Customer Innovation

Customer-Centric Strategy for Enduring Growth

Kogan Page, 2014

15 min read

10 take-aways

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What's inside?

Customer preferences and visionary innovation are not mutually exclusive.

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Two kinds of strategy offer companies good, but apparently quite different, paths forward. The first, “customer-centric” corporate strategy, has been around since the 1960s. The second, visionary “breakthrough innovation,” refers always to the example of its past master, Apple’s late CEO Steve Jobs. Both paths can lead to great market appeal, but is it possible to combine them? Well, Apple continues in many ways to blend these approaches successfully, and so does Netflix, known for both customer-pleasing programming and technical innovation. Can your organization do the same? In this structured guidebook, professor Marion Debruyne offers a three-by-three “framework” to help you pursue both missions simultaneously by taking three steps shaped by three customer-focused “lenses.” She advises companies to become “outside-in” or “customer-innovation” organizations by creating a “reverse value chain” that begins with customers’ wishes and then develops innovative products. Despite her text’s complexity and overuse of jargon, getAbstract recommends the meat of Debruyne’s approach to entrepreneurs, investors, business students, executives who create company strategy and mid-level managers who have to implement it.

Summary

The “Outside-In” Organization

Conceptual fads abound in strategic management and marketing; two popular concepts call for being either “customer centric” or pursuing “breakthrough innovation.” Many people believe these two concepts are opposites.

On the one hand, the customer-centric, “market-based or market-driven” strategy combines asking customers what features they want with the process of internal product development. Market-driven companies enjoy a strong record of success, but they risk expensive failures if they misunderstand customer needs. For example, this can happen when executives rely on a “product-centric” strategy based only on engineered product development. The customer-centric strategy often relies on “incremental innovation,” continuous small-step product improvements.

On the other hand, “breakthrough innovation” often springs from a visionary’s exceptional ability to create a product that people want before they even know it exists. For example, Steve Jobs, perhaps the best known of such masterminds, created the iPad with no market research at all.

Both strategies, as well as those in between, like incremental innovation, generally...

About the Author

Partner and associate professor at Belgium’s Vlerick Leuven Gent Management School, Marion Debruyne, advises businesses on market changes. She has taught at the Wharton School, the Kellogg School and the Goizueta Business School at Emory University.

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J. B. 6 years ago

This is a very interesting article which has give me food for taught on an upcoming proposed project.

Marion Debruyne