Innovation by listening carefully to customers

Long Range Planning, Vol. 26, No. 3, pp. 95 to 102, 1993 0024-6301/93 $6.00 + .OO Printed in Great Britain 0 1993 Pergamon Press Ltd

95

Innovation Bv Listening Carefully /

to Customers

Fernando Flares

The author offers a dramatically different way of listening to customers in today’s rapidly changing business world. Com- pany representatives would go beyond the stated wants and needs of potential customers. They would listen for the unspoken concerns the customer has about the future, behind their words, behind even their body language, facial expressions, gestures, and all the rest. These listeners would expand their focus to include the customer’s moods, predispositions, culture and background, the problems and opportunities that they are facing now, and those they may be facing in the future. What remains unsaid-even what is simply taken for granted-is often the most important part of the conversation. Listening, as discussed here, is more than the information-gathering of traditional market research. Listening is establishing and building rapport, with the goal of creating a different, more collaborative relationship with the customer. Listeners concentrate on the key distinctions that can serve as a bridge between their world and the customer’s The skilled listener becomes ever more sensitive to how a customer’s past has shaped his or her view of the market and the world. Company representatives bring their own backgrounds to illuminate customers’present situations in new ways, and help them invent opportunities for the future. Then those listeners are in a position to explore the kinds of products and services that will produce the best value for the customer, where those offers can be improved, and what new offers can be invented.

The world experiences upheavals from time to time that change forever the way we do things. Christo- pher Columbus stumbled on an unexpected island and humanity was never the same again. The harnessing of electricity opened the way for wholly unpredictable technologies in power, light, habi- tation, transportation, communication and just about everything else. Now we are talking of the vast expanse of the planet as a single global village. Ideology and religion, distance and time, ethnicity and language are no longer the barriers to business that they have been in the past-the same blue jeans dance to the same rap beat in Novosibirsk as in New York City.

Somehow, amid all this ever-accelerating change,

Dr Fernando Flores is Chairman of the Board and Founder of Business Design Associates, Inc.

most people would like to live together in relative harmony, to survive our differences, to give and to take, to sell and to buy, and, as the twenty-first century approaches, to adopt new ways of listening to each other-active listening, engaged listening, heedful listening. Statesmen are adapting to this need, and so, too, must companies that expect to trade competitively in markets that span the globe and demand a multiplicity of choices.

The traditional ways of doing business are no longer adequate. Serving a predictable market with generically designed products and services is a thing of the past. It is not enough any more to gather statistical information on the largest possible market and then serve it at the lowest feasible cost. Today’s global trade is not driven by product or market, but by customers’ wants, whether what they want is clearly expressed or vaguely implied.

Customers now demand that a company’s offerings be individualized to meet particular needs, situations and lifestyles. And they want products and services of superior quality available promptly. Never before has such a burden been placed on managers. The requirements are for innovation, flexibility, improvization and, above all, thoughtful anticipation based on active listening to customers so as to determine their concerns. Being prepared to deliver on such requirements will require companies to cultivate new practical competences, to redesign the ways they do their work through business processes, and to orientate themselves to their customers in a new way.

Listening is More than Hearing In America’s contemporary youth culture, a fre- quently heard phrase is ‘Do you see where I’m coming from?’ This replaces the old-fashioned, ‘See what I mean?’ But we might use it for our purpose here as a starting point for understanding the dramatically different way that we do business in our changing world today. It is no longer enough to

96 Long Range Planning Vol. 26 June 1993

know where we ourselves are coming from, given our education and background, culture and context, habits and prejudices. We must concentrate even more on where potential customers are coming from. Are we truly hearing what they are saying, over the din of our own experiences? Are we hearing it in the context of their culture, education and background? Or are we hearing only what we arc telling ourselves, without the benefit of insight into where customers are ‘coming from’, and, consequently, probably mishearing them?

Listening to build a true collaboration with the customer may prove a challenge-a difficult skill to master-to many, it requires more than simply hearing and understanding the words. It demands attention to other aspects of conversation: body language, facial expressions, gestures, tone of voice, and all the rest. More importantly, it calls for empathy, getting inside the speaker’s mind and mood, pushing past his or her own assumptions that leave much unspoken. For what remains unsaid may hold the most value, while the words are often mere ‘window-dressing’ rhetoric.

To illustrate, let us imagine two men sitting in a sweltering railroad car travelling near Calcutta. Each is sweating profusely. Each can see that the other is equally uncomfortable, broiling away in silence. And then one says, ‘Sure is hot in here’. The other grunts, ‘Sure is’. On the informational level, not a scrap of anything new has been conveyed. And, yet, something important may have taken place all the same. The way has been cleared for many possibilities of profitable friendship based on mutual discomfort made into a bonding experience by a banal conversational gambit. On the other hand, the second man could respond with, ‘Of course it’s hot, you idiot’, and a wholly different atmosphere would be created. Once a conversation about the heat began, the two men would be sharing a potential relationship and future possibilities that had not existed before.

Listening, then, is a good deal more than the information-gathering of traditional market research. Listening is primarily about establishing and building rapport. To be less than careful and attentive in this regard is to court failure.

A classic example is the Ford Motor Company’s self-inflicted disaster in marketing the Edsel in 1957. The heavily advertised automobile failed to sell and, amid scorn and derision for everything from its looks to its name, left the market in 1960. Barabba and Zaltman in their recent book, Hearing the Voice of the Market, noted that, although the car’s promoters claimed to have done extensive research ‘on every aspect of the Edsel’s entry into the market’, whatever information was thus acquired was hardly put to productive use. The authors quoted an article by John Brooks in the 26 November 1960 issue of The New Yorker as

reporting: ‘. . . Edsel was named for the father of the Company’s president, like a nineteenth-century brand of cough drops or saddle soap. As for the design, it was arrived at without even a pretence of consulting the polls, but by the method that has been standard for years in the designing of automo- biles-that of simply pooling the hunches of sundry company committees’. Barabba and Zaltman cited a contrary example in Akio Morita, the founder of miraculously successful Sony, who scoffed at market research, saying: ‘Our plan is to lead the public to new products rather than ask them what they want. The public does not know what is possible, but we do’.’

Some Listen, Some Don’t The kind of listening we are talking about here, going beyond market research to the individual concerns of customers, could have spared Ford its Edsel embarrassment. More recently, it could have alerted U.S. businesses to the need for reform in the relationship between customer, provider and sup- plier that comprises the&St-in-Time (JIT) approach, which was pioneered in Japan in the 1950s and now seems to be catching on everywhere. Ironically, JIT had its roots in America-specifically, in American supermarkets-but it took an observer with a different background to grasp its significance. Today, many American producers are chastened by Japanese success with the theories of Dr. W. Edwards Deming, whom they ignored when he originally presented his ideas. Still, many also have trouble accepting JIT, which runs counter to American manufacturing tradition.

This tradition, in its basics, dictated that extensive inventories had to be maintained at all times in order to assure that the machines of mass production never stood idle. To guarantee full utilization of equip- ment, huge inventories were tolerated as a costly but necessary surplus in the American system. But scarcity, not surplus, was the hallmark of life in Japan after World War II, and the prime task for manufacturing engineers at Toyota, for example, was the elimination ofwaste. Giant inventories were out of the question. The answer they found was JIT-to build only what was needed when it was needed, restocking only as each item left the storeroom and was put to use.

Taiichi Ohno of Toyota, one of the inventors ofJIT, gives full credit to American supermarkets as his prime inspiration: ‘from the supermarket we got the idea of viewing the earlier process in a production line as a kind of store. The later process (customer) goes to the earlier process (supermarket) to acquire the required parts (commodities) at the time and in the quantity needed. The earlier process immediately produces the quantity just taken (restocking the shelves)‘.*

innovation By Listening Carefully to Customers 97

Toyota’s success in listening to other backgrounds and traditions is by no means unique. ABN/AMRO, Holland’s largest bank, has demon- strated a similar sensitivity in growing to be the 13th biggest bank in the world, with 1470 branches, including 417 abroad. Matsushita, one of Japan’s electronics giants, has launched a listening programme to hear what foreign managers of its overseas subsidiaries have to say; about 100 of them are being brought to Japan each year, to work in company offices and factories, not only to learn but also to report on their experiences to Japanese colleagues. In this way Matsushita is trying to catch up with rival Sony, which for years had been similarly nurturing its managers, both foreign and Japanese.

Monsanto’s Nutrasweet faces a special problem. The billion-dollar unit will lose its very profitable lo-year hold on the sweetener aspartame with expiration of its patent at the end of 1992. It is reorganizing ‘along customer lines’ to meet stiff competition from a host of synthetic, low-calorie sweeteners newly freed to use aspartame. Nutra- sweet officials say that they expect to lose $250m in the first year of free competition. Anticipating heavy penetration by new competitors in its U.S. market, the company is working on new, cheaper super-sweeteners-‘we’ve had some customers in for taste tests’-and is looking around overseas, for possible acquisitions, mergers and joint ventures. Also, as a result of listening to the shifting concerns of the ageing baby-boomer market, it is test- marketing a chain of fitness centres for adults over 50, a population segment that will expand dramatically in the mid-1990s.3

Few American businesses have utilized listening for customer concerns more astutely than the McDonald’s Corporation. Now, the fast-food giant is working with Turner Broadcasting System’s CNN on a private television network that would beam customized news, entertainment and advertising into its 8600 U.S. restaurants. It would be similar to CAA’s Check Out Channel in 15 supermarket areas and Airport Channel in passenger terminals in several cities.4 McDonald’s also is putting roasted chicken, pizza, lasagne, and other pasta dishes on its menus because it found ‘people want something more than just hamburgers and fries’.5 Stressing environmental correctness is another new listening- based gambit for McDonald’s. And, moving farther afield but still related to the company’s focus on families, it has opened near Chicago what may be the first of a chain of indoor play centres, not attached to any McDonald’s restaurant, where parents can watch from a quiet room while their children play safety.”

Listening paid off for Swatch Watch U.S.A., a subsidiary of SMH, Inc. based in Biel, Switzerland. Its chronograph, introduced in 1991, turned the firm around from going under with a dying brand

to sales that soared to $400m or more worldwide. It also sparked such widespread interest in chrono- graphs and sports watches that an army of competitors joined Swatch in the field, including Guess, Fossil, Anne Klein, and Timex. Altogether, these leaders accounted for half the market, but Swatch stayed ahead with a ‘veggie line’-watches shaped like a red pepper, a cucumber and a bacon-and-egg combo, retailing for $100 in a limited number of only 9999 worldwide-that had people waiting in line for hours to buy.’

Success has come in a variety of ways to those managers who have organized their companies around better listening and coordination. Toshiba concluded that its subsidiaries responded to market needs more effectively ‘by designing and building products closer to the markets where they are sold’. Consequently, it opened a factory in San Jose, California, adding 100 new jobs, to produce a high- capacity computer disc-drive designed and engi- neered at the company’s Irvine headquarters.* Another example is IKEA, the phenomenally successful Swedish company that is now the largest furniture retailer in the world, with annual sales over $3bn. Heavily dependent on JIT, it has developed all of its own software to communicate electronically with two primary distribution centres, filling orders and restocking when inventories run low. All links in the distribution chain are monitored to insure timely delivery of products to retail stores, including 14 in the United States.”

Body Shop, founded 16 years ago by a husband- wife team in Littlehampton, England, now sells about $400m worth of cosmetics annually under a philosophy devoted to using natural materials and aggressively preaching environmental protection (‘profits with principles’). Founder Anita Riddick says the firm is often viewed as ‘a very flaky, hug-a- tree company’, which fits the lifestyles of many customers, but, like Walt Disney, it rigidly pursues store uniformity and legal pursuit of copycats, in efforts to maintain and protect its key recognition factor for its customers.‘O Kraft-General Foods and others are exploring the new concepts of ‘partnering’ and ‘category management’, both heavily indebted to listening to customers, JIT and creative use of modern technology in what John Humble and Gareth Jones have labelled ‘a climate for innovation’.” Partnering and category management work like this: Instead of depending upon the old concept of product/volume driven sales, particular supermarkets are identified, along with the types of customers, based on lifestyles and demographics, who shop those stores. Scanner data reveal top products in a category, as well as in a department and which among them is growing fastest, i.e., category management. A partnership can be formed on the basis of this knowledge between retailer and manufacturer, to the consumer’s ultimate benefitI

Another kind of partnership made possible Canon’s


development of EOS, the high-quality, extraordin- arily popular autofocusing camera it introduced in 1987. Canon had determined the market existed, even though nothing like EOS had been created before. It combined its proven engineering and manufacturing expertise with Motorola’s micro- controller technology, and the happy partnership flourishes to this day.13

All of these examples of effective listening and partnering represent valuable extensions beyond refinements in marketing research or computerized linkages of customers’ interests with R & D possibilities, as described in some recent literature.14

Listening in Action Companies used to be able to control their own destinies by dictating the conditions of satisfaction in the marketplace. Interpretations of the past would create the present market conditions and the future was predicted by extrapolating from the present. But, today, customers are striving to invent the future for themselves, and careful attention must be paid to discover where they are headed. It is a challenge and an opportunity. To take advantage of it requires a new way of looking at change- through the eyes of the customer with full understanding, not only of their needs, but also of their world and their concerns for the future.

This kind of listening involves keen attention to customers’ predispositions-how their background structures what they see as necessary, desirable, or even possible. Predispositions are planted in all of us in childhood, arising from the social and cultural environment into which we were born. Some predispositions fall by the wayside as we gain skills and sophistication, but many stick with us forever. Most Russian children, for example, would not understand a suggestion that they earn pocket money by setting up a lemonade stand on a street corner. But most American children would get the point right away, having seen older siblings and friends cash-in on such rudimentary entrepreneur- ship. Many Russian people are going through the ‘lemonade-stand syndrome’ in transforming cen- trally controlled communism to the market-based economy of democracy. Most do not know how to do it. Very, very little in their background predis- poses them to buying and selling and profit-taking. They know all about standing in line, but little about comparison shopping. Because companies, too, have predispositions, it will be interesting to see how IBM, regarded as staid and stable, and Apple, seen as iconoclastic from the start, get their managements together in their new relationship. Obviously, much unlearning as well as learning is in order.

A company representative listening for these predispositions has critical leverage. They have the

freedom to move beyond customers’ stated needs to explore the whole world of their concerns, and to invent offers that are more satisfying than customers could have imagined themselves. The result is greater opportunity for both customers and the company. A simple example is the case of the man who enters a clothing store and tells a clerk he wants to buy a shirt. The clerk, who is astute, looks at his customer and sees a young professional probably poised for quick ascent up the corporate ladder. A conversation with the customer confirms the clerk’s initial impression. He may need a shirt, but he also wants to look good, impress his superiors and thereby enhance his chances of success. In partnership, the buyer and seller create a future consisting of, not simply the needed shirt, but suit, socks, tic, hat, topcoat-an entire wardrobe designed for a young executive. Similarly, IBM’s early customers expressed a need only for a machine to do mathematics quickly; what IBM saw was the possibility of a new way of running businesses, and by automating simple, repetitive tasks like payroll- processing and list-making, it sparked a revolution that led to discovery of more and ever more applications for computers. No customer expressed a need for a Walkman sound system, but soon after Sony invented it, everyone had to have music with them wherever they went. Nike and Reebok invented concerns for innovations that elevated the lowly sneaker to high fashion.

Organizations like IBM, Sony, Nike, and Reebok went beyond listening and inventing future possibilities to execution-they mobilized their resources to push those possibilities to fruition. That is the central issue. Today’s global businesses must inte- grate the activities of teams and individuals on a planet-wide scale. This co-ordination must be fast and flexible, adjusting rapidly to changing market conditions. It requires the rigorous management of three aspects of providing satisfaction for the customer-business, information and material processes, as described in Figure 1.

In the traditional material and information processes, people co-ordinate the acquisition, storage, transformation and movement of raw materials, parts, products, documents and electronic communications. To ensure that listening for the customer’s concerns runs through the entire company, we have distinguished a third kind of process. In business processes, people co-ordinate the transactions that lead to customer satisfaction. A business process is a linked set of internal and external transactions, or workflows, that all share the same basic structure illustrated by the business actions diagrammed in Figure 2.

In this graphic illustration, the four phases of a basic workflow can be distinguished:

A The customer makes a request or the provider makes an ofir.

Innovation By Listening Carefully to Customers 99

I

Business Process

Satisfy customers, complete offers and requests, satisfy stakeholders, and accommodate custom requests.

l Workflows l Roles l Acts l Conditions of satisfaction l Time

l Completing transaction and producing satisfaction when a customer requests a product or service, or a company offers a new product.

l Sales order from customer triggers transactions with inventory, manufacturing, and distribution to fulfil.

Information Assemble data into l Documents and records Order data entered into a Process information products, i.e. l Data database, computer

inscriptions and records l Storage and retrieval, communications for used to support acts taken transmission, manipulation, financial transactions, in business processes or assembly, and comparison processing of invoices, materiel processes. information systems.

Materiel Process

Assemble components into l Product unities Movement of paper in the product unities. l Raw materials and office, manufacturing

components products in assembly lines, l Transportation, storage, distributing and delivery of

assembly, transformation, products. and comparison against standards

Copyright @ 1991, Business Design Associates, Inc. All rights reserved worldwide.

Figure 1. Processes for customer satisfaction

Coordination between a Customer and a Performer to fulfill the customer’s Conditions of Satisfaction.

Request or offer

CUSTOMER

/- ~#;;I;;;

Cycle time

+L& Declaration of

satisfaction Declaration of

completion

Copyright @ 1991, Bueirteee Deeign Aueooiarea, inc. All right8 reeorved worldwide.

J

Figure 2. Business actions to satisfy customers

Long Range Planning Vol. 26 June 1993

The provider makes a promise to perform, the customer makes a promise to pay, and they reach ugreement, whereupon they have invented a future action together.

The provider, once having performed, makes a declaration of completion.

The customer, accepting the performance, makes a declaration of satisfaction.

This is the critical link that closes the loop of listening. Even after all the work is agreed upon and completed, the customer may find that what has been produced does not really address his or her concerns. Companies that manage this critical link will be able to keep collaborating with their customers to continually reinvent their offers, rather than losing them to the competition.

This workflow is quite universal, independent of specific communication technologies, and even of different languages and cultures. It presents a simple set of individual elements offering possible ways in which people can co-ordinate their actions, to ensure that they satisfy their customers and invent new possibilities for the future.

Training and Tools for Listening Even the most conscientious company, focusing

earnestly on what the customer states as requirements, can still fail to satisfy the client in the end. What the emerging global marketplace calls for today is competence in listening for partnership. Market representatives must be trained to listen for, not only what customers say they need, but also what concerns they articulate, clearing the way for the invention of possibilities for the future. Excellence in producing satisfaction requires high reliability in sensing customer desires and exquisite timing, meaning companies must be constantly reconfiguring their operations in anticipation of the customer. Workers must be, not simply retraining occasionally, but immersed in constant learning, maintaining a high level of skill, able to work autonomously, and also serve as mentors to spread competence throughout the company. As Dietger Hahn has noted, ‘On the one hand, this means to delegate responsibility; on the other hand, it involves that managers take responsibility, that is, they are willing to justify their actions’.‘5

Likewise, employees make a commitment to immerse themselves in practical learning on the job, always reaching for the next level of skill so as to provide more satisfaction for customers. Figure 3 presents the development of practical learning in a progression through six levels of competence- Beginner, Advanced Beginner, Competent, Profi- cient, Virtuoso, and Master. For each level, it

Past Traditions Present lnvolvment Future Breakdowns

end Diacouraee Experience lnvolvment Expectation and Opportunities

Master Historical conversations about Observation of and/ Willing and able to Spots unusual Speculatea about how

the evolution of the practice or participation in re-invent the situations and emerging changes in the

and its piece in the culture at hiatoricel changes in practice to suit opportunities for culture may affect the practice

large. the practice. changes in the re-invention. end require re-invention

world context. or modification.

Virtuoso Historical conversations about Past successful Moves without Anticipates the Formulates strategy for

innovators in the practice and performance in the deliberation in the world context end moving in the practice

its relation to different cultural practice in a variety world of the practice, sees the neceaaary according to emerging trends

life-styles. of different contexts. produces excellence action immediately. and likely advances of

in others. leading-edge practitioners.

Proficient Existing community atendarda Paat action in a Performs with Begins to see way* Seeks out ways to improve

of excellence (benchmarks) large number of excellence and to configure performence and make more

and conversations about crises situations and begins to see the resources for efficient use of reaourcee.

and opportunities in the experience of their practice in its world super-satisfactory

current aituation. outcome. context. performance.

Competent Standard practices of the Previous respon*es Can complete the Can set priorities Anticipates concearna of the

community for producing and to symptoms and practice to the and anticipate the client or community and

aaaeaaing aatiafactory initial practical aatiafaction of rlient resources needed breakdowns that could

performance. experience in the or community. for producing prevent satisfactory

domain. satisfaction. completion.

Advanced Existing aphoriame and Previous use of Begins to recognize Begins to spot Anticipates breakdowns

Beginner rules-of-thumb for dealing with rules relating aspects of the future breakdowns beyond his competence and

aituationa identified by the features of the practice situation and opportunities speculates about what must

presence of various aymptoma. enviroment to assymptoms for signalled by be learned next.

correct actiona. future possibilities. symptoma.

Beginner Basic distinctiona and existing Previously learned Followa rules, Can anticipate only Oriented toward aatiafying

traditiona of instruction in the practices in related instructions, and what the rules say the instructor by applying

practice. domains. previously learned will happen. rules correctly.

standard practices.

Copyright @1991, Business Design Associates, Inc. All rights reserved worldwide.

Figure 3. Competence levels for employees

Innovation By Listening Carefully to Customers

outlines a person’s past background and experience, their present capabilities, and the kind of orientation they may have as an employee toward the future.

Cultivating the skill to build trusting, collaborative relationships, customer representatives become a different kind of observer of customers’ worlds. In Figure 4 we outline one set of observations that representatives might use to orientate their listening and learning. These are not the only questions to consider in listening for a potential customer’s concerns, nor are they necessarily the right questions for every corporation. But they illustrate the tone and direction that are necessary for developing a collaborative relationship with customers.

The chart can serve also as a reliable checklist or questionnaire for managers who might like to measure their own organization’s listening potential. It can be summarized into four principal areas:

Mission of Customer in World Context-What client concerns are inherited or historical, and how do they connect with your own? What are the client’s present declared mission, standard practices and emerging concerns? How to help redefine the client’s market identity in the future?

Innovation-What is the history of the client’s technologies, and of your own? What are the client’s current core technologies, technology practices, and potential new technologies? What can you draw from your own experience to induce new client offers in the future?

Everyday Production of Satisfaction-What standard practices are inherited or historical, and how do they connect with your own? What do

101

the client’s units do today, what are their production and co-ordination standards and what new offers is the customer pursuing? What can you draw from your own experience to enhance the client’s everyday co-ordination of action in the future?

Training in Existing Internal Practices-What are the client’s educational assumptions and practices, and which do you share? What are the customer’s views on current employee training, employee development and needed skills for new offers? What can you draw from your own experience to promote competence and learning in the client’s company for the future?

Companies throughout the world are beginning to see this kind of listening as a competitive necessity. U.S. automakers, showing a comeback that is looking stronger and more intelligently crafted than expected, are enthusiastically collaborative in their approach to buyers. General Motors, for example, launched a programme to replace without charge, rather than repair, a variety of new engines that drew buyer complaints in late 1991. Among the 1992 models involved were some versions of the Buick Skylark, Oldsmobile, Achieva, Pontiac Grand Am, and some GMC and Chevrolet pickup trucks. Motor magazine senior editor Tom Wilkin- son called this aspect of GM’s customer-is-king campaign ‘a win-win situation’.lh In pharmaceuti- cals, Eli Lilly & Co. has adopted ‘Success through People’ as its sales philosophy, of which E. M. Cavalier, vice president of sales, said, ‘We take our responsibility to customers very seriously. Every employee adheres to the company’s mission state- ment and vision, which decrees, among other things, that all company activities should be con-

Past as Received Traditions and Discourses

Present Declarations and Practices for Coordination

Constitution Standard Practices New Offers

Future as Possibilities

for Customers’ Identity

Mission of What central concerns do What mission in What are the practices What emerging What practices can you bring

Customer customers inherit from the the world have for assessing end concerns are being from your own experience that

in World surrounding industry and customers declared7 changing customers’ addressed by the can transform the customem

Context culture? How do they connect strategic direction7 customers’ new identity in the marketplace7

with your own historical CffWS?

concerns?

Innovation What are the histories of critical What core What practices are in What innovations in What practices can you bring

technologies in your own and technologies have place for creating technology and/or from your own experience that your customers’ industries7 customers declared new offers and for production will be can suggest new offers for

es the basis for their continuous needed to produce customem to make? offerings? improvement? the new offers?

Everyday What standard practices have

Production cuatomen inherited from of previous traditions7 Which do Satisfaction you share?

What are customers’ What are the standard What are the specific What practices can you bring existing business practices for new offers customers from your own experience that units and their areas production and arca pursuing7 can enhance the customen of responsibility? coordination in existing everyday coordination

customers’ companies? of action?

Training in What practices and assumptions What are customers’ What are the essential What new skills must What practices can you bring Existing about education do the declarations about akills required by customers develop from your own experience to internal customers hold, and which do employee training customers’ employse~? internally to wppcrt enhance competsnce and Practices you share with them? and development? the new offers? learning in the cwtomers

ogsnization87

Copyright @ 1991, Business Design Associates, Inc. All rights reserved worldwide.

Figure 4. Listening to customers


ducted with a thirst for excellence, with the highest ethical standards and with a customer orientation.“’ Another who listens when customers talk is folksy ‘ad wizard’ Leo Burnett, creator of such advertising icons as Tony the Tiger, the Jolly Green Giant, the Pillsbury Doughboy and the Marlboro Man. Bur- nett’s Chicago-based advertising firm was flourish- ing while Madison Avenue suffered recession. Burnett said he concentrates on pleasing current clients (half have been with him for 20 years or more) and avoids spending much time on going after new ones, as many firms do.” He depends upon his considerable credibility to get them. Industry credibility, on the other hand, eluded IBM and Apple, whose technology-development agreement failed to convince sceptics that it would improve quality and lower prices of computer software. Hugh Brownstone, manager of strategic planning at Barclays Bank in New York, said, ‘While IBM, quite naturally, tries to regain control of the operating system (market) on one hand and chips on the other, someone else could come along and build an object-oriented voice operating system and that would blow everybody out of the water’.”

Conclusion Today’s global market, constantly changing in a world that seems always in dizzying transition, can no longer be served with generically designed products and services. The time is past when it was enough to gather statistical information on the largest possible market and then serve it at the lowest feasible cost. Global trade is not driven by product or market today but by what will satisfy individual customers. This is not simply what people say they need. It is, above all, the concerns they have about the future, and it behoves the successful provider to discover what they are.

A company’s offerings today must be individualized to meet particular needs, situations and lifestyles. Customers demand products and services of superior quality delivered with speed. The requirement is for innovation flexibility, improvization and, above all, anticipation and invention of new opportunities in active collaboration with the customer. Responsive listening and execution will depend on continual redesign of business processes, cultivation of new skills, and a basic reorientation toward the customer and work.

The organization that is listening, that organizes for completion and satisfaction and that builds on learning will gain a decisive competitive advantage into the next century. It will be a leader in observing and adapting to the new ways of doing business in

the new world that is rapidly unfolding before us every day.

References

(1) Vincent P. Barabba and Gerald Zaltman, Hearing the Voice of the Market: Competitive Advantage through Creative Use of Market information, Harvard Business School Press, MA (1991).

(2)

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Ohno, Taiichi, Toyota Production System: Beyond Large-Scale Manufacturing, Productivity Press, Cambridge, Mass (1988).

George Lazarus, Facing U.S. heavyweights, NutraSweet looks abroad, Chicago Tribune, Business, 4, 2 July (1991); Nancy Ryan, Sweat equity: Fit Baby Boomers could fatten NutraSweet, Chicago Tribune, 1, 11 September (1991).

Nancy Ryan, McDonald’s, Turner Broadcasting cook up TV venture, Chicago Tribune, Business, 1, 19 November (1991).

Nancy Ryan. McDonald’s putting roasted chicken, pasta dishes on the front burner, Chicago Tribune, Business, 1,25 September (1991).

Peter Kerr, Tempus fugit, but you can buy it, New York Times, D-l, 10 October (1991).

Madonna Behen, New ideas have Swatch ticking again, Women’s Wear Daily, 1, 30 August (1991); Bill Workman, Veggie Swatch watches set off feeding frenzy, San Fancisco Chronic/e, B-5, 12 September (1991).

Dean Takahashi, Toshiba develops disk drive of high capacity; Computers: The firm has opened a factory in San Jose and will hire up to 100 employees to produce the device, which can store one gigabyte of data, LosAngeles Times, D-6,6 August (1991).

‘Just-in-time’ methods help fuel IKEA growth; Success of furniture chain is based on more than marketing savvy. Chain Store Age (Executive Edition), 67 (7). 49, July (1991).

Martha T. Moore, Body Shop: ‘Profits with principles’; Owner promotes corporate activism, Money, 8-B, 10 October (1991).

John Humble and Gareth Jones, Creating a climate for innovation, Long Range Planning, 22 (4), 46-51 (1989).

Ken Partch. ‘Partnering’: a win-win proposition or the latest hula hoop in marketing, Supermarket Business, 46 (5). 29, May (1991).

Picture Perfect, the Canon EOS, Electronic Engineering Times, M-12, 30 September (1991).

See, for example, T. M. Pavia, Using marketing models in strategic planning, Long Range Planning, 6 (1991); A. R. Andreason, Backward marketing research, Harvard Business Review, May-June (1985); A. S. Lauglaug, Integrating customers and innovation through technical-market research, Long Range Planning, 2 (1993).

Dietger Hahn, Strategic management-tasks and challenges in the 199Os, Long Range Planning, 24 (I), 26-39, February (1991).

Adam Bryant, G.M. policy: New engines, not repairs, New York Times, 50,9 November (1991).

Kerry Rottenberger, Eli Lilly lauded for its bedside manner, Sa/es & Marketing Management, 143 (1 1 ), 56, September (1991).

Advertising: Leo the Gentle, Economist, 320 (7721), 58-59, 24 August (1991).

Robert L. Scheier, Skeptical industry will need more results, less rhetoric; The Apple, IBM alliance, PC Week, 6 (28). 14. 15 July (1991).

Innovation by listening carefully to customers

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