Companies are designed to

out!customerskeep

VIA CHUCK COKER ON FLICKR.COM

don’t bring a knife to a gunfight - OUR 19TH CENTURY MODEL FOR COMMUNICATION IS BREAKING UNDER THE PRESSURE OF 21ST CENTURY CUSTOMERS, MARKETS AND SOCIETY.

CORE IDEA / GAP / CHALLENGE DISCUSSED IN THE TALK:

companies increasingly have to accommodate and woRk on the premise of the customer. adding huge strain to the current model of management - designed to keep customers out.

linkthroughout the presentation I HAVE ADDED LINKS. just click:

I HAVE TRIED TO DESIGN A VALUABLE RESOURCE - WITH DIRECT LINKS TO WHERE ALL THE IDEAS AND THOUGHTS ARE COMING FROM.

communication is marketing is distribution is productEVERYTHING IS THE INTERFACE BETWEEN THE CUSTOMER AND THE COMPANY

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“Marketing is not a function; it is the whole business seen from the customer’s point of view.” - PETER DRUCKER -

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Marketing is not magic IF THE PRODUCT DOES EVERYTHING IT CAN TO KEEP CUSTOMERS OUT - THEN MARKETING CAN’T FIX THAT.

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This makes customer activation an integrated part of the product

and it makes marketing and products the same thing - because they both have to accommodate and work on the premise of the customer.

THE THIRD WAVE OF TECH.WELCOME TO

WHAT TECHNOLOGY IS BRINGING NOW ISN’T JUST IMPROVEMENTS AND EFFICIENCY AROUND THE PRODUCT - IN THE COMPANY’S INTERNAL AND EXTERNAL VALUE CHAINS - IT IS CHANGES TO THE NATURE OF THE PRODUCTS THEMSELVES.

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Before the advent of modern information technology, products were mechanical and activities in the value

chain were performed using manual, paper processes and verbal communication. The first wave of IT, during the

1960s and 1970s, automated individual activities in the value chain, from order processing and bill paying to computer-aided design and manufacturing resource

planning. (See “How Information Gives You Competitive Advantage,” by Michael Porter and Victor Millar, HBR,

July 1985.) The productivity of activities dramatically increased, in part because huge amounts of new data

could be captured and analyzed in each activity. This led to the standardization of processes across companies—

and raised a dilemma for companies about how to capture IT’s operational benefits while maintaining

distinctive strategies.

HOW SMART, CONNECTED PRODUCTS ARE TRANSFORMING COMPETITION

The rise of the internet, with its inexpensive and ubiquitous connectivity, unleashed the second wave of IT-driven transformation, in the 1980s and 1990s (see

Michael Porter’s “Strategy and the Internet,” HBR, March 2001). This enabled coordination and integration

across individual activities; with outside suppliers, channels, and customers; and across geography. It

allowed firms, for example, to closely integrate globally distributed supply chains.

The first two waves gave rise to huge productivity gains and growth across the economy. While the value chain was transformed, however, products themselves were

largely unaffected.

HOW SMART, CONNECTED PRODUCTS ARE TRANSFORMING COMPETITION

Now, in the third wave, IT is becoming an integral part of the product itself. Embedded sensors, processors, software, and connectivity in products (in effect,

computers are being put inside products), coupled with a product cloud in which product data is stored and

analyzed and some applications are run, are driving dramatic improvements in product functionality and

performance. Massive amounts of new product-usage data enable many of those improvements.

HOW SMART, CONNECTED PRODUCTS ARE TRANSFORMING COMPETITION

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WHAT MAKES SMART, CONNECTED PRODUCTS FUNDAMENTALLY DIFFERENT IS NOT THE INTERNET,

BUT THE CHANGING NATURE OF THE “THINGS”.

HOW SMART, CONNECTED PRODUCTS ARE TRANSFORMING COMPETITION

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SPEAKER NOTES: This quote went viral on LinkedIn in March 2015. It seemed to hit a nerve..link

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Tom Goodwin is senior vice president of strategy and innovation at Havas Media.

It’s by Tom Goodwin,arguing that the coming battle for the customers will on the customer interfaces. link

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THESE COMPANIES REALIZE THAT THE MODERN AGE IS A TIME OF SCARCE ATTENTION AND ABUNDANT CONNECTIVITY, WHERE SMARTPHONES ARE OUR PRIMARY ACCESS AND POINT TO EVERYTHING; WHERE MONEY AND EVERYTHING IS DIGITAL; 

- TOM GOODWIN -

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where the interface layer is where the profit is;

your companies most profound business.

WHERE PHYSICAL ASSETS AND EMPLOYEES ARE LIABILITIES;

and where providing a slick, best in class human experience will create

“TO MANY MANAGERS, THE PRODUCT IS THE BUSINESS,” WRITES NIRAJ DAWAR IN TILT. “FIRMS CONTINUE TO SPEND INORDINATE AMOUNTS OF TIME, EFFORT, AND RESOURCES ON THEIR PRODUCTS. IN FACT, BUSINESSES ARE STRUCTURED AROUND THEIR PRODUCTS… BUT, THE ANSWER TO QUESTIONS LIKE ‘WHY DO CUSTOMERS BUY FROM US?’ DON’T RESIDE IN PRODUCTS. THEY RESIDE ALMOST ENTIRELY IN THE INTERACTIONS THAT TAKE PLACE IN THE MARKETPLACE.” - STEVE DENNING -

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EFFICIENCY STANDARDIZATION

COMPANIES CARE ABOUT

THIS HARMONIZES POORLY WITH UNPREDICTABLE CUSTOMER BEHAVIOR AND NON-ALIGNED PRIORITIES

&

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THE CURRENT PRACTICE OF MANAGEMENT IS NOT ALIGNED TO A NEW WORLD WHERE CUSTOMERS SUDDENLY BECOME AN IMPORTANT STRATEGIC ASSET. COMPANIES HAVE BEEN DESIGNED TO KEEP CUSTOMERS OUT.

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BRAND, DESIGN AND ADVERTISING ARE ALL TOOLS TO SAFELY KEEP CUSTOMERS ON THE OUTSIDE. IF COMPANIES ARE TO REAP THE BENEFIT OF DELIGHTING CUSTOMERS - THEY NEED TO RETHINK / REDO THE WAY THEY MANAGE THEIR COMPANY and market their products.

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INDUSTRY TO CORE BUSINESS

THE DEMISE FROM COMPANY TO INDUSTRY AS A CONCEPT IS A POISONED PILL

- FROM A CUSTOMER VALUE PERSPECTIVECompanies concentrate on optimizing their core business. Giving away products and services that they would logically provide from a customer perspective, but are not optimal when applying current business and management logic.

Companies end up fighting for market share in ever decreasing markets. Flatly excluding/ consciously ignoring logical and lucrative extensions.

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THIS IS THE CUSTOMER-JOB-TO-BE-DONE THE COMPANY HELPS SOLVE

WHEN IT LAUNCHES

INDUSTRY TO CORE BUSINESS

THE DEMISE FROM COMPANY TO INDUSTRY AS A CONCEPT IS A POISONED PILL

- FROM A CUSTOMER VALUE PERSPECTIVECompanies concentrate on optimizing their core business. Giving away products and services that they would logically provide from a customer perspective, but are not optimal when applying current business and management logic.

Companies end up fighting for market share in ever decreasing markets. Flatly excluding/ consciously ignoring logical and lucrative extensions.

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THIS IS THE JOB IT IS HELPING CUSTOMERS SOLVE TODAY

[COMPANIES GET STUCK IN THE IDEA OF THE ORIGINAL JOB. NOT SEEING THAT AS PEOPLE ARE PERFORMING AND SOLVING THE JOB THEY REDESIGN AND FRAGMENT IT. COMPANIES GET

STUCK ON THE MAIN DESIGN, IGNORING CONCIOUSLY THE EXTENSIONS THAT EMERGE]

INDUSTRY TO CORE BUSINESS

THE DEMISE FROM COMPANY TO INDUSTRY AS A CONCEPT IS A POISONED PILL

- FROM A CUSTOMER VALUE PERSPECTIVECompanies concentrate on optimizing their core business. Giving away products and services that they would logically provide from a customer perspective, but are not optimal when applying current business and management logic.

Companies end up fighting for market share in ever decreasing markets. Flatly excluding/ consciously ignoring logical and lucrative extensions.

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THIS IS THE JOB THE COMPANY IS SOLVING IN THE FUTURE

[EVENTUALLY THE ORIGINAL JOB MIGHT END UP AS JUST A NICHE DELIVERY. THE CUSTOMER HAS MOVED ON TO DIFFERENT WAYS OF SOLVING THE ORIGINAL JOB]

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“So, the simplest explanation you’ll ever hear of why succesful organizations ultimately fail is this:

They fail when the leaders fail to write of their own depreciating intellectual capital”.- GARY HAMEL

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43% of ceos now include customers in business strategy development. 60% expect to do so in the future.

The area in which CEOS expect to see customer influence grow the most; their business strategy.

- BRIDGET VAN KRALINGEN, SENIOR VICE PRESIDENT, IBM GLOBAL BUSINESS SERVICES

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- CHRISTIAN MADSBJERG AND MIKKEL B. RASMUSSEN, HBR.ORG, AN ANTHROPOLOGIST WALKS INTO A BAR

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The biggest challenge CEOs face is the so called complexity gap.

CEOs see a lack of customer insight as their biggest deficit in managing complexity. .. And rank “customer obsession” as the most critical leadership trait.

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IBM: CEOs say customers come second only to the c-suite in terms of the strategic influence they wield (2013)

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CXOS MOST RADICAL SHIFT MAY BE A NEW VIEW ON WHAT IT MEANS TO COLLABORATE WITH CUSTOMERS.

“In the next few years we want to build deep, strategic relationships with our customers, enterprise-to-enterprise relationships where the ‘customer is for life.’”

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WE IDENTIFIED THREE KEY THEMES THAT WILL HELP YOU SHAPE YOUR ORGANIZATION’S FUTURE:

•Open up to customer influence • Pioneer digital-physical innovation• Craft engaging customer experiences

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“Customer experience … is a fundamental dimension of how a company competes.”

- JOSEPH PINE, COINED THE TERM EXPERIENCE ECONOMY HBR, DISNEY, ADVANCING THE CUSTOMER EXPERIENCE

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We realized that if we didn’t build our strategy around how customers experience our products, a start-up with that focus could eventually overtake us.” - PHILIP GERSKOVICH, SENIOR VICE PRESIDENT, ZEBRA TECHNOLOGIES

“Too many companies see customer experience as a slogan exercise.

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Ed Thompson, an analyst at market research firm Gartner, says: “Between 5% and 10% of companies truly have a customer culture at their core, but the rest have been forced to care because all other means of differentiation have been eroded over time. That’s why it is currently a hot topic and has been very high on CEO agendas for the last three years or so.”

In many consumer sectors, it has become increasingly difficult for organisations to really stand out from the crowd in terms of pricing, products or services.As a result, the last great bastion of differentiation in recent years has become that of customer experience – and that seems unlikely to change any time soon.

“the rest have been forced to care because all other means of differentiation have been eroded over time.”

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accepting customers as active stakeholders is one sure way to quell the factions and unite the C-suite in a common purpose.

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The idea that customers benefit from engagement with their insurance needs is part of Progressive’s philosophy.

Encouraging the use of products and services that foster active involvement, we can improve the experience for everyone.

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If one issue has the potential to unite the C-suite to act in concert, establishing trust-based relationships with customers stands at the top.

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Apple, almost bankrupt in 1997 after years of 20th century managerial approach to management was taken over by Steve Jobs. Who was a tyrant on behalf of the customers. Spending four years cleaning up the company and throwing out employees who had no direct impact on contributing to customer value. In 2001 Jobs had changed the company and its culture and set it up for large scale rapid innovation - and the story of its success is widely known.

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SUCCESSFUL COMPANIES:

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PUT THE MOST IMPORTANT PEOPLE INTO TEAMS WORKING AUTONOMOUSLY ON THE CUSTOMERS MOST IMPORTANT PROBLEMS.

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successful companies:

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“AS WE CONFIRMED IN OUR “NEXT 30-YEAR VISION,” WHICH WE CREATED IN 2010, OUR ULTIMATE GOAL IS TO ALLEVIATE

SADNESS AND INCREASE EVERYONE'S HAPPINESS TO THE GREATEST EXTENT POSSIBLE THROUGH THE INFORMATION REVOLUTION.”

- LETTER FROM THE CEO MESSAGE -

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but NONE OF THIS helpS if we are not seeing the bigger picture…

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IMAGE BY BEN LANSKY ON FLICKR.COM

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“The problems that we can solve as a species, is fundamentally limited by out capacity to manage. to bring people together, to coordinate, to accomplish things at scale. -

And I’m arguing today that this technology has to be reinvented, root and branch, it is a problem that is so urgent, so complex and so eminently worthwhile. That none of us who have a stake in the future of humanity should be sitting at the sidelines.” - GARY HAMEL

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THE REASON CUSTOMERS DON’T CARE IS BECAUSE COMPANIES DON’T CARE

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customer experience

2004

WEBSITE

2011

MOBILE FIRST

2015

information architecture

User experience Analytics

CloudIOT

Mobile

Collab. tech

2017

outcome economy

MANAGEMENT

CROSS-CHANNEL OMNI+DELIVERY+PRODUCT

ACTIVE COLLABORATION PARTNERING WITH THE CUSTOMER EVERY DAY

TO GET THE BEST POSSIBLE OUTCOME FOR THEIR JOB-2-B-D1

PASSIVE OFFER SALES & ZERO MOMENTS OF TRUTH

CHANNEL

2004-2017 FROM INCREMENTAL 2 LOGARITHMIC CHANGE

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