Several of the companies that I work with have change initiatives ongoing. Some of these initiatives are more technology oriented, others affect the business strategy and yet others seek to re-position the company in the ecosystem it is part of. However, all these initiatives have one thing in common: customers will be affected by the changes that are under consideration.
Any change initiative, innovation initiative or cost reduction initiative is based on so called “leaps of faith”, i.e. the beliefs that underlie and justify the investment in the initiative by the company. My concern is that many companies spend vast amounts of resources on building some product or preparing some change in the engagement with customers before actually testing with these stakeholders whether this is something that they support and are willing to engage on. The leaps of faith often become gargantuan jumps with a high likelihood of being wrong.
Whenever I bring up my concern and the suggestion that it might be helpful to get early feedback on the concept under development, I get a variety of responses that never fail to surprise me. These are some of the main ones:
- We know what the customer wants
- We don’t want to disrupt our current relationship with our customer
- Our brand will be damaged or affected negatively if we show unfinished products or solutions
- Sales does not allow anyone to talk to customers
- My boss is afraid that I make promises the company can not keep when I talk to customers
- My solution is not yet good enough to show to customers
- We need the following X more features and then we can show it to customers
- Our customers don’t want to talk to us
- This solution targets a new market and we don’t have any customers yet
- Henry T. Ford also didn’t ask his customers what they wanted
The responses basically fall into three main categories: beliefs about the customer, internal customer engagement processes and beliefs about the quality of the solution. Let’s examine each of these categories in more detail.
Beliefs about the customer: If you feel you know your customer really well, I will challenge you: whatever you’re proposing, the reaction of customers is going to surprise you. If you think your customer doesn’t want to talk to you or think less of you for discussing early stage ideas or concepts that are under development, you have a much bigger problem: you’ve reached the point where the customer views you as an interchangeable supplier and you’ll lose the customer the moment a competitor comes along with a better value proposition. Finally, if you are targeting a new market and customer base, you are flying blind as you have no idea whether the concept resonates with these new customers. Obviously, it’s even more important in this case to learn what is important, to build empathy and to understand what resonates with customers.
Internal customer engagement processes: In my experience, this comes down to two patterns. First, the sales and marketing organization is afraid that others from the company interfering with the ongoing customer relationship will affect future sales. As their bonus is directly connected to sales targets, the folks in sales and marketing will fight tooth to nail to resist others upsetting their carefully orchestrated engagement process, no matter for what reason. Second, for a variety of reasons, senior leaders are extremely concerned about the brand of the company and the perception of the company by customers and prefer to reduce the risk by minimizing interactions between employees and customers. Clearly these leaders do not trust their own employees to act with sufficient common sense to avoid upsetting the customer. What does that tell you about the company culture?
Quality of the solution: Especially in organizations that have a long history of delivering products and solutions to customers, everyone, from product managers to engineers, has a very high bar of what an acceptable product looks like. Consequently, for new products and solutions, the tendency is to wait until the quality and feature richness of the new solution is on par with mature products. In addition, the team is often concerned about the customer reaction and worries that it might be negative. It’s then easier to avoid this risk by delaying a little further.
The commonality between these three categories is that in every case, the right behavior is exactly the opposite of what happens in many of the companies that I work with. Everyone (or at least almost everyone) should talk to customers on a very regular basis. The more uncertainty exists around customer preferences and product functionality, the earlier and more frequent customer interactions should take place. If you’re solving a problem that the customer cares about, he or she will be happy to spend time to talk to you and to help you solve it in a way that is best for his or her company. Obviously, the inverse is true as well: if you’re working on something the customer doesn’t care about, it doesn’t matter how glossy or feature rich the solution is. The customer won’t touch it and doesn’t want to talk to you.
Note that I am not advocating that you slavishly follow any wish or desire expressed by a customer. Customers do not know what they want until you show it to them. Your job is to build so much empathy with customers that you can more accurately predict what would deliver value. And then test the concept with customers continuously to minimize the amount of risk, in terms of resources, capital and reputation.
Software-intensive companies and the industry at large are undergoing several major transformations. Digitalization, servitization, big data, artificial intelligence and ecosystems are only some of the topics modern companies struggle with. As a consequence, business-as-usual and the associated comforting, repeatable processes are rapidly disappearing. Instead, we live in an age of constant uncertainty. In this state, close and frequent interaction with customers is absolutely critical. The principles for startup companies as preached by the likes of Steve Blank and Eric Ries now apply to all companies. Because we’re all back to running startups and this means we have to start acting like entrepreneurs. And entrepreneurs focus on what the customer wants, act on their best understanding of customer needs, constantly validate their beliefs with customers, learn and adjust and find ways to deliver value so that they can capture some of that value as revenue.
So, after reading this article, ask yourself this: when did you last talk to a customer? And what can you do to talk to one today? You better start acting like an entrepreneur because soon, that will be the only role that matters.