by Robyn Bolton | Jul 29, 2020 | Customer Centricity, Innovation, Strategy
Over the past several weeks, I’ve kicked off innovation projects with multiple clients. As usual, my clients are deeply engaged and enthusiastic, eager to learn how to finally break through the barriers their organizations erect and turn their ideas into real initiatives that generate real results.
Things were progressing smoothly during the first kick-off until a client asked, “Who’s my customer?”
I was shocked. Dumbfounded. Speechless. To me, someone who “grew up” in P&G’s famed brand management function and who has made career out of customer-driven innovation, this was the equivalent of asking, “why should I wear clothes?” The answer is so obvious that the question shouldn’t need to be asked.
Taking a deep breath, I answered the question and we moved on.
A few days later, the question was asked again. By a different client. In a different company. A few days later, it was asked a third time. By yet a different client. In yet a different company. In a completely different industry!
What was going on?!?!?
Each time I gave an answer specific to the problem we were working to solve. When pressed, I tried to give a general definition for “customer” but found that I spent more time talking about exceptions and additions to the definition rather than giving a concise, concrete, and usable answer.
That’s when it struck me – Being “customer-driven” isn’t enough. To be successful, especially in innovation, you need to focus on serving everyone involved in your solution. You need to be “stakeholder-driven.”
What is a customer?
According to Merriam-Webster, a customer is “one that purchases a commodity or service.”
Makes perfect sense. At P&G, we referred to retailers like WalMart and Kroger as “customers” because they purchased P&G’s products from the company. These retailers then sold P&G’s goods to “consumers” who used the products.
But P&G didn’t focus solely on serving its customers. Nor did it focus solely on serving its consumers. It focused on serving both because to serve only one would mean disaster for the long-term business. It focused on its stakeholders.
What is a stakeholder?
Setting aside Merriam-Webster’s first definition (which is specific to betting), the definitions of a stakeholder are “one that has a stake in an enterprise” and “one who is involved in or affected by a course of action.”
For P&G, both customers (retailers) and consumers (people) are stakeholders because they are “involved in or affected by” P&G’s actions. Additionally, shareholders and employees are stakeholders because they have a “stake in (the) enterprise.”
As a result, P&G is actually a “stakeholder-driven” company in which, as former CEO AG Lafley said in 2008, the “consumer is boss.”
How to be a stakeholder-driven organization
Focusing solely on customers is a dangerous game because it means that other stakeholders who are critical to your organization’s success may not get their needs met and, as a result, may stop supporting your work.
Instead, you need to understand, prioritize, and serve all of your stakeholders
Here’s how to do that:
- Identify ALL of your stakeholders. Think broadly, considering ALL the people inside and outside your organization who have a stake or are involved or affected by your work.
- Inside your organization: Who are the people who need to approve your work? Who will fund it? Who influences these decisions? Who will be involved in bringing your solution to life? Who will use it? Who could act as a barrier to any or all of these things?
- Outside your organization: Who will pay for your solution? Who will use your solution? Who influences these decisions? Who could act as a barrier?
- Talk to your stakeholders and understand what motivates them. For each of the people you identify by asking the above questions, take time to actually go talk to them – don’t email them, don’t send a survey, actually go have a conversation – and seek to understand they’re point of view. What are the biggest challenges they are facing? Why is this challenging? What is preventing them from solving it? What motivates them, including incentives and metrics they need to deliver against? What would get them to embrace a solution? What would cause them to reject a solution?
- Map points of agreement and difference amongst your stakeholder. Take a step back and consider all the insights from all of your stakeholders. What are the common views, priorities, incentives, or barriers? What are the disagreements or points of tension? For example, do your buyers prioritize paying a low price over delivering best-in-class performance while your users prioritize performance over price? Are there priorities or barriers that, even though they’re unique to a single stakeholder, you must address?
- Prioritize your stakeholder by answering, “Who’s the boss?” Just as AG Lafley put a clear stake in the ground when he declared that, amongst all of P&G’s stakeholders, that the consumer was boss, challenge yourself to identify the “boss” for your work. For medical device companies, perhaps “the boss” is the surgeon who uses the device and the hospital executive who has the power to approve the purchase. For a non-profit, perhaps it’s the donors who contribute a majority of the operating budget. For an intrapreneur working to improve an internal process, perhaps it’s the person who is responsible for managing the process once it’s implemented. To be clear, you don’t focus on “the boss” to the exclusion of the other stakeholders but you do prioritize serving the boss.
- Create an action plan for each stakeholder. Once you’ve spent time mapping, understanding, and prioritizing the full landscape of your stakeholder’s problems, priorities, and challenges, create a plan to address each one. Some plans may focus on the design, features, functions, manufacturing, and other elements of your solution. Some plans may focus on the timing and content of proactive communication. And some plans may simply outline how to respond to questions or a negative incident.
Yes, it’s important to understand and serve your customers. But doing so is insufficient for long-term success. Identifying, understanding, and serving all of your stakeholders is required for long-term sustainability.
Next time you start a project, don’t just ask “Who is my customer?” as “Who are my stakeholders?” The answers my surprise you. Putting those answers into action through the solutions you create and the results they produce will delight you.
Originally published on March 23, 2020 on Forbes.com
by Robyn Bolton | Jun 3, 2020 | Innovation, Tips, Tricks, & Tools
Last week, I published a post with a very simple goal – define innovation so we can stop debating what it means and start doing it.
The response was amazing. So, I figured that this week I would tackle another buzzword – Design thinking.
We’ve all heard it and we’ve probably all said it but, like “innovation’ we probably all have a different definition for it. In fact, in the last few months alone I’ve heard it used as a synonym for brainstorming, for customer interviews, and for sketching while talking. Those things are all part of Design thinking but they aren’t the entirety of Design thinking.
What I tell my clients
When a client asks if we’re “doing Design thinking,” here’s what I say;
“Yes, because Design thinking is a way of solving problems that puts customers and stakeholders, not your organization, at the center of the process and seeks to produce solutions that create, capture, and deliver value to your customers, stakeholders, and your company.”
- What: One could consider the official definition of Design thinking to come from Tim Brown, Executive Char of IDEO, who stated that “Design Thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success”
- Why: Useful in solving “wicked problems,” problems that are ill-defined or tricky and for which pre-existing rules and domain knowledge will be of limited or no help (or potentially detrimental)
- Inspiration: Understand the problem by building empathy with stakeholders (deeply understand their functional, emotional, and social Jobs to be Done) and document that understanding in a brief that outlines goals (ideal end state), bounds (elements to be avoided), and benchmarks against which progress can be measured
- Ideation: Generate ideas using brainstorming to develop a vast quantity of ideas (divergent thinking) and then home in on the ideas at the intersection of desirability, feasibility, and viability that best fit the brief (convergent thinking)
- Implementation: Prototype ideas so that they can be tested, evaluated, iterated, and refined in partnership with customers and stakeholders, ensuring that humans remain at the center of the process.
- When: At the start of any R&D or development process
- Traditionally, design was involved only in the late stages of development work, primarily to improve a solution’s functionality or aesthetic. Design Thinking’s ability to pull the designer mindset into the earliest phases of development is, perhaps, one of the biggest impacts it has made on business and technical fields
- Where: Can be done anywhere BUT, because it is a human-centered approach, it must involve multiple human beings through the process
- Who: Anyone who is willing to adopt a “beginner’s mind,” an attitude of openness to new possibilities, curiosity about the problem and the people with it, and humility to be surprised and even wrong
Important Points & Fun Facts
- Design Thinking IS a human-centered design approach. This means that it seeks to develop solutions to problems by involving the human perspective at every single step of the process
- Design thinking is NOT synonymous with user-centered design though user-centered design could be considered a subset of Design Thinking because it gives attention to usability goals and the user experience
- Design Thinking was NOT invented by IDEO, but I would argue that they have done more to popularize it and bring it into the mainstream, especially into business management practices, than any other person or firm.
- Design Thinking IS the product of 50+ years of academic and practical study and application. Here’s some fun facts:
- 1935: The practice of Design thinking was first established by John Dewey as the melding of aesthetics and engineering principles
- 1959: The term “Design thinking” was coined by John E. Arnold in his book Creative Engineering
- 1991: the first symposium on Design Thinking was held at Delft University in the Netherlands
- 2000s: Design thinking is widely adopted as an innovation approach thanks to books by Richard Florida (2002), Daniel Pink (2006), Roger Martin (2007), Tim Brown (2009), and Thomas Lockwood (2010)
- 2005: Stanford’s d.school begins teaching Design thinking as a general approach to innovation
- Design Thinking is NOT just for radical/breakthrough/disruptive innovation
- Design Thinking IS useful for all types of innovation (something different that creates value) resulting from wicked problems. In fact, as far back as 1959, John E. Arnold identified four types of innovation that could benefit from a Design thinking approach:
- Novel functionality, i.e. solutions that satisfy a novel need or solutions that satisfy an old need in an entirely new way
- Higher performance levels of a solution
- Lower production costs
- Increased salability
If you want to learn more…
As noted above, there are lots of resources available to those who are deeply curious about Design thinking. I recommend starting with Tim Brown’s 2008 HBR article, Design Thinking, and then diving into IDEO’s extremely helpful and beautifully designed website dedicated entirely to Design thinking.
Here’s what I’d like to learn…
- Was this helpful in clarifying what Design Thinking is?
- What, if anything, surprised you?
- What else would you like to know?
Drop your thoughts in the comments or shoot me an email at email@example.com
by Robyn Bolton | May 27, 2020 | Innovation
When I worked on P&G’s WalMart sales team, one of my bosses was a big guy with an even bigger personality. He shared his opinions loudly and broadly and one of his opinions was that we needed to stop using the word “breakthrough.”
“If I have to hear one more time about some new ‘breakthrough’ soap, I will throw you out of this office myself!” he would bellow.
Years later, I can’t help but wonder what he would think of the word “innovation.”
In May 2012, The Wall Street Journal published an article positing that, as the word “innovation” increased in usage, it decreased in meaning. The accompanying infographic said it all:
- 33,528: Times “innovation” was mentioned in quarterly and annual reports in the previous year
- 255: Books published in the last 90 days with “innovation” in the title
- 43%: Executive who say that their company has a Chief Innovation Officer or similar role
- 28%: Business schools with “innovation,” “innovate,” or “innovative” in their mission statements
That may seem like a lot but, remember, that data is nearly 8 YEARS OLD!
The desire for and investment in Innovation in all its forms – accelerators, incubators, startup/venture studios, corporate venture capital teams – has only grown since 2012.
While this may seem like a good thing, the fact that the success rate of innovations hasn’t changed, means that most people react to “innovation” the same way my boss reacted to “breakthrough” – if you bring it up, they throw you out.
To avoid getting thrown out of offices, one of the first thing I do with my clients when we begin working to build innovation into an enduring capability within their companies, is re-establish what innovation is and is not.
Innovation IS something different that creates value.
When people hear the term “innovation,” they tend to think of new-to-the-world gadgets that fundamentally change how we live our lives. Yes AND it’s many other things, too. Let’s break down the definition:
- “Something” includes products and technology, it also includes services, processes, revenue models, and loads of other things. Consider this, many would argue, quite convincingly, that the Toyota Production System was one of the biggest innovations of the 20th century
- “Different” often surprises people. After all, even Merriam Webster defines innovation as “something new.” But here’s the thing, one of the most commonly cited innovations, the iPhone, wasn’t “new.” Even Steve Jobs admitted it when he said, in his keynote speech, that Apple was introducing three products – a widescreen iPod with touch controls, a mobile phone, and an internet connected device. The iPhone was, however, different because it combined those three devices into one.
- “Creates value” is probably the most important part of the definition. All innovations solve problems. Solving problems creates value. If you solve a big problem, either because it’s a problem lots of people have or it’s a very painful problem a few people have or something in-between, you create a lot of value for others and for yourself.
Innovation IS NOT a one-size-fits-all term.
Think of it this way, both a Kia and a Maserati are cars, but you wouldn’t expect to pay Kia’s price tag and get a Maserati (and vice versa). Similarly, both a convertible and a pick-up truck are automobiles, but you wouldn’t use your convertible to carry building equipment to a construction site.
With a definition as broad as the one above, it’s possible for “innovation’ to become even more meaningless as it gets applied to more things. That’s why it’s important to identify different types of innovation.
There’s no universally accepted set of innovation types, which is why I recommend companies consider defining at least three types that reflect their business and forward-looking strategies.
One of the most common set of innovation categories is based on the degree of change required for implementation:
- Core Innovation requires minimal or no change to the current business model (customers, offerings, revenue model, resources and processes). Also known as Continuous or Incremental Innovation, this is the unglamorous but deeply important work of constantly improving what you do and how you do it.
- Adjacent Innovation changes a significant change to at least one element of your business model. It could be changing who you serve, like expanding from interventional cardiologists to general cardiologists, what you offer, like P&G’s expansion into “durable goods” when it launched Swiffer, or how you offer or deliver it.
- Radical innovation is the stuff that gets all the press. These innovations fundamentally change the business, like IBM moving from computers to business services. These innovations are high-risk and require a lot of time, money, and patience to see to fruition. This type of innovation is also called “Breakthrough” but, for obvious reasons, I shy away from that term.
There are many things that need to be done to shift innovation from buzzword to business capability. Defining innovation AND at least three different types is only the first step in moving from innovation theory and theater to building innovation into a true capability that drives sustainable growth.
Or, as I would tell my old boss, “It’s the first step. But it’s a breakthrough one.”
Originally published on December 30, 2019 on Forbes.com
by Robyn Bolton | Apr 1, 2018 | Customer Centricity
“There is only one boss. The customer.” – Sam Walton
With all the buzz around human-centered design, customer-centric businesses, and external-facing organizations, corporate America is (finally) waking up to the importance and value of creating things that people actually want and that solve people’s problems.
Teams of innovators, ethnographers, socialists, researchers, and consultants scurry about gathering customer insights, soliciting customer feedback, and generating reports that can be funneled back to R&D, innovation, and product development teams to inform the development of the Next Big Thing.
While this is all important work, amidst all of this activity, one customer is consistently overlooked. And it is this customer that often decides the fate of the Next Big Thing
There is only one first customer. Your boss.
Let’s start with what a customer is:
“The recipient of a good, service, product, or idea obtained from a seller, vendor, or supplier via a financial transaction or exchange for money or some other valuable consideration.
Yes, you should spend a lot of time getting to know the people outside your company who will eventually be asked to exchange money for the good, product, or service you are creating.
You also need to spend time getting to know the people inside your organization who you are currently asking to exchange money (give you a budget) or some other valuable consideration (time, people, permission) for your idea and its development.
And you need convince them that “a financial transaction” is worth it because, if you don’t they can and will spend their money elsewhere.
Your boss is a tough customer
No matter what type of company you are in — from a company of 10 to a company of 10,000 — you are faced with limited resources. A dollar spent in one place means a dollar not spent in another place. A person allocated to one team means one less person on another team.
Managers have to make resources allocation trade-offs all the time but are often moving pieces between functions and teams where they know the ROI of additional investments. This situation changes dramatically when a manager must decide whether to invest resources into a new and uncertain venture or to invest in the core, and much more certain, business.
Convincing your boss to buy your idea, especially if that idea is a new venture, is tough because you’re asking your boss to buy (or invest in) something with an uncertain ROI rather than buy (or invest in) something with a more certain ROI. But you can be successful if you understand your boss.
Your boss can be understood (and their decisions anticipated)
First, get comfortable with the fact that your boss is a human being. And, just like other human beings, your boss makes lots of decisions, believes that these decisions are based on logic and reason, and actually bases most decisions more on emotion and instinct.
As frustrating as this may be when you are at the receiving end of these decisions, take comfort in the fact that you can actually use the tools you use to understand external customers to understand, and even anticipate, your boss’ decisions.
- What is the current business situation? While this is usually an easy question to answer, it can be hard to anticipate what impact it will have on your boss’ willingness to invest. Just as most people are hesitant to invest in something new when the current business environment is poor, many people are equally hesitant to invest when business is booming. This is usually because investments in the core business are generating more than usual upside and that’s great for your boss and/or there is no urgency to do anything new because people assume the good times will go on forever (news flash: they wont’). So while you can’t anticipate what impact the answer to this question will have on your odds of securing investment, you do need to know the context within which you are asking.
- What is your boss being asked to deliver? How is she measured and rewarded? Is your boss expected to deliver revenue increases? She’ll be drawn to new ideas that increase revenue. Cost savings? Then pitch ways to improve efficiency. How much time does she have to deliver results? If she needs to show results quarterly, you have to generate results quickly. If she has a year to show improvement, you have a longer runway to show results.
- What is your boss’ reputation? Does she like it? Humans are hard-wired to be social creatures so, whether we admit it or not, we really care how other people see us. What is your boss’ reputation — is she known for being a steady hand that consistently delivers or a renegade willing to rock the boat and take risks? And how does she feel about her reputation? Does she like it or does she see herself differently? If you have a boss that likes being seen as reliable and a defender of the status quo, you’re going to have a much harder time selling your new idea than if you boss is seen (or wants to be seen) as the next Steve Jobs.
With the answers to these questions, you can figure out the likelihood that your boss will buy your idea. If you boss is managing a business that is struggling, is expected to increase revenue after years of decreases, and is happy to be known as someone who always delivers, it’s unlikely she’ll be willing to invest resources in a new and unproven idea. But if your boss is managing a struggling business, is expected to develop new revenue streams that will replace the old ones, and enjoys a reputation as a someone who challenges the status quo, odds are she’ll support a reasonably well-thought out proposal for initial investment in a new venture.
Before you get the opportunity to sell a new product or service to external customers, you need to sell your idea to internal customers…your boss. Take the time to understand you boss, the things that motivate her and the issues and challenges that she faces. Then, just as you create a product or service to solve your external customers’ problems, you can create a pitch that shows your boss how your idea solves her challenges.
Approach your boss as you would a customer and you’re likely to get the support you need. Forget that your boss is your first customer and you may never get the chance to pitch to the ones you’ve spent so much time studying.