Saturday, December 18, 2010

Services of the church

At our recent eMBA class, we had a discussion on a very current topic; religions and the role of the Finnish church.

Basically the common view was that the Finnish evangelic lutheran church is old fashioned and has no clear strategy.

What was missed was a clear positioning; a view on how church really sees homosexuality and women in church and how they want to serve their members. The discussion of gay people has been refreshing, for the church to really clarify who is their target audience what what purposes they serve. They´ve never had any yt-neuvottelu (cooperation negotiations) to bring focus and efficiency.

We invented a new service concept for church at christmas. Instead of packing to a crowded church, why not have a short outdoor ceremony with a few songs, punch, having people go out for a walk but having an easy-to-use religious service.

We also discussed whether religion should be part of education in schools and if they should organize christmas parties. Votes were for and against. I know, christmas parties are nice, but it´s a celebration of the birth of Jesus. Is the role of schools to celebrate religious events? Instead, should or could schools celebrate the end of a school term and find another program for that? Why would schools portray religious agenda if they not have a political agenda? If one role of religion is to educate ethics and behaviour, would there not be other ways of doing this eg philosophy?

I still belong to church. My main reasoning is the goodwill done for less fortunate. But I, too, start questioning the role it could provide taken the opportunities from today´s needs of emotional and physical wellbeing.

Saturday, December 4, 2010

Branded generosity

Trendwatching.com published its list of key consumer trends for 2011. On the same list you could spot two very human elements: random acts of kindness, consumers craving for kindness and being surprised in a positive way and emerging genorisity, giving, donating, sharing and sympathizing vs just selling and taking.

In other words, brands are expected to act humble, personal, showing compassion and understanding customers daily challenges. This is nothing new. But my guess is that the deeds expected from companies will no longer be big bursts of sponsorships and donations but they can be small things, generating daily goodwill. They do not need to be just donations but simple gentlemanlike acts towards customers.

Personal experiences from service economy. For the first time in my life I ordered two dresses from two different online stores. The other one was more expensive. Dress was sent as promised and was ok. The other dress was sent also as promised. With the dress came a small branded bag and the dress was on a hanger. I was so surprised.

I guess best branded deeds will be notes and messages from companies in unexpected moments. Monthly newsletters are nowdays normal. But what about personalized messages. Those that you get on birthdays and on special occasions, personalized to your orders and needs. Most companies admire Amazon for being able to track persons purchasing history and being able to make recommendations for customers´s interests. How could you do the same in industrial engineering?

Finnish brand committee´s report for branding Finland was showing similar kinds of elements of showing generosity. The committee proposed various missions for Finns for keeping up and building Finnish brand. One mission was for school children to talk to more quiet classmates. What could be my company´s small deed to providing better happiness to our customers?

Saturday, November 13, 2010

Evaluating change process

70% of organizational changes fail. Typically, in change management there is lack of systematic or even basic follow-up.
Naturally prior to change you need to understand what is the need to change. If it´s not broken, don´t fix it. If you change, you need to address the need for change. Misunderstandings come from a thought that change is something negative. To change, you need to evaluate the change, define objectives and approach, then evaluate again.
Typical problems in change are eg resources, motivation, communications, change management and training. Set objectives at beginning of change to follow-up results.
And what are the success factors of change programs? According to PwC´s global research key success factors for transformation programs are:
* outcome-driven process change
* benefits case and transformation strategy
* change management
* organizational alignment
* governance.

Sunday, October 31, 2010

Organizational leadership vs dynamics

DeWit and Meyer (2004) describe two dimensions of organizational perspectives: leadership supporting a controlled system creating strategy and implementing it top-down, and dynamics, creating disorganization to achieve strategic renewal. Both dimensions have their value and an organization should consider which perspectives it utilizes in its strategy and operations, or if it can benefit from both - experimenting from new or different ways of working and innovating.

International corporations have grown so big that it is purely impossible to lead purely based on authority and control. Companies are affected by new working methods, new media and generations, who require and impose a less authoritarian way of working. There are demands for new communications tools, virtual collaboration and self management. Time differences and cultures bring new elemnets to having new perspectives.

Sustainability is affecting people´s behaviour and social expectations in respect to travel, production methods and collaboration. New working methods bring cost savings, employee satisfaction and efficiency. It also creates frustration since letting go of the old and learning new is always difficult.

Elements of organizational leadership bring some assets to having a clear direction. It is important however that in a top-down organization strategy is implemented by involving teams in the creation process and encouraging initiative.

Sunday, October 3, 2010

Community based business in China

Director William Toh from Chia Tai Group of Companies explained how Chinese business works. One example is a community created around the business. A transportation company might have their own schools, nursery and social activities to form a community among the employees and their families. Building a relationship with the community is key to doing business. Things are bought within and with the community, not as individuals. Even corruption can be addressed to help the communities and the poor.

Director Toh´s bet on successful consumer goods would be in the range of attractive design and products that appeal to groups or societies. I was thinking, could social networks and eCommerce be developed to take advantage of the already existing communities - or rather nurture them? Usage of internet is mostly in pockets. Number of mobile devices is much more significant than number of PC´s. eCommerce in China will grow but main consumption will still be done through retail. Community thinking applies to planning retail. Feeling and touching are important and that can be best experienced physically.

Individualistic brands such as Nike and Apple, luxury fashion brands do well because Chinese community is about comparison. Best for your family.

Regarding b-to-b the set-up is the same. Make sure you have a network of local partners. Make sure you network with Chinese community in your home market. Bring your wife or husband to meetings. Take care of human resources.

Sunday, September 26, 2010

I visited Kirnu

Our eMBA class spent a day as Shanghai World Expo. We visited different pavillions and joined a seminar at the Finnish pavillion Kirnu. There was endless discussion on what the expo is all about and who is it for. If 96% visitors are Chinese, is it too focused on China. Or isn´t it fantastic to have focus on Chinese market and having awareness in China.

Focus for different markets varied. Some countries presented a more touristic approach whereas others took a business or educational perspective presenting future opportunities within technology, science, medicine, design, fashion, industry.

Comparing Kirnu to other countries pavillions was difficult. I was excited but not impressed with any of them. In general I felt there were too many things in the pavillions and overall impression was lost to thinking what the message is. Africa was my favourite with a lively bazaar atmosphere. But mostly the messages were unclear. Norway had a good promise: nature as a source of energy. Expectations were built around a forest trail. First impression worked: "take a breath of fresh air". But after the entrance the atmosphere vanished, drowning the original idea and again filling the space with industry, tourism etc related content.

My expectation on Kirnu was a design experience with Finnish simplicity and brightness of the North. What I saw: images displayed on Kirnu walls focusing on green cities. Small display windows on various elements of Finnish culture and industry: sauna, lakes, childrens playrooms, fashion, design, technoloy, santa. I lacked a clear positioning and interaction. Visitors were trying to touch display screens but some of them were not to be touched. Helsinki design capital message was on a small sign at the end of the route. For me the most positive detail was from Nanso. They provided purses for sale with tigers on them (in honour of the year of the tiger, having done their homework).

Though I wanted to see a clear theme - be it Moomin valley, Punavuori design district or a Finnish catwalk, I heard Chinese themselves liked Kirnu. At least our queue was longer than the one at the Swedish pavillion.

Friday, September 24, 2010

Transformation of inter-city transport in China

High speed trains - faster than 350 km/hour - have a future in China. From Hong Kong to Shanghai predicted future trip would be only six hours. Equally - if not more relevant will be the lines between coastal cities adn mainland China. A wide coverage of high speed train network is planned for all of China by 2015, approved early this year in congress.

The high speed train will transform business in China. Cities will be accessible easier and faster. Impact for trade is huge. Chinese will be more exposed to consumption and service economy. Expectations for local retail will increase. Marketing and sales will have an impact.
WalMart has already opened business in China through a joint venture. Opportunities for retail business will increase through the transformation of transport and the expected increased purchasing power of the Chinese.

And yes, I had a chance to take a train with 430 km/hour. Smooth ride!

Report from eMBA study trip in Hong Kong - Shanghai.

Sunday, September 19, 2010

Role of OEM´s in China

Challenges for original equipment manufacturers (OEM´s) in China the past years have been following:
* Cost of resources and energy have increased
* Value of RMB has gone up by 25%
* New employment law makes it mandatory to buy an insurance for each employee. Also compensation has changed in terms of layoffs.
* Environmental protection requirements have increased after the Copenhagen summit. This causes a 5-10% investment increase for businesses.
Altogether - cost of operations in China in the past has increased 15% at least. China is still world´s manufacturer but this equation creates a problem.
How should the problem be tackled and what does this mean for OEM´s?
To start with, it is crucial to transform China from a manufacturing market to a service based economy. The improved standard of living will enable higher income and exposure to a wider international taste.
The support for OEM business will decrease. In the future, development strategy will support a new kind of development within services and technology, and coordination of regional economy. One of the examples is the Yangtze river region around Shanghai. Covering approximately 11% of China´s population, it accounts for 24% of the economy. Within a few years, this area is expected to have a population of 250 million people - same as in USA. Professor Sheriff from Hong Kong Polytechnic University´s bet for multinationals is to go for the three growing regions: Hong Kong / Guangdong, Yangtze and Beijing / Tianjin.

Report from eMBA study trip in Hong Kong - Shanghai.

Friday, September 17, 2010

Glimpse of Chinese economy

Representing more than a fifth of world´s population, the economic effect of China is vast.

Despite slowdown of investments in China in 2009, the expected GDP growth rate in China until 2015 is predicted to grow. After this, the prediction is for it to decrease whereas rest of the world´s growth rate between 2015-2050 remains even. After the slowdown of 2009, China GDP growth rate early 2010 was 11.9% and expectation for next year 10-11%. Expectations of total retail sales of consumer goods maintain a huge growth rate of 20% in 2010. According to professor Sheriff from Hong Kong Polytechnic University this is crazy. Why is this growth rate a problem?

China´s growth is investment driven. Since the saving rate in China is above 25%, this will prove difficult in case of economic downturn. Should foreign investors stop investments, Chinese government is able to issue bonds to replace part of salaries. This development is not healthy. Growth should not be driven by investments but consumption. Question is how to transform the culture of China to support a higher standard of living. Part of this will be by governmental legislation, strenghtening the younger generation´s position in urban areas and improving their education and purchasing power. Another is the transformation of China to a service based economy through economic development programs.

Report from eMBA study trip in Hong Kong - Shanghai.

Sunday, September 5, 2010

Service business opportunities by integrating megatrends and customer needs

Tekes, the Finnish funding agency for technology and innovation has published a report on the future of services business innovations. Tekes report is created for any organization who wants to challenge and renew their current thinking on services business. Tekes report wants to take a challenging and questioning role in businesses looking into their current assumptions.
The report itself is entertaining and provides a business minded and practical approach rather than a scientific one. For Finnish companies this opens good perspectives since Tekes takes a global view.
The key perspective from the service business innovation is to find opportunities in the crossroads of service innovation megatrends and the perceived customer needs. Through the opportunities identified, organizations come up with innovations that must be supported by high class organizational capabilities and implementation.
And what are the Tekes´s identified 10 megatrends?
* The cloud
* Web based delivery
* Mobile value delivery
* Everything as a service
* Experience design
* Sensing and monitoring
* Collaborative contributions
* Social networking and communication
* Climate change and sustainability
* Globalization with local reference.

Sunday, August 22, 2010

Services becoming an essential element for engineering success

Services are becoming an element of future success for Finnish companies. Even the foundation of Aalto university in Finland is a decent example of logical way of introducing more commercial and arts related skills to engineers and vice versa. It has been argued in public discussions that we lack marketing, brand and design skills. But looking at the educational offering today, things are way different than 10 years ago. For the better.
Talouselämä magazine wrote an article on industrial engineering companies in Finland who are expanding their offering to services. But can Finns master services without the successful background of engineering?
Companies like Kone, Wärtsilä, Metso and Nokia Siemens Networks are now putting great emphasis on services. Offering maintenance, training and development provides further opportunities to acquire better share of the market and an improved relationship with customers. Kone is increasing their service culture through educating "ambassadors" who do not just offer services but are skilled to communicate and market the offering. These companies have built their success on engineering.
According to Talouselämä, Vectia´s Kaj Storbacka thinks the services business in Finland may expand but will be limited. According to Storbacka what Finns may concentrate on is service concepting and management.
Can we build companies will full scale service skills; combining our engineering skills and experience with a specialized service culture? What is it with our culture that limits offering turn key solutions based on our services skills? And if we cannot, what would limit us from acquiring needed skills from abroad and building the success on what we do well? IBM turned from an IT company to a service and consulting house. If engineering as an industry in Finland is showing the signals of providing improved offering through services, will we limit it based on our culture, or are we able to learn and grow globally, acquiring skills and experience needed to make a turnaround business?

Wednesday, July 28, 2010

Cultural business angels

There is a saying that during his life, a man should go to the army, build a house and write a book. The cultural elements of this humorous anecdotes may be changing.
The Finnish business paper Kauppalehti published an article (July 27) on Finnish former businessmen, who are currently working as cultural business angels, investing their money on old mills and mansions. The motivation of working with the old heritage sites is not to make profit but rather to contribute to common cultural and historic good and enjoy and value beauty and restoration. There is money spent on restructuring, rebuilding and refurnishing old sites.
I sympathize with these cultural businessmen. I don´t have a million to invest in an old mansion myself but did my share of cultural wellbeing ten years ago by organizing three big events in an area which I like: dancing. Arranging something on your own time took effort, time and money. These events were new, different from normal weekly dances and are still well remembered.
The negative effect with the cultural investments is that not everybody values and favours the changes and initiatives. There is criticism and complaint. Therefore motivation has to lie elsewhere than just public good.
Another interesting news was that the share of restaurant chains in Finland is decreasing to the benefit of more independent restaurants. Restaurants are eg providing more Finnishness, uniqueness and local flavour to their offering.
Even if Finland as a country may lack in service quality and culture, our skills may very well be in the cultural and coulinaristic content.

Sunday, July 11, 2010

This years innovation trends by Trendwatching.com

Each year Trendwatching.com publishes its view on most promising innovations (www.trendwatching.com/briefing). This year, Trendwatching.com published a pool of 67 trendy ideas, inspiring on improving consumer living and understanding the mindset.
Trendwatching.com split the 67 ideas into various categories and encouraged maintaining a rough approach to innovation - we need not think of R&D labs of ultimate most astonishing innovations. Instead, innovations can be small, frivolous and inexpensive and yet succeed in enchanting and exciting people.
Reading through the 67 innovations following logics were no surprise:
* Innovations as service. Helping for self expression, excitement, making a statement, enjoyment, learning, giving for others. Hotels providing educational classes or sketching a travel accident through an online service.
* Sustainability and social causes. Innovations helping people to recycle, re-use, save energy, make donations and support less fortunate. ATM machines with charity donations, buying things and giving in return.
* Shopping made easy and local. Bringing a shop to the consumer eg at camping site, mobile soup delivery, providing regional flavours, online shopping preferences tools, navigation services, garden-for-rent.
* Personalization. iPhone and online applications for providing your preferences online and ordering unique. Yogurt, shorts, petfood, lingerie, crowdsourcing products, group buying. Having used an online photo album tool for creating a wedding gift, I was excited on BookOfFame. A custom made notebook on Facebook feeds. Having read endless funny email conversations between friends, we always keep laughing about saving the conversations and printing them out for a memory when we´re old. And we never do. Now somebody has actually thought of keeping track of these conversations just as having a photo album, a blog or a diary.
The most futuristic idea to me was RosettaStone: a tablet with an embedded microchip to represent key things of a deceased´s life in a grave. Readable through a mobile device. Is this the future of cemeteries? Will it become a true multimedia presentation in the future of what we were? Or will personal barcodes be a new way of expressing ourselves?
Most positively surprising for me was the limited number of iPhone applications in the briefing. Hooray, there are also other ways to innovate and enjoy life.

Saturday, June 26, 2010

Leader behaviour analysis

At an summerish eMBA class on organizational behaviour, we conducted an assignment covering 20 business situations. Each included a question on "how would you act" as a leader in a specific situation. The objective of the exercise was to see if you can match your leadership skills with the situation at hand.

The interesting part of the experiment was the scores with our foreign students. You cannot generalize too much, but it was obvious that specific cultures somewhat impact our behaviour, including our leadership qualities.

When planning and implementing change, it is an art thinking of and preparing for needed stages; exploring, informing, engaging, influencing, executing and refining. Analyzing the possible outcome but also the likely situation at hand of a person helps to utilize an optimal style throughout the process.

In order to build your own leadership skills, you first need to do some self-evaluation to understand your own behaviour and competencies. Knowing yourself helps analyze situations and behaviours of others.

To get started and to have a nice comparison with your colleagues, to go 9types.com.

Hanna Viita

Friday, June 4, 2010

Marketeers renewal

Marketing today looks different from what it was early 1990´s. Planning direct marketing, print, tv, radio or outdoor has gotten way more complicated. Consumers lifestyles, values and behaviour plus media consumption have changed. Internet and globalization has changed our way of communicating, consuming and living. Values are now focused on life satisfaction, family, sustainability and self-actualization.

No wonder marketing as a function is changing drastically. Marketing has evolved from awareness building to understanding customer needs, finding opportunities, providing insights and linking customer needs to product portfolios, services, total offering and message. Marketing communications is the final link to optimize customer touchpoints and provide interaction.

Apart from understanding customers changing needs, marketeers follow up and even drive the changing roles of marketing, media and consulting agencies. Marketing has become a center for customer dialogue (Strategy & Business issue 54, 2009) - running activities to connect with customers on a daily or even nightly basis. New marketing positions now include "community manager", "customer dialogue specialist" and "marketing analyst".

What more, now that companies talk of social media, marketing has a golden opportunity to build its own relevance, knowledge and role. The current understanding and experiences can be extended to customer care, product development, logistics and sales. Anything to serve customers better.

Hanna Viita

Monday, May 24, 2010

Structuring for service and motivation

One of our classes recent visiting lecturers was Eltel Networks´s CFO. Listening to a finance-oriented presentation got us thrilled on how employees can be motivated by simple ways of organizing and structuring the company.

Eltel did a turnaround of its operations few years ago. What they focused on and wanted to value was internal entrepreneurship and thus serving customers better. The old matrix organization with functional responsibilities was tossed. Instead, Eltel organized its sub-units as independent sales teams, having full profit and loss responsibility. Each sales team was in charge of customer relationship and had resources accordingly. No central overheads were charged to these independent sales units. Within a few years results have spoken for themselves.

If the progress is similar in other companies, sounds like the old school scorecards will be dead. Corporate employees no longer are motivated by objectives set too far apart from their daily responsibilities. People find motivation in doing, participating, influencing operations and seeing the actual results. On a daily or monthly basis, rather than annually.

Recent study on Finnish students´ employment expectations was drastic: there is no ambition to succeed careerwise. On the contrary, young employees are expecting a nice balance between work and leisure. What they want is a life they can appreciate not just looking from company headquarters.

What Eltel realized was that they can influence the success of the company by looking into what really motivates people. Let the company objectives meet the individual ones – in an ethical, inspiring and human way.

Tuesday, April 27, 2010

Outside-in or inside-out?

Bob DeWit and Ron Meyer (2004) describe the competitive strategies of companies for being external vs internal driven. Companies having an inside-out perspective rely on their internal capabilities such as processes, technology and design – creating a competitive advantage that is difficult to imitate. On the contrary, an outside-in approach is more based on market sensing, bonding with customers and monitoring technology, not inventing it. Whereas an inside-out driven company might focus on order planning and generation, an outside-in driven company would focus on fulfilling customer demand, billing and payment.

Wouldn´t you think that a company can succeed only having its emphasis on external market conditions? Understanding what are customer needs and demands, how competition functions and what is the next consumer trend? On the other hand, if your company can offer something unique that customers cannot even dream of, customers would not even understand to build demand unless they see and try the product.

Considering that Apple and Google have built most advanced, easy-to-use and smart products (services) – don´t they show both technological and design capabilities that no-other company possesses? And haven´t they yet built their services purely on what customers are in need of, having the most active consumer dialogues asking for feedback and participation? Therefore, can there be inside-out without outside-in? One without the other?

Hanna Viita

Friday, April 16, 2010

It´s about perception

Our MBA class visited various sites downtown Helsinki on a Saturday to look into how brands are implementing their strategy. We visited Nokia flagship store with high expectations. And the experience was great: staff greeted us, was very helpful, spoke various languages. All products and applications were showcased, atmosphere was good. After the visit the group still felt that something was missing. “Where was the ultimate experience”? What caused most discussion was how the staff was dressed (in sweatshirts and sneakers). After all the discussion I felt that visit to Nokia store is not just about Nokia. A Nokia flagship store in Helsinki with its wooden design represents the whole Finnish technology knowhow and culture. It should be the ultimate experience that shows what our nation can do with the eyes of Nokia. I felt the sweatshirt discussion was just partly concretizing the customer experience for it could still be developed further. More than changing uniforms.

Another interesting notion was how Finland brand sounds. We discussed how in the morning train Finns prefer to sit in quiet and enjoy the peaceful moment they have before rushing off to work. The same sound experience – quietness – was experienced at Finnish design forum at Erottaja. No music in the background, great element for showcasing Finnish design, having its origins in our nature and culture, as plain as it is.

Hanna Viita

Monday, April 5, 2010

Marketing as a service

If there is any one dream a marketeer has, it is influencing customer behaviour by the activities a company offers. Marketing can offer activities as services and complement the actual product by making communications truly beneficial for the customer. The crucial thing is to base the service on company´s core values.

What customers wish for today is time, independence and convenience. An article by Trendwatching.com states many companies now are turning their marketing campaigns into broader services.

In Trendwatching.com article numerous examples of such services were iPod applications. Since mobile applications still reach a limited audience, my favourite case was one by Adidas with an actual physical service. What they created was a running store in Tokyo offering locker rooms and showers for customers who want to take a run. Anyone can use the store as their home base for an exercise. You also have equipment for rent. How often I´ve had time to spare downtown thinking where to go for an hours exercise that does not require a membership. Loved it.

What is crucial is to start from benefits the brand can offer. According to Trendwatching.com this could be related to information, saving costs, connectivity or simply getting healthier or happier. Plan what you can offer and select a channel where you best can support, help and guide your customer.

Hanna Viita

Thursday, March 18, 2010

Pricing on demand

I listened to an YLE radio interview of CEO Risto Juvonen from Live Nation, a concert organizer in Finland. Risto Juvonen was predicting a change to pricing model of concerts in a few years time.
Juvonen predicted a similar model for concerts as is the case for flight tickets currently; you don´t know what the person sitting next to you is paying for. There will be the ones who are willing to pay more for better seat or better service, as some are willing to have less for a smaller amount of money.
What would you be willing to pay for a concert? Or an airline ticket? And what would you pay for? A seat in the first row? Good food and service? Great lounge and shopping arrangements? In-flight entertainment or the actual show? Having a sense of belonging or travelling to a trendy destination? Again, this direction requires more specific customer segmentation and being able to tailor service offering accordingly. Which other industries will this concern? Gyms, restaurants, sports events, parking, public transportation? And how far will it go? Backseat passes, pick-up from home, dinner, merchandising included?

Hanna Viita

Tuesday, March 16, 2010

Quality services in springtime

During one service management class we discussed Tropicana Premium Orange Juice. Best quality, real flavour, no added sugar. 2,58 Eur per liter at Stockmann department store. Must have for many despite the high price. Tropicana has become one of the most popular orange juices in Finland. How? We agreed that despite the high price, the flavour is so much better that people are willing to pay more. They even drink less.
I started thinking of my own consumer behaviour. When going to a café, I prefer a cozy place with a good location and good coffee. When going dancing, I pick a place that features the best band in the country. When once a year going for a lovely massage, I stay away from the sports masseurs and pick an exotic spa with scents and music. I like doing grocery shopping at Stockmann´s.
What my choices have in common is that for me they are scarce but I prefer them because I feel they have top quality. I´m not an optimal consumer - I don´t buy services too often. But I may be a potential consumer if companies have me buy more of these services. I already like what they offer. If only I had more money or more time.
I came up with one solution. My friend told me how she dislikes wearing 60 den pantyhose still in March due to cold weather. Solution therefore is: spring. Focus shifts from cold weather, shovelling the snow and pantyhoses to going out and enjoying everything around you. More cafes, more dancing, more things outside. One month to go for a summer opening. Hopefully service providers do much better soon!

Friday, March 12, 2010

What is next luxury?

Trendwatching.com published their view on 10 crucial consumer trends for 2010 (http://trendwatching.com/trends/10trends2010/).
The one that caught my eye was the definition of luxury – you simply cannot define it. Luxury is what you (your customers) define it to be. According to the review you should not focus on understanding what is the next thing but how your customers define it. They appreciate it because it is scarce.
Services are often considered as luxury. But for some luxury can be simply more time, time for yourself, NOT having to do something, not spending money, contributing to charity etc.
How could we offer something that consumers are willing to have and gain value of, at the same time contributing to our company success? Productization of services is common for companies who can provide services on a more mass tailored way; haircut, spa treatment, personal trainer or coaching session. But according to trends surveys, we need to provide more unique, more tailored, more personal experiences and ways of consumption. I guess one of the key questions is how you can you make customer meeting as (cost) effective as possible, still making it unique. Or can you make the experience ultimate unique that customer is willing to pay or do most anything to have it again? Can you replace or mass-tailor physical contact? What do you say of mass wedding nights at local churches? Personal or mass-tailored luxury? Easy-to-get or easy-enough-luxury? At least fits with target audience needs – churches have been fully booked so the concept seems to work. But it´s one service which the customer should not come back to, so expect no return calls.

Hanna Viita

Thursday, March 4, 2010

Consumers adding value

Key to companys´s success is in creating value for customers while differentiating itself from competition. The term co-creation has appeal in companies´ current strategy work in regards to involving employees or customers in the development of new services. There are new methods involving the consumers or employees, though the processes are still rarely used nor used on a systematic basis. Richard Priem (2007) suggests consumer perspective is potentially important for strategic management since consumers experiencing company benefits are adding more value to the process.

Altogether companies could find new ways of increasing profitability through consumers creating more value and increasing a single purchase. The key to consumers adding value is to have them experience the brand during consumption. Everybody benefits from services improvements. Starbucks, typical example of a successful brand where consumers are sitting in the well designed cafes, listening to music, reading books, buying good coffee and Starbucks accessories. But can there be more than a sofa to a brand experience? Starbucks presents ways of involving the customer and adding value to the whole coffee drinking process. First of all, you can help Haiti through going to Starbucks stores. What else? Moderated Starbucks idea generator online by Sally and Brendan (real people with real moderator jobs) who collect customers suggestions on service improvements. And not just collecting ideas but actually reporting which ideas have been implemented and who suggested them. All suggestions are divided in 3 ideas categories: products, experiences and involvement (eg community involvement and social responsibility). All registered Starbucks community members have a chance to see the given ideas and give their vote on them or generate further ideas. And if my or my friend´s idea was implemented at Starbucks, I would definitely go and see how it´s done in the stores. More coffee, please.

Monday, February 22, 2010

New methods, new services

In order to get development to current services, does everything new need to be developed with something new? What´s the value of experience and old school research nowdays when you have social media to collect information directly from customers? Why would any company need to change the way they collect information?

It´s been stated that in order to get better results and increase customer value, companies need to develop closer customer relationships. These relationships are fostered by learning from customer needs and acting on that knowledge. In order to serve customers better there is a need for better and more innovative services. More traditional research such as interviews and surveys are a good way of collecting data, but there´s more available.

In order to get more innovative services you need to involve the customer to the process. More traditional research methods are a logical source of market data, but in order to find latent customer needs and get more innovative ideas, you should work with developing the services with your customers. Let them try and use your service at a real environment, observe and ask them how they use it and what thoughts they have while using it.

This form of customer involvement may bring input and advantages to various functions of the organization, from new service development and design to marketing and processes. It also serves improving organizational learning capabilities.

Limitations? Implementation is everything. A plan is not enough. You need to show attitude, test, try, evaluate, understand, act upon results – and do again. Few supporting techniques are available but best asset is faith in customer knowledge and pressure from the market to improve services to get a better competitive advantage. Systemacy brings a logical continuum of ideas for further improvements.

What´s in it for customers? Better service and education. For companies – competitive advantage through reduced time to market, improved functionalities, process, solutions, better employee motivation and organizational capabilities or profitability.

And utilization of social media? Yes, if that environment brings out relevant data of the usage or a platform through which you can easily communicate on the service.

Hanna Viita
Sources: Matthing, Sandén, Edvardsson:
New service development: learning from and with customers
Jayasimha, Nargundkar and Murugaiah:
New service development: role of customer contact executives

Saturday, February 20, 2010

Organizing for new service development provides better innovation

Some time ago I started MBA studies on Service Excellence at Haaga-Helia.
During my course on new service development one of the most interesting discussions was around an article by de Jong & Vermeulen on a literature review of Organizing successful new service development.
One of the key elements of providing more innovation for organizations is to create a climate that supports it. The authors state that there are two key areas you need to take into consideration for creating a suitable climate for new service development - people and structure. You need to allow external contacts for employees to get more ideas, have access to insights, enable efficient communications between people in the organization, provide autonomy at work, clear goals, strategy, training, IT support and job rotation. We discussed if these shouldn´t be the core elements of any company for succeeding and why would these be the specific success factors for service innovation.
What was the authors´s second point in organizing for new services development was what to me made the difference; you don´t just create a suitable climate but you need to manage the key activities: get product champions, management support, provide structures, systems, processes and techniques (eg brainstorming) to get results. There need to be teams and resources available to enable innovation and spend time on it. We discussed that if both climate and management of people and structures are in place, you should achieve your goals. Benefits and motivation will follow tools and objectives provided.
Service innovation is not ad hoc creativity. It, too, needs being organized in order to generate a continuous stream of results.

Hanna Viita