Sep 24, 201301:37 PMPoint of View

The METROPOLIS Blog

An Era of Choice

(page 2 of 4)

Businesses thriving today on new market dynamics, from technology to brand leadership (Apple being a potent mix of both), are paving 
a new strategic path others can follow. Not all firms are employing the same model, but each one is discovering new ways of working. Next generation companies are questioning historical precedents about scale, productivity, centralization, sourcing, and talent. Innovation is emerging as a discipline rather than an exception. New ideas about problem solving, agile prototyping, and socialized innovation are leading to new breakthroughs.

Shirts on our backs: The focus of how we’re meeting societal needs is shifting.

Courtesy www.flysfo.com, allyoncars.blogspot.com, www.apple.com

The success of the industrial era is yielding a post-abundance era of choice. Companies built for scale will need new strategies – new ways of seeing and criteria for making decisions.

Assembly line innovator Henry Ford famously quipped that his customers could have any color car so long as it was black. If industrial scale was about automated sameness, knowledge-based choice is about personal meaning. Understanding people, their behaviors, motives, and ultimately how people make choices, is critical in the new era. Though not new, concepts in human-centered design applied to new business conditions (“design thinking”) is emerging as a significant approach for finding and building upon new opportunities.

NEW LENSES

Disruptive change of this sort forces leaders to get back to basics. Category and company orthodoxies should not be taken as givens as firms try to answer two fundamental strategic questions: Where are you going to play? How are you going to win? These two questions sound deceptively simple, but getting to answers requires new a way of seeing.

Deciding where to play involves better understanding the context of your business through the eyes of the customer. Most businesses view themselves as providers of products or services, but they might be better served to describe what they do in terms of customer value. What 
companies sell isn’t always what customers buy.

User research can be used to discover what Patrick Whitney calls user "terrains" – a collection of motives, priorities, and aspirations that comprise ways users think about their goals. Starbucks makes money by selling coffee, but it sells a larger envelope of activities – a place to meet a friend or colleague, to learn about music, browse merchandise, or learn about coffee. Nike sells shoes but focuses on athletics. Disney sells entertainment but focuses on fantasy experiences (“magic”). Identifying user terrains can expand a company’s opportunity area for innovation. Understanding what users value is a step toward creating meaningful value propositions.

Terrains and Territories: Asking basic questions about customer value can lead to profound insights. 

Courtesy Kevin Budelmann

After learning about the user goals, a company needs to decide how to identify their "territory" – a focus on how they’re going win. What else might the company offer to help the customer accomplish her goal? User terrains are what customers do or want, and the company’s territory is how they’re 
going to help customers succeed. It’s like positioning, except categories 
are defined by customers rather than similar companies, and the claim is 
a specific subset of the category rather than a broadly inclusive offering.

Answering the key strategic questions enables system-level planning: 
What are the key customer touch points in your company territory? 
What is the exchange of value between people and organizations that 
motivates participation?

Customer touch points are parts of your new aligned system – key customer interactions, often enhanced by things you can make. Frameworks, like “poems” (people, objects, environments, messages, services), can be 
helpful to identify and describe system components.

Understanding how people make decisions, to what and how people 
assign value is at the core of behavioral science. What is clear from this area of study is that much of the value exchanged goes beyond money. Mapping these value relationships in a networked fashion can be described as a value web – in contrast to the more linear value chain.

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