Profiting From Change
Successful companies are those most adept at understanding how customer needs are likely to change. They choose a clear path, and adjust their course as events unfold. As the explorers who set out to find new trade passages did centuries ago, they plan a route, and refine the map as they go.
Here are five keys to success:
1. Live in your customers’ world
Use your own product or service, and those of your competitors, just as a customer would. Visit customers and watch them buying, using, maintaining and disposing of your product. Talk to customers about the changes they are seeing in their competitive environment and in the economics of their business.
When Delta Air Lines wanted to improve the customer experience, they asked top management to “fly like a customer.” Flying like a customer meant buying tickets online, waiting through long security lines and sitting in cramped coach seats. Management experienced some of their customers’ frustrations firsthand, and made changes to improve satisfaction.
2. Conduct small experiments
More and more, we’re hearing that companies are simply “trying more things” and watching to see which ones work.
Intercontinental Hotels created multiple designs for their new Holiday Inn reservations website, put them all online, and found out within a few hours which design customers preferred.
In another example, The Coca-Cola Company realized that Christmas season marketing efforts were being duplicated in every market. Though tailoring to local markets is important, they saw that many best practices could be leveraged regionally or globally. Coke experimented by asking a team from Germany to develop a global marketing approach for the season. The team was successful in collecting and employing the best ideas from around the world, and this tactic is being expanded.
3. Collaborate with purpose
New electronic media increasingly enable customers to participate in marketing, product development, technical support, sales and more. This process reduces cost (when customers perform work previously done by employees) and allows companies to learn from customers at a far faster rate.
Similarly, smart companies are increasingly asking employees to collaborate across geographies and organizational lines. Cisco has adopted a cross-functional “councils and boards” structure. The system enables Cisco to better address emerging markets and to combine technologies to offer the customer a more complete solution. Extensive use of social networking and videoconferencing tools has cut down on executive travel even while increasing innovation and execution speed. Collaboration helps good ideas bubble up from more sources, and accelerates learning.
4. Rethink “headquarters” and work across geographies
Take strong steps to stay in touch with what’s happening in dispersed geographic markets.
Many companies, such as Halliburton, Accenture, and computer maker Lenovo now have no real headquarters location, spreading top executives among several geographies. For example, Lenovo’s top management team is spread between Singapore, North Carolina, Hong Kong, Seattle, and India. The company’s top 20 leaders meet monthly, each time in a different place. These approaches help keep companies from developing “tunnel vision” in a single market.
5. Set a clear direction, but stay flexible
Successful companies paint a clear and compelling picture of the future they wish to create for customers, employees, investors, channel partners, and other stakeholders. By painting this picture, they align decision making, and greatly increase the chance that the picture will become reality. At the same time, they stay flexible. They listen continuously, put feedback loops in place, establish and monitor metrics, and adjust their plans as things change.
