In the Intelligent Era, Companies Will Still Need Customers
Chapter 8: People Want Genius Experiences that Give Them Superpowers
When I listen to business leaders talk about what they plan to do with AI it all sounds the same. They plan to deploy AI to gain efficiencies. They want a smaller workforce. They seem convinced that AI will dramatically reduce the need for knowledge workers. They would dearly like to eliminate call centers. Maybe get rid of HR. Automate more of marketing. The list goes on.
Like the bankers in 80s who saw the ATM as a means of delivering the same service without having to pay people, today’s leaders believe that AI was built for them, for their business model. Or put another way, they believe that AI will really not change the relationship the brand has with the customer—only the employee.
Let’s set aside for a moment the fact that companies who treat their employees badly almost always treat their customers poorly. We will save that discussion for another day. Instead, let’s look at the blinders that often come with business models.
Here’s a question for you. Since the 2000s, has there been any innovation personal and commercial money management? Absolutely. So much. Let’s start with PayPal and then Venmo. How about digital wallets. Or how about QuickBooks. Or sites like Robinhood. Or Mint.
Now, how many of those technologies were built by banks? None! I can tell you after two decades of working with financial institutions that it is not because they couldn’t create these types of solutions, it’s because leadership saw technology as a way of making cash transactions more efficient for banks. Period. Full stop. Remote check deposit, you say? It helps the efficiency of the bank first. And requires a smaller workforce. That’s why they invested.
You might say that banks are supposed to be about money, not technology. They were staying in their lane. Has there been any innovations in money since the 2000s? That should be core to banking, right? Why yes there has been. Crypto currency. Was Bitcoin invented by a bank? No.
Please don’t misunderstand me. I like ATMs. I like banks. I like AI. But there is a tendency on the part of the business model thinkers and leaders of most companies to deploy technology to maintain certain functional requirements at the expense of growth and innovation.
And that blindness stems from a fundamental misreading of what customers want. Business leaders think customers want incremental, functional improvement in their core offerings. What customers actually want, at least from banks, is to get rich. Or, if not to get rich, then to be able to manage their money to maximize their lifestyle.
The lesson to draw from the ATM example is that companies who deploy new technology today for the sole purpose of reducing their workforce or creating other efficiencies become blind to what it is that customers actually want. They assume, incorrectly, that customers will be satisfied with incremental improvement (or worse, status quo) to solutions. They are, therefore, taking the customer for granted. And, over time, they will either lose the customer or become less valuable to the customer. (How long has it been since you used an ATM?)
The role of experience strategy is to make new technology solutions more valuable to customers and companies. And that means identifying new needs from customers—not simply trying to increase their satisfaction scores. Experience strategists are essential to short-term and long-term growth and business model viability.
Why? Because the experience strategist never takes his or her eyes off of the customer. The strategist asks the question, “if we introduce this technology, how will customer behavior change? And what else will they want?”
In the 1990s Jack Welch ran General Electric. And Michael Porter was the world’s most famous strategist. Welch focused on business processes. He introduced Six Sigma to GE. He worked to break down silos. His mantra was to be number one or number two in each industry. And he fired a lot of people using his ‘stack ranking’ system.
Michael Porter—at least in the 90s—was principally focused on his five forces model. These forces were threats to business models and included: new entrants, bargaining power, substitute products, and rivalry between competitors.
Neither Jack nor Michael really concerned themselves with customers. And in many ways the current arguments about AI sound like Welch and Porter from the 90s. Companies are pushing hard and fast to build capabilities within their organizations that will make them either number one or number two in their industry. They are ranking their employees based on whether or not AI should be able to do their jobs. And they are so focused on new entrants, substitutes, and competitors that they can hardly think about customers. (Some have argued that Boeings problems building airplanes these days can be traced back to their CEOs, who came from GE and learned their craft from Jack Welch.)
Eliminate customer service. AI will do that. Eliminate knowledge workers. AI will do that.
What they should be asking themselves is ‘how do we keep our customers and get more customers using AI?’ I mentioned this in my previous post but let me reiterate it here again. AI is the first technology that I can think of where the customer has the same access to the solution that the company has.
So, while companies are focusing on downsizing their businesses, their customers are focused on deploying these same new technologies to do amazing new things.
They will deploy AI to help them find ways to save money. They will use AI to improve their health, to help them reach their goals, to provide guidance on travel experiences. They will integrate AI into their life systems. And they will go directly to OpenAI and Google for these services.
What companies who are not OpenAI and Google should be doing right now is talking to their customers about their hopes and dreams for AI. They should be asking their customers to think big—really, really big. So big that it would seem impossible for the company to actually pull of the new solution. And then they should focus most of their resources on going after that new, crazy big solution.
To do otherwise is to watch your business model erode and your customers leave.
To be continued …