Introduction
In today's rapidly evolving business landscape, companies face unprecedented challenges in maintaining customer loyalty and satisfaction. Alan Trefler's book "Build For Change" offers a comprehensive guide for businesses looking to adapt and thrive in this new era of customer engagement. The book explores how the rise of social media and constant connectivity has fundamentally altered the relationship between businesses and their customers, and provides strategies for companies to position themselves for success in this new environment.
The Changing Customer Landscape
The Rise of Generation C and Generation D
Trefler introduces us to two key customer groups that are reshaping the business world: Generation C (Content) and Generation D (Destroy). Generation C, comprising mostly of millennials, is known for being entitled, fickle, and difficult to please. However, it's Generation D that poses the greatest threat to businesses.
Generation D represents the next wave of young consumers who are not content with simply turning away from companies they dislike. Instead, they actively seek to destroy businesses that fail to meet their expectations. Armed with the power of the internet and social media, Generation D can quickly rally thousands or even millions of users against a company, potentially leading to its downfall.
The Customerpocalypse
Trefler warns of the "customerpocalypse" - a scenario where a company's customer base disappears almost overnight. This can happen when businesses fail to adapt to the demands of Generation D, who are particularly sensitive to three main issues:
- Poor service
- Products that don't live up to their advertising
- Products that are disappointing compared to competitors
To avoid this fate, companies must radically rethink their approach to customer engagement and business operations.
The Limitations of Big Data
While many businesses have embraced Big Data as a solution to understanding their customers, Trefler argues that this approach has significant limitations. He points out that Big Data is essentially a snapshot of the past, providing information about who customers were and who they are now, but offering little insight into their future desires and needs.
The Danger of Complacency
Trefler uses the example of Sony to illustrate the dangers of relying too heavily on past success and failing to anticipate changing customer needs. Once a market leader in personal music devices with products like the Walkman and Discman, Sony was blindsided by Apple's introduction of the iPod and iTunes store. This case study serves as a stark reminder that even industry giants can fall if they fail to innovate and adapt to evolving customer preferences.
The Vodafone Approach
In contrast to Sony's misstep, Trefler highlights Vodafone's successful use of data. The company employs a strategy of careful judgment and constant improvement, using information about past customer behavior to create personalized "daily specials." This approach demonstrates how data can be effectively leveraged when combined with forecasting and a willingness to learn through trial and error.
Designing for Generation D
To win over the demanding Generation D, businesses must focus on creating seamless, efficient processes that prioritize ease of use and personalization.
The Pitfall of the Inside-Out Approach
Trefler cautions against the "inside-out" approach, where companies simply add digital elements to existing processes without fundamentally redesigning them. He cites the example of BB&T bank, which initially failed in its attempt to move account creation online by merely digitizing the existing lengthy forms and approval processes. This resulted in a significant drop in customer satisfaction.
Embracing the Outside-In Approach
The solution, according to Trefler, is to adopt an "outside-in" approach. This involves:
- Focusing first on what customers want
- Designing seamless processes to provide it
- Breaking down departmental silos to create a unified customer experience
BB&T's successful pivot to this approach resulted in faster account creation, improved customer satisfaction, and significant cost savings. This transformation highlights the potential benefits of truly customer-centric process design.
The IT Challenge
One of the major obstacles facing businesses in their quest to adapt to the new customer landscape is the disconnect between business leaders and IT professionals.
The Communication Gap
Trefler identifies a common problem in many organizations: business owners, who often lack technical knowledge, create overly complicated or impractical plans for IT systems. These plans are then handed off to IT experts who have little understanding of customer needs or operational requirements. The result is frequently a flawed system that fails to meet the company's needs.
Zombie Systems and Manual Workarounds
This communication breakdown can lead to two undesirable outcomes:
- Zombie systems: Flawed IT systems that persist because the communication gap between business and IT is never bridged.
- Manual systems: Frustrated operators abandoning complex systems in favor of basic, often inefficient manual processes.
Both of these outcomes hinder a company's ability to provide the seamless, efficient service that Generation D demands.
Bridging the Business-IT Divide
To overcome the challenges in creating effective technological systems, Trefler advocates for a radical rethinking of how businesses approach IT development.
The Hybrid Vigor Approach
Drawing inspiration from botany, Trefler proposes a "hybrid vigor" approach to IT development. This involves bringing together outstanding workers from both the business and IT sectors to combine their specialized skills. By fostering collaboration between these traditionally separate domains, companies can create more robust, efficient, and reliable IT systems.
Innovation Centers and the Chief Process Officer
Trefler highlights two strategies for implementing this collaborative approach:
- Innovation centers: Dedicated spaces where business and IT teams can work together to create effective IT systems.
- Chief Process Officer (CPO): A specialized role overseeing the integration of business needs and IT capabilities.
He cites the example of Telstra, an Australian telecommunications company, which has seen significant improvements in customer satisfaction and operational efficiency after implementing these strategies.
Key Strategies for Success
Throughout the book, Trefler offers several key strategies for businesses looking to thrive in the age of Generation D:
Embrace continuous innovation: Constantly reassess and adapt to changing customer needs and preferences.
Develop flexible, dynamic internal processes: Create systems that can quickly respond to new challenges and opportunities.
Foster collaboration between business and IT teams: Break down silos and encourage cross-functional teamwork.
Prioritize customer-centric design: Always start with the customer's needs and work backward to create solutions.
Use data thoughtfully: Combine Big Data insights with forecasting and experimentation to anticipate future trends.
Invest in seamless, omnichannel experiences: Ensure consistency and ease of use across all customer touchpoints.
Cultivate a culture of adaptability: Encourage all employees to embrace change and continuous improvement.
The Importance of Company Culture
Trefler emphasizes that successful adaptation to the new customer landscape requires more than just technological solutions or process improvements. It demands a fundamental shift in company culture. He argues that progress is only possible when businesses create an environment where all team members - from customer service personnel to IT developers - feel like they're working towards a common goal.
This cultural shift involves:
- Breaking down departmental silos
- Encouraging open communication and collaboration
- Fostering a shared sense of purpose and customer focus
- Empowering employees to innovate and take calculated risks
- Celebrating adaptability and continuous learning
By cultivating this type of culture, companies can become more agile and responsive to the ever-changing demands of Generation D.
Case Studies and Real-World Examples
Throughout "Build For Change," Trefler provides numerous case studies and real-world examples to illustrate his points. These include:
- Nokia's failed attempt to compete with Apple in the smartphone market
- Sony's inability to adapt to changing music consumption habits
- Vodafone's successful use of personalized daily specials
- BB&T's transformation of their account creation process
- Telstra's implementation of a Chief Process Officer and customer-centric redesign
These examples serve to both highlight the dangers of failing to adapt and provide inspiration for successful transformation.
Final Thoughts
"Build For Change" presents a compelling case for why businesses must evolve to meet the demands of a new generation of customers. Trefler's insights into the rise of Generation D and the potential for a "customerpocalypse" serve as a wake-up call for companies that have grown complacent or resistant to change.
The book's emphasis on breaking down silos between business and IT teams, adopting an outside-in approach to process design, and creating a culture of continuous adaptation provides a roadmap for companies looking to thrive in this new landscape. By embracing these principles, businesses can position themselves to not only survive the challenges posed by Generation D but to flourish by meeting and exceeding their expectations.
Ultimately, "Build For Change" argues that success in the modern business world requires a fundamental shift in how companies approach customer engagement, internal processes, and technological innovation. Those who can make this shift will be well-positioned to capture the loyalty of tomorrow's customers and avoid the fate of once-dominant companies that failed to adapt.
As we move further into the digital age, the lessons and strategies presented in this book will only become more crucial. Companies that take Trefler's advice to heart and commit to building for change will be the ones that not only survive but thrive in the face of ever-evolving customer demands and technological disruptions.