Customer first without compromise

Customer First without Compromise

In mid-September 2013 we (Peter Hinssen & Steven Van

Belleghem) organized an inspiration journey to the American

West Coast. The goal of the trip was to gain a better

insight into the method of working and entrepreneurship

in Silicon Valley. In this paper weve written down our

conclusions and vision.

The paper is based on our visits of the following start-ups

and big successful companies: Taco Bell, Quid, Salesforce.com,

Google, Evernote, Apple, BlueKai, LinkedIn, Disney, Stanford,

Yammer, Yahoo, Microsoft, Starbucks and Amazon.com.

The Spirit of Silicon Valley


Our conclusions can be summed up in a few words since they

are all based on the same principle: putting the customer

first to an extreme degree. The customer is truly at the

heart of the philosophy and any form of compromise at the

expense of the customer is out of the question. Successfully

implementing this modern customer approach requires a

flexible, networked organization. Marketing, HR, IT and

general management must share a network. The hierarchy

can remain in place but doesnt have to be respected. Keeping

things moving, making real-time decisions and continuously

optimizing the customer relationship are the goals shared by

every level of the organization. And finally, the network needs

a purpose-driven culture to get everyone on the same

page. Instead of talking about their products, Silicon Valley

companies talk about how they are going to change the world.

We will now examine each of these three steps in detail.

Customer first without compromise

The Network organization

Purpose driven culture


Successful companies reinvent the relationship with their customers. Modern organizations

build a structure that truly puts the customer first: customer-centricity without compromise.

For example, Evernote could make bigger short-term profits by charging their customers for

downloading their app. However, they would never do this because they would reach fewer

customers that way. LinkedIn could make lots of money by commercializing their network data but

theyll never do so. Customer-centricity without compromise means keeping the customer at the

heart of things, even if this goes against the bottom line in the short term.



The theme of our visit with Apple was their extreme focus on

all details that impact the customer relationship. Apple wants to

surprise its customers and exceed their expectations in every

detail. They do this not just through the next disruptive innovation

but also by optimizing the existing customer relationship in the

extreme. Yahoo, a company in a major turnaround, wants to

improve the consumers daily habits.

The Yahoo weather app (winner of a 2013 Apple Design Award) is

a case in point. There are many weather apps but Yahoo displays

stunning photographs of the featured cities and has created a very

user-friendly interface. The philosophy to surprise the customer

in every detail has brought about a change in the organizations

culture. If its not good enough its not put on the market.

Inspire & Delight

nui7711 / Shutterstock.com


New products should be released faster. The trick is to work with

short feedback loops and improve products in real time. Traditional

companies conduct months of market research prior to releasing

a new product. After the launch, the product has to remain viable,

even if the objectives are not met. In other words, subsequent to

the launch, all they do is wait and tweak the marketing strategy

from time to time. The new model shortens the time to market

for new products.

Those products are improved very rapidly thanks to real-time

feedback from staff and social media. Modern product launches

are an iterative process, thereby turning the launch into the start

of a new process. We heard about restaurants that change their

menus and instantly know what customers think thanks to the

feedback they give the staff. This information is shared internally

via Yammer, an internal collaboration tool. Shortly afterwards,

the product is updated. Products that are not up to standard are

immediately discontinued.

Short Feedback Loops & Real-time Improvements


Big data is the buzz word right now. All companies use

data to enhance the customer relationship. Modern

technology allows us to focus on the desires of individual

customers and not just those of the average customer.

Big data predicts what a customer wants before the

customer himself is aware of his desires. Instead of

real-time solutions we are now looking at before time

solutions. Companies can offer their customers today

what they will need tomorrow. For instance, Taco Bell

uses big data to predict the success of product launches.

They can tell with 90% accuracy how successful or

unsuccessful a new product will be. Data is the marketing

departments new secret weapon. Data can not only be

used to predict the chances of success but also to make

the right message appear at the right time. Evernote,

a free app to create notes and record voice memos, is

convincing consumers to switch to their paying version

by presenting commercial messages in the appropriate

Real-time Insights & Personalization through Big Data

context. Nowadays a modern marketer looks for ways of

using data to boost his sales figures.

Nikes Fuelband is another example of a big data tool.

Users of this digital bracelet provide Nike with tons of

free personal info. Nike knows where you are, how far you

walk, how often you work out and what your heart rate is.

In theory, Nike could have a new pair of trainers delivered

to your doorstep at exactly the right time. It would be

the ultimate proactive service a brand could offer its

customers. Thanks to big data, companies know what you

need before you do.


Everyone knows Angry Birds, the most successful mobile game

ever. The games success can be explained in three words: fast,

easy and fun. The new challenge will be to make your relationship

with the customer meet the Angry Bird rules. Do new applications

have a short time to market? Are they easy and fun? Its not an

or question, its an and question. Consumers are accustomed

to the ease of use of Apple and Google. Customers expectations

usually evolve faster than a company is able to make changes.

That is why it is necessary to subject every product launch or new

online feature to the Angry Bird test. Davy Kestens, the founder

of Twitspark, feels that investing in patents is a waste of energy.

They stand in the way of innovation. When faced with copycats

we simply need to improve our products even faster.

Angry Birdization


All around us, thanks to the extreme effects of digitization, weve started to shape a society that

is entirely based on the concept of networks. Networks of information, networks of knowledge,

networks of entertainment, networks of friends, networks of enterprises. Everything we see

around us is based on the concept of networks, fueled by digital technologies that are making our

society a more connected and networked system every single day.

We wont be able to understand, or leverage, the age of networks if we dont start to think about

our world, our businesses, our companies, and our markets as complex, internetworked systems. We

have to understand the new language of the age of networks if we want to reinvent our companies.

The Age of Networks


Networks may seem complex and hard to manage at first, but there are

a number of advantages in networked thinking:

Information flows faster in networks.

Companies need information on their markets in real time to make

decisions faster than ever. Networks turn information ponds into

rivers, flowing through the organization.

Intelligence filters faster in networks.

With so much information around, its increasingly difficult

to distinguish important data from rubbish. Networks distill

information so the relevant information sticks out.

Innovation flows faster in networks.

By combining the intelligence of more people inside (and outside)

an organization, without hierarchical boundaries, good ideas will

thrive faster. Just look at how start-ups function.

The Advantages of Networked Thinking


What will organizations look like in the age of networks? What will companies look like in an era of total and complete fluidity?

The Network doesnt care for hierarchy The world has shrunk to six degrees of separation, so why should employees care for a structure and a hierarchy that has

too many managers between them and the CEO? The next generation has learned to live in the network, make connections

in the network, and advance through the network. For them its not up. Its not horizontal. For them its all in the

network. It has become a vertical playing field. The vector points to the network.

The network rewards people who can contribute Information is only valuable if you share it. If you want to advance in the network, you have to feed the network. You

have to supply information, share information, and facilitate the velocity of information in the network. Networks live on

information that is spread.

The network is a pure meritocracy You earn your rights in the network based on what you do, what you provide and what you share. Not on some badge of

honor, stars or stripes that make sense in the hierarchical world, but not in the network.

This will truly change the way we work. The way we build organizations for the future.

The way we think about companies for the next generation.

Rethinking Organizations for the Age of Networks


The new world of work will require a complete rethinking of the

engagement of people to your company, based on the philosophy of the

network. And we might have to throw away many, if not all of the tools

that we have used in the past, when companies were still very much

based on the ancient model of the hierarchical structure.

The central element of this transition to the age of the network, is

that the static structures of today will have to be reinvented for the

age of fluidity. This is a completely new paradigm. Careers will have to

be reinvented and replaced by much more fluid thinking, but also the

way we will reward people for their efforts will have to be completely

overturned.

The fundamental shift is that were replacing the notion of loyalty by

the notion of relevance. The company structures of the past were

completely based on control and loyalty mechanisms. If companies are

going to behave in a network-based society, they will have to become

networks themselves.

From Control to Fluidity


In the era of fluidity, we have to adopt this structure-network duality. We have to build

organizations that are capable of behaving like a structure and as a network at the same

time. That when we need to drive for efficiency, we need to push on the structure, and

when we need to drive for innovation and creativity, we need to push on the network side

of the organization.

Adam Pisoni, the CTO and co-founder of Yammer puts it like this: Of course companies

should have structures and org-charts. But it doesnt mean companies should work that

way. They should understand the network dynamics of their organization. Yammer has a

structure, and an org-chart, but as Adam says: We just dont use the structure. We use

the network.

The power of the network is forcing companies to change their organizational culture and

structure. On the surface, we see this new way of working as technology and tools. But

deep down, its a cultural thing. Starbucks is not just a corporation, its really a network.

Their headquarters arent really headquarters, they are the central hub that supports the

network. That philosophy is a deeply cultural phenomenon.

Coexistence


Michael Porter once said that the essence of strategy is choosing what not to do. We found this

mentality has really permeated Apples organization. If an Apple employee comes up with a new idea

then this idea can be launched on condition that an old idea is made obsolete in return. Apple has

the highest value of any company in the world and employs just 25,000 staff (not counting retail).

Apple has fewer than 100 product marketers. This is made possible by their strong focus on a mere

handful of products. Extreme focus is a necessity in a network organization. Without focus the

network would be ruled by chaos.

Extreme Focus


Most CEOs understand the power of purpose. A purpose is a higher

goal for the organization. Starbucks says it best: To inspire and

nurture the human spirit one person, one cup and one neighborhood

at a time. Starbucks is not about selling coffee but about bringing

people together. When you visit the company, this mentality is palpable

in every corner of the building. Every employee breathes this mentality.

Yahoo doesnt say: We make apps and we make people happy.

Instead, Yahoo says: We make the consumers daily routine easier

and more enjoyable. Evernote doesnt say: We make software so you

can make notes. Instead, Evernote says: We make our customers

more efficient. At a product launch, none of these companies talk

about the product itself. What they do talk about is their philosophy.

A philosophy projects passion and enthusiasm. It ties the staff to the

organization. Thanks to the philosophy, employees are glad to go the

extra mile.

Clear & Inspiring Purpose


A purpose is great but it is worthless when it is not carried

by the staff. We felt this clearly during practically all of our

visits. The people working for these companies are proud of

what they do and they believe in their employers purpose.

No one makes products in Silicon Valley, they are all changing

the world. We were all affected by the drive, the passion and

entrepreneurship these people exhibited. Purpose and passionate

staff are motivating factors. Customers feel this and it incites

them to buy. Yammer is the perfect example. The founder of

Yammer, Adam Pisoni, gave us a fantastic presentation about

the organization of the future. At no time did he mention his

product. Instead, he shared his vision and his passion.

The result was wonderful: nearly everyone was interested in

buying the product. If hed given a product demo, the outcome

probably would have been less spectacular.

Everybody Lives the Purpose


The power of a company is in the passion and the details. Details make a crucial difference in the customer relationship.

Every organization has major processes to keep their customers satisfied. However, these processes often ignore the little

details and the interactions between the various contact moments. Customer satisfaction is made or broken by details.

Besides details, passion is the prime ingredient of success. Self-confidence, pride and passion are contagious. We visited

companies big and small but they all shared the same pride and passion. In fact, we found that the more passionate they

were, the more enthusiastic we felt about our visit.

Modern organizations are faced with huge challenges. The external clock ticks faster than the internal one. Consumers

attitudes towards companies are becoming increasingly demanding. The world is evolving at breakneck speed. A modern

company has no choice but to adapt to this evolution. Darwin said that it is not the strongest of the species that survives,

nor the most intelligent, but the most responsive to change. Today that Darwinism is being taken to extremes.

The way to adapt is: customer first without compromise! Build an organization that can deliver on that promise:

a network organization driven by a strong sense of purpose.

Details and Passion

[email protected]

@hinssen

linkedin.com/in/phinssen

facebook.com/hinssen

[email protected]

@StevenVBe

linkedin.com/in/stevenvanbelleghem

facebook.com/theconversationmanager

Peter Hinssen Steven Van Belleghem

Business

Customer first without compromise