Agile is often thought of as a process when it’s really a mind-set (supported by processes, of course). Yes, it’s about testing and learning, and new ways of working, but at the heart of agile is the determination to provide the customer with something she or he wants or needs. That’s the point. Enshrining this principle across the business provides a consistent point of reference. But while almost every company will claim to be “customer first,” a closer look under the hood often reveals that internal efficiency or profit rather than customer need is the true driving force.
An agile mind-set starts from the premise that everyone is responsible for the customer, be it the CEO who determines the business strategy, the salesperson directly serving the customer, or the data scientist developing analytics platforms. You will only be able to embed agile ways of working once this becomes a core value, providing cohesion and purpose. This isn’t about doing your job better; it’s about serving the customer better.
The way a true customer-first ethos comes to life is through design—the process of integrating the customer point of view into all development.
This is much more than gathering insights or building elegant websites. It’s about building an adaptive learning process around the customer for everything the company does.
Getting design right is worth a lot. Companies in the top quartile of the McKinsey Design Index, which rates companies by how strong they are at design, outperformed peers in their sector in terms of growth by as much as two to one.
Here are two of the most important things the winning companies do:
1. They Make Huge Efforts To Know The Customer
A design approach requires solid customer insights to understand the real needs of potential users. Yet only around half the companies McKinsey surveyed conducted user research before generating their first design ideas or specifications.
One international pizza chain wanted to improve home delivery, a crowded market where consumers were already spoiled for choice. Data analysis revealed that one of the biggest drivers of customer satisfaction was how hot the delivered pizza was. This fact led the business to invest in “Intelligent Kitchen” technology, which determines when orders are baked based on the delivery address, driver availability, and current location, as well as road conditions to ensure the customer got a piping hot pizza. This approach grew overall sales 7 percent in the first year, and more in the years following.
The best results come from constantly blending both quantitative and qualitative research. One top team invites customers to its regular monthly meeting solely to discuss the merits of its products and services.
And the CEO of one of the world’s largest banks spends a day a month with the bank’s clients and encourages all members of the C-suite to do the same.
2. They Continuously Improve With Customer Feedback
Continuous improvement is key to success for a digital transformation. This is the raw learning capability. You can see it in companies that foster a culture of sharing early prototypes with outsiders and discouraging excessive time spent on mock-ups or internal presentations. Despite the value of iteration, however, almost 60 percent of companies in our survey said they used prototypes only for internal-production testing, and even then, only late in the development process.
New technologies allow companies to uncover insights and test products in a dramatically faster way than traditional market research or focus groups. Digital marketing teams can convene online customer panels using video chats and watch as the panels test products and provide feedback in real time. One insurer created digital diaries to help identify customer pain points that would previously have gone undetected.
Similarly, digital companies can quickly A/B test new products and campaigns with thousands of customers in hours or days.
Agile isn’t just a process. It’s a mind-set that puts customer objectives first. Team autonomy works best with guiding principles about what needs to be done and why.
Agile coaches are necessary to train people to learn new skills fast—leaders included.
Agile budgeting helps scale agile by quickly allocating money to projects.
Agile ways of working can’t take hold unless they are supported by stable processes.
Design thinking is the commitment to completely understanding your customer.
Contributed to BSI By: Arun Arora, Peter Dahlstrom, Klemens Hjartar, and Floria Wunderlich. Excerpted from their book Fast Times: How Digital Winners Set Direction, Learn, and Adapt (Amazon Publishing)
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