Disrupting Innovation Beliefs

A customer centric approach to business-model innovation

I recently came across a great article from the team at McKinsey and it really got me thinking about how business can tap into its customers as a source of innovation.

In the article by Marc de Jong and Menno van Dijk, they talk about companies reframing their beliefs and business model as one approach to business model innovation. By using a process to systematically examine each core element of their business model – a business model canvas approach would be the best place to start.

Having analyzed hundreds of core elements across a wide range of industries and geographies, the authors found that a reframe seems to emerge for each one, regardless of industry or location. Moreover, these themes have one common denominator: the digitization of business, which upends customer interactions, business activities, the deployment of resources, and economic models.

One of the more obvious places that I agree with out of the article as the first place to innovate is customer relationships, or as the article puts it taking customers “from loyalty to empowerment.”

This part of the article hit home for me because of a recent experience I had with a major corporate – which turned into 4 separate business interactions. All I wanted to do was make a claim for my accidently broken TV. The whole process was long, hard and disappointing, not giving me any feeling of empowerment.  Clearly it had been thought out on a meeting table and not by any real customers, or actually any thought.

As we know one of the key principles in the process of design thinking is to get a whole lot closer to the customer and use observation and questioning to make key learnings. One of the easiest ways for marketers to do this is for marketers to be come customers in their own business for a day. That’s when true insight can be gained, and innovation follows.

As the article suggests, “Businesses should strive for customer loyalty, right?” Loyal customers tell their friends and they mean repeat business and growth, right???

However, as smart marketers we know that the pursuit of loyalty has become more complicated in the digital world. Customers are empowered by digital tools and reviews and ratings about products and services, especially from their close knit circle of friends on social media. Most significantly, the article points out “the former passivity of customers has been superseded by a desire to fulfill their own talents and express their own ideas, feelings, and thoughts. As a result, they may interpret efforts to win their loyalty as obstacles to self-actualization.”

Instead of fighting that trend, why shouldn’t companies embrace the paradox that goes with it: the best way to retain customers is to set them free.

There is no time like the present to go and co-create your new business model with your customers and see how you can empower them. What have you got to lose?


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