Ask your customers
Earlier this year, toy retailer Toys R Us declared bankruptcy, unable to compete with Amazon. It was a sad end to a beloved retailer, and it added to the notion that being swallowed by Amazon is a foregone conclusion for nearly all retail businesses.
But it’s not.
When companies choose to apply a mindset of innovation, grounded in an understanding of their core business and their customers’ needs, they can withstand disruption in their industries, thrive on it, or even lead it. That was the approach taken by a client of ours when we worked with them to proactively innovate their business model to deliver more comprehensive value to their customers.
The Fortune 500 company is the leader in a decidedly un-sexy market. They provide maintenance supplies, products and equipment to facilities managers at at large commercial properties. They offer items such as cleaning supplies to toilets, and everything in between. As a large supplier, their strength is in their ability to offer the lowest prices on anything maintenance crews need, and deliver those products quickly. They are a one-stop superstore.
Envisioning the Future
Our client saw the writing on the wall. They could easily be replaced.
Amazon continues to add major new categories to their portfolio. They had already supplemented their long-established dominance in books and music with clothing, electronics, and home goods. With their purchase of Whole Foods, their 2015 announcement of Amazon Business, and their intention to take on the health insurance industry, it’s clear no one is safe.
Like any smart business, our client recognized they needed to be in the service business. Their customers have jobs to be done, and the only way to survive is to help them get more of their job done. That means transforming from being simply a supplier to an integrated service provider.
When faced with looming innovative disruption from the likes of Amazon, the only choice is to lead a disruption of your own. For many companies, that means expanding their offerings to their customers in the form of new services. Often that requires a digital solution, and that means getting into the software business.
But it takes more than just acquiring technology to help your customers get their jobs done today. In order to compete with Amazon, or any other disruptive force, companies need to be able to see into the future and anticipate what customers’ needs will be, and what role technology will play.
Our client understood that, but they also recognized that they needed to take a step back first.
So they did.
They went through a detailed exercise of predicting what the job of a property maintenance manager would look like five to 10 years from now. Instead of focusing on the transaction of buying supplies, they zoomed out.
They envisioned property maintenance managers using augmented reality to diagnose maintenance problems in a unit, image recognition to identify specific parts, and voice recognition to be able to place orders. They saw technology being used to predict facilities supply needs, and having the products delivered just in time.
This exercise allowed them to see where they could have a greater impact. Not just making it easier to order their products, but making their customers jobs — and lives — easier. In fact, the very notion of actively ordering and purchasing products may itself become obsolete. Our client foresaw a time when the products they offer are integrated into their fulfillment services. So facility managers have all of the products they regularly use identified in their accounts, so all they have to do is click a simple “reorder” button.
No decisions to be made. No shopping or selecting products. Just ordering from their list of pre-selected products. Predictive inventory at its best.
That kind of dynamic inventory management lends itself very well to the facilities maintenance industry. Our client saw the future. The next step was determining how to get there.
With a vision of the future of facility maintenance, the company then had to start the process of learning how to create it. They needed a plan that would help them transition to this future, so they could be ahead of the curve, leading innovation, instead of reacting to it.
Thus began the process of learning and experimentation. They were faced with learning several different technologies with which they had no experience as a company. Voice recognition, image recognition, geo-location.
An additional layer to that is the actual behavior of their customers and how that might limit the company’s ability to offer innovation. For example, very few facility maintenance technicians are issued smartphones by their employers. The closest thing they have to that is a two-way radio.
This clearly places limits — at least for the time being — on any technological solutions they could offer.
We were looking at a short-, medium- and long-term future, and we needed to be able to work toward all three, essentially simultaneously. The first steps were small, working on solutions that could be executed fairly quickly and placed in users’ hands within six to 12 months.
At the same time, with the medium- and long-term futures in mind, we and our client were able to engage their customers in thoughtful conversations about their work and how it could be made better through technology. This not only allowed us to gain insights into what specific steps we’d need to take to move forward, but it also positioned our client as a leader and partner who is committed to their customers’ success.
Through this process, we worked with our client to identify the first-phase solutions that could be developed and launched with relative ease and speed. We determined that, because the technicians themselves had limited access to technology, the best way to start was to make the store room smart. So we worked with the company to create a beta test of an app that would run on an iPad located in the store rooms.
The app has a voice-activated inventory management and ordering interface, similar to Alexa but proprietary to the company. (They didn’t want to use Amazon’s interface, for obvious reasons).
The app allows technicians to walk into a store room, ask the app if a certain part is available. If it is, the technician can take it, verbally “check it out,” and take it to be installed. The app then automatically updates the inventory and alerts the maintenance manager when new parts need to be ordered.
Though far from perfect, voice recognition is a key component to the app. Not only does it make interfacing with the app easier, but the company also envisioned technicians being able to talk to the app in the store room, through their walkie-talkies.
The app is being beta tested with several of the company’s customers, and so far has shown promise in helping them manage their inventory and keep residents and guests happy. But the app itself is almost beside the point.
Often, when companies are faced with disruption and the need to innovate, they’ll jump right into app development. They’ll build a product they think their customers want. Something that streamlines the process of customers buying their products.
Taking this approach, more often than not, they’ll find that the app doesn’t work. People don’t use it, and the company has wasted huge sums of money.
At times, of course, quick fixes are necessary. But whenever possible, it’s best to fully explore the how and why of a situation. This gives us the opportunity to explore a solution that delivers greater value for our clients — and their customers — over the long term.
By taking the approach of zooming out and fully understanding what their customers do every day. Our client was able to open new lines of communication, and show that they wanted to understand the challenges they face and look for ways to address them.
And, because they were able to produce a working beta in 90 days, they showed their customers they were serious about innovation. The app isn’t perfect, by any means. Some of the technology isn’t sophisticated enough to do what the company envisions, and their customers’ access to technology is also limited.
But they showed a commitment to innovation that provides true value to their customers. And that they were about more than just shipping things quickly. Check out the entire case story here.