Range Anxiety: Customer Issue or Product Issue?

Electric car

I mentioned in a previous short article about how companies can misinterpret what their clients want and in another about industry reactions to issues. In this article, I want to explore how companies can force their issues onto the customers.

Background

I was reading up on electric cars (EVs) and in the last year the phrase “range anxiety” has become commonplace to the point that it’s widely understood without explanation. That doesn’t prevent traditional news outlets from generating a preamble for it. Over time, those preambles will disappear, partly due to the phrase being recognisable by the general population and partly due to the issue not existing (fingers crossed).

However, before we get to that stage, there’s an issue. And it’s not the range anxiety that’s the issue. Instead, what’s intriguing is that it’s a problem with the overall product and the ecosystem that product operates in, yet the term is one that is assigned to the consumer of that product.

As a Driver

I don’t have range anxiety. I have an expectation that charging an EV is an immature industry. Too few charging points, too many charging points blocked (by non-EV cars or by EV cars that have already charged), too many complications with charging (points not working, financial mechanics not working, etc).

That’s not range anxiety, that’s a broken ecosystem.

The more expensive (and the new, forthcoming) EVs have a range that is in the same order of magnitude as the petrol or diesel engine vehicles. It’s not quite as good, but it’s getting close. The number of petrol-filling points dwarfs the number of electric charging points. That’s not news. We see government initiatives and industry initiatives to alter that ratio. So we’re seeing change, but it’s slow.

Ecosystem

The problem is one with the ecosystem.

Imagine the opposite, had we only installed 300 petrol stations in the whole country. And restricted the flow of petrol through the nozzle so that drivers to spend 30 minutes filling their cars. Would the drivers be suffering from range anxiety? No, it would be a non-suitable solution.

So why has the car industry (and the press) adopted the concept of range anxiety and given that problem to the consumer?

It’s a nice, let’s-not-blame-ourselves way of saying we haven’t built the entire solution. The car manufacturers have built their part, but not completed on the rest of what’s required to make their product a fully-workable solution. I can think of one manufacturer that has made some attempt to address that; Tesla have installed their supercharger network. Living beyond 50 miles of London, there aren’t that many of those around so it’s of limited use. There are some, but you have to be on those motorways to realise the benefit. I know that one group of manufacturers under the name of Ionity (Audi, Porsche, Daimler, BMW & Ford) in conjunction with ABB are also installing chargers in mainland Europe, so that’s another manufacturer-led attempt to influence the ecosystem.

As a Driver (reprise)

I don’t have range anxiety. I have a desire to be able to get where I’m going. I have no issue with stopping part-way for some time to charge the car. I have an issue with that charging being a problem. That shouldn’t be a problem.

Potential Reasons

I can see a few reasons for not investing in a nation-wide infrastructure.

  1. Cars in the next 10-15 years may have 1000+ mile range, so most charging will be home or destination, not requiring charging in the middle. So why invest for the short-term when the mid- to longer-term looks very different? [disclaimer – I don’t know the industry well enough to know if this is achievable]
  2. Manufacturers and charge-point installers are working with the bell curve. Assuming normal distribution of the number of miles people regularly travel, they’re concentrating on the drivers that travel least and working upwards. Longer journey drivers are to stick to ICE until EV can provide the range. That’s balancing the current situation with (1) above. 
  3. Personal cars will morph into personal mobility. However, I’d still expect the EVs involved in this mobility to require charging, but possibly at base locations.
  4. The efficiency of solar energy production is to increase meaning that solar panels on cars could keep the cars topped up. Therefore don’t require mid-journey charging [disclaimer – I’ve heard it mentioned, but don’t know viability]
  5. Fewer longer journeys as populations restrict themselves to smaller boundaries; think Brexit on a city scale…every city.
  6. Improvement in technology reducing the need for travel. The holy grail and the decades-old promise of tech-enabled conference calls. The more journeys removed, the more functional the current ecosystem becomes.

Are any of those true? I’d say that (2) is true, at least to some extent. Companies will have conducted market analysis to understand the demand, cost of responding to the demand and the potential price and pricing models.

Shortcuts and the Consumer

So why do we have an industry and a press (probably following the industry) putting the problem onto the consumer? Add to that unclear and ever-changing messages regarding the phasing out of ICE and buying/renting/leasing a car requires more effort than it used to.

People take shortcuts. Cialdini’s influential work on persuasion shows how susceptible we are to the misuse of shortcuts and why we use them. There is no shortcut available at the moment when buying EVs, at least not one that still allows you to be happy afterwards. True, salespeople can mark the car prices differently to provide comparisons, you can take a loan car, you see images of EVs with celebrities. All of those lead towards the short-cuts. And those short-cuts may get the one-time sale, but they don’t convert the customer to EVs. 

Which leads to the question, which company is going to reduce the brain effort required in obtaining EVs while making good on converting consumers to EVs?

False Features

headphones

Are the features you provide in your products the features that your customers want or those you think they want?

Variants on that question are common. But all too often, a feature slips through and you have to wonder how it got there, how was it approved, why did the company spend time and effort to build it?

I was browsing for some headphones over the weekend.  I saw the typical functional features of playtime due to battery, recharge time, frequency response, etc. I also saw the non-functional features such as design, shape, colour, etc.

Then I saw this feature, where you could use the hashtag #LameIdeas for your benefit (#hashtag name changed to protect the innocent). The idea was that you could take an image of yourself using the headphones and then  post that image using the provided hashtag.

How is that a feature? 

Later on in the specification, it mentions this phrase:

“won’t slow you down”

I had never considered a situation where headphones would slow me down. Even the 1980s headphones, bereft of the miniaturisation possibilities available today, didn’t slow you down.

In both cases, the features are nothing to do functionally with the product; instead they’re most likely marketing’s view of how the product should be used, especially by those they think will be using it. 

My gut feel is that was an inside-out way of thinking. Marketing deciding what their customers would want and using that as a feature. However, it could be that the company conducted user research and found that the customers did want to post hash-tagged photos about their new headphones.

Customer vs Enterprise Perspective

Port

Here’s a quick exercise on perspective, scope and how we view problems. 

How big is your enterprise?

Follow that question with these two questions:

  • How big is it compared to the size of your organisation?
  • How big is it compared to the size of your team?

That’s the internal focus. 

Now let’s try a different perspective:

What does your typical customer think the size of your enterprise is?

Now follow that question with these:

  • Who did they speak to first when enquiring about your products/services or asking for a referral to you?
  • Did you include the indirect sales channel or the affiliate?
  • How about the marketing activities that created brand awareness?
  • How about the pain that the customer experienced, creating the need to change? Was it caused by your product or a partner in the process?
  • How about the delivery driver?
  • Or the aftersales phonecall
  • Or the insurance claim?

That introduces us to the Customer Perspective and it’s usually different from the internal focus, taking into account the wider enterprise.

The Customer Perspective

4 mailboxes with red flags
Where does the enterprise stop?

While the customer is less likely to understand the difference between the concept of organisation/company/firm and the concept enterprise, they innately know the difference. They feel it and express it to you through their complaints and praise. 

For instance, the delivery driver belongs to you, regardless of whether you’ve outsourced delivery or whether you pay per delivery. Even if your organisation doesn’t do delivery, but instead pays for delivery services, to a customer that’s still part of the same enterprise. If delivery goes wrong, it’s your fault. Why did you use that delivery company? Why don’t you manage them better? This is even more the case with installers. Even if you only deliver part of the service, your reputation can be tainted by those that are involved with the customer later in the process.

The salesperson works for the same enterprise, not necessarily the same organisation

At the other end of the journey, did the customer speak to a salesperson who promised them features they can’t have? If that salesperson worked for a 3rd party, as in common with utilities and telcos, not only may you have the issue of a disgruntled customer (and having to work through what happened and then how to resolve the expectations), but you’ve already off to a bad start with building a relationship with the customer. This is worse when the line between your organisation and the salesperson is blurred. We see this commonly where brand artefacts are appropriate (sometimes under agreement, sometimes inappropriately) to appear to the customer that the salesperson is part of your organisation.

The Truth Behind Reducing Death Rates

grave

I was being interviewed by a prospective client a few years ago and I was asked an odd variant of a common question. There are more typical versions of that question, e.g. “what accomplishments are you most proud of?”. This variant blended the 3rd person perspective with reputation and achievement. If was more along the lines of “we have to answer to others as why we’re hiring your services, what could your previous clients point to when describing your achievements?”

I chose to answer with a light-hearted tone. I’ve been in too many situations where the questions and answers are formulaic, following a set pattern. That doesn’t make you stand out, but does show you can conform.

I answered “well, I reduced the death rate for one of my clients, if that counts”. In many health and care front-line organisations, including local authorities, there’s an element of gallows-humour. I’d fortunately judged my audience correctly and lightening the mood with such a response that almost no other company is going to respond with, but a response that cut to the core of the work and purpose of the client’s work. 

The interaction and, to some extent the laughing, that followed as the conversation subsequently took a friendlier, calmer turn showed that we had the ability to get on, drive towards a common goal and could agree on what was important; i.e. the people in that room, either the prospective client or the consultant were not important, it was the people who received the services. But that’s not what I want to focus on here.

My response was the right one for that time and place. However it’s inaccurate. 

Did I lie? No.

Did I distort the trust? No. (but let’s see).

Here’s the kicker, I don’t think anyone can actually reduce the death rate. People die, we can’t avoid that. If we’re discussing the death rate in a city, then the question revolves around where and when people die. If they die elsewhere, they’ll be statistics against another city or region. If they die later, they’ll be statistics against another time period. That may seem harsh, judging deaths as a statistic, but it’s easy to then re-apply that to the individuals that we interact with.

In the instance of people applying for social care, there’s an uncomfortable statistic that some people die before they receive the social care that they need. The system is designed as much as feasible within its funding constraints to prevent that happening. But considering the fact that the people who apply for care are in need, some may be incredibly frail and/or ill, then they will have a higher-than-average propensity to die within a given month compared to the rest of the population. Much of social care is designed to prevent deterioration of need, so catching more people earlier is a good thing for the population on the whole. People stay fitter and remain fitter for longer period of time. Hence many authorities have a more urgent track for those in immediate need of care. This can be a messy process internally for the authority as the rest of the controls and management need to then catch up to the immediate responses made by the front-line worker on the scene at the time. Even so, some people die before the care has been applied. In a reactive environment, this is unavoidable. I’m not convinced it’s ever completely avoidable (i.e. down to zero), but the number can be reduced.

Where’s this taking us? A person applying for care (or having someone apply on their behalf) needs care often at the time that the care is applied for. The longer the provision is delayed, the more the needs of that person deteriorate. As the needs deteriorate beyond a certain point, they can become life-threatening. While not applicable to absolutely every person applying, in aggregate you can see why providing social care earlier than at current, could well result in a decrease in the numbers of people dying in that month, and possibly the next, etc. But at some point all we’ve done numerically is shift the deaths to a later month. The death rate of the number of people dying that month has reduced. The human side of this is that someone has got to experience life for another month, maybe another year, etc. Their family has had chance to live with their family member, etc. There’s a distribution of need and impact on life and every individual is different, so not all quality of life is equal at any stage of life, let alone in the penultimate months.

So death rate, while we commonly understand what it means, is probably not what we mean when we use the phrase. We’re thinking of the number of people that die in a time period, e.g. per month. The people still die (as do we all), just later and hopefully with a better quality of life during their later months. Within a month, the number dying may reduce. Within a year, it may be the same number (as would have happened without intervention or change). Or we may see a decrease in the number for a few months, then back to a more static number per month for following months.

Would that mean that the interventions had been a failing?

  • If we’re only looking numerically at the number of deaths per month, then yes.
  • If we’re looking at the age at death, then no, since we’d expect to see an increase. But it’s worth bearing in mind that it’s difficult practically and ethically to know what would happen if we didn’t make the changes.
  • If we’re looking at the effects on an individual’s life, then no, it’s a success since we’ve possibly decreased dependency, increased quality of life, increased duration of life at a lower level of need, etc
  • If we’re looking at the effects on lives in aggregate, then no, for the same reasons as the effect on the individual, but in this case, across many individuals.

Back to the interview. So while I responded with decreasing the death-rate, there was an implicit understanding of what that meant to people engaged with the service. Imagine a newspaper, the death rate is in the headline but the majority of the article is the body of text which is the lives of the people.

There are two additional quirks of this effect:

  • I was measuring the number of people who were dying while waiting for social care provision, not the number of people dying in the city, although there’s likely to be a good correlation.
  • The numbers of deaths were increasing due to population size, although we’re seeing some effect from the Second World War and other great population-affecting events. So I was reducing the relative number against an increasing baseline. In fact, if I remember correctly, we surpassed the population effects and did decrease the number dying outside of care for the measured time periods.

Participation

NateSmith

A short while ago, I posted about how we can engage others in making decisions through the creation of an appropriate framework. Today, I noticed something else similar.

I saw a video of the drummer Nate Smith engaging an audience in counting. Now if you’ve got even a basic level of musical talent, you’ve probably winced at some point in a concert where the band get the audience to clap. You’re wincing, not because of the tackiness of the action, but in the knowledge that the activity is a balance between enough people being involved and entropy. That entropy is introduced over time as the audience lose the beat compared to the band or each other. Add to that, there’s always a section of the audience that appear to have no sense of timing.

Now what’s special about the Nate Smith video is the time signature. Back to basics, almost all pop music is 4/4. You hear four beats to the bar. Go back to Motown classics that keep people dancing and you’ll hear four-on-the-floor, i.e. that kick drum plays on every beat; 1,2,3,4,1,2,3,4,1,2,3,4 and so on. Even with something so simple, you can confuse an audience.

Yet in the Nate Smith video, it’s 7/4. That’s obscure. It falls into the category of music that a DJ should never play, and I mean never. People trip over themselves. You can get similar effects with Living in the Past by Jethro Tull (that’s 5/4) and Golden Brown by the Stranglers (13/4 and 12/4).  I can only think of one popular song of any genre in 7/4. That’s Money by Pink Floyd. Even that changes time signature part-way through. But think how difficult that song is to dance to or even to tap your foot to. That’s why 7/4 is obscure. In fact the only other song in 7/4 I can think of off the top of my head is Kam Ideme by the Slovak band Korben Dallas. The beauty of Kam Ideme is that it doesn’t feel 7/4, it’s not far off a a typical 4/4 and even has a feel of a waltz to it (3/4, but that’s probably because 3/4 + 4/4 can equal 7/4, depending on what’s accentuated).

From the video, we’re missing the full context. It starts mid-way. You can see that the audience have started to clap, but they’ve lost time. So Nate stands up, engages them and encourages them to do it properly. There’s no mention of the odd time signature. Just a drum pattern and a signal for the audience to clap. Even varying the pattern, the audience still knew when to clap. Until he’d varied it beyond the point of recognition or when he’d chosen a pattern that would create an accent that was close to the main beat but late enough to cause a problem. The audience could tell and didn’t know whether to go with Nate or with the time that they’d been shown to follow.

Nate Smith teaching the audience how to count to 7  https://www.youtube.com/watch?v=Njy7pMVKJ8Q

Invest in Now

drops-of-water

Also known as “Take care of the customer in front of you, not their future selves.” 

I’m minded of this, specifically regarding how organisations can manipulate the perceived balance of power between them and their customers when applying refunds.

Mistreatment

I’ve noticed that it’s not necessarily specific companies, but the industry sectors they operate in.

There are a few laggard industries whose code of conduct allows them to refund a customer in future for something that they’ve failed at in the present (or in the past if it’s taken a while to bring the issue to light). 

Two of the major industries that operate in this manner

  1. Water industry. If there’s a restriction on potable water, such as a hosepipe ban, then the company is obliged to refund the customer an amount in the next billing cycle. 
  2. Train operators. If a train is late or cancelled, then they are obliged to reduce the amount of the season ticket for the next season.

Balance

Both are in the favour of the organisation, not the customer.

  1. It allows the organisation to profit from the use of the money until they need to pay it out. But the customer has the issues now.
  2. The customer may move on. They may be moving house and job, and so not need another season ticket for trains or have to pay water bills for the same property. Therefore the organisation may not have a duty to that future customer and so may not have to make the refund. 

Customer Experience

From the point of being fair to the customer, you’d expect the organisation to pay the refund at the point of the complaint (or at the point of knowing about the issue if that happens first).

While that may seem soft-hearted – after all businesses are there to return increased dividends to shareholders – it’s becoming better business sense. This is increasing to the point that it’s becoming a key differentiator.

However, notice that both of the industries mentioned above were once state-owned, then privatised but they are at different stages of industry deregulation. On the surface, both industries are being made by their respective regulators to become more customer-focussed. However water companies have adopted the concepts with more vigour; train companies on the other hand are taking a backward step, if not many steps backward.

Water Industry

 

Leak

The water industry has focussed on the Service Improvement Mechanism for a number of years. With the switch to a wider-ranging C-MEX score, we will hopefully see more responsive reactions to poor service.

Let’s put this into perspective, no matter how much of a refund I’m given in a future period, I’ll still score a water company poorly for delaying that refund. Sort the issue now and how much should be charged for the service (or lack of service) during that issue. How many other customers will think similarly?

Fixing an issue includes more than the technical fix, commonly we’d expect to see:

  • the temporary fix (to stop it getting worse),
  • the long-term fix (to stop it happening again),
  • the clean-up and tidy-up,
  • restorative works to put property back as it was and
  • the financial element.

If the organisation leaves any of those to a later date, then they’ve failed in that interaction. Admittedly, this becomes more complex if there is no financially viable long-term fix. There will always be cases that are not fully resolvable, perhaps requiring an investment of £10m+. That’s not the same as the Ford Pinto calculation; it’s quality of life not life and death we’re discussing here. On average, we’d expect a comparable percentage of unresolvable issues across all the water companies. Or rather, there’s little reason to believe that any one region would suffer a greater percentage of issues which can’t be resolved than any other region. 

The company that resolves the issues completely for the customer, from the customer perspective, is the one that will lead in that C-MEX score. If one water company starts to treat customers more fairly (even if they do not have to), then I’d expect to see their rating increase. It’s not the only angle, but a committed approach to treating customers fairly and competently has to be a good thing. If one company does take this approach, would it cause other companies to follow suit just to keep up? Imagine the world if treating customers fairly became the norm rather than the exception.

Rail

 

rails

Which brings me onto the rail network. UK rail operators appear to be taking an alternative approach; that of distancing themselves from the customer. Witness the recent news over the last few months regarding Northern Rail and Southern Rail. In both cases, issues from significant under-investment in the operation (crucially the number of drivers and conductors plus planning in sufficient training time) have had massive impact on the lives of commuters, resulting in some resigning from their jobs that they can no longer get to. For a more up-to-date perspective, look for #Northernfail on Twitter. The change in timetable exacerbated the issue; it didn’t cause it.

Northern Rail’s response to date has been decidedly squirmy. I don’t think I’ve ever described an action that way before, especially in any official report, but it’s an appropriate description for what the public are seeing. There is no proper apology, refunding is problematic, there doesn’t appear to be a solution in place that will ease the lives of customers. Instead, the organisation is applying cryptic rules in its refund schemes, most likely to keep refunds to a minimum by filtering out those that don’t meet its exact criteria. While that may be appropriate for the company and complies with the regulator, it does not make for a good customer experience. Northern Rail are working from a monopoly position. It’s not fully a monopoly, but there are very few if any other options. In many cases for customers, there is no alternative transport option, and definitely no other rail option.

Summary

Once again, I find myself asking who in the company has forgotten the customer. Or if the company believes that someone else is the customer. For instance, I’ve seen some B2B and similar companies that only focus on their immediate customer, i.e. the company that is buying from them. This comes at the expense of the end customer or consumer. 

Regardless of the industry, there will be a person who lives in a neighbourhood whether a city, district, village or wherever. They have a family, friends, occupation, hobbies, etc. That is your end-customer, even if you only deliver part of the service. What is your organisation doing to improve their customer experience? And are you doing it at the right time?

 

 

Devolving Decision-Making through Frameworks

Jumbled music

If you create an appropriate framework, people can understand what to do when you haven’t told them the details.

All too often, organisations define rules that do not need defining. They may choose to set criteria for approvals, or host panels in order to evaluate submissions. A better approach in many cases is to create a suitable framework and devolve the authority to those who need it.

Suitable Framework

How would we know whether a framework is suitable

  1. What to do under what conditions
  2. What to do when those conditions aren’t met
  3. Guidance on what to do when the conditions do not make sense/do not apply
  4. Guidance on what to do when the process cannot be followed

Let’s have a look at Bobby Mcferrin and how he is presenting the scale.

  1. He creates a framework, defining how we are meant to respond based on the presenting condition in front of us (i.e. where he stands)
  2. He indicates that we’re only interested in the semitones – i.e. we’re not meant to respond to every slight step or assess the accuracy of where he has landed in order to produce microtones.
  3. The framework he has created allows to very quickly infer what the proper response should be when presented with a new condition (i.e. he steps outside of the boundary).

He builds on our already existing knowledge (e.g. what we’ve learnt in our early years, what we’ve observed from watching other musicians such as pianists, etc) and combines that with what he’s defined so far, so that the audience can infer the next note. Even though he hasn’t actually told us what that note is. 

Application

What could you take away from that?

Are there set (often regular) meetings within your organisation? Look at them and see what could be devolved either to smaller groups (even down to one person) if the rules can be defined.

Treat your customer as valuable

Hospital
Treating your customer as valuable could be the first step to understanding what your customer values.
 
Shopping Carts
Shopping Carts

I went shopping in my local supermarket. It was eventful for the number of things that went wrong for me, all of which could have been prevented with some foresight and some real-world gemba.

 
It was early in the morning so I had chance to see the store operate with fewer customers. This also meant that I could move around the store quicker than usual. So from that perceptive, the shopping expedition was a success….at least until the checkout process.
 
For a large supermarket, there were no checkout assistants at that time in the morning. Instead, there was a bay of 4 self-service checkouts. That’s not too bad, I find them very useful when I have a handful of items. However on this occasion I had a full trolley and had no choice but to use the self-service checkouts. The first issue with this is that there is very little space to put items once you’ve scanned them. To keep scanning more items, I had to swap out each bag once I’d filled it. Every time I did this, the machine told me off. This meant that a checkout supervisor had to come across and tell the machine to ignore the missing bag. That dance occurred several times since the trolley was full.
 
I valued the speed and efficiency of being able to pick my items at my convenience. I didn’t mind whether I scanned the items or whether they were scanned by a checkout assistant. However I did mind the lack of planning for catering for shoppers who had more than a basket. And I minded being reprimanded by a machine for solving a problem that it was creating. I’m confident enough that I have zero issues with being reprimanded by a machine; it’s just a set of algorithms encoded by another human. In this case, a human that didn’t foresee the machine being attached to a tiny tray and being used by a shopper with a trolley. But I did mind the rigmarole that it created.
 
Discharge
Discharge

I had a brief stay in hospital a few years ago. Everything ran smoothly until I was discharged. From my perspective, I was still a patient regardless of the official status. I was in hospital, feeling lousy and weak after 5 days of little to no food or drink and due to continue with medication for a further 7 days. Nothing major, but enough that I was allocated a hospital bed (if you’re familiar with the UK’s NHS, that’s a good measure of a condition). I was discharged in the morning, roughly 9:30am and was due the following dose of medication at 10:30am. Unfortunately, medication after discharge isn’t dispensed by the ward staff, it comes from the hospital pharmacist. I spent 3 hours waiting for the hospital discharge to deliver my medication to the ward so I could go home. That meant I couldn’t arrange transport since I didn’t know when I could leave. More importantly to me, the medication I was due at 10:30am didn’t arrive until the afternoon. During this time I occupied a hospital bed, although I think I would have been moved to a day room had the ward been full to capacity.

 
 
 

Analysis

At that time, NHS hospitals in the UK had a 28 day return policy, in that they were fined for patients who were readmitted for the same condition within 28 days of discharge. That goes some way to ensuring that discharges are medically appropriate. Unfortunately it doesn’t go to check that the discharge process itself is appropriate. It’s still focussed on the condition that the person was originally admitted for, rather than the smoothness of the discharge process. It’s as if the patient is no longer a patient once medically discharged, assuming they will be safe in their environment (e.g. home). The actual situation is somewhat more intricate than that but the effect on the discharged patient isn’t any different. To them, they’re still in hospital, still expecting the rest of the hospital services to be working to achieve the full discharge (not just the medical discharge).
 
Similarly, for the supermarket. The main experience was great but marred by the part of the process where I actually get the goods I pay for.
 
In neither of those cases did I feel fully valued. In the case of the hospital, I can forgive easily. However, from the perspective of efficiency, there’s a lot to be said for getting me out of the hospital as quickly as possible, so as to free up resources for others who need them. The more time I spent in the hospital following the medical discharge, the more failure demand I created (simply by being there, not that I created it on purpose). And the more risk of something happening while I was on the hospital grounds.
 
This leads onto the peak-end rule where we attribute a large portion of our memory of the experience based on the peak and the end of the customer journey. So no matter how good a service you provide to your customers, they’ll remember how it ends.
 

Your Customers’ Problems Are Your Problems

bathroom

I’m writing a new book, this will be my second*. I’d written a couple of chapters last week, one of which focussed on how organisations leave problems for the customers to resolve, but that they don’t think of it that way. In one chapter, I used the example of “Warning. Hot Water.” signs, stipulating that the organisation has decided that rather than fix the problem, they’ll leave it to the customer to work around the problem. Every day, every day they use the tap. When viewed like that, putting a sign up doesn’t really resolve the problem.

I was in a hotel at the weekend and I tend to think of hotels as having solved this particular problem a long time ago; it’s usually workplace offices that still have these signs. But enter the bathroom and it’s plastered with “Warning. Hot Water” signs. And it was seriously hot, close to scalding. For IHG, you’ll find this out when I review the hotel. It was just one of a list of issues. I travel a lot. I’m pretty flexible and lenient as far as hotels go. If there’s a problem, as long as it’s resolved, I’m happy. By that, I meant that I recognise that there are faults in any system, in any organisation and that’s ok by me. But if it’s a systemic failure, then I’m concerned. This hotel had a number of repeated failings. A quick look at trip advisor shows the issues are not isolated.

At what point does someone responsible for fixing a problem decide that a sign is enough? That the customer can have the problem? Did they work through a customer journey? Did they wonder what it would be like to be tired after travelling, hungry, thirsty, maybe a headache? Maybe not speaking English as a first language. Maybe not being used to English norms regarding taps (plumbing doesn’t seem to be standardised across the world)?

Why would we expect a foreign guest and customer to be familiar with the quirks our hotel’s plumbing?

Signs such as this protect the organisation. They inform the customer, but they do not remove the problem.

I go into more detail in the new book. If you’d like to be informed, subscribe to the newsletter.

 

*If you’re curious why you haven’t seen the first book, it’s because I haven’t released it yet. The first draft is ready and I’m taking a short break from it to gain some distance before returning for the final push.

Outsourcing Your Future – part 2

theatre seating

There are a number of company-hosted competitions, events, hackathons all with the aim of introducing innovation to the host company. I questioned the rationale behind these initiatives in the first part of Outsourcing Your Future.

The P&G Signal Accelerator Innovation Brief for Daycare Subscription is a good example of how these can be presented to the public, encouraging submissions from other companies. It opens the door for innovation with the potential reward of access its brands for the external company.

Whereas I questioned the motivation behind the initiative in the previous post, I want to look at other aspects in this post.

Maturity of the host

When I talk about maturity, I’m usually thinking of the difference between experience and wisdom. Someone can have a great number of experiences, but they may not be wise from what they’ve experienced. Similarly, an organisation that is mature in age is not necessarily mature in its capabilities.

By hosting innovation events, older companies are trying to introduce the capability of innovation into their organisation. It’s a parallel move to that which we saw in call-centres, then contact centres and also in shared services solutions. The company focusses on its core and outsources some standardised capabilities of its business.

In principle, that seems fair, since innovating is just one of many capabilities (we could give it a better name, but it’s still innovation). The bigger issue is that the target of these innovation events is often the core business; something which very few chief executives would ever dream of outsourcing. However in hosting innovation events, that’s what they’re doing; they’re outsourcing the company’s future.

Direction

Having read through a number of calls-for-applications and similar invites, plus being familiar with a larger number of events, I see two directions forming.

  1. Rather than the innovation happening on the inside and pushing it’s way out, the innovation is nurtured on the outside and is adopted internally. Or more often, it meets the resistance of the host organisation and fizzles.
  2. Innovation happens on the outside and is then partnered, e.g. you keep the external startup as an external and then purchase services from it (which may be viewed as allowing it access to your procurement team, but it’s still money transferring for services). That partnership arrangement keeps the innovation skills on the outside, but allows you the benefit of the innovation for a cost.

Managing risk

Considering the age of many companies hosting these events, they will have rigid governance procedures. Startups, on the other hand, do not. They are more flexible, more able to change direction and quicker to deliver. By allowing other companies into your problem space, you take advantage of their ability to take shortcuts that wouldn’t be allowed in your organisation. Those short-cuts may not be short-cuts in reality, it could well be that your organisation has created obstacles that do not need to be there. However, the result is that the external startup can deliver more quickly than your internal teams. That speed of delivery has value in terms of being able to conduct business experiments and learn from the experiments more quickly.

But as well as being able to make short-cuts, startups can take riskier approaches, which is easy to see when one of the guiding mantras of the startup ecosystem is “Do things that don’t scale” originally from Paul Graham.

By hosting innovation events, you’re outsourcing some of your risk management. You allow yourself to focus on the product, not how the product was developed. That doesn’t free you from all responsibility, but it does allow a shift in responsibility at significant points in the development process.

Debt

There’s been a growing trend of recognising the concept of technical debt. In the same way that shortcuts or short-term decisions for technology have to be paid back later, there are other forms of debt. I’ve discussed process debt before.

Innovation events, especially sprints have an element of creating debt. It’s not necessarily bad debt, since the act of bringing people together to progress a common goal has significant value, but the team involved may decide to do something quickly because of the time available. Even if the decision is “I’ll do it in this tool to get it ready by Thursday evening and, if the concept is accepted, then we’ll do it properly next week.” – that’s still debt. And we’ll see those decisions across process, technology, management structure, job descriptions, skills, stakeholder management, customer engagement, etc.

At the point that you want to bring the innovation in-house, you will have to pay that debt, so where have you found yourself? Did hosting the innovation event outweigh the debt incurred? Sometimes yes, sometimes no.

Value

And that brings me to my last point. I’m struggling to think of – actually, I can’t think of – a single company that has ran an innovation event and then openly discussed those innovations a year later. There are companies that regularly host innovation events and there are those that are starting out in 2018 for the first time. Of those that have hosted previously, none publish what’s happened since. Some do not refer to previous events. A few publish what happened soon after the event, but do not follow-up with current news, reflecting on the value realised through hosting the event.

I can think of one company that has benefited from an innovation event from a cultural perspective; being able to expose its wider workforce to innovation through immersing them in a week-long festival. Even in that case, one which they openly refer to previous innovations, I do not know which of the innovations are currently active one year later.

For instance, I’d be interested to see previous entrants to the event, how they were engaged following the event and what progress has been made up to now.

I can think of one brand-led accelerator, Collider, that does publish details about previous cohorts.

Overall, it looks like the pickings are slim when trying to evaluate the performance and value of outsourcing innovation through hosting an innovation event.