Tuesday, March 30, 2021

When it comes to understanding customers, you can't handle the truth

 With all due respect to Jack Nicholson, who said this line in A Few Good Men, and to Aaron Sorkin, who wrote the words, most companies cannot handle the truth about the wants and needs that their customers have, because the truth is inconvenient at best, and often ignored at worst.  It is far easier to assume you know what customers want, and further to assume that they want what you have already.  Rather than create something new or different based on actual needs, your teams continue to create products that your firm is comfortable creating and you assume you are meeting the needs of your customer.

If innovation is creating new products or services to meet unmet needs, or creating or modifying existing products and services to make dramatic improvements for existing known needs, then something has to change - either the customers need to change their perception and the value they place on your existing products and capabilities, or you need to change how well you understand what your customers want and value.

Staple yourself to an order

I was speaking recently with a new acquaintance and told him about an article originally written about business process improvement entitled Staple Yourself to an order originally published in the Harvard Business Review.  It involved the haphazard way many business processes flowed through an organization, not based on straightforward processes and logic, but based on the ebbs and flows, straightaways and eddies of a process built and modified over years, bridging internal siloes and different compensation systems.  The original intent of the article was to encourage managers to actually walk through the set of steps that a customer order would go through and to remove those that did not add value, shorten the time in each activity if possible, and ensure that every activity added value.  

Today, we'd call an activity like that a "customer experience journey", which many innovators are borrowing from design thinking.  In my previously mentioned conversation, I told my colleague I thought the new mantra should be "staple yourself to a customer" to understand and experience what they want, what the need, and what they experience when they buy from you or when they use your product or service.  Only then can you understand the gaps, the near misses and the absolute failures associated with your offering.

You'll need some objectivity

Many such activities start out appropriately, trying to understand what a customer really wants or needs.  But they quickly fall into a rationalization process - "but if they only understood our product" or "but our product solves these other needs".  It can be very difficult to have the objectivity you need to fully understand what customers need, because often they can't fully communicate what they want - but they can tell you what's missing, what's absent, what pisses them off and what they think should be possible.  This can be hard to hear, and often may not align to what your company's current capabilities are (that's the part about handling the truth) but this truth can inspire you, and give you insights that can lead you to better products, services and solutions.  You just need the strength of character to listen and not get caught up in defending your own products.

I've often found that most people are good at doing this - just not in their own area of expertise.  Take some financial services clients I worked with.  They could describe for hours gaps or areas of concern or missed opportunities with products and services in healthcare, but struggled to find areas of concern in their financial services products.  I think this is true across the board, because we struggle with fixedness - seeing only what we want to see - and struggle with the fact that we need to admit our own products and services don't really do all that much for customers.

New Insights, New willingness, New risks

If you want to innovate, you've got to either create something so dramatic that people find you and adopt your product or service, or solve problems that customer have that they might not even be aware of.  To do the latter, you have to find new insights, new customers and new needs.  It is as simple as that.

Once you've found new insights and needs, you and your organization needs to be willing to confront the existing product and service offering with what's missing and what needs to be created or changed, and that will be difficult.  No one wants to say anybody's baby is ugly, least of all their own, so getting people to think differently will take a lot of evidence and some willingness to change.

Then, if you can get that far, you'll have to plunge into the unknown, because you'll be creating new products and services that solve newly identified needs, and that will stretch your capabilities to the fullest.  These new developments will introduce risk, but if you can address customer needs and handle the truth about what customers want, and create products and services that meet those needs, you'll mitigate the risks substantially.


So, to do innovation well, you've got to:

  1. Be prepared to learn and grow
  2. Be willing to listen and discover new needs
  3. Be willing to acknowledge that the existing solutions simply aren't good enough
  4. Be willing to engage customers and prospects to uncover existing unmet or unarticulated needs and validate those needs
  5. Be willing to handle the truth that your existing products and services aren't differentiated and aren't good enough
  6. Provide all of this evidence to your management team and trust that they are willing to listen, absorb and learn
  7. Make big bets to create new products and services that meet these needs, rather that rationalize about your existing products and how customers don't understand them

You can call anything you create "innovation".  In fact it is an over-used word that has lost its meaning.  If you want to create products and services that customers want, think are differentiated and worth paying more for, then you need to create something that is 1) new and 2) valuable and 3) that may not be exactly what you already offer.  The new and valuable parts are discovered and validated by understanding what customers want and need, and letting the facts speak for themselves.  Can you handle the truth, or will you rationalize what you hear?

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posted by Jeffrey Phillips at 12:39 PM


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