Change is hard - status quo is painful

Change is hard for many reasons and for most people. First and foremost any action that gains a reward will be repeated. Secondly, only practical actions will lead to actual change. While you think of a change needed, nothing will happen until you actually act upon that need.
So what are we doing right and how can we enforce that behavior?
Marshall Goldsmith has in his The Success Delusion shown that humans, and in fact any animal, reinforce successful behavior. The more successful we become, the more positive reinforcement we get - the more likely we are to experience the success delusion: I behave this way. I am successful. Therefore, I must be successful because I behave this way. The chain of conclusions is just plain wrong. We all hear what we want to hear. We want to believe those great things that everyone is telling about ourselves. That belief in ourselves is what helps us become successful. It is also what makes it very hard for most of us to change.
You are successful! You are doing a lot of things right! Why do you need to change? Humans, society and the world are constantly changing. You current behavior that is contributing to your success needs to change in order to stay successful. If you don't change then you will eventually find yourself in a situation where people will consider you less successful. Or current successful behavior that helped getting us to our current level can very easily block us from going to the next level of performance. So change is needed to stay put and to develop further. Status quo will eventually deteriorate our performance and not lead us to develop our skills and performance any further.
How do you then change?
Analyzing what actions need to change might be easy. However, it is very easy to fall into a problem focusing exercise where you end up emphasizing on problems instead of what is working. Start identifying what is working today and what you are really good at. What new behavior should you add? By doing more of what is working and what will improve your future performance you will do less and less of what is not part of the new you.
So what about the how?
Now it becomes harder in my own experience. It's easy to say that I want to behave in this or that way, much harder to actually change the behavior. Here are some real world examples of turning insight into action:

• Start acting. Just do it to borrow a catch phrase from Nike. When Toyota incurs change in their own organization they follow a very simple 3 step model. Identify change needed, start acting, explain and conclude what actually happened. The importance here is the action before explaining why. Just do it!
• Make action steps concrete. Make them possible to act upon. "Listening to customers" is not possible to do here and now (unless you actually go out and ask them questions ...). Turn it into concrete actions; what does it mean here and now to listen to customers? If the customers are saying they don't want to wait by the checkout, then have the cashiers call for help anytime more than one person was waiting. That is possible to act upon.
• Make a goal hierarchy. Break down your overall goals into actionable goals. Connect actions and people to each of the goals. Follow up you actions that leads to the higher level goals.

This way you turn insights into action. Action into new behavior. New behavior into further success.

More to read:
Marshall Goldsmith Library: The Success Delusion
Fast Company September 2010: Tase the Haze
MIT Sloan Management Review Winter 2010: How to change a culture: Lessons from Nummi

Innovation governance while user innovation flourishes

Letting a thousand flowers bloom when enabling your user community to innovate sounds promising. Eventually there must come something good and novel out of such a process, mustn't it?
While having your user base innovate for you is hard in itself, collecting and actually producing real products and services out of that is the real hard nut to crack.
Look at Lego who invited their users to innovate new sets out of the basic building blocks. A tremendous amount of creativity and energy went into coming up with new designs. From those designs Lego collected the most popular ones and turned them into retail products. The rest remains on the web-page for everyone to download and find the pieces themselves.
The main difference here compared to most organizations is that the main activity in playing with Lego is to build things from scratch. The most exciting creation is already today seen with much envy and heavily copied. So the DNA of the product is to create new designs.
How do you translate this into other products?
You need to clearly govern your innovation work making sure you capture the most innovative ideas from your users. How can I govern my innovation process?
We have found that the following areas are helpful in identifying where to focus your efforts when dealing with customer interaction:

• Involve the Lead users
• Who are your most innovate users? In which environment does the most creative new ways of using your product thrive? Identify where innovation is most likely to occur and watch users closely. Invite yourself to watch, talk and co-create new uses. Give them specific tools like Lego did when creating special software to design and store new sets to be posted and shared on the Lego web-site.
• Define goals and measure effects
• When executing innovation projects, what are the goals? New products, new usages, new segments, lowering production costs, or something else? Establish measuring and visualization on a daily level so that progress can be viewed and measured with short feedback loops. Why everyday, isn't that too often? Most of the tasks in an innovation project are repetitive and trackable. Involving users means that you probably have hundreds or thousands of users involved in all kinds of experimentation and design. That activity needs to be measured and visualized to enable progress and not turn it into chaos where you don't know what is actually going on.
• Resource allocation
• How do you assign resources to new projects? On which parameters are new initiatives weighted and prioritized? Having  resource fluidity where resources are flexibly assigned to projects regardless of their home turf of the resource owner is one of the most important ways to create strategic agility. When a user comes up with a new usage it should not be up to that specific organizational unit to decide on how to explore it. Resources has to flow between units and organizations to enable fast leverage of the opportunity.

Govern your innovation efforts through flexible resource allocation based on clear set goals and effect tracking in collaboration with your lead-users. This will maximize your return on innovation where early and close user involvement and customer interaction secures clear user benefits. Your innovation employees will combine their product insights with users everyday knowledge of how to apply the product.

Everyday Hacker - everyone's not a designer

Participation is the new brand loyalty. What is better for participation than inviting your customers to do the personal customization themselves? Designing stuff for people to like and hope for their loyalty in return is not going to work anymore. Troed Troedsson, a future researcher, has found that up until the mid-eighties the key differentiator was knowledge. Nowadays it is understanding. Understanding what your customer wants and desires. Who is better on understanding their needs than the customer herself?

There are several very good examples on how to engage the customer in participation and designing according to their own desires and understanding on who they are:

• Make your own chair. Buy a cubic formed chair with a hammer. Use the hammer to form it as you like.
• Hacking IKEA. Make a children's chair out of a normal chair buy sawing a hole in the seat.
• Fan popcorn popper. When buying a popcorn popper, get it with your favorite team logo on it.
• Amazon Webservices. Build your own Amazon bookstore using the backend features of Amazon.
• Cookies and cakes. Buy a cookie mix and add eggs (Dan Ariely showed that without the eggs there is too little participation).
• Scion car designed by you and manufactured by Toyota together with a backbone of 1000's of partners.
• Threadless combines custom T-shirt designs with easy to shop for those who don't know what to design.

What should you think of when entering the mass-participation era?

• Design for different levels of customer participation. The occasional customer, the regular and the hard-core.
• Make it easy to switch between levels of participation. Make the customer a success regardless of participation.
• Enable your IT systems and supply-chain to handle great flexibility. How to plug-and-play in the back-end towards partners? Can you be as flexible as Toyota with Scion where the the car is manufactured and then pimped by one or more partners through an advanced supply-chain?

Then of course there are always those who don't know what they want. Be sure not to confuse them with alternatives. Make it easy to participate and co-create or you will loose everyone except the most hard-core fans.

Finally you will get many more ideas on how to develop your future products through the understanding gained from your customers.

More to read:
March 2010 article in Wired: Destroy is the new DIY
Dan Ariely in The upside of Irrationality

How may we help? Increasing loyalty by reducing effort.

Customer loyalty comes not first and foremost from satisfying your customers - it comes from reducing the effort of dealing with you. CES or Customer Effort Scores is a new predictable way of measuring loyalty from the customer base that have been in contact with you. CES predicts the future loyalty and revenue levels. CES can be used to measure direct effects from customer service interactions - in terms of ease of effort which increases loyalty and contact levels which lowers customer support costs.

Meeting customer expectations and reducing effort during customer interactions requires you think of the following:

• Head off the need for follow-up calls and interactions - anticipate the future
• Normally you measure the First call resolution level which indicates how good you are at solving customer problems in the first call. Measure return calls on a slightly longer horizon, 1 or 2 weeks, and you will see that certain types of calls generate subsequent calls for other related problems. Measuring and analyzing these downstream calls will improve your service quality and remove the necessity of future calls. Saving both your resources and lowering the effort of being a customer to you.
• Address the emotional side of interactions - who is at the other side?
• Sometimes we give the same answer and motivation to all customers. Try to balance the emotional mode they're at and their personality. Based on wording the customer uses and how they say things, give slightly different responses. To some your empathy matters, to others exact date for when a replacement will arrive is most important. What will the customer's feeling be after the interaction has finished? That will determine both additional calls, their view about you and the effort of interacting with you.
• Learn from disgruntled customers - how do you continuously improve?
• Disgruntled customers are disgruntled for a reason. They had some expectations that you have not been able to live up to, right or wrong. What can you do to improve your delivery and communication to further improve your delivery?
• Empower the front line to deliver a low-effort experience - what policies are blocking them?
• Measure things like "Ask once" and "Capturing the no's" enables you to identify when your front-line is not empowered to service a customer request. Having a front-line that can handle the entire interaction shows that you care about your customer by trusting the ones handling customer contacts. They're not just a filter to turn away customer requests - they are there for me as a customer.

CES, Customer Effort Scores, captures the customer impressions at the transactional level, negative and positive. It is at the transactional level that you build real loyalty - not on the brand level. Ask the question "How much effort did you personally have to put forth to handle your request?".

High levels of CES affects your internal delivery costs as well in terms of repeat calls, call transfers and channel switching. Performing a CES finally enables you to catch customers at risk of defecting and thus you get a last chance of keeping them.

More on this subject can be found in this HBR article: Stop trying to delight your customers

Front line service innovation

Front line workers are the ones who delivers real customer value in a service organization. Drive value creation and innovation through front line employees is the way to improved efficiency and new services. How do you efficiently innovate through the front line? After all they are not hired to be innovative, their task is to deliver service and support customers.

First of all you must define the questions you are trying to answer through front line innovation.

• Innovation of new services?
• Improving the efficiency of service delivery (deliver it the right way)?
• Improving the effectiveness of service delivery (deliver the right service)?
• Empowering the employee?
• Collaborating and involving the customer?

Front line service innovation leverages the direct customer experience, knowledge and quick round-trip time that enables experimentation. The trick is to empower, engage and motivate your front line people to take care of new ideas that comes flowing while working.

Kaiser Permanente, a Health care provider, has introduced a small team of special trained innovators called Innovation Consultants. These innovators can be design specialists, anthropologists or psychologists. They work according to a "human centered design"  principle where they involve the front line and their customers in improving efficiency and effectiveness at the same time as they innovate new services.

• Uncovering the untold story. Since most innovation and efficiency increase comes in the interface between the front line employee and the customer it is important to uncover the untold story. Things that get neglected because they have always been that way. Or you don't see them consciously where drawing a picture of how you feel when interacting in that situation will reveal you inner feelings. This leads to more sharply defined problems ready to be solved. 
• Packaging change. Every innovation results in some kind of change being executed. The innovation starts somewhere and then it all starts. How should it be replicated throughout the organization? How to measure its effectiveness? Applying the 5 Implementation principles enables an organization to quickly and successfully roll out a new service and still build upon employee engagement.

By working and empowering front line employees an organization can significantly increase both their innovation power as well as collaborating more closely with their customers. This leads to increased revenues through new services and rising profits through increased efficiency.

More to read on Kaiser Permanente's Front line innovation