innovation starts with customers

7/29/2019 Innovation Starts With Customers

1/6

2013 Predictive Consulting Group, Inc.All rights reserved. Reproduction prohibited.CHIEF CUSTOMER OFFICER COUNCILwww.ccocouncil.org | (978) 226-8675 Page 1

Innovation Doesn'tCome from the Top or

the Bottom: It MustCome from Customers

by Curtis N. Bingham


2/6


Innovation Doesn't Come from the Top or theBottom: It Must Come from Customers

Curtis N. Bingham

Founder and Executive Director

Chief Customer Officer Council

CurtisBinghamistherecognizedauthorityonchiefcustomerofficersandthefirsttopromotethisroleasacatalyst

forcompetitiveadvantage.HeisthecreatoroftheCCORoadmap,agroundbreakingworkcontaining100+critical

strategiesessentialforcustomercentricity.Asaninternationalspeaker,author,andconsultant,Curtisispassionate

aboutcreatingcustomerstrategytosustainablygrowrevenue,profit,andloyalty.

Introduction

Thereareanumberofcommonmisconceptionsaboutwhereinnovationstarts.Somepeoplebelieve

that great leadersdrive innovation.Othersbelievethat theroots of innovation lie in pure research,

unadulterated and unfettered by customer issues or complaints. Still others believe that innovation

starts with employees and suggestion boxes. However, the landscape is littered with great leaders

whose innovationsdidn'tamount toanything orweren't sustainable (thinkKodak,orXerox)andthe

daysofpureresearcharedisappearingliketheBellLaboratoriesofyesteryear.Thenewrealityis that

innovationmust startwithcustomers. Inthisage, customersaretaking controlof businesses,setting

their own agendas, and rewarding those companies that can adapt and better serve them. Chief

customer officers, with their intimate customer knowledge, are uniquely qualified to proactivelydiscovercustomerneeds,wants,anddesiresandhelptheorganizationprofitablydeliverinnovations.

Where Doesnt Innovation Come From?

Therearetrulygreat leaderswhove redefined theproduct andcompetitive landscape, such asAkio

Morita,oneofthefoundersofSonyandthefatheroftheWalkman;SteveJobswithAppleComputer,

theiPod,iPhone;LouGerstnerofIBM;andothers.However,thepagesofFortuneandtheWallStreet

Journalarefilledwithfarmorenumerous,othergreatleaderswhovefallenintodisgraceafterbeing

unabletoconsistentlyandreliablygenerateprofitableinnovations.

In addition, pure research laboratories such as IBM Research and Bell Labs are shrinking and

disappearing.Oncethedomainofonlythelargestresearchlabs,smallbusinessesnowownupwardsof35%oftheworldspatents.WhileatBellLabs,Iwasdismayedattheinsulararroganceof theLabsas

engineers essentiallysaid, Weknowwhat ourcustomerswantwetold them so! Customerswere


3/6


considered beneath them, and it showed in the companys rapidly eroding bottom line. Pure R&D,

unadulteratedbycustomerissues,cannotbeasustainablesourceofrevenue-drivinginnovation.

Employee innovation programs are only marginally better than pure research in that with some

exceptions,theyarefocusedinternallyonimprovingoperationalperformanceratherthanbreakthrough

technologythatsimplifiescustomerbusinessprocessesandenhancescustomerprofitmodels.

Marketing has traditionally focused on building a brand, creating an artificial need, or creating

awareness in hopes that they'll catch a prospect during their purchase cycle. Those days are over.

Brandsaredead,needsaretooexpensivetocreate,andsimplyhopingtocatchsomeonewithawell-

timedmessageis ludicrous.Brandsusedto serveasaproxyfordetailed,analyticproductinformation

thatwasunavailableintimespast.InthisPost-InformationAge,ortheAgeofAccess,consumershave

farmoredetailedproductinformationavailable tothem fromcompanies, reviewers,users,andeven

competitors.Withthisoverabundanceofinformationandtrustedrecommendations,thereisnoneed

forthebrandexceptasanaffinitymarkerorcommunityalignmenttool.

The Root of Innovation

Ifinnovationdoesntcomefromstrongleaders,properlyschooledemployees,behemoththink-tanks,or

fromoutward-boundmarketing,wheredoesitcomefrom?

PeterDruckersaid,Thepurposeofabusinessistocreateandkeepacustomer.Ifyourpurposeisto

getandkeepprofitablecustomers,shouldntyourprimarysourceofinnovationbeyourcustomers?

Itisnolongerpossibleforanycompanytosimplydevelopanewproductbasedonsomecoolideaand

throw it over the wall in hopes that marketing and sales can figure out how to create a need in

someone,somewhere.Competitionistoointense,customersaretoodemanding,andprofitmarginsare

toothinforthiskindofmistake.

Inshort,thecustomerrules.

Employeesaregreatatrecognizingopportunitiesthatcustomerspresent.Greatleadersarethosethat

recognizeinnovationwhentheyseeitandproperlyfundandcommercializeit.R&Disuniquelyqualified

to find ways of developing profitable solutions to well-defined customer issues and opportunities.

Marketingmustbethefacilitatorofallofthese;ensuringthefirmsvaluechainbeginsandendswith

thecustomer,earningsignificantprofitsfromstarttofinish.

How Do We Leverage Innovation?

Proctor&GamblesseniorleadersrecentlyrealizedthattherewasnowaytheycouldmaintaintheirgrowthtargetswiththeirNotInventedHeresyndromebecausedoingsowouldrequirethecompany

to grow by $4 billion each year. Instead, they realized that their goal should be to be the best at

understandingtheircustomers.ThroughtheirConnect+Developprogramtheyrefuelinggrowthby


4/6


purchasinginnovationsfromnetworksofsmallercompaniesfromaroundtheworldthatuniquelyand

profitablysatisfycustomersandenhancetheirexperience.

Toeffectivelyleverageinnovationtofuelcustomer-centricgrowth,companiesneedtodothreethings:

1. Develop and regularly refresh an extraordinarily deep understanding of customers needs,wants,desires,andattitudesregardingtheirproducts,services,andthecompanyitself

2. Assignexecutivechampionsforinnovationinitiatives3. Createaunifiedprocessforidentifyingandqualifyingnewopportunitiesforproducts,services,

markets,orsegments

An Extraordinarily Deep Customer Understanding

Itisnttoohardtofindoutwhatcustomersneed,want,andarewillingtopayfor.Infact,itisquitetheopposite. Customers are demanding to be heard. If you search the web for aberrations of many

companysnamesyoullinvariablyfindsitesthatcustomershavesetuptovoicetheiropinions(e.g.,

citibanksucks.com).

Unfortunately, notnearlyenoughcompaniesmake sufficienteffort todevelopthis level of customer

insight,choosinginsteadtooperatefromthegut,orrelyuponoutdated3rd-partyresearch.

One of my clients, a major financial software vendor, thought its customers were insanely price

sensitive.However,intalkingwiththosecustomers,Ifoundalargeandeasilyidentifiablesegmentthat

trulyvaluedthevendorsproductsandwerewillingtopaydoubleandeventriple itscurrentrates.In

addition, I also discovered an important business need in the market for a product that they had

previouslythoughttobeverylowvalueandwereconsideringjustgivingawayforfree.

Toeffectively listen, you must speakwith and learn from customers, vendors, partners, and others

wherevertheycanbe found.Youneedtoscourthesocialweb,forums,andusercommunitestowoo

leadusers,bloggers,exemplarsandadvocateswhocanmeaningfullycontributetoyourgrowingbodyof

knowledge.

Ofcourseyouneedtosolicitinformationaboutproductissuesbutthereisfarmorethanthattobe

gained. You must delve deeper into customer attributes, perceptions, dissatisfiers, and business

processesinordertoquantify,justify,anddefendthevalueyouprovideandfortifytheirpurchaseand

retentiondrivers,aswellastodiscovernew,profitableopportunities.

TheCCORoadmap(http://www.ccocouncil.org/site/cco-roadmap.aspx)identifiesinnovationasoneof

thekeyresponsibilitiesoftheCCO.Thechiefcustomerofficer(CCO)isuniquelyqualifiedtoidentify,

evaluate,andrefinecustomer-centricinnovationstoensurethegreatestsuccess.World-classCCOshave

attheirfingertipsdata identifyingthemost valuableandprofitablecustomerswhoseneedsaremost

important toconsider.In addition, theseCCOshave thestrongestB2Bcustomerconnectionsandthe

greatestB2Ccredibility togarnerparticipation incustomer listeningactivities that discover, test,and


5/6


refineinnovativeideas.Leveragingtheirin-depthcustomerunderstanding,CCOscaneffectivelyground

themostpromisinginnovationeffortsinreality.

Assign Executive Champions for Innovation Initiatives

Asmentionedbefore,greatleadersarethosewhocanrecognizesignificantinnovationandsuccessfully

evaluate it,vet itwith customers,andcommercialize it.Executiveleadershipalone hasthe ability to

understandpotential, forswearrisk, fund great ideas,andremoveobstacles.Companiesmust create

executive-levelsupportforwell-qualifiedinitiativessotheyseethelightofdayandhaveachanceto

contributetothecompanysbottomline.Aswell,thesecontributionsmustbeformallymeasuredand

rewardedtoensurethatthedesiredresultsareachieved.

A Unified Process to Qualify New Opportunities

Withtheseeminglyunendingsupplyofnewbusinessopportunities,howdoyougoaboutevaluating

them all to determine which ones are viable? For Proctor & Gamble, the process was relatively

straightforward:itidentifiedthefivebiggestcustomerissuesforeachitsdivisionsandthenspenttime

with key customers to identify the desired experience around each issue. It then began to source

solutions from innovation marketplaces, evaluating each according to potential profit contribution,

strategicfit,andoverallimprovementtothedesiredcustomerexperience.

While your processmay bedifferent, the most important thing is to ensure that there is a unified

processthateveryoneinyourorganizationunderstandsandcanfollow.

Conclusion

Innovation may be incremental. It may be transformational. Regardless of which, it is clear that

sustained, profitable innovation comes from customers. Those companies that strive to intimately

understand their customers needs,wants, anddesires andprofitably satisfy them better than their

competitorsarethosewhowillwininthecustomerseyesandinthemarketplace.

Letyourcustomersguideyournextstrategicmovesoyoucangrowprofitsasyouattractmoreofthe

bestcustomersandkeepthemlonger.*

*CopyrightNotice:Allcontentcontainedinthisarticleiscopyrightprotectedmaterial.Reproduction,inwholeorinpart,inany

formormedium,withouttheexpresswrittenpermissionoftheChiefCustomerOfficerCouncilisstrictlyprohibited.


6/6


About CURTIS N. BINGHAMAsExecutiveDirectoroftheChiefCustomerOfficerCouncil,CurtisBinghamis

therecognizedauthorityonchiefcustomerofficersandthefirsttopromotethis

role as a catalyst for competitive advantage. He is the creator of the CCO

Roadmap,agroundbreakingworkcontaining100+criticalstrategiesessentialfor

customercentricity.Asaninternationalspeaker,author,andconsultant,Curtisis

passionateaboutcreatingcustomerstrategytosustainablygrowrevenue,profit,

andloyalty.

About THE CHIEF CUSTOMER OFFICER COUNCIL

TheCCOCouncilisapowerfulandintimategatheringoftheworlds

leading customer executives from widely diverse industries.The

Councilhelpsexecutivesachieveobjectivesfasterandmoreeasilyby

leveragingbest practices. Ithelps validateand refine strategiesand

initiativestoavoidexperimentingatcustomerexpense.Membership

isbyinvitationonly,andpurposefullycross-pollinatedwiththemost

forward-thinkingcompanies,largeandsmall,soastohelpcustomer

executivesdeliversolid,customer-centricbusiness results. Formore

information,[email protected].

Jointheconversation

www.ccocouncil.org

PowerfulInfluenceonCustomerCentricity AuthorityisthecurrencyoftheC-

Suite.GreaterAuthoritymeansgreaterabilitytoinfluencetheorganizationto

takeadesiredaction.Sohowdoyouincreaseyourauthorityandbetterusethe

authoritythatsbeengrantedtoyou?Howcanyoubuildstrongerrelationships

and demonstrate and communicateresults?In thisBinghamAdvisory, youll

not only learn about the three types of chief customer officer authority:

Positional,BorrowedandEarned,you'llalsolearnfivewaystoborrowandfour

waystoearngreaterauthority,withspecificexamplesofeach.

Downloadyourfreecopytodayatwww.ccocouncil.org/thebinghamadvisory/

Thought-leadingVideos

ccocouncil.org/video

MoreArticlesbyCurtis

ccocouncil.org/exclusiveresources

LinkedInDiscussionforCCOs

(ForVPsandabove)

CCOCouncilNetwork

innovation starts with customers

Documents