Over the past 12 years, Bain & Company, has conducted global management studies to assess management trends among companies around the world and of different sizes to assess what tools seem to work best to improve the bottom line and their strategic position in the marketplace. The most recent study was completed in 2005.
Its results are eye-opening and a good reminder to associations as we assess our own approaches to improved productivity and efficiencies. Some highlights include the following:
Executives are becoming more customer-centric – they felt they do not know enough about their customers, with nearly two-thirds of survey respondents agreeing with the statement “insufficient customer insight is hurting our performance.” They also indicated they aren’t doing a good enough job of satisfying the customers they have.
Innovation is the next big challenge – Executives were concerned that there is an increase in the commoditization of goods and services all over the world . Over three-quarters believe that a growing percentage of the goods and services they offer “behave like commodities,” while 56% say they should “focus more on revenue growth and less on cost reduction.” Over 86% of respondents believed that “innovation is more important than cost reduction for long-term success.” Yet 73% of executives admitted they were not doing enough to support innovation.
Alas when asked what tools and techniques they commonly used to stimulate revenue growth and strategic positioning to enhance customer-centricity or stimulate innovation, executives indicated that investment in CRM (customer relationship management) and market segmentation were not meeting these needs. New approaches in “open market innovation,” “mass customization” and “customer loyalty” were being far under utilized to spur customer intimacy and innovation, despite data that showed that companies who pursued “open market innovation” as a major strategy were significantly more satisfied with their results than those who didn’t.
So What Can We Learn from This?
This data supports the London School of Business research into creating and sustaining innovation as shared in an earlier post. It also reinforces the latest successes in open business model and content co-creation by companies like InnoCentive, InnovationXchange, P&G and others.
If you don’t involve the customer in product or service development beyond the focus groups or advisory groups,
If you don’t explore how to create essential value from the customer point of view that is solutions-oriented,
If you don’t rethink how to engage your customers throughout the product and service development process,
Then you can expect further erosion of product,service or membership value as the confusing array of choices makes it harder for your target audience to determine where to invest their time and money.
And, you can see that a global company isn’t immune to the same problems you have.