It’s The Customer, Stupid!

What do Circuit City, Jan Carlzon, and Erich Joachimsthaler have in common?  Through their actions they have all made important statements about the role of the customer in business.

Langdon Morris, in his Permanent Innovation blog, bestows upon Circuit City the dubious honor of Mr. Morris’ Worst Practices In Innovation Award.  The award recognizes Circuit City’s recent decision to cut costs by eliminating 3400 of their more experienced workers.  Kudo’s to Langdon for this well deserved recognition of a hare-brained moved on Circuit City’s part.  In an extremely competitive market where the level of in-store service provided can be a key driver of the customer experience, Circuit City has chosen to curtail its ability to deliver an enhanced customer experience.  Perhaps, they might have considered how to better leverage their experienced resources to draw more customers to the store—maybe learning from the example of home improvement leaders with in-store workshops, etc.

Which brings me to Jan Carlzon…  By an uncanny coincidence, the same day I read about Langdon’s Worst Practices in Innovation Award, I noticed that Patty Seybold, in her Outside Innovation blog, wrote last Friday about “Focusing on Moments of Truth in Customer Experience.”  Here, Patty makes reference to Jan Carlzon’s book Moments of Truth.  In his book, Jan says about moments of truth, “Anytime a customer comes into contact with any aspect of a business, however remote, is an opportunity to form an impression.”  This is advice that would not only be useful for Circuit City to consider, but is also very important for all of us who are serious innovation practitioners.  At some level, every innovation is defined by and in response to a perceived need to reshape a moment of truth in the Carlzonian sense of the term.

This theme is also central to a new book by Erich Joachimsthaler, Hidden in Plain Sight.  By yet another uncanny coincidence, I happened to read this book Friday evening while traveling between Boston and Los Angeles.  In Hidden in Plain Sight, Joachimsthaler presents what he calls the Demand-first Innovation and Growth model (DIG).  This is described by the author as a structured and repeatable way of analyzing a company’s opportunity space to find winning strategic growth opportunities.  In brief, DIG comprises a three step approach to the problem:

1. Map out the demand landscape – This means considering the customers’ behaviors to understand their goals, activities, and priorities.  In doing so, Joachimsthaler prescribes considering this free from the confines of your current product, positioning, branding or anything else that can obstruct your ability to see things objectively.



2. Define the opportunity space – Once the demand landscape is known, you need to consider how the landscape relates to you.  Looking at the landscape from a series of perspectives defined by the method (eye of the customer, eye of the market, eye of the industry), you should identify your sweet spot in the demand landscape and the growth platforms that lead to a sustainable innovation program.



3. Create the strategic blueprint for action – Finally, the articulation of an action plan to attack the opportunity completes the methodology.

The key element of Jochamsthaler’s DIG methodology is the notion of demand-first thinking.  In truth, this is not new; it is very much at the heart of Christiansen’s mantra of identifying the job.  But, Jochamsthaler’s articulation of the point is admirably on point and highlighted by a very engaging case study about Frito Lay’s experience in learning about the demand landscape of their salty snacks and how it changed the way they think about their market.

Circuit City could have benefited greatly from examining DIG.  Had they looked at this model, they might have avoided their current act of self evisceration.  Had they developed an understanding of how to innovate around customer demand, they may have seen their opportunity differently and understood how to leverage their strengths to better respond to their customer’s needs, wants, frustrations, and passions.

Comments

[Erich Joachimsthaler]

thanks for the comments on the book. It is very rewarding as an author to read your comments on the blog. Erich