Customer-centricity for catalyzing solutions success
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We're thrilled that Tom Sadtler, a veteran marketer with deep experience in solutions marketing at HP, CA, and other industry leaders, has joined the fold at Solutions Insights as one of our trusted associates. Tom is particularly interested in organizational change for solutions, and agreed to follow Steve's recent post on organizational models with some suggestions on how companies can actually get moving on the necessary transformation.
Here are Tom's thoughts:
Most B2B IT companies these days understand the benefits of selling integrated solutions: improved customer satisfaction and the potential to sell bigger offerings with higher revenue and margin.
Similarly, many of these companies are skilled at creating a vision of the organizational integration that it takes to become a stronger, solutions-driven company.
The problem, which I’ve seen over and over during my last 15 years of marketing IT solutions, is that companies have great difficulty actually changing the processes, incentives, and overall employee behavior needed to attain the vision.
Building out a solutions capability doesn’t just “happen.” It takes investment, determination, and a commitment to long-term transformation. In our quarterly results-driven environment, few have the persistence and stamina to get through all the different levels of change. As a result, studies have shown that an unacceptably large percentage of technology purchasers have been dissatisfied with the ”solutions” they purchased, and didn’t received the promised benefits.
One needs three components to drive organizational change:
Dissatisfaction with the current state often comes from amplifying the voice of current or former customers. For example, many customers want more than a piece of software; they want the product integrated into their business or they want to know how best to use the product to solve a specific business problem.
For the vision, I would use the four-step customer centricity maturity model developed by Harvard Business School Professor Ranjay Gulati, author of Reorganize for Resilience: Putting Customers at the Center of Your Business.
Level 1: Companies at level 1 are very product focused and have an "if I build it, they will buy it" mindset. The focus is on technological excellence with some diffuse understanding of customers who may buy the product. Level 2: Companies at level 2 have a basic understanding of their customers, typically coming from some market research and segmentation studies. Many firms get lulled into complacency at this stage. They start talking about customers and distinct segments and believe that this alone is an indicator that they have now made the shift toward an outside-in perspective. Frequently such firms still remain fundamentally oriented toward pushing products, albeit in a more refined and targeted way. Their market research starts to permeate their sales efforts but does not have much of an impact on their product development and other upstream activities. Level 3: The move from level 2 to level 3 is a major shift in both mindset and actions. The focus here migrates from selling products toward solving customer problems. In so doing, firms become adept at comprehending what their customers' deep-rooted issues are and look for ways to position themselves to address those issues. In trying to go from insight to action, these firms seek to make their internal silos more permeable while also building bridges across them wherever necessary. They shift their culture so that some of these ideas begin to permeate and shape the behaviors and actions of their employees. Level 4: At level 4, firms become agnostic about whether they produce all the inputs they provide to their customers and, akin to a general contractor in construction, look for ways to assemble the appropriate pieces that may go into tackling customers' challenges. A level 4 firm is more attached to producing solutions to customers' problems than it is to the products and services it offers. This intellectual, structural, and emotional transition means that the company is no longer concerned whether the inputs it uses to solve customers' problems are its own or assembled through a network of partners.
For the practical next steps, I would find a group within the organization that is already operating at a more mature level than most, and point to its success. Most large organizations have at least a few of these groups. As the author William Gibson has said, "The future is already here — it's just unevenly distributed." Highlighting the success of the most customer-oriented groups along with the voice of other customers that are dissatisfied with the more general current state increases the motivation and underlines the practical next steps toward the more customer-centric future.
*Check out videos from Steve Hurley’s recent conversation with Ranjay Gulati on the new Solutions Insights YouTube channel.