The Customer OS - Why digital isn’t digital and customers hold the key to your future

The Customer OS - Why digital isn’t digital and customers hold the key to your future
Helge Tennø | jokull.io Customer Strategy | Customer Insight THE CUSTOMER OSWHY DIGITAL ISN’T DIGITAL AND CUSTOMERS HOLD THE KEY TO YOUR FUTURE
My back story: I. There are no lack of headlines trying to explain the future with words such as «transformation», «digital», «Internetification» etc.. But these terms have no context or explanation - they are just there to help people who don’t understand what is happening sell that they do. II. I was baffled when I, in my talk at the end of a three day workshop on «change», asked participants what was changing? And nobody had a valuable answer. III. I made my goal to dig underneath the superficial surface and help organizations and teams articulate what they were seeing around them. To help them develop a common understanding and shared language enabling them to work better together going forward. Follow me or even better, join my knowledge network on LinkedIn:
growing complexity PART 1 PART1:GrowingComplexity
«PEOPLE HAVE CHANGED MORE THAN THE BUSINESS ORGANIZATIONS THEY MUST DEPEND UPON FOR CONSUMPTION AND FOR EMPLOYMENT» - Shoshana Zuboff PART1:GrowingComplexity link
Every century or so, fundamental changes in the nature of consumption create new demand patterns that existing enterprises can’t meet. - Shoshana Zuboff - PART1:GrowingComplexity link
PART1:GrowingComplexity link
A MUTATION IN CAPITALISM ITSELF It would be easy to construe these as isolated cases of innovation and industry change, but I believe they represent much more: a mutation in capitalism itself. What’s the difference? Innovations improve the framework in which enterprises produce and deliver goods and services. Mutations create new frameworks; they are not simply new technologies, though they do leverage technologies to do new things. Historically, mutations have superseded innovations when fundamental shifts in what people want require a new approach to enterprise: new purposes, new methods, new outcomes. Creating value in the age of distributed capitalism By Shoshana Zuboff http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/creating-value-in-the-age-of-distributed-capitalism PART1:GrowingComplexity link
- CHRISTIAN MADSBJERG AND MIKKEL B. RASMUSSEN, HBR.ORG, AN ANTHROPOLOGIST WALKS INTO A BAR The biggest challenge CEOs face is the so called complexity gap. CEOs see a lack of customer insight as their biggest deficit in managing complexity. .. And rank “customer obsession” as the most critical leadership trait. THE PART1:GrowingComplexity link
PART1:GrowingComplexity To explain what is happening.. We are not talking digitization or transformation, we are talking What does that mean? mutation.
this happens …and so PART 2: PART2:ThisHappens
People reach their goals through their behaviors. They hire products and services because of the processes these offer that allows different types of behavior. These processes are themselves limited to what the current technology can offer. And hence people’s behaviors are limited to the technology that is available. PERSON GOALPROCESS BEHAVIOR TECHNOLOGY PRODUCTS AND SERVICES PART2:ThisHappens
What happens when the technology changes? But… PART2:ThisHappens
What happens when the technology changes? What happens when people’s goals change? But… PART2:ThisHappens
"In the old model things didn't change very fast, it was predictable and so you built for predictability. It was like saying; 'go find this object in a well lit room’." - Aaron Dignan - A Well Lit Room It used to be… PART2:ThisHappens link
- In a well lit room these factors are all very predictable - PERSON GOALPROCESS BEHAVIOR TECHNOLOGY PART2:ThisHappens
New technology invites companies to find new processes creating new behaviors for people Slow moving societal change like the increase in higher education, standards of living, social complexity and longevity etc. changes people’s mind in regard to what they find valuable Dark Room Now it’s more like… PERSON GOALPROCESS BEHAVIOR TECHNOLOGY - Aaron Dignan - PART2:ThisHappens link
Companies tend to over invest in keeping the current processes intact rather than exploring how technology can enable new processes and consequently new behaviors - allowing customers to achieve their goals in new ways. Where it all breaks down: - Clayton Christensen - PART2:ThisHappens link
PART2:ThisHappens - Helge Tennø - «IT IS NOT ABOUT OLD PRODUCTS OR SERVICES BECOMING TOO COMPLICATED OR TOO SLOW, THEY BECOME IRRELEVANT.» link
There was a time when TV content was best organized into linear channels - this was the premiere possible solution at the time. But, then the technology changes and what was the optimal solution only becomes an option in a menu of opportunities. It doesn’t make much sense anymore to hold the customers hostage to a very limited set of processes and behaviors if our job is to help them utilize content to achieve their newfound goals. PART2:ThisHappens
PART2:ThisHappens
so…this might be your future in three to five years … PART 3: PART3:Sothismightbeyourfuture
The customer is not in the driver seat. It is us that no longer understands what they find valuable to pay for. Willingness To Pay PART3:Sothismightbeyourfuture
Identity PART3:Sothismightbeyourfuture link
Mass consumption lowered prizes and opened massive new markets to people who wanted goods but couldn’t afford it. Individual Zero marginal cost of customization makes possible the production of individual services at the same low price points as if it was mass produced. People will pay for the ability to get their personal product (their liberation from the hostage taking of mass produced goods). They now set the premise and tailor every detail to themselves. e.g. There are no two Google search results, Facebook feeds or Amazon product pages. Every smartphone is unique two minutes after you boot it for the first time. 1900 2000 PART3:Sothismightbeyourfuture
PART3:Sothismightbeyourfuture link
identity + individualization Increased willingness to pay Finds / opens / creates new markets This might be your future in three to five years … PART3:Sothismightbeyourfuture
choice…and how not to see it.. PART 4: PART4:Choiceandhowtonotseeit
freedom of choice, not voice. The democratization of the Internet has led to If everyone is offering the customer the same processes and infrastructure customers are only given a choice between logos and colors. But, if a provider offers the same or competing value with different processes and / or no infrastructure. Then the customer has been given a real choice and there is a real threat to the incumbents. ChoiceNo Real Choice KEYWORD: DIFFERENT PROCESSES & INFRASTRUCTURE PART4:Choiceandhowtonotseeit
Common market reaction to real threat: the threat to make it dissapear e.g. Insurance companies understand the importance of insuring against damage or loss to people’s physical property. But in regards to intellectual property they don’t see their role at all. This is strange. Given that if you loose your computer the stuff on it is far more valuable than the box itself. What business are the insurance companies really in? The insurance industry avoided any problem by just renaming the whole problem. Insurance of intellectual property is now called cloud storage. re-name PART4:Choiceandhowtonotseeit
Re-naming is a sickness plaguing industries - because it suffocates companies by protecting them from real growth. Companies shrink and suffocate until they end up as commodities or infrastructure. Companies don’t die they suffocate PART4:Choiceandhowtonotseeit link
Over time companies and industries seem to forget their understanding of the market, their CVP. They become prone to unconsciously hold a very limited view of their future. Seeing the world from a technology, market or product perspective creates a very narrow frame of reference where new wealth opportunities are easily overlooked. PART4:Choiceandhowtonotseeit Time Creating a market by seeing it from the perspective of the customer value proposition [CVP] The original technology and processes end up becoming a commodity or infrastructure Competition is openly let in to offer the same CVP due to difference in technology and process Market in terms of Customer Value THE CUSTOMER OS Operating in the market from the perspective of its Customer Value Proposition link
It is always easy to explain the world in hindsight, so lets try foresight: It is becoming increasingly clear to banks that where FinTech proposes no real threat WeChat and other social life-platforms do. How/why? FinTech proposes to better one or a few components in the banks value chain - but the chain itself will remain in the banks control. Life-platforms turns this on its head. Suddenly banks become the component and life-platforms become the chains. Banks, with their processes and infrastructure suddenly, and very visibly, are becoming irrelevant. PART4:Choiceandhowtonotseeit link
PART4:Choiceandhowtonotseeit Companies aren’t disrupted, components in their value chain are. This is comparable to the theory of disruption where Clayton Christensen argues that an industry is ripe for disruption when its core technology is stretchable. “Its core technology” being a component in the value chain essential to the nature, protection or capitalization of the industry. http://www.180360720.no/?p=5070 link
PART4:Choiceandhowtonotseeit Foresight (2015): link
hardware as an opportunity PART 5: PART5:ManagementAsAnOpportunity
Customer OS as a hardware /management problem PART5:ManagementAsAnOpportunity
Companies are designed to out! customers keep VIA CHUCK COKER ON FLICKR.COM PART5:ManagementAsAnOpportunity link
efficiency COMPANIES CARE ABOUT this harmonizes poorly with unpredictable customer who want nothing more then their own surplus & standardization PART5:ManagementAsAnOpportunity
PART5:ManagementAsAnOpportunity link
PART5:ManagementAsAnOpportunity Companies become internal bureaucracies link
«the process of work becomes work itself» PART5:ManagementAsAnOpportunity link
Is Delighting The Customer Profitable? Delighting the customer through outside-in innovation is not just profitable. It’s hugely profitable. That’s ultimately why it has become a business imperative. It explains why its conquest of the business world is inevitable. It’s not because the customers are more contented or because the people doing the work are happier or because it extends the life expectancy of a firm, generates jobs and fuels the growth of the economy. It does all those things, but the real driver of its inevitability is that it makes more money. Is Delighting The Customer Profitable? Steve Denning http://www.forbes.com/sites/stevedenning/2011/04/01/is-delighting-the-customer-profitable/#273e04c2151b Just look at the ten-year share price of exemplar firms like Apple [APPL], Amazon [AMZN] and Salesforce.com [CRM], with increases of around ten times to fifteen times. Compare that to traditional stalwarts like GE [GE], Walmart [WMT] and Intel [INTC], which struggle even to hold their share price constant. PART5:ManagementAsAnOpportunity link
«At a high level, banks make money out of two things. One is net interest margin. The other is kicking you when you’re down.» - Ricky Knox, Founder Tandem - Some industries are so fundamentally customer hostile, it would need a reboot in order to fix it. PART5:ManagementAsAnOpportunity link
-ism or -ism Is your company following PART5:ManagementAsAnOpportunity
«Let me give you an example of how expensive that can be. A decade ago four of the most powerful technology companies in the world were Intel, Dell, HP and Microsoft. And yet all four of them completely missed the single biggest shift in the generation in their industry. And that was the shift to wireless. The mobile opportunity was not an existential threat to their core business. We continue to over concentrate power in our organizations. When you give a few people at the top the power to set strategy and direction you are giving them the right to hold the organizations capacity to change hostage to their own personal willingness to adapt and change.» «[successfull companies] fail when their leaders fail to write of their own depreciating intellectual capital.» - Gary Hamel PART5:ManagementAsAnOpportunity link
«We were caught of guard» Senior Management in some of Norway’s biggest media companies after ignoring the warnings from their talented employees for years. PART5:ManagementAsAnOpportunity
The old management model is a control mechanism subdividing talent into compartments where top-management destroys their ability to create value. Enabling companies are driving information rapidly out to front-line self- organizing teams in order for them to operate autonomously and react instantly to changes in customer demand patterns. Employees given the opportunity to use their talent unleash massive wealth for the corporation. Cases in point: Salesforce, Netflix, Patagonia, Zappos, Tesla, AirBNB, Morning Star, Etsy, Nest, Spotify, Valve, Google, Burtzorg, Haier, Gore Technologies, DSM, GE Health, Whole Foods, Zara, Telus, Uber, Amazon, Facebook, Apple PART5:ManagementAsAnOpportunity link
«Even the worlds most efficient hierachical, linear organization was unable to keep up with the speed of this distributed network» - Chris Fussel, Stanley McChrystal Group - Graph / slide from Mike Arauz / aug.co PART5:ManagementAsAnOpportunity link
«The problem set for an organization usually changes every week.» - Chris Fussell, Managing Partner at McChrystal Group - PART5:ManagementAsAnOpportunity link
software as an opportunity PART 6: PART6:SoftwareAsAnOpportunity
Customer OS as a software /insight problem PART6:SoftwareAsAnOpportunity
- CHRISTIAN MADSBJERG AND MIKKEL B. RASMUSSEN, HBR.ORG, AN ANTHROPOLOGIST WALKS INTO A BAR The biggest challenge CEOs face is the so called complexity gap. CEOs see a lack of customer insight as their biggest deficit in managing complexity. .. And rank “customer obsession” as the most critical leadership trait. THE PART6:SoftwareAsAnOpportunity link
In 2003 the customer was in sixth place in regards to strategic influence. Ten years later they are second only to the c-suite. IBM Global C-Suite Study - PART6:SoftwareAsAnOpportunity link
Companies who give customers a voice at their c-suite table perform 15% better on average. The more weight the customer is given the better the result. - “The Chief Marketing Officer Matters!” by Frank Germann, Peter Ebbes, and Rajdeep Grewal - Harvard Business Review: PART6:SoftwareAsAnOpportunity link
Being overconfident in regards to customer insight is a challenge PART6:SoftwareAsAnOpportunity do you know that youHow know what you need to know?
THE UNKOWN UNKNOWN PART6:SoftwareAsAnOpportunity link
Ed Thompson, an analyst at market research firm Gartner, says: “Between 5% and 10% of companies truly have a customer culture at their core, but the rest have been forced to care because all other means of differentiation have been eroded over time. That’s why it is currently a hot topic and has been very high on CEO agendas for the last three years or so.” In many consumer sectors, it has become increasingly difficult for organisations to really stand out from the crowd in terms of pricing, products or services.As a result, the last great bastion of differentiation in recent years has become that of customer experience – and that seems unlikely to change any time soon. “THE REST HAVE BEEN FORCED TO CARE BECAUSE ALL OTHER MEANS OF DIFFERENTIATION HAVE BEEN ERODED OVER TIME.” PART6:SoftwareAsAnOpportunity linkCath Everett, ComputerWeekly.com Customer experience is big differentiator for organisations
PART6:SoftwareAsAnOpportunity link
IS CUSTOMER INSIGHT EVEN THE RIGHT APPROACH? PART6:SoftwareAsAnOpportunity
«We tend to throw out the most meaningful and most revolutionary if we ask people about their preferences» - Malcolm Gladwell - PART6:SoftwareAsAnOpportunity link
PART6:SoftwareAsAnOpportunity Know Your Customers’ “Jobs to Be Done” Clayton M. Christensen, Taddy Hall, Karen Dillon, David S. Duncan https://hbr.org/2016/09/know-your-customers-jobs-to-be-done link
«THEY CAN PICK OUT THE BEST CREDIT RISKS, IN AN ECONOMY WHERE INFORMATION ON CREDIT- WORTHINESS IS, SHALL WE SAY, A BIT THIN.» - Nicholas Lardy, a longstanding expert on China’s financial sector at the Peterson Institute for International Economics - http://www.ibtimes.com/mybank-vs-webank-chinas-internet-giants-go-head-head-new-online-banking-sector-1941380 PART6:SoftwareAsAnOpportunity link
in conclusion PART 7: PART7:Inconclusion
PART7:Inconclusion link
link
«Customer Strategy means gathering, cultivating and distributing knowledge about the customer throughout the organization. So that any talent and every team instantly can make their own decisions based on emerging customer needs – not having them depend on or wait for an organizational structure designed to preserve itself or its players.» - Helge Tennø - PART7:Inconclusion link
«The measure of a successful company is its ability to let its customers and employees liberate it.» - Helge Tennø - PART7:Inconclusion
- Thank you - THE FUTURE IS ONLY COMPLEX IF YOU FAIL TO UNDERSTAND IT FROM THE PERSPECTIVE THAT IS DRIVING THE CHANGE. Helge Tennø | jokull.io Customer Strategy | Customer Insight «When others look at you and think you’re nuts, it’s because they are looking at it from their perspective» - SwimRun Competitor, Norwegian In-flight Magazine -
Helge Tennø | jokull.io Customer Strategy | Customer Insight Follow me or even better, join my knowledge network on LinkedIn

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