2013 Predictive Consulting Group, Inc.

All rights reserved. Reproduction prohibited.

CHIEF CUSTOMER OFFICER COUNCIL
www.ccocouncil.org | (978) 226-8675 Page 1
Innovati on Doesn' t
Come from the Top or
the Bottom: It Must
Come from Customers

by Curtis N. Bingham

2013 Predictive Consulting Group, Inc.
All rights reserved. Reproduction prohibited.
CHIEF CUSTOMER OFFICER COUNCIL
www.ccocouncil.org | (978) 226-8675 Page 2
I nnovati on Doesn' t Come from the Top or the
Bottom: I t Must Come from Customers

Curtis N. Bingham
Founder and Executive Director
Chief Customer Officer Council
cottls 8loqbom ls tbe tecoqolzeJ ootbotlty oo cblef costomet offlcets ooJ tbe fltst to ptomote tbls tole os o cotolyst
fot competltlve oJvootoqe. ne ls tbe cteotot of tbe ccO kooJmop, o qtoooJbteokloq wotk cootololoq 100- ctltlcol
sttoteqles esseotlol fot costomet ceottlclty. As oo lotetootloool speoket, ootbot, ooJ coosoltoot, cottls ls posslooote
oboot cteotloq costomet sttoteqy to sostoloobly qtow teveooe, ptoflt, ooJ loyolty.

1here are a number of common mlsconcepLlons abouL where lnnovaLlon sLarLs. Some people belleve
LhaL greaL leaders drlve lnnovaLlon. CLhers belleve LhaL Lhe rooLs of lnnovaLlon lle ln pure research,
unadulLeraLed and unfeLLered by cusLomer lssues or complalnLs. SLlll oLhers belleve LhaL lnnovaLlon
sLarLs wlLh employees and suggesLlon boxes. Powever, Lhe landscape ls llLLered wlLh greaL leaders
whose lnnovaLlons dldn'L amounL Lo anyLhlng or weren'L susLalnable (Lhlnk kodak, or xerox) and Lhe
days of pure research are dlsappearlng llke Lhe 8ell LaboraLorles of yesLeryear. 1he new reallLy ls LhaL
lnnovaLlon musL sLarL wlLh cusLomers. ln Lhls age, cusLomers are Laklng conLrol of buslnesses, seLLlng
Lhelr own agendas, and rewardlng Lhose companles LhaL can adapL and beLLer serve Lhem. Chlef
cusLomer offlcers, wlLh Lhelr lnLlmaLe cusLomer knowledge, are unlquely quallfled Lo proacLlvely
dlscover cusLomer needs, wanLs, and deslres and help Lhe organlzaLlon proflLably dellver lnnovaLlons.
Where Doesnt Innovation Come From?
1here are Lruly greaL leaders who've redeflned Lhe producL and compeLlLlve landscape, such as Aklo
MorlLa, one of Lhe founders of Sony and Lhe faLher" of Lhe Walkman, SLeve !obs wlLh Apple CompuLer,
Lhe lod, lhone, Lou CersLner of l8M, and oLhers. Powever, Lhe pages of lorLune and Lhe Wall SLreeL
!ournal are fllled wlLh far more numerous, oLher greaL" leaders who've fallen lnLo dlsgrace afLer belng
unable Lo conslsLenLly and rellably generaLe proflLable lnnovaLlons.
ln addlLlon, pure research laboraLorles such as l8M 8esearch and 8ell Labs are shrlnklng and
dlsappearlng. Cnce Lhe domaln of only Lhe largesL research labs, small buslnesses now own upwards of
33 of Lhe world's paLenLs. Whlle aL 8ell Labs, l was dlsmayed aL Lhe lnsular arrogance of Lhe Labs as
englneers essenLlally sald, We know whaL our cusLomers wanL-we Lold Lhem so!" CusLomers were
consldered beneaLh Lhem, and lL showed ln Lhe company's rapldly erodlng boLLom llne. ure 8&u,
unadulLeraLed by cusLomer lssues, cannoL be a susLalnable source of revenue-drlvlng lnnovaLlon.

2013 Predictive Consulting Group, Inc.
All rights reserved. Reproduction prohibited.
CHIEF CUSTOMER OFFICER COUNCIL
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Lmployee lnnovaLlon programs are only marglnally beLLer Lhan pure research ln LhaL wlLh some
excepLlons, Lhey are focused lnLernally on lmprovlng operaLlonal performance raLher Lhan breakLhrough
Lechnology LhaL slmpllfles cusLomer buslness processes and enhances cusLomer proflL models.
MarkeLlng has LradlLlonally focused on bulldlng a brand, creaLlng an arLlflclal need, or creaLlng
awareness ln hopes LhaL Lhey'll caLch a prospecL durlng Lhelr purchase cycle. 1hose days are over.
8rands are dead, needs are Loo expenslve Lo creaLe, and slmply hoplng Lo caLch someone wlLh a well-
Llmed message ls ludlcrous. 8rands used Lo serve as a proxy for deLalled, analyLlc producL lnformaLlon
LhaL was unavallable ln Llmes pasL. ln Lhls osL-lnformaLlon Age, or Lhe Age of Access, consumers have
far more deLalled producL lnformaLlon avallable Lo Lhem from companles, revlewers, users, and even
compeLlLors. WlLh Lhls overabundance of lnformaLlon and LrusLed recommendaLlons, Lhere ls no need
for Lhe brand excepL as an afflnlLy marker or communlLy allgnmenL Lool.
The Root of Innovation
lf lnnovaLlon doesn'L come from sLrong leaders, properly schooled employees, behemoLh Lhlnk-Lanks, or
from ouLward-bound markeLlng, where Joes lL come from?
eLer urucker sald, 1he purpose of a buslness ls Lo creaLe and keep a cusLomer." lf your purpose ls Lo
geL and keep proflLable cusLomers, shouldn'L your prlmary source of lnnovaLlon be your cusLomers?
lL ls no longer posslble for any company Lo slmply develop a new producL based on some cool ldea and
Lhrow lL over Lhe wall ln hopes LhaL markeLlng and sales can flgure ouL how Lo creaLe a need ln
someone, somewhere. CompeLlLlon ls Loo lnLense, cusLomers are Loo demandlng, and proflL marglns are
Loo Lhln for Lhls klnd of mlsLake.
ln shorL, Lhe cusLomer rules.
Lmployees are greaL aL recognlzlng opporLunlLles LhaL cusLomers presenL. CreaL leaders are Lhose LhaL
recognlze lnnovaLlon when Lhey see lL and properly fund and commerclallze lL. 8&u ls unlquely quallfled
Lo flnd ways of developlng proflLable soluLlons Lo well-deflned cusLomer lssues and opporLunlLles.
MarkeLlng musL be Lhe faclllLaLor of all of Lhese, ensurlng Lhe flrm's value chaln beglns and ends wlLh
Lhe cusLomer, earnlng slgnlflcanL proflLs from sLarL Lo flnlsh.
How Do We Leverage Innovation?
rocLor & Camble's senlor leaders recenLly reallzed LhaL Lhere was no way Lhey could malnLaln Lhelr
growLh LargeLs wlLh Lhelr noL lnvenLed Pere" syndrome because dolng so would requlre Lhe company
Lo grow by $4 bllllon each year. lnsLead, Lhey reallzed LhaL Lhelr goal should be Lo be Lhe besL aL
undersLandlng Lhelr cusLomers. 1hrough Lhelr ConnecL + uevelop" program Lhey're fuellng growLh by
purchaslng lnnovaLlons from neLworks of smaller companles from around Lhe world LhaL unlquely and
proflLably saLlsfy cusLomers and enhance Lhelr experlence.
1o effecLlvely leverage lnnovaLlon Lo fuel cusLomer-cenLrlc growLh, companles need Lo do Lhree Lhlngs:

2013 Predictive Consulting Group, Inc.
All rights reserved. Reproduction prohibited.
CHIEF CUSTOMER OFFICER COUNCIL
www.ccocouncil.org | (978) 226-8675 Page 4
1. uevelop and regularly refresh an exLraordlnarlly deep undersLandlng of cusLomers' needs,
wanLs, deslres, and aLLlLudes regardlng Lhelr producLs, servlces, and Lhe company lLself
2. Asslgn execuLlve champlons for lnnovaLlon lnlLlaLlves
3. CreaLe a unlfled process for ldenLlfylng and quallfylng new opporLunlLles for producLs, servlces,
markeLs, or segmenLs
An Extraordinarily Deep Customer Understanding
lL lsn'L Loo hard Lo flnd ouL whaL cusLomers need, wanL, and are wllllng Lo pay for. ln facL, lL ls qulLe Lhe
opposlLe. CusLomers are demandlng Lo be heard. lf you search Lhe web for aberraLlons of many
company's names you'll lnvarlably flnd slLes LhaL cusLomers have seL up Lo volce Lhelr oplnlons (e.g.,
clLlbanksucks.com).
unforLunaLely, noL nearly enough companles make sufflclenL efforL Lo develop Lhls level of cusLomer
lnslghL, chooslng lnsLead Lo operaLe from Lhe guL", or rely upon ouLdaLed 3rd-parLy research.
Cne of my cllenLs, a ma[or flnanclal sofLware vendor, LhoughL lLs cusLomers were lnsanely prlce
senslLlve. Powever, ln Lalklng wlLh Lhose cusLomers, l found a large and easlly ldenLlflable segmenL LhaL
Lruly valued Lhe vendor's producLs and were wllllng Lo pay double and even Lrlple lLs currenL raLes. ln
addlLlon, l also dlscovered an lmporLanL buslness need ln Lhe markeL for a producL LhaL Lhey had
prevlously LhoughL Lo be very low value and were conslderlng [usL glvlng away for free.
1o effecLlvely llsLen, you musL speak wlLh and learn from cusLomers, vendors, parLners, and oLhers
wherever Lhey can be found. ?ou need Lo scour Lhe soclal web, forums, and user communlLes Lo woo
lead users, bloggers, exemplars and advocaLes who can meanlngfully conLrlbuLe Lo your growlng body of
knowledge.
Cf course you need Lo sollclL lnformaLlon abouL producL lssues buL Lhere ls far more Lhan LhaL Lo be
galned. ?ou musL delve deeper lnLo cusLomer aLLrlbuLes, percepLlons, dlssaLlsflers, and buslness
processes ln order Lo quanLlfy, [usLlfy, and defend Lhe value you provlde and forLlfy Lhelr purchase and
reLenLlon drlvers, as well as Lo dlscover new, proflLable opporLunlLles.
1he CCC 8oadmap (hLLp://www.ccocouncll.org/slLe/cco-roadmap.aspx) ldenLlfles lnnovaLlon as one of
Lhe key responslblllLles of Lhe CCC. 1he chlef cusLomer offlcer (CCC) ls unlquely quallfled Lo ldenLlfy,
evaluaLe, and reflne cusLomer-cenLrlc lnnovaLlons Lo ensure Lhe greaLesL success. World-class CCCs have
aL Lhelr flngerLlps daLa ldenLlfylng Lhe mosL valuable and proflLable cusLomers whose needs are mosL
lmporLanL Lo conslder. ln addlLlon, Lhese CCCs have Lhe sLrongesL 828 cusLomer connecLlons and Lhe
greaLesL 82C credlblllLy Lo garner parLlclpaLlon ln cusLomer llsLenlng acLlvlLles LhaL dlscover, LesL, and
reflne lnnovaLlve ldeas. Leveraglng Lhelr ln-depLh cusLomer undersLandlng, CCCs can effecLlvely ground
Lhe mosL promlslng lnnovaLlon efforLs ln reallLy.


2013 Predictive Consulting Group, Inc.
All rights reserved. Reproduction prohibited.
CHIEF CUSTOMER OFFICER COUNCIL
www.ccocouncil.org | (978) 226-8675 Page 5
Assign Executive Champions for Innovation Initiatives
As menLloned before, greaL leaders are Lhose who can recognlze slgnlflcanL lnnovaLlon and successfully
evaluaLe lL, veL lL wlLh cusLomers, and commerclallze lL. LxecuLlve leadershlp alone has Lhe ablllLy Lo
undersLand poLenLlal, forswear rlsk, fund greaL ldeas, and remove obsLacles. Companles musL creaLe
execuLlve-level supporL for well-quallfled lnlLlaLlves so Lhey see Lhe llghL of day and have a chance Lo
conLrlbuLe Lo Lhe company's boLLom llne. As well, Lhese conLrlbuLlons musL be formally measured and
rewarded Lo ensure LhaL Lhe deslred resulLs are achleved.
A Unified Process to Qualify New Opportunities
WlLh Lhe seemlngly unendlng supply of new buslness opporLunlLles, how do you go abouL evaluaLlng
Lhem all Lo deLermlne whlch ones are vlable? lor rocLor & Camble, Lhe process was relaLlvely
sLralghLforward: lL ldenLlfled Lhe flve blggesL cusLomer lssues for each lLs dlvlslons and Lhen spenL Llme
wlLh key cusLomers Lo ldenLlfy Lhe deslred experlence around each lssue. lL Lhen began Lo source
soluLlons from lnnovaLlon markeLplaces, evaluaLlng each accordlng Lo poLenLlal proflL conLrlbuLlon,
sLraLeglc flL, and overall lmprovemenL Lo Lhe deslred cusLomer experlence.
Whlle your process may be dlfferenL, Lhe mosL lmporLanL Lhlng ls Lo ensure LhaL Lhere ls a unlfled
process LhaL everyone ln your organlzaLlon undersLands and can follow.
Conclusion
lnnovaLlon may be lncremenLal. lL may be LransformaLlonal. 8egardless of whlch, lL ls clear LhaL
susLalned, proflLable lnnovaLlon comes from cusLomers. 1hose companles LhaL sLrlve Lo lnLlmaLely
undersLand Lhelr cusLomers' needs, wanLs, and deslres and proflLably saLlsfy Lhem beLLer Lhan Lhelr
compeLlLors are Lhose who wlll wln ln Lhe cusLomers' eyes and ln Lhe markeLplace.
LeL your cusLomers gulde your nexL sLraLeglc move so you can grow proflLs as you aLLracL more of Lhe
besL cusLomers and keep Lhem longer.
*

*
copytlqbt Notlce. All conLenL conLalned ln Lhls arLlcle ls copyrlghL proLecLed maLerlal. 8eproducLlon, ln whole or ln parL, ln any
form or medlum, wlLhouL Lhe express wrlLLen permlsslon of Lhe Chlef CusLomer Cfflcer Councll ls sLrlcLly prohlblLed.

2013 Predictive Consulting Group, Inc.
All rights reserved. Reproduction prohibited.
CHIEF CUSTOMER OFFICER COUNCIL
www.ccocouncil.org | (978) 226-8675 Page 6
About CURTIS N. BINGHAM
As LxecuLlve ulrecLor of Lhe Chlef CusLomer Cfflcer Councll`, CurLls 8lngham ls
Lhe recognlzed auLhorlLy on chlef cusLomer offlcers and Lhe flrsL Lo promoLe Lhls
role as a caLalysL for compeLlLlve advanLage. Pe ls Lhe creaLor of Lhe CCC
8oadmap, a groundbreaklng work conLalnlng 100+ crlLlcal sLraLegles essenLlal for
cusLomer cenLrlclLy. As an lnLernaLlonal speaker, auLhor, and consulLanL, CurLls ls
passlonaLe abouL creaLlng cusLomer sLraLegy Lo susLalnably grow revenue, proflL,
and loyalLy.

About THE CHIEF CUSTOMER OFFICER COUNCIL
1he CCC Councll ls a powerful and lnLlmaLe gaLherlng of Lhe world's
leadlng cusLomer execuLlves from wldely dlverse lndusLrles. 1he
Councll helps execuLlves achleve ob[ecLlves fasLer and more easlly by
leveraglng besL pracLlces. lL helps valldaLe and reflne sLraLegles and
lnlLlaLlves Lo avold experlmenLlng aL cusLomer expense. Membershlp
ls by lnvlLaLlon only, and purposefully cross-polllnaLed wlLh Lhe mosL
forward-Lhlnklng companles, large and small, so as Lo help cusLomer
execuLlves dellver solld, cusLomer-cenLrlc buslness resulLs. lor more
lnformaLlon, emall lnfo[ccocouncll.org or call 978-226-8673.


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