If you consider that innovation is a team sport, and that the most important players are your customers, then innovation requires new, robust forms of collaboration with your customers. It is about turning a company, and its entire value chain, over to the command and control of customers. This new reality demands a shift in our thinking about innovation. Winning companies will be so close to their customers, they will be able to anticipate their needs, even before their customers do, and then turn to open innovation to find compelling value to meet those needs. Because your customers are your only true asset in the new world of low‐cost suppliers, your business model will likely need to be expanded so that you can fulfil as many of your customers’ needs as possible.
This approach is indeed a major growth strategy in a world of declining margins and commoditisation. Now the question is; how do you get ever closer to your customers? One approach is the Voice of the Customer (VOC), which was all the rage in business circles back in the ‘90s, but got lost amidst the dot‐com boom, abundant cheap‐labour supply resources from Asia, and emerging markets as globalisation reached a fever pitch. VOC is a process discipline, a way for companies to gather customer insight to drive product and service requirements. Techniques for VOC include focus groups, individual interviews, contextual inquiry, ethnographic techniques, etc. Each technique involves a series of structured, in‐depth interviews that focus on the customers’ experiences with current products or alternatives within the category under consideration. Needs statements are then extracted, organised into a more usable hierarchy, and then prioritised by the customers.
Today, VOC is again moving front and centre, thanks to the many channels of dialog made possible by the Cloud. However, customers often do not know, or cannot effectively communicate their actual needs and requirements. Therefore businesses must find more creative methods of understanding customer requirements. Smart companies are now emphasising business intelligence everywhere and integrating Web 2.0 communications technologies. Leading companies are creating blogs and wikis, placing their avatars in Second Life and taking their businesses to Twitter. But you won’t want to just open up these new Web 2.0 channels of communication and turn up the volume. You’ll want to have business intelligence embedded throughout your process management systems, and forge meaningful collaborations using human interaction management systems (HIMS) and processes to tame the chaos and noise inherent in Web 2.0 technologies.
Today’s customers want it all, whether it is buying a PC, spare‐parts, engineering services, or life insurance, customers want complete care throughout the consumption life cycle—from discovery all the way through support after the sale or contract. Today, customers demand the best deal, the best service, and solution‐centred support that can only be optimised by true customer collaboration. Competing for the future is about the total customer experience.
Not only do companies need new means for listening to, and collaborating with customers, they also need to act on the information thus derived. To do this, they must hone the innovation process itself using the emerging principles of innovation management if they want to deliver ever more compelling value to their customers.
In addition to getting closer to your customers, businesses also need to get closer to suppliers and trading partners that make up the complete value delivery system and that operate against their own clocks. The days of the vertically integrated company or even captured supply chains that depends only on itself to deliver value to customers is long gone. Today it is multiple companies that collaborate in any given value chain, which can be a project manager’s nightmare unless roles and responsibilities can be delegated, distributed and managed across the value chain and all its contributors.
Delegation is an essential part of any innovation initiative, so identifying roles and responsibilities early in a project is important. Applying the RACI (Responsible, Accountable, Consulted, and Informed) model can help. As a leader of an innovation initiative it is important that you set the expectations of people (staff, customers, partners, suppliers) involved in your project from the outset.
Innovation initiatives require many people’s involvement across many companies, so businesses must do all possible to avoid a situation where people are struggling against one another to do a task. Equally difficult is dealing with a situation where nobody will take ownership and make a decision. How do people know their level of responsibility; when they should involve others, or when they should exercise their own judgment?
Without clearly defined roles and responsibilities it is easy for innovation initiatives to run into trouble. When people know exactly what is expected of them, it is easier for them to complete their work on time, within budget and to the right level of quality – or sometimes more importantly – know when things have gone astray and to whom to communicate.
Indeed, innovation is a team sport involving customers, suppliers and trading partners.
