Customer As Strategy

Helge Tennø | jokull.io
Customer Strategy | Customer Insight
.customer
strategyWHY DIGITAL ISN’T DIGITAL AND
CUSTOMERS ARE HOLDING THE
KEY TO YOUR FUTURE
as

“TO MANY MANAGERS, THE PRODUCT IS THE BUSINESS” - NIRAJ DAWAR, TILT
“Firms continue to spend inordinate amounts of time, effort, and
resources on their products. In fact, businesses are structured around
their products. Companies have product divisions and product
managers, and proﬁtability is generally measured by product (not by
customer).
But the answers to questions like ‘Why
do customers buy from us?’” don’t reside
in products. As Dawar points out, they
“reside almost entirely in the interactions
that take place in the marketplace.
- Steve Denning, CES: A User's Guide To The New Economy
http://www.forbes.com/sites/stevedenning/2015/01/14/why-the-consumer-electronics-show-is-dying/#1443d21222cb
Planning meetings and budgets are product-based, incentives and bonuses are tied to product
volume moved, and the managers’ hopes and aspirations are pinned on product innovation and the
new-product pipeline. Building better products, conventional wisdom in these companies holds, is
their pathway to a better, less price-competitive future.
.preface

For the customer
the experience
is the sum of all
transactions
with the
company
PRODUCT
SERVICES
COMMUNICATION
.preface

TECHNOLOGYDISTRIBUTION
.preface
CUSTOMER
VALUE
You start of by identifying the customer value you are going
to create, and then ﬁnd the distribution and technology

.growing complexity
PART 1
PART1A:GrowingComplexity
Image by NASA Goddard Space Flight Center on ﬂickr.com

«PEOPLE HAVE CHANGED
MORE THAN THE BUSINESS
ORGANIZATIONS THEY
MUST DEPEND UPON FOR
CONSUMPTION AND FOR
EMPLOYMENT»- Shoshana Zuboff
link

Every century or so,
fundamental changes in the
nature of consumption create
new demand patterns that
existing enterprises can’t
meet.
- Shoshana Zuboff -
link

link
.the premium puzzle
Based on articles and talks by Shoshana Zuboff, and Gary Hamel
EARLY CONSUMERS
PROPRIETARY CAPITALISM
MASS CONSUMERS
MANAGERIAL CAPITALISM
NEW SOCIETY OF INDIVIDUALS
DISTRIBUTED CAPITALISM
ZONE OF
INNOVATION
1890 2005
1915 2020
2050
ZONE OF
INNOVATION
MIGRATION
PATH
MIGRATION
PATH
ZONE OF
MUTATION
ZONE OF
MUTATION
ELECTRICITY
INTERNET
MOBILE
BIG DATA
IOT
CLOUD
+
+
COMBUSTION ENGINE
Zero marginal cost
Every century or so, fundamental changes in the nature of consumption
create new demand patterns that existing enterprises can’t meet.

http://www.180360720.no/?p=5227
We are living in the age of mass individualization. No
two people get the same Google search result, see
the same products on amazon.com, have the same
Facebook feed or iTunes catalogue. Every smartphone
is unique two minutes after its ﬁrst boot.
We are living in an age where the new mega industries have all become personal services
industries and the old incumbents are still struggling to put out a mass product at almost no
margin or cost (e.g. digital news media, insurance, banks, bikes, cars, tooth picks etc.).

discuss:
Is there a / is there a looming
premium puzzle in your industry?
What is it?
In pairs of two for three minutes:

.there are no maps, you are the mapmaker
We are increasingly moving
from a world of predictability
and standardization where
there are simple problems,
single solutions and best
practices. To a world that has
complex problems with
multiple solutions which only
emerge after they are
influenced by an input
variable.
Continuing along the vector
of the current paradigm.
Becoming a highly efficient
component in a different
value chain.
a. What customers find valuable to pay
for is changing 
b. Technology is changing how  
people do stuff leading to a
mutation of processes  
(e.g. SMS and payments  
become the same process)  
c. People organize in multiple
immediate networks, lasting from
seconds to months or years. These
networks are distributed, they don’t
have a plan and only react when
input hits them. Companies are the
input variable.
People are developing
new demand patters our
current business
organizations can’t meet
Enkle
Komplisert
Komplekst
Kaotisk
We’re facing new
types of problems
Entering new paradigms,
offering new processes to
help the customers progress.
Establishing new value
chains.
There will be a natural
separation between
format (the
processes+tech. firms
offer) and resource
(what is valuable to
people), where the
existing format stops
being inseparable
from the resource and
becomes an option.
.mutations
.infrastructure
We need
new types of
organization
s around new
types of data
PART1B:GrowingComplexity
- Shoshana Zuboff

.progress, struggle
understanding customers’
PART 2
and
circumstance
PART2A:UnderstandingCustomers’progressandcircumstance

ACTIVE
VS.
PASSIVE
DATA
THE DATA DELUSION:.the fallacy of
SURFACE
GROWTH
CONFORMING
DATA
.the fallacy of.the fallacy of

link
After decades of watching great companies fail, we’ve
come to the conclusion that the focus on correlation—
and on knowing more and more about customers—is
taking ﬁrms in the wrong direction. What they really
need to home in on is the progress that the customer is
trying to make in a given circumstance—what the
customer hopes to accomplish. This is what we’ve come
to call the job to be done.
Know Your Customers’ “Jobs to Be Done”
Clayton M. Christensen, Taddy Hall, Karen Dillon, David S. Duncan
https://hbr.org/2016/09/know-your-customers-jobs-to-be-done

CUSTOMER STRATEGY / THE CUSTOMERS JOB
JOB DESCRIPTION
WHAT JOB?
DESCRIBE THE CUSTOMERS CIRCUMSTANCE, PROGRESS AND STRUGGLE
CIRCUMSTANCE
IDENTIFY THE SITUATION WHAT MOTIVATES ME?
PRIORITY
PRIORITY
PRIORITY
HELGE
TENNØ
JOKULL
180360720.NO | JOKULL.IO
SOURCE, The canvas comprises the thoughts on customer-jobs-to-be-done presented through a series of articles:
- Finding the Right Job For Your Product, Clayton M. Christensen, Scott D. Anthony, Gerald Berstell and Denise Nitterhouse, http://sloanreview.mit.edu/article/ﬁnding-the-right-job-for-your-product/
- Giving Customers a Fair Hearing, Anthony W. Ulwick and Lance A. Bettencourt, http://sloanreview.mit.edu/article/giving-customers-a-fair-hearing/
- Mark Johnson @ the Business Design Summit in Berlin 2013, http://www.businessdesignsummit.com
- The Innovator's Secret Weapon, Bill Ding, Jian Sun, http://bit.ly/1IoGyR4
WHAT PROGRESS, STRUGGLE AND CIRCUMSTANCE IS
THE CUSTOMER HIRING THE PRODUCT / SERVICE FOR?
FUNCTIONAL GOAL
WHAT AM I TRYING TO ACHIEVE?
SOCIAL GOAL
WHAT DO I WANT TO ACHIEVE IN THE
INTERACTION WITH OTHERS?
MOTIVATIONAL
GOAL

PART2:UnderstandingCustomers’progressandcircumstance
discuss:
What progress, struggle and circumstance is
the customer hiring the product/service for?

Over time companies and industries seem to forget their understanding of the market, their CVP.
They become prone to unconsciously hold a very limited view of their future. Seeing the world from a
technology, market or product perspective creates a very narrow frame of reference where new
wealth opportunities are easily overlooked.
.customer OSOperating in the market from the perspective of its Customer Value Proposition
link
PART2B:UnderstandingCustomers’progressandcircumstance
Competition offering the same CVP is
conciously let in as they are using
different core technology or core
business model
Creating a market by understanding the customer’s progress,
struggle and circumstance (customer value proposition)
The original technology and processes end
up becoming a commodity or infrastructure

Common market reaction to real threat:
e.g. Insurance companies understand the importance of insuring against damage or loss to
people’s physical property. But in regards to intellectual property they don’t see their role
at all. This is strange. Given that if you loose your computer the stuff on it is far more
valuable than the box itself. What business are the insurance companies really in?
The insurance industry avoided any problem by just renaming the whole problem.
Insurance of intellectual property is now called cloud storage.
renamethe threat to make it disappear
PART2B:UnderstandingCustomers’progressandcircumstance

PART2:UnderstandingCustomers’progressandcircumstance
discuss:
What are the advantages of the different
approaches to understanding the market:
- Core technology
- Core business model
- Customer job / progress and circumstance

.mutation
PART 3
Technology is changing how people do
stuff, leading to a mutation of processes.
(e.g. SMS and payments become the same process)
PART3:Mutationofprocess
of
process

People reach their goals through their behaviors. They hire products and
services because of the processes these offer that allows different types of
behavior. These processes are themselves limited to what the current
technology can offer. And hence people’s behaviors are limited to the
technology that is available.
PERSON GOALPROCESS BEHAVIOR
TECHNOLOGY
PRODUCTS AND SERVICES

.but
What happens when the technology changes?

What happens when the technology changes?
What happens when people’s goals change?
.but

"In the old model things didn't change very fast, it was predictable and so you
built for predictability. It was like saying; 'go ﬁnd this object in a well lit room’."
- Aaron Dignan -
A Well Lit Room
It used to be…
link

- In a well lit room these factors are all very predictable -
TECHNOLOGY

New technology invites companies to ﬁnd new processes
creating new behaviors for people
Slow moving societal change like
the increase in higher education,
standards of living, social
complexity and longevity etc.
changes people’s mind in regard
to what they ﬁnd valuable
Dark Room
Now it’s more like…
TECHNOLOGY
- Quote by Aaron Dignan -

New technology invites companies to ﬁnd new processes
creating new behaviors for people
Slow moving societal change like
the increase in higher education,
standards of living, social
complexity and longevity etc.
changes people’s mind in regard
to what they ﬁnd valuable
TECHNOLOGY

- Helge Tennø -
«IT IS NOT ABOUT
OLD PRODUCTS
OR SERVICES
BECOMING TOO
COMPLICATED
OR TOO SLOW,
THEY BECOME
IRRELEVANT.»
link

PART3:Process
discuss:
Are we in the business of solving a customer
problem or selling a customer process?
To which consequence?

PART 4:
PART4:Thismightbeyourfutureinﬁveyears
your future
this might be
in three to ﬁve years …

The customer is not in the driver seat.
It is us that no longer understands
what they ﬁnd valuable to pay for.
.willingness to pay

Identity
link

MASS
STANDARDIZATION
IDENTITY
INDIVIDUALIZATION
THE WILLINGNESS TO PAY A PREMIUM IS CONNECTED TO IDENTITY
INDIVIDUALIZATION UNLEASHES NEW MARKETS AND WEALTH

«We want to make a
personal Google for
each and every user»
«We made Google search for everyone and
today we made Google Assistant just for you»
Sundar Pichai, CEO Google
4th October 2016
Microsoft wants to
"democratize
artiﬁcial
intelligence" and
bring AI to systems
that everyone uses.
http://arstechnica.com/information-technology/2016/09/microsoft-
merges-bing-cortana-and-research-to-make-5000-strong-ai-division/

«THEY CAN PICK OUT THE BEST CREDIT RISKS, IN
AN ECONOMY WHERE INFORMATION ON CREDIT-
WORTHINESS IS, SHALL WE SAY, A BIT THIN.»
- Nicholas Lardy, a longstanding expert on China’s ﬁnancial sector at the Peterson
Institute for International Economics -
http://www.ibtimes.com/mybank-vs-webank-chinas-internet-giants-go-head-head-new-online-banking-sector-1941380
«We’re connecting 10,000+ data points per customer
to build a new kind of credit score. It's working in a
way that the world has never seen before.» - tala.co
THE UNBANKED AND THE UNDERBANKED
DATA HVILKEN DATA KAN VI SAMLE
OG HVORDAN KAN VI BRUKE DENNE?

discuss:
What would identity and
individualization look like in your
industry? Is it already here?

PART 5:
choice.
freedom of
PART5:Freedomofchoice

.freedom of choice, not voice
The democratization of the Internet has led to
If everyone is offering the customer the same processes and infrastructure customers are only given a choice
between logos and colors.
But, if a provider offers the same or competing value with different processes and / or no infrastructure.
Then the customer has been given a real choice and there is a real threat to the incumbents.
ChoiceNo Real Choice

Customer Expectation GAP-graph / Richard Trovatten
Time
Customer
excpectation
«Innovation over time ads layers of new customer expectations»
Layersofinnovation

Companies aren’t disrupted, components in their value chain are.
NEW VALUE CHAIN
TRANSACTION COST =
PROCESSING INFORMATION AND COMMUNICATION
TRANSACTION COST =
PROCESSING INFORMATION AND COMMUNICATION
COMPONENT REMAINS UNCHANGED
COMPONENT BECOMES INCREASINGLY
IMPORTANT TO CUSTOMER- COMPANY
KEEPS AVERAGE ADVANTAGE
NEW COMPONENT EMERGES - COMPANY
CHOOSES TO IGNORE EMERGING
CUSTOMER DEMAND
COMPONENT IS REMOVED FROM THE VALUE CHAIN.
VALUE CHAIN BREAKS UP.
NEW COMPONENT EMERGES. VALUE
CHAIN BECOMES HORIZONTAL.
COMPANY IS UNABLE TO COMPETE WITH
ASSYMETRIC COMPETITION
NEW COMPONENT EMERGES - DATA
DRIVEN CLOTHING XXX INTRODUCES
NEW DELVIERABLE AS INCUMBENT VALUE
CREATION BECOMES INFRASTRUCTURE
MAP STRING OF COMPONENTS
WHICH COMPONENTS ARE INTERNAL AND
WHICH ARE EXTERNAL?
IDENTIFY THE COMPETITIVE LANDSCAPE
[DISPLAY LOGOS]
WHAT IS CUSTOMER VALUE AND WHAT IS
INFRASTRUCTURE?
WHICH COMPONENTS REPRESENT YOUR
COMPETITITVE ADVANTAGE?
WHICH COMPONENTS REQUIRE A HIGH
DEGREE OF FLEXIBILITY
TO MEET THE CHANGING AND DIVERSE
NEEDS OF THE MARKET?
WHICH COMPONENTS ARE RIPE FOR
DISTRUPTION?
WHICH COMPONENTS ARE KEY WHEN
MUTATING TO OTHER INDUSTRIES?
-
HOW DO WE ORGANIZE FOR THIS?
HOW DO WE FUEL THE ORGANIZATION?
ca.
Mu.
cv.infr.
ﬂex
D.
VALUE CHAIN MAPPING:

Encyclopedia Education

discuss:
What are the core components in your
value chain? Are they stretchable?

PART5:Choiceandhownottoseeit..

It is always easy to explain the world
in hindsight, so lets try foresight:
It is becoming increasingly clear to banks that
where FinTech proposes no real threat WeChat
and other social life-platforms do.
How/why?
FinTech proposes to better one or a few
components in the banks value chain - but the
chain itself will remain in the banks control.
Life-platforms turns this on its head. Suddenly
banks become the component and life-platforms
become the chains.
Banks, with their processes and infrastructure
suddenly, and very visibly, are becoming
irrelevant.
link
PART5:Choiceandhownottoseeit..

PART 6:
.hardware
PART6:Hardware
What are we organized to accomplish?

Companies are designed to
out!
customers
keep
VIA CHUCK COKER ON FLICKR.COM
link
PART6:Hardware

We were designed to engage in a predictable environment, which
requires that [the customers] are similarly designed. But, [the
customer] network didn’t have a ﬁve year strategic plan, they
didn’t have a linear hierarchy or centralized authority. We had to
understand that we were ﬁghting against a complex, movable,
continuously changing decentralized and distributed network.
And these networks would last for six months or twelve minutes.
- Paraphrasing Chris Fussell & Rachel Mendelowitz -
[I removed references to Al Qaida and changed them with the customer]
@responsiveconference.com, 20.aug.16
vs.
PART6:Hardware

efficiency
COMPANIES CARE ABOUT
this harmonizes poorly with unpredictable customer who want nothing more then their own surplus
&
standardization
PART6:Hardware

«Let me give you an example of how expensive that can be. A decade ago four
of the most powerful technology companies in the world were Intel, Dell, HP and
Microsoft. And yet all four of them completely missed the single biggest shift in
the generation in their industry. And that was the shift to wireless. The mobile
opportunity was not an existential threat to their core business.
We continue to over concentrate power in our
organizations. When you give a few people at
the top the power to set strategy and direction
you are giving them the right to hold the
organizations capacity to change hostage to their
own personal willingness to adapt and change.»
«[successfull companies] fail when their leaders fail to
write of their own depreciating intellectual capital.»
- Gary Hamel
link
PART6:Hardware

«We were caught of guard»
Senior Management in some of Norway’s biggest media companies after ignoring
the warnings from their talented employees for years.
PART6:Hardware

«Even the worlds most efﬁcient hierachical, linear organization was unable
to keep up with the speed of this distributed network»
- Chris Fussel, Stanley McChrystal Group -
Graph / slide from Mike Arauz / aug.co
link
PART6:Hardware

«The problem set for an organization
usually changes every week.»
- Chris Fussell, Managing Partner at McChrystal Group -
link
PART6:Hardware

The old management model is a control mechanism subdividing talent into
compartments where top-management destroys their ability to create value.
Enabling companies are driving information rapidly out to front-line self-
organizing teams in order for them to operate autonomously and react
instantly to changes in customer demand patterns. Employees given the
opportunity to use their talent unleash massive wealth for the corporation.
Cases in point: Salesforce, Netﬂix, Patagonia, Zappos, Tesla, AirBNB, Morning Star, Etsy, Nest, Spotify, Valve, Google, Burtzorg, Haier, Gore Technologies, DSM, GE Health, Whole Foods, Zara, Telus, Uber, Amazon, Facebook, Apple
link
PART6:Hardware

PART6:Hardware
discuss:
How are we best designed
for the customer?

.software
PART 7:
The execution is never better than the
strategy we put in, and the strategy is
never better than the data, insight and
experience it is built on top of.
PART7:Software

- CHRISTIAN MADSBJERG AND MIKKEL B. RASMUSSEN,
HBR.ORG, AN ANTHROPOLOGIST WALKS INTO A BAR
The biggest challenge CEOs face is the so called
complexity gap.
CEOs see a lack of customer
insight as their biggest deficit
in managing complexity. ..
And rank “customer
obsession” as the most
critical leadership trait.
THE
link
PART7:Software

IS CUSTOMER INSIGHT EVEN
THE RIGHT APPROACH?
PART7:Software

.disorder
complex
complicated
simplechaotic
Cause and effect: understandable in
retrospect but do not repeat
Probe - sense - respond
Cause and effect: Detectable but
seperated over time and space
Sense - Analyze - respond
Cause and effect: Repeatable,
perceiveable and predictable
Sense - Categorize - respond
Cause and effect: Not detectable
Act - Sense - respond
Unordered context
Ordered context
The
cyneﬁn
sensemaking
framework
Making sense
of the world
so we can act
in it
- Dave Snowden, SenseMaker
PART7:Software

The customer
is not a
segment, she
is a signal
PART7:Software

link
In short, mutations that upend
industries can come from
anywhere, and conventional forms
of market analysis and competitive
strategy will miss those mutations.
PART7:Software
- Shoshana Zuboff, Creating value in the age of distributed capitalism
- www.mckinsey.com/business-functions/strategy-and-corporate-ﬁnance/our-insights/creating-value-in-the-age-of-distributed-capitalism

What can the customer teach us?
- progress and circumstance
- input variable
- complex
- signal
- mutation
PART7:Software
discuss:

</end of digital>
PART 8:
new models
and
practices
PART8:</endofdigital>

THE CHANGING CONTENT OF CAPITALISM
«the speciﬁc kinds of business models and practices that create wealth in any given era»
MERCANTILE CAPITALISM
Venetian merchants and Dutch traders
PROPRIETARY CAPITALISM
Factory and workshops of the British Empire
MANAGERIAL CAPITALISM
American modelled mass consumption
DISTRIBUTED CAPITALISM
Apple, Alphebeth, Facebook, Amazon
2000 -190018001600-1700

A MUTATION IN
CAPITALISM
ITSELF It would be easy to construe these as isolated cases of innovation and industry
change, but I believe they represent much more: a mutation in capitalism itself.
What’s the difference? Innovations improve the framework in which
enterprises produce and deliver goods and services. Mutations create new
frameworks; they are not simply new technologies, though they do leverage
technologies to do new things. Historically, mutations have superseded
innovations when fundamental shifts in what people want require a new
approach to enterprise: new purposes, new methods, new outcomes.
Creating value in the age of distributed capitalism
By Shoshana Zuboff
http://www.mckinsey.com/business-functions/strategy-and-corporate-ﬁnance/our-insights/creating-value-in-the-age-of-distributed-capitalism
link

DISTRIBUTED CAPITALISMCOMPANIES WHO OWN THE MEANS OF DISTRIBUTION OWN THE PIPELINE TO PEOPLE
WE NOW LIVE IN AN AGE OF
ALIBABA, WECHAT, KAKAO, LINE FACEBOOK, APPLE, AMAZON, GOOGLE

MASS
STANDARDIZATION
IDENTITY
INDIVIDUALIZATION
THE WILLINGNESS TO PAY A PREMIUM IS CONNECTED TO IDENTITY
INDIVIDUALIZATION UNLEASHES NEW MARKETS AND WEALTH

«The measure of a successful
company is its ability to let its
customers and employees
liberate it.»
- Helge Tennø -

PROTOTYPE
FLEXIBLE TECHNOLOGY AND SYSTEMS
Q.: Which demands do we need to put on our technologies and
systems?
KEYWORDS:
- Flexible, agile and dynamic platforms
- Rapid iterations and user testing
- Individual services and experiences
- Immediate, real-time and distributed data
- Machine learning / AI for individualization
- Capture all structured and unstructured customer data
- Multiple solutions running at the same time
FUELING THE 21st CENTURY ORG.
Q.: Where and how can we start to understand different
circumstances and progress? Where can we learn the
most for the least amount of time and money? How do
we get to the first data point?
KEYWORDS:
- Fast realtime feedback loops, smaller probes in parallel
- Cluster on actual behavior
- Direct contact between the decision makers and raw data. Without interpretative layers
- Continuos learning and adaptability
RESPONSIVE ORGANIZATION
Q.: How do we organize to match the
customers’ distributed networks?
KEYWORDS:
- Decentralized teams and decision making
- Information is open - not protected
- Organize around customer problems
- Immediate and continuos deployment
APPROACH / MINDSET
Q.: How can we make better sense of the
problems we face, how do we solve different
problems?
KEYWORDS:
- Adopt complex problem approach in addition to already established
simple and complicated approach
- Capture customer data to understand causality / problem
- Strong opinions loosely held
Understand customers problems
PROGRESS AND CIRCUMSTANCE 21st CENTURY VALUE
& REVENUE STREAMS
CANVAS FOR DISCUSSION: APPROACH / MINDSET,
TECHNOLOGY, ORGANIZATION AND BUSINESS:
21st CENTURY
THIS MODEL IS JUST A THOUGHT EXPERIMENT. ANY FEEDBACK WOULD BE MUCH APPRECIATED.
EXPLANATION:
This model is a suggested sense making tool to help organizations develop a shared language and understanding
as they are figuring out how to move from the existing model to a new OS / operating system more fit for the 21st
century customers and mutating markets.
SELF-ORGANIZE:
The model is not linear, it does not have a start or an end. The team
uses the framework to inspire a discussion on the topic.
Q.: How can we better identify the different customer
circumstances and aspiring progress?
Q.: What type of value should we measure and
where do we find new revenue streams?
HELGE
TENNØ
JOKULL
180360720.NO | JOKULL.IO
WHAT NOW?

Helge Tennø | jokull.io
Customer Strategy | Customer Insight
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