Adam Hartung produced an interesting; yet controversial piece in customer management. For decades, mottos as ‘customer is always right’, ‘ follow the customer’ and similar practices and focus on voices of customers overwhelmed managers, leaders and products innovators and designers. Companies used to continually listen to customers, alter their processes, add extra features or produce new model based on customers feedback. Marketing managers excelled in investigating means to collect, analyze, synthesize and transform customers’ inputs and feedbacks to workable products or services. Hartung is providing different perspective! Leaders have to listen to their competitors, or actually, observe and monitor their competitors moves. Though I do not see this as a new management trend or marketing shift, I tend to feel that; for the last decade, corporations innovation and change management programmes got twisted and diverted from reality; a cycle of hype overwhelmed blindly executives and diverted their efforts. I tend to relate these failures Hartung indicated to a more organizational-related problem rather than understanding competitors moves.
Basically, I would rather analyze PWC, EDS, Sun or Silicon Graphics (to name few from Hartung article) from Jim Collins model for failure in his book (How the Mighty Fall). These companies could have been in continuous falling cycle due to inevitable changes in the marketplace (globalization, technological changes…etc), however, in broader perspective, this could be due to their ‘undisciplined pursuit of more’ and/or ‘denial of risks and perils’, they hit failures in several perspectives. Though, some of these companies are still profitable and doing well as of today, however, according to Collins, they might not be great companies.
Though Hartung intellectual output is insightful, nevertheless, very controversial. I leave you to judge! Here are few lines, while you can read the full article at Forbes. Click here.
“It may be apocryphal, but Henry Ford supposedly said, “If I had asked my customers what they wanted, they would have told me a faster horse.”
It is not apocryphal that within a few short years of creating the modern personal computer market, International Business Machines ( IBM – news – people ) abandoned the PC. Its customers, who were data center managers, told them there was no future in the PC. Of course, that verdict came a few decades early. It cost IBM a lot of revenue.
Both stories illustrate the grave risk that lies in listening to customers–especially in listening to them about innovation and market shifts, which we’ve been seeing plenty of and which will surely not let up in 2010.
All kinds of businesses turn to their customers for insight. “Voice of the customer” research projects are a hallmark of currently popular lean manufacturing setups. Companies that use customer resource management programs (Salesforce.com ( CRM – news – people ) is one) typically turn to their biggest customers for input, because Pareto’s law tells them that 20% of their customers produce 80% of their revenue. But there’s no reason those biggest customers should be particularly perceptive.
In reality, customers rarely know what they want, beyond more, better, faster and cheaper. Customers, especially big ones who are locked in to your solution, don’t seek out anything really new, especially if it means they’ll have to invest in new tooling, systems or processes. They don’t look for change. Mostly they want only to tilt the adversarial customer-supplier relationship in their advantage, hoping they can persuade you to help them save money. And you mostly just want to sell them more stuff.
“Customer insight” is all about short-term tactics. It leads to things like deeper volume discounts, matching competitors’ prices, higher product quality, improved service, less carried inventory and more automation–all in exchange for bigger orders. It all reinforces the short-term business.”