Our friend Katie posted something on Facebook recently about box-checking and diving into process without thinking through the process, which is a problem in many companies ... so I thought I'd share this, with some solid MIT research on the issue.
Customer insight is an interesting topic in the modern business world. We've got some evidence that customer relationships are now trumping the value of "brand," which totally flips the script that a lot of CEOs and CMOs have been playing from for decades. Then, we've got this other idea of "Nobody asked for Uber." In other words, growth and innovation tend to come from what customers need, not what executives think. This may sound very logical, but a lot of companies still haven't even remotely mastered this idea. It murders their customer insight processes. Here's the final piece of the puzzle: many companies still treat customers as, essentially, "wallets with fingers." Hard to derive customer insight there.
There are two major problems here, I'd argue. The first is how we set up hierarchy. You can make the most money by being furthest from the customer. That makes no sense. So you've got these guys making $225,000 per annum sitting in meetings, right? Most of their week is spent sitting in meetings with other people like them. In many cases, they have no idea who the "end user" is. Maybe they've seen some data -- you'd hope -- but even then, they probably haven't straight-up interacted with a slew of customers. How can they possibly be making customer insight decisions then? In short: they can, but those decisions will be very skewed. The second element of this problem is that all these guys are considered "stakeholders." Further down the chain, where you might have more customer insight, your job is seen as "pleasing these stakeholders."
In short: people with real intel on customer insight often have to run in circles placating those with less insight but bigger salaries. This is where hierarchy is a problem and why stuff like "self-management" has come into the light of late.
The second issue is the role of data. A lot of customers make purchase decisions off emotion, but because data is en vogue now, a lot of organizations are chasing that. Problem: they're chasing it based on outdated success metrics. Problem II: collecting data essentially for the sake of collecting data does nothing but slow down your decision-making. Slow decision-making is the first way established companies get "disrupted."
So here's where we are: customer insight is important, but the pathway that many companies take to customer insight is flawed. What now?
Customer insight: The value of stop and think
The whole time I had office jobs, here's one thing I never understood. Almost no one thinks about anything. People just race from task to task and meeting to meeting. I wrote a post about this once.
Well, some people much smarter than me -- MIT Business School -- also wrote a post recently called "The Lost Art Of Thinking In Large Organizations." Very good, detailed post. Read it if you have time. Right up top, they nail the problem:
How did we arrive in a state where managers do not recognize that thinking is part of their job? The answer reflects a relentless focus on execution in many large companies. A company becomes big by finding a successful business model — and then scaling it massively. This necessitates building a finely tuned system with highly standardized processes. To get promoted in such an environment requires an almost singular focus on execution. In other words, it requires action more than thinking. However, once executives are promoted to a senior level, these new business leaders must be able to think strategically. Ironically, the very skills in execution that led to their promotions often make these executives ill-equipped for their new roles, since their strategy thinking muscles have withered from disuse.
Yep. Here's the real deal. Most supposed "strategic" plans are really operational plans. Why does this happen? Because the guys who create these strategic plans have spent 15+ years being told all that matters is execution. So they outline the details and call that "strategy," when in fact that is logistics or operational elements. As a result, most strategic plans are garbage. Plus: strategy, by definition, has to evolve. If the market shifts or you have turnover or certain stuff happens with a product, the strategy changes. When you put strategy on a document, it usually becomes intractable. That's bad.
What does all this have to do with customer insight?
You need a way to get at customer insight. Most "thought leaders" will come along with a bucket of buzzwords and grab at those. It will be something about "real-time customer analytics" and "resolving pain points." The thing is, a lot of people -- and especially people who run companies -- have no idea what those terms mean. To them, they just heard "I need to hire someone who understands this shit, and STAT!" Remember: concepts around "data" and "insights" are relatively new at a lot of companies. The existing power core is often clueless.
You make money from your customers, whoever they are. So I don't care if you have a "strategic road map" or a "customer-driven mission statement" or whatever else. You need a way to get at customer insight. And the first step of all that is really thinking about the big picture, instead of just sprinting to your next call.
How can we think about customer insight?
A lot of this, as with all business, begins with intelligent questions. None of this will be breaking news to you, but questions here might include:
- Who buys our stuff?
- Why do they seem to?
- Where? (In-store, laptop, mobile, tablet, etc.)
- Who have we talked to?
- What have they said?
- Who seems to never buy our stuff?
- What markets/angles are we missing?
- In the corners of the Internet where our people reside, what are they bitching about?
- Could we solve those problems for them?
- Can we do this without spending tons?
That's just a beginning list. There are dozens more I left off.
Seems reasonable. How do most companies get at customer insight?
In short? They over-emphasize process as opposed to thinking about the real issues. This is where we get mostly-useless user personas from, for example. ("Sally Sales Girl.") It's the origin point of horrible, off-task marketing campaigns that deliver no value too. It's because people want to feel in control of something, anything at work. As a result, they focus on things they can control -- like crafting a persona or designing a campaign. Those concepts are tied to customer insight, but they themselves are not actually customer insight. A stunningly low number of people seem to understand this, however.
Think about it this way. Customer insight is rooted in listening and feedback. Execs screech all the time about how that's impossible and they're so busy driving the ship forward, but it's hardly impossible. Social + digital + mobile make it easier than ever to understand your customers. You may not know their entire bio and sexual past, no, but you can know a hell of a lot about them. But it requires work, listening, and two-way conversations. You know what else requires those things?
Hmmmm, let me think. Oh yea. Management. And 82 percent of managers are train wrecks too.
In sum: a lot of companies would rather have process-driven control over some aspect of work than actually get at customer insight. In the same way, most managers would rather hide behind process-rooted performance reviews than actually grow their employees. It all comes back to laziness and confusion around what "work" even is or should represent. If you gloss over those issues, you'll never solve for the bigger set.
What else might you add on getting at customer insight?
This post originally appeared on Ted's primary blog, The Context of Things.