Shift in Mindset

Customer-driven innovation requires a shift in a company's mindset.

Without a customer there is no business!  What could be more obvious than that?  But while most companies claim to be customer-centric, or customer focused, few really are.  Why?  Because most companies are still product-centric, orchestrating customer interactions around a set of rigidly defined company offerings; they have yet to make the transition to co-creating relevant and uniquely meaningful value through personalized customer interactions.   

Take the example of Sport and Health, a chain of fitness clubs in the Northern Virginia area.  My family and I have been a member of this club for over 15 years.  During this time, the fundamental structure of the club has remained unchanged.  The basic identity of the club still revolves around its physical offerings - courts for tennis, racquet ball, and basketball, indoor track, fitness machines, spin cycles, swimming pool, racquet ball courts, and exercise/dance studios. 

However, we, the customers, have changed and so have our fitness needs.  If the club was truly customer-focused as it claims, then it should invest in understanding how its customers' needs are changing as they pass through various stages of their life-cycle.  Fifteen years ago, we had a child at home, we are empty nesters now.  Recently, when my membership came up for renewal, I decided to test the system.  After several irritating attempts I finally managed to connect with a human being.  I asked if they would be willing to accommodate my changed workout habits and fitness needs through a custom created membership plan.  The answer was a crisp no!  I could select from one of six standard membership alternatives; one, two, or a three year membership term, with tennis or without tennis. 

 Not all organizations are like the Health Club.  On a recent visit to the Boeing 737 plant, I saw first hand the extent to which Boeing works with its customers, different airlines of the world, to co-create relevant and specific customer value.  The interior of the plane is totally co-created by Boeing and the buying airline.

Starbucks is another example.  A key ingredient in Starbucks popularity is the ability of a customer to "co-create her coffee."  I'm pretty sure that if you were to walk in today and ask for a Gingersnap Latte without whipped cream they would oblige you, even though the drink preparation script specifies a whipped cream topping.  The Barista may lecture you on what you are giving up, but that's subject matter for another blog. 

Several factors contribute to companies falling short of their customer focused claims.  Key among them are:

1. Co-creating value with customers is effortful
2. Having to expend the extra effort tests a company's will; most companies come up short
3. Service companies, health clubs, restaurants, etc., still have a poor understanding  of innovation and its role in creating incremental customer value
4. Customer-driven innovation requires a shift in mindset, from a company-centric view that believes that value is intrinsic to a company's offerings, to a customer-centric view that says value is co-created through individual-specific interactions between consumers and companies