30 Under 30 2024

Think strategy. Think big

Bernd Schmitt is Robert D. Calkins Professor of International Business at Columbia Business School in New York, where he directs the Centre on Global Brand Leadership.This professor, author and consultant finds customers fascinating; he even coined the term “customer experience”. Schmitt works with forward thinking companies to improve their insights into customer behaviour

Published: Nov 20, 2009 01:04:22 PM IST

How did you move from a focus on customers to, now, “big think strategy”?
Several of my books were on customer experience. I launched the concept of experiential marketing, as least from a conceptual point of view, and also framed the right examples and benchmarks that companies can use to create a great customer experience. Most recently I’ve branched out into creative strategy, which I call “big think strategy”. Of course, focusing on the customer experience also plays a role in big think strategy. In fact, revamping, or moving from a more functional and analytical approach in your organization to focusing on customers and their experiences, is one way of doing big think; but there are other ways, as well. Those have become the themes that run through all my work.

How do you see the customer experience over the last decade?
It has improved. Retailing is entirely different from 10 years ago. Take a casual clothing line such as Abercrombie & Fitch — the way they market themselves now in the retail space is entirely different. But it’s not only about retailing. It’s also about communications. It’s about websites. So, the customer experience is a hot topic, and lots of companies are working on it. They’re creating management positions within their organizations to create experiences for customers.

Is there one customer experience — or does it change with countries and cultures?
There are cultural differences, no doubt. An experience that might work in the United States may not work in Europe or Asia. So, you have to be very sensitive to customer trends, their needs and lifestyles, all of that. That’s the exciting thing about customer experience management: you can never say, “We’ve fixed the experience now, this is how it is.” You always need to update it; you always need to upgrade it.

Living in New York, I think it is natural to focus on the customer experience, because there are lots of interesting experiences around one in the daily life of people, but also commercially. When you look at the retail environment, for example, when you have contacts with the advertising agencies and the communication businesses, you can’t help but think that marketing is not only about rational things and stressing product characteristics and product specifications, but also that you also need to be creative and unusual in the approach that you’re using with your customers.  New York is a great laboratory for studying what’s going on with customers, but it’s only one laboratory. That’s why I travel a lot. Being a city person, I like to compare how companies market themselves in different parts of the world. There are many different industries, companies and countries; so, without doubt, there are many different kinds of customer experiences.

What are some of the trends in China and the Far East?
China is really improving a lot of customer experiences. Think about the Maglev, the high-speed train in Shanghai. It’s mostly a Siemens product; but in Munich, in Germany, they never put it on the tracks. In Shanghai, they have done it! It’s a great experience to be in the city within 10 minutes, and there are many other ways in which China is helping to improve what it feels like to be a customer. Recently I went to China and, right after I went through customs, a rating scale illuminated asking me to rate the officer in terms of how satisfied I was with the experience. That is world-class customs service. So, there are lots of interesting things going on in China with respect to experience management.

If the customer experience has improved in the last decade, where’s it going next?
I think the customer experience will change in several ways. First of all, customers are very concerned about going green, buying green products, about companies being serious about being green. So, we will be seeing a lot of changes in this regard from companies trying to win the hearts of consumers. I also believe (and this is a major change) that customers will want to be more casual, more connected — even emotionally connected — with companies. They don’t want to do business with big anonymous conglomerates that they don’t know anything about and which may be behaving in unethical ways. So, I think we’ll see a lot of more interactivity and openness in the transactions between companies and consumers.

So customers will come to expect more from companies.
That’s right, and that is a challenge for experience management. When expectations increase, companies have to live up to the new expectations; and that requires a new management style. Management needs to be constantly in touch with customers, understanding what they expect and responding accordingly. But that is something that will make companies better.

This all sounds like something that would be hard to teach in a classroom. Is it?
I sometimes bring customers into the classroom. That’s number one. Companies should be doing the same thing; they should bring customers into their organizations. Also, I teach my students a lot of the new technologies and the new research methods that are focused on customer insight — methods that have to do with running focus groups, for example, not in a laboratory, which is an artificial environment, but in stores. So, we talk about research techniques in my class and we practise those. And I sometimes take students into the field. We do a retail tour in New York City and observe what’s going on — observing customers in their natural environments (something that I think companies should also be doing). I think these are great techniques for understanding customers and for understanding the customer experience. The classroom is a great starting point for learning about customers.

Some companies treat customers poorly. Do you have a sense why they allow themselves to lag in this area?
I think what’s stopping them is that many companies are still very bureaucratic. Sometimes they are afraid to interact with customers and perhaps discover that customers don’t like how they have been treated. I think that’s the major reason: fear of the customer. Think about it. Customers can be very frightening because they can be very demanding. And you may not want to know about it. You think you have much more control if you are just staying inside the organization.

That is certainly not a big think strategy, is it?
The customer experience is a major factor in anyone’s strategy; so, ignoring customers is short-sighted. I wrote my latest book to help companies think more broadly. All my work has been about creativity and doing new things. Customer experience is about innovation with respect to the customer. Big Think Strategy is, more broadly, about how to be innovative, how to develop an innovative, creative strategy within the organization. In the book, I give managers tools on how they can source bold ideas, turn them into a strategy and launch that strategy.

What if managers are not just short-sighted, but stuck?
I remember going to a hairdresser in Hong Kong, and he asked me where I part my hair. I told him, “On the left.” Then he asked how long I had been doing that. I said, “I don’t know — 40, 45 years.” And then he said, “You won’t for the next 40.” This was a great inspiration for me. What he was doing at that moment was, in a way, killing a sacred cow: that I had parted my hair on the left and never thought of doing it any other way. And in companies you have lots of these sacred cows; things that they have always done in a certain way. And they therefore believe these things must be done in a certain way. Everyone makes certain assumptions that they never question — managers, too. It can be very enlightening for a company to make a list of those sacred cows and then come up with alternatives to the ways that things are done. In such a process, many managers come to realize that there are often no good reasons for doing a lot of things the way they have always been done.

Have you tried this exercise with managers?
When I do workshops with organizations, managers can easily come up with a list of 20 or 30 sacred cows tied to how with the company deals with operations, marketing and new product launches. They come up with these sacred cows, and then they develop alternative ways of managing such important tasks. Not all of those alternatives will be great improvement on how things are done at present. The alternative ideas have to go through an evaluation process, and so on, but that’s one way of sourcing bold ideas. The exercise usually pays off with many new ideas that can be implemented.

Are companies structured to think big?
Most companies are extremely conservative. They are also very bureaucratic. They are usually organized in silos that don’t talk to each other. When you do a big think strategy, you need to break through that; you need to break down the silos. And you need to have procedures and tools on how to source bold ideas, such as looking outside the business. A technique that I use a lot in my workshops is to ask managers to perform outside-industry benchmarking. Many companies benchmark within their industry — airlines look at other airlines — but they also need to get ideas from the best performers in other industries and what they’re doing.

All of this requires bold leadership, does it not?
I’m very interested these days in leadership. When I wrote Big Think Strategy, I realized that the notion that leadership as something analytical — about decision making in a status quo situation in which one chooses the best possible option — is only one particular part of leadership. Another part of leadership is to look into the future, to be creative, to create new worlds. For that companies need different leadership skills.

Can you help them learn new leadership skills?
The companies I work with hire me to help them to grow, to see the world in new ways, to imagine new realities. Most businesses have a leadership team with some conservative, status quo-oriented managers working along with those who really want to revamp their business. Of course, if the business is in a dynamic industry, then the company has no choice but to think out of its current operational and strategic box. Either way, developing a big think strategy can be helpful.

Is that a concept that works globally?
Absolutely. I am based in the United States, of course, because I teach at Columbia; but I also do a lot of work in Europe. (I’m originally from Germany.) And I do a lot of work in Asia, in the major countries in Asia that are focused on strategic development and developing global brands.

I notice that you market yourself with a compelling website and an interesting blog.
I’m a marketing professor, so I’d better market myself. And I have, indeed, a website where I talk about my ideas via the weblog associated with it. I like to use new media. I think new media are great ways of communicating with my customers, and my customers are readers, students, managers and CEOs.

Who influences your thinking?
I’m trained as a psychologist, so I read a lot of psychology books. I think Howard Gardner does some very interesting work on intelligence, very solid work about the different aspects of intelligence that require a certain leadership. I was inspired in my experience work by a major thinker at MIT, cognitive scientist Steve Pinker, who wrote a popular book called How the Mind Works (Penguin, 2003). I thought it was a brilliant book, and it inspired the different types of experiences that I have in my own book, such as sensing, feeling, thinking, acting, relating and so on. I get a lot of inspiration from the psychology literature, but I also do a lot of novel reading. And I get a lot of inspiration from the arts, as well. When I sit in an opera or theatre performance, I usually get lots of ideas.

My own sense of you is that you are a kinetic personality.
I’m always moving around; I’m very restless. I can’t do the same thing over and over again. I was trained as a psychologist, but then I moved into marketing, then I did these experience concepts. Now I work on big think. I work on leadership. I like to do different things. I’m always thinking, and thus I greatly enjoy the opportunities I have to help others to think more widely and more creatively.

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