Always Start With the Customer
Getting outside the building. Putting the customer first. Ideas very few companies would disagree with.
But sadly it’s an approach that receives more lip service than actual implementation. Rare is the company that requires face-to-face customer interaction as an essential component of its innovation work.
CareerBuilder is one of those companies, thanks in large part to the work of Chief Innovation Officer Abdel Tefridj. His approach to customer-focused innovation has been instrumental in incubating nine-figure business lines from scratch, and has helped CareerBuilder maintain a reputation for innovation inside an industry often viewed as anything but.
I had the pleasure of sitting down with Abdel last week to discuss how he approaches innovation, what he looks for in team members, and how to bake this customer-focused approach into an organization’s DNA.
DI: When you’re at a cocktail party, how do you describe what you do?
AT: Fundamentally my job is about identifying pain, connecting dots and solving problems for our customers. Once I’ve found customer pain my job becomes to give my company and team the necessary toolkit to solve the problem effectively, ultimately in a way that provides ROI for the business.
DI: How would you describe your approach to leading an innovation team?
AT: I always try to leverage cross-functional teams. The biggest trap I see for large companies is falling into a silo mentality. In order to avoid silos you need to have people from different departments, different skillsets. Strong technical team members, strong strategic team members, strong business and operations team members.
I look for people who are curious, who aren’t afraid of the nebulousness of change management, and who have the ability to execute.
It’s critical team members have beginner’s mind. If you think you already know how something should be done it limit your options. I always encourage my team to be reading and researching, as often as possible in fields outside our own.
I took our team out to San Francisco recently to meet with 15 or so startups – AirBnB, Twilio, Uber. We learned from other industries and how they operate their marketplaces, including Zillow and Trulia. The point was to show them the cadence of execution resident in startups, but also to expose them to different industries, giving them stimulus to connect the dots later.
Steve Jobs talked about how rare it is to have people with diverse enough backgrounds to connect dots effectively. You have to have a broad enough set of stimuli to avoid linear thinking and identify truly useful solutions. I’ve had the benefit in my career of having worked in 12 wildly different industries. But anyone can develop this habit.
That’s really all creativity is – taking disparate ideas and connect the dots between them. I hammer that idea into my team constantly – they all know that Steve Jobs quote by heart.
The last thing is possibly the most important, and that’s talking to the user. While some of the dots will come from looking at other industries, most of the really useful material will come from your own customers.
Literally every single week I’m spending time with end users. You must leave the building, sit down with them, listen to what they’re saying (and what’s behind what they’re saying), observe with your eyes. That’s imperative.
DI: What’s the biggest issue you see with innovation inside of larger organizations, and how do you solve it?
AT: The biggest issue is almost always silo thinking, trying to break out of that pattern. One of the best reasons to talk to customers, other than it directly leads to better products, is that it can break silo thinking. You’re no longer talking about what one department or team member thinks vs. another. Instead you’re all looking at what the customer is saying, and making decisions with that information. It’s an outside opinion, and a powerful one.
DI: Do you think of innovation from primarily a product perspective, or do you fold in service, process, or even business model innovations as well?
AT: People get caught up in product, and product can be super important. But when you talk to customers about what frustrates them, you’ll rarely hear issues about the product. It’s usually a customer experience problem. The reality is everything about your communication with customers is part of your product.
Process improvements can be huge as well – you can create a product in a variety of ways, but you can always do it in a way that is more elegant or creates a better experience for the customer. Amazon obviously proved that with the one click buy button – you’re still checking out of a shopping cart, but they made the process painless.
DI: How do you staff innovation teams? You already mentioned cross-functional, but how large or small are they?
AT: On the one hand I try to keep my team to a minimum. But on the other, the entire company is my team. I’ve been blessed with a pretty rapid career ascent, and one of the things I’m often asked is how I managed to move up with such small teams. But that demonstrates how pervasive silo thinking is – they think of the size of your team as a measurement of your influence.
If you can learn to think of the whole company as your team, and of your job as serving them as best you can, everything changes. I work very hard to build deep relationships with everyone in the organization. I’ll often be folded into threads on projects I have nothing to do with to offer advice or a second opinion. When that happens I try to give them the best possible answer I can, to help connect the dots for them or bring in some voice of the customer data they might not be familiar with.
I do that because I obviously want the company and my colleagues to succeed. But it’s also strategic – to make innovation happen you have to have plenty of allies who want you to succeed as well. There’s an African proverb that says “if you want to go fast go alone, if you want to go far, go together.” I try very hard to live that, serve my colleagues and help us all go far together.
I also constantly champion the voice of the customer. Every two weeks I have a client come into our office, and all departments are welcome to listen in. Not everyone has as part of their job description to regularly be out of the building talking to customers, so this is a way to bring the customer to them. I think this helps the whole company be in alignment with the primary problems we’re solving, helps them connect the dots. The voice of the customer is truly the biggest hammer in a successful innovation toolkit.
DI: How do you balance the need for moonshot disruptive innovations with the short term wins of incremental innovation?
AT: Well obviously you need to focus on both. One of the things I’ve been developing is something I’m borrowing from Intel and how they approached product development for the Pentium. They had three different lenses as an organization, with three teams. One was focused on efficiency, on making quick wins to incrementally improve the business. And then they had two future state teams, one looking at next year and one on three years from now. I think that’s a great approach.
One pitfall I often see is punting on having short term impact. Particularly with development teams, it is tempting to get caught up in the next big platform. And there’s definitely some truth there – Marc Andreessen once said you should blow up your codebase every 3 years in order to remain nimble and avoid the encumbrances with legacy systems. It’s thankfully an approach our CTO and I are very much in alignment on.
At the same time though, people often get caught up in the next big thing and don’t have any logic behind it. When I hear that I always tell my team the next big thing is here with the current product. I train people to take their big idea and figure out a way to test it – faster, cheaper, and with our current platform.
DI: Sounds Very Lean Startupy – Focusing on Testing and Validated Learning.
AT: I strive for balance there. I definitely like the Lean Startup’s focus on creating a hypothesis, testing it quickly, and making sure you look at the relevant KPIs. But I think you can sometimes get carried away with lean.
I’ve seen this with taking customer development feedback too literally. I obviously pay a ton of attention to the voice of the customer, but you don’t want to be led by the customer. It’s a subtle distinction, but important. They’re often good at telling you the problem, but not great at articulating a solution. Again, there’s a ton to like about Lean, but don’t let the process become more important than the outcome.
DI: Describe the process at a high level. How does an innovation move through the organization?
AT: Again, it almost always starts with the customer. Tons of people have ideas, but if you say “go get me 5 users that would value this solution,” 95% won’t be able to do it. So that’s a great filtering mechanism at the very top.
Once you have a problem or potential idea identified, you leave the building and try to find out the extent of the problem. How common is this with our customers? How big of a problem is it? Is it consistent? What are the root causes behind the problem? By really digging into the details you can often uncover what the actual solution should be, which might not have been evident immediately.
We once had a situation with a recruiter looking to fill an SAP role. We sent over 100 qualified resumes, each of which was rejected. Our account manager asked me to look into it given my technical background, so I hopped on the phone with the guy. He told me they were all asking for more than the client was willing to pay. It turns out the number was far below market.
He asked me to prove that with actual data, so I went into the system and gave him a report showing him a distribution of salary data for positions like this. He got so excited went to his client with the information, and immediately came back requesting similar data for 10 new jobs, then for all the jobs with all his other clients. It quickly became something his entire department was ordering. Today it’s one of our fastest growing divisions and a new product line.
It’s unlikely that would have emerged if we didn’t have the discipline around talking to customers and digging underneath the surface to uncover the actual pain. Once you’ve identified it, your job becomes much easier.
DI: How do you insulate your innovation work from the execution work of the larger enterprise?
AT: I don’t – I try to embed it more in the process. Like I said, I approach the whole company as my team, and I assume we all want to go the same direction together. Because of that, innovation initiatives here get the necessary air cover they need. That isn’t to say it’s always easy – as companies grow and mature, they inevitably pick up some organizational memory, where the strong temptation is to start saying “that’s always the way we’ve done it.” But by constantly trying to remind people to have beginner’s mind, and constantly keeping the customer front of mind, most of those problems are able to be overcome.
DI: What are your thoughts on open innovation, either through leveraging research or IP from the outside, or by spinning off internal IP that’s not being used? What lessons have you learned about making open innovation work?
AT: We do believe in open innovation, although that term means many things to different people. For me, that means partnering with university professors to bring in external research, and also acquiring companies that can help us accomplish our goals. But typically an acquisition comes after we’ve identified and demonstrated a level of proof around a particular pain point – the acquisition is rocket fuel to help us give the initiative a boost, but the initiative already has some momentum behind it.
DI: If you were to give one piece of advice to a company looking to build out a formal innovation department or initiative, what would you say?
AT: Start with the users. Where is the pain, how big is it, and how prevalent is it? Lots of companies ask people what they like – that doesn’t work. Ask what they hate – that’s where the opportunities lie. If you can identify the key frustrations for your users, understand the why behind them, and deliver solutions to those problems, your innovation work will pay off.