From Customer Orientation to Customer Centricity

Much has been said about the importance of customer orientation. Satisfy your customer : Do as customer says, never say no, the customer is always right. Don't stop at customer satisfaction: Endeavor to create customer delight. Deliver benefits, not just features. Be close to your customers : Meet them personally, talk frequently. Relationships matter: It is all about people. Listen to customer suggestions. Customer is king: As Gandhi famously wrote, he is the very purpose of our existence.

I argue that Customer Orientation, as expressed in the lines above, is a necessary but not sufficient condition for winning in today's highly connected markets. What we need is Customer Centricity, and that is what I am about to describe in this post.

To define Customer Centricity, we need to look beyond the obvious factors of customer orientation. Let us do this in seven steps.

1. Identify with customer goals
First you need to understand customer's goals. This will help you perceive true customer pain points. Not just the pain points the customer expresses explicitly, but the latent ones that remain beneath the surface.

2. Understand customer aspirations
Customers are human - they aspire. Do they aspire to be associated with your product or your service or your brand? Think of a developer trying to get into an Apple conference, or an online user wanting to experience Google wave - which is currently by invitation only!

How do you create this desire for associating in your customer's mind? You need to recruit the customers who are already on board as trust agents. Get them to present on your behalf at conferences, write about your products and services in magazines, write reviews on sites such as yelp or e.pinions, give quotes, create podcasts and build youtube videos. Collaborate with your customers to build case studies to celebrate joint achievement.

One key purpose of branding then is to create an aspiration in customer's mind to associated with you, and to be seen with you.

3. Co-create value with customers
Involve customers in creating value through your business. Get ideas from customers in a focus group or a user meet. Have them test your products, as many SaaS companies do. Take their help in merchandising: an online user community is a great place where you can do this. Observe customer buying preferences and create attractive bundles. Groupon is a great example of how customers can be involved in marketing and selling. Referral programs involve customers in the selling process. Online community MVP programs encourage customers to get involved in supporting other users.

4. Build great customer experiences
Say goodbye to one-time transactions with your customers, and say hello to continued engagements. Move from deal / transaction thinking to continuous engagement thinking. Consider the Apple App Store. You get an account, buy something today and you get an ongoing relationship where you receive new offers, latest arrivals, specials and so forth. Your buying experience is hassle-free. You get all your account information in one place. Same with the Amazon Kindle store, or even a brick-and-mortar bookstore such as Borders .

The idea of a customer experience is to convey a consistent net impression through all customer touchpoints. Consider visiting a Nordstrom outlet and a Nordstrom site, and compare that with the Costco experience. In each case the core value proposition (class or variety and cost-savings) is conveyed across both touch points consistently. A Toyota Prius iphone advertisement conveys the experience of the interior of the car - you simply move the iphone to pan across the view of the interior. AAA combines the phone service, texting and technician visit touchpoints into a unified customer experience suggesting friendly and prompt help from a knowledgeable professional.

5. Provide thought leadership
In some markets, thought leadership provides the foundation of trust, which is critical to customer relationships. Thought leaders identify and express latent needs of a large number of users. They envision a better future. They take uniquely refreshing positions on key topics. For example, a presentation software vendor may write a thought leadership article on the use of Twitter for setting up backchannels during presentations for audience collaboration. An e-learning software vendor may write about how to design ad-hoc social agile learning.

6. Narrate success stories together
It is your customer's success, not yours, that we are talking about here. Describe your achievement in terms of customer goal fulfillment. Describe the business context of the challenge you overcame. Preferably state measurable results. For example, instead of saying :'Created 70 hours of e-learning in 90 days' say: 'helped UNO train 9000 volunteers in Africa in 90 days thru elearning'. Share the stage with your customer. Identify the various elements of value that you created for your customer.

7. Get on the customer's social graph
People use social media for self-actualization. Recognize and harness the power of interest groups. Get on the social graph, spread your message, use them as online trust agents. Imagine three options: Post to Yelp / Share on Facebook / Email a Friend. Which one has the highest trust factor? Which one has the widest reach? You will need to make decisions of this kind in utilizing social networks. You can also use social graphs to monitor your brand. Use dialog between your customers to learn about your brand and reputation. Understand why people are not buying your products. Listen to these non-customers.

From the foregoing, it should be easy to see that Customer Centricity is a leap forward from Customer Orientation. The chart below summarizes the differences.

Customer Orientation	Customer Centricity
Do as the customer says	Identify with the customer's goal (anticipate customer needs)
Create events of customer delight	Captivate customer through engagement
Deliver benefits	Deliver experiences
Be close to customer	Get on social graph
Build a relationship through service	Strengthen relationship through thought leadership
Listen to customer	Also listen to non-customer
Customer is king	Customer is a strategic resource

In today's always-connected, over-communicated and trust-hungry markets, I believe customer orientation is not enough. Indeed, customer centricity, as described above, shows the way to win those markets.

Eight Things to Look out for in a Plan

Some time back I had read somewhere an article on how to assess the health of a factory during a site visit, based on 8 factors. In this post, I propose to help assess how good a plan is, based on 8 salient features of a good business plan.

1. The Idea
What is the idea? What is different? A simple, un-obvious, easy-to-describe idea which a large number of people can repeat back without changing. That to me is the #1 requirement. Twitter's microblog and Subway's Foot-Long Sub are good examples.

2. The Opportunity
Does your idea solve a big problem? What is the market opportunity? What is the addressable market? It must be right-size and -more importantly- with a growth potential. That growth potential should be deduced from observable trends in the environment. The opportunity is at the core of external analysis. Nokia in the 1990s and Google in the 2000's identified such big and growing opportunities in mobile communication and online advertising respectively.

3. Why Us?
Why on earth should we be the best people to pursue the opportunity and the idea? What are our core competencies? Why can't someone else do it better? What's so special about us? This is the core of internal analysis. When Apple went after reorganizing the music industry with iPod, and Wolfram Alpha decided to be the #1 search engine for computable information, they leveraged their core strengths in consumer software/hardware and mathematical software respectively.

4. What Will it Take?
What resources will this take and where to get them from - what to give up, what to do less in order to do more of this. When Nokia decided to focus on Telecom in the early 1990's they gave up a bunch of other businesses. When ICICI decided to become a bank around the same time, they invested in a bunch of new capabilities related to retail banking.

5. Business Model
Who pays? How do we make money? That defines the business model. A musician may distribute the music absolutely free online and leverage the popularity to organize live concerts for a fee. A site like LinkedIn may provide free membership to a large number of professionals and essentially sell the use of their data to a select number of paid subscribers interested in recruiting. Zynga may choose to money on several small transactions, each involving buying of a virtual trinket meant as a gift. Tap2Talk is free for the user, but its customization requires subscription, and it is tempting to customize it to suit the voice of your kid.

6. Sustainability
How do we protect our business from competition? What barriers for competitor entry do we erect? Are these on supply side (patents, exclusive sourcing) or on demand side (customer captivity, channel exclusivity)? Or are their systemic barriers arising out of economies of scale, making it hard for competitors to produce for less? Microsoft, Garmin, Research in Motion all created barriers that allowed them some measure of sustainability.

7. Timeline
Okay, so what is the plan? What are the milestones? What is time critical? What are the dependencies? Companies like Electronic Arts -the game maker- and Intuit -the personal finance software maker- must take into account external factors (holiday season, tax year-end) to determine their timelines.

8. Cash Flows
It does, initially outward and then hopefully inward. A plan needs to visualize the flow of cash and figure out investments needed, RoI and other metrics.

In summary then the first 4 factors answer the "what" questions. What is the big idea? What is the big opportunity? What's special about us? What will it take? The next four factors answer the "how" questions. How do we make money? How do we sustain? How do we plan the timeline? How do we finance and get a return?

A good planner should pay sufficient attention to both types of questions and put together a winning plan.

Keeping up with the Deluge of Information

Leo Laporte delivered a brilliant keynote on "why new media matters" at eLearning Guild DevLearn 09 in San Jose today. Leo, known for his TWIT podcasts and TWIT Live realtime Web TV channel, opened the session out for questions. One question was - How do you keep up with all the information that is appearing around you? There seems to be an overload. How do you manage to stay on top? His answer was insightful. "I don't. It's like a river flowing by, and you dip your toes in when you get some time. I use my friends to filter information. They tell me what is interesting."

According to Leo, about one billion people now have the ability to broadcast. He quoted -someone- saying that 80% of content out there is crap. "And that's being an optimist", he added.

The Ten Faces of Innovation

Tom Kelly, the author of The Art of Innovation, has proposed ten personas that innovators could assume in an organization. The personas serve to demystify innovation, and provide a way for aspiring innovators to understand how they could contribute.

The Learning Personas

1. The Anthropologist: Camps out with target users, observes them, understands how they interact with products
2. The Experimenter: Prototypes ideas, thrives on trial-and-error, draws stakeholders in to test prototypes, embraces early failures
   
3. The Cross-Pollinator: Explores other industries and cultures, translates the findings to your business

The Organizing Personas

1. The Hurdler: Outsmarts and overcomes obstacles to innovation, knows which buttons to press
   
2. The Collaborator: Brings selected people together, leads from the middle, helps create multidisciplinary solutions
3. The Director: Gathers talented team and helps spark their creative talents

The Building Personas

1. The Experience Architect: Designs whole customer experiences. Recognizes that value added comes from the quality of experience provided. Sets the stage for positive encounters with your organization thru products, services, digital interactions, spaces or events. See products as journeys to be mapped. Brings products nearer to the customer.
   
2. The Set Designer: Creates right environment for innovation
3. The Caregiver: Anticipates customer needs and delivers customer care beyond expectations
4. The Storyteller: Builds internal morale and external awareness through compelling narratives

In an innovation workshop it is interesting to explain these personas to participants and have them wear a tag displaying the persona they have chosen for themselves for a session. The group then gets down to work on new ideas.

In a recent workshop we tried this, and realized that it is hard to assume a persona and maintain one's viewpoint accordingly for too long. People are just themselves.

Which suggests that people have strong natural inclination towards one or mabe a few of these roles and the whole team will do well to recognize that quickly so everyone can contribute the most in an innovation factory.

Every Wacky Idea is not an Innovation

It is often hard to assess whether a new business idea is truly innovative. To determine if your idea is innovative, here are some questions I suggest you ponder over.

Novelty

• Is anyone doing something similar? Is the difference apparent?

Passion and Belief

• Can you sleep well if you were told this idea will not be implemented?
• What are you willing to risk in pursuit of this idea?

Simplicity and Clarity

• Is this idea very simple to describe to a large number of people?
• If yes, can they find it easy to repeat its essence back to you correctly in their own words?
• When successful, will the idea look obvious in hindsight?

Market

• For whom will this idea create a value, and how much?

Timeliness

• Is there one logical reason why this idea was not a good idea to implement before now?
• What discontinuity or tipping point has arrived in the environment that creates a niche for this idea now?
• What enabling factors have arrived on the scene that make the implementation of this idea possible today?

Strategic Fit

• Is there a way to derive sustainable competitive advantage over others, from this idea ?
• Why will you - or your team - be better at implementing this idea than someone else?
• How does this idea complement your strategic imperatives, or deliver a new one?
• Will you be able to build value for customers using this idea without harming your fit with the ecosystem in which you currently operate?

These are inconvenient questions, and sometimes very hard to answer - such is the lure of your own idea. But I recommend you answer them, and if you are satisfied, you may have an innovative business idea. Let's talk about it.

The Innovator's Dilemma

Why do small companies out-innovate large ones? How is it that some of the best innovations in products, services and business models have come from little known companies? Are they somehow more creative? Are they less afraid to try new things? Are they more adventurous? Do they have little to lose?

Clayton Christensen, in his brilliant book The Innovator's Dilemma has analyzed this phenomenon in great depth. Based on research and analysis, the author demonstrates several insights into the dilemma.

Management Humor

Before the great recession recedes in the background, I thought I would mention my favorite example of wry management humor, from Harvard Business Review.. circa 1990.

"Normally I don't mix business with pleasure, but you are fired!"

A Recent Story of Innovation

How does an innovation come about?

My blog post titled Where Did YawnBuster Come From? describes the experience of coming up with a innovative new product that takes boredom out of presentations. This post is in my blog on interactive learning.

Innovations can have different origins. This one began with a genuine market need - that of making presentations less boring - and articulated the need in terms of a new product concept waiting to manifest itself.

The concept then morphs into use-cases, which compellingly demonstrate that it addresses the problem effectively, in certain circumstances.

Next, the concept needs an implementation that is realistic and feasible. So the blog post illustrates how we went about verifying this.

Once feasibility is established, we are one step further along. Now the focus is on the context of this new product, its core value proposition, its target market and a messaging that can be captured in a catchy name.

For someone interested in innovation, this post will make good reading from that perspective.

Strategic vs Tactical

Strategic issues have to do with allocating scarce resources to promising opportunities - and consequently, denying those resources to less deserving opportunities.

One aspect of strategic decisionmaking is about competition. You create barriers for competition where competition is imminent, and you obtain relative superiority over competition where the competition is manifest.

Another aspect of strategic decisionmaking has to do with innovation. You think of new ways to create value for customers.

Yet another aspect of strategic decisionmaking concerns itself with reflection. You figure out your own core competencies and play to exploit them. You understand your culture and put its strengths to use.

Strategy alters the strength of the enterprise relative to its competition.

Tactical issues, on the other hand, are about efficient execution. Tactical decisionmaking leads to absolute gain in operational efficiency. It leads to streamlined processes, reduced risk, and so forth.

Tactical decisionmaking can often be incremental: improve utilization, enhance productivity, increase return-on-investment. The metrics it aspires to meet are absolute: efficiency, quality, productivity, profitability.

To quote Kenichi Ohame, from The Mind of a Strategist, his famous strategy classic, "The mind of a strategist functions differently. Gaining relative superiority over competitors is different from making internal improvements with reference to an absolute model. It is the difference between going to battle and going on a diet."

Often then managers who make a transition from a tactical level to a strategic level are quite un-prepared to change to a strategic mindset. Several managers were able to experience this firsthand at a strategy workshop which I will describe in this blog some time soon.

Why this blog?

Since 1990, I have been involved in growing Harbinger Group, a business that I founded. It has been nearly two decades full of action. This blog is an effort to chronicle some of the insights gained, lessons learnt, values upheld and beliefs strengthened.

The main theme of this blog is entrepreneurship. Posts of this blog will draw on innovation, strategy and leadership. More often than not, the lines are blurred, and indeed these additional themes are sometimes inseparable. In such cases, a post may touch upon two or more of these additional themes.

And again, the past is only a prologue. As we enter next cycles of growth, some reflection upon our ways of doing things is in order. Reflection is a great way to learn, and writing encourages reflection. That is another important purpose of this blog.

Happy reading.

Who this blog is for

This blog is for people who see themselves growing as innovators, strategists, leaders and entrepreneurs. Much of the material in this blog is based on the thinking and practices that have led Harbinger Group to become an example of:

• Innovative entrepreneurship in the field of hi-tech, building market-pioneering products.


• Successful international company headquartered in India, enjoying a dominant market-share, rapid growth and sustained profitability.
  


• Value-based organization, transforming its people into leaders, combining success with fulfillment.
  

Harbinger Group's core values are: Innovate, Partner and Excel. The Harbinger philosophy is to create value for its clients through a culture of continuous learning, respect for the individual, and innovation.