Use Smart Customization to Recession-Proof Your Business?

 

Ever since I attended the MIT Smart Customization Seminar in November, I've been aware that a switch has flipped inside my gut. For me, this is a sign that there's an important shift in the technology-enabled business strategy landscape that my clients need to act on! It also reminds me of the visionary clients I have who are already way ahead of me in adopting (and probably shaping) the transformation that's upon us. People like Phil Gibson at National Semiconductor, Pat Kerpan at Cohesive FT, and Jonathan Clark at Elsevier are among our clients who have been pioneering in smart customization for years (although they may not have called it that).

My "gut feels" usually occur just before the knee of the adoption curve. Sometimes it's several years before, but, recently I notice that the lag time is decreasing... My instincts are slowing down with the rest of me as I age.  These days (as I near 60!) my inner alarm only blares a few months ahead of the tipping point. So there's even more urgency to pay attention!

Smart Customization is BIG! I now believe that if you don't switch your business operations and processes to embrace this paradigm, you're going to left in the proverbial dust. Smart Customization is when you empower customers and partners to custom-design their own goods, services, experiences, and approaches and you deliver these customized products quickly (within minutes or days) and cost-effectively (at only a small premium above mass-produced or standard products). You can apply smart customization to information, apparel, food, manufacturing—virtually any industry or practice.

Smart Customization is a sustainable approach to practicing customer-led innovation. It's a form of iterative customer co-design that causes you to profoundly rethink your business architecture. To be successful, you need to decompose your offerings into modules. The boundaries (or APIs) of these modules are defined based on the characteristics or attributes that matter most to customers in specific contexts.

Smart Customization is a really shrewd strategy to jumpstart or revive during a recession. You can start small. You can leverage the many platforms and ecosystems that already exist. You make money by streamlining operations, eliminating inventory, and reducing time-to-cash dramatically. You boost and differentiate your brand by injecting excitement and emotion into it. Customers become invested in the experience of customizing and personalizing. They come back to do it again. They tell others.

If you miss the smart customization bus, there may not be another one.

This week, I offer a "Best Practices Report"—Smart Customization Comes of Age—based on the case studies presented at the MIT Smart Customization Seminar. It's a great place to begin your journey.

Comments

[Graham Hill]

Hi Patty

Your post catalysed me to write a post of my own on How the Recession Increases Customer Centricity. By building on the five customer-centric characteristics, companies can both increase their customer-centricity and respond dynamically to the recession.

Keep up the great work.

Graham Hill
Customer-driven Innovator

[Graham Hill]

Hi Patty

I couldn't agree more. Smart customisation is a critical component of, lets call it, 'value-based customer-centricity'. Frank Piller of the Smart Customisation Group at MIT is perhaps the leading academic exponent of this approach.

There are five key divers in value-based customer centricity, including:

1. Having a deep understanding of customer needs (based on customer jobs and outcomes)
   
2. Mass customisation of products, services & experiences
   
3. Dynamically reconfigurable delivery system
   
4. Lean business support systems
   
5. Customer value management across the customer portfolio.

You can see the linkage with smart customisation through #2 & #3. But this is much more than just smart customisation, as Frank points out in his book 'The Customer-centric Organisation'.

I blogged about this further in a May 08 post on How Customer-Centricity Drives profits.

For those not able to fly over to Boston for the next Smart Customisation Seminar, Frank is running a week long course on Building the Customer-Centric Organisation at the IE Business School in Madrid in March.

I for one intend to be there.

Graham Hill
Customer-driven Innovator