Customers don’t just adopt innovations; they alter them, adapt to them, and are changed by them. Like economic Charles Darwins, successful innovators strive to observe and understand how their customers evolve.
Pick any product or service that matters. Google’s search engine. Credit cards. Boeing’s 747. The iPhone. Amazon’s recommendation engines. Microprocessors. Subprime mortgages. Indoor plumbing. Laparoscopic surgery. Fracking. Computer-aided design. Customer loyalty programs. The steam engine. Text messaging. GPS.
Pick any innovator who matters: Jeff Bezos. Steve Jobs. Henry Ford. Estée Lauder. Bob Noyce. Sam Walton. Werner Siemens. Coco Chanel. Matthew Boulton. Akio Morita. Eiji Toyoda. Walt Disney. Marvin Bower. Mark Zuckerberg.
Successful innovators don’t just ask customers and clients to do something different; they ask them to become someone different.
Facebook asks its users to become more open and sharing with their personal information, even if they might be less extroverted in real life. Amazon turned shoppers into information-rich consumers who could share real-time data and reviews, cross-check prices, and weigh algorithmic recommendations on their paths to online purchase. Who shops now without doing at least some digital comparisons of price and performance?
Successful innovators ask users to embrace–or at least tolerate–new values, new skills, new behaviors, new vocabularies, new ideas, new expectations, and new aspirations. They transform their customers. Successful innovators reinvent their customers as well as their businesses. Their innovations make customers better and make better customers.
Google provides an excellent example of understanding and acting on “The Ask.” The company’s PageRank algorithms–honed and polished by cofounders Larry Page and Sergey Brin–fundamentally redefined the power and potential of Internet “search.” Google’s link-based architecture quickly became more than the world’s most successful search engine. The technology effectively made its users partners and collaborators. The multibillion-dollar innovation investments made in hardware, software, and network technologies were also investments in the collective intelligence of Google’s users.
“Google gets smarter every time someone makes a link on the web,” declared Tim O’Reilly, the publisher and Internet investor who coined the Web 2.0 sobriquet. “Google gets smarter every time someone makes a search. It gets smarter every time someone clicks on an ad. And it immediately acts on that information to improve the experience for everyone else. It’s for this reason I argue that the real heart of Web 2.0 is harnessing collective intelligence.”
O’Reilly is correct. Google’s algorithms continuously build on its customers’ collective intelligence. What makes the company’s collective intelligence algorithms so brilliant, says Google research vice president Alfred Specter, is that Google is constantly learning from–as well as about–its users. This is Google’s distinguishing competence.
Consequently, declaring that Google is in the search business radically misunderstands both its technology and business model.
Google is just as heavily committed to the “searcher” business.
The company has created and refined literally hundreds of millions of searchers even as it performs hundreds of billions of searches. Google continuously improves the quality of its search by improving the capabilities of its searchers–and vice versa. As Google’s searchers grow smarter and more sophisticated, so does Google. Win/win.
This enormous global pool of new and improved human capital had never before been profitably tapped. Google has reaped disproportionate returns not just on its capital investments in search software and silicon but from its human capital investments in searchers.
Just as Henry Ford’s automobiles created a new nation of drivers, Google’s search engine(s) networked a new world of searchers. Just as improving a car demands a different design sensibility than improving drivers, enhancing search poses technically distinct challenges from enhancing searchers. Henry Ford mass-produced drivers; Sergey Brin and Larry Page globally interconnected searchers.
These entrepreneurs redefined and transformed the customer capabilities of their eras. They create a new vision of the customer.
“Larry [Page] is into making people what he wants them to be,” says a former Google executive who worked closely with the cofounders, “which is a little smarter.”
So what did young Google’s search innovations ask its customers to become?
Google asked customers to become people who wouldn’t think twice about spending a few moments to type in some words on their computer–don’t worry about typos!–and quickly scan the list of clickable links that instantly appeared. They could be confident their brief time commitment would give them exactly the link(s) they wanted or needed. Google’s innovation asked its users to become “instant searchers.” All for free. Hasta la vista AltaVista.
For anyone with Internet access, Google’s initial “innovation ask” was simple, easy, and low maintenance. (Compared to, say, Ford Motor’s Model T innovator’s ask, which minimally required the purchase of a horseless carriage, and the time and effort to learn how to drive.)
The genius of Google’s innovation ask–and, make no mistake, it is genius–was making impatience a customer virtue. Google aspired to create impatient users who expected easy interfaces and ridiculously fast results at absolutely zero cost. Google left for its rivals the more patient and plodding souls who didn’t mind paying a small price for slightly more complicated interfaces, noticeably slower response times, and pretty good results. Of course, those customers turned out not to exist.
The result? Google’s competitors have been forced to live search environments defined by Google’s innovator’s ask. They’ve been forced to come up with differentiating innovator’s asks of their own. Microsoft’s Bing and Wolfram’s Alpha both understand that their asks–not just their technologies–need to distinguish them from Google. They have no choice but to ask their users to become a measurably different kind of searcher. They need to complement as well as compete. They need to distinctively invest in their users. This goes beyond traditional strategy and branding.
Classic MBA innovation marketing or marketing innovation analysis would say Google fulfilled a latent or explicit need and/or delighted its customers. This is not wrong. But it is woefully inadequate. The innovator’s ask suggests Google dramatically redefined–even recreated–the market by simultaneously training and successfully learning from its customers.
Google’s ease of search and collective intelligence algorithms represent ongoing innovation investments in the human capital and capabilities of customers. Google successfully made its hundreds of millions of customers more valuable to the company and for each other. Google’s advertising-based business model monetized the innovation investments it had made.
Google is, indeed, in the search business, but its future success remains predicated on customers becoming better, more frequent, more discriminating, and more engaged searchers. The human capital is king. Google’s customers did become a little smarter. Maybe a lot smarter.
Consequently, whenever Google innovates, improving interfaces, algorithms, or user experiences isn’t enough. Google must also answer a unique variant of its innovator’s ask: What does our proposed innovation ask our searchers to become?
What does Google+ ask Google’s global community of searchers to become? You can be sure Larry Page knows the answer(s) to that.
Reprinted by permission of Harvard Business Review Press. Excerpted from Who Do You Want Your Customers To Become? Copyright 2012 Harvard Business School Publishing Corporation. All rights reserved.
Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business, is the author of Serious Play. He has consulted on innovation issues for Microsoft, Facebook, Google, IBM, Procter & Gamble, China Mobile, Disney, and Intuit, to name a few.
[Image: Flickr user Ross Vox]