Innovation transforms the customer as well as the product

As Francis Bacon declared roughly five hundred years ago, “He that will not apply new remedies must expect new evils: for time is the greatest innovator.”

The whole premise and promise of innovation is “change.” How should those changes shape the customer vision? Innovation influences the vision of the customer; the vision of the customer influences innovation. Serious innovators strive to understand and influence both.

Most corporate vision statements focus on grand enterprise aspirations. That’s a global phenomenon. Toyota’s vision statement, for example, describes “contributing to the development of a prosperous society through the manufacture of automobiles.” Amazon’s declares, “Our vision is to be Earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.” McDonald’s vision “is to be the world’s best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.” Nike’s is “To bring inspiration and innovation to every athlete* in the world [*If you have a body, you are an athlete].” Samsung’s is “Leading the Digital Convergence Revolution.”

The customer vision, however, is fundamentally different. A customer vision statement explicitly identifies the qualities and attributes the organization aspires to create in its customers. The overwhelming majority of companies, however, don’t possess or publish customer vision statements. Their formal vision and mission statements typically acknowledge customers but seldom detail how they wish them transformed. They rarely highlight the customer values — besides customer “satisfaction” — they wish to inculcate.

Visionary organizations that value innovation should have simple customer vision statements. They need to imagine — and articulate — who and what their customers should become.

Successful Innovation Rebrands the Customer, Not Just the Product

A “vision of the customer” perspective evokes the design and innovation sensibilities of the innovator’s ask. Take the broader view of what your innovations really ask customers to become.

The larger question — the “macro-ask” — is, if the customer were a product or a service, what would its most valuable and appealing attributes be? Identify the two or three most compelling characteristics of your customer vision. Recall the examples from Google, Starbucks, Toyota, and Apple. What customer values, expectations, perceptions, or behaviors does your vision transform? How do your innovations enable your customers — or key customer segments — to achieve this? Your innovations are investments in realizing the customer vision.

The customer — not the innovation — is the asset. Instead of debating how best to market, brand, or position their innovations, innovators should address how their innovations would best up-market, rebrand, or reposition their customers. Successful innovations rebrand your customers, not just your products, services, or your enterprise. Kindle and iPad users are every bit as branded as Amazon and Apple. Prius and Quattro drivers are as branded as Toyota and Audi. What brand of customer does your innovation help create?

Again, successful innovations go beyond the quid pro quo; they’re targeted investments in the customer’s future value. Understanding the essential attributes your innovation cultivates in customers is essential. Facebook provides an excellent case study of capturing these attributes well. Facebook understands how its innovation investments are designed to transform its users. Facebook’s mission “is to give people the power to share and make the world more open and connected.”

Mark Zuckerberg’s customer vision veers into bluntness: he literally asks Facebook users to be open and sharing with their personal information. His innovations empower people to become more connected. Left unspoken, of course, is that his company effectively suggests that users abandon more traditional notions of privacy and personal discretion in favor of greater disclosure to more people.

Facebook is, of course, tremendously concerned about (re)assuring users that they have the final word on controlling their own information, that is, the ability to share and connect. But there is little doubt that Facebook possesses a compelling vision of its customers’ futures. The company’s technology road map strongly suggests its “asks” will continue to broaden and deepen the meaning of “sharing,” “open,” and “connected.” That’s powerful. Facebook’s done-in-a-hurry billion dollar acquisition of Instagram starkly illustrates the breadth and bandwidth of the company’s evolving ask. Innovations straying beyond the mission statement’s immediate boundaries may also drive the firm’s future. But a singular insight stands out: Facebook’s founder knows his innovator’s asks will fundamentally transform the vision, values, and value of his users. That is his deliberate intent.

Yes, Facebook succeeds by serving and delighting friends and followers worldwide. But that misses the far larger $100 billion point. Zuckerberg and his top management have an excellent idea of who and what they want their customers to become. They’re investing accordingly.

Getting Beyond Marketing (and Strategic) Myopia

For serious students of management, these questions and cases recall Theodore Levitt’s classic 1960 article, “Marketing Myopia.” The article is the most requested reprint in the history of the Harvard Business Review. This piece builds upon its central question.

Levitt argued the single most important marketing-strategy issue confronting executives was, “What business are we in?” Most companies, he insisted, fundamentally misunderstand their markets and thus facilitate their own obsolescence.

“The classic example of this is the buggy whip industry,” Levitt observed. “No amount of product improvement could stave off its death sentence. But had the industry defined itself as being in the transportation business…it might have survived. It would have done what survival always entails, change.”

Marketing myopia prevented the industry from seeing what business it was really in. To succeed, Levitt maintained, “The entire corporation must be viewed as a customer-creating and customer-satisfying organism. Management must think of itself not as producing products but as providing customer-creating value satisfactions . . . In short, the organization must learn to think of itself not as producing goods or services but as buying customers, as doing the things that will make people want to do business with it.”

The innovator’s ask refines and reframes Levitt’s organizing insight. What business a company is in depends, in large part, not on existing customers but who tomorrow’s customers will — and should — be. Could the core competence and customers of buggy whips have been successfully translated to steering wheels? Successful innovations simultaneously anticipate and create those customers.

This essential marriage of marketing and innovation was superbly articulated by management’s prolific guru a tutti guru, Peter Drucker. “Marketing and innovation produce results,” he observed. “All the rest are costs.” Indeed. The Ask is a question explicitly designed to align marketing and innovation for results.

In effect, The Ask represents a managerial mash-up of Levitt’s “Marketing Myopia” manifesto and Drucker’s 1954 The Practice of Management declaration that “there is only one valid definition of a business purpose: to create a customer.” Drucker didn’t go far enough. The innovator’s ask explicitly addresses the kinds of customers companies want — and need — to create.

Per Drucker, the real purpose of business is to profitably transform a customer. Strategic innovators — as well as serious strategists, marketers, designers, and brand champions — must constantly ask themselves: Who do our customers want to become? What kind of customers should we be investing to create? What kind of customers will our innovations “buy”?

If the purpose of business is to transform a customer, then the purpose of The Ask is determining and detailing the dimensions of that transformation. The Ask is a clear call to action that demands strategic introspection. How will a proposed innovation change our customers? What makes that change special or unique? What makes us believe that? Is that the change we really want? How do we know?

Virtually everything Drucker and Levitt observed remains as valid today as when it was first written. But The Ask illuminates their work from a vastly underappreciated marketing and innovation perspective.

Markets and customers are dynamic. They’re always changing, always evolving. What do our innovations — what do our competitors’ innovations? — ask them to become? Is what we’re asking them to become good for them and good for our business? Their passion for value creation suggest Drucker and Levitt would take those questions seriously.

Apple’s rich ecology of macro-asks offers particularly persuasive case studies in customer vision. Apple’s great innovation wealth creates unusual mixes of macro-asks. Any company that has a “genius bar” wants to send a clear signal about how it views its human capital investment in customer support.

But arguably its most fundamental and intriguing ask is in its founder’s obsession with great design. From his curiosity about calligraphy to his collaboration with world-class industrial designers, Steve Jobs demanded compelling, flawless, and elegant design. This obsession defined the single most important theme in Apple’s innovation investment portfolio.

“When you’re a carpenter making a beautiful chest of drawers,” Jobsonce observed, “you’re not going to use a piece of plywood on the back, even though it faces the wall and nobody will ever see it. You’ll know it’s there, so you’re going to use a beautiful piece of wood on the back. For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.”

That quote speaks volumes. For all Apple’s technical brilliance and user experience obsession, Jobs clearly asked his customers to passionately appreciate great design. “Good enough” design wasn’t. Even excellence was regarded with suspicion. The objective was “insanely great.”

Jobs wanted customers to become as design-obsessed and detail-oriented around digital technology as he was. The ability of customers to embrace the values, craft, and quality of Apple design was essential to its success. Apple trained its customers to become design connoisseurs.

Learning from Luxury: Branding the Customer Vision

Apple’s fanboy/cult sensibility is both echoed and amplified by luxury brands. Contra Apple, market success for an Alessi or Vuitton depends as much on desirable exclusivity as superlative product quality. A Breitling or Rolex emphasizes not just high-performance precision and aesthetic perfection of timepieces but the prestige and accomplishments of their possessors. Customers become what their watch ostensibly represents.

Because luxury brands celebrate lifestyle values over economic value, they’re transformative in ways most traditional marketers are not. They’re selling branded lifestyles, not just best-in-class products and services. Like Zuckerberg’s Facebook, they know exactly what they’re asking their customers to become. They know they must be fully aware how their innovations and enhancements reinforce and enhance the brand character. Successful luxury brands live The Ask.

That makes them superior templates for “customer vision” design and “innovation ask” insights. Treat them as sources of design inspiration. What luxury brand would your best customers — or your highest-end customers — be most likely to choose or affiliate with? (Whether even your wealthiest customers could actually afford such luxury is beside the point.) Which aspects and elements of luxury lifestyle brands would resonate best with key customers? Identifying the aspirationally affective can be as important as determining the economically effective.

Customer slices and segments preferentially clustering around certain luxury brands — Audi? Prada? Lexus? BMW? Hermès? Rolex? — send a clear signal that there are affective attributes ripe for innovation investment.

This offers another reason why Jobsian innovation and design-driven differentiation matter so much. While luxury firms compete for the wealthiest of the wealthy and most discriminating of the discriminating, market realities suggest remarkably little meaningful commoditization at these peaks of the pricing pyramids. No narcissism of minor differences here. Customer experiences and innovation asks are designed to be distinctive. The devil lives — and prospers — in the innovation details.

These excerpts were adapted from the HBR single Who Do You Want Your Customers to Become?, published by Harvard Business Review Press, 2012.

Michael Schrage, a research fellow at the MIT Sloan School’s Center for Digital Business, is a columnist for Harvard Business Review, Fortune, CIO Magazine and MIT’s Technology Review, and is widely published in the business press. He is a senior advisor to MIT’s Security Studies Program and consults to the U.S. government on national security systems innovation and a Senior Fellow of the Design Futures Council.