Jean-Claude Larreche is the holder of the “Alfred H. Heineken Chair in Marketing” at Insead. His last book is called “The Momentum Effect” and has met quite a wide success since its May 2008 launch.
One particular tool has grabbed my interest and, with Jean-Claude’s consent, I have started to experiment with it quite widely: the Discovery path matrix (please click one the image to enlarge and clarify it).
The two axes are pretty clear: Vertically, the question asked is “are the users or market aware of their own needs?” In many cases we know exactly what we want and no subtleties are needed in order to provide us with what we expect. But in some cases, “we don’t know what we don’t know”. As the old joke goes, candle users would never have come up with the idea of electric lamps should have they been surveyed…
The horizontal axis is the one of our firm: do we clearly and explicitly know what our customers, or the market, need or do we ignore it? The reasons can be multiple, such as true ignorance, refusal to listen, complacency etc…
Let us now dive deeper into each one of the “four boxes”:
- Customers/The Market and we are aware: I call it the “License to operate” context. It is the place for operational excellence and efficiency. This is where we can not fail as customers “know that we know”. It is something like safety when it comes to airlines or hygiene for restaurants. But it is also, potentially the “Red Ocean”, the “commodity hell” where all actors, customers as well as suppliers know about market’s needs. It is difficult to escape to pressure on costs here… The processes to support that box are around operational excellence, efficiency, SOP’s etc…
- Customers/The Market are aware and we are not: I call it the “Complacency?” box as sometimes complacency isn’t the sole reason for it. We may truly ignore why clients are interested in us, we may be blind to the customers’ customers needs, or, as explained in October 31st 2010 post, we may have internal blockages or be so well entrenched into our implicit beliefs that we fail to hear. LISTEN to our customers is actually the key instruction here. Listen through surveys, through blogs and social networks. I am always amazed to see how little in touch some of us are with how customers use our products or services. The old story of General Motors’ executives, who couldn’t relate to the frustration of their customers re: the quality issues of their cars, because theirs were taken care of as soon as they drove in by an army of technicians, comes to mind! Support processes here all evolve around ensuring that the voice of the customer will be heard (customer service, after sales service, customer surveys etc…)
- Customers/The Market are not aware and we are: I call it the “blindspot” box . How you are going to use this knowledge is delicate. It is said that a famous sports car manufacturer (in my own preference, the best) found out that they had little insight on the critical purchase decision criteria of tone of heir most profitable segments. Having finally researched it, they found that buying their prestigious brand was a way for them to concretely explain and justify to their younger children, why Daddy was working long hours and wasn’t as present as he would have liked… What do you do with such information. The brand chose to publish sensitive clips which linked a child’s dream to that specific brand. But in most cases, when you know about the Market’s needs and it is not yet aware of it, your safe bet is to TEACH. Teach the Market/Customers about their unconscious need; show them how your product, service or experience may help them fulfil this unconscious but present need. This is what personal computers, mobile phone manufacturers or a firm like Apple do well (who amongst us knew that they badly needed an Ipod, an Iphone or Ipad before they were “invented”?). This is going from market driven to market driving! In order to support that aim, the processes here will be around “Scanning the periphery”, understanding customers’ customers or end users, etc..
- The last box (Customers/The Market as well as our company are unaware of the needs) is called the “Holy Grail”. It may seem esoteric as it is difficult to work on “what we don’t know that we don’t know”. This is the ground of “constantly preparing for the future instead of guessing it”, creating an intelligent organization instead of outsourcing its strategizing capacities to consultants, challenging orthodoxies and pre-established models. The style here is OBSERVE! This box relates to the “Complex environment” described in a recent post. Letting things emerge and dealing with ambiguity are an important skill here. Another October post (also relating to leading in complexity) also mentions a few “recipes” amongst which, creating small entities which will test in a less risky way, the emerging technologies or market needs. Here we need to put very different processes in place.
Each time I run the exercise of going through this matrix with a team, the outcome is very insightful and interesting. In a given case, we spent a whole day around what it meant and how to ensure that leadership in the four boxes is maintained… I warmly encourage you to do so with your won team!
Unexpected cancellation of my Brussels trip last week but my wife quickly found out a replacement activity: I went cleaning and preparing the wine cellar in the old chalet we bought, live in and are remodeling. So, if you happen to pass by our ski resort of Villars, you will be welcome with a glass of wine. I finally found it amongst the boxes of our movings!
France is on the menu this week for an innovative “Disruption Experience” tailored for one of our closest clients. Have a great week all!
 J.C. Larreche “The Momentum Effect : How to Ignite Exceptional Growth” (2008) Wharton School Publishing