Before reading the articles, I always thought it was best practice to listen to the customers (business norm). As the goal of many businesses are to meet the needs of a group of customers. Therefore, a logical extension would be to listen to their needs and wants when it comes to growing the company in order to continue to meet their needs. Thus, it is ironic that this practice is the main reason many good company, with good management, fail (Why Good Company Fail). Because they listened to their customers, and made investments in products the customer wanted, they failed to accurately predict the market direction and lost their leadership position. This danger of failure is especially prevalent in times of disruptive changes.
As discussed in the book “The Innovator’s Dilemma”, technology can be categorized into sustaining technologies and disruptive technologies. Sustaining technologies improve product performance, thus companies can be successful by listening to customers. However, with disruptive technologies, product performance will likely decrease in the short term. Listening to customers will then either discourages these changes or cause changes to start too late, since disruptive technology are often not initially used or wanted by a firm’s most profitable customers. In addition, the technology is often in a small or emerging markets. Therefore, companies will often miss the best moment to invest in disruptive technology. By the time they realize the growth of the disruptive technology it is often too late, either for investment or general competition, resulting in their ultimate failure.
As discussed in previous reading, there are ten disruptive trends in the world right now, each as strong as the impact of the industrial evolution (Ten It- Enabled Business Trends by Mckinsey). These disruptive technological trends make now a critical time for future successes of many companies. It will be interesting to see which companies could correctly anticipate the market and grow with those changes.
For example, one of the trends is technology as a social matrix. To stay competitive, companies advocate for social media use to engage consumers, such as Walmart using social media to let consumers vote on weekly special or companies using social media, such as Twitter and Facebook, as a method of customer service. Another trend is ‘charting experiences where digital meets physical’, where company can use technology to blur the boundary between the digital and physical. Examples of this are the ‘Magic Mirror’ from Macy, where the special mirror superimposed clothe onto the reflection1, or the virtual makeup artist from Sephora2, where users can upload a selfie to try on makeup virtually. These are all examples of successful company accurately predicting the market growth and keeping up with the disruptive trend, instead of solely listening to their customers. They are meeting the customers’ current and future needs, even if the majority of the customers may not realize they need or want that change at the moment. But by looking ahead, the company can ensure long term success.