Design for your customers’ future not not your bottom line.
[originally written in August 2017]
I read two stories today that sum up, with alarming clarity, where companies go wrong, and of course, they both point to the same thing. Your best hope for the future is always to think of your customers’ future.
“After decades of success, dominating the global luxury market with impeccably designed engineering marvels, Germany’s carmakers face their iPhone moment. Like BlackBerry and Nokia before, they are confronted with a US company selling an elegant device based on superior technology.” (John Gapper in the FT)
This has very little to do with luxury or technology, and even less to do with US v German design, but it has everything to do with losing sight of why people buy your products. Tesla is the iPhone and BMW & Mercedes are Nokia & Blackberry. It’s an easy analogy. No one wants diesel cars anymore, but the reasons are not to do with fuel, they’re to do with the manufacturer's differing attitudes.
That FT article is worth a read, because it’s not a Tesla hype-piece. Far from it. Electric cars are also much simpler to build: “Mr Musk says that a Tesla 3 has between 6,000 and 7,000 (parts), while Goldman Sachs estimates that a traditional vehicle has 30,000.” Therefore, the economies of scale will quickly make them much cheaper to build too.
Brexit has hobbled the British car industry with a massive burden of unnecessary and ridiculous complexity, but if it has any chance of surviving into the 2020’s it has to be designing and building electric cars right now. Fossil-fuel powered transport has no future.
If a car company isn’t 100% focussed on building electric cars, today, it will be dead before the next decade is out. That’s not because electric cars are ‘better’ cars (that’s a complex and nebulous argument), it’s because it’s obvious that they’ll be far better for their customers.
Kodak passed on digital photography, even though they were well aware of its rise long in advance, and had been developing the technology themselves. Sony’s globe-straddling Walkman was killed stone dead overnight by the iPod, even though they were, then, leaders in digital audio.
Nokia, Motorola, & BlackBerry all thought their size and their customers’ brand loyalty would save them, but to paraphrase Henry Ford, why would you buy a faster horse when you could have a car? Ten short years later and I’ll bet that no one reading this has a phone made by those companies.
This could happen to any company, not just phone or car makers. Any business that rests on its laurels and does what it’s always done, the way it’s always been done, is doomed sooner rather than later. Which leads neatly to the second thing I read today.
This might seem like a complex dance — a company will fail if you don’t focus on the bottom line, but the bottom line will fail if you don’t focus on the customer — but it’s actually very simple. The latter always drives the former, not the other way around.
Again to paraphrase a great Ogilvy quote, ‘any damn fool can put on a deal, but it takes genius, faith and perseverance to solve a customer’s problem’…and that’s what builds a valuable and trusted brand that has a long future. We’re usually smarter than we’re given credit for and we don’t like to think that we’re being conned to enrich the already rich.
VW got busted for emissions-dodging, but it’s clear that the whole car industry has been fixated on protecting their dominance at the expense of their customers’ best interests. We’re far more concerned about our own bottom line — and the planet’s — than theirs , and we (and therefore the global markets) will not forgive them.
Amazon is eating everybody’s lunch and has an obscenely healthy bottom line because it focuses, relentlessly, on how to make things better for the customer. Jeff Bezos isn’t necessarily the most likeable of leaders, but he drives everyone in his company to work towards the future, not to maintain the status quo. Their default operating mantra is ‘How do we do what we do, better, for our customers?’
Every post and article of this kind uses the global megabrands as examples and that can make the challenges seem quite far removed from any ‘normal’ company or small business. But everyone needs to heed these lessons from the giants because they’re just as relevant, if not more so, for us small-fry.
I’ve worked with two really good small companies recently who have both refused to truly embrace online sales and marketing because ‘that’s not how their business works’, but neither can see that their falling sales are because that is exactly how their customers work now.
I don’t want to call up to see what stock you have in my size and colour and to give you my twelve digit credit card number over the phone and wait till Mabel from accounts gets back from holiday to get a receipt and have it delivered in five to seven working days. I want to buy it with an Amazonian one-click, and get it tomorrow.
Call me impatient, but why would I buy a horse when I could have a Tesla?
Whatever it is your company is doing today, you need to stop and check one simple thing. Can we do this better for our customers? If you don’t ask that question of every aspect of your business you’ll be tomorrow’s BlackBerry.