Over time and as a company grows, the ability to deliver inspiring solutions often fades. Many organizations talk about returning to their roots or becoming more nimble in the digital age, and they presume doing so requires shaking up corporate structure.
But industry leaders in large part attribute their organizations’ resurgent innovativeness not to reorganization, but to a simple shift in mindset about how their teams approach customer-centricity. Powered by empathetic product managers and designs, companies of any size can meaningfully and continuously innovate.
In the face of changing market dynamics, product teams tend to approach customers within the context of their own organization’s existing processes and product portfolios. Author and professor Donald Sull describes such behavior as “active inertia.” Rather than suffering from paralysis (which is often intuitively perceived as the enemy), companies take actions that are hamstrung by the narrow-minded perspective of past solutions.“Innovators think in terms of verbs, not nouns.”
As Sull elaborates, “[the] fresh thinking that led to a company’s initial success is often replaced by a rigid devotion to the status quo.”
Contrary to conventional wisdom, Blockbuster didn’t fail because of an unwavering refusal to embrace digital. The problem was that Blockbuster’s revenues were largely dependent on its notorious late fees which couldn’t easily be justified using a subscription model. When Blockbuster’s CEO proposed dropping late fees so that the organization could transition, other executives were quick to point out how immediately disruptive that would be to its revenue streams. Key stakeholders were constrained by an overreliance on what had worked in the past, and ousted the CEO. Blockbuster eventually launched a watered-down version of Netflix but it was too little too late, and the company soon declared bankruptcy.
When approaching innovation, the renowned designer co-founder of IDEO, Bill Moggridge, urged his colleagues to understand that “we are designing verbs, not nouns.” Moggridge had experienced Blockbuster’s pain more than 2 decades earlier while designing one of the first commercial laptops. Despite winning countless awards for its elegant physical design, the laptop was severely limited because it ran on the clunky DOS operating system.
As IDEO’s current CEO Tim Brown described the device in his book Change by Design:
“To perform the simplest operation, it was necessary to type an arcane sequence of commands that bore no relation to lived experience—in the sharpest contrast to the ingenious device, which folded in half like a notebook and disappeared into a briefcase.”
The dilemma led Moggridge to realize that, to be successful, designers must address the core customer activity. He had designed a portable computer but didn’t enable customers to work.
As part of The Innovation Benchmark, we interviewed a number of design and innovation leaders across the Fortune 500 that echoed a similar sentiment. Products and solutions become stale as customer activities evolve, and it is a relentless obsession with the verb instead of the noun that enables organizations to continuously innovate.
Ford Motor Company has spent more than a century selling cars and trucks, but the organization thinks about its business more holistically. “It’s about providing personal mobility and really doing so in an affordable manner,” says Venkatesh Prasad, a Senior Technology Leader at Ford, responsible for open innovation. Cars may have replaced the horse and buggy, but Ford innovates not by continuing to engineer cars but by enabling customers to travel. They’ve reframed their product narrative around the entire travel experience.“Products and solutions become stale as customer activities evolve.”
For example, Prasad sees opportunities when noting trends in consumer travel that extend beyond traditional car ownership or leasing. “We certainly are in the world where we use cars one way or the other, whether that’s getting a ride from A to B or sharing a ride with someone else,” he says.
That thinking has led the company to invest heavily in research and development into ride-sharing apps and self-driving capabilities. Ford also recently announced the spin out of a wholly owned subsidiary, Ford Smart Mobility LLC, to design, build, grow, and invest in emerging mobility services. Both initiatives reflect Ford’s expanded business model of being both an auto and mobility company.
But an increase in scope must be accompanied by an increase in efforts, and Ford isn’t afraid to call for reinforcements. The company has joined the OpenXC movement, an open-source project that enables third-party developers to read car data. Prasad says that many of the applications are obvious, like the ability to notify drivers about potholes, hydroplaning, and other environmental hazards. But he believes the initiative’s potential is limitless, and he’s excited to see what external experts can come up with.
“It’s possible to see how digital platforms come in handy as a critical connector and can drive core business efficiencies and innovation on the one hand,” Prasad states. “And then, of course, make people’s lives better through mobility on the other hand.”
And that’s long been Ford’s mission, reflected even within the Henry Ford Museum in Dearborn, Michigan. “You go in there and of course you see a lot of transportation exhibits, but you also see the flashing light of a Holiday Inn exhibit,” Prasad describes. “You wonder what that’s doing there, but Holiday Inn came to be because people were able to go further distances and didn’t have a place to stay. So, it’s those kinds of ecosystems, synergies, and adjacencies we see in the future.”
But Ford doesn’t have a monopoly on that type of thinking, nor on the “travel” verb. When we spoke with Matthew Von Ertfelda, Vice President of Marriott’s Insight, Strategy, and Innovation team, he expressed a similar outlook.
With 19 brands, 4,400 hotels, and over a million hotel rooms, Marriott has moved far beyond its original 9-stool root beer stand—and it expects the evolution in its business to continue. Ertfelda describes the organization as “a global hotel company that we actually like to refer to as a travel company.” And that directly translates into their approach to customer-centricity and innovation.
“We see what we do as guest experiences, product and service experiences, that actually transcend individual hotels, to become a part of the life of the traveler and consumer,” he says.“To be successful, designers must address the core customer activity.”
Organizations that take holistic approaches to customer-centricity offer a number of actionable takeaways for product and design leaders:
Outline the verb. It’s time to stop thinking about organizations as static portfolios of products. What customer pain point is being solved, and what activity is enabled because of the solution? Shift to thinking about how you can continue to learn and revise your understanding of that activity over time.
Identify blockers. Organizations stagnate when they only look inward when considering opportunities for innovation. Assessing your company’s existing resources and capabilities is certainly a critical step in the process, but customer-centricity means that the company’s processes and offerings must at times be challenged and overturned.
Speak for the customer. It’s undeniably difficult for companies to grow and maintain empathy for diverse and ever-changing customer personas. But it’s even more difficult for executives to ignore customer feedback and behavioral data. Step up and be the voice of your customer. Your competitors are already doing so.
It would certainly seem intuitive that being innovative requires your company to first undergo “big” structural changes. But once you stop thinking in terms of designing products and begin thinking in terms of designing activities, you just may find that customer-centricity isn’t foreign after all.