Design That Moves Business: What exactly is “customer-centric”?
By guest authors Charles W. Bush and Kathy Hwang of 3Strand Innovation, a brand, design and business consultancy.
Everyone claims to take a “customer-centric” approach to business these days. You may have even heard more people using the terms “design research” or “strategic research.” Such an approach has been used to validate the work of many of the world’s largest (and most expensive) business and design consulting firms, who argue that researching the habits and trends of your customers before beginning design is a prerequisite for innovation. Some firms who claim this end up finding the nuggets that produce gold for your company. Others simply send you a big invoice. So how do you distinguish between the two?
The most successful firms are able to take the qualitative observations of users and connect them with a quantitative ROI. An example of this approach to user research is the “Lead User” theory. Eric von Hippel introduced this term in 1986 to identify the key people in your market who will best help your company grow. According to von Hippel, “[Lead Users] are at the leading edge of an important market trend(s), and so are currently experiencing needs that will later be experienced by many users in that market. They anticipate relatively high benefits from obtaining a solution to their problem, and so may innovate.” [1]
Lead Users love your products so much they will tinker with them, create new ways to customize them, and even possibly invent something more valuable than your offerings. A single individual may hold the key to the future of your company, and chances are that individual is not an employee. For example, nutritional supplement bars were being developed by leading-edge athletes long before PowerBar turned them into a commercially viable product.
Part of the strategic design process is finding and connecting with these people who wake up using your product, take it the bathroom with them, and are lulled to sleep with the knowledge it will be there in the morning. This means talking to the somewhat unusual and obsessive folks who take their own laundry detergent on vacation with them because “it’s just better.”
Taking this theory a step further to find a quantitative measurement of success, a study conducted at 3M suggested that not only are Lead Users more innovative, but they also provide solutions with more commercial viability. One of the more surprising results came out of 3M’s 5-year sales projections, where the forecasted sales for Lead User inventions amounted to $146 million versus a mere $18 million from Non-Lead User teams [2].
A new breed of strategic innovators has spent the last 10 years focusing on this type of user research and customer engagement. They specialize in “getting smart” quickly about your product, connecting with your Lead Users, and being hypersensitive to human pain points. Not only will the strategic design firm find the information you need, but will also (drawing upon years of experience with visual communication) translate that information to an organization in the most effective form. Strategic researchers also take on a bit of a Lead User-Light role, by learning quickly about your product, connecting and empathizing with its users, and constantly looking for ways to improve it to meet unspoken user needs.
As we mentioned before, there’s no sure thing with some companies. Market-changing breakthroughs are rare, but based on these studies, when user research is treated as an integral part of the process, the chances of innovation are significantly higher.
Part of the struggle in the next year will be having the confidence to innovate in tough economic times. As competitors begin to disappear under the weight of the recession, now is the time to innovate and take market share. Companies will need every tool available to them to survive. Investing in strategic innovation will be key to directing a company’s development and leveraging its pull on the market.
Sources:
[1] Eric von Hippel, Democratizing Innovation; pg. 22.
[2] Lillien et al. 2002.
This segment is part 8 in a 8 part series
Jump to part: 1, 2, 3, The Motorola RAZR Effect, 2, 3, An Unusual Place for Design, What exactly is “customer-centric”?
1/25..I really learned a lot from your most comprehensive piece on customer centric innovation and particularly the last part, which spoke to companies needing every tool that will help them survive along with the critical need for innovation.
I’ve included some ideas from my colleague Jatin DeSai, founder and president of The Desai Group, which specializes in innovation excellence, about what companies will need to do in this economy. Happy to put you in touch with Jatin. His e-mail is jdesai@desai.com. Thanks for your consideration. Steve Gaynes
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During the down-times, businesses need to pay special attention to the impact on your business cockpit – People, Process, Customers, and Strategy:
1. People: During times like these as when the workforce is most stressed. Your top-talent is the first group you must be most concerned with. It is this group that is going to make you or break you after the crisis is over. This is the group that will pick up the pieces and move the organization forward. Pay special attention to this group. Hold town-hall meetings, and become overly available to them with transparence.
2. Processes: Most organizations will feel huge productivity lose across number of critical processes. Take the top 3 processes, and invest in optimizing them to improve quality during these tough times – most of your competitors will lose quality and productivity.
3. Customers: Customers are very worried about your organization’s ability to deliver on the promise. They will have extra tolerance for mistakes. Most organizations pull resources in this area as well. Instead, bring customers into your business conversations like you’ve never done before. Use your customers to help you develop the next product, or improve your service, to improve your hiring practices, enhance your IT platform, etc. When chips are down in the market is when you want to over serve your customers.
4. Strategy: By definition strategy means differentiated position in the market. That is, your customers (internal or external), fully understands how you are different then your competitors. This is the time, when your competitors behaviors about their strategy will become visible in the marketplace. Look for the signs of such activities. Also look for new emerging patterns in the industry, as they will surface from dormancy. Listening carefully to your competition, marketplace, and the industry trends at this time, you will be able to enhance your own strategic position and move quickly to new blue-oceans with breakthrough results faster over the next 18 months/next product cycle.
Thanks for the extra tips, people, process, customers, and strategy are areas that can certainly make a difference to any company.
Given today’s culture we want to encourage more people to tell specific stories when and how they learned from their customers. We think we could all use a good success story these days.