Transparency may gain companies greater reputation, credibility, and trust in the marketplace. However, changing culture and attitudes towards transparency in an organization that has traditionally been closed is a challenging task.
Openness is a key trend of the modern connected age. From transparent firms to open governments, the discussion is on the air: Can companies and governments be more effective, responsive, customer oriented, and profitable by embracing openness?
Many companies have the fear of being criticized publicly or getting bad reviews. Having customer feedback and third-party product reviews right on your site is a radical approach for many. How unpredictable and risky it might seem, the benefits of doing this are the tremendous cost savings in finding early about wrong pricing models, defective products, usability issues, and unnecessary features. If you are honest, transparent, and let people to see that you are serious about getting their feedback, they will increase their trust, engagement, and eventually you will gain greater reputation and profits.
Today customers talk to each other through the internet. Unless you open up channels for listening to them, they will find ways to talk to someone else. The transition is to move away from telling your customers what to do and start listening and embracing the ideas that come from them.
Learning from the markets: Case Nokia
In the last three years Nokia has had reorganizations at least every six months. A reorganization usually means for an employee a possible change in job description and the very real risk of being left without a job. Reorganizations are very stressful events and usually a result of the lack of foresight and ability to make gradual and tiny adjustments to your business based on changing market conditions.
Once the system is out of sync with the market, it eventually succumbs into an expensive reorganization. In the last three years Nokia has lost more than 75% of its market value. By being more sensitive and open to learning from changing customer needs in addition to having a flexible organizational structure, Nokia could have perhaps avoided all of this.
A change in culture of believing that companies create value towards one that understands that the way customers use products creates value is a challenging shift. It is no surprise that companies such as Nokia with a long history in perfecting a different logic will have hard time to understand and embrace a new mode of value creation.
Nokia has been a victim of their own success. Efficient hardware manufacturing and logistics has been in the core of Nokia’s achievements. Now that the value creation has shifted to applications created by their users, Nokia has enormous problems to make the leap to a new mode of value creation based on a developer and user ecosystem. Better hardware and a better operating system no longer counts. It is now all about the move from systems to ecosystems and user-generated functionality based on user context – And this is a process in which companies need to stop talking and start listening.
Learning from your customers and your own actions: Case Zappos
Zappos is the largest online shoestore in the U.S. sold recently to Amazon for $940 million dollars. All their employees have pre-approval of the CEO to do anything to build customer satisfaction and provide a great service. They are not counting minutes on phone support or hours spent in helping customers on social media. Their slogan, “powered by service” reflects their values. Even though they are an online business only, with 365 day return policy and free shipping both ways they have better customer service than any physical shoe store you have ever seen.
Each year they produce a 480-page Culture Book written by their employees, partners, and customers alike and published without censorship to see if their values are visible in their actions. Most of their employees remember their 10 core values by heart. Many companies state in their values and mission statements that they are customer oriented. More often than not, such statements are thin air compared to what real customer orientation is all about.
