There are certain ideas about which, once they have taken hold, is very hard to imagine a time when we might have thought any other way. Not many people still believe that the Earth is flat or that the sun goes around the Earth. It seems obvious to us that bacteria cause infections, that keeping wounds clean is a good idea, and that night air is no more toxic than that which we breathe in the daytime.
It can feel the same with management ideas. Henry Ford came along with the assembly line and mass production and changed the way people thought about manufacturing forever. But where management ideas differ from scientific facts is in one key respect: what makes a basic scientific fact ‘true’ (and I use inverted commas advisedly here) is reproducibility.
Science tells us that if you heat water, then at around 100 degrees Centigrade (depending on your altitude), it will start to boil. This will happen no matter where you are on the planet, who you are, or what you use to heat the water. But management ideas don’t give us such reliable reproducibility. They are only ever a way of approaching a problem or situation. They provide a lens through which to view a set of highly complex circumstances and some tools to aid decision-making, rather than a hard and fast predictor of outcomes. (Part of the reason for this lack of predictability is that by definition, management ideas involve people, and we are a complex, unpredictable, and interconnected bunch. It’s just the same for economic theories and political ideologies.)
So it’s important to keep management ideas in perspective, and not let any of them acquire the status of hard and fast truth. This isn’t easy, particularly with ideas that take deep root in our thinking: it can be very difficult to step outside the confines of a pervasive idea and think about things in a different way.
One such idea is the notion of customer-centricity. We all know roughly what customer-centricity is: the idea that a business should organise its efforts around what its ideal customers want in order to maximise its profits. Seems obvious, right? Of course, that’s what organisations should do – after all, isn’t the customer always right?. So when we innovate, we often start with the customer or service user and their unmet needs, with approaches such as design thinking or co-creation that put the customer at the heart of the innovation process.
But customer-centricity only seems obvious because this is one of those ideas that has taken such deep root in our thinking. And not only that, if it is accepted as a fact in all cases, it can be actively damaging to an organisation – and beyond. So when might we want to say no to what our customers want?
When the customer is wrong
The problem with customer-centricity is that it reflects classic free-market capitalist thinking – i.e. if the customer wants it and will pay for it, it must be the right thing to sell. The problem with this comes when what the customer wants has a negative impact elsewhere. As customers, we tend to assume that if something is legally allowed to be sold, then it must be ok to buy it. Conversely, organisations might assume that if something is legal and the customer is willing to buy it, then making and selling it is defensible. But we only have to think of examples such as selling weapons to other countries, or single-use plastics that pollute the environment, to see how flawed these assumptions are.
When the customer is not fully informed
Sometimes, customer demand for something damaging may not be as a result of flawed assumptions on their part. The complexity of our markets and supply chains means that the customer is almost certainly unaware of the full ramifications of their buying decision. As Michael (the Architect of the Good Place in the popular NBC series) says:
“Life now is so complicated, it’s impossible for anyone to be good enough… These days, just buying a tomato at the grocery store means you are unwittingly supporting toxic pesticides, exploited labour, contributing to global warming. Humans think they’re making one choice, but they’re actually making dozens of choices they don’t even know they’re making.”
In this situation, do we shrug our shoulders and say ‘well, if the customer cared enough they would spend hours and hours finding out about our supply chains to make a fully informed decision’? Or do we, as organisations, commit to ensuring that those tacit choices are ethical?
When the customer’s need is not important
I know, right – what a sacrilegious thing to say. But increasingly, I see innovation solving ‘problems’ that really don’t seem terribly important in order to come up with new products. My favourite recent example was the free sample of Cat Soup I found in my box of cat food. I don’t know what need this particular product is meant to be addressing (the marketing material doesn’t even try to tell us), but I do wonder if it’s worth all the time, money and other resources spent on bringing something like this to market. And yet customers will probably buy it, not because their cat needs it to survive but simply because it’s there and they feel they must need it, or it wouldn’t exist. No wonder the world is going to hell in a consumerism handbasket.
Again, if customers are willing to pay for it, this might not matter, were it not for the fact that we only have finite resources and rather more challenging problems on our plate, such as climate change. These circumstances mean that we need to divert resources away from the small, insignificant problems of whether our cats need soup, and start thinking about some of the bigger challenges. As the great Rick says in Casablanca “it doesn’t take much to see the problems of three little people [or cats] don’t amount to a hill of beans in this crazy world”.
When the customer’s desires clash with other imperatives
Let’s assume for a moment that there is a valid customer need for Cat Soup and the standard pet food pouch is, from the customer’s point of view, the most effective way of packaging it. From a waste point of view, however, these types of plastic pouches are very difficult to recycle or biodegrade. This puts the customer’s needs in direct opposition to the environmental needs of our planet.
From a customer-centric point of view, this won’t matter until enough customers start to care about the environmental impact of the packaging and stop buying Cat Soup. But we know that the world doesn’t work like that: our choices as consumers are constrained and guided by complexities around availability, brand building, transparency, time and many many more. We also know that some needs are more important than others. If we wait for consumer buying decisions to change the world for the better, we might wait a long time.
When the customer has no idea what they really want
Customers are notorious for not really knowing what they want – which is why good design thinking research does not just ask customers what they want but also uses observation and immersion in order to identify insights that the customers themselves might never articulate. As Mauro Porcini, SVP and Chief Design Officer of PepsiCo say: “Listen to your consumers but don’t believe them. When questioned about their behaviours people will often tell you what they want you to hear, in order to feel good about their actions, sometimes even lying to themselves…..Or they do things that they enjoy, but they can’t even admit it to themselves, and when they are forced to rationalise what they do, they go in denial.”
“If we want to innovate for real, designing products, brands, services and experiences that are new, unique and different, then we all need to listen to people and observe them, interpreting what they do, mixing the data we collect with a good dose of intuition, imagination and vision. Data without imagination won’t change the world. Consumer research without intuition will deliver just mediocrity”.
When the ideal customer might be the wrong customer
Focusing on the ideal customer from shareholder capitalism, profit-driven point of view can lead to a rather blinkered idea of who that customer might be, and conveniently ignore any idea of broader social value (or lack thereof). Director of the Institute of Innovation and Public Policy, Mariana Mazzucato, argues that the pharmaceutical industry is a classic case in point: “companies prioritise “blockbusters” at the expense of commercially unappealing medicines that are hugely important to public health.”
So should we all be completely ignoring our customers’ wants and desires when looking to innovate? Of course not. The danger with management ideas is not that they might be flawed (I suspect they all are), but when we forget that they are. Customer centricity is just one of the many ways we can approach innovation, and sometimes all it takes to get out of an innovation rut is to see what might happen if you started from a different position.