Sense & Respond: The Quest for Simultaneity
People have the amazing capability to sense, transmit, interpret, decide, direct & respond; this ability is what makes us human.
We have a shared sense of purpose and the ability to act in harmony to achieve that purpose. As we get older, we do our best to learn from our mistakes, anticipate more realistically and become less reactive; creating a state where there’s zero latency between sensing & responding. On the contrary, businesses are very black and white.
Currently, most businesses still function on traditional principles that have proven to be successful in the last century; however these principles may not work well today. Allow me to elaborate:
– Product-Out: The shared purpose was to make and sell; get the product out quickly, efficiently and profitably to as many consumers as possible. The understood rule was if it was marketed well it should (hopefully) sell. This rule worked well as long as supply exceeded demand and consumer choice was limited.
– Intra-active: Business units mostly worked within themselves and, at best, were connected with the unit adjacent in the value chain.
– Governance: The decision making structures were that of Command and Control; consisting of one key decision maker at the top of the hierarchy, followed by their team that would execute these discussion.
With the customers in control, the amount of choice available and the easy access to that choice, has made Product-Out models redundant. With the increasing amounts of environmental uncertainty, accurately planning-forward without many assumptions is near impossible. Instead, it’s become vital for an Enterprise to be able to ‘sense & respond’ with as little latency as possible to changing demands. This can provide phenomenal competitive-advantages.
In business, simultaneity is thought of as ‘zero latency’ between the time taken to make a decision based on incoming signals and to transmit these decision to their point of implementation.
The need for change
While simultaneity is an ideal-state, your journey towards this ideal-state will hone your ability to sense & respond. And, in the process you will gain phenomenal advantages. I am sure you would have read about Zara’s case-study where Store Managers order fresh stock twice a week. Their entire supply chain is geared to respond to it (contrast this to 8-9 months for most of the other importers). The design-teams respond in near real-time to demands like a line of fashion from a recently released movie that has suddenly become a hit.
However this does not only apply to retail led example with complex supply chains at the back. There are also a number of recent examples from the banking sector. The delay in launch of Apple Pay for HSBC customers generated a lot of negative sentiment on Social Media. As an outsider, it is impossible to pinpoint the real reason for the delay, however it was entirely possible to:
– Sense the interest in the product prior to the launch, for example a simple question on consumers using the HSBC iPhone App; this would be fairly inexpensive
– Once the delay was evident, notify their customers on their iPhone Apps about the impending delay, instead of customers discovering it themselves and taking it out on Apple via their social media pages
– Many, if not all, of the negative tweets went unanswered; these could have been automated to a large extent. Many consumers did get an ‘Apple Pay coming soon’ email that morning, however that was not the channel consumers were using in attempts to register, nor was it the channel they were using to reach out to Apply with their frustrations.
Another example is from one of our customers in the electronic product segment. They were getting conflicting signals: increased drops on their website, surge in call-centre calls, but increased customer-satisfaction scores. Using their next-generation insights & analytics platform that gave them a 360 degree visualisation of their customers, they were quickly able to visualise that a rogue product-activation tutorial led to a support call and an ensuing gift-voucher (and therefore a happy customer). Having a single-platform that generated Omnichannel Insights for an individual consumer could help correlate issues that cut across online, product engineering, customer support departments and be able to respond quickly. The same platform also allowed them to generate and deliver personalised, dynamic recommendations to shoppers, while simultaneously improving customer lifetime-value.
Sense-and-respond does not only deliver better customer service, but also helps in product development. In the example above, the product-usage data was also used to provide strong insights on new product-development that led to greater sales and reduced the cost of developing new products.
Increasingly, businesses are using power of inexpensive experimentation (e.g. multivariate testing) to sense consumer preferences in real-time. This is done by serving various version of the same page to different consumers on the live-site, selecting successful designs and reaping significant commercial benefits (see this example of a $300m button).
How do you develop Sense & Respond?
The future of every business is going to be customer-centric and not product-centric. To become more customer-centric, everything needs to revolve around a customer and their journey. Therefore, it’s vital that a business prioritises the following:
- Listen towhat customers are telling them; directly and indirectly.
- See what this information is telling them by better visualisation; visual thinking unlocks hidden patterns.
- Develop a Nervous System to connect various parts of a business to receive, process and collaborate on this information in real-time.
- Reflect on what this information is telling us by consolidating and classifying information.
- Smell problems that are brewing by using advanced data strategies like pattern recognitions and cohort analysis; identifying the problems you can’t see or the issues you don’t hear about.
- Develop a taste to use these insights and experiment. Take small bites of a problem; experiment, learn and improvise.
- Then, reimagine every customer touchpoint toknow them well and not just sell.