Author Archives: Howard Tiersky

About Howard Tiersky

Howard Tiersky is an inspiring and passionate speaker, the Founder and CEO of FROM, The Digital Transformation Agency, innovation consultant, serial entrepreneur, and the Wall Street Journal bestselling author of Winning Digital Customers: The Antidote to Irrelevance. IDG named him one of the “10 Digital Transformation Influencers to Follow Today”, and Enterprise Management 360 named Howard “One of the Top 10 Digital Transformation Influencers That Will Change Your World.”

Creating Effective Digital Teams

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Creating Effective Digital Teams

GUEST POST from Howard Tiersky

Creating digital products is a multi-disciplinary process, blending creativity, engineering, strategy, customer support, legal regulations and more. How to structure their teams is a major challenge faced by large enterprises and global brands undergoing a digital transformation. Specifically, they need to answer the following three questions:

  1. What’s the optimal way to organize the necessary roles and responsibilities?
  2. Which part of the organization should own each capability?
  3. How do we get everyone working together?

The optimal structure for digital teams varies across different organizations. At FROM, we use a base framework that identifies fifteen key roles or competencies that are part of creating and operating most digital properties. Those roles are divided into three conceptual teams: the Digital Business Team, the Digital Technology Team, and the Extended Business Team.

The Digital Business Team

  1. Digital Business Vision Owner: The Business Vision Owner defines the key business measures and objectives for the digital property, including target market segments and their objectives. This “visioneer” makes final decisions on product direction.
  2. Product Management: Product Management owns the product on a day-to-day basis, and liaises with other areas to make sure the digital value proposition is realized. They’re responsible for commissioning and reviewing customer research to develop and maintain the product roadmap in terms of the business vision and can prioritize the backlog of changes and improvements.
  3. Program Management: Distinct from the Product Manager, the Program Manager is responsible for owning the long-term plan to achieve the product roadmap, including budgets and resource allocations, and for maintaining the release schedule.
  4. User Interface/User Experience: UI/UX is responsible for the overall look and feel of the digital product. They develop and maintain UI standards to be used as the product is developed, are involved in user testing, and QA new releases.
  5. Content Development: Content Development creates non-campaign and non-marketing or editorial content for the site, including articles, instructions, and FAQ or helps content. Their job is to create content that’s easy to understand and consistent with the brand or voice of the product or site.

The Digital Technology Team

  1. Front End Development: Front End Development selects frameworks and defines front-end coding standards for any technologies that will be used. They’re also responsible for writing code that will execute in the browser, such as HTML, HTML5, JavaScript, and mobile code (e.g., Objective-C.) Front End Development drives requirements for back-end development teams, to ensure the full user experience can be implemented.
  2. Back End Development: Back End Development manages core enterprise systems, including inventory, financial, and CRM. They’re responsible for exposing, as web services, the capabilities that are needed for front-end development. They’re responsible for developing and enforcing standards to protect the integrity of those enterprise systems, as well as reviewing requests for and implementing new capabilities.
  3. Data: Data develops and maintains enterprise and digital specific data models, managing data, and creating and maintaining plans for data management and warehousing. They monitor the health of databases, expose services for data access, and manage data architecture.
  4. Infrastructure: Infrastructure maintains the physical hardware used for applications and data. They maintain disaster and business continuity programs and monitor the scalability and reliability of the physical infrastructure. They also monitor and proactively manage the security of the infrastructure environment.
  5. Quality Assurance: Quality Assurance creates and maintains QA standards for code in production, develops automated and manual test scripts, and executes any integration, browser, or performance testing scenarios. They also monitor site metrics to identify problems proactively. (It should be noted that, though you want dedicated QA professionals on your team, QA is everyone’s responsibility!)

The Extended Business Team

  1. Marketing: Marketing is responsible for some key digital operations. They develop offers and campaigns to drive traffic. They manage email lists and execution and manage and maintain the CRM system.
  2. Product and Pricing: Product and Pricing responsibility can vary, depending on industry and type of digital property. When appropriate, they develop, license or merchandise anything sold on the site. They set pricing and drive requirements for aligning digital features with any new products based on those product’s parameters.
  3. Operations: Operations is responsible for fulfillment of the value proposition. For commerce sites, for example, this includes picking, packing and shipping orders. For something like a digital video aggregation site, responsibilities include finding, vetting and uploading new video content.
  4. Business Development: Business Development is focused on creating partnerships that increase traffic and sales, or find new streams of revenue.
  5. Customer Support: Customer support is responsible for maintaining knowledge of digital platforms, policies, and known issues and solutions. They assist customers with problems and questions and track customer interactions to report on trends and satisfaction levels.

How these teams and the roles within them fit together varies from company to company. However, it’s good practice to review this model to see, first, if you have these key roles represented in your organization. Then, make sure to create well-defined responsibilities and processes, and finally, look at how they function together, to see if they’re organized in the most effective manner. If your Digital Business, Digital Technology, and Extended Business teams are in sync, all your projects will benefit.

This article originally appeared on the Howard Tiersky blog
Image Credits: Pixabay

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Creating a Seamless and Unique Customer Experience

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Creating a Seamless and Unique Customer Experience

GUEST POST from Howard Tiersky

Most companies recognize that creating a seamless and unique customer experience is key to success in the digital world, but that’s not always easy to do. How can you deliver the optimal digital experience to your users?

If you’ve ever been to the arctic circle, there are icebergs that are not only acres wide, but that rise hundreds of feet above sea level — truly massive objects. Yet what is perhaps even more amazing is that scientists tell us that almost 90% of a typical iceberg’s mass is underwater, and not visible to from the surface. If you are in the “iceberg business” — studying them for science or cutting through them for ships to pass — it’s quite important to understand not just the visible component, but the full scale and depth of the iceberg.

Similarly, most companies now recognize that creating a seamless, elegant and differentiated customer experience is key to success in this increasingly digital world. Defining that optimal experience is not necessarily an easy task. In fact, it can seem like a huge undertaking, and at FROM, it’s something that we spend a large portion of our time working with clients to optimize.

But we also see many companies struggling to execute on delivering their customer experience vision. There are many reasons for this, but a starting point of success is realizing that excellent customer experience is more than meets the eye. While concrete manifestation of the experience is found in the brand’s digital properties, content, and features, this is just the part of the iceberg that sticks up above the water. Beneath the waterline is three additional supporting elements that must also be effectively managed in order to achieve an excellent customer experience and the associated business outcomes.

User Experience FROM Iceberg

1. Technical Architecture

Outstanding customer experiences are supported by modern technology stacks that permit two essential capabilities:

Access From Any Touchpoint

Great customer experiences have the flexibility of touchpoint, and permit you to not only interact via web, phone, mobile, kiosk or other devices but have all actions instantly updated and available in a consistent manner. An example of what not to do: I placed an order on HomeDepot.com and immediately realized I made a mistake. I wanted to cancel it, but due to technical constraints, you can’t cancel orders on the website, only from the call center. So I called the call center, and they told me they wouldn’t be able to “see” my order (and therefore weren’t able to cancel it) for about an hour when the systems synchronize, and I should call back then. Not a great or accessible customer experience.

Flexible Frameworks

Flexible frameworks have the ability to be modified rapidly along with the changes that are being frequently deployed. The number one secret to how great customer experiences got to be great? It’s not by having a genius team that gets it right the first time; it’s through an iterative process of testing and learning. To do that, you have to be able to efficiently code, test, and iterate or kill new ideas quickly. Furthermore, the frameworks for presentation, business logic, and transaction processing need to be flexible. If user testing shows that changing the sequence of information collected from users during a checkout process might improve conversion, you need to be able to make a change like that reasonably simply. We often see companies with aging mainframe-based “back office” systems that are holding them back from being able to re-engineer their customer experience because “that’s not how the legacy system works.” No matter how much pain, companies in this situation need roadmaps to upgrade, redesign or replace these inflexible systems to permit the creative evolution of their customer experience.

2. Business Operations

Serving the digital customer effectively is not just about creating digital touchpoints, but about evolving the total experience with digital at the center. That means you will need to change the way you do business in a variety of spheres. Customers who use online chat to ask questions expect answers far faster than those who email, let alone those who send in snail mail. Digital customers opening an account at your bank don’t want to have to wait to receive a thick packet of forms in the mail that they have to sign in 17 different places. You may want to offer digital customers alternatives in “out of stock” situations (such as a direct ship) or permit them to customize their purchases in ways that weren’t previously possible. Truly optimizing for digital will probably change how you merchandise, your return policies, your customer support, customer communications, and, well, everything. It may require new roles, new processes or a re-organization of the company.

3. Business Model

One of the benefits customers see from digital is a huge improvement in the value equation. Skype has taken our long distance bill from hundreds of dollars to pennies. Spotify has given us access to practically any song ever recorded for a few dollars a month, and Netflix has done the same for movies. In many markets, Uber has halved the cost of a taxi. This is awesome for consumers, but threatening to incumbents whose business models are dependent on the pricing levels of legacy business models. Jeff Zucker, the former CEO of NBC, echoed this concern a decade ago when he bemoaned having to trade “analog dollars for digital pennies.”

Why are some companies able to offer consumers a “better deal?” Because digital can take substantial cost out of the equation, allowing more digitally centric companies to be more cost-competitive or shift to totally different business models (subscription access to huge content libraries instead of one by one DVD rental in the case of Netflix; offering the largest ground transportation fleet in the world without ever buying a single vehicle in the case of Uber; likewise eBay and Alibaba, two of the largest online stores, both of which stock no inventory.) You can have a great website and app, but if the fundamental value equation of your business is no longer competitive, you are going to struggle.

Don’t Bolt On Digital

Digital started out as a means of communication. We then had the era of eCommerce, where we “bolted on” digital alternatives to access the same inventory and offers available in our non-digital channels. But today, the winners are “digitally-transformed” companies that are offering a digital value proposition and have a technology stack that empowers them to create a great customer experience, and the business processes necessary to support and deliver on it.

It may seem like a lot. And it is. The world is changing fast, and the companies that succeed in the future will be those that make the transition. The ones that don’t will wind up on the list with companies like Kodak, Polaroid, BlockBuster, Sports Authority, Borders, Linens and Things and Circuit City. You can use this as a high-level roadmap for what you need to do to keep up with the digital transformation era. If your formula is not working yet, ask yourself which of these three areas you might not be paying enough attention to, or adapting quickly enough.

This article originally appeared on the Howard Tiersky blog
Image Credits: Pexels

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Think Outside Which Box?

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Think Outside Which Box?

GUEST POST from Howard Tiersky

We’ve all said it. We need to think “outside the box.”

But what is this box-like barrier that would otherwise constrain our thinking, and how do we move beyond it?

At FROM, we use our custom-built workshop space, Innovation Loft, to help teams from some of the largest brands in the world move beyond that metaphorical box to create new products, processes or entire businesses. We’ve spent a lot of time studying the barriers that limit individual or team thinking, and testing methods to break free of those barriers.

Through our work, we’ve discovered there isn’t just a single box. Instead, there are four nested barriers that can limit thinking.

  1. HABIT
  2. BELIEF
  3. IDENTITY
  4. IMAGINATION

You can use a variety of different techniques that you can apply to help get past each box, but they differ, depending on which box you’re focused on.

BOX ONE: HABIT

People constrained by habit are best described by the phrase, “If it ain’t broke, don’t fix it!” This box exists because it’s our comfort zone – where we know what works. But the uncharted territory is where much of the treasure lies!

Overcoming the Limits of Habit

How do you move teams beyond habit? One way is to explore ‘stretch-goals,’ or goals well beyond what’s possible with your current method of doing business. For example, if your manufacturing process takes 90 minutes to produce a carton of ice cream, conduct an exercise to brainstorm how you could produce that same carton in only 5 minutes. This type of exercise requires completely different thinking about the entire manufacturing process. It might not actually be practical or cost-effective to make the cartons in 5 minutes, but the process of thinking about how it could be done is one way to explore what lies beyond the box of habit.

BOX TWO: BELIEF

Even when we’re ready to move past habit and try something new, there’s another box that constrains what we believe will work or are capable of accomplishing. In corporate environments, the box of belief is epitomized by statements like, “We tried that before and it didn’t work,” or “We can’t compete in that space.”
Whether these beliefs are true or not, they’re often over-generalized or stated in absolute terms. Take, “We can’t compete in that space.” It may not be wise to compete in that space, but is it really impossible? By staying in the box of belief, you could be dismissing possible opportunities.

Overcoming the Limits of Belief

To tackle the barrier of belief, use an exercise that sorts beliefs from facts. Underlying facts are helpful, but the beliefs associated with them can be limiting. If you chose to pursue a certain goal, how would you move past the facts? If it’s not that you can’t compete, but that there are barriers to doing so, what are they and how might you get past them? Ultimately, you want ideas for clearing each obstacle, so you can evaluate if it makes sense to proceed.

BOX THREE: IDENTITY

Even when we’re willing to change and believe certain things are possible, we can remain stuck inside of a box of our own identity. This box is best characterized by statements like, ‘We don’t do that at this company,” or “That wouldn’t be consistent with our brand.”

Overcoming the Limits of Identity

First things first: It’s valuable to have an identity, and to have a brand that customers know stands for something. However, getting past a belief barrier doesn’t necessarily mean acting outside the box, but just to think outside the box. Identities need to grow and change over time, and can’t do that if you never consider possibilities beyond your current identity. (e.g., Apple used to be called ‘Apple Computer,’ but now they make more money from phones and are known as simply ‘Apple.’)

To temporarily think outside your current identity, play the ‘What Would Company X Do?” game. Give separate teams one company or entity, and have them look at the problem at hand in the way that organization might. Apple, the Marines, Starbucks, and Disney are good companies to use as models, as they’re all successful entities with very different identities and ways of solving problems. Viewing your company’s problems or opportunities through the lens of another company can yield interesting, new ideas. If some of the ideas aren’t a good fit, that’s ok! In ideation, we’re mining for gold, so a large quantity of sand and pebbles in the pan is not an indicator of failure – it’s the number of gold nuggets that indicate success.

BOX FOUR: IMAGINATION

Ideas beyond the box of imagination aren’t even a blip on the radar, or even in the realm of our thinking. We don’t consider them outside our beliefs, or inconsistent with our identity because we don’t consider them at all.

Overcoming the Limits of Imagination

What we can imagine comes from a combination of our experiences, plus an ability to take those experiences and combine them in novel ways. To stimulate imagination, it’s important to define a clear goal for your team, and encourage them to share and explore past experiences that may be relevant to that goal. If you want to increase customer loyalty, have your team review experiences that have affected their loyalty to other products and services. Then, expose them to new ideas and knowledge – things like competitive case studies, trends or technologies that might be part of a solution to the problem. When teams have a greater range of experiences to draw from, they can start to imagine possibilities that they didn’t previously have the “raw materials” to form.

It’s fantastic to have an identity, beliefs, and habits. All these aspects of our personality serve us in various situations. But it’s also valuable to be able to temporarily turn these psychological limits off in the context of exploratory ideation. You never know what’s out there, and you can enrich your value proposition, your brand and even yourself by embracing the freedom to explore what lies beyond. Then, you can decide for yourself whether or not to expand the box!

This article originally appeared on the Howard Tiersky blog
Image Credits: Pexels

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Why Organizations Struggle with Innovation

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Why Organizations Struggle with Innovation

GUEST POST from Howard Tiersky

We all know the world is changing rapidly. It’s clear that in order for organizations to remain relevant to the next generation of customers, and even in the next generation of technology, we must adapt, evolve and transform. The field is littered with once-great companies who failed to do this: Blackberry, Nokia, Kodak, Borders, Western Union, Blockbuster, Polaroid.

But accepting major change, or even in some cases small changes, isn’t easy for large companies. At Innovation Loft we’ve worked with scores of major brands on their efforts to conceive, create and launch new products, enter new markets, redefine their value propositions and distribution strategies, and address various types of transformations. We’ve seen some spectacular successes and some tragic near misses. In watching these innovation stories unfold, we’ve concluded that there are three key reasons why innovations fail.

Three Key Reasons Innovations Fail:

  1. The Wrong Idea
  2. Failure to Execute
  3. Sabotage!

It’s important to keep these three domains of risk in mind when approaching any innovation project, and a lot of our work at Innovation Loft is focused on how to manage and mitigate risks in each of these three categories. Let’s look at these one at a time:

1. The Wrong Idea

Change is not always good. New is not always popular. How can you tell the right ideas from the wrong ones? Here are a few practices that can make a big difference.

Focus on Customer Needs

It may seem like Apple has made its success on delivering customers new capabilities they “didn’t know they needed.” And that may be true in the sense that if you had asked customers, they might not have articulated a desire for an iPod or an iPad. However, if you focused on observing consumers in their day-to-day interactions back then, the challenge of dealing with dozens or more CDs, and the decision about which ones to bring clearly created a “pain point.” Fast forward a few years. People trying to curl up with their laptop in bed to watch a movie was clearly awkward, and watching a movie on a small iPhone was also sub-optimal. Apple identified gaps they could fill. Many unsuccessful ideas lack a clear customer value proposition and are based on the assumptions of a benefit consumers will eventually realize.

Test and Iterate

Think of product development as a spiral. Test the simplest, lowest-cost version of your product (even if it’s a paper mockup) to get early feedback from users. Continue that process each step of the way, through launch and beyond, to really understand how consumers are using your product and where it may need improvement.

Pivot

Ultimately, don’t fall in love with your idea. Focus on the value you can create for your customers. Even with the first two points in this list, you can still find yourself launching the wrong idea. That’s the risk of innovation. In a large corporate environment, it’s important to set the expectation up front that there will be flexibility on redefining the product, even substantially, as the project goes on. While this approach may not be consistent with typical enterprise “capital budgeting” processes, it’s critical to the success of innovative projects.

2. Failure to Execute

Even if you have the right idea, you can fail to execute. Effective execution is measured by quality, speed, and communication.

Quality: Does the product fulfill the vision? An initial version of a product may not be as feature-rich as future releases (the original iPhone did not allow copy and paste, let alone the downloading of apps!) The key test is not comprehensive features but doing a few things very well.

Speed: In a world of innovation, we are always in competition. At the initial launch of Android, it was clearly behind the curve compared to iOS. Over time, Android was able to catch up and eventually exceed iOS sales. The two remain locked in an arms race for higher standards and better capabilities, and the timing of improvements clearly has a substantial impact. Nevertheless, Android’s story demonstrates that even with a late start, one can catch up. Kyocera and Nokia were in the market with smartphones several years before Apple.

Communication: Peter Drucker said, “Business has just two functions: innovation and marketing.” The two must go hand-in-hand. Apple’s genius has been the marriage of a great product with great communication.

3. Sabotage

Companies are designed to resist change. Classic business books define how organizations must specify roles and clear processes for how to operate. But this resistance to change is misplaced when it comes to innovation. We’ve seen many great projects killed in infancy, or even after launch and initial success, due to areas of an organization whose interests would be threatened by the success of that transformation.

If a new product or project is truly going to be transformational for your company, expect it to have enemies. These enemies’ very survival (or their perception of it) may be at stake. Many innovative products that were on the path to “saving the company” are killed through internal sabotage. As soon as there is any misstep in an innovation initiative — as there always is — forces are ready to pounce and convince the powers-that-be that it’s time to “put it out of its misery.” Can you imagine Apple killing the iPhone over Antennaegate or the Apple Maps debacle?

How can you avoid sabotage? One tactic is trying to gain as much organizational alignment as possible during each step of the innovation process. Don’t assume that because a solution seems “obvious” to your team that others will automatically support it. Involving key executives, in addition to as many parts of the organization as possible, will garner more support. Give team members the chance to participate and feel ownership of the initiative. In the words of Harry Truman:

“It’s amazing what you can accomplish if you don’t care who gets the credit.”

So how do you figure out the right answer, get everyone on the same page, and focus on a common innovation goal? At FROM, we use a specific model to approach the process of identifying the most relevant opportunity areas for innovation, and to build group consensus around the best approach. You’ll have to adapt it to your situation, but the model should provide a good starting framework.

This article originally appeared on the Howard Tiersky blog
Image Credits: Unsplash

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Innovation Friction Risks and Pitfalls

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Innovation Friction Risks and Pitfalls

GUEST POST from Howard Tiersky

There’s a lot to be learned about innovation by looking at good ideas that just didn’t make it. We’d all like to believe that if we have an idea that genuinely improves upon something, and if we execute that idea correctly, the idea will be successful. But there is another factor to consider:

Here’s today’s example:

Back in the early 2000’s, I was running part of the eCommerce practice for Ernst & Young. Around 2003 we moved into a shiny new building at 5 Times Square in New York City, right next to where the ball drops on New Year’s Eve. The building was the first place I had ever seen with a keypad-controlled elevator. Instead of pushing an up or down button, the elevator is called by a numerical pad. You type in the number of the floor you are going to and receive a response from the keypad with a letter (such as D.) That letter corresponds to the elevator that you have been assigned to. You go to “your” elevator and, when it arrives, it automatically takes you to your floor.

This innovation delivers several benefits that improve the elevator experience:

1. It makes the elevators more efficient.

People going to lower floors are clustered together, as are people going to higher floors, and people going to the same floors are put on the same elevator. This allows more elevators to run express. Fewer stops. Less waiting for an elevator and a faster trip in the elevator.

2. It reduces “clicks.”

In a traditional system, an elevator user has to “call” the elevator and indicate their desire to go up or down. Once in the elevator, the user has to pick a floor. The old system was not a massive amount of effort, but the new system reduces two interactions to one. Presumably an improvement.

(Plus there’s no worrying about the kid in the elevator who decides to push all the buttons — there aren’t any!)

Is there a downside to this innovation?

Well, if you’re already in the elevator, there’s no opportunity to change your mind without getting off on the wrong floor and repeating the whole process. The biggest downside of this innovation is simply that it requires users to learn something new. In fact, when I moved into 5 Times Square, I found that when people came to meet with me for the first time, the first 10 minutes of our meeting was inevitably focused on their need to vent their reactions to our crazy elevators and how they couldn’t figure out how to use them!

Truthfully, the elevators were easy to use. Clear instructions were printed above the keypad, and the system worked very well. The problem was that it required users to relearn a skill they had fully and completely mastered (i.e., using an elevator) and start over at a beginner level — even if it only took 30 seconds to learn how to use the new elevator system.

I’ve watched with interest over the years to see if these types of elevators would take off. It turns out they didn’t. Very recently, I was visiting a client in Houston. The building had actually spent money to remove the keypad system and replace it with the traditional 2-step process. Wow. You know your innovation is not doing well when your customers are willing to invest tens of thousands of dollars to get rid of it and go back to the old way.

After much thought, I believe it’s all because of the friction of asking people to re-learn how to push an elevator button. Some innovations don’t require this. The new Boeing 787s have substantial innovation, but from a passenger standpoint, they work in basically the same way as the last round of airplanes. The innovations improve comfort, fuel efficiency, and other factors, but you recline the seat and return your tray table to an upright position in pretty much the same old way. Other innovations require learning: ATMs, DVRs, electric cars. All of these innovations have been successful, despite their learning requirements. However, the need for users to learn new behavior did slow their adoption. Innovation friction slows down adoption of innovations that require substantial behavior change, and even more so if it requires learning. This is especially true if the innovation requires un-learning an old way of doing something. If the friction is greater than the momentum of the benefit of overcoming it, the innovation stops dead in its tracks.

An example of this friction is the metric system, which has made only a very small amount of progress in adoption over the last 50 years, despite being clearly superior to the “English system.” It’s just too darn much trouble to change.

One last story about innovation friction from early in my career.

At that time, I was working with a lot of insurance companies creating web-based interfaces to replace traditional “green screen” systems used by insurance agents to quote and initiate new policies for auto and home insurance. It typically took a new hire 4-5 months to learn the system well enough to complete a policy quote — and well over a year to become truly proficient with it! We proudly designed replacement systems that anyone with basic computer skills could learn in a day or two at most, but found that some users were quite hostile to our efforts. They already knew how to use the green screen systems, and they were pretty darn fast with them. One Customer Support Agent even quoted Charlton Heston to me, saying I would only be able to take away her green screen if I pried it from her “cold dead hands.” Creepy? Yes. But also telling. Those old systems are gone now, because of the huge benefit of being able to train people on the new system so quickly. This benefit put the companies that used the new system in a position to more or less force that innovation onto other users.

Many successful innovations have required change and learning — automobiles, indoor toilets, smartphones. With all of these examples, we’ve seen many people willing to learn, for whom the “pain” of change was outweighed by the perceived benefit. But we also see a substantial number of users who resisted for years, saying, “No thanks, I like my outhouse (or horse and buggy or bank teller) just fine.” When conceiving or launching an innovation that requires learning, it’s important to consider the role innovation friction will play in adoption, where you can reduce it, and where you can increase the user’s willingness to accept it as the cost of the greater benefit.

This article originally appeared on the Howard Tiersky blog
Image Credits: Unsplash, Howard Tiersky

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Ignite Innovation with These 3 Key Ingredients

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Ignite Innovation with These 3 Key Ingredients

GUEST POST from Howard Tiersky

The team at FROM has worked with dozens and dozens of companies to create innovative new products, processes, and channels to connect with customers. It’s very rewarding work for many reasons, one of which is the incredible people we get to work with at our clients. In fact, we find over and over that our clients have teams with tremendous knowledge, vision, and passion to serve their customers. And yet, it can sometimes take an outside force (like us) to unleash their full creative potential or to catalyze the action need to move an idea forward along the pathway of value. Why is that?

Having observed many companies go through transformations that yielded massively innovative thinking and action from teams that were previously struggling, the difference usually boils down to something that had been missing in the company’s culture, processes, or environment. But what?

Consider this analogy. To create fire you must have three key ingredients:

  1. Some type of fuel
  2. Oxygen
  3. A spark or source of heat to start the reaction.

These ingredients are all necessary for the reaction to occur. If any is missing, nothing happens. The dormant potential is not realized.

It’s a similar pattern with sparking innovation. There are three key ingredients. When these are present, amazing things can happen. And when any is missing, there’s no reward structure or corporate mandate that can create the magic.

The human mind is an incredible problem-solving machine, and it works best when given a very clear and precise goal.

1. Focused Objective

The first ingredient is a Focused Objective. This is the SPARK of innovation. The human mind is an incredible problem-solving machine, and it works best when given a very clear and precise goal. Defining the right objective that you want your innovation team to churn on is the first step in empowering them. If you want your team to create a more innovative doorknob, that’s somewhat specific. However figuring out how to create a doorknob that looks like brass, lasts for at least 10 years with normal residential use, and can retail for no more than $19.99 is a much more specific objective. The brain is more resourceful when it really understands the target it is shooting for.

Where does such specificity come from? We use a concept in our innovation framework that we call Cascading Innovation.

  • It might have been a prior team’s innovation output to figure out that a $19.99 “faux brass” doorknob is what the market wants. Their specific objective might have been to determine what gaps exist in the doorknob market where the company could generate at least $50M in incremental sales by 2014 through existing retail channels.
  • That input might have come to them from yet another team whose focus was to figure out which market in residential hardware has the greatest potential for growth over the next 5 years, perhaps they concluded it was doorknobs.

Constraints

When articulating a focused objective, it is very important to clearly define the correct constraints.

On one hand, we want to drive innovation, and so we want to be careful not to state the objective or the problem too much in the terms of the current “legacy” solution to the problem. Henry Ford said, “If I’d asked people what they want, they’d have said a faster horse.” So avoid defining the problem as “a faster horse” versus “a faster way to travel.”

At the same time, all creativity exists within some kind of framework, whether it’s the structure of a haiku poem or a painting created within a defined frame.

What’s fabulous about clear constraints is that once all the constraints are clear, then we can tell the teams with confidence that any solution which solves the problem within the constraints is fair game, even if it looks nothing like what anybody expects. That is very liberating.

Henry Ford said “If I’d asked people what they want they’d have said a faster horse.”

2. Information

The second ingredient to ignite innovation is Information. Relevant information is the FUEL of innovation. Our doorknob team is hopefully populated with some individuals who have some of their own stored information in the form of personal experience in the doorknob biz. But collecting the right additional information and making it easy for the team to organize and internalize it is key. Information might include: competitive examples of other low cost doorknobs which have or have not been successful; market research about consumer needs; materials prices for a variety of different low cost metals along with information about their durability. Figuring out the right information with which to FUEL your team will allow them to burn hotter and longer on the problem.

There are three ways to get the information to feed your team:

The people you choose for the team bring different backgrounds and experience to the table. On the projects on which we consult, significant thought goes into the right composition of the client’s innovation team to bring different backgrounds, knowledge, personalities and perspective to bear.

  1. Once assembled, each team member’s individual knowledge will be an information resource to him/herself, as a member of the team. The team’s collective knowledge will be a resource to the entire team if you structure the collaboration to foster knowledge sharing.
  2. Secondary research such as market studies, government statistics, materials analysis, etc can provide critical reference. Gathering the full gamut of available information and structuring it so that it is easily digested and referenced can be a sizable undertaking, but is critical to giving the team both information that may yield flashes of valuable insight as well as the tools they need to evaluate and prioritize ideas as they are generated.
  3. Primary research that your team participates in, such as talking to customers and building and testing physical prototypes, is another way to get the information to fuel your team. There is no substitute for personal experience.

You can also think of two key “buckets” of information that together form the ideal fuel.

1. Knowledge of the problem space

  • Who are the users for whom we are innovating? What do we understand about their needs?
  • Has this problem been solved before or have prior attempts been made? What was the approach and what were the results?
  • How can a potential solution’s effectiveness be measured? How will we know when the problem is solved?
  • Has anyone solved or attempted to solve a similar problem which may be instructive?

2. Knowledge of the resources that are available to create the solution

  • Details on the rules regarding any constraints that must be met for a successful approach (e.g. regulatory restrictions or distribution restrictions)
  • Specific characteristics of different materials or processes, that either enable or hamper their use in particular ways
  • Information on new technologies that can be leveraged in the solution

There is a wonderful scene in Apollo 13 where the team has to figure out how to keep the astronauts alive until re-entry even though the Co2 “scrubbers” in the command module have failed, causing the air to become slowly poisoned. The leader of the Mission Control team tasked with solving this problem dumps onto the table all the “stuff” they have in the command module and tells the team “we have to figure out how to make this (the large square filters they have) fit into the hole for this (the smaller round filters that have failed) using nothing but this (the pile of miscellaneous stuff on the table which mirrors the available material in the command module). Watch this one minute clip it’s a great example of a clear focused objective with clear information about the resources available to solve the problem:

3. Freedom

And so what is the OXYGEN we need to finish the recipe? Freedom is the OXYGEN of innovation. What do we mean by freedom? In daily “business as usual” there are a variety of things that hold us back — which suppress the natural release of our latent creativity just as lack of oxygen snuffs out a campfire. Here are a few of the barriers to freedom and how we overcome them.

  1. Fear. Fear of looking foolish and fear of political repercussions are the two greatest risks to innovation. These fears hold back new ideas and honest discourse regarding ideas that do come forth. These are best overcome with culture. In our innovation workshops we stress rules such as “leave rank at the door,” and highlight the value of bad ideas.
  2. Patterns. We all have certain patterns we follow. Those patterns are the grooves in the road that make it hard to find a new path and they are the shackles that keep us from thinking freely. There are many ways to break patterns. Some techniques we use in our innovation frameworks and workshops include: working in a different type of workspace, music, toys, time compression, physical activity/games and mixing teams in unexpected ways.
  3. Assumptions. People have assumptions about what can or can’t be done, what the company will or won’t allow, what the market will or won’t accept. However most successful innovations break existing assumptions. One of the reasons its important to state the problem and its constraints with great care is that in doing so we let the innovation team know those are all the assumptions they should respect, anything else should be challenged. We also conduct exercises specifically designed to remove assumptions. One great example is the “Google exercise.” It works like this. People perceive Google as innovative. So we tell people: “Google just bought your company, and they put their most innovative team on the problem. How would they solve it?” (and it can work with Apple or Facebook as well). This context puts people outside their normal assumptions about what is possible in their environment and even, strangely enough, frees them from their own limiting beliefs about their own imaginations. The team may come back and say, “Well the guys at Google would do this wild innovative thing, but that’s the sort of thing we’d never come up with here at Acme corporation.” Uh oh, tricked you! You just did.
  4. Faith. The last component of freedom is faith. A lack of faith can stifle innovation. Teams must believe that solutions to the challenge exist and that they are more than capable of arriving at them.

So those are the three ingredients to ignite innovation: a clear set of objectives to spark the FIRE, a rich set of information to FUEL it, and an atmosphere of freedom acting as OXYGEN so the flame can breathe.

This article originally appeared on the Howard Tiersky blog
Image Credits: Unsplash

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The Innovation Enthusiasm Gap

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The Innovation Enthusiasm Gap

GUEST POST from Howard Tiersky

Getting new innovations launched within companies of any significant size typically requires buy-in from a number of different people and groups around the organization.

And moving towards a “culture” of innovation that the most successful companies create definitely requires that there be a critical mass of people with common understanding of the value of innovation.

Different Attitudes Towards Innovation

In any given enterprise there are generally many people who are hungry for the excitement of innovation and at the same time there are often many people who are resistant. Innovation, after all, inherently means change. And while change is viewed by some as exciting, challenging and fun, others view change as risky, scary and something to be avoided wherever possible.

Understanding how to segment your key stakeholders at all levels of an organization based on their appetite and attitude towards change is very helpful in devising a plan to “bring along” as many people as possible on the innovation bandwagon. All people are unique and hold certain beliefs and attitudes for a variety of reasons including their personality, past experiences, and reward constructs. But we’ll talk about one high level trend that we have found to apply in most cases regarding how to gauge the likelihood that people will have initial enthusiasm for innovation based on their level in the organization. This is not the only way of slicing the onion to predict who will favor vs resist innovation, this is just one model, but it’s the one we’ll focus on in this article.

The Innovation Enthusiasm Inverted Bell Curve

The Inverted Bell Curve

While we have no quantitative research to support this, we have generally observed an inverted bell curve trend as it applies to “Innovation Enthusiasm.” Let’s consider three basic groups:

  1. The company leadership team: Primarily the CEO, but also the other members of the leadership team (CFO, COO, COO etc) who are held directly responsible for the company’s success.
  2. The “troops”: The bottom couple of tiers of the organization that typically make up 90% of the employees
  3. The managers: Specifically the middle to upper level managers. These may be department heads, marketing executives, product managers — people who have achieved some level of status and success within the organization’s hierarchy but who are not at the top level.

So lets take these groups one at a time.

CEOs Like Innovation

The vast majority of CEOs of large enterprises recognize that innovation is essential to their company’s success and consequently essential to their success and continued tenure as CEO.

Why is this the case? A CEO’s job is to grow a company. In most cases, A CEO whose company is not growing is a CEO who is soon to be fired. And growth almost always requires innovation. Why? Well let’s be a bit simplistic and say there are two primary market conditions in which a company can find itself — a market which is not fundamentally growing and one which is.

In a market that is fundamentally not growing, the three main ways that a company can grow would be for it to:

  1. Out-innovate competitors so as to take their share
  2. Move into new product categories or businesses
  3. Acquire competitors

All three of these require some level of innovation. Number one is obviously about innovation. Number two requires a healthy amount of innovation around creation of new capabilities. And even number three, the seeming least innovative of the three, still usually requires innovation from a scale management perspective.

In a market that is fundamentally growing, sitting back and riding the “rising tide” is not necessarily the key to growth. Innovation is also critical for a company to grow in the midst of a strong market. Successfully riding the rising tide requires innovation. Why?

  • Substantial scaling requires innovation – As markets increase in size, a company may find that in order to take full advantage of the scale of the opportunity they need to be able to serve 2x, 10x, even 100x the customers or orders they did previously. That level of scaling generally requires a substantial change to how business is done. Apple has had to be just as innovative in their supply chain and distribution approach as they have had to be with their product development in order to capitalize on the success in the growing market for mobile devices.
  • Growing markets attract disruptors – If the market demand for a product or service is surging, that tends to attract investment and competitive innovation. If the market is growing but a competitor out-innovates you, you might find yourself shrinking even though the market is growing. Consider Research in Motion.

So a CEO has every reason to like innovation. Does a CEO have any reason to fear innovation? Not much. Innovation isn’t always successful, however most boards are far more patient with a CEO who is innovating and not finding success than they are with a CEO who isn’t innovating at all. Furthermore, even unsuccessful innovation gives a CEO something to tell his board and investors to keep them optimistic about the future, so even innovations that are unsuccessful in the market can, for a while at least, keep a stock price up which is, after all, a CEO’s main performance metric.

The Troops Like Innovation

We’ll call the 90%+ of employees of a given company, the “troops”. While of course nothing is absolute, troops, on the whole, tend to like innovation. Why?

  • They want the company to be successful – They can see that changing with the times and bringing new products to market will help the company. They take pride in the brand and they know that financial success and growth means job security and raises, and that their long term job security will be in danger if the company doesn’t keep up with the times.
  • It can help them serve the customer better – Troops who face customers directly most of the time want to do their job as well as possible since part of their job satisfaction can be the direct and immediate feedback they get when interacting with the end-customers.
  • It creates opportunity – For ambitious people lower down in the organization, change creates new needs and new opportunities which could accelerate their rise.
  • Its exciting and interesting – Lots of jobs are boring. Change creates interest.

There are certain types of change that can be threatening to the Troops; such as innovation via overseas outsourcing or automation that eliminates employees, so those are exceptions. There definitely are also members of the troops who tend to fear and resist change as a first reaction, however at most companies these are the minority. Properly communicated innovation initiatives that don’t have an obvious or direct threat to employees job security is generally embraced by the majority of the troops.

Managers Don’t Really Like Innovation

So if The CEO’s like innovation, and the troops like it, whats the problem? You have both the top leadership of the company and the overwhelming majority of the employees ready to embrace innovation, surely that should be enough, right? It’s not. We see over and over again CEOs who feel stuck because they are asking their “people” to innovate and its just not happening. What we find at many companies is that despite being encouraged by the CEO and top management, most middle and upper-level managers have limited reasons to be motivated to truly innovate in a dramatic way. Why is this the case?

Change creates risk. Middle and upper-level managers have the most “stake” in the status quo – they have the most to lose. Middle and upper-level managers tend to own processes and products. When new processes and products arise to potentially replace their existing fiefdom, managers will often do their best to ensure that they wind up with the same scope of responsibility, the same budget and the same number of direct reports. While its possible for managers to move up in a new order, very often a “bird in the hand” mentality among managers encourages a stance which is about defending the status quo and supporting “innovations” which inherently work within the existing structure. Ultimately, this often means only very incremental innovations.

One might think that middle and upper managers have the same loyalty to the company and shared interest in the company’s overall success, but in our experience this is not quite so. Individuals generally rise to these ranks because they are fairly savvy and that savviness generally extends to the recognition that their personal career success is not necessarily tied to the company overall. For example a product manager with a successful product at a company which overall is going down the tubes can, at the right moment, jump ship and leverage their demonstrated track record of success. However an individual who becomes marginalized by change at their current company (or simply winding up with reduced responsibilities), while they certainly can still move to another position, is all of the sudden playing defense.

Furthermore, that mindset of innovation “within the current structure” is then telegraphed to their team members. Its common for the troops to realize that the CEO wants dramatic improvements based on his communications, however if lower level employees also perceive that the head of their department is looking to not rock the boat too much, the troops may ultimately shift their loyalty to the manager who conducts their performance evaluation, decides their increases and determines promotions.

The truth is that collectively within an organization, while the CEO might be the single most powerful individual in terms of influencing the organization, the middle and upper-level managers are the most powerful layer, so if they are not embracing of innovation, they can stifle it fairly easily, no matter what the CEO’s and troops’ wishes may be.

Rogues

However, we do see in most organizations that there are “rogue” upper and middle managers who buck the trend. They are either passionate about the company or just turned on by the new and innovative to such an extent that it makes sense for them to take the risk and go “all in” in support of massive innovation. We see that typically about one in twenty middle and upper-level managers are of this type. These individuals can be a key to turning the tide, however there is great risk that these mavericks will face such pressure from their peers in an organization that they either stifle their own tendencies, or more likely, leave for an organization where the culture is more welcoming of innovation. By allowing this “weeding out” of the true innovators at the middle and upper-level management layer, the ratio of rogues can drop from one in twenty to one in a hundred or even less.

Summary

Here is a summary of the attitudinal tendencies. Remember, there are always outliers, this model is only meant to help provide understanding around how different circumstances and levels of risk and reward from change influence people differently at different levels.

CEO + Leadership Team​

Leadership TeamAttitude: Favor innovation that drives up stock price. Often has sense of urgency.

Risk: The risk is not innovating. CEOs must drive growth which usually requires innovation. If the CEO does not drive growth he, and his immediate reports, are likely to be looking for new jobs.

Reward: Even the appearance of innovation (say, an improved product pipeline) can give a CEO room to breathe with a board and investors as it creates optimism. True innovation at the Apple or WalMart level of course creates superstar CEOs.

Troops

TroopsAttitude: Tend to be open to the idea of innovation except when it is targeting outsourcing, staff reductions, or automation which risks their job.

Risk: The biggest risk in typical organizations is that “getting involved” with innovation projects might be seen as negative by the middle and upper managers by whom troops are evaluated.

Reward: The rewards are greater job security if innovation is successful as it helps the whole company as well as the ability to better serve customers an

Middle-Upper Management

ManagersAttitude: Tend to resist innovation or seek to compartmentalize innovations that do not jeopardize the organizational structure

Risk: The risk is that true innovation might change the organization so completely that their current position or its level of power, budget or scope would be jeopardized.

Reward: The potential exists for a middle/upper manager to “break out” and prove themselves a superstar by innovating. However most innovation requires collaboration with peers and if they cannot find willing partners in their peers their likelihood of failure is so high that the rewards seems unattainable. For middle/upper managers who are naturally inclined towards innovation despite the risks, the rewards are more emotional—they thrive on either improving things, helping their company or being a part of something new and exciting.

This article originally appeared on the Howard Tiersky blog
Image Credits: Howard Tiersky

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How well do you know your customers?

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How well do you know your customers?

GUEST POST from Howard Tiersky

Early in my career, I had the chance to lead a product development team in creating a new kind of internal communication platform for large accounting firms. Our target users were auditors and tax consultants. We worked with those types of people often, so we felt we knew what they needed.

We “checked the box” that we knew our customers, got creative and came up with the idea that we loved. It was innovative, creative, exciting. It still brings a smile to my face, remembering how awesome an idea it was. We worked eighteen hours a day for months on that idea. We were inspired and committed to the product fulfilling its potential. We were on a mission.

So, what happened when the product launched?

The features we thought were so fantastic were of marginal importance to our users, and we had overlooked some of their critical needs. Also, the product had some major usability problems, because we didn’t fully understand all the circumstances under which the product would be used. It was a disaster; our sponsors pulled the plug. We couldn’t believe it! We had cared so much! We had tried so hard! But truthfully, it was entirely predictable.

We fell in love with our idea, instead of falling in love with our users. We wanted our product to fulfill its potential, instead of thinking about how to help our customers fulfill their potential.

These mistakes are not uncommon. According to Nielsen, 85% of new products fail, no doubt for multiple reasons.

Imagine this: your next product has a set of features that solved a huge problem for your customers. Those features were communicated in a way they found easy to understand, and the product was available at a price they were ready to pay. Do you think that product would have an 85% chance of failure?

How well do you know your customer? What does it even mean to “know” your customer?

The Front End of Innovation conference (FEI) asked me to speak at once of their conferences about the five key challenges large enterprises face around innovation. Lack of true customer insight is second on that list. Here are a few quick tactics to help you incorporate the “Voice of the Customer” into your product development process:

1. Humility

Have you ever bought something expensive, that you totally intended to use, but once you bought it, you only used it once, and then barely ever again? Or you committed to a gym membership, and then never went?

The reality is, we don’t even know ourselves all that well! Acknowledge that it’s no small feat to understand someone else well enough to predict their future behavior.

2. Get Specific

What do you need to know about your potential customers or users of your product that would really make a difference?

  • Why do they do business with you?
  • What are their unmet needs?
  • How is their world changing?
  • Who else is courting them?
  • What do they like least about your product/service?
  • There’s something that, if you could do, would make them pay double: what is it?

3. Involvement

It’s not enough to have one market research person who supposedly understands the customer. Ideally, you want everyone on the team to have a tangible understanding of your product’s user. Just reading someone else’s PowerPoint overview really doesn’t give you the kind of gut understanding. I like to have everyone on our product design team spend at least a couple of days trailing customers and watching them in their native habitats. This allows the team to really understand the customers’ world and their current reality. Team members always come back from that type of personal experience full of ideas.

4. Iteration

The world is changing fast, and so are your customers. You have to keep studying them and learn how their needs are changing. As your product moves from an idea to a prototype, to beta, take every opportunity you can to study how users react.

5. 4D Listening

Lastly, when you’re studying your customers, try to see past the surface of what they’re telling you they need to what they actually need. Henry Ford once said, “If I asked my customers what they wanted, they would say ‘faster horses.’” Which is exactly it! Your customers may not be able to envision the kind of solutions your product team can conceive. So listen past their stated requests, to fully understand their underlying concerns and needs. Your customers want to go faster, and hopefully, you can come up with a far more practical solution than trying to breed faster horses.

Which of these is most important in your experience?

This article originally appeared on the Howard Tiersky blog
Image Credit: Pexels

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Embrace Your Disgruntled Customers

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Embrace Your Disgruntled Customers

GUEST POST from Howard Tiersky

Every day, businesses find themselves faced with unhappy customers; if you’re like most people, you might feel apprehension when an unhappy customer requests a meeting with you.

Most of us are in business to make people happy and to create satisfied customers, so every unsatisfied customer can seem like a failure. Research has shown that the impact of praise and criticism are not equal. For most people the same volume of criticism is felt much more deeply than praise.

Actually, disgruntled customers are an absolute gold mine of potential insights about your product or services, and your overall business. But only if you mine them in the right way.

First, let me encourage you to ask a high quality question that I learned from one of the smartest people I know, Tony Robbins.

What’s great about disgruntled customers?

When faced with any challenge, Robbins encourages people to ask, “What’s great about this?” or “What’s the opportunity inherent in this problem?” Take a moment and ask yourself that question in terms of your dissatisfied customers.

To get you started, here are five things I jotted down that I think are great about disgruntled customers:

  1. They care about your product. If they didn’t, they wouldn’t be emotional and they wouldn’t be reaching out.
  2. They are willing to give you their time. Those who complain typically want to engage in some sort of dialogue.
  3. They chose you to begin with. They wouldn’t be customers if they hadn’t made a decision to buy your product.
  4. They have knowledge about the overall product experience. They have experienced your marketing, your sales process, and what it’s like to begin using your product. They have been through at least part, if not most, of the product lifecycle.
  5. They probably don’t want to leave you. If they did, they wouldn’t be disgruntled customers, they would be ex-customers!

Think of disgruntled customers as people who have selected to use your product or service, who care a lot about it, and who want to give you some of their time to provide their thoughts. Their negative feedback actually gives more opportunities to improve than a happy customer ever could.

Three Types of Disgruntled Customers

There are three types of unhappy customers, and it’s helpful to determine which type you are talking to.

Type 1. Customers who should be happy.

This is someone who signed up for your product or service for reasons that are consistent with the intent of your product, and is basically trying to use it the way it was intended.

If the customer represents your “typical” customer and isn’t happy, then you really want to understand what the problem is and how to fix it. There are probably more people with similar dissatisfaction, who may not care enough to complain. Your disgruntled customer is not your worst customer. Your worst customer is the one who doesn’t care enough to complain but simply leaves and you never know why. Whatever problem these unhappy customers have is likely the same problem that some prospects have — a problem that kept them from becoming a customer in the first place. Understanding these customers and making them happy has to be a high priority.

Type 2: Customers who shouldn’t be happy.

This type of customer is trying to use your product for something that really isn’t what the product was designed for.

Customers unhappy with the results of using oil paints meant for works of art to paint furniture fall into this category. It might be easy to dismiss these customers. They shouldn’t have bought you product in the first place, right? But they could represent a massive new market opportunity. You might learn that your paint comes in colors not available in traditional furniture paint, or has a different kind of sheen that made that customer want to use it for an “off label” application. Although it didn’t work in its current formulation, it might clue you in to adjustments you can make to reach this new market. We call these types of users Lead User; “failed” lead users, like in our paint example, can seed ideas for product innovation.

Type 3: Customers who will never be happy.

These are the customers who, no matter what you do, never seem to be happy.

It’s true that there are people out there who thrive on complaining, but it’s important to hear them out to make sure that they are not actually a Type 1 or Type 2 Customer. For example, some people always seem to exaggerate the impact of their dissatisfaction. If someone tells you, “I spent 30 minutes waiting in line at the rental car counter and it ruined my vacation!” that sounds a little crazy. However, just because people might not be reasonably reporting the emotional impact of their problem doesn’t mean they aren’t cluing you in to real, solvable problems. Be grateful for these “complainers”. A lot of other people might just have been unhappy, said nothing, and gone to a competitor!

Questions to Ask Disgruntled Customers

If you want to get the most out of your meeting with a disgruntled customer, you need to ask the right questions to fully understand the situation.

1. Ask who they are, and what their goals were in buying your product.

There are several benefits to this. First, people like to talk about themselves, so it tends to be a positive way to start the conversation. Second, it takes their mind back to a time when they were happy with you, when they decided to buy the product. And third, it helps you understand what type of customer they are: whether their expectations were aligned with the product’s intent, they just like complaining, or they have legitimate concerns. This helps you understand what they care about most and what you did “right”, from a marketing and sales perspective, to get this person to sign up in the first place.

2. Ask what the problem is (because they’re dying to get that off their chests).

The trick here is to let them blow off some steam, and then try to unpack the problem to find some clear actions to take. For example, “I can’t believe how bad your restaurant is  —  it was horrible!” doesn’t provide any actionable feedback. And sometimes a customer wants to tell a long, convoluted story, after which you need to probe for the one key thing that’s the root cause of the dissatisfaction. Where did the person’s expectations fail to be fulfilled?

If they tried painting the chair with oil paints meant for portraits and three days later the chair was still not dry and the paint was dripping off, it would be ridiculous to ask “Is that not what you expected?” Clearly that’s not what they expected! But what did they expect? How fast did they expect it to dry, how long did they expect it to last, etc?

Tony Robbins’ has a formula which conveys this type of thinking:

Satisfaction = Reality – Expectations

If the reality is better than your expectations, you are satisfied. If the reality is less than your expectations, you are dissatisfied.

This formula teaches us that reality isn’t the only place we can improve our offering — we can also improve the expectations we set. Ask your customers where their expectations came from in the first place. If the expectations were contrary to your actual offering, did something in your marketing or your sales process create that expectation? Is your distribution chain is making mistakes representing what your product can do? It can also be helpful to ask what impact the price of your product has on expectations. Sometimes people assume a product at a certain price point will have certain characteristics, even if that’s not necessarily true.

3. If the person is still using your product, ask why? Why haven’t they just switched to another product?

You don’t want them to switch to another product, but you might learn something interesting about your product by asking this question. Someone might say he hates the taste of your product, but stays with it because it’s the only gluten-free protein powder available in his state. Your product may have differentiating aspects that you aren’t even aware of, and that’s good information to have.

4. Ask how you can fix their problem.

Generally, talking to disgruntled customers is more about learning how to improve our overall business than saving that individual customer (though sometimes in doing this, we can save the individual customer, as well.) Studies show that a customer with a major point of dissatisfaction, who complains and is able to be heard and get their issue resolved, will often become a far more loyal customer than one who never had a problem in the first place.

“That’s another great thing about disgruntled customers: they are offering you an opportunity to transform them into your most loyal customers!”

Remember, sometimes just being heard is enough to satisfy a customer. They may be able to live with the problem if they just feel validated and heard. Once you get customer feedback, a personal message letting them know that you understand the issue and are trying to resolve it, and that you appreciate their feedback, can be worth a lot. If the customer is experiencing an acute problem, such as a broken product, you want to address the problem and let the customer know that you are committed to solving the problem, what steps you plan to take and how you’ll keep them apprised of the progress. Ideally you should have one problem “owner”, who is accountable for its resolution.

Lastly, if disgruntled customers are Type 2 Customers and they want something your product or service can’t provide them with, thank the customer for their feedback and advise them on how to be successful in achieving their goal  —  even if it means recommending a competing product or service! While you might not always succeed, every meeting with a disgruntled customer is an opportunity to make and unhappy person happy, and that’s a great feeling!

This article originally appeared on the Howard Tiersky blog
Image Credit: Pexels

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What is Digital Transformation anyway?

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Digital Transformation is the third wave of digital evolution.

What is Digital Transformation anyway?

GUEST POST from Howard Tiersky

The first wave was brochureware. Enterprises created websites that communicated their story. As simple as this idea is, it was revolutionary. The business value of providing instant sales and marketing material at the click of a mouse is hugely valuable.

The second wave was eCommerce. Enterprises connected customer-facing digital front-ends to their back-end systems, so that customers could engage in transactions directly via their browser or mobile device. This wave generated much more value than brochureware, because it reduced the cost of customer interaction, and removed friction from the user experience. Businesses who have mastered eCommerce have been able to trump former market leaders. In today’s world, if you can’t provide elegant digital options for the customer throughout their entire journey, you’re toast.

Now we find ourselves in the third wave: Digital Transformation. eCommerce added new pathways for pre-existing offerings, but companies going through digital transformation need to reinvent themselves for a digital age. Netflix made the transition from being a mail-order company to a streaming company. Though they still focus on their core value proposition of providing extended choices and increased convenience, their entire solution offering had to shift, along with their customer experience, pricing, contracts with suppliers, marketing, and more. Furthermore, given new methods of interacting with the consumer, it became practical for them to focus serious resources on content creation, as well. While the Netflix DVD-by-mail service was definitely eCommerce enabled (i.e. you could order DVDs via their web site), their digitally transformed value proposition is fundamentally impossible without digital.

Uber is doing the same thing for transportation. While plenty of taxi and limousine companies have apps that allow you to order their vehicles, Uber created a business model that was completely digitally focused. This meant that they didn’t need to own any vehicles or hire any drivers to become the largest ground transportation company in the world. It’s worth noting that Uber didn’t really go through a digital transformation, it was born digital. Digital Transformation is what pre-digital companies must undertake to compete in the newest wave of the digital age.

But even those companies that are “born digital” will need to focus on ongoing transformation. There are multiple examples of early digital successes, companies like Yahoo and MySpace, that failed to continue to transform.

Digital Transformation also requires a different mindset around where digital “lives” within the organization. You can visualize the way digital transformation works in the enterprises like this:

  • Wave 1 – Brochureware: Digital was part of marketing.
  • Wave 2 – eCommerce: Digital is a support service, creating digital pathways to pre-existing services like ordering, customer support, and billing.
  • Wave 3 – Digital Transformation: Digital reimagines the entire value proposition and business model of the company.

The goal of Digital in Wave 2 is to support the strategy and operations of the company by augmenting non-digital channels with more efficient and elegant digital alternatives. But in Wave 3, digital is driving the bus. The entire company — its value proposition and business model — is reimagined with digital at the center. This requires some substantial shifts in organizational structure, roles, and mindset; these shifts make companies hesitant to move towards true digital transformation. They engage in what is sometimes called Digital Decoration, that makes them seem progressive while protecting the “integrity” of their legacy business structures.

This is a losing strategy. There’s a long history of companies who decided to protect their existing models over supporting new ones. Kodak suffocated its early digital camera products; Blockbuster resisted focusing on digital delivery of entertainment. Western Union scoffed at the telephone.

In fact, here’s an example of an internal memo sent at Western Union:

“Why would any person want to use this ungainly and impractical device [a telephone] when he can send a messenger to the telegraph office and have a clear written message sent to any large city in the United States?”

Western Union opted out of the “digital transformation” of its era and I predict the same outcome for pre-digital companies who take a similar approach.

This article originally appeared on the Howard Tiersky blog
Image Credit: Pexels

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