If you are a customer-centric CIO and want to create company change through greater customer involvement, Patricia Seybold's Outside Innovation is for you. Her case study-driven book shows how firms like Staples Inc. engage their customers in product development, a practice that provides the differentiation firms need today. While business executives are often those leading the charge, CIOs want to be involved early on to lay the technical groundwork to facilitate customer engagement (i.e., by deploying technical toolkits). The good news: This can be easier in the midmarket than at larger companies, Seybold tells us. "Technology trends like open source and Web 2.0 -- where customers roll their own technology -- those are all techniques that midmarket companies are much more likely to adopt much more quickly," explains the author. (432 pages, $26.95)
Author Conversation: Patricia Seybold and Outside Innovation
Interview by Anne McCrory
Patricia Seybold's latest book, Outside Innovation, discusses how companies are engaging customers in the product development process and the benefits that result (think: products that fit a need right out of the chute). So where does the CIO come in? At the very beginning of the process, says Seybold, who as principal of the Patricia Seybold Group has consulted with hundreds of companies over the past 30 years. Recently Seybold spoke with CIO Decisions Editor in Chief Anne McCrory.
How can CIOs use this book?
This book gives them ammunition to help their internal customers understand how important it is to work with their external customers in gathering priorities and requirements for any customer impacting initiative, whether it's a new product or service their company is designing or whether it's business process redesign or doing a major ERP [enterprise resource planning] implementation or coming up with their SOA [service-oriented architecture].
What is the challenge for CIOs here?
I think one of the difficulties the CIO, and the IT organization, often has is getting the business to agree (a) that they should be involved in working with the end customers and (b) that they can actually take on a sponsoring role in bringing customers in to actually gather requirements up front. They can make that a requirement for any initiative that comes in for funding and resource allocation; ideally [the proposal] should have as the first three or four paragraphs, "Here is the customer business case. This is how this initiative is actually going to make it easier for our customers to reach their outcomes."
What types of CIOs do you see leading these efforts?
They are very customer-centric to begin with. They understand that the company's bread is buttered not just by [the business executives] but more importantly by the customers that those people's units serve. They tend also to be pretty visionary. They understand already in their guts what the capabilities of technologies are. So they are typically the ones who would be early adopters of service-oriented architectures, of customer self-service tools like customer portals, opening up APIs [application programming interfaces].
What should they be doing?
They really need to recruit the sponsorship of [business leaders]. They can work with any of those business units to get directly in touch with customers and then co-design with the end customers and the business-unit sponsors around whatever the initiatives are.
How does co-design work?
Co-design can be face-to-face design, or it can be harnessing online communities. Many of the companies I researched had these very vibrant online communities. Another theme that you'll see in the book is the theme of giving customers innovation toolkits to let them basically roll up their sleeves and work electronically to do their own design.
Technologically, what should IT be doing to facilitate co-design?.
The technology group should be aggressively, proactively making sure that the business units understand that they can have a platform to host these lead customer communities so they can constantly have customer input on tap.
What about companies in the midmarket; is this something they are likely to do?
One of the things that a midsized company can often do is be more nimble and a bit more forward thinking than a big behemoth. Technology trends like open source and Web 2.0 -- where customers both roll their own technology and use open APIs and do their own tagging and filtering -- those are all techniques that midmarket companies are much more likely to adopt much more quickly. Because typically they don't have so much NIH [not invented here] -- "Oh no, we can't do that. We did it 20 years ago and it failed, and therefore we can't do it now."
What is a good example of IT getting involved at the outset?
One of my clients is an energy company, and their initiative is being led by their technology group. They've always had this 'We need to take care of little old ladies and make sure they don't get cold' sort of corporate culture.
Now, after three or four mergers, they're doing a whole rework, a service-oriented architecture. They're driving their architecture in terms of what services should we be focusing on and what are the ones that are the most customer critical and how do we rationalize across all these different back-end systems that we have that we need to integrate. And the IT folks are saying, "We want to drive the services portfolio by understanding the most customer-critical requirements."
So they're adding this piece to the front end, which basically says, "Before we come up with our library of services, we're going to go do co-design sessions with our end customers to make sure that what we're getting are the most customer-critical, customer-impacting things." We're going to figure out how customers measure our success, and then we're going to instrument that all the way down into our technology. So we know that if customers need a two-hour turnaround when their boiler goes out, we have actually instrumented all of our technology to be able to do that.
Anne McCrory is editorial director of CIO Decisions and the CIO Decisions conference. Write to her at email@example.com.
This was first published in October 2006