02 Nov

Innovation with the customer at the centre

Sector boundaries are blurring. Traditional business models lose their strengths and existing success formulas become outdated. The ever-changing needs of today’s demanding, and always-online customer has become the new constant.

In order to stay in business, organizations need to have a proactive, customer-centric approach. This requires an open, innovative and change-oriented corporate culture. But not every organization is able to quickly adjust to this new reality, and can realise a cultural change. Small, new, disruptive players seem to be more successful than existing organizations. Why? They are design-driven.

What makes an organization design-driven? And why is a design-driven organization by definition customer-centric? The two don’t seem related with each other. But they are. Let’s get back to my study at the University of the Arts Utrecht to explain why. To graduate, I could come up with a fictitious case, but I didn’t want to. In fact, I wanted to have the end user of my spatial design project in mind. I wanted to know who it was and what its wishes were. I selected Selexyz, a large bookstore chain in the Netherlands. I met with my client, the manager of the branch in Utrecht who let me interact with employees, and do research among customers. I followed them in their search for the right product in the store. A wonderful job. In my project I had been guided by the end users: employees and customers of Selexyz. This is what I think design thinking is all about.

With customer’s needs in mind

Traditionally, designers learn to design for the user. If we translate that into an organization it is essential to innovate with customers’ needs in mind, but also to involve them in improvement processes. After all, they will make use of the services or products of the organization. The importance of design thinking is widely recognised by decision makers. Take a look at IBM, that is hiring over a thousand designers to create a design-driven culture. Or Accenture, that took over service design agency Fjord. But also the relatively new player Airbnb establishes its own in-house innovation and design studio Samara to experiment with new services. The Design Management Institute found that in the US, up until 2014, design-driven companies outperformed the S&P stock market index by 219% over the last 10 years.

An organization that embraces design thinking, builds its processes on the principle of ‘the user at the centre’. In my view this is one of the key design principles. Services and products are designed with the aim of solving a user’s problem or contributing to a user’s daily life enjoyment or convenience. Continuous adjustments and improvements come with it.

Recently I talked with a user of a new app. She did not understand that the app was released with so little to offer. But when I explained her that from now on new features and improvements would be developed based on input and feedback from her and other users, she understood that this was the right way to introduce a new digital service. Her role had changed from user to expert and co-producer. And based on this way of working, an app will never be ‘finished’. The app evolves with the user. The continuously changing society, and thus the user, is the new constant. If an organization is not connected with the user of its products and services, this new constant is a challenging target. However, if the source of all innovations is the end-user, services and products will always be relevant and valuable for the end-user.

Create an organization-wide customer-centric culture

This is not an obvious way of working in traditional, hierarchical organizations. That is why many of them develop research and innovation labs and agile-working start-ups alongside their existing organization. For instance, BBVA has its own Innovation Centre. And Telefónica Alpha is the research and innovation lab new style of the Telefónica Group. And also inside Philips Design multidisciplinary teams conduct extensive user research to understand the needs of end users. What those companies realize is that changing a culture is not achieved by hiring strategic designers, a new CDO, or setting up an innovation lab. But by using these to create an organization-wide customer-centric culture, they can realise a solution and future-oriented organization within a year or two.

The role of Marketing

What surprises me is that marketers and business development managers no longer seem to play a role in this. But they should be the initiator of a customer-centric change inside their companies. Although we learned from Drucker that “customer orientation is the key to marketing success”, the customer seems further away than ever. Design thinking is not a trend, but is a business strategy that aims to add value to the life of the customer and contributes to the success of the company. If you are a marketer or business developer, ask yourself: how many customers do I actually know? How do I involve customers in improving our services and products? Whom am I really talking with? Isn’t it the purpose of marketing to think: What can our organization and our products and services mean for society, for people, users, customers?

I’m not saying that the large number of customer data (‘big data’) is useless. These data may even be the reason why companies have less real contact, interaction and exchange of knowledge with the end user. But what does age, income, purchase frequency, web search, app download, Facebook likes, etc. say about the daily customer’s experience with your service? How do you get real insight in its daily activities, motives and emotions that affect your service, but are not shown by these data? And how do you realise service improvements based on these insights?

Remain valuable in the life of your customer

It is the multidisciplinary approach and holistic vision of design-driven organizations that ensures a solution-oriented culture arises with the experience of the customer as its fundament. Products are not just products, but services with a set of contact moments that are and remain valuable in the life of the customer. If it turns out that this value decreases, optimal ideation and immediate anticipation are of great importance. The closer the relationship with the customer, the more successful.

This post has been published on LinkedIn, 13 September 2016

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