Brett King

Customer Value Innovation

In Technology Innovation on October 22, 2009 at 13:23

Excerpt from Chapter 2 – Measuring the Customer Experience

An emerging field in customer experience and behavioural research and marketing is the area of value innovation. Value innovation, in strategic terms, is the creation of a superior customer value with a view to gaining a competitive advantage and/or rejuvenating the institution and organization (Berghman & Matthyssens, 2006). Whereas organizations like Google thrive on constant innovation, traditional organizations like established financial institutions find such more difficult to manage.

Innovation of the Customer Experience, however, is no longer a choice, but a necessity, and more importantly a competitive weapon. As customer behaviour continues to involve more and more rapidly, a culture of continuous improvement of the customer experience is required. This culture of innovation can then influence the entire institution from management through to frontline staff.
This notion of value innovation goes beyond changes in product, process and services and includes:

• New ways of servicing customers/clients,
• New ways of offering value propositions to customers,
• New ways of collaborating with customers,
• New ways of working, and
• New ways of networking competencies and resources

To effectively measure innovation in the institution, we need to measure how innovation is conceptualized, how well the innovation is oriented toward the customer (instead of solely internally), the approach that will be used to roll-out the innovation or proof-of-concept, how we are learning as an organization, and what research (R&D) is being carried out.

Achieving Customer Value Innovation

Achieving Customer Value Innovation

A number of institutions have recently appointed a Head of Innovation or Chief Innovation Officer to set out to accomplish this task. However, the major issue currently facing the institution is we simply don’t measure collectively the experience of the customer, thus any attempts at innovation are likely to be met with frustration because the organization does not understand the competitive benefit likely to be gained.

A good summary of value innovation is defined as:

…the result of the creative efforts of individuals directed by managerial methods that stimulate and foster a culture of learning and creativity within the organization. (Colurcio & Mele, 2008)

Here is the conflict. The more we enforce ‘traditional’ process within an institution, the less likely we are to generate creative solutions to customer issues and problems. The common answer being “sorry the bank does not allow us to do that Sir!” Until we value the ability of our staff to innovate around the customer and support such innovation, then the culture of punishing a staff member for stepping outside of the ‘normal’ procedure is likely to hinder progress in this area.

Why not try Google’s approach? Google offer their staff 20% of their working week to work on innovation and improvement of the business. They can work on any project or assignment they like, and this often results in various project and work groups being spontaneously created by likeminded colleagues with an ‘idea’ on how to do something better.

Why not allow every department and product team to create an innovation role? Give the Chief Innovation Officer a dotted-line of oversight of these resources in addition to the department leads, and let them go for it!

Creating an Innovation Network

Creating an Innovation Network

Thanks for listening

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