Innovating the Customer Experience

Innovation is the buzz word of the millennium. Everyone, every company and now even governments are trying to innovate. Why? Competition in many industries is global and many companies see innovation of products, services (especially customer service) and business models as the path to maintaining competitive advantage, and creating sustainable profitable growth. The age of the Internet and now Web 2.0 has disrupted government and forced a new era of transparency that has never been seen before. Governments are now in a situation where citizens are now customers demanding enhanced services.

Many companies think they can simply “silo bust” and force feed a collaborative culture and bam they get innovation. It doesn’t happen that way. Technology can be a key enabling platform especially for innovating the customer experience, but it is nothing without the innovators. Everyone is not an innovator, just like everyone is not an entrepreneur, but the two share similar characteristics. According to the Oxford English Dictionary the word innovation harkens back to Hartz Darm 1297: Innovation= the action of innovating; the introduction of novelties; the alteration of what is established by the introduction of new elements or forms. This is quite an eloquent definition and it somewhat fits modern day organizational process. When I think about innovation today I see four pillars, all of which in some way are related to the innovation of customer service.

The Four Pillars of Innovation

Product innovation
Business model innovation
Services model innovation
Organizational innovation

Building a culture of collaboration isn’t the instant answer to creating innovation or innovating your customer’s experience. However, leveraging the newest collaborative applications can help find your innovators and ultimately lead to innovation. The biggest challenge facing organizations today are finding the innovators in their organizations and/or, recruiting innovators. Creating, managing and enabling a culture of innovation is a difficult task and as I always say, “you can’t make huskies run like greyhounds.” I discussed the cultural aspects of innovation in my blog the Silicon Valley Way and how culture has played a key role in the rise of the valley. http://myventurepad.com/peterauditore1/54784/silicon-valley-way

Who are the Innovators?

Three years ago I became an active member of the Berkeley Innovation Forum, (BIF) which includes a selected group of innovators along with those companies that are trying to innovate. BIF is the genius of Dr. Henry Chesbrough, Professor and Executive Director of the Center for Open Innovation, who has brought together a “who’s who” of innovation from many global corporations. Dr. Chesbrough has also written a series of books on innovation which I would highly recommend, including:

Open Innovation, HBS 2006
Open Business Models, HBS 2006
Open Services Innovation, Jossey Bass 2011

My colleagues and I at SAP have attended the meetings and participated in three innovation challenges. Interestingly all of which have been directly related to innovating products, services and business models:

Best Buy Challenge: Selling and Marketing of Electric bikes.
Nike Challenge: Selling Biometric clothing to a target market.
SAP Challenge: Acquiring a billion users.

Innovators are a rare breed and like entrepreneurs they are major risk takers and are not afraid to fail. Sometimes an innovator is an entrepreneur. Many come from cultures of innovation like Silicon Valley or were raised by innovative parents or family members. They think differently and when they were kids they got the birthday card that said, “You march to the beat of a different drummer.” There are innovators in your company, and/ or organization, the way to finding them is by empowering them. Innovation is also driven from the ecosystem surrounding the organization including its partners, but this also includes customers.

At the BIF meeting this spring, Scott Cook CEO of Intuit presented their approach to finding the innovators and executing what he called “small experiments” that were product and/or services model innovations. This was a very new and unique approach to finding ideas and innovators in Intuit and it was done through an IT platform developed by a new employee that came into the company and said Intuit’s knowledge management sucked. They empowered the employee and built a new “Facebook like” collaborative knowledge management platform for sharing ideas in hopes of facilitating innovation. This has enabled Intuit to find the innovators and empower them, the old knowledge management platform was seldom used by employees as are most because there was nothing in it for the employee. SAP has recently announced that it will be bundling its collaborative platform named Streamworks into its business portfolio, making it easier for its customers to find innovators and share knowledge across CRM and ERP systems.

Innovating Customer Service

During the late 1980s CRM emerged and one of the first proactive steps in customer service was the customer satisfaction survey. There was even a company named CustomerSat in the valley that I worked with. Customer satisfaction information can be easily acquired now by sniffing the digital exhaust of the social customer. In the case of social customers that don’t post reviews it is not that easy, but you can bet that they are reading online reviews even if they aren’t posting them.

In my view innovating customer service begins with understanding the complete end to end customer experience. This is not easy and many companies in retail services like Starbucks for example, have gone to third parties to hire “secret shoppers” who chronicle their experiences. Today’s customer experience doesn’t begin at your website; it begins in the social media ecosystem. I walked into an AT&T store last week to add another IPhone to my account and as soon as I walked in the door I expected poor service. It was not, the service was excellent but why? The representative was armed with all the information about me that made the visit PERFECT and his understanding of AT&T products and services was outstanding. Here is where the training comes in and we all know about the employee turnover rates in retail.

Knowing the customer is king and when you look at competitive differentiation today for many companies it’s all about the customer experience. In order to wow them you must know them. This means understanding the discipline of business intelligence and leveraging it to harvest the rich data sets that are easily accessed from social media. Innovating the customer experience requires more than CRM systems and information technology, and/or collaboration between employees that probably aren’t innovators. You must find your innovators, they may be your customers and/or your partners. Intuit’s example is a great one; I have posted a series of blog on BIF on this site and www.myventurepad.com. One thing I have learned about innovation in scientific and technology careers and at BIF, is that it is not a defined process with a cookie cutter menu. And this is what many companies try to implement. Until next time I wish you great selling and marketing in the millennium.