CHAPTER 6

INNOVATION:
A COLLABORATIVE PROCESS

As you’ve seen, customer typing is an incredibly powerful way to get to know your customers at a deeper level than customer segmentation ever did. As you begin to distinguish among your customer types, your perspective on how you view customer expectations changes. You are able to see the world through your customers’ eyes, from their range of experiences, and in coordination with what’s important to them—that is, what they love and what they hate. In return, this affects the way you understand and design the experiences you create for them.

In the simplest of terms, you are in the business of customer experience. It doesn’t matter if you are selling a product or a service. It doesn’t matter if you are a business-to-consumer (B2C) or business-to-business (B2B) enterprise. You are in the business of providing experiences to customers; we all are.

As we’ve stated, in order to create outstanding experiences, we need to innovate. Each business is unique and each customer type is unique. Therefore, each consumer experience should be tailored to this uniqueness: a core premise of What Customers Crave.

Collaboration is a primary driver of innovation and is one of the most important things you can do to gain a competitive edge. I worked with a large computer manufacturer whose service team constantly experienced a product flaw: The USB battery door kept breaking off. Because there was no collaboration between the design team and the service team, the problem grew worse. Collaboration between the two teams would have quickly led to a solution.

Companies that excel at creating exceptional human experiences collaborate across a range of roles, both internal and external to their organization—for example, vendors, competitors, and employees. These roles can also be broken down into customer types. Understanding each type of collaborative customer will help you create the best innovations for them. As you innovate exceptional experiences for these collaborative customers, your “paying customers” also benefit because you will now be providing them with an improved holistic business experience from top to bottom.

WHAT COLLABORATION CONTRIBUTES TO
THE INNOVATION PROCESS

I’ve spent my entire career in the innovation space. One of the many things I’ve learned is that in order to create incredible solutions for your customers, you need to connect and collaborate with others. We can’t be all things to all people in the innovation process. We can’t know everything, have the most training in every area, and have the most creative ideas alone.

Primary Collaborative Types

Exceptional innovation requires bringing in particular life skill sets and new insights from different collaborators in order to increase the likelihood that our innovations will deliver the highest level of customer value. I have broken down these collaborators into four common customer types. You may have others, but this is an excellent place to start. Figure 6-1 depicts the main collaborative types with whom you can design exceptional and relevant customer experiences.

Figure 6-1. The four primary collaborative customer types.

Each collaborative customer type brings a unique and important contribution to how you create superb experiences across each touchpoint of the customer journey. Each type has a different perspective on the journey and fulfills a different role. By viewing collaborative experiences and expectations from each of these angles, you get a far clearer and more complete picture of the kind of design you need.

In my work, I’ve seen many organizations become “idea bullies.” They assume that they know it all and can do it all. Because they have this limited mindset, they typically end up creating incremental innovations that have little to no customer value.

At the other end of the spectrum, the most successful organizations are collaborators. Years ago, I had the great honor of touring DreamWorks Pictures in California, where I was told a fascinating story about a place they call the Secret Room. (This was many years ago, and I hope my memory is correct.) Apparently, animators wanted a place to collaborate, a place where they could hang out and share ideas undistracted. One day, one of the animators walking to work noticed an outcropping on a section of the building he worked in. On investigation, he found a large unfinished area, where the animators began hanging out at all hours. Creative people aren’t creative only between nine and five. Day by day, week by week, the animators brought more things into this space: a fake fireplace and a bar, a menorah and a Christmas tree, and all kinds of furniture. Eventually, management found out and fired them. They had done all this without permission and had violated all sorts of regulatory codes. Pretty quickly, though, the managers realized they’d fired some of their best people and hired them all back. They also upgraded the room so it was compliant with the building codes, and to keep the room secret from other employees, added a door that looked like a bookcase. You had to pull on War and Peace to gain entry!

My point is that people want to collaborate, especially those doing cool, creative things. Great organizations honor their people by allowing them to do things they do naturally. They seek to cocreate so they can deliver bulletproof innovations and human experiences that lead their market and industry. They are open to skills and experiences from different areas so they can design more holistic experiences for their consumers.

THE CONSUMER COLLABORATIVE TYPE

Up to this point, I have talked about inventing exceptional and relevant experiences for your customer. However, it’s also important to actively invent with your customer. The consumer collaborative type is one of the most important collaborators in your innovation strategic alliance.

There are many ways to cocreate with your customers. We’ll discuss the four most important ways here.

The Digital Sandbox: Listen, Learn, Apply

Southwest Airlines has a blog entitled Nuts About Southwest. The blog allows Southwest customers, who are referred to as Fans, to express what they love and hate about their travel experiences with Southwest.

Because the airline is a customer-centric company, its personnel actually listen to the dialogue on this blog (what I call strategic listening) and then apply what they learn from it to their operation.

Most executives believe it is risky to set up digital sandboxes where your customers can openly discuss what they love and hate about your brand. But the opposite is true: It’s an excellent way to gain real-time, authentic insights. Your customers can clue you in to areas that need improvement, and more important, they can tell you how you can improve them, which allows you to provide the most exceptional and relevant experiences.

Online Challenges: Inexpensive and Actionable

Online challenges are another way to collaborate with your customers. Here, you significantly reward customers for presenting ideas on how to improve their experience at various touchpoints. This is a low-cost way to get actionable innovations straight from the horse’s mouth.

An added benefit is that your customers will feel involved and that their needs are being heard. This, in turn, creates more ownership and empowerment and leads to increased loyalty—a win for everyone. You don’t have to create these online challenges from scratch; there are many “just-add-water” solutions. Examples are Yammer, Spigit, and Bright Ideas.

Online challenges do not involve only external customers. For example, 80 percent of corporations in the Fortune 2000 use internal social networks. These intranets allow different types of people throughout the organization to hang out together. They’re designed to leverage game mechanics and social engagement and can be very much like Facebook. Employees are encouraged to collaborate around organizational needs, problems, and opportunities.

For example, a challenge for an automotive service company might ask for ideas on how to increase the speed of getting customers through the registration and check-in process. A game can be made of it, because people like to win. The challenge provokes discussion and dialogue and can be continually updated. This kind of thing, which is often referred to as internal crowdsourcing, certainly demonstrates the power of collaboration. You might be surprised at how many great ideas your company stakeholders have.

Innovation Safaris: Live the Experience

As I discussed in Chapter 2, to truly understand your customer types and what they are experiencing, you must go out and live their experiences at each touchpoint. I call these journeys “innovation safaris.”

It’s essential to get out of your cubicle and spend time every week experiencing each and every touchpoint from your customer’s perspective; this is the nut of the innovation safari. Make a commitment to leave each safari with a new customer-centered innovation in mind. If you do this every week for a year, you’ll have more than fifty customer-centric innovations to choose from, improve, and implement. It will change your business. It will change your life.

Customer Brainstorming Meetings:
Feedback + Ideas = Innovation

Invite your full range of customer types to formal brainstorming meetings with specific goals to create new innovations across both digital and non-digital channels. Get their feedback and their ideas, and tap into new areas of creativity.

The magic is that you get to hear all this from the people who matter the most: your customers. It’s not a focus group where you ask questions about their experiences, take away the information, and collate it with all your other “big data.” Instead, it’s a structured environment in which you ask them for specific ideas. Tap into their loves and hates, and they will teach you what to innovate.

“Your most unhappy customers are your
greatest source of learning.”

— BILL GATES

THE STAKEHOLDER COLLABORATIVE TYPE

After the customer, the stakeholder is next in importance. In this context, your stakeholders are your employees.

Generally, enterprise goals are designed to meet well-defined strategic objectives, such as increasing efficiency, reducing costs, finding new innovations, and improving customer relationships. Stakeholders/employees are important because they are problem-, opportunity-, and customer-facing. They’re on the front line in dealing with real customers and real issues. They know more about how to deliver on your enterprise strategy than you do.

Collaborating with your employees has tremendous, often untapped, enterprise value that includes but is not limited to the following:

•Significant improvement in the quality of work life

•Faster time-to-market

•Better experiences across the customer journey

•Best touchpoint-specific innovations

•Lower-cost customer acquisition

•Improved ability to attract millennial talent

And the list goes on and on and on.

Stakeholders drive your best innovations. My consulting firm was recently engaged by an organization whose inbound sales had suddenly taken a 15 percent drop. Before hiring us, the company had brought in several consulting firms to look at its pricing strategy, do a competitive analysis, and study market trends to determine what had gone so desperately wrong. After more than $2 million and four months’ work, there was still no answer.

Knowing the history, we went right to the smart and engaged people we needed to speak to: the company’s employees. After interviewing only three of these stakeholders, we discovered the problem right under their nose.

Here’s what happened when I asked one stakeholder why he thought sales had suddenly plummeted 15 percent. He immediately answered, “It’s the wait time. Duh!”

“The wait time?” I asked.

“Our sales dropped when we increased the wait time on the phone from an average of three minutes to nearly nine minutes. They wanted to save money by having fewer inbound telemarketing agents.”

Wow!

Further analysis proved the stakeholder absolutely right. In fact, the data clearly showed that after the wait time went up, consumers simply hung up. I asked the stakeholder why he hadn’t shared this with his managers. His answer: “They never asked.”

Point made.

What I frequently find is that most of my clients have a math problem: They can subtract but they can’t add. They’re extremely good at cost cutting, but they’re not as good at increasing revenue. We know it’s ten times more expensive to acquire a new customer than it is to keep an old one. It doesn’t take a lot of math to realize that if customers leave because they’re not being properly served, your company eventually fails. Too often companies erroneously believe that if they reduce costs, they’ll automatically make more money. They forget that customers have options, and an increase in wait time means people will go elsewhere. They assume the way to reach the low-hanging fruit is to reduce costs by reducing value when the opposite is true. How does Apple justify having dozens of attendants in its stores when Best Buy has only a handful? Easily. Every attendant at Apple is selling something. If the stores had half the number of people, they’d sell half the amount of goods. Customers don’t wait.

Leverage Participation with Best Practices

The best way to collaborate with your stakeholders is to bring in innovation best practices, several of which were discussed in Chapter 5. Innovation is a delicate ecosystem. You must create complete systems that include best practices that leverage socialization and game mechanics to drive the engagement necessary to make innovation really work. You want to create the opportunity for stakeholders to collaborate with each other by giving them a time and place to do it. Using social enterprise networks allows you to digitally engage stakeholders. Outside experts can set up the collaborative framework and provide the best practices so that you can execute it. It isn’t expensive to implement, and the return on investment can be dramatic. War is waged on the battlefield of innovation, and that’s where we’ll win. Uber didn’t reinvent taxicabs; Uber reinvented the way customers get from one place to another. This is disruptive innovation.

Impel Engagement via Internal Social Networks

One of the best ways to drive collaboration among stakeholders in an organization is to use enterprise social networks. These internal networks, similar to Facebook, allow you to post specific innovation challenges. I worked with a company that needed to significantly reduce operational costs in order to develop a product for its customers at a much lower price. The executives hosted an internal Biggest Loser Challenge and reached out to their 3,500 employees to find money leaks in their system. In just a few weeks, they had identified millions of dollars worth of leaks and far surpassed their original goal of reducing operational costs. Using game mechanics and socialization, you can significantly increase stakeholder engagement and collaboration.

THE PARTNER COLLABORATIVE TYPE

Some of the best innovations come from the manner in which you create integrated value with strategic partners and alliances.

One of my clients is among the world’s largest hospital chains. A goal of the chain was to improve the way in which it delivered safe clinical experiences to patients. To help achieve this goal, we conducted regular brainstorming sessions with several relevant vendors. What happened was astonishing.

In the exchange of ideas that ensued, we were able to come up with a range of new technologies and services. The cost to my client was zero, yet the estimated enterprise benefit was more than $15 million in reduced liability, increased patient throughput, and significantly improved patient satisfaction. Meanwhile, the vendor/partners increased their profits, opportunity, and involvement in the hospital. Not a bad outcome from just sitting down with partners and collaborating.

Partner relationships are extremely important strategic components to your overall customer experience success. In my own business, my strategic partners and alliances are critical to the way I deliver services to my clients.

THE COMPETITOR COLLABORATIVE TYPE

The term “open innovation” is widely used, but very few leaders understand its implications. From my perspective, open innovation means partnering with everyone—in some cases, even competitors.

One of the most interesting examples of open innovation can be found in Sierra Nevada Brewing Company founded by Ken Grossman, a company I mentioned in Chapter 4. Ken believes that there actually are no competitors. He periodically collaborates with other brewers. For example, in honor of Sierra Nevada’s thirtieth anniversary, he teamed up with four competitors who along with him had simultaneously spearheaded the craft beer trend, and they created a series of four beers, each brewed with a fellow craft beer pioneer. I think Ken’s willingness to collaborate is a big part of his success and why he is so highly respected in the craft beer industry.

Most businesses have opportunities to collaborate with competitors in a way that delivers mutual benefit. These competitor collaborative types see the universe from the perspective of abundance. They don’t fear collaboration and instead seek it out. They understand that collaboration with people in the same industry can add to greater mutual prosperity through an exchange of ideas, experiences, and skills.

Some competitors, however, see the universe from the perspective of scarcity. In other words, they see you as the enemy. Such competitors are not going to be good collaborative partners because they operate from a place of fear. So choose your competitor collaborations carefully, but certainly do not exclude this as part of your overall enterprise innovation commitment.

I’ve enjoyed the accolades I’ve received in my professional career as an inventor of more than forty patented technologies. The truth is, however, that my innovation success rests in the fact that I collaborate with geniuses. When I look at the most innovative companies, I find they have developed a culture of collaboration and cocreation. They develop technologies with a team that is encouraged to take smart risks in order to develop special products and services for their customers. They fuel this collaboration by encouraging courage.

The new concept of open innovation suggests that we can collaborate and cocreate even with competitors, but most important, we really need to take the time and effort to understand the customers we serve. We need to understand the hidden meaning and see the nuances that drive breakthrough customer experiences.