citizen Evangelist

My family lost its matriarch last week.  As a result, our family was drawn together to celebrate her life.  This celebration gave me the rare opportunity to learn a bit more about my grandfather, the husband of my departed grandmother.  They had been married 65 years and together, they had taken the family’s sustenance farm and turned it into a highly profitable corporation, retired, and later launched an adult retirement community providing an incredible amount of revenue toward their life and the life of the family.

I had always admired what he was able to do and aspired to have the same level of success.  He shared with me a simple, obvious, and powerful truth during our time together.

You will fail if you’re in business to make money.

When your objective is to make money, you will do stupid things.  You will cut corners.  You will not take important risks.  You will achieve mediocrity and fail.

Alternatively, if you’re in business to do something like make a better product or be the best provider of service, he said:  You will be surprised at how much money will find its way to you.

So… what’s your purpose for being?  Want to make some money?  Or do you want to make something special?  You better pick right.  Only one correct answer here.

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Merriam Webster defines innovation as:

Function: noun
Pronunciation: \ˌi-nə-vā-shən\
1. the introduction of something new

Wikipedia adds some additional thoughts in this matter:

the change must increase value, customer value, or producer value. Innovations are intended to make someone better off, and the succession of many innovations grows the whole economy.

There is an important distinction between invention and innovation that often goes unnoticed:

An invention is an object, process, or technique which displays an element of novelty.

Inventions are first ever creations. Innovation is the tireless pursuit of creating value. Innovation isn’t isolated to products. In fact, innovation can occur in every business process, in every customer interaction, and in every activity that takes place within and around your business. It isn’t about being first. It isn’t even about being ideal. It is only about improving what you have and what your are doing to increase value for you, your customers, your products & services, and your business. Innovation is about staying viable in the market and refusing to succumb to the commodification of your business.

Let’s face it: the competition is out there. They are going to be working hard to increase their revenues. They are going to work hard at taking revenue from you. Can you afford to be the low cost leader when competing in a global marketplace where there are companies with employees and operation costs that are a fraction of yours? Or are you ready to take on a new way of thinking, a corporate directive that focuses not on driving down costs but instead on driving up value?

Just In Time Innovation is a simple concept: when the opportunity presents itself, make improvements. In practice, things get pretty complicated. This requires a whole new way of organizing yourself and a significant new importance placed on truly understanding your customer. The customer is your boss. The customer pays your salary and gives you your job. The customer is who determines if you’ve succeeded in providing value in excess of your costs. When you are successful your customers will buy your product and tell their friends.

There are many recent signals that a handful of companies are embracing this belief and are getting organized to innovate in new and exciting ways. Ben McConnel notes the launch of Starbuck’s My Starbucks Idea. Last year, Dell launched a similar initiative with IdeaStorm. And earlier this week I referenced a slightly different approach by Nokia and the use of Beta Labs.

Customers buy because the are seeking something. When a customer buys from you, is there any additional you could you could do for that customer? How do you know? Do you ask them? If a customer is asked “How else can we help you?” is that information collected? Is it available throughout your organization? Can your organization take that information and innovate?

If you don’t have a strategy and don’t have the tools, what are you doing to ensure your company is going to survive?

Disclosure: I am founder and Chief Evangelist of Whisper Labs. We offer a hosted web application that makes it easy to collect and manage customer ideas. Your customers know what they want. Some times, they even know what you can do differently in order to provide what they need. The best thing you can do is ask them: “What else can we do to delight you?”

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Time and time again I’ve worked with organizations bringing new products to market and time and time again the expectations of the product are mis-aligned with what the realities of the product. The “blame” if you feel compelled to assign any blame can be assigned to the sales person or the marketing team for mis-representing the product, to the product development team for incomplete, missing, or broken features, or on the customer for not understanding the product.

At the end of the day, assigning blame is a foolish pursuit. At the end of the day, the fact remains that someone had hopes that were unfulfilled. The question now faced is: what are you going to do about it?

You have:

• a product (or service)
• a user or customer
• a revenue opportunity (or risk, depending how you want to look at it)

Seth Godin believes your customers are watching what you do over listening to what you say. Patrick Williams asserts that you need to spend more time listening and understanding what your customers and prospects want and need. Alliance Science adds that you should be the first place your customers go to find a solution.

As I stated yesterday, much of this comes down to trust and communication.

Isn’t it time to get a real dialog started? Provide something that someone wants or needs and you struggle selling it. Treat your customers like they matter and they won’t distrust you. Do the right thing for your customers and they will do the right thing for you.

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What is the value of an idea?

Some might say that ideas aren’t worth much. In fact, there are many different people who feel the same way. Even Thomas Edison was quoted as saying: “The value of an idea is in using it.”

I think most people only consider the value of ideas when:

1. They feel ownership of the idea
2. The idea represents something they would find useful

The irony with most companies is that most of the focus is only around those ideas that are generated within the company. In those cases, yes… I too agree that ideas are worthless unless executed.

But companies need to be mindful that there is a segment of ideas that has significant value. The value could be either positive or negative, and the risks associated with ignoring these ideas can be dramatic. Do you know what ideas I’m referring to?

Customer generated ideas

Customer generated ideas are typically incremental improvements or extensions to existing products or services. These ideas are rarely ground breaking or disruptive (for example: a user of a stove would not suggest the creation of a microwave oven and the owners of horses would not have suggested the introduction of an automobile). Because these ideas are not generated within the company, many organizations and individuals cast these ideas aside with a “not built here” mentality. Other organizations willingly collect these ideas and even act upon them to deliver incremental improvements. By far, the biggest problem companies face is the fact that there is not an effective method for the company to:

• Collect these ideas in a method that is easy for the customer to participate
• Record who suggested the idea
• Easily get feedback from the stakeholders on the value of the idea
• Communicate to those stakeholders:
  • The popularity of the idea
  • The stakeholders who support the idea
  • The priority of the idea
  • The status associated with action on the idea

Building customer engagement is difficult at best. When your customers feel strongly enough to share their ideas on how to improve your product or service, you have an opportunity to engage that customer and deepen that relationship. If you make it difficult to receive that idea, fail to acknowledge that you’ve received that idea, fail to consider that idea, and fail to communicate status to that customer you’ve given that customer a valid reason to seek a relationship with another vendor.

So, the next time a customer shares a product or feature idea with you, consider this: is the real value to your company in the idea? Or is the real value in how you interact with the customer?

My opinion: treat the customer like they are important & then determine how to act on the idea. The value still comes from how you act, but make certain that you don’t set yourself up to lose the customer in the process.

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I had a great conversation with a former coworker about the challenges faced since we went our separate ways. I couldn’t help but think about how the things we discussed were so similar to every situation that I’ve ever faced as a product manager.

Internal Politics vs. Customer Priorities

As a product manager, when I was faced with the task of determining what we should do for our next release, the core challenge always came down to selecting the best enhancements &/or new products that would help drive market adoption, drive increase value (revenue) and drive reduced costs. At face level, this seems to be an easy task. In truth, this process is much more an artform than a science. The challenge faced by most product managers is the validity of the “truth” used in making decisions.

When the CEO or the executive management team make assertions that the number one priority for the company is to do something, it is often difficult to refute. Further, doing so can be a career limiting move if you don’t have market facts to back yourself up with.

When the VP of Sales or any respected member of the sales team claims that a particular feature which is lacking would generate a higher close rate and millions of dollars in additional revenue, it is a challenge to hold a different opinion.

When the executive in charge of customer loyalty and customer experience points to user flows or the absence of features and boldly states that changes will lead to reductions in customer attrition or increases in use and revenue, any dedicated product managers will want to deliver solutions that improve customer revenue and longevity.

When all three of these executives are demanding different things and the development organization only has capacity to implement a portion of one thing, what is the correct answer? Should you side with the CEO? Do you act on the advice of Sales? Perhaps you focus on the areas identified by the stakeholder responsible for customer loyalty & customer experience?

The unfortunate truth is that none of these individuals can absolutely know the right answer. The right answer can only be determined in hindsight — after the decision is made, the development team executes, and the organization pushes the new release to production. Even then, the product must be used and opinions made by the intended beneficiary of the enhancement before any true measure of the ROI can be made.

What makes this even more challenging is the fact that not everyone on the team has the same objectives. What if the sole objective of the CEO is to earn short-term reputation points with the board of directors? Or, perhaps she is looking to get the incremental valuation bump based upon early news of the release? What is the motivation behind the message from Sales is closing a very specific deal which will help him to get his commission or save his job? What if the reason that your seeing customer attrition has nothing to do with specific features and the real reason is due to poor customer support?

Seth Godin posted some thoughts on who the “Boss” actually is just a few days ago which helps to keep things in perspective. At the end of the day, it doesn’t matter who on the team thinks they are right. What matters is whether the decisions made add new customers, keep current customers longer, drive up revenues, or decrease the costs of servicing those customers. The “boss” will always let you know how you’re doing in a measure called revenue from which you can qualify your success using another measure called profit. Make the right investments in the right way, profit goes up. Make a mistake… and well… that’s another discussion.

So… who is driving your priorities?

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