BackExcerpt: The Attacker’s Advantage
Management guru Ram Charan emphasizes that an intuitive understanding of consumers can be developed by observing them directly
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In summer 2014 Harvey Koeppel, the former chief information officer (CIO) of Citigroup’s global consumer group, told me how the idea for mobile banking was created. In 2003 he was visiting a recently created branch in Mumbai that had all the latest technology, and he saw how customers loved it. That night, at a long dinner attended by the head of Citigroup in India, Koeppel was fiddling with his BlackBerry and the idea popped into his mind. He turned to the Indian manager and asked, “How would you like to have a Citigroup branch in a BlackBerry device?" The manager replied, “Really? Can we do that?" Koeppel assured him that they could and proceeded to sketch out the application on the proverbial napkin. The venture was approved by headquarters, and the application was launched within three months. It was the first ever foray into mobile banking by any big bank.
You cannot develop an intuitive understanding of customers or consumers without direct observation. Even as CEO of Wal-Mart, Sam Walton walked the stores; countless others do the same. Steve Jobs’s and Jeff Bezos’s feel for the consumer, gained through keen observation, is legendary. Take another example, India’s Kishore Biyani, founder and head of the highly successful Mumbai-based Future Group, with businesses in retail, brand management, real estate, and logistics. The company has its roots in retail, beginning with Pantaloons, a department store chain, and Big Bazaar, the country’s leading hypermarket chain, sometimes referred to as the Wal-Mart of India. Biyani uses plenty of analysis to determine which markets and categories to enter and which to exit, but even in his elevated role he spends time to understand the consumer, and he makes it an organizational priority. “I’m on the floor twice a week and I take people with me," he says. “Wherever we go, we meet people. When we go to stores, we watch people, what are they putting in their shopping basket, who is making the purchase decision, what are they wearing, how are they behaving. We try to correlate our observations with what we build in that community.
“In our business, things change quickly. New products come about and get launched. We must be in touch with what’s happening around us in society, and have an understanding of what influences that. Then we work through the data."
Retail outlets typically serve several communities, and the Future Group team does extensive research to understand the particular identities of each of those communities—not just their income, but also things like linguistic and religious differences, and whether they are migrants from other states in India, nonmigrants, professionals, and so forth. The team prepares detailed reports that explore why people behave as they do, whether they might change, and how well they would accept something new.
There is always a human observation behind the analysis. In late 2013 Biyani noticed that girls in some local villages were going to temple in jeans, which had always been taboo. He saw that shift as a sign of two things: a greater receptivity to Western clothing and more respect for girls. He thought, “If that change is now accepted, then other things will change as well. Society is shifting, and the family is allowing it." That observation had business implications. It meant that girls, and young people in general, might be more involved in purchase decisions. To prepare for that scenario, Biyani began to reimagine the company to include more young people, more women, and more people who understand diversity. “By 2015, we will have a different organization," Biyani said. The overarching lesson is that subtle differences in consumer behavior exist virtually everywhere. You need to pay close attention to them. Biyani captures the idea this way: “My job is to take decisions. If I don’t understand customers, the organization could wither to nothing."
If you’re a midlevel leader, you might have the kind of exposure to customers that will help you develop your instincts—but you can lose interest if you’ve been conditioned
by a career’s worth of reviews in which the boss obsesses over financial results and ideas are shot down if they’re not backed by hard numbers. Don’t let that happen. Visit customers and/or consumers regularly, make your own observations, and figure out how their needs are changing. That’s how you’ll develop your intuitive sense of evolving demand against the backdrop of the broader external changes, such as regulatory, geopolitical, societal, or technological. Focus in particular on the customer’s pain points, and what might fix them.
The new challenge, in short, is to link your gut with a good enough understanding of digitization to imagine how you could use it to transform the consumer experience. Your company touches the consumer in many ways, before and after the sale. How can technology, broadly defined, improve that end-to-end experience? Amazon is the go-to example—but remember that it was born of Jeff Bezos’s personal enthusiasm for creating better consumer experiences. He was exposed early in his career to a brilliant mathematician named David E. Shaw, who started an investment company, D.E. Shaw, based on algorithms he had developed. Bezos saw what algorithms could do in finance. He was able to link that power with consumers’ desire for a more efficient shopping experience. From then on, he saw ways to improve and expand the service, always working backward from the consumer experience to the sensors, algorithms, and software required to provide it.
Excerpted from The Attacker’s Advantage: Turning Uncertainty Into Breakthrough Opportunities (230 pages, ₹ 799), with permission from PublicAffairs.
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