At a Customer Value Proposition workshop I attended last year – when asked the question what value does your company create and for whom, I like so many others in the room responded with confidence and swagger along the lines of ‘I work for Company x and we provide highly flexible and agile software solutions to the world’s largest y…’. I was stopped abruptly in my tracks. ‘Stop talking about ‘what you do’ and answer the question’… was the retort…’what value does your company create for your customers?’ My confidence quickly dissipated as I struggled to address this simple question and spluttered a response while welcoming the interjection of the next hapless fool.
So what does value mean to our customers?
To ‘win’ we need to provide a value experience which is superior to the alternative offers which the Customer can choose from. In their book ‘Creating and Delivering your Value Proposition’, the authors sum it up nicely, Customer’s no longer buy ‘things’, they buy the experiences those things are able to offer. So to truly understand what our customer’s perceive as value we must start with acquiring a deeper understanding of who they are, what needs and desires they have, what motivates them, and what they like or dislike about the way particular products or services are made, packaged, marketed, sold and supported.
For years designers (and I was one of them), took existing innovations and either designed packaging to make them aesthetically beautiful and desirable to the customer or we enhanced brand perceptions by developing evocative advertising and communication strategies which appealed to their sensibilities. I recall endless excursions into the field building out sketchbooks of inspiration and insights into the customer and the world they lived in, coming up with new ideas and developing storyboards to demonstrate proposed concepts, testing and refining these back and forth until we got it just right. Those skills were quickly abandoned once I entered into the technology world in the early 90’s, a world driven by linear and silo’ed functions and processes which too often resulted in an ‘in-side out’ approach to creating, developing and delivering products en mass.
Innovation for many companies today is at the forefront of their organisation’s strategy and is seen as an important source of differentiation and competitive advantage. But do companies know how to innovate effectively around value creation? In his HBR article Tom Brown describes the design-thinking approach to innovation, which adopts at its core a human centric design methodology to help create new ideas which better align with the customers’ needs and desires and create dramatic new sources of value. It employs a designer’s awareness and methods to match what people need with what is technically possible and what a viable business strategy can convert into customer value and market opportunity. Thomas Edison one of the earliest proponents of design-thinking broke the mould of the ‘lone inventor’’ type by adopting a team orientated approach to innovation combining different types of people including thinkers, improvisers and experimenters. Through hard work, collaboration, diverse skills and embracing a trial and error approach truly great innovations such as the light bulb were borne.
Humans as consumers are not rational beings therefore solutions to their problems need to satisfy both needs and desires. Businesses who can appeal to a customer both emotionally and functionally stand apart even if they not the first to market. Design-thinking as a discipline provides such an approach to innovation. Now if only I could replay my answer to that question in that workshop.