Outside Innovation

BestBuy’s Blogging CEO Sparks Criticism from Customers and Employees

Brian Dunn, BestBuy CEO [Photo: Businessinsider.com]

Best Buy’s CEO, Brian Dunn, blogged a rebuttal to a critical Forbes article in early January. He took responsibility for a number of screw ups during the holiday season, but pointed out that Best Buy was a strong, profitable retailer and was working hard to create an even “more seamless experience between our stores, web sites, call centers and services teams.”

The real news was the candor of the hundreds of comments that piled on within hours of Dunn’s post, including detailed critiques of operations from employees and former employees and criticism from customers. Here are two examples:

Example of Customer Feedback:

“I should not have to wait 45 minutes, go through 3 associates, and be bombarded by repeated attempts to sell me a credit card, extended warranties, and service protection to buy a laptop … I can’t even walk out of an empty Best Buy store with a video game in 5 minutes. …At a crowded Apple Store, I grab what I want and the employee in that section checks out my order – out in 3 minutes.

As CEO, you can IMMEDIATELY improve the customer experience by not requiring employees to hound customers with warranties, credit cards, protection plans, and etc. If I wanted them, I’d ask. This will seriously fix the majority of negative customer experiences.”

~ Comment by Simon — January 6, 2012 @ 7:13 pm

Public Outcry and Wikipedia Stopped Legislation!

Wikipedia's Blackout

I agree with San Francisco Chronicle’s James Temple that the SOPA/PIPA Blackout on January 18 marked the Web’s political coming of age. The fact that Wikipedia consulted with its community of supporters and blacked out its site in protest of the proposed Internet censorship legislation was what turned the tide. As soon as it became apparent to senators and congresspeople that Wikipedia was going to shut down in protest and that other major web sites would join in the protest, they realized that the tide of public opinion was against the entertainment-industry-sponsored legislation. Both proposed bills were seriously flawed, since they originally planned to block the URLs of web sites that were accused of copyright infringements without due recourse. The bills’ sponsors began to address critics’ concerns by changing the implementation of the anti-piracy provisions, but the Wikipedia community and other Internet champions felt that they needed to take a very public stand. It worked! The current legislation is now dead.

Apple to Transform Textbook Publishing

A textbook on Apple's ibooks 2 application

Apple continues to transform education, now taking aim at the broken educational textbook industry. The creation, publishing, approval process, and distribution of educational textbooks for elementary, secondary, and university education have been ripe for a customer revolution for over 20 years. On-demand printing and the Internet both helped to accelerate the process. Visionary undertakings like Nature Education’s Scitable offering (high quality free life sciences’ learning materials) have also helped to pave the way. But it took Steve Jobs’ vision of transforming educational publishing to make this a reality.

What Apple has done is 1) to make it easy for students and teachers to access high-quality interactive learning materials for free from Apple U (via iTunes), 2) to provide tools (ibooks author) that will make it easy for more people to create and to publish high-quality, interactive educational content and 3) to provide a win/win business model that keeps educational publishers in the game by letting them sell electronic textbooks at lower price points (e.g., $14.99) to a much larger number of students worldwide.

Apple is spawning a huge, vibrant ecosystem of incumbents and new players (including students and teachers) that will thrive around students’ outcomes: successfully mastering new concepts and skills.

Customers Want to Help You—and Themselves—Don’t Waste It!

By Ronni Marshak

We have long advocated seeking help with innovation on new products, processes, business models, and relationship issues from your customers. They know what works and what is broken; they know what the competitors offer that is better and worse than what you provide; they know what problems they still have to solve; and they know how they want to get things done and how they want to do business with you. You probably have some ideas on all this, but you are looking at everything from the inside out, and, therefore, are stuck with a limited, self-serving, perspective.

More and more companies are investing in customer-engagement projects to gain the outside-in perspective by launching Customer Advisory Boards, Customer Co-Design Sessions, and including CX and UX methods during product development. Or should we say, companies are re-investing in many of these activities. So many organizations tried to engage customers as advisors in the past but failed to truly leverage that engagement.

In last week’s article, Patty Seybold and I identify the five major internal organizational showstoppers that stand between your customer projects and success:

1. We don’t get the resources we need in time.

2. We can't get quick & easy access to the right customers.

3. We don't have buy in from key colleagues nor proactive support from key executives.

4. We can’t take action on customer-critical issues in a timely fashion.

5. We don’t have measurable/tangible business results.

I find the most frustrating of these to be number 4: not taking action.

Too often, after what seems like a successful engagement, nothing happens. The customers, who willingly and enthusiastically gave their time and brainpower to trying to find win/win ideas for your organization, never hear from you again—at least not in the context of the project. They don’t know if you heard what they said; they don’t know if you’ve done anything about it; they don’t know if you even care. And that’s a really bad thing. It is easy to alienate even your best customers by wasting their time and efforts.

It never really comes down to nobody caring. It’s a matter of focus and priorities. Everyone is so busy and cash strapped that they have a hard time finding the energy and resources to pursue all but the most easily implemented customer improvements. They know that it is important to get back in touch with customers, but, too often, time passes, and they are embarrassed to reach out. And the executives who approved the projects in the first place have moved on to other pressing issues and are hard to get back on board.

But it is vital that you do. Even if months have passed since you worked with your customers—even if it is a year or more—you need to re-engage. Go back to them with apologies for not contacting them sooner, but with evidence that you did, indeed, hear their priorities clearly. Usually, even if you haven’t specifically taken action to work on those customer priorities, others in your company have created and enhanced products, services, and processes that most likely touch on a number of them. Point out that work. Give the customers credit (even if the work was serendipitous). But it is vital to jumpstart the relationships. Especially since you are going to want to go back to them in the future for new engagements and innovations.

What Stands in the Way of Successful Customer-Centric Projects?
The Five “Gotcha’s” that Plague Most Initiatives
By Ronni T. Marshak and Patricia B. Seybold, Patricia Seybold Group, January 5, 2012

What Comes After Social Networks and Cloud? Customer Ecosystems

Here’s an emerging pattern that we’ve been following for over a decade. We believe the time is right for these to begin to really take off.

Customer ecosystems self-organize around things that customers care about and need to get done, like manage their money, manage their health, design a winning product, take a family vacation, embark on a new career, or complete successful projects at work or in their communities. They’re customer-driven in that customers get to decide what activities and resources they need, who they’d like to have as suppliers, and what constitutes success. So, a customer ecosystem is a business network that’s aligned to help customers get things done—both the things they want to accomplish and the things they want to manage.

A number of visionary companies have been investing in and co-evolving these networks around their brands and with their partners. We’ve been following some of these customer ecosystems for a long time. They include:

• The customer ecosystem National Semiconductor built around its WEBENCH^® design tools
• The consumer and partner network that South Africa’s Discovery Insurance has built around its Vitality Wellness program
• The thriving global ecosystem that Zazzle has built around its custom printing business

Now it’s time to lay out the principles of what constitutes success.

What Are the Six Critical Success Factors for a Viable Customer Ecosystem?

1. Help customers achieve and/or manage something they care about.
2. Design for specific target audiences.
3. Provide a “secret sauce” that transforms customers’ ability to get things done.
4. Attract partners & suppliers who can contribute to these customers’ success.
5. Align the entire ecosystem to meet customers ’ success metrics.
6. Embed, co-brand, and be ubiquitous so customers will encounter and use your secret sauce no matter what their starting point is.

What do we mean by a “Secret Sauce?” For National Semiconductor, it’s a set of sophisticated tools that enable customers to configure, test, and optimize their electronic designs, including real-time information about parts availability and pricing from hundreds of suppliers and distributors. For Discovery Vitality, it’s a set of scientifically-based health and wellness indicators that health insurance customers are incentivized to meet, along with a vibrant network of health and fitness partners. For Zazzle, it’s the combination of their patented printing technology, their ability to leverage their customers’ creativity, and their deep understanding of how to create stores within stores within stores.

To be successful, you’ll need to truly change the way people are able to accomplish their goals and manage their activities. Otherwise, you’re just providing a step change, and it will be easy for customers to get things done without your help and for competitors to imitate. Most of the successful customer ecosystems we’ve found have developed and evolved their secret sauce over at least a decade. Not only do you have to transform how customers do things, but you need to co-evolve that enablement and learn as you do so. You can’t shortcut the 10,000-plus hours of co-evolution that are required to make a real difference in peoples’ lives.

Will You Miss the Next Big Thing?
It’s possible that we’re wrong. Maybe customer ecosystems will remain a little understood, esoteric niche market. We’re often so far ahead of the market that it takes years for people to start behaving in ways we predict. But here’s the question: Can you afford not to get started? What if we’re right, and you have the opportunity to build a sustainable brand franchise and vibrant ecosystem whose combined revenues and impact on peoples’ lives is a hundredfold what you could achieve through simple organic growth of your company? What do you really have to lose? All we’re actually proposing is a different way to think about how to design and implement your next customer-touching initiative.

The Next Big Thing: Customer Ecosystems
Six Secrets for Designing Business Networks Aligned To Help Customers Get Things Done
By Patricia B. Seybold, Patricia Seybold Group, January 12, 2012