Center your organization around the customer’s problems
Modern, agile times require just as modern and agile organizations. Without agility it becomes difficult to truly deliver a strong brand experience for the customer. But just how could such an organization look? Could the key lie in centering your organization not around products, but problems?
(This story was originally published in a slightly different Swedish version for our client Billogram.)
“Merry Christmas”. These two words were the only two written in the SMS sent from Neil Papworth to Vodafone director Richard Jarvis on December 3 1992.
It was the first SMS ever sent.
Shortly after Mr. Papworth had sent that first SMS, the technology started to spread like wildfire across our planet. We all eventually discovered that this ability, to be able to communicate smoothly and without the demand for a real-time response, really was kind of nice.
The success story of SMS clearly exemplifies the potential power that lies in identifying a problem that people want solved, and then presenting a solution that answers to the problem.
Looking at it from the perspective of a product or service owner, the story of SMS is also a useful lesson. You see, it is easy to forget that people use SMS to solve a problem, NOT because sending a text is fun in and of itself. At first, the thought might sound confusing, but the difference between the schools of thought is colossal. It may actually constitute the difference between brands that struggle and those who thrive in the agile times we live in. It’s about realizing that no one actually wants to send an SMS. No one wants to read the morning paper. No one wants electricity.
What people want, is to get their problems solved. And that should be the central point around which you organize your brand.
Why no one wants to send an SMS
Let us dig deeper in the story of SMS to illustrate the difference between these ways of thinking. When the use of SMS accelerated many telecommunications companies made a fortune by charging a couple of cents for each SMS sent (later the charges diminished, but with millions of texts sent daily it was still a gold mine for telecoms).
Hundreds of texts a day became thousands and hundreds of thousands — come 2010, the citizens of the world sent 193 000 texts every second. Right around this time, however, a shift began. Apps such as Facebook Messenger, WeChat and the pioneer WhatsApp exploded and revealed that no one actually wants to send an SMS. What people want to do, is to communicate smoothly and without the demand for a real-time response.
The guys in Mountain View focused on the customers’ needs and organized themselves to deliver a solution.
A telecommunications company on its toes would have predicted the boom for WhatsApp and its equals. The popularity of SMS clearly showed that people love to communicate that way. Even so it was two ex-Yahoo employees in Mountain View, California, who started WhatsApp — not Vodafone, AT&T or some other operator.
The guys in Mountain View focused on the customers’ needs and organized themselves to deliver a solution. The operators were focused on earning money from SMS.
Even though SMS remains popular to say the least, WhatsApp today generates three times more daily traffic than SMS. WhatsApp was bought by Facebook early 2014 for 19 billion US dollars.
Talk about customer centricity that pays off.
Organizing around the customer’s problems
We can’t all be out looking for the next WhatsApp or an equally disruptive innovation. What you definitely can do, is to start adjusting your organization to better match the customer’s actual problem. Otherwise you run the risk of your competitors pulling the rug from under you with the WhatsApp of your sector.
“Re-organization? Yuck!”
Yeah. In a world as fast moving as ours is right now, our instinct says it’s hard to create processes and put together organizations that last longer than a loaf of newly baked bread. You may re-organize only to find, the second you’re done and everyone is comfy in their new chair at the office, that our stormy world has changed. Again. And so you re-organize. AGAIN.
However. In the eye of the storm, we find a constant: the customer. Not because customers don’t change — we are all customers and we change all the time — but because no matter what, at the end of the day, the needs of the customer are always what’s most important. If you’re organized to solve the problems of that customer, you’ll always be correctly organized.
What job is your solution hired for?
One of the clearest voices in the area of “focus on the customer’s problems” is that of Clayton Christensen, who put forward the so called “jobs to be done” theory (which he has written about for HBR, among many others).
The theory is simple: the customer has “jobs” that need doing (jobs in this terminology are problems to be solved, needs to be fulfilled). Skilled companies focus on finding jobs to be done and offer solutions. The founders of WhatsApp identified a better way than SMS to address the need for smooth communication, so they offered a solution. Four years later: well hello 19 billion dollars.
A “job” can be anything, really. “I need something to pass the time while I wait in line” is a small but not insignificant job to be done. Some are much grander in scope, such as “I need to find a life partner”. Some jobs show up without warning: “My luggage got lost at the airport and I need to get clothes for my business meeting.” Other jobs are predictable, routine: “I need to make healthy lunchboxes for work.” A job can be more emotionally oriented: “I need something that brings some colour and finesse to my living room”.
For all these jobs, we “hire” solutions, as Christensen puts it in his HBR article:
“When we buy a product, we essentially “hire” it to help us do a job. If it does the job well, the next time we’re confronted with the same job, we tend to hire that product again. And if it does a crummy job, we “fire” it and look for an alternative. (We’re using the word “product” here as shorthand for any solution that companies can sell; of course, the full set of “candidates” we consider hiring can often go well beyond just offerings from companies.)”
In any given situation, your product or service might provide immense value, or be of no value at all. It depends on how well it gets the job done.
I often get into discussions that I believe break down because the people in the discussion have different opinions of the term “value” — what is value? Many who sell a product argue that it is of really high value because of the craftsmanship that went into it, because of the components, the esthetics. And yes, maybe to some those things create value. But the jobs-to-be-done-theory makes the discussion much easier: in any given situation, your product or service might provide immense value, or be of no value at all. It depends on how well it gets the job done. And that is up to the customer to experience and decide.
Soon the morning paper will be out of work
Let’s look at the morning paper. It was much more popular in 1980 than it is today. Why? Today just as back in the 80’s, many have the need to get updates about the world around us, preferably while sipping our hot morning beverage of choice. However, in 1980 the paper was the given candidate to “hire” for this job — today, the morning paper has a tough job competing. Many hire their social media flow for this job, or the online editions of the evening papers, or web broadcasts. As a Swede, I’m not even limited to the Swedish offerings; if Trump has done something stupid again I’m more interested to read CNN than Swedish paper DN.
In this competition it becomes tough for the printed morning papers to get hired, since, as the above scenario shows us, this is how it is:
No one wants a morning paper — you want an update of the world around you.
No one wants a utilities company — you want the fridge, the oven and the television to work.
No one wants to sign up for a wireless plan — you want to communicate with colleagues, friends and family.
And so on.
Stop a moment to think: What job or jobs is the customer hiring your brand to perform? Do you even know? You may believe one thing but the truth is another.
Once you have got that fundamental question answered, the challenging part arrives: Are you truly fit to help the customer get that job done, even if progress in society makes other solutions more attractive to hire? Or are you — as the telecoms were when WhatsApp arrived — dependent on the definition staying the same? As soon as your equivalent of SMS or morning paper isn’t as popular any more, what do you do then? This is the difference between being oriented around the product vs. around the problem, which might also constitute the difference between downfall and survival.
“The problem is that while you cement an organization built to produce this clearly defined product, you risk losing sight of the job you’re actually supposed to be hired for”
Theoretically none of this is particularly hard to get. We can all nod and say “Yeah I totally don’t need the morning paper any more, I have social media, I get it!”. But the challenge which follows is a tougher nut to crack: How can large organizations change from being solution-focused (“we deliver an SMS service”) and instead focus on the job the customer wants done (“we answer to the need to communicate smoothly and without the demand for a real-time response”).
The more product focused you become, the worse you’ll be at solving the problem
Almost every organization is if not entirely then at least partially product-oriented. Catastrophic? No, the attraction of being product-oriented is understandable. If you’ve decided that a morning paper is your product, it becomes much easier to organize. It’s easy to define more or less exactly what it takes to produce the paper (written content, photos, ads, printing etcetera). It’s also quite easy to decide what to measure to determine whether your paper is successful or not (e.g. number of subscribers, ad revenue).
The problem is that while you cement an organization built to produce this clearly defined paper, you risk losing sight of the job you’re actually supposed to be hired for. Helge Tennö, a customer strategist from Norway and prolific blogger, captures this dilemma wisely in a Medium story:
“As organizations grow up their mindsets changes from the customer’s problem to making their own solutions and services better. They exchange their messy customer data for measurable data, data that can fit into an Excel spreadsheet. The data becomes all about products, features and competitors. They forget the customer’s job and start understanding the world through the eyes of their solutions.”
We now see the paradox emerging from the fog, stepping into clear view.
Imagine a woman, we’ll call her Molly. She and a couple of colleagues have quit their old job because they have identified a problem in their field that they believe they can solve with an innovative product. They develop the idea, acquire some funding, launch, become successful and soon they’re living the life. So Molly, the CEO, starts scaling up the business focused on this innovative product, of course, since there is demand and it’s profitable. As they scale up, the board of course wants to see what returns the investments produce, so they decide on key metrics, gather more data and track everything in different software applications. They implement changes to the product and giddily rub their hands studying the Q4 sales prognosis.
These tactics are familiar — and a trap. Molly focuses the company on the product instead of staying focused on what got them started: the job to be done. It actually goes so far that when Molly and her team start getting insights into faults with the product and a shifting need on the customer’s side, those insights are not considered valuable — they’re considered distractions to their finely tuned machine. Back to Tennö:
“All challenges are solved inside a beautifully choreographed and trained machinery of roles, rules, guidelines, components and transactions. But, in these organizations where the process, not the product becomes the measure of success, any distraction to the process becomes the problem. And so, when met with uncertainty the company will pull all its force to create the illusion that the world is still the same, buy customer insight to prove they can fit the customer to the problem and fail to explore or prioritize anomalies.”
I love that part which I bolded. What if papers in the 90’s had spent less time convincing themselves that “people will always want to read a paper!” and more time developing new offerings suited to the new world order created by the Internet and digitalization?
The only thing certain is uncertainty
At this point it is not enough to once more blurt out a “we are going to focus on solving the customer’s problems!”. How can you actually deliver on that? Tennö argues for the principle “fit for uncertainty”. He poses that in a world where the only thing certain is uncertainty, companies must be organized based on that uncertainty.
Let’s look at an example which brings this principle to life: Zappos. This american online shopping giant, specialized in shoes and accessories, has around 1 500 employees. In 2014/2015 they went through a much discussed re-organization inspired by the influential book Reinventing Organizations, by Fredric Laloux. CEO Tony Hsieh removed all managers and made the organization self-organized. Instead of departments and hierarchies the employees would now be part of different circles (inspired by the organizational idea holocracy).
Why did Hsieh radically want to re-organize Zappos? So they could meet the rapid pace of development and uncertainty in today’s business environment, writes New Republic in a long story where they talk to and about Hsieh and Zappos. Hsieh wants everyone at Zappos “to approach their work like an entrepreneur, to be adaptable, flexible, resourceful, and creative”. Hsieh also draws parallels to cities and their resilience. When cities grow the productivity of their inhabitants also does, but in companies the opposite happens, he observes.
Why? Maybe because the freedom and creativity of every single employee is suffocated and they are forced to follow the processes and rules of the machinery Tennö describes.
Another company which has gone in the direction of radically increased freedom is the dutch home care provider Buurtzorg (dutch for “neighborhood care”). It was founded in 2007 by Jos de Blok, who himself had worked as a nurse. He felt that the traditional ways of working in his occupation were hindered by too much bureaucracy and a lack of autonomy. So Buurtzorg, he thought, should be built on self-organization and independence.
Today Buurtzorg has over 14 000 nurses who are self-organized in teams of up to 12. These roughly 1 000 teams have support from only 50 admins, 18 coaches and 0 — zero — bosses. The result? Buurtzorgs nurses are truly able to focus on their patients. One of the nurses had this to say when interviewed by the blog Corporate Rebels, who visited Buurtzorg:
“We feel more liberated, appreciated, and fully in control of how we can provide the best possible healthcare to our clients. Instead of having to work with lots of frustrating bureaucracy, we can now do what we love to do: delivering care to clients.”
If the employees are given freedom, it is a prerequisite that they know which problem they need to solve for the customer.
This way of thinking is starting to spread; here in Sweden I have encountered organizations who are starting to adapt ideas straight from or similar to the ones posed by Fredric Laloux.
How can you begin to transform?
It’s easy to read about companies such as Zappos and Buurtzorg, become “inspired” and then nothing happens. In a hundred years we could be sitting here mulling over what our companies should have done in 2018, but already today we need to read the situation as it is and act.
So what should we do? If there is one clear common denominator shared by these examples, it’s freedom. The employees are given increased freedom so that they can better solve the customer’s problems. And that’s just it: If the employees are given freedom, it is a prerequisite that they know which problem they need to solve for the customer. Let’s get back to Clayton Christensen one last time:
“Identifying and understanding the job to be done are only the first steps in creating products that customers want — especially ones they will pay premium prices for. It’s also essential to create the right set of experiences for the purchase and use of the product and then integrate those experiences into a company’s processes.”
Once the problem is correctly identified, the job well defined, you can organize yourselves around it. Let this focus become part of the process, as Christensen writes. It’s guaranteed to be a bit scary and different. But starting to explore what a modern, customer-centric organization looks like for you is the first step to creating a brand that will survive no matter what jobs the customer wants done in the future.
