Sunday, September 23, 2007

Customer Glasses

Oren Harari on the value of wearing customer glasses. An excerpt:

In one of McNerny’s early senior meetings, he asked the executives to explain the value and benefits of the 787’s new composite technology. The chief technology and engineering people put together a nice Power Point on factors like fatigue life, corrosion, and such,. The manufacturing and financial people put together a nice Power Point on factors like operational and cost efficiencies and such. And McNerny responded in a bizarre way. He said, in effect, that he was aware of all those benefits, but they all were benefits for Boeing. His question was different. What he had meant was: How does the new composite technology benefit Boeing’s customers, in this case the airlines? As you can imagine, the reaction in the room was slack jaws and a “hmmm…”.

But McNerny was not engaging in word play. He was trying to get Boeing's leaders to view the world from the customers’ perspectives, and act accordingly. If the composite technology would have lasting business value, the value should be reflected primarily on behalf of Boeing’s customers, and if it was, then Boeing would benefit with the kinds of customer loyalty, market share, profit margins, and sustained growth that truly delight investors. In fact, it turns out that the composite technology would very much benefit aircraft customers by significantly lowering their maintenance and fuel costs, providing them with much greater flexibility in their routing, increasing their speed to destination, and so on. Unsurprisingly, once all this sank in, Boeing people raced to develop even more customer-pleasing features into the product.

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