Razzle Dazzle Them

I recently heard a keynote speech by a senior executive to his management team at an off-site planning meeting, during which he charged that “It feels to me like we’ve taken a cue from the musical Chicago, relying on ‘Razzle Dazzle’ rather than any genuine contributions in terms of new products or technologies.  We have to recognize that won’t carry us far, won’t allow us to achieve our goals for the next five years.”  He went on to challenge his organization to figure out a strategy by which they could move from Razzle Dazzle to game-changing innovations that would move the needle and ensure that the firm stayed ahead of its competition.

His worry about the firm’s innovation track record was one shared by many organizations#.  And our own research into the foundations for strong supplier-customer relationships suggests that the vast majority of supplier success stories are focused on innovations brought by the supplier to the customer, often ones that came as a positive surprise#.  Those firms that develop strong innovation and product development processes are regularly rewarded, both along financial dimensions and in their reputation within their markets.

The research referenced above makes a strong argument for the importance of bringing customer insights into these processes.  More often than not, customers have clear and explicit ideas about what they want from their key suppliers, and can frequently define the goals that should define investment projects.  This doesn’t deny the fact that some of the greatest innovations are ones that so significantly changed the game in ways that few, if any, customers had ever dreamed of, but in the vast majority of projects which we’ve studied, success was guided in an important way by customer inputs and disappointing project outcomes very frequently fell into that category because of a failure to hear customer messages.  

Effective listening takes work, and bringing innovative approaches to the listening process itself can help to achieve the goal of obtaining solid and actionable customer messages that can help shape better plans.  Our experiences working with numerous customers on this challenge yielded a number of interesting ideas about how to be innovative in gaining insights from key customer organizations:

1. Collaborate in undertaking research about the expectations of the end customers (those further down the customer chain) in the markets served by your direct customer. Over and over, we see proof statements that these later-stage customers are the best source of ideas about what will make a difference.

2. Set up forums involving the two company’s experts in R&D, product development, ‘e’ business systems, and other topics relevant to the success of future plans.

3. Hold meetings to discuss key success metrics and ideas about how to improve performance in the future.

4. Sponsor unique benchmarking efforts and market research that might trigger new approaches to markets, manufacturing, service delivery, or other topics.

5. Invite your customer and even their own major customers to participate in your company’s planning forums.

6. Ask your customer to audit and recommend improvements in your company’s product development, customer service, logistics system, and other business functions.

7. Create regional or vertical market forums involving key people from a customer organization to suggest ways in which you can collaborate to can grow the business.  Focus these discussions on what product evolutions will yield success in the growth segments of their regional or vertical markets.

8. Involve the two organizations in scenario planning exercises designed to spotlight potential changes in the business environment. Translate the results from such efforts into implications as to how the team can build the foundations for a competitive advantage within the environment defined by the scenario.

9. Set up opportunities for people from your firm and your customer’s firm to jointly meet with regulators and other third-party influencers in the business environment in question. Learn what is coming down the road, and, more importantly, what such experts think are the opportunities that those in the industry are missing.

10. Regularly ask your own organization, your customer, and their customers the questions “What have we missed?” and “What could we be doing better?”

One point that must be noted from this list is that the perspective about innovation is far broader than product development and technology, although those are certainly of greatest importance.  Many of the supplier success stories told by customers involve innovations in business systems, cost reduction, relationship management, and other dimensions that can yield improved results for both parties to the relationship.

The action plans that can result from innovative listening programs can take a firm far beyond Razzle Dazzle, yielding improved financial results and stature.  In a future in which competitive challenges are only likely to intensify, leadership along all of the dimensions of innovation is likely to be among the factors that separates the winners from the also-rans in those competitive battles.