Using customers to drive innovation in service provider organisations

I have tried (and failed) over the last 5 years to sell the concept of the Client Knowledge Base (CKB) to both commercial and government organisations (in both cases 'from the inside'). Obviously part of the failure is down to me, and to the fact that in both cases my position in the organisation (an ex-Executive who had downshifted into a call-centre role) worked against anyone taking me seriously.  But the experience also highlighted some 'factors' at the corporate level which work against the (easy) adoption of a Client Knowledge Base philosophy.

Firstly let me say that I still believe that Client Knowledge is the key to obtaining a competitive edge when most other factors are 'levelled out' (I'm sure that there's a technical term for that..).  That's to say, if I can simply make a better product, or offer it cheaper (without subsidising it), or if I have a captive market then I'm unlikely to be focussed on how 'intimate' my relationship with my customers is.  I might realize (hopefully before its too late) that I can't do this 'ad infinitum'.  But (in the usual ironic way), if I'm fairly successful at what I'm doing 'at the moment' (with the level of Client Knowledge that I have) then I'm unlikely to make the effort to further build that Client Knowledge.  If - on the other hand - my business is on the skids I will be more inclined to try and cut costs by - as has been pointed out by Chris Lawer - trying to reduce customer interaction to the bare minimum because it is 'human' expensive.

This seems to a 'universal truth' and perhaps requires some specific strategies (which I might canvas outside this comment rather than have it sink under its own weight) - but one thought that comes to mind is that it might be easier to introduce these approaches in a new business, rather than an established one.

I could at this point tell the story of a technology company offering support to about 30 clients (with about 12,000 system users) where the need for a new competitive edge was dismissed, on the basis that the technology support companies (and the clients) in the fairly small marketplace they operated in had reached an 'equilibrium' where none of the companies offered exceptional service and more or less counted on picking up new contracts to replace the ones that were inevitably 'not renewed'. This strange relationship, with service providers recycling each other's clients worked because in technology it was too easy to over-promise, but even easier to under-deliver, and the weakness of corporate memory (and understanding of technology) meant that the client that 'dropped you' would welcome you back (along with your new promises) after a couple of years of disappointing experience with the 'others'.

Even start-up technology companies which promised a 'different approach' seemed to quickly learn that it was easier (and cheaper) to collude in this arrangement, and those that were truly innovative (and showed signs of committment to CK) were fairly soon 'bought out' by the larger companies who - as a rationalisation measure - 'homogenised' the service level in their new acquisition back to the level applying in their own company. That's to say they bought the new company in order to acquire the contracts that it brought with it, and for the 'success' associated with the 'name', but they had very little interest in the business practices of the 'new kid on the block' (dismissing them as 'immature' and 'unbusiness-like"). So again the irony is that the more successful a start-up company is at using CK the less likely is that it will continue an 'independent existence' or maintain its committment to those principles - unless it is immediately and dramatically successful and that success is visibly built around 'that factor'. Even then it is easy for a company (or an acquiring company) to (loudly) claim that they are committed to CK because it is difficult for clients to perceive exactly what that means
in practice.

To conclude (this short loop) then, what may be required is for clients to 'get the picture' of what CK is, and to understand what it looks like 'on the ground' (so that they can recognize the difference between promises and the real thing) and sell them on the benefits of it for them, and then let the clients 'drive' the process of adoption in the companies who are selling to them.

But there's a further caution. Client-driven innovation is the basis of the ITIL process whereby a set of standards for IT support was initially 'sold' to technology-consumers in government and private enterprise, and then adopted slavishly by technology service providers.  The weakness of ITIL (which I might say is better than what has gone before) is that in order to make it easily comprehensible to clients a 'service philosophy' has more or less been reduced to sets of procedures and forms which are highly 'visible' (and therefore give the client a 'check' that the service provider has 'adopted the standard'). Forms and procedures, however, can support a committment to, and a philosphy of, improved (and collaborative) service, but they can not create one 'out of thin air'. ITIL was designed (I believe) to be expensive, and accreditation is ONLY via obligatory training courses which attempt to ensure that the philosophy was conveyed, and that organisations had to make a real committment to it. But in the end the driving force for organisations buying ITIL is the expectation of the client that they will have it, and the client generally looks no further than the certificate posted on the wall, or the plenitude of forms that accompany it. What ITIL needs to do is sell 'higher expectations' to clients about what ITIL will deliver, but working against this now is a certain equilibrium that has been built into the marketplace. It is difficult for ITIL to tell the market that many of the companies that have adopted the ITIL standard are not delivering the FULL benefits of the system without the market jumping (unfairly) to the conclusion that there's a defect in ITIL. So there may be a lesson there as well. The answer might be to offer 'free' training to clients about what to expect from an ITIL service provider, but the ITIL organisation having embarked on the business of making money may have some trouble coming at that concept (perceiving that it will reduce the number applying for the full fee courses). A more 'open-source' approach, however, might avoid some of the pitfalls that accompany a decision to commodotise what is essentially an approach rather than a product.

Sorry to break the rule 'don't tell me about the problem, tell me about the solution' but I hope I've hinted at the latter enough to justify an open discussion of the former. If I didn't think that CK was a  tremendously worthwhile approach I wouldn't, and I wouldn't recommend that others, make the effort to consider the blockers, which is a necessary first step to overcoming them