A collection of articles written by Customer 1st
Driving Innovation to Retain Competitive Advantage
28th October 2011 | Posted in Service Innovation
I have spoken before about moments of truth and how critical they are to the customer's journey within your organisation, but my question today is, where does service innovation begin? I believe that customers have expectations of your organisation and the products and services that you supply, and so we need, if possible, to tap into their thoughts. What sorts of service improvements do customers anticipate?
I remember a statement made by the UK Prime Minister, Tony Blair, when he addressed the Department of Trade and Industry back in 2004. He said, “Innovation, the exploitation of new ideas, is absolutely essential to safeguard and deliver high-quality jobs, successful businesses, better products and services for our customers, and new, more environmentally friendly processes.” That was and is so true, and the global economic changes since 2004 do not make the statement any less relevant. For those trying to improve service and gain competitive advantage, it remains a key factor that should not be overlooked.
We now have a variety of customer feedback tools, and we often engage with customers through customer-focused forums, but we tend to “repair” our service delivery, satisfying basic needs and wants rather than being innovative. We continually strive to satisfy customers and occasionally exceed their expectations. However, sometimes services need to be redesigned by applying blue sky thinking, enabling your customers to stretch their imagination and tell you what their hopes and preferences for services and products are. This is where an organisation can gain real competitive advantage, by understanding customers' dreams and aspirations, going a step beyond satisfying their basic needs.
In some cases, staying ahead of the competition means that you and your employees need to develop products and services that your customers did not even know that they wanted. When did we realise that we could not live without our automatic washing machines, iPhones, iPads, Kindles, and so on? Who decided we needed to reinvent service delivery? Was it Disney, Amazon, First Direct, Tesco, or Singapore Airlines?
Andy Grove, chairman of Intel, stated, “Breakthroughs come from an instinctive judgment of what customers might want if they knew to think about it.” But how can you reinvent your service by looking through the lens of your customers' hopes and desires, not just their needs and expectations?
Innovation is the implementation of new ideas to achieve your vision. You can use new ideas from your employees, too. In today's world, we can actually experience superior service; we can benchmark our service against, not only the best in our own sector, but also world-class leaders, such as the ones I mentioned previously. I am constantly amazed by the exciting ideas that employees have regarding service improvement that originate from innovation projects, staff suggestion schemes, employee focus groups, and team meetings. Of course, your people are the ones who interact daily with customers; they understand their issues, and they have built close relationships with customers, but do we ask them for their ideas? We should do this, systematically.
Many organisations still do not recognise the contribution that staff can make to improve service for their customers. World-class service tends to come from organisations where every employee contributes equally to the success of the business, where they understand the organisation's service vision and values. People in these organisations place the customer at the heart of everything they do; they are loyal to both the customer and the organisation, and they understand the importance of their role in making the business successful. Innovation, therefore, should not totally be the responsibility of the product development department, but, rather, it should be the responsibility of every employee. There needs to be an environment where every germ of an idea is valued. We all have the ability to think outside the box, and it is a natural human instinct to dream up better ways of doing things. We experience new products and services daily; we have a vision of what we would like in the future, and so we can all contribute as team members to service innovation.
One company that has been proactive in encouraging the growth of ideas is UK-based TDI International. Terry Houlihan, managing director of TDI, asked, “What will happen to our market share if we fail to innovate and ignore new ideas marketed by our competitors?” TDI encouraged innovation by developing the Innovation Challenge Awards. This programme provides a driver to stimulate the discovery and successful exploitation of ideas by giving recognition to anyone in a business who puts forward ideas. It provides a driver, through an innovation management framework, to ensure a strong focus on innovation within an organisation, embedding it within the company culture. When employee performance is recognised and rewarded, employees will be empowered to offer their ideas. Further, managers act in a role as “innovation guide,” stimulating idea growth while fostering the implementation of innovation and contributing to the achievement of a shared vision and goals.
One of the key drivers to business success is service agility—how quickly your organisation can change to meet and exceed customers' demands, as well as its ability to be innovative. We would not have a global economy today if no one had improved communications, invented faster modes of transport, or transformed supply chains. Let's all try to think of tomorrow's world and how our organisation will look and feel in 2020.