Where do we want to be tomorrow?
Have you been asking yourself that question? Well, if you are responsible for (co-)determining the corporate strategy of your company then I have some bad news for you. You’ve been asking the wrong question.
You should have been asking “What is the customer journey that we want to bring the day after tomorrow?” Why? Because focusing on tomorrow (a.k.a. short-term planning) leads to iterative development. Iterative development can cause you to miss the boat when your sector undergoes a major transformation. On the other hand, by asking the right questions, you could have been the one leading the transformation!
Let’s look at a few historical examples
Do you remember the first mobile phones?
Those big, heavy devices that were more a “transportable” phone than a truly mobile phone. Well, they were quickly replaced by models that were a lot smaller and more convenient. Those models were replaced by even smaller models, which were replaced by smaller models again, and smaller models thereafter… a paradigm of iterative, incremental improvements at work. The problem, here, is that the benefits for the customer get smaller after each iteration. Sure, going from a huge phone that weighs over a kilogram to something lightweight that fits in your pocket (such as the ubiquitous Nokia 3310) offers a great benefit to the customer. However, at some point the next increments just don’t offer any real benefits. Who cares if their phone weighs 75g or 65g? Who cares if their phone is 6cm or 5cm in length? It might even become too small for convenient use.
All the major mobile phone manufacturers were playing the iterations game and trying to take the development of the competition just one step further. As such, they were completely caught by surprise when companies like Apple introduced the first smartphones. Suddenly, mobile phones emerged on the market that could shoot video, take photos, play music, send and receive email… and much more. Instead of spiraling down the iteration whirlpool, smartphones provided a springboard into the future from which these companies soared ahead of their competition; it goes without saying that the smartphone revolutionized the customer experience! Let’s just say that it didn’t end well for classic mobile phone manufacturers like Nokia and Sony Ericson. This is just one example of iterative development at work.
Do you remember the analog film camera?
Two big names in the industry at that time were Kodak and FujiFilm. Let’s focus on Kodak.
Although Kodak developed a digital camera way back in 1975, the first of its kind, the product was dropped, out of fear it would threaten Kodak’s photographic film business. In the 1990s, Kodak planned a decade-long journey to move into digital technology. Overall, though, there was little implementation of the new digital strategy, as Kodak’s core business faced no pressure from competing technologies. Kodak executives could not fathom a world without traditional film, so there was little incentive to deviate. Instead, they remained iterating through new generation of analog film, year-after-year. As we now know, however, consumers began to gradually switch to the digital options – DSLR cameras from companies such as Nikon, Canon and Sony. This was further accelerated by the ubiquitous addition of camera phones.
At the beginning of the millennium, film sales dropped sharply, which Kodak attributed to the financial shocks caused by the September 11 attacks. Executives hoped that Kodak might be able to slow the shift to digital through aggressive marketing. Here we have a company that developed the first digital camera but was unwilling to lead industry that they themselves initiated. They completely failed to anticipate how fast digital cameras became commodities, let alone the impact of cameras on cellphones, smartphones and tables.
So, how do we avoid making the same mistakes?
By asking the right questions. One of those questions is “What is the customer journey that we want to bring the day after tomorrow?” Notice how we’re focusing on the day after tomorrow. We’re not thinking about the immediate future. It’s not about next quarter, or even the current fiscal year. No, we’re taking about planning beyond the immediate horizon. Once we know where we want to be the day after tomorrow, we can use the technique called backcasting to determine where we’ll need to be tomorrow. This way, an organization can attain a competitive advantage over the competition by not stubbornly iterating, but by innovating the customer experience.
Make no mistake… It’s all about customer experience
It’s not about moving to the cloud or migrating to another technology. It’s about how you will improve the lives and experiences of your customer; the customer journey, if you will. Smartphones changed people’s lives because suddenly you could suddenly do so many things with a single device: take pictures, check your email, book a flight… the list goes on. All of this became possible using a device that could previously only be used to call and send text messages. Similarly, digital cameras became a success not because they offered inherently better technology than analogue cameras; in fact, the opposite is true. The image quality of early digital cameras was inferior. However, the entire workflow and, more importantly, the resulting customer experience was better. Users could now immediately see their photographs, download, edit and print without darkrooms or dependent services. Furthermore, it no longer mattered how many pictures you made, as the act of taking a picture became “free”. Instead of continuously buying film, customers could re-use storage cards. Thus, both smartphones and digital cameras are concrete, historical examples about how innovating the customer experience rather than iterating small technological improvements can drive success.
To conclude, the vision is not about technology. It is about improving the lives of your customers by offering better products and services. Technology is just the tool and driver to make the vision possible. That is also why you need a competent IT partner to support you during every step of this journey: from the brainstorm sessions and the ideas to the implementation and operational execution of your vision. We can help to execute on your vision, to be ahead of the change, to be ahead of the competition and to lead you into the day after tomorrow.