Customer Centricity vs. Innovation

I can’t count the number of times I have heard an organization or company claim itself to be completely customer centric and brag about how everything they do revolves around the customer. The first question that comes to my mind in such situations is whether that organization can be innovative at all in any meaningful way.

Sure, focusing on making customers successful is critical to sustaining and growing any business. Driving the adoption of your products by customers, delivering on the promise of the brand and helping customers realize the value proposition communicated to them are all equally important.

However, being excessively customer centric has its own set of problems. In a majority of cases, customers typically demand fixes to product issues or at best suggest incremental improvements. In software, for example, changes requested could be performance or reliability improvements, making the user interface more user friendly, extensions to platform support and so forth. These are evolutionary ideas that make your products more mature, usable and stable.

But, you can’t rely on customer input to come up with the next revolutionary idea. This is the gap that product managers have to fill. Unfortunately though, many product managers seem to have cultivated the habit of taking every proposal, small and large, to their favorite set of customers for advice. This is useful for minor improvements, but doesn’t work at all for grander ideas. In the latter case, customers are most likely to be dismissive of the idea and may suggest that you focus on stabilizing your current product portfolio before venturing into newer areas.

This observation seems to be true across a variety of industries; from software to fast food. The President of Yum! Restaurants International (Yum! Is the parent company of KFC, Pizza Hut and Taco Bell), Graham Allan, who was a guest speaker in one of my International Marketing classes shared his observation that market research studies conducted prior to launching a new concept in a new market were of very limited value. For example, consumers in the Middle East did not respond favorably when asked about their opinions about launching Pizza Hut in that region, but once the chain opened, they simply couldn’t get enough and the concept has subsequently been a roaring success. These same consumers now regularly provide feedback to the restaurants about ideas for new toppings etc. – the same kind of incremental improvements that they are best at suggesting.

Moral of the story: Do your due diligence, but don’t be dissuaded by less than enthusiastic feedback from prospects when bringing disruptive or revolutionary products to market. There is no substitute for your own judgment in such cases.

Your thoughts?