Five Key HR Trends for 2013

8/13/2019 Five Key HR Trends for 2013

1/16

Five Key HR Trends for 2013

1 Towards an integrated technology ecosystem

In his review of the HR Tech Europe conference, analyst Josh Bersin said, “While the tech

markets continue to be hot, let's all remember that HR organisations and their companies need

sound, solid solutions which solve real business problems, not just deliver fun and fanciful

tools.”

All HR teams will be well aware of the technology opportunity for the year ahead - be it mobile,

software as a service, bring your own device, harnessing data analytics and so on. However, the

reality will be how best to integrate systems to deliver real-time intelligence to users, be they line

managers or senior executives. Sales and CRM solutions have led the way and HR systems will

need to catch up and quickly. For HR professionals, understanding the technology opportunity

and turning it into business advantage will be more critical than ever.

2 Focusing on better employee engagement

The 2012 Global Workforce study from Towers Watson shines the light on the issue of

employee engagement. It's survey of 32,000 full-time workers showed just 35% of workers are

highly engaged.

That might not be surprising considering the backdrop of global financial turmoil. However, it isan eye-watering statistic. The authors of the report go on to say that the overall quality of the

work experience depends far more on the quality of employees‟ relationship with their managers,

their trust in senior leadership and their ability to manage stress on the job.

The report goes on to say that organisations will need to focus on:

1. Enabling workers with the right set of tools, resources and support2. Creating workplaces that are energising to work in as they promote

physical, emotional and social well-being

3 Responding to change fast

In the coming months and years, successful businesses will be the ones that adapt to change and

quickly. This business imperative is clearly an HR imperative as our own research of more than

750 HR leaders showed that many large organisations are struggling to provide the training and

skills quickly enough to keep pace with how they, their markets, competitors and customers are

changing. The same challenges apply across the spectrum of HR disciplines.

http://www.lumesse.com/landing-pages/agile-learning-research/registrationhttp://www.lumesse.com/landing-pages/agile-learning-research/registration


2/16

4 Getting to grips with 21st century talent management

Research from the McKinsey Global Institute suggests that by 2020, the world could have 40

million too few college-educated workers and that developing economies may face a shortfall of

45 million workers with secondary-school educations and vocational training. In advanced

economies, up to 95 million workers could lack the skills needed for employment.

Finding talent is only one part of the story, however. Deloitte‟s Talent 2020 survey warns that

employers must engage employees with meaningful work or watch them walk out the door

(coming back to the engagement agenda). It‟s research shows that 42% of respondents who have

been seeking new employment believe their job does not make good use of their skills and

abilities.

5 Embracing the changing role of HR

Ulrich in his vision of HR shifting to its next stage of development - 'HR outside in' - suggest six

new competencies for HR. They are:

Credible activist

HR professionals with credibility in the business, with good stakeholder relationships and who

get things done.

Strategic positioner

Understands the global business context and builds the relevant organisational capabilities

around that.

Capability builder

Helps define and build organisational capabilities.

Change champion

Helps build the organisation's capacity to change and to sustain change.

Innovator and integrator

Ability to innovate and integrate HR practices around critical business issues.

Technology proponent

Using technology to stay connected with peers and colleagues and taking a bigger role in

managing information and turning it into useable knowledge.

importance of human resources

Business Management

http://www.mckinseyquarterly.com/Talent_tensions_ahead_A_CEO_briefing_3033http://www.mckinseyquarterly.com/Talent_tensions_ahead_A_CEO_briefing_3033


3/16

Role and importance of human resources

Role and importance of human resources

Human Resources (HR) is concerned with the issues of managing people in the organisation.

The Human Resources department is responsible for many people related issues in an

organisation.

Under the HR department‟s remit are the following roles:

The process of recruiting suitable candidates for the organisation Identifying and meeting the training needs of existing staff Ensuring employee welfare and employee relations are positive Ensure the working environment is safe for employees Raising awareness of current workplace legislation

The Human Resources Department also covers five key roles.

Executive role – in this role the HR department are viewed as the specialists in the areas thatencompass Human Resources or people management.

Audit role – in this capacity the HR department will check other departments and theorganisation as a whole to ensure all HR policies such as Health & Safety, Training, Staff

Appraisal etc are being carried out in accordance with the company‟s HR policy.

Facilitator role – in this role, the HR department help or facilitate other departments to achievethe goals or standards as laid out in the HR policies of the organisation. This will involve training

being delivered for issues that arise in the areas relating to people management. Consultancy role – the HR department will advise managers on how to tackle specific managing

people issues professionally.

Service role – in this capacity the HR department is an information provider to raise awarenessand inform departments and functional areas on changes in policy.

Recent trends in critical HR management practices

The present day economy has been titled as “Knowledge economy”. In such an economy, it is

people who make all the difference. In political economy capital or market was important.

Talent occupies centre stage in the Indian workplace. In view of this, managing and retaining

manpower is becoming crucial to an organization‟s success. To achieve this, companies across

sectors are focusing on some of the more critical HR practices. Some of the trends that have been

noticed are:


4/16

Leadership development

Creating a pipeline of leadership talent is key to a business‟ future growth. It is imperative for

the top level of an organization to make leadership talent management a priority, and put its

money into long-term plans, as opposed to short-term ones. If companies are worried about theirtalent pipeline, they have to develop their people.

Work-life balance

No company or employee has found the Holy Grail of balancing work and life, but that is a work

in progress. However, multinationals, information technology (IT) and IT enabled services

(ITeS) companies have been able to promote the balance between career, family and leisure-time

better. Other sectors have also been increasingly promoting a work-life balance.

Interestingly, most companies in India use benefits such as flexible timings, telecommuting,

crèche facilities and concierge services as an attraction and retention strategy. Experts say

companies should see the work-life balance as a business proposition since progressive

companies carry business forward with employees and families.

Inclusion and diversity

With higher numbers of Gen Yers joining the workforce in India at a time when companies

across the world have an ageing workforce on their rolls, conflicts are to be expected. Therefore,

companies are investing both time and resources in ensuring that all age groups are comfortable

working together.

Organisations in India have also been focusing on making workplaces more representative. For

companies such as ICICI Bank Ltd, Hindustan Unilever Ltd, Vedanta Resources, PepsiCo India,

Shell Companies in India and Bharti Airtel Ltd, gender diversity has become a critical area of

focus.

Health and wellness

The work culture at globalized workplaces involves long working hours, frequent travel,

multitasking and tight deadlines - and all this often leaves employees mentally and physically

stressed. Companies have begun to realize that healthy employees contribute to higher efficiency

and productivity. Apart from medical benefits, companies are also offering yoga classes and


5/16

health camps and have doctors on campus.HCL Technologies Ltd, for instance, like many other

IT companies, has 24/7 medical facilities in all its centres. DuPont has an Intranet-based tool,

which assesses an employee‟s health through a questionnaire and makes recommendations based

on the scores.

Right skilling

Right skilling, or matching jobs with a particular level of training rather than hiring overskilled

workers, is gaining currency. Companies use this strategy to tide over a manpower supply crunch

and to broaden their talent baseApart from IT and ITeS firms, organizations in the banking and

financial services sector, too, have been increasingly hiring graduates and training them. The

upside? Lower attrition rates and wage costs. Pai explains that when you have an over-qualified

employee, it is very difficult to meet her aspiration levels and, therefore, the chances of the

employee moving on to something more challenging are higher.

Managing „solid citizens

Organizations which neglect their solid citizens are doing this at their own peril, say experts.

Unlike star performers who are potential leaders, and therefore more likely to move out of an

organization faster, this group provides stability and bench strength to an organization. Experts

say companies need to take a fresh look at solid citizens and invest time and resources in

managing and developing this group.

Instant rewards

Recognizing and rewarding performers is one of the most effective tools to attract and retain the

right talent. Companies in India are looking at rewards systems more seriously, and are adopting

total rewards practices that include compensation in both cash and kind.

Apart from lifestyle perquisites such as a house, a car or a club membership, profit-linked

incentives, deferred gratuity, and wealth-building programmes in the form of stock options and

soft loans, companies are also including work-life balance programmes; competency pay

packages where niche skills are compensated; and career opportunities, such as overseas

assignments, new projects, etc., to reward staff. These rewards can be tailored to suit the top

performers‟ aspirations to achieve maximum effect.

Measuring human capital: Evaluation of performance plays a key role, not just in rewarding an

individual employee, but also in setting performance benchmarks. And hence, the need for a fair


6/16

and transparent performance management system. A strong performance analysis helps make

human resources both efficient and effective.

Managing aspirations

As aspirations of organizations grow, so do those of employees. And, with the changing

lifestyles and profiles of the workforce, personal and professional aspirations of employees are

not just varied, but are increasingly on the rise. Experts say people as well as organizations have

aspirations, and when the two get aligned, achieving business goals becomes easier. Companies

should be clear about goals of individuals as well as of the organization, and the role each needs

to play. The firm should also communicate the goals, and have robust and reliable processes to

execute them.

360 degrees feedback

Finally, recognizing the need to make performance appraisal systems more effective, an

increasing number of companies are using the 360 degrees or multi-rater feedback process.

Unlike the traditional appraisal system, which gives unidimensional feedback, this one allows an

employee to give feedback to her reporting manager, peers, direct reports and others. While most

companies started using this system as a means for performance appraisal, most of them now use

the 360 degrees feedback system to identify the learning and development needs of employees.

Since companies are finally valuing people and their softer skills, does that make it easier to hire

good people? The answer is no. In today‟s business climate, attracting and retaining the bestemployees is very difficult. The reason is a combination of the change in business practices and

the shift in employee attitudes.

The business landscape has changed dramatically in the past decade as a result of many factors

from the feverish hiring boom of the 90s to the economic slowdown in the later part of the last

decade. During this same period of time, employee attitudes have changed dramatically.

Exposure to widespread layoffs and corporate scandals has led to an erosion of company loyalty

and reevaluation of career and life priorities by many employees.

So now we have companies looking to acquire the best talent and a growing workforce of

talented individuals who are no longer attracted by compensation alone, but who require and

value intangibles as well.

The bottom line is this. In order to achieve professional growth and success in the next period of

increased talent acquisition, technology professionals are going to have to step out of their


7/16

comfort zone and develop the holistic, relationship-focused business skills that companies are

requiring.

And by the same token, companies are going to have to take a more strategic and supportive

approach to recruiting and retention if they want to find and keep the new breed of evolvingtalent.

Sample size calculator

For most clients the statistical reliability of their market research is of paramount importance.They need to be certain that any plans or strategies that they develop are based on robust data.

So, we often get asked the question: How many interviews do you think I need?Perhaps the real questions should be: How few interviews can I get away with?

The very simple answer is - it depends on how reliable your data needs to be.

To help you decide you can test out possible interview numbers in the calculator below. You willneed to know what your total population is - for example the number of customers if you aredoing a customer satisfaction survey or the population of a district, town or ward if you are doinga public consultation.

How many interviews How robust is the data

Calculate Sample Size

Confidence Level: 95%99%

ConfidenceInterval:

Population:

Interviews

Required :

Find Confidence Interval

Confidence Level: 95%99%

Sample Size:

Population:

Percentage: 50

Confidence

Interval:

The confidence interval or the margin of error as it is sometimes called, is the plus-or-minusfigure usually reported in newspaper or television opinion poll results. For example, if you use aconfidence interval of 5 and 41% percent of your sample give a particular answer you can be


8/16

"sure" that if you had asked the question of the entire relevant population between 36% (41-5)and 46% (41+5) would have picked that answer.

The confidence level tells you how sure you can be that the answer you receive is representativeof the entire population. It is expressed as a percentage and represents how often the true

percentage of the population who would pick an answer lies within the confidence interval. The95% confidence level means you can be 95% certain; the 99% confidence level means you can be 99% certain. Most of our clients use the 95% confidence level.Accuracy also depends on the percentage of your respondents that pick a particular answer. If99% of respondents said "Yes" and 1% said "No," the chances of error are remote, irrespectiveof sample size. However, if the percentages are 51% and 49% the chances of error are muchgreater. It is easier to be sure of extreme answers than of middle-of-the-road ones.When determining the sample size needed for a given level of accuracy you must use the worstcase percentage (50%). You should also use this percentage if you want to determine a generallevel of accuracy for a sample you already have.

Following decisions about how data is to be collected the next consideration is how to select asample of the population of interest that is truly representative. At the same time, the requirementthat samples be representative of the population from which they are drawn has to be offsetagainst time and other resource considerations. This being the case, choices have to be made between the mathematically superior probabilistic sampling methods and the more pragmaticnon-probability sampling methods.

Chapter Objectives

This chapter serves to teach the reader to:

Distinguish between probabilistic and non-probabilistic sampling methodsUnderstand the bases for stratifying samplesMake an informed choice between random and quota samplesComprehend multistage sampling, andAppreciate the use of area or aerial sampling.

Structure Of The Chapter

The early part of the chapter outlines the probabilistic sampling methods. These include simplerandom sampling, systematic sampling, stratified sampling and cluster sampling. Thereafter, the principal non-probability method, quota sampling, is explained and its strengths and weaknessesoutlined. The statistical aspects of sampling are then explored. A number of illustrativecalculations are presented.


9/16

Two major principles underlie all sample design. The first is the desire to avoid bias in theselection procedure; the second is to achieve the maximum precision for a given outlay ofresources. Bias in the selection can arise:

if the selection of the sample is done by some non-random method i.e. selection is consciously

or unconsciously influenced by human choice

if the sampling frame (i.e. list, index, population record) does not adequately cover the target population

if some sections of the population are impossible to find or refuse to co-operate.

These cause selection or sample bias and can only be avoided if a random method is used. Otherdesigns, to be described shortly, can retain the essential element of randomness but manage toincrease precision by incorporating various restrictions and refinements. Figure 7.1 gives anoverview of the sampling methods that are either explained within this chapter or are explored in

the exercises which accompany this textboo

The Customer is Always Right - But are They Always Worth it? by Lynette Ryals

July 23, 2013

Abstract: This article looks at what we mean when we talk about customer profitability,and examines the idea of ’total customer value’ - how much a customer is worth to the

irm. The conclusion is that we cannot form an accurate view of what a customer is worthusing a traditional profitability analysis. I argue that a broader approach to the problem o

identifying profitable customers is needed if marketers are not inadvertently to destroy

shareholder value by favoring costly customers.

Some customers cost us money: It‟s a familiar saying that business would be great if wedidn‟t have to deal with customers. But have you ever stopped to consider that your business might be more profitable without customers - without some of them, at least?

In an article published in the Harvard Business Review, Cooper and Kaplan (1) reportedthe astonishing case of a heating wire company which analyzed its customer profitabilityand discovered that the famous 20 - 80 rule, which would suggest that 80% of profits camefrom 20% of customers, had to be revised:

"A 20 - 225 rule was actually operating: 20% of customers were generating 225% of

rofits. The middle 70% of customers were hovering around the break-even point, and10% of customers were losing 125% of profits"


10/16

Even more amazing: it was the largest customers who were producing the biggest losses.

Changes in our market places, and better information about the profitability of ourcustomers, are challenging some of our cherished notions about what constitutes a good(and profitable) customer. Large accounts, for example, may carry the prestige but may

actually cost us money by demanding exclusive service whilst simultaneously squeezing uson price. Nor are customers who use a portfolio of our products necessarily profitable, asone bank discovered:

"Interestingly, the most profitable 10% and the least profitable 10% have almost identical

numbers of products... ‘sell more products, make more money’ just isn’t true."

(Customer Information Manager at a major international bank)

A third category of customers may not be profitable. They are very satisfied with ourservice but are heavy users of our time, always calling in to our branches or telephoning us

with small queries.

A simple customer profitability analysis might suggest that companies should not do business with certain customers. But this could be a dangerous conclusion. Managers needto examine the analysis very carefully, for two reasons:

traditional profitability analysis is inadequate there are benefits other than economic ones of dealing with certain

customers

Traditional customer profitability accounting is inadequate: Early approaches to

understanding customer profitability, as opposed to product profitability, suffered from anumber of drawbacks. Sometimes an organization would find that its costing systemssimply did not allow it to analyze profitability by customer; others focused on detailed andtime consuming arguments about cost allocation. Until the advent of activity based costing(ABC), most organizations wishing to scrutinize customer profitability had to allocate lesstangible costs in proportion to sales revenue or volumes. The effect of this was to"penalize" customers who might be more efficient for the firm to deal with (because they buy in larger lot sizes, for example).

More serious, however, are some of the other criticisms of traditional customer profitabilityaccounting:

o it tends to relate to profitability in a single period only;o it takes no account of risk or volatility in returns;o therefore it fails to measure the real value of a customer to the firm.

Single period profitability: Marketers have long understood that customers may beunprofitable in one accounting period for reasons which have little to do with their longerterm prospects, and the accounting tool for measuring the value of future spending -


11/16

discounted cash flow (DCF) - has been around for quite some time. The part that has beenmissing from the picture was a way of forecasting just what those future-spending patternsmight be. Businesses needed to know what customers were going to do in the future eventhough in many cases they were not able to say with any degree of confidence what theyhad done in the past. All that a business had to go on were the results of market research

purporting to indicate customer satisfaction or future purchase intentions. Many amarketing manager found to his or her cost that what customers say and what they do can be very different.

Recently, however, technology has developed to such an extent that we know more - andcan predict more - than ever before. Better behavior modeling techniques and more powerful data analysis using new technology based on data warehouses allows us to makemore accurate predictions of a customers‟ spending patterns over the lifetime of therelationship.

Customer lifetime value calculated in this way gives marketers more useful information

about the value of a customer than single-period profitability. It helps to explain why a bank, for example, might be interested in recruiting lots of students as customers;unprofitable in the short term, these students should develop into high earning, highly profitable customers in a few years‟ time.

Customer risks and the cost of capital. DCF is a useful tool, but by no means the end of thestory, for two reasons:

The discount rate may differ from customer to customer (some customers just are more risky than others, they exhibit larger variations in returns).

The amount of capital needed to serve a customer may vary.The concept of economic value added (EVA® ), developed and trademarked by theconsulting group Stern Stewart (2), helps us to understand this point. Economic valueadded is the return earned in a single period after the costs of all capital are taken intoaccount - not just of debt capital, but of equity capital as well. The total economic value ofa customer is then the sum of that customer‟s EVA® throughout the relationship.

The EVA® approach shows us that firms should only take on high-risk customers wherethese customers offer a return which compensates for the extra risk . In other words, valueis destroyed where return fails to compensate for incremental risk; and it is created wherereturn exceeds incremental risk.

The EVA® approach to value creation seems to offer a real way to understand customervalue based on the transactions of that customer. However, I would argue that we need togo deeper than that to understand what a customer is really worth to an organization. Thereare some aspects of value which are difficult to state in financial terms, but which arise outof the relationship you have with your customers.

The real value of a customer to the firm: In their book on relationship marketing, Payne et


12/16

al (3) discuss the limitations of the traditional marketing paradigm as follows; "... this short-term transactional focus is inappropriate for industrial and services marketing,

where establishing longer-term relationships with customers is critical to organizational

success." At the core of relationship marketing is the idea of customer retention and theacceptance that this is no longer achieved purely by managing the customer relationship.

Suppliers, alliances, internal markets, referrals and influencers all have a part to play. Anincreasing body of work around relationship marketing is indicating that these relationshipshave value over and above the immediate economic value of the transactions involved.Listed below are four relationship effects which are thought to be significant value-adders.These are the four powerful effects of Reference; Referral; Learning; and Innovation.

Reference accounts: Reference accounts are the customers who add prestige to yourorganization simply because you are known to be one of their suppliers. This is oftenassociated with large and powerful companies with stringent supplier selection andmonitoring procedures. Sometimes these customers will permit their names to appear onyour literature, will give you a reference, will speak at your conferences or will even allow

site visits by other prospective customers. Even if they do not, just being associated withcertain companies has a value to you. In the UK, to be a supplier to Marks and Spencer orto Tesco confers a certain standing on the company; in the US, the equivalent might be to be a supplier to Saks or Wal-Mart. The prestige customer acts like a brand name, reducingthe psychological risk of dealing with you ("if they supply Wal-Mart, they must be good").This encourages other buyers and therefore the value to your company of these referenceaccounts is greater than the value of your transactions with them.

Referral: An insurance company has a small customer who is renowned for being difficultand time-consuming. The insurance company probably makes no profit on its businesswith that customer whatsoever. Why does this company continue to court this demandingcustomer? Why doesn‟t it discourage him, or refuse to deal with him altogether? Theanswer to this seeming puzzle is that this individual has a great deal of influence in hislocal region. He is appreciative of the service that his insurers give him, and he tellseverybody about it. In fact, he has recruited a significant number of good, profitable clientsfor this company over the years; he refers others to his favorite supplier. Referral accountsare customers who refer other customers; they may not be intrinsically profitable inthemselves, but the business they help to bring in can be very substantial. After all, who areyour best sales people - your sales team, or your satisfied customers?

Learning: Some customers are intrinsically valuable in a way that would be difficult toidentify through normal accounting procedures. These are the customers from whom youlearn. It is said that Toyota is particularly good to have as a customer because it will helpits suppliers to install certain systems and processes. The supplier then reaps the benefit ofthese processes for the rest of its business. Learning from customers might result in betterways of manufacturing products, or better administration or IT. Sometimes the customer iseven prepared to train its suppliers‟ staff.

Innovation: Sometimes the learning benefit from a customer is not a transfer of know-howfrom them to you; sometimes, the process is a shared one of joint learning from which both


13/16

parties benefit. Jointly funded research and development (R & D) is one of the best knownexamples; as is the use of certain customers as beta test sites for partially developed products or systems. You get the benefit of feedback about your new products or servicesin use, but before committing massive sums to the venture by rolling it out on a large scale;and the beta test customers benefit from early delivery of the product and often the chance

to influence the final design towards one that fits their needs more precisely. This alsoresults in a more efficient use of information. The customer is likely to be informed aboutwhat the market wants; the supplier, about what is possible. Automotive suppliers, forexample, are credited with a string of recent product innovations, such as ABS, which haveimproved sales to both parties. Jeremy and Tony Hope, in their book "Competing in theThird Wave" (4) cite the experience of Chrysler which, in an effort to simplify its production process, offered its suppliers $20 000 for each part they could engineer out of acar. One supplier submitted no fewer than 213 ideas, of which 129 were approved, savingChrysler $75.5 million. That supplier‟s turnover with Chrysler has doubled.

Total Customer Value: The total value of a customer is, therefore, the risk-adjusted

economic value plus the relationship value. This model helps us to understand how acustomer that looks unprofitable may add value; and how two customers with the sameapparent financial profitability may have a very different value to a business.

Implications for managers: We can use this to increase returns to our shareholders.Companies create shareholder value when they recruit and retain customers with a positivetotal value; they destroy shareholder value when the customers they win have a negativetotal value.

First, carry out customer profitability analyses based on lifetime value information. Whereexceptionally profitable customers are identified, aim to create referrals. Customers will

tend to mix with and hence to recruit others like themselves, a point well made byReichheld (5). All companies have value locked up in their current customer base, the trickis to find ways of releasing it.

Second, gather information about customers, about what they do and what they think; notonly will this improve lifetime profitability modeling, it will help to release some of thehidden potential in your customer base.

Third, think about the potential business your customers could bring. Customer potentialhas two forms; the business customers can bring over a lifetime, and the share of theircurrent business they now give to a competitor. Once this is understood, you have a basisfor developing strategies towards these customers. The strategies should address how youkeep the business you have for that customers lifetime, and how you increase your share oftheir spend.

Finally, if you can identify customers who have high economic value (when measured bytheir net present risk-adjusted value) and high relationship value (when measured byreference and referral, learning and innovation effects), then you should focus on these asyour greatest value creators. These are the candidates for the red carpet treatment. Losing


14/16

one of these customers is a tragedy, gaining one is a cause for celebration.

Competitors who understand real value have an advantage in developing customerstrategies: Objectors to the Total Customer Value concept may argue that it is too difficult.But we do need to understand the real value of a customer if we are going to build

exceptional shareholder value by identifying, winning and keeping high value customers.Because there are plenty of hungry competitors out there, circling our most valuablecustomers and waiting to pick them off!

References:

1. 1991 "Profit Prioritiesfrom ABC"

R. Cooper andR. S. Kaplan

Harvard BusinessReview May-June1991 Vol. 69 No 3

2. 1991 "The Quest forValue"

G. B. Stewart Harper Business

3. 1995 "RelationshipMarketing forCompetitiveAdvantage"

A. Payne, M.Christopher, M.Clark, H. Peck

ButterworthHeinemann

4. 1997 "Competing in theThird Wave"

J. Hope & T.Hope

Harvard BusinessSchool Press

5. 1996 "The LoyaltyEffect"

F. Reichheld Harvard BusinessSchool Press

Arthur Middleton Hughes is Vice President of The Database Marketing Institute. Ltd.([email protected]) which provides strategic advice on relationshipmarketing. Arthur is also Senior Strategist at e-Dialog.com ([email protected]) which provides precision e-mail marketing services for major corporations worldwide.Arthur is the author of Strategic Database Marketing 3rd ed. (McGraw Hill 2006). Youmay reach Arthur at (954) 767-4558 .

The articles on this web site are available to the general public to read, enjoy and forlimited business use. If you want to reprint more than one or two of them for resale or usein a business or educational environment, send an email to Arthur Hughesat [email protected]. He will give you permission by return email. Thecost, depending on the number of copies you want to reprint, is very inexpensive.

http://dbmarketing.com/Who%20We%20Are/Arthur_Hughes.htmmailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://dbmarketing.com/Who%20We%20Are/Arthur_Hughes.htm


15/16

Customer “NECESSITY” is key factor in driving Innovation

Posted on February 7, 2013 by Brian

Farnsworth • Collaboration, Creative, Customers, Innovative,Leadership, Process, Rewards/Ince

ntives, Strategic, Teamwork

One of the biggest debates around innovation is who are you

innovating for? Many organizations innovate around a product they believe will be really

valuable even if the customer isn‟t sure they really need it. The other group focuses on

innovating around solving and the customer has. This is the group that believes innovation

should be built around necessity, not just a new product or service.

There was a great article written by the group, Marketing Magazine, out of Australia called,

“ Necessity is the Mother of Innovation.” They talked about the term innovation as one of the

most abused and overused words in our language today. One quote that really summed up the

essence of the article was from IDEO‟s CEO Tim Brown, with what he called “Design Thinking.

He said, “design thinking is the human-centered approach to innovation that integrates the needs

of people, the possibilities of technology and the requirements for business success.”

The author of the article offered a great comment around the difference in how companies

innovate. He said, “With commercial imperatives driving much of the innovation conducted by

brands, there is a real danger of innovation out for the sake of making profits, rather than making

something of genuine value to the consumer.”

There were a few really key takeaways I found in the article that I believe all of us can benefit

from when we think about them relative to our own businesses. They were:

Think with your eyes-nothing beats seeing it with your own eyes. This is the first part of human-centered design thinking.

http://www.simplivative.com/author/brian/http://www.simplivative.com/author/brian/http://www.simplivative.com/category/collaboration/http://www.simplivative.com/category/creative/http://www.simplivative.com/category/customers/http://www.simplivative.com/category/innovative/http://www.simplivative.com/category/leadership/http://www.simplivative.com/category/process/http://www.simplivative.com/category/rewardsincentives/http://www.simplivative.com/category/rewardsincentives/http://www.simplivative.com/category/strategic/http://www.simplivative.com/category/teamwork/http://www.marketingmag.com.au/http://www.marketingmag.com.au/interviews/necessity-is-the-mother-of-innovation-35979/#.USD8-mdniM3http://www.marketingmag.com.au/interviews/necessity-is-the-mother-of-innovation-35979/#.USD8-mdniM3http://www.ideo.com/http://www.ideo.com/http://www.ideo.com/http://www.ideo.com/people/tim-brownhttp://www.ideo.com/people/tim-brownhttp://www.marketingmag.com.au/http://www.ideo.com/people/tim-brownhttp://www.ideo.com/http://www.marketingmag.com.au/interviews/necessity-is-the-mother-of-innovation-35979/#.USD8-mdniM3http://www.marketingmag.com.au/http://www.simplivative.com/category/teamwork/http://www.simplivative.com/category/strategic/http://www.simplivative.com/category/rewardsincentives/http://www.simplivative.com/category/rewardsincentives/http://www.simplivative.com/category/process/http://www.simplivative.com/category/leadership/http://www.simplivative.com/category/innovative/http://www.simplivative.com/category/customers/http://www.simplivative.com/category/creative/http://www.simplivative.com/category/collaboration/http://www.simplivative.com/author/brian/http://www.simplivative.com/author/brian/


16/16

Flat the organization-hierarchy breeds fear. Ideas should be able to come from anywhere in theorganization bringing and without apprehension.

The need for speed-more and more brands are seeing the need for speed and iterations as being akey part of the new product development cycle.

There was a great comment offered by Paul Bennett, also from IDEO. “It‟s a phenomenon that

Bennett calls the „dinosaur baby‟. “A dinosaur baby is something so ugly that only a dinosaur‟s

mother would love it,” he explains. “Some people spend enormous amounts of time incubating

something privately inside their organization, never letting anybody see it, loving it to death

because they‟ve done it, not because it‟s good.” To avoid giving birth to baby dinosaurs, Bennett

advises bringing as diverse a group as possible into the process as early as possible, making the

journey a collaborative endeavor instead of an isolated experience.

I think we can all learn a great deal from our customers that will help us create “necessity”

innovations rather than innovations someone doesn‟t really need. Always thinking about how

this solves the customer issue should be at the core of everything we develop. I know for

ourselves, getting more insights and ideas from our people that interact with the customer is

going to accelerate our innovation in the future. How are you innovating?

Five Key HR Trends for 2013

Documents

Transcript of Five Key HR Trends for 2013