Customer Experience Fuels Innovation

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How does customer experience fuel innovation?

I was honored to be a guest on #innochat on Thursday, July 21. Innochat is a weekly Twitter chat (Thursdays, 9am PT) about innovation and covers a wide range of topics and angles. If you love talking innovation, make time for this chat every Thursday.

The topic on July 21 was one of my favorites: customer experience, of course. Not just customer experience, though, but how customer experience drives or fuels innovation. This is a hot topic. We want (need) to see companies innovate for the customer, but many companies still struggle with what that means, how to do it, and what it takes to truly be innovative; instead, they imitate. I think Kerry Bodine said it well in her 2013 Harvard Business Review article:



 Everyone talks about customer experience innovation, but no one knows quite what it is or how to attain it. In fact, when we ask customer experience professionals how they’re driving their innovation efforts, we find several misguided approaches that actually thwart differentiation and waste massive amounts of time and money in the process.

You’re not innovative if you imitate; innovation is all about creating a clear differentiation between you and the next guy. What value does your brand bring to the table that no other brand does? How does it make customers’ lives – and the jobs they are trying to do – easier?

The questions posed to the group were pretty straightforward, yet thought-provoking; they also seeded future #innochats, when the self-named “innocats” (love that) can dive deeper into customer experience innovation. This is an important topic with many different angles to cover. The questions we discussed were:

  1. What role do you think that customer experience plays in innovation?
  2. How does customer experience relate to user experience?
  3. What is the relationship between customer service and customer experience?
  4. How does the view of customer experience from the outside-in compare with the inside-out view?
  5. How do we balance the importance of customer experience with other issues?

For a transcript of the chat, visit Innochat and scroll to the bottom of the page.

Two really big (and key) things to think about as you look at your organization’s ability to innovate a great customer experience are your customers and your culture.

1. Understand your customers
In order to innovate for your customers, you need to engage with them, listen to them, understand who they are and so much more – but most importantly, you need to understand what they are trying to do: what task, what job, what they are trying to achieve.



People don’t want to buy a quarter-inch drill. They want a quarter-inch hole! -Theodore Levitt

2. Create a culture of innovation
The culture needs to allow employees to be creative and entrepreneurial. Don’t stifle new ideas and innovation. Allow employees to pose, develop, and try new ways of doing the same old thing. Encourage efficiency, simplicity, and killing old rules and making new ones. I can speak from experience when I say that that stifling creativity, growth, and innovation is painful and kills employee engagement quicker than anything. 

A few years ago, I wrote about the Culture of Curiosity. Perhaps that’s a place to start. Advocating and driving such a culture throws inside-out and outside-in thinking aside for the moment and calls for upside-down thinking. Toss everything you know out the window for the moment, and think differently.

Around here, however, we don’t look backwards for very long. We keep moving forward, opening up new doors and doing new things, because we’re curious…and curiosity keeps leading us down new paths. -Walt Disney Company

If employees are constantly asking questions and being curious, they get to:

  • Learn more about their customers
  • Better understand customer needs and, more importantly, the jobs they are trying to do
  • Learn about partners, the market, emerging trends, etc.
  • Ideate and innovate
  • Create new/better products, features, and services
  • Eliminate processes and policies that are harmful to the experience
  • Change the way the company does business (for the better)
The problem is that, at a lot of big companies, process becomes a substitute for thinking. You’re encouraged to behave like a little gear in a complex machine. Frankly, it allows you to keep people who aren’t that smart, who aren’t that creative. -Elon Musk

If you keep doing the same thing, you’re going to keep getting the same results, right? With some of the statistics about customer experience as bad as they continue to be, I think companies are continuing to do the same thing. So it’s time to start asking some serious questions and not be afraid of the answers – or the consequences and changes as a result.

Innovation and change go hand in hand. That’s a good thing. Don’t stifle it.



Innovation distinguishes between a leader and a follower. -Steve Jobs

9 COMMENTS

  1. Annette, love your article.
    My experience with many companies is that they do not take care of fundamentals and rush for new stuff….their web sites are not updated; Today I got three calls from the company by three different people (Hyundai motors) asking the same questions, and again today, I got a run around with a company I have an AMC with…..WHY?
    Till we stop these aggravations, the rest is only icing hiding the true nature of the experience being offered

  2. If several keystone elements exist……….a) employees have access to, and can help interpret, insights from qualitative and quantitative customer experience research, b) customers are not just purchasers, but are stakeholders and collaborators in product and service development, and c) the culture is customer-centric as well as inclusive……the ground will be fertile for customer experience to help drive innovation.

  3. Great post as always Annette. When it comes to innovation, I do believe that most businesses are a long way from being anywhere near truly delivering it. Part of the problem is the overwhelming majority of organisations around the world are still unable to get the fundamental basics of their customer journeys right. As a result, they spend most of their time reacting to the basics going wrong, rather than investing time in understanding how to use innovation to differentiate their proposition in the future.

    The other trend I am observing is that of limited skill and expertise when it comes to innovation. Many people within a business do not actually know the art of the possible – not enough investment is being made in talent and experience that can inject genjuine new ideas and invention into the delivery of the experience.

    In summary, a business that can successfully do both things – consistently get the basics right AND inject an innovative sprinkling of fairy dust – will be the tru customer centric winner of the future.

  4. Great post, and critical topic for CX professionals.

    Too often CXM has become a “find and fix” initiative. Good for starters but hardly differentiating unless all competitors are doing nothing. With 80+% of executives at least claiming they want to differentiate based on CX, that’s a bad assumption to make.

    In my research of 25 drivers of business performance, the one with the highest impact was “Constantly seeks ways to improve solutions delivered to customers.” In other words, innovate.

    One quibble, in your post title you say “Customer experience drives innovation.” However, CX — what the customer perceives — is actually an outcome of innovation.

    From the body of your article it’s clear you mean the practice of CX, which I call Customer Experience Management (CEM or CXM). I think it’s important not to use CX to mean both the practice (what the company does) and the outcome (what the customer perceives).

    In the CRM days, people used the term to mean both the practice and the tools. It created a lot of confusion, leading to many thinking they are doing CRM by installing software.

    In the case of CXM, I think it’s fair to say that having a CX program doesn’t automatically ensure that innovation will happen.

  5. Annette, great topic and great insights.

    A few thoughts about innovation. First, the discovery process becomes true innovation when it achieves a level of commercial success. If it doesn’t hit that mark it is a learning experience.

    Second, I believe that the Theodore Levitt quote misses the point that you were making. That is, nobody really wants 1/4 holes. I recently tried selling a handful of 1/4 inch holes and then added some 3/8 inch holes and still had no success. The jobs people are doing (like organize your library or potting plants on a new bench) are the true outcomes and the holes are tasks along the way.

    And finally, creating a culture of innovation is fine as long as there is clear accountability so that the front line employees do not just experiment with their customer’s work methods. These folks must be properly be trained to think creatively and to assess the risks of messing up a customer – the ultimate bad customer experience.

  6. Annette – thank you for sharing the Twitter discussion details. I look forward to joining those soon.

    Bob, as I thought about the question posed, I agree with you about the need to disambiguate the broader practice of CX(M) and the individual experience one is evaluating. Is it safe to say the rapidity of co-evolution between technology and customer expectations (their needs to both ‘do new things/ perform more complex or a broader set of tasks) spur innovations across the entire organization.

    I also think it is incumbent on CXM thought leaders to evangelize best practices from across industries, especially in cases where the brand architecture suggests brand calibration across them in order to align expectations. For example, tech companies greatly benefited from insights generated by CPG’s early use of validated campaign solutions and significantly. reduced the adoption lag inherent among ‘house of brands’ and ‘hybrid’ brand architectures.

  7. Hi Annette

    A confused and confusing post.

    Whilst customer experience can certainly benefit from innovation, they are not related in any way. You can create a great customer experience without innovating, just as you can innovate without it changing the customer experience.

    Innovation isn’t about differentiation either, but about 1. providing novel solutions that 2. meet customers’ unmet needs 3. at a profit. But be careful; too much uncontrolled innovation can be a bad thing. As Clayton Christensen showed in his 2001 HBR article on ‘Skate to Where the Money Will Be’, it can put a company at risk from disruptive innovators.

    In my experience, most organisations would be better off getting their customer experience basics right than trying to innovate.

    Graham Hill
    @grahamhill

  8. CX and innovation are indeed inextricably entwined and, to Bob’s point, it’s sometimes difficult to know which will drive which. Innovations in technology, creatively applied, have led to complete paradigm shifts in CX. (Mobile technology is a great example)

    Similarly, organizations bent on continuous CX improvement have come up with some pretty nifty innovative thoughts. (think Amazon).

    I do think that innovation is a critical x factor. Too many organizations think only in terms of addition and subtraction when it comes to CX. Increased experience equals increased cost – and smaller budgets equal decreased experience – that sort of thing.

    The great organizations are the ones who constantly look for new ways to increase experience – while increasing profitability at the same time.

  9. Thank you, all, for your comments. One of the questions that came up as John and I were framing the chat was… does innovation drive/fuel the customer experience, or does the customer experience fuel innovation? We determined there were arguments for both, and landed on focusing on customer experience fueling innovation. Understanding the customer and what job he is trying to do ought to be a catalyst for designing new, fresh, more-efficient, etc. ways of helping the customer complete that task. That would support outside-in thinking, too.

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