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2012: The year when the customer holds the conch

Tsukioka Yoshitoshi: Toyotomi Hideyoshi returning to the scene of his army’s victory

It’s that time of year when I get asked to make predictions for the year ahead, particularly in the context of enterprise software. It’s that time of year when I tend not to do anything as a result.

But this year’s different. This year I think we’re on the verge of something sufficiently different to warrant my writing about it. Something that’s been spoken about for over a decade. Something that’s been bubbling under for much of that time. Something that’s happening now; something that will dominate the year to come, perhaps the decade to come.

Max de Pree, one of my favourite writers on leadership, once said:

In some South Pacific cultures, a speaker holds a conch shell as a symbol of temporary position of authority. Leaders must understand who holds the conch—that is, who should be listened to and when.

In 2012, the customer holds the conch. And for years to come, the customer’s going to keep that conch. It’s not just about broken guitars. Or retracted debit card fees. Or shelved plans to break up services. Or even, for that matter, Occupy movements or Arab Springs

It’s about all of them. So, with that as context, here are my predictions for the world of enterprise software in 2012.

 

Prediction 1: The customer will insist on being listened to

Hank Ketcham, the creator of Dennis The Menace, once said, I think via Dennis: Just because I didn’t do what you told me, doesn’t mean I wasn’t listening to you. That’s what companies have been doing, not listening. They’ve spent a long time often pretending to listen to the customer, then doing what they intended to anyway. Listening is going to become more important than ever before. And if you want to listen to the customer, then you’re going to have to go to where the customer is. In the social networks. The hierarchical broadcast model of advertising will get replaced by a networked distributed listening model, something that has already begun to happen. More and more, the use of focus groups and sample surveys will recede, as companies learn that listening at scale is more accurate than the randomness of sampling. The skills required to structure the surveys will still be needed, but the surveys will operate across the customer base rather than concentrate on a select few. Customers are sharing where they are, what they did, what they’re doing and what they’d like to do. They’re sharing who they were with, who they are with and who they’d like to be with. They’re sharing what they liked, what they like and what they would like. Customers are sharing their personal and individual preferences, plans and intentions, and they expect to be listened to. Personalisation and customisation will stop being buzzwords and become business as usual.

 


Prediction 2: Customers will insist on being listened to

Listening to the customer is not going to be enough. Companies are going to have to learn to listen to customers in groups as well as as individuals, severally as well as jointly. Obfuscation of price and discount and service availability and service quality is going to become more and more difficult, as connected customers learn how to use their power to obtain and sustain transparency; the perfect market that companies have dreamed about will start becoming reality….. for customers. Trust between customers and companies will increasingly come to depend on this transparency. Think Groupon meets Priceline, but on steroids. As a result, companies will have to be able to design services at speed, to listen at speed and to adapt their offerings at speed, responding to customer sentiment, learning by doing. Feedback loops will become more and more important. Customers will also increase the way they listen to each other, as they recognise the value of their social networks not just as recommenders but as filterers.

Prediction 3: Customers will insist on true freedom of choice

Historically, there have been many markets where customer choice has been restricted by companies focused on vertical integration; the ability to mix and match components or ingredients was denied on the basis that vertically integrated end-to-end solutions were cheaper to acquire and easier to use. Over time, this became part of the customer psyche, perhaps akin to Stockholm Syndrome. As customers learn about their power as individuals and as a collective, they will insist on true choice, and continuing choice. Products will be seen as belonging to families and ecosystems, with increasing choice between components of the ecosystem and between ecosystems. Interoperability will become more important.

Prediction 4: The enterprise software landscape will be transformed as a result

Companies will need tools to help them listen to their customers, individually and collectively; to understand what they’re saying; to build, alter and refine their offerings based on customer feedback; to work with other companies in an open and federated manner; to make their products and services work with competitive products and services; to give their customers choice, and to expect their customers to exercise that choice.

Driven by this freedom of choice, the end-to-end control historically enjoyed by many companies will disappear. Process automation will look different, as companies spend more and more time dealing with exceptions rather than norms; a plethora of small, lightweight processes will emerge, to replace the traditional high volume highly repeatable form.

Service transparency will become a mandatory requirement across systems, 24×7, accessible across the web. Customers will choose to shift time and shift place at will. They will expect services to be delivered independent of device or location or operating system; they will expect services to be migrated between device and location and operating system.

The cost of change will finally begin to matter, as companies realise that monolithic vertically-integrated systems appear to provide lower operating costs, but only in a steady-state world. The outsourcing industry will come under immense pressure as a result, as their customers realise the importance of open flexible frameworks with low cost of change by design rather than accident.

 Prediction 5: People will realise that all these predictions could have come true years ago, and start asking what took them so long

None of this is particularly new. I could have written these predictions five years ago, ten years ago. There’s nothing I’ve said that wasn’t already in the Cluetrain Manifesto in 1999. Yet a dozen years have passed. What’s changed? Perhaps nothing. Perhaps I’m all wrong, and the tipping point hasn’t arrived yet. Perhaps Arab Spring will be reversed; perhaps Occupy will come to nothing; perhaps the customer, having tasted true power, will meekly hand it back to the incumbents who’ve shaped the last five decades between them.

Perhaps.

Or perhaps the time has come, and the changes we’re seeing are irreversible. After all, as Hugh Macleod pointed out in the “Hughtrain”:

So that’s it. I’m done with predictions for next year, even if it is that time of year.

Incidentally. It is that time of year. If you read this far, perhaps you’re a fan of this blog. In which case please consider voting for the blog here. And if you’re in voting mood, try this.

Posted in Four pillars .


8 Responses

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  1. John Dodds says

    I’d love to think you’re right JP and that my inclination to propose 2022 is too pessimistic. I agree with you that it’s irreversible but it always amazes me that reasonable, business-oriented people in my social stream make incredibly unreasonable demands in their online complaints.

    Asking them how they’d react to such requests from their clients/customers tends to awaken them to the asymmetry.

  2. cliveboulton says

    Good predictions. Can listening and designing for exceptions prevent disasters?

    BP moved away from vertical integration of systems of information and process and ended up with the Deep Deepwater Horizon disaster in the Gulf of Mexico last year. Deregulated banking crashed the worlds economy.

    How does information flow with designs for exception across boundaries of responsibility > BP, Haliburton, Transocean, Cameron. > Lehman, Countrywide, Mortgages, Home owners.

    “What if were are wrong?”

  3. JP says

    Clive, thinking about this one, will reply in a few weeks. Serious question, needs some hard thinking.

  4. clive boulton says

    JP, yes, MIT PDF: Decentralizing decision making in modern military organizations. Masters thesis by Boon Kim Tan http://bit.ly/sX1JQK

  5. clive boulton says

    Hi JP,
    Now BP’s received a negligence ruling. Fines of about $18 billion expected. Do you think we can pass information around better to anticipate and offset risks between partners, or will the huge risks require a return to a vertical command and control structure: BP buys up its services providers? http://t.co/gkWU6WFhOg
    Thanks for your thoughts,
    clive

Continuing the Discussion

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    […] The customer contract has changed, forever. Prospect and customer expectations of how we engage and service them are […]

  2. Why I’m Optimistic about 2012 linked to this post on November 30, 2011

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  3. E L S U A ~ A KM Blog Thinking Outside The Inbox by Luis Suarez » Reflections from 2011 on The World of Social Media linked to this post on December 23, 2011

    […] other word you would want to insert right after!), Technology, the Internet and whatever else you can think of, like it seems to be happening in a rampant fashion year after year even to the point of […]



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