Why do we take non-productive decisions? This is a question easy to hear nowadays. I believe one of the answers (probably the most important one) comes from a Market Research Executive Board report: almost all executives agree that customer focus is critical to their company’s success – yet only 40% of senior executives feel that they have the support and tools that they need to be customer focused.
And why is that? – we may ask. Well, research into the customer decision-making environment reveals that the Research function—the organizational owner of customer knowledge, one of three components of customer focus – is currently set up to impact only 10% of the company’s customer-facing decisions. This leaves 90% of decisions being made based on “gut instinct” and/ or insights and information provided by other sources.
Not long ago I realised the importance of client facing behaviour – more details in this article – and decisions inside the firm will definetly impact this behaviour directly.
I started enjoying coffee a few years ago so I hope the fact that I didn’t know about Douwe Egberts until recently will be kindly overlooked. A nice flavour during a Dutch breakfast convinced me to try this coffee again some time, and the opportunity came a few weeks ago while being in Hague with my wife. She noticed Douwe Egberts’ shop on Noordeinde street so we decided to have a latte and a sandwich.
I’ve placed the order, took the plate with the two full glasses of latte and headed to our table. Everything would have been a normal visit and no story would have been told unless an unfortunate accident happened: my backpack dropped from my left shoulder on my forearm while bending to place the plate on the table. You cannot imagine the mess I’ve made: there was coffee spelled all over the table, chairs, floor… the full content of the two glasses was literally all over the place.
One of the girls from the bar came in a hurry and, before I would have my chance to apologize and even before looking at their messed assets, she made sure I’m all right and directed me to a toilet to wash my hands and jacket. When I returned, she was already cleaning the mess so I went to the bar to order some new ones. She noticed me, smiled and told me she would bring the coffees to the table. Obviously, I told myself, it’s fair not to take a second chance with my two left hands but than I had my first surprise: she wouldn’t let me pay for them but insisted to accept the new coffees on the house. You can see part of my second surprise in the picture nearby: they made it for us with unworthy consideration – a “cappuccino art” heart on each of the lattes and two nice dark chocolates aside.
That was the moment I turned from an occasional customer to a “brand lover”. No matter how much you try to promote a brand, in the end your client facing staff will be making the difference in your brand promise.
Looking back at my brand management story:
the quality of the product made me become an occasional customer;
the service made me “love” the brand;
accessibility is a key point in being a loyal customer (the brand is not so well represented when compared to competitors such as Starbucks, for instance).
When we talk about innovation it’s easy to come up with the Apple example but is this the business innovation we should constantly keep a look at? I believe this is a very limited approach as innovation is not only in the product we sell but also in the way we do our business – and this is a core ongoing task in business management.
Innovation is shifting away from pushing products out of labs, towards creating value for customers. And finding out what customers value means getting closer to them. That’s why creating value can mean innovating business models, servicing, processes or marketing. According to a recent survey, over half of CEOs are focusing more on business model innovations.
Being innovative is a long-term and continuous process. Companies are challenged to create the business of tomorrow even as they focus on keeping the organisation lean today, with more immediate incremental improvements supplemented by long-term big bets. Effective innovators have structures and practices in place to make innovation more systematic. This allows them to ‘control’ accidental discoveries, and to be continuous innovators. Such structures include a grassroots approach – empowering employees to act like entrepreneurs – as well as strong leadership backing and centralised support.
Innovation processes are also opening up, for example to suppliers, customers or even the world at large. These changes often need to be accompanied by changes to the operating model. In fact, it’s the complete change of operational models as a result of digitalisation that drives many forms of innovation. Many great innovators are embracing what digital means for their business while others are inventing new operating models to target the under-served in markets once thought unreachable.