Customer service providers put a lot of effort into consistency and reliability. Many service deliverers operate under pressure to keep their standards up. Yet an even bigger challenge is present: in today?s increasingly global and competitive marketplace, keeping abreast of change is imperative to organisational survival.

Here are six success factors that the authors identify in innovative organisations:

1. Vision & Values
A strong vision, clearly communicated and understood by everyone throughout the organisation, is essential. Underpinning this in the most successful organisations are organisational values that encompass trusting employees, treating them as partners and giving them responsibility within a defined framework. Tolerating a measure of non-conformity and risk taking also marks out successful innovators.

2. Structure
An organisational structure which allows all employees ease of access to both their internal and their external customer is typical of the structure of innovative organisations.

3. Knowledge management
The free-flowing sharing of information and learning is typical of innovative companies that practise creative, ?Wow!? customer service.

4. Look outside the organisation
Successful innovative companies react fast to changing customer demands by encouraging an external perspective and using that perspective to embrace change.

5. Processes and procedures
Put processes in place for encouraging creativity and procedures for screening potential ideas and putting them into practice.

6. Motivation through recognition and celebration of success
Publicise and reward innovation.

Copyright ? eCustomerServiceWorld.com Ltd. 2001. All rights reserved.

A Note on Language & Spelling
This article uses UK English spelling.

Sarah Cook is Managing Director of The Stairway Consultancy Ltd and Steve Macaulay is a Management Development Consultant at Cranfield School of Management. Link: Stairway Consultancy and Cranfield School of Management in the Consultancy sub-section of our .

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Sarah Cook is Managing Director of The Stairway Consultancy Ltd and Steve Macaulay is a Management Development Consultant at Cranfield School of Management. Link: Stairway Consultancy and Cranfield School of Management in the Consultancy sub-section of our .

How to be different
Customers face a world of over-supply and sameness. So, how do you harness creativity and innovation to make sure your customer experience is different from the rest? Sarah Cook and Steve Macaulay show you how to become an innovative organization.)

The challenge for many customer-centric businesses is to ?inject? innovation into its life-blood so that it becomes part of its very being. Only a few organisations have been able to do this successfully, but their success is noteworthy. First Direct, the pioneering UK bank, revolutionised the retail banking sector with the introduction of its telephone banking service. Tom Farmer grew UK automotive service company Kwik-Fit (now owned by Ford) on the back of a simple idea ? exemplary service and efficient delivery were winners in a fragmented industry where standards were poor.

Recent years have seen enormous pressure on organisations to improve the way they do business with their customers. Lack of service even risks public humiliation as the UK?s Passport Office found to its cost when its government-sponsored Service Charter mark was withdrawn for inefficient delays in issuing passports during the busy summer period.

Changing customer behaviours & expectations
Today?s consumer is increasingly sophisticated, educated, confident and informed. They have high expectations of the service they want to receive. They want greater choice and will not be ?sold to? or manipulated. They know their rights and are more likely to make their opinions known if they feel that these have been violated.

High cost of mass marketing
It is no longer financially viable for many companies to ?mass market? their products or services. A UK government Department of Trade & Industry and CBI (Confederation of British Industry) survey found that the real differentiators were innovative and customised products and customer support. Lloyds TSB Bank, for example, intends to use sophisticated call recognition systems so that it is able to identify its premier customers and tailor the service it provides accordingly.

Smart competition
The advent of increasing globalisation allows organisations to compete on a regional, national and pan-continental basis. The on-line bookseller Amazon has broken traditional consumer purchasing patterns on a global basis via the use of technology. Today its market share is threatened by the advent of cyber competitors. The message is clear; no one can rest on their laurels.

Technology
If the areas outlined above are the drivers of change for managing customer relationships, the greatest facilitators of change are the possibilities that the greater use of technology opens up. From buying products or services on-line using the internet to paying bills via a mobile phone, the use of technology potentially revolutionises an organisation? interface with customers.

For example, Chubb Insurance Group processes its claims on the spot: Chubb representatives visit a customer?s premises, input data via a laptop computer and print out a cheque there and then. The US home delivery retailer, Peapod, uses its customer database to prompt individuals in advance when they are likely to be running out of household provisions.

Creating an innovative organisation
So what does it take to make an organisation more innovative? According to innovation expert, Cranfield School of Management?s Professor Simon Majaro, innovation ?has to be managed, nurtured and controlled in a systematic way?. There are no simple answers but research undertaken by the UK?s Department of Trade and Industry and the Department of Education and Employment amongst innovative organisations suggests that people are the key to successful innovation.

The research shows that leaders of successful innovative businesses create an environment where people want to take responsibility. They are focused on the customer and continuous improvement. They trust their employees to be the same.

Signs which indicate an innovative climate include:

Customer views are regularly sought
Procedures are customer-orientated
People talk optimistically about the future and do not harp back to the past
Informal ideas meetings happen on an ad-hoc basis
Leadership is open to challenge
Achievement and new ideas are celebrated
Status symbols are nowhere to be seen
Risks are taken and people learn from successes and failures

In his book, Innovation and Entrepreneurship, Peter Drucker lists seven basic sources of innovation which he believes need constant monitoring:

The unexpected: Learning from a success, failure or an outside event

Incongruities: Noting gaps where ?things don?t add up? according to expectations or conventional wisdom

A crying need: ?There ought to be a better way?, yet currently there is no solution available

?Ripe-for-change? industry and market structures: Indications include rapid growth and converging technologies, particularly where there are a few dominant players

Demographic changes: Such as affluent retirers, ?baby-boomers? etc

Changes in perception: People begin to view products or services differently. For example, many bank customers no longer need to visit their branch to make transactions

New knowledge: which promotes opportunity to be seized upon

Success Factors
Here are some of the success elements that help an organisation?s employees feel willing and able to be innovative.

Vision and values: A strong vision, clearly communicated and understood by everyone throughout the organisation, is essential. Underpinning this in the most successful organisations are organisational values that encompass trusting employees, treating them as partners and giving them responsibility within a defined framework. Tolerating a measure of non-conformity and risk taking also marks out successful innovators.

Changing culture and values is not an easy task, but it can be done. The Wal-Mart owned UK supermarket chain ASDA has changed out of all recognition in the last decade through clear vision and a lot of hard work. Crucially it involved employees (called colleagues) in the process of implementing brand values, which were the same for the colleague as for the customer.

3M is widely held up as having an innovative vision and values. More than 30% of its sales come from new products less than four years old. It is not afraid to take risks at any level or function, based on customer needs and it makes this explicit. Peter Bonfield, head of telecommunications? giant BT, says : ?We cannot achieve change unless we have everybody believing that they are part of it and that they think it is the right thing to do?.

It is important that the espoused values of the organisation are aligned with behaviours. One of the authors undertook an assignment for an investment bank to help them become more creative and innovative. The first stage was to conduct research into the reasons why people were reluctant to put forward new ideas, despite its publicly stated values. A trainee banker typified the response : ?On my first day I was told by two people that I was wearing brown shoes not black.? These words told the trainee the real message that not stepping out of line was what mattered.

Many organisations have a culture of bureaucracy : ?not invented here? and preoccupation with cost-cutting. These trends need to be identified and progressively rooted out if innovation is to be part of working life. The leading UK supermarket chain, Tesco, puts its success in being twice voted the UK?s ?most admired company? by the business community down to innovation and constant improvement in serving the customer. In a recent job advert it proclaimed: ?Our culture is free of bureaucracy, hierarchy and red tape ?we?ll encourage you to think outside the box, accept accountability and bring new, fresh and original thinking?.

Structure
An organisational structure which allows all employees ease of access to both their internal and their external customer is typical of the structure of innovative organisations.

The more layers of management between the front-line and the top, the more likely it is for new ideas to be filtered out. Innovative companies have short reporting structures and fluid boundaries. By contrast one company known to the authors has six layers of management in its distribution centres. ?Everyone says they feel a manager is looking over their shoulder? remarked a senior manager. No wonder he felt innovation was absent! One of the steps that retailers Marks & Spencer and Sainsbury have taken is to abolish several layers of hierarchy in their effort to re-focus on the customer.

Knowledge management
The free-flowing sharing of information and learning is typical of innovative companies that practise creative, ?Wow!? customer service.

Innovative organisations encourage people not to be protective of their knowledge base but use it for the good of the company. 3M sets up knowledge fairs to promote knowledge transfer. Useful knowledge soon gets out of date so everyone needs regular ?top ups? of new knowledge. Team working to share knowledge between and within teams can help.

Innovation succeeds where frequent change is encouraged and learning is shared. Recent surveys of the most successful companies show just how innovative they are. Amongst the top manufacturers, the introduction of new products in the last five years was a massive 55%, against just 2% in the sector as a whole. UK retailer Dixon?s internet service, Freeserve broke new ground in that market by offering free internet access (Editor?s Note: Not quite: it did not include the cost of telephone calls. Freeserve has just ? January 2001 ? introduced unmetered access at a fixed low monthly cost, after earlier experiments with unmetered access led to network overload and a withdrawal of services to some customers). It was originally suggested by a specialist, not senior management.

Training can help people adopt a process to stimulate new thought. Often the best ideas come from associated thinking. Having ?thinking-time? is often a rare luxury within busy organisations. However, there are processes which can be used as individuals and in groups to give them ?time-out? and to allow free-thinking such as brainstorming techniques.

One advertising agency found a marked increase in its innovative power by inviting staff to attend creative thinking training. Here the nature of creativity was explored and techniques such as brainstorming, mind mapping and word association learnt to enhance creative thinking.

Fujitsu-owned UK computer company ICL has appointed a senior manager to promote knowledge management and innovation internally, seeing this as central to its future success.

Look outside the organisation
Successful innovative companies react fast to changing customer demands by encouraging an external perspective and using that perspective to embrace change.

Benchmarking against best practice is a valuable way of understanding what other organisations are doing to satisfy the customer. This can be achieved through commissioning benchmarking studies, attending customer service conferences and belonging to benchmarking forum.

Award winning Brazilian industrialist Ricardo Semler, President of Semco S/A, consults with many major companies and believes that the main lesson businesses can learn is not to fear innovation but to lead change. The advice given to Semco employees is ?Don?t settle down. Give opinions, seek opportunities and advancement. Always say what you think.? This kind of culture views change as healthy and positive.

Processes and procedures
Put processes in place for encouraging creativity and procedures for screening potential ideas and putting them into practice.

It is not enough to expect people to be innovative. Once ideas have been generated, it is essential to have a procedure for channelling the ideas into life. High quality project management of this process is vital.

Some organisations adopt a formal ?suggestions scheme? approach where the response to the suggestions is speedy and well communicated. A sure way of killing off ideas is to adopt a procedure which is unwieldy, slow and poorly communicated. Procedures for making suggestions should exist and everyone be aware of how ideas are evaluated, and importantly the criteria which are used to assess attractive ideas. Communicating processes must be thorough : for example, how do you put forward ideas and to whom?

The hi-fi retailer Richer Sounds has one of the most successful suggestion schemes in the country. Championed by its chairman, Julian Richer, the organisation has set up a consultancy arm to provide advice to other large organisations on how to make their suggestion schemes succeed. He asserts : ?All organisations should be continually improving which means continually looking for the best way of doing things. There is never a perfect way ? there is only the best way while you find a better way.? He also points out the need for processes ?to ensure that what is currently the best way is used by everyone, every time?. (Links: An interview with Julian Richer in this ; Julian Richer?s book in the eBook Store)

To promote and communicate new ideas, ICL holds an annual Innovations Award, with customers sitting on the judging panel. It believes a well-thought-out process and active communication is essential.

Motivation through recognition and celebration of success
Publicise and reward innovation. Publicly recognising when things have gone well sends powerful messages of endorsement to others in the organisation. Motivated employees are worth 10 times that of de-motivated ones ? any customer will tell you that. Richer Sounds encourage ideas, especially those which help the customer and reward them in big and small ways.

Conclusion
Innovation won?t ?just happen?. There is no short-cut or easily transferable route to innovation. Those organisations who do it well have created a climate where people have permission to find and implement new ways to be customer-focused and where rigorous processes back this up through to implementation.