Customer Driven Innovation: A Top Priority for the CIO?

The report also goes on to make an interesting prediction.

In 2009, I think we'll see this term shift from "customer-facing" to "customer-embracing" to signify the move from the largely passive approach of merely facing your customers to the more active and engaged notion of embracing.

Personally, I think the prediction misses its mark - they should have labeled the priority customer-driven innovation! 

But semantics aside, my first reaction was a positive one. Not that we need IT czars or CIOs endorsing our passions. But I thought it could only help if departments other than innovation and marketing embrace and implement customer driven innovation programs.

My initial positive reaction however gave way to gripping anxiety, thanks to Gillian Tett and Krishna Guha. In his excellent FT article, analyzing the current financial crisis, Guha identifies a key culprit:

I could not help ask myself the question, what do CIOs know of customer-driven innovation? Are they going to spend the time and effort learning about customer-driven innovation, before trying to intervene? Will they tailor their interventions to suit the needs of customer-driven innovation in different business contexts? Or will they embrace it so tightly in their arms of standardization and efficiency as to suffocate its spirit?

Remember CRM - Customer Relationship Management? Its widely recognized and accepted that in most companies, CRM programs achieved significantly less than what they were expected to. And while finger-pointing never helped clean up a mess, there is irrefutable evidence that CRM programs failed due to:

• too much IT involvement, 
• too much focus on internal processes,
• too much discussion about dirty data,
• too many arguments about integration, and
• too little focus on the customer!

Ironically, in their preoccupation with implementing technological solutions, companies and their vendors lost sight of the obvious - CRM programs are about customers!  They are about getting customers closer to the company, about increasing customer loyalty, by providing them with relevant and unique value that they would find difficult to get from the company's competitors. Or if they would, they would have to pay a much higher price.

No matter how companies sugar coat the finger-pointing game, at the end of the day we can safely say that implementing market-facing programs, especially those that involve customers, who don't always behave predictably, are about more than just technological wizardry.

Whiz kids, whether they be yet-to-start shaving ivy league graduates, or overgrown beards at SAP and Oracle with little or no understanding of why customers buy, how their preferences are shaped, and how why they decide to stay with a company or switch, is a sure recipe for failure.  This was true for CRM; and will hold for customer-facing/embracing/driven innovation as well.

So the question is - will CIO's benefit customer driven innovation, or will they limit and circumscribe it?

Should we evoke George Santayana's wisdom and remind the various CXO's of CRM's history of underachievement so they are not doomed to repeat it, this time for customer driven innovation?  Or should we heave a sigh of relief that it is indeed history, keep our fingers crossed, and hope for the best?

I am for waving banners and marching! How about you?