and become involved in games making ‘virtual’ pizzas.

Staff needed to be open to customer criticism to help them make better pizzas that customers would love eating as well as keeping them warm enough by the time of delivery. So Domino’s took on board customer views of how bad the pizzas were and suggestions on what to do to improve them.

Customers’ frank views were aired in advertising and social media and created a transparency and honesty that enhanced brand trust. Domino’s used staff in ads to describe how they had changed recipes and ingredients to make better tasting products. The company created a delivery car with one seat and a warming oven for up to 80 pizzas. It modernized its image to create more of a sense of style and a sense of humor. All of these things were needed for success. Here is 4 minute video describing what they did:

But the foundation for creating this change to a more agile, customer-responsive business came from the customer mindset brought by the new leader and embedded in the business in a way that enabled them to change and transform. As one senior leader told me recently it is the focus on the customer and their changing needs that is the motivator for leaders and staff to change!

Domino’s business results prove the point. Today, it is the second-largest pizza chain in the world, with more than 12,500 locations in more than 80 countries, and up from a share price of around $8 in 2010 to one of $215 in June 2017.

Learn more about what a customer centric culture and mindset are by reading our book, the Customer Culture Imperative.

What do customer centric companies do? Create Advocates for Life.

corso281In my travels in recent weeks I have experienced two examples of how a customer-centric attitude and behavior produce memorable customer experiences. Both of these were in hotels in different countries.

In Rome my wife and I stayed at Hotel Corso 281. We planned to go south for a few days by train and wanted to leave a large case at the hotel and pick it up again on our way from the Amalfi coast via Rome to Venice. Even though there would only be a 45 minute time between our change of trains in Rome, Delia, the front office manager assured me that they would send a taxi with my bag to the station as soon as my train arrived in Rome. So we took the chance. When I nervously called the hotel on the morning of our journey and spoke to the hotel front desk a different person was fully aware of my situation. As we pulled into Rome station I called again and another front desk person was fully aware and organized a taxi to send the bag. When the taxi arrived at the station it had a large sign with my name in the side window and I gratefully took my bag. Soon after I received a call from Delia to tell me the taxi driver reported to her that the bag had been delivered. We made the train connection all because of a display of team collaboration embedded in the belief that the customer’s needs must be met. When next in Rome we are going back to stay at Corso 281.

In Dubai I checked in to the Rihab Rotana hotel after a 7 hour flight from London. The front office manager gave me his card and also the card of the other front office manager who was off duty. He assured me to call them any time if there was a problem or something they could do. This gentleman, Mazen, was gracious, attentive and carefully explained all hotel services. This manner of care could be seen from all staff in the hotel – from housekeeping to concierge to the gym and pool deck.. Soon after checking into my room a bowl of fruit was delivered. Each day in my week long stay I was greeted by the smile of Daryl, a young lady in the restaurant who seemed to be there for all seven days of my stay. She told me that their team of five often had to work long hours and 7 days because when the hotel was very busy they had to make sure all guests received a great experience. Sometimes at the end of the day even though she had already been there 12 hours her greeting and smile never diminished. I will go back and stay at Rotana in Dubai.

While these things are small for service people with the right attitude and attention to customer needs, they are huge for the customer.

Bottom line – I am an advocate of both these hotels, they stick in my mind, I will go back and I will recommend anyone that asks to try them as well.

Do you attract the right talent to your organization? People that focus on the reason their job exists? Does the leadership of your organization focus its attention on delivering a great experience?

You can learn more in our book the Customer Culture Imperative

Customer Centric Leadership in Action – A lesson from Elon Musk

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One of the central tenets of being a customer centric leader is listening to customer feedback and responding with action.

There is no better recent example than Elon Musk’s response to a customer complaining about the Tesla charging stations being used simply as car spaces.

The Tesla customer complaining happens to be Loic Le Meur, a fellow entrepreneur and major tech influencer, with 130k followers on twitter. You could argue that probably holds more weight than just your average customer but clearly the issue was one bubbling up and on Elon’s mind.

Here is the interchange from the two on twitter below:

elon_musk_twitter_response

Loic’s tweet was responded to within 20 minutes and within 7 days the press announced “Tesla to begin charging idle fees to those remaining on the charger beyond a full charge”

As the team at OfficeChai reported:

“Tesla was going to charge $0.40 for every minute a fully charged Tesla would stand at its parking stations after a five minute grace period. This simple change would ensure that people wouldn’t leave their cars at parking stations, preventing others from using them.

And what’s incredible is the pace at which the product change was implemented. Tesla might still call itself a startup, but it hardly is one – it has over 30,000 employees, and large engineering teams. To have a product feature conceptualized, implemented and shipped in a week is nothing short of miraculous.”

Now this might not be the perfect solution but Tesla will listen to customers and refine further as needed.

This is what customer centric leadership looks like in action, in this case led from the top. Elon’s expectation is that everyone in Tesla is listening to customers and responding to continually refine and improve the experience and value being offered.

Are you are customer centric leader? Find out more in our book, the Customer Culture Imperative

 

5 ways the insurance industry is being disrupted

Game_Changer_Disruption

The insurance industry is facing a shake-up. The traditional model using specialist agents who communicate with their customers around the time insurance premiums are to be renewed and offer generalist solutions is being disrupted.

  1. Consumer needs and demands are changing. Independent online research sources enable consumers to buy online, compare alternative offers and enhance self-service choices. Insurers will need to offer more personalized products that take account of individual circumstances and provide more transparency in their pricing.
  2. Sites such as Friendsurance enable friends to pool their premiums and is an example of how social networks are bypassing traditional insurance companies. As these grow they will impact incumbents.
  3. Car manufacturers are looking to add value to their offerings and through technology will have the ability to offer tailored insurance based on a driver’s history rather than industry wide statistics. Just as they bundle in car servicing they have the ability to bundle in insurance as an overall car package.
  4. As more car sharing takes place and the number of low frequency drivers increases premiums can be restructured to cover “pay as you use”.
  5. Many new competitors will be pure play online companies as we now see with specialized travel insurance companies like 1Cover. There will be many specialized market niches for them to attack.

Incumbent insurance companies will need to build a cultural capability around customer and competitor foresight – a capability that is attuned to future customer needs and future competitive threats. This will require a cultural agility that enables them to innovate and act before customer changes and new competitor models break the floodgates and seriously erode their businesses and their future.

Is your company being disrupted or a disruptor?

You can read more about what you must do to build customer and competitor foresight in The Customer Culture Imperative.

Where is the innovation in American retail banking?

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More than 150 nominations representing over 30 countries were received for the 2012 BAI-Finacle Global Banking Innovation Awards for breakthrough innovations that positively impact banks and their customers. Of these, 27 were from banks operating in the US and 4 from Canada.

The awards are designed to recognize banking organizations for game changing products, services and practices in retail banking. The award winners were selected by an independent international group composed of prominent industry thought-leaders, academics and retail banking professionals. The winners were announced on October 12, 2012.

The award for the Most Innovative Bank of the Year went to First National Bank in South Africa.  The Product and Service Innovation winner was the OCBC Bank, Singapore, the Channel Innovation award went to DenizBank, Turkey and the Disruptive Innovation in Banking award was won by Alior Bank in Poland.

Here’s how the judges described the First National Bank, a Division of FirstRand Limited:

“First National Bank was named as winner for its culture of innovation and advancement of retail banking. As part of their innovative culture, the bank holds an internal competition, called “Innovators,” that formally encourages and supports the process of innovation and related competencies. Business units within FNB are empowered to innovate through leadership buy-in and advocacy. As a retail banking institution, FNB takes a top down approach to innovation to embed it into the culture. It shows visible support of innovation through internal programs designed to develop new-to-the-world products and services that provide access to retail banking for all who want it. FNB’s commitment to innovation can best be seen through their annual contest – “Innovators”.

“Innovators” is a companywide initiative that supports and enables innovation with leadership buy-in and advocacy from the CEO and his direct reports. Winners of “Innovators” win real money (up to $120,000 USD) for innovations that meet the test, such as e-wallets and mobile phone offerings, which FNB is known for.

FNB encourages innovation at the lower levels of the organization, too, with its “Minivation” program, which rewards back office employees with “e-bucks” that they can redeem at FNB clients for suggesting more day-to-day, incremental improvements. A minivation is anything that takes less than three months to implement that provides some business benefit.

From an organizational strategy design perspective, there is a bias towards innovation in the FNB overall strategy in that it is both a strategic pillar and organizational value. FNB’s decentralized structure gives discretionary decision rights to business units who are enabled and encouraged to innovate. This top-down leadership and support evidenced through the sheer volume of innovations in all categories at FNB makes them The Most Innovative Bank of the Year. “

Of course, this is not the final word on innovation in American retail banking, but there was only one US bank finalist amongst the 12 finalists in the four categories suggesting that innovative practices can be learned from banks operating in other countries.

But what does successful innovation require?

Sustainable innovation, well described in the First National Bank case above, requires an embedded culture led from the top and supported and recognized at every level and in every group in the organization. To be successful, this innovative culture must incorporate behaviors that focus in 5 areas:

1)   Customer needs, especially foresight of future customer needs

2)  Competitive advantage, especially foresight of future competition

3)  Broader external changes, especially changes around the periphery of the industry

4)  Collaboration, especially internal  across functions and with external partners

5)   Alignment, especially innovation aligned with the company strategy

How innovative is your culture compared with your peers? Do you see strong behaviors noted above that are requirements for successful innovation in your business?

5 traits companies must have to play in free-for-all energy industry

customer centricity in the energy_industry

Traditional electric utilities are on the verge of facing massive competition. The barriers to entry have fallen and a large number of new and old companies have entered the power generation business.

Numerous and diverse competitors non-utilitieshave already entered the electricity business. Wind farms are expanding. More than a hundred Silicon Valley startups are developing new power technologies. Many of these have venture capital funding. Several like the Bloom Box fuel cell, have the potential to transform the industry by bringing power generation to the home.

Real estate companies and builders are supplying rooftop solar on new homes. Schools, government buildings, and businesses are deploying their own solar panels. Chevron Energy Solutions, a Chevron subsidiary, is one of the nation’s largest installers of solar energy systems for education institutions

Tie this to consumer and business resistance to higher energy prices and an increasing drive to seek out lower cost alternatives and we will soon see the competitive floodgates open putting the traditional players with big traditional infrastructure investments at risk.

It is not clear where all of this is going to go.  Everything is in the mix – technology, the economy, politics, globalization and societal trends towards “green and clean”. The government plays a big part with its energy policy along with regulation, subsidies and incentives for varies parts of the industry.

The one factor that is common to the longer-term success of each player in this industry is the adaptability of its corporate culture. In this environment it must have a culture characterized by 5 traits:

  • Customer understanding and insight
  • Competitor awareness and foresight
  • Peripheral vision of industry changes and impacts
  • Strategic alignment around value for all stakeholders
  • Collaborative and empowered workforce

Those players that have these 5 cultural traits embedded in their DNA will be able to adapt to the rapidly changing conditions and challenges in this disruptive industry. Those that don’t will disappear or be acquired.

Could your business survive in a competitive free-for-all like this? Does it have the 5 traits required for success in any industry undergoing major market and technology shifts?

4 reasons internal competition helps companies win with customers

competition-matters

People view competition in many different ways. In the business world it is often viewed negatively as it can impact profit margins and companies must compete for a share of the pie. From a customer’s perspective competition drives better service, better prices and better value.

Personally I am a big fan of competition, it pushes me to the next level, it forces me to get better. Inside organizations competition can also prove to be a positive force but no all competition is healthy and productive.

Unhealthy competition develops when the following happens:

1. When it causes people to feel negatively about other peoples’ successes as opposed to motivated.

2. When people wish for others to have obstacles so that they are held back.

3. When people feel shame when they fail.

4. When it motivates people to seek competitors who are naturally weaker than themselves, so that they feel an advantage.

Healthy competition can be a great productivity booster in organizations and drive better results. Here are some of the benefits:

1. It encourages people involved to strive further and push themselves harder than they would have without competition.

2. It drives people to achieve more growth and success – not because they are driven to win or lose – but because they are doing your best at something that you care about.

3. It changes the boundaries of what you believe you are capable of and stretches the limits of what you believe is possible.

4. It requires the courage to take risks, requires the willingness to fail, and necessitates a vulnerability to admit you are ambitious to succeed.

The worlds best organizations balance healthy competition with cross company collaboration

What type of competition do you see in operation where you work? Do different functions compete in a healthy way? Do they collaborate?