The obsessive thinking and operations of customer innovation
Updated: May 4
Customer futures: earning the right to lead customers to a better future they may not be able to see themselves
Leading marketers are getting back to their roots, re-focusing on the things that really matter - creating customers. While there are a number of challenging operating priorities for marketing, there's a higher purpose too. Obviously, there's a need for marketers to live in the 'here and now' but at the same time they need to be inside the dreams and aspirations of customers, they need to see customer futures first.
But, its not enough to understand customers and their aspirations, it's not enough to 'focus on customers'. Marketers need to be 'in a better future', develop capability to see and deliver possibilities, many of which the customer will not be able to see themselves and most important of all, be able to engineer a path for others to join them in that future - a synthesis of customer obsession and innovation.
When companies become distracted by what they think they're good at, the lose perspective. When companies focus on what their customers perceive to be valuable they win.
Al Ries, way back in 1996 in his book Focus, said: "specialisation drives quality...you need to communicate your leadership not just your quality". We'd like to think, customer obsession drives quality and you need to become known for: leading customers to a future they may not be able to see themselves.
What is 'customer futures'
Customer futures is a way of thinking and a way of operating that commits an organisation to creating better futures for their customers. Some might argue this is what their organisations already do. In some companies that are obsessed with customers and innovation, like amazon, that might be true. However, in many organisations that's simply not the case. Most companies don't have a customer strategy, let alone a vision for where their customer want to be or an operational plan to get them there. Jeff Bezos was spot on, when talking about true customer obsession, when he said:
"Even when they don't yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it, and I could give you many such examples." Jeff Bezos, Business Insider UK
So what's essence of Customer Future thinking and operations?
Customer futures is a creative, dynamic culture, an urgency, and obsession with customers and innovation
Customer Futures is an externalised future perspective, it shifts thinking from 'current customer context' to to desired future state - that, which would make a customer very happy
Customer Futures creates clear line of sight and focus, aligning operations around building a better future for customers, one they may not be able to see themselves
Customer Futures provides a catalyst for innovation and creativity, synchronising operations, brand, product, service, experience, social mission......everything, around delivering desired, and often unmet, unplanned and unknown customer outcomes as quickly as possible
The top priorities of marketing
Arguably there are three priorities for marketers: creating customers, persuading people to do something and managing behaviours. We think there is one more higher purpose: 'earning the right to lead customers to a better future they cannot see themselves'. When you think about it like this it becomes clear that marketing is strategic, mission critical and all about keeping the organisation focused on what really matters - customer futures.
We also think the same mantra applies to staff, shareholders, partners, suppliers. In other words marketing is about leading everyone to a future they may not be able to see themselves. And why not? Marketers have all the tools, experience and capability to do this. They are masters in the arts of storytelling, persuasion, articulation of value, interpreting behaviours, they know what customers expect, they are the 'customer in the business'. In short, it's a significant part of marketing's job to make sure that customers get the value, access and choice they expected. Otherwise, brand, value propositions, customer experience and fulfilment are just empty promises, or lets just say, sub-optimal.
What should marketing be?
Is marketing a tactical tool to generate sales opportunities, run campaigns, communication projects and PR, a function to generate more customers, to retain customers. Or something much more? Is it a collection of strategic disciplines deployed to build compelling visions, engage people, encourage interaction around ideas and connection between people, a conduit through which people and communities are aligned and connected to common purpose and shared outcomes? Is marketing as much about motivating and engaging staff as it is customers.
Many great marketing leaders, like Richard Branson would likely agree with this. Remember when he famously said: "If You Look After Your Staff, They'll Look After Your Customers. It's That Simple". Clearly, marketers have a critical role to play in ensuring that staff can see the future as well as customers, they have a responsibility to provide staff with 'organising thoughts' that help them navigate to that future. Done well, this prepares the organisation and it's staff, equips them and gets them ready to support customers in realising this future.
A combined internal and external perspective doesn't in any way detract from healthy obsession about customers, rather it explains why marketing must be engaged to help align the organisation around customer value. It emphasises the need for marketing to be involved with operations that deliver value to customers, touch customers or any other 'high priority' stakeholder group who's perspective or behaviour will have an impact on the customers future.
Customer futures | customer innovation operating model
Key strategic choices were well articulated in 1995 by Michael Treacy and Fred Wiersema in their seminal work: The Disciplines of Market Leaders. They explained how different customers buy different kinds of value and why these different kinds of value need different operating models, a must read for every marketer.Customer intimacy, client intimacy, whatever you want to call it has become a jaded term. It doesn't resonate with an outside-in perspective and is almost meaningless to customers themselves. Who ever heard of a customer asking for more intimacy?
Customer intimacy and customer focus approaches all started out with laudable aims, but they've been corrupted over time, hijacked with intent, to increase account penetration, share of wallet, up-sell, cross-sell. It didn't start out that way. Once upon a time it was about really understanding what customers needed, their behaviours, their aspirations, getting close enough to their business that you became an indispensable trusted partner. We need to get back to that, and perhaps go further to innovate, co-create, collaborate with customers to uncover unmet needs.
Their original model had three axis: operational excellence, product leadership and customer intimacy. Each of these represents a different operating model, different management systems and cultures. The essence of the approach was about making strategic choices between relative investment in each operating model that would ultimately drive differentiation and brand 'in market'. All companies would be expected to have competence in all three dimensions but should exhibit excellence and therefore build reputation in at least one.
About 10 years ago we modified this model to include social mission and determined that all four axis were actually forms of innovation. The essence of the models remained the same, except that innovation became the main underlying process and culture. This was in response to the increasing pace of change and technological disruption in many markets. This has proven to be a useful path to follow as more complexity, instability in markets, new technology and significant shifts in social culture and customer behaviours demand more imaginative quick responses. In short increased pace and scale of change requires an innovative response.
After many years applying these models to real world strategic challenges we have developed a new model which we think supersedes them all. It is an evolution that focuses on customer innovation and customer futures. It wraps all organisational capability and competence around customers. We created this because, increasingly we found it difficult to justify any sub-optimal performance with regard to customers, that deep customer insight and innovation were paramount and could not be subjugated with respect to any other operating model.
What we're left with is an customer obsessed - innovation operating model. An integrated operating model:
Obsessed with bringing innovation to customers, obsessed with what customers need now and in the future.
Leadership that are progressive, creative and able to co-ordinate investment and resources across a number of operating models and strategic processes to focus on customer futures
A business structure that's adaptive, fast to change when required but able to maintain a level of stability and cadence that avoids calamity - long term innovation
Management systems that are driven by innovation and a vision of a better customer future, that measure strategic processes and intellectual capital that add value to customers
A culture obsessed with innovation and customers, that avoids, perhaps eliminates anything that doesn't add value to customers
It's challenging to blend different operating models, different cultures, different management practices, but it's possible, it's been done. More importantly, it's become necessary. The stable economics, political, commercial and social systems we were all so used to are no longer with us. We face a world of increasing complexity and disruption, where the linear management approaches of the past just don't work anymore.
Knowing the art of the possible
The truth is that customers do not always know what they want, they don't know the art of possible. Customer innovation, customer futures creates a partnership between customers and organisations, a bond, a common purpose and shared outcomes where customers explain their needs, wants, dreams and aspirations and organisations provide the foresight and mechanisms to realise them - getting customers to a future with products and services customers could never have envisaged. It's a continuous iterative dialogue, a never ending journey of joint discovery and innovation.
Even for the most mundane products and services, the most regulated, risk averse industries, organisations where the need for stability is absolutely essential, the model works. Innovation isn't always a fantastic leap into the future, there are many forms of innovation. Some are highly disruptive, unbelievable leaps forward, some are far more modest. All are predicated on seeing a better future, fixing a problem, meeting a need, exploiting assets and capability to get there. What we're talking about here is an organisations opportunity and perhaps responsibility to lead customers to a better future.
Increasingly demanding customers have come to expect very high levels of service, flawless experience. Though they might not be able to tell you how, they expect be delighted, they expect efficiency, innovation, social conscience. They want to be pleasantly surprised, entertained, rewarded. They want your organisation to get them to a future, to help them realise their dreams. Companies that meet or surpass these demands by inventing the future customer want are rewarded with loyalty and revenue.
Regardless of how far removed you are from the ultimate bill payer, you need to become obsessed with customers and their futures.
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