Everyone wants to channel the incredible disruption and success of Silicon Valley, but how should we go about it? Whenever great leaders write their memoirs or business self-help books, common themes tend to emerge. The path to success is rarely straight, usually featuring a fair dose of good fortune, adversity, hard work and close calls that make the story compelling. And the companies involved often share the personality of their leader. These companies, particularly those in the technology sector, bear the hallmarks of resilience and adaptation that should see them flourish for years to come.
But when we look inside the typical organization, things aren’t so encouraging. We can see that many processes and practices are designed to limit exposure to the conditions that drive success. A new business forged in harsh market conditions can only succeed through a maniacal focus on customer needs. So why do so many companies restrict this frequent contact with their customers?
It isn’t all bad news. Some processes, such as those employed in product design, have established methodologies to drive user engagement and validation, from inception through to launch. Maybe this is because failure rates are so high if customers aren’t directly involved along the way. But others, particularly in the marketing space, fall short. From strategy to design to production, invalid assumptions are made about the customers’ motivations and behaviors, usually through rose-tinted glasses. The team works for months in their echo chamber, and then wonders why the end result falls flat. The failure to engage with customers across the board leads to a business that is less effective and ultimately more exposed to an unforgiving market.
Why is this so? Are the ideas themselves truly so valuable that we can’t possibly risk a member of the public leaking news of this idea that’s so majestic, so earth-shattering that they’d risk breaking the non-disclosure agreement to get the news out? Of course not. In fact from experience I’d say not involving the customers makes the opposite likely.
Assuming the leader has been brave enough to back an innovative idea, it tends to get watered down between agreement and launch as the lawyers and jobsworths have their say—unless the customer’s voice keeps the idea alive.
Given how many successful people and companies talk about testing and learning and iteration and validation, it’s remarkable how few companies actually put it into practice. Remarkable—but understandable. It’s time consuming, it can be expensive, it impacts your potential to hit deadlines and people don’t take criticism well. And that’s just a few of the reasons.
But when we start to pull the threads of those excuses, they start to unravel. Testing with customers can be expensive, but it doesn’t have to be. By putting effective constraints around the ideas being tested—for example using paper sketches rather than production quality assets—and insisting on quick and fast tests, we can prepare in a fraction of the time and cost. And as it turns out, the less time you invest in the assets, the better you take the criticism because you haven’t invested too much of your soul in it.
This one constraint can unlock a huge amount of potential. By testing early, we’re getting incredibly rich and valuable feedback from the marketplace. This doesn’t just help us to improve our idea, it can also help open up completely new avenues for exploration. It’s this repeated exposure to the market that helped Odeo pivot into Twitter, helped Game Neverending pivot into Flickr, turned Fabulis into Fab.com, and many more.
You might still find you can’t hit your deadlines, and that’s OK. Much better to know you’ll be failing early on in the process, and pursue an approach with far better prospects for success.
Put short, having a boss that supports and drives innovative behavior is the key to unlocking this huge opportunity.
One concern that has to be addressed head on is the huge percentage of startups that fail. It’s said that somewhere between 75 and 90 percent of startups fail in their first three years, and it’s fair to say no one’s career is going to last long with that kind of strike rate. But this is where comparisons with Silicon Valley and the world of startups isn’t really that helpful. You don’t need close inspection to see that the starting conditions are having a huge impact on the outcome. Large organizations have an existing successful business model and customer base that would be the envy of any startup. And by their very nature, startups are typically bringing an untested product or service to market that has to successfully jostle for space in the crowded lives and wallets of their potential customers.
But then on the flip side, protecting brand equity is also an interesting area to explore. You could argue that their nothing-to-lose attitude gives startups free reign to explore ideas that could cause irreversible damage to an established company. The bigger the brand, the greater the fear that a small mistake can have catastrophic repercussions—and the higher the chance that risks won’t be taken.
The point is that, while there are dynamics at play within the startup world that should be appealing to established companies, they can to be adapted for the corporate environment. Simply by getting closer to our customers we can plot a path to success.
Phil Whitehouse is APAC innovation lead at Digitas
Source: Campaign Asia-Pacific