Who Do You Want Your Customers to Become?
July 23, 2012 Editor 0
Right answers to wrong questions virtually guarantee failure. Innovators betting on “out of the box” thinking or “faster, better, cheaper” innovation paradigms for success all too frequently find themselves — and their customers — disappointed. Asking “how can we build a better mousetrap?” in an era of touchscreen and haptic virtuosity is not a recipe for success. Just-in-time innovation healing the pains customers have in the “here and now” may be wonderful — but it’s the very definition of tactical, rather than strategic, investment.
When I look at what historically — and sustainably — works as a strategic innovation investment mindset, a single question dominates: “Who do our customers want to become?” The better we know and understand who customers want to become, the better we can invest and develop the innovations necessary to get them there. To see customers as the assets they really are, the strategic design and marketing question must shift from “What’s the new value of the innovation?” to “What does our innovation really ask customers to become?” and, even better, “Who do we want our customers to become?” These questions shift the focus from extracting value from customers to making customers more valuable. Simply put, this new focus redefines the purpose of innovation — which is not just designing better products and services, but designing better and more valuable customers.
This turns more traditional notions of innovation value inside-out. Innovation is not just an investment in product enhancement or customer experience; innovation is an investment in your customer’s future — a human capital investment in who your customers really want or need to become.
History gives a lot of credence to this “human capital” model of innovation influence. Henry Ford didn’t just facilitate “mass production;” he enabled the human capital of “driving.” George Eastman didn’t just create cheap new cameras and films; he created photographers. Sam Walton’s Walmart successfully deployed scale, satellites and supply chain superiority that turned shoppers into higher volume, one-stop everyday low-pricing customers. Steve Jobs didn’t merely “reinvent” personal computing and mobile telephony; he reinvented how people physically touched, stroked, bumped and talked with their technologies. Google’s core technology breakthrough may appear to be “search;” but the company’s algorithms and business model is contingent upon creating hundreds of millions of smart “searchers” worldwide.
The essential economic takeaway from these examples is that long-term innovation success doesn’t revolve around what innovations “do,” it centers on what they invite customers to become. Successful companies have a “vision of the customer future” that matters every bit as much as their vision of their products.
Jeff Bezos, Steve Jobs, Mark Zuckerberg — and even RyanAir’s Michael O’Leary who famously proposed coin-operated in-flight toilets— have rigorously thought through how their innovation investments would make their customers even more valuable. Today’s Web 2.0 network effects business model — where a service becomes more valuable the more people use it — and crowdsourcing represent perfect examples of how smart companies increasingly recognize that their own futures depend on how ingeniously they invest in the future capabilities of their customers. Their continuous innovation is contingent upon their customers’ continuous improvement. Call it “customer kaizen.”
The overarching theme and common denominator to all of this is that these entrepreneurs and enterprises were relentlessly investing in the capabilities of their customers. They were innovative by investing in who their customers and clients wanted to become. By ignoring or avoiding this “innovator’s ask,” too many organizations are cheating themselves and their customers on getting measurably better returns on their innovation investment. It’s the difference between “transactional innovation” and innovation based on more sustainable relationships of mutual gain.
Want to transform your innovation mindset? Start thinking how your proposed innovations make your customers more valuable. Ask yourself if your innovations are investments your customers’ futures. Because if they’re not, they may not be good investments at all.
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