2    Building Shared Customer Insights

According to various history books, Christopher Columbus set out in 1492 to find a new route to the Indies from Europe. His actions were driven by a bold vision with significant risks and uncertainties, but he (and his financial backers, King Ferdinand and Queen Isabella) believed the potential payoff justified the risk.

It so happens that Columbus did not make it to the Indies. He ran into the Bahamas on his westward journey. When he did so, he did not think he’d failed. Nor did he set out to find a way around the Bahamas so that he could achieve his original objective. Instead, Columbus claimed his discovered lands for the Crown of Castile and declared his mission a success.1 It is now well established that Columbus’s riches were ill begotten, so we are not applauding his behavior. But his story is interesting because, even though he never reached the intended destination, his vision took him somewhere worth going.

Companies could have a similar experience on their digital journeys. As they attempt to imagine value propositions based on the capabilities of digital technologies, leaders are navigating uncharted waters. Those waters are rough! Digital technologies, customer demands, and business competition are all rapidly changing, making outcomes unpredictable and success fleeting. Companies will need to adapt to the realities they encounter and the opportunities they find.

Companies Learn What Makes a Viable Digital Offering

One problem you’re likely to encounter as you commit to developing digital offerings is that it’s hard to know exactly which digital offerings represent a great opportunity for your company. You need to start developing digital offerings now so you can figure out your opportunities—and fend off disruptors. A successful digital offering leverages the capabilities of digital technologies to provide a solution to a problem or issue that a customer invariably hasn’t articulated. It represents the intersection between what customers desire (even if they don’t know it yet) and what digital technologies make possible. See figure 2.1 for a representation of a digital offering.

Figure 2.1

Digital offering: customer desires intersect with solutions

Finding the point of intersection between what a company can do with digital technologies and what a customer wants is challenging for two reasons. First, most companies have little experience imagining what solutions they might develop with digital technologies. They are still learning what ubiquitous data, unlimited connectivity, and massive processing power make possible.

Second, customers often can’t imagine what they want until they have it. Steve Jobs famously declared that he didn’t ask customers what they wanted because he knew better than they did. The iPhone thus emerged from out-of-the-box thinking, as did Uber, Facebook, and Airbnb, rather than from resounding customer demand. Companies trying to solve customer problems have limited direction as to what a customer will find valuable.

In theory, the number of potential digitally inspired customer solutions is nearly infinite (a typical MBA class can propose dozens of ideas in a single class session). In practice, most possible solutions would never find a customer base. Thus, identifying solutions that will generate genuine customer enthusiasm (in the form of willingness to pay) is not a trivial task. If you want to deliver valuable digital offerings, you’ll need to aggressively seek out the intersection of customer desires and digitally inspired solutions.

The experiences of starry-eyed college students are actually relevant to companies embarking on digital transformations. College students have a propensity for dreaming up digital offerings that crusty old academics can’t imagine will attract customers. Indeed, the crusty academics are often right. When students hit the sidewalks to try to sell their ideas, they often get a quizzical look from a potential customer who doesn’t see the value. In some cases, however, students’ proposals spark creative ideas in the minds of bemused potential customers, who might respond: “I’m not interested in that, but let me tell you what I would find valuable.” The students are back in business, flush with customer insights. With enough iterations of such a feedback cycle, students may find the sweet spot where what they can develop intersects with what customers will buy.

This iterative development process is the norm. Consider, for example, that Airbnb grew out of the belief that people would pay to sleep on an air mattress on a stranger’s floor.2 Similarly, Instagram started as an app for checking in and hanging out with friends (and sharing pictures) that proved too complicated to use.3 Twitter’s founders first tried a podcasting platform, Odeo, which Apple made obsolete.4 Even AUDI had to kill off its “share a car among five friends” app before rolling out successful mobility services.5 For new and old companies alike, digital offerings are born out of iterating with an idea until it finds the sweet spot in figure 2.1.

Experiments Create Shared Customer Insights

Iterating to find the intersection of what digital technologies make possible with what customers will buy is a test-and-learn process.6 Digital offerings are well suited to rapid test and learn because they are software based. Software coders can develop a minimum viable product (MVP), release it to customers or a test group, and get immediate feedback. Based on the feedback, a company can quickly enhance or discard the product.

Companies seeking to develop viable digital offerings adopt this approach. They encourage widespread experimentation through events like hackathons and other competitions, through special funding opportunities like an internal kickstarter.com or “shark tank” proposal review process, and through new organizational units like innovation labs and digital business units. They learn about customer desires by mapping out customer journeys, by co-innovating with key customers, by releasing code and monitoring customer feedback.

Of course, such widespread innovation could simply waste resources on pointless experiments. Companies can counter that risk by insisting on small experiments that quickly produce measurable outcomes. Any experiment that doesn’t quickly generate customer enthusiasm can be abandoned, while those with the most potential can be cultivated. This is hard to do. People with an idea want it to succeed, so they will be tempted to tweak an unsuccessful idea rather than abandon it.

Learning from experiments depends on recognizing what isn’t working and shifting resources to something that might be more successful. As Frans van Houten, CEO of Philips, notes:

When we make big, $50 million mistakes, it is usually because we are killing something too late. It’s the typical innovator’s problem.

Whether an experiment succeeds or fails, building a successful digital business requires accumulating learning about how the company can use digital technologies to address customer needs. In big companies, accumulating such learning is only half the challenge. Individuals and business units must share their learning. Otherwise, multiple people within a company may invest in similar experiments to learn the same lesson.

Successful digital businesses have a natural ability to experiment with potential offerings so they can learn what they can do and what customers want. They have configured people, processes, and technologies to incorporate digital offering experiments into their DNA. In doing so, they are developing a building block we call shared customer insights, defined as organizational learning about what customers will pay for and how digital technologies can deliver to customer demands.

Schneider Electric, which has transformed multiple times since its founding in 1836 as a producer of iron and steel, offers an example of a company accumulating shared customer insights to deliver new customer value propositions.

Building Shared Customer Insights at Schneider Electric

Since around 2014, Schneider Electric has been on a digital transformation that has made it a leader in energy management and automation in homes, buildings, data centers, infrastructure, and industrial settings.7 With a global presence in over 100 countries and 2017 revenues of €25B, Schneider is providing integrated efficiency solutions that combine energy equipment, automation, and software.

In the ten years prior to its digital transformation, Schneider had acquired over 200 companies and brands. These acquisitions enabled the company to expand its energy equipment products and solutions to include:

  • Power distribution products
  • Metering products that measure energy consumption
  • Building management systems and security
  • Data center physical infrastructure
  • Grid infrastructure management systems
  • Intelligent energy management solutions

Like its competitors, in its early adoption of sensing technology and the Internet of Things (IoT), Schneider provided remote monitoring of large electrical equipment (e.g., switches, circuit breakers, transformers). But this remote monitoring was largely a device-by-device service: when a product malfunctioned, both the customer and salesperson received an alert indicating that the equipment potentially needed to be replaced. This remote monitoring originally was more of a sales tool than a customer service.

Inspired by the capabilities of IoT, Schneider’s leaders believed sensors and connectivity could provide customers with far more than an alert that equipment was failing. In particular, business leaders proposed that sophisticated analysis of integrated sensor data could help customers become much more energy efficient. Accordingly, the company adopted a mission of delivering solutions that ensure that “Life Is On™ for everyone, everywhere, and at every moment.” This mission is a commitment to provide customers with reliable, cost-effective energy management.

Early Experiments

Initially, business units experimented individually with new customer solutions aligned with the company’s vision and burgeoning digital strategy. Product development staff in the business units worked with customers to understand their expectations, needs, and challenges and, in turn, identified digital enhancements to products. Schneider’s IoT Technology Platform Vice President Michael MacKenzie described how individual lines of business funded these early efforts and ideas proliferated:

At the start, the businesses owned their product roadmaps and therefore determined their needs: local initiatives, local success, and failures, sometimes. They were making decisions and learning in a microcosm.

These early experiments generated some successes. As far back as 2012, Schneider’s IT division had introduced its Data Center Infrastructure Management (DCIM) solution, called StruxureWare™. DCIM offered an integrated set of products, solutions, software, and services across a data center’s physical infrastructure, including power, cooling, energy management, and remote monitoring. According to Schneider, 40% of the ongoing cost of managing a data center is energy, so this kind of offering possessed a strong use case for energy management solutions. And because they were, by nature, comfortable with software-based solutions, data center customers were eager to acquire and use this new solution.

In general, however, the company’s initial business unit–driven approach to developing digital offerings did not deliver the expected results. Prototypes built within business units were expensive and prone to scalability and security issues. The proliferation of local offerings was not building either significant new revenue streams or reusable strategic capabilities. Schneider’s IoT & Digital Offers Executive Vice President Cyril Perducat said of this initial approach,

Everyone across the company is trying to reinvent digital for our products, so everybody is establishing partnerships with different start-ups offering all types of technology innovations. But this results in multiplication of partnerships, multiplication of cloud providers, multiplication of connectivity protocols, anything you can imagine in digital.

To address these issues, Schneider took advantage of SMACIT technologies, such as mobility, cloud, analytics, IoT, and cybersecurity, to bolster shared digital capabilities for all its businesses. Cyril Perducat, head of IoT & Digital Offers for Schneider Electric, took responsibility for seeking business opportunities to create new offerings that leveraged these shared capabilities. He found that business leaders were reluctant to shift their offerings to the shared infrastructure, so he created an internal Digital Services Factory (DSF) to ensure that the businesses saw increased benefits and lower risks when they did so.

Formalizing Learning and Engaging Customers

Perducat’s team partners with the business units (and with virtual teams from an ecosystem of external partners) to bring together capabilities to generate ideas for digital offerings within the context of key market trends and needs. Some ideas come directly from an interested customer, while others come from business leaders responding to reported customer needs, problems, pain points, and desires. More recently, the company has started to surface new opportunities from data insights based on how customers are using their digital services.

The DSF team escorts concepts for digital offerings through four stages: ideation, incubation, industrialization, and run and scale. In the ideation phase, they review new ideas to identify recurring and similar concepts, because those ideas, if applied by multiple business units, are likely to deliver greater value. Product teams engage key customers early in the ideation phase to learn the viability of a concept. The Digital Services Factory team quickly stops those ideas that do not appear to have a viable business case. Meanwhile, the company assigns business product owners to the most promising ideas.

If a concept moves to the industrialization stage, Schneider typically requires that a customer fund a pilot, thus increasing the likelihood that initial customer enthusiasm will convert into revenues. IoT Strategy & Business Design Vice President Carlos Javaroni explained how, in this phase, cross-functional teams work jointly with the customer to ensure that the offering delivers on the customer value proposition and that the customer sees it:

The voice of the customer is the critical place to begin. Understanding the business problem we are trying to solve informs us about the appetite for the solution. In several cases, we have received very positive customer feedback, but that’s not necessarily enough for them to spend money on it. Therefore, we keep our customers at the center of our co-innovation.

Some innovations add digital features to existing products. For those, industrialization involves finding customers interested in the new features and value. The existing product sales staff will take on that responsibility. For more strategic energy management solutions, Schneider has found that its usual customer contact isn’t the right person to make the purchasing decision. For these so-called “C-level” offerings, Schneider is developing a small team of more experienced and highly specialized salespeople.

Schneider has found that customers tend to adopt C-level offerings incrementally, as they learn how to benefit from them. Thus, the specialized salespeople can be valued members of product development teams, helping to incrementally develop offerings customers want at the pace they want them.

Accelerating Product Development

To accumulate shared customer insights, Schneider has created a new development process for its digital offerings. The company’s traditional product development involved lengthy, rigorous research and development followed by prolonged rollouts of important innovations. In contrast, the digital offering product life cycle, driven by the DSF, starts with an identified customer need; proceeds through development of a minimum viable product that customers test and use; and then enters a stage of continuous improvement, expansion, and development of related offerings.

Schneider has partnered with a variety of best-in-breed technology companies to apply more iterative development approaches and co-innovation. This has involved abandoning legacy IT methodologies and pre-digital product R&D approaches for purposes of developing digital offerings. As a result, Schneider has collapsed the time from ideation to industrialization from two or three years to just a year. Chief Digital Officer Hervé Coureil described how combining different approaches has improved product development:

R&D will take time to release a product, because it has to be more than perfect. And with good reason. Our products have safety functions. Then you have the world of software, which says, “Okay. Let’s experiment. Let’s iterate. Let’s do it like startups do. Let’s give them a Minimum Viable Product.” Connecting the two approaches is one of the interesting challenges of business leaders.

As it gradually builds shared customer insights, Schneider has started generating revenues and profits from new digital offerings. In 2018, Schneider had around 40 digital offerings, including digital services for asset management (e.g., predictive maintenance), energy resource management for C-level business forecasting and budgeting, and consolidated remote monitoring of specialized machine fleets. Another 20 offerings were nearing roll-out.

Designing for Shared Customer Insights

As the Schneider example suggests, digital companies develop an ability to learn what their customers will find valuable. The essence of designing for shared customer insights is creating roles and processes that help a company find the intersection between what solutions it can deliver and what solutions the customer wants, as suggested by figure 2.1. Because of uncertainty around both how customers want to be engaged and what customers want, digital offering development involves constantly testing the viability of ideas. This process is sometimes referred to as discovery-driven planning.8 Companies with a shared customer insight capability have built up a knowledge base about the problems, inconveniences, and desires of their current or potential customers, and that allows them to more quickly identify and seize opportunities.

Schneider Electric and other leading companies have adopted a number of design practices supporting the accumulation of shared customer insights. Our research found that these practices are associated with increased revenues from digital offerings:9

  • A high-level digital vision for new customer value
  • A constant flow of digital experiments that test how digital technologies can deliver customer value
  • Tightly integrated product development, sales, and service processes
  • Customer co-creation of digital offerings
  • Formalized sharing of learning across the enterprise

High-Level Vision

Schneider Electric’s vision of providing intelligent energy management solutions guides choices about what experiments to pursue. Similarly, Philips’s stated vision to improve healthcare outcomes at lower cost and USAA’s vision of ensuring the financial security of its members establish general parameters for experiments of interest. As a result, these visions limit the odds that experiments will simply distract a company from strategic pursuits.

It is worth noting that while we call these visions “digital” (because they are inspired by digital technologies), they are, in fact, these companies’ overall business visions. In a digital economy, a digital vision is the business vision.

Many early visions provide only a rough idea of potential customer digital offerings. For example, CEMEX, a global cement manufacturer based in Mexico, intends to create a customer experience that will make the entire construction industry more efficient. It kicked off the effort to deliver on that vision by developing a digital platform called CEMEX Go, which provides visibility into a building contractor’s (i.e., the customer’s) transactions and order status through a mobile app. CEMEX will learn how to make the construction industry more efficient as it experiments with new functionality and solutions around CEMEX Go.10

A pharmaceutical company that has traditionally developed and sold drugs now imagines a broader vision as a disease expert. This vision encourages experiments focused on preventing, diagnosing, and treating illnesses apart from drug development. In shifting its vision from providing drugs to fighting diseases, the company expects to take advantage of massive amounts of data it already owns or can easily access. This will surely lead to new value propositions delivered by a more expansive set of services that could include lifestyle changes, diet changes, or gene therapies in addition to drugs. The revenue model for such offerings will surely differ from drugs. How will the company learn what it can do that customers will pay for? By experimenting.

As companies build customer insights, their visions are likely to evolve. For example, the Singapore-based financial services company DBS Bank started pursuing its goal to be the “Asian bank of choice” in 2010. By 2014, the company was “making banking invisible.” Its vision in 2018 was “making banking joyful,” with the branding position “Live More, Bank Less.” DBS’s evolving vision first helped position DBS as the bank of choice for customers and employees. Building on what it learned, it has disrupted banking in India by launching an entirely digital mobile-only bank there.11 In 2017 and 2018 DBS began offering car, property, and electricity marketplaces on the DBS website. In short, digital visions direct experiments. In turn, experiments invariably reshape a vision.

Constant Flow of Experiments

Although no company has unlimited capacity for experiments, conducting more experiments generally leads to more learning. Schneider manages the capacity issue by quickly assessing the potential of ideas through the development of minimum viable products and discarding those ideas that aren’t resonating with customers.

DBS Bank has dispersed responsibility for digital innovation throughout the company. DBS, which is the biggest bank in Southeast Asia (in terms of assets under management), provides a full range of financial services to 9 million customers in 18 markets. In 2015, its 22,000 employees were concurrently running 1,000 small experiments throughout the bank. Some of these experiments were quickly abandoned; others evolved into digital offerings or features for customers.

To generate shared customer insights, DBS stimulates idea generation and idea testing with techniques such as internal crowdsourcing, customer experience labs, hackathons, external partnering, nurturing of fintech startups, and technology scanning. One highly touted initiative partners senior leaders with young technology staff in hackathons. The company has observed that this exercise is valuable for helping senior leaders recognize the possibilities that digital technologies create while focusing younger staff on important business problems.12

A major source of ideas worth testing at DBS is examination of the customer’s journey, which involves mapping the full experience of customers as they interact with the company. Designers attempt to get inside the mind of the customer—to feel like they are the customer—at moments such as when a customer decides to use a DBS product. Designers sometimes create a “pretend” customer, giving the person a name, age, and occupation, and take this customer through the journey of applying for, say, a mortgage or credit card, to understand what that customer is going through. They then consider what the customer is thinking, what emotions they are experiencing, what their concerns are. Given those insights, they try to improve the customer experience.13

One member of the top management committee of each business unit at DBS heads a “Customer Journey Experience” team, as a peer to (and working with) the product heads, functional heads, and country heads of that business. Customer Journey Experience teams work with product teams to ensure that “journey-thinking” inspires experiments.

DBS’s pursuit of customer insights and constant flow of experiments is paying off. In 2016, and again in 2018, DBS was named the “World’s Best Digital Bank” by Euromoney. In 2018 Global Finance Magazine also named DBS “Best Bank in the World.”14

Toyota Motor North America (TMNA) has also introduced a variety of approaches to fostering digital experiments.15 When Zack Hicks, now the company’s chief digital officer, was CIO, he introduced an Innovation Fair at which employees shared their innovative ideas with others in the company and competed for funding and the prestige of seeing their ideas move forward. Losing teams could also apply for funding from a variety of sources. This concept has been absorbed into global innovation fairs at Toyota Motor Corporation.

The innovation fair is just one way that TMNA encourages experimentation and innovation. For example, TMNA has an iCouncil that acts as a polite “shark tank.” iCouncil members, who have director-level business positions (and budgets), might help the owner of an idea develop a business case, authorize funding from a director’s budget or a special CIO fund, or team up an innovator with an IT person who could develop a simple app.

TMNA has also established The Garage, a small area within IT where two contractors provide up to 30 hours of development time to individuals who want to try out a new idea. The Garage allows people to circumvent typical funding processes to create a prototype that might demonstrate the viability of a concept. The Garage also offers equipment like iPads and server space to individuals who want to experiment with an idea. Promising ideas can be shopped around to a specific business unit or entered into the Innovation Fair.

Finally, TMNA IT developed a Kickstarter type of application where individuals can post ideas for innovations and receive feedback. This app is particularly good for those ideas that are creative but too raw for testing. A user can share the idea on a forum where others can respond with a thumbs-up or -down and with suggestions that might help advance the concept.

Most of the experiments that emerge from TMNA’s initiatives target the customer experience. Some are relatively simple and quickly developed, such as an app that helps customers interact efficiently with dealers after they have started to configure their preferred vehicle online. In some cases, however, TMNA’s small experiments lead to changes in products or kick off new offerings. Experiments have led, for example, to innovations in the application of telecommunications and satellite systems for in-car safety, GPS, and entertainment services.

Tightly Integrated Product Development, Sales, and Service Processes

A number of business leaders in our research expressed surprise about how long it can take customers to warm up to compelling value propositions. A new value proposition invariably requires a customer to act differently—to disrupt a power structure, shift expertise, or respond to new data. As noted above, Schneider Electric found that it needed a different sales force to sell and inform its “C-level” intelligent energy management solutions.

ING Direct Spain relies on cross-functional teams to ensure that new offerings address a customer’s needs end-to-end.16 Functions like product management, marketing, operations, IT, credit risk, and operational risk work together at a very early stage of product definition. The benefit of these cross-functional teams is to bring together different perspectives that encourage mutual challenging. This mutual challenging mitigates the risk of designing offerings that the company cannot afford to support or that create customer hassles rather than a great experience. This helps ING Direct Spain limit business complexity. Werner Zippold, former COO of ING Direct Spain, explained the value of airing very different perspectives before putting a new product into production:

Any idea that survives that sort of challenging has a certain guarantee that it’s well thought through in terms of how you actually handle the operational complexity later, because you have operations and IT people actually contributing in the definition. And they can offer solutions or twist the way we do things to make it a lot simpler. You need to be able to challenge the business side: “From my perspective, are you really sure that the value added justifies that increase in complexity?”

Exposing potential offerings to both front office and back office experts surfaces complexity and has given ING Direct Spain more manageable systems and processes, which supports reuse as the company develops digital offerings.

Customer Co-creation of Digital Offerings

Schneider’s approach to building customer insights involves working directly with customers early and often. Digital innovations are brilliant only if customers are willing to buy them. Every company has made false assumptions about what customers might want. A company with a shared customer insights asset can quickly identify and correct those false assumptions.

Philips’s attempts to redefine healthcare are heavily dependent on what customers (including healthcare providers, insurers, and individual consumers) are ready to buy and use. Customers have habits and they are not always willing to change those habits, even when the benefits of doing so seem obvious. Philips’s efforts are further hampered by industry complexity.

A consistent challenge is that many healthcare improvements help one party but negatively impact another. For example, insurers want their patients to recover quickly from surgery, but for hospitals, empty beds reduce revenues. Similarly, helping individuals stay healthy is a universal desire. Nonetheless, insurance companies are not always willing to pick up incremental costs for keeping people healthy, even though such costs will invariably be lower than treating a preventable illness or condition.

The complexities and uncertainties around the development of healthcare solutions led Philips to invest substantial resources in customer co-creation efforts such as their HealthSuite Lab workshops. The intention of these multi-session HealthSuite Lab workshops is to learn about customers’ most pressing problems and to figure out how to solve them—in other words, to learn what customers are likely willing to pay for. As Manu Varma, Business Leader for Wellcentive and Hospital to Home at Philips, noted, “We don’t always know what customers’ challenges are. They don’t know what they want.” HealthSuite Labs is a consultative process designed to enlighten both sides.

When embarking on a HealthSuite Labs engagement, the customer (usually a healthcare provider) and Philips agree to solve a complex healthcare challenge jointly. To do so, HealthSuite Labs sessions typically bring together providers (e.g., hospital managers, physicians, nurses), patients, and payers (insurance companies, government agencies). In total, a HealthSuite Labs session can include 12 to 40 people, many of whom are not regularly in a position to talk with each other. Mark van Meggelen, Business Leader of Healthcare Information and Connected Care for Philips in Benelux, describes the impact of participating in HealthSuite Labs as follows:

In the past, we had talked a lot about patients, but I never actually met a patient until we started pioneering HealthSuite Labs. It made me humble, because of the burden the disease entails for patients. The way they are supported is far from optimal.

The multidisciplinary and collaborative approach of HealthSuite Labs allows teams to tackle difficult healthcare issues; their proposed solutions aim to improve the overall healthcare system rather than improve the processes or outcomes of a single stakeholder. For example, a HealthSuite Labs engagement could lead to redesign of reimbursement schemes so that all parties profit and are incentivized to do what is best from the perspective of system-wide outcomes and costs.

Formalized Sharing of Learning across the Enterprise

Schneider has folded its Digital Services Team into a Digital Business Unit reporting directly to the CEO. This unit owns responsibility for accumulating and sharing learning about customers and digital technologies. This shared learning helps build functionality into the Schneider EcoStruxure platform that supports digital offerings. It also provides insights into which proposed experiments are most promising.

Decades of research on product development have demonstrated the risks of isolated innovation. In particular, innovation, while essential to vibrant business models, can nonetheless lead to non-value-adding business complexity.17 This is what happens if experiments take place locally and the learning is not shared. Companies will miss opportunities to integrate data, products, and services across product lines or business units that can lead to new customer value propositions.

Some companies have created centers of excellence, where experts can exploit learning from other parts of the company. For example, Ferrovial, a Spanish infrastructure company with 70,000 employees, has created an innovation center staffed with 25 people who help teams develop competitive bids for new business by identifying relevant prior solutions, potential third-party partners, or solutions that exist in the marketplace. The innovation center attempts to solve any problem that will obstruct development of innovative bids. In doing so, the center reuses expertise that might otherwise remain local.18

Alternatively, some companies push innovation expertise and tools out into the business. At DBS, the Customer Journey Experience teams help others in the business learn how to answer questions about customer journeys, often hand in hand with similarly distributed analytics teams.

Creating a Culture for Shared Customer Insights

Driven by the fear of digital disruption and/or the thrill of digital greatness, companies are designing organizational roles and processes for accumulating insights on both the capabilities of digital technologies and the interests of customers. In doing so, they are building an organizational asset that positions them for digital success.

Building this asset involves disrupting established management practices and individual habits. In other words, it forces a change in corporate culture. Taking an iterative test-and-learn approach to developing offerings will be a foreign concept to almost anyone who has risen to the top of an established company. For example, pharmaceutical companies have 10-year development cycles; auto manufacturers often take 5 years to develop, test, and roll out new products. These long cycles involve huge allocations of resources. They are “big bet” strategic initiatives.

Most digital innovations are much smaller bets. A few of those smaller bets could become very big deals, but most will be discarded. Imagine the carnival game where each player can bet on any horse until the race begins. Once the race starts, the bettor just hopes to win. Conducting digital experiments is like betting a tiny amount on all the horses at the gate and then having the option to increase any bet at various points during the race. There is no need to make a big bet until the winner is almost certain. The shared customer insights building block allows companies to place their bets exactly this way.

Getting Customer Insights Right

Digital offerings must find the point of intersection between what digital technologies can do to redefine your company’s value proposition and what your customers will value. To find that sweet spot, you’ll need to configure people, processes, and technology in ways that encourage a test-and-learn approach to developing digital offerings. People must learn new habits guided by new processes and enabled by new technologies and data. To support your efforts to build shared customer insights, this chapter developed the following key points:

Shared customer insights are valuable for identifying early digital offerings. They are just as important for constantly enhancing and evolving your portfolio of digital offerings over time. The habits you create for shared customer insights are a long-term asset. They will make you more agile, and they will help you focus on critical requirements for your other building blocks.

Notes