Getting to 26.22 (and Beyond)

How Customer-Focused Product Definition Can Thrive During Change

Marathon runners know how to pace themselves so they don't bolt off the starting block and exhaust their energy before the 26-mile mark. The practices that make marathon running possible—a focus on the long view, pacing, and lots of preparation—make sense in business as well. Often, though, the business "race" continues for years and the "runners" must sustain their focus and energy not only on a straight-line journey from Point A to Point B but through the twists and turns of change.

This article looks at how one PDC client sustained an intense customer focus throughout the course of organizational change. Through a transition that included the merger and acquisition of Diagnostic Products Corporation, Bayer Diagnostics, and Dade Behring by Siemens to form Siemens Healthcare Diagnostics, the company remained committed to a customer-centric product definition (CCPD) process. What the organization learned can be helpful to any company—whether facing change on a small or grand scale.

Customers and Change

In the best mergers and acquisitions, organizations are easily able to blend shared philosophies, values, and approaches. If circumstances are more challenging, groups must overcome differences while at the same time continuing to serve customers and create value for company stakeholders.

Customers don't always take kindly to this kind of change. A 2005 Accenture study on mergers and acquisitions showed that more than half of survey respondents were not convinced that consumers benefit from mergers and acquisitions (banks had the highest at 69 percent who thought mergers were detrimental to customers). And perhaps their skepticism is justified: "Mergers and acquisitions have a dismal record when it comes to delivering value and increasing shareholder returns; companies will have to do the tough work of strategic integration and restructuring to succeed," according to a recent Landor article on M&A activity in 2009.

Identify and Stick to the Vision

Fortunately for customers, there are examples that defy this perception. One such story comes from PDC client Deirdra Dougherty, a veteran of customer-focused research and design, and interviewee for PDC's first book. In her role as Director of Marketing Analysis and Business Metrics for Siemens Healthcare Diagnostics, Dougherty oversees analysis for 14 product lines and brings a passion for customer-centered product definition to the Siemens product development process.

Along with Kendra Moore, Senior Manager of Product Definition, Dougherty has kept her team focused on the customer through each stage of the integration. “While our people and our customers have experienced many changes, our company’s customer-centric vision has stayed the same," says Dougherty. “The customer is at the heart of everything we do.”

Propagate the Vision

Once there's a clear vision, the next step is to ensure that everyone is on board with the process. This can be a tall order for any organization, and the support of the company’s leadership team is critical. "Our mandate is to deliver the customer and competitive data our strategic decision makers need to develop products that deliver real value. We count on active engagement across every level of the organization,” explains Dougherty. Under Dougherty’s guidance, Siemens Healthcare Diagnostics takes a focused and systematic CCPD approach.

First, the marketing analysis team is leveraged as an entry point into the organization for talented and motivated young people. They learn the market, customers and tools. When they move to other parts of the company, they bring this customer- and market-orientation with them.

Kendra Moore is dedicated to managing the individuals who serve as guides to the CCPD process throughout the organization, making sure that they are trained by bringing in PDC for refresher training. She ensures that these guides are deeply involved with the product development teams. The guides manage the overall CCPD process, talk directly to team members to understand their needs, and make sure product developers work closely with staff from the analytics team to understand the market data. These embedded experts serve as a resource throughout the organization and are true evangelists for the customer-centric view of product definition.

Finally, Dougherty's group has defined a clear growth and training path. She describes how the process works: "We have content owners in the process who are the more experienced leaders. New people shadow the senior people on live projects. We start newer people out at the least complex of the four levels of the process. We run internal workshops where they do role playing." At Siemens, the process has been institutionalized. In an FDA-regulated environment, the FDA audits performance against the defined procedure. This fact, coupled with strong leadership support for the process, means that anyone who comes into the organization is brought up to speed on how things are done and ensures that customer-centricity is embedded in the process.

Expand the Vision

Early in the integration process, senior management provided the direction and support needed to fully integrate CCPD into the new organization. Dougherty and her team worked to identify the “best demonstrated practices” from each of the legacy companies and to create a consistent process across the new organization. In many ways, bringing the best practices of CCPD to all the parts of the organization is like implementing the process from scratch. Dougherty and Moore are creating success stories that will help build and strengthen CCPD practices within Siemens.

"When you are managing a process through change, you have to do a lot more communication," says Moore. She and her team did road shows at product development sites to share the value of CCPD and show how the process works, giving product development staff an idea of the stages, timing, roles, and deliverables associated with the CCPD process.

Moore has also provided high-value tools for various stake holders. For example, each team leader gets a slide deck that gives a bird's-eye view of the process before they take their team through any steps. There's a budget guidance algorithm that helps team leaders plan for resource management. And an extended CCPD team, which includes program management, meets with Moore's team once a quarter to review what's working and what isn't.

Finally, Moore has worked to build partnerships with marketing and product management to make sure each team has the resources it needs.

Communicate the Value of the Process

"When teams first see a presentation about the process, everyone gets very excited about the idea of CCPD," Dougherty says. "Then comes the realization about the amount of time it will take." To counter this concern, Dougherty and Moore emphasize the value of the process, focusing specifically on the value CCPD generates at every phase. “It is important that teams see how the information answers real questions at each stage,” notes Dougherty. “The data is incredibly powerful.”

The CCPD approach goes far beyond focus groups or online survey research. Understanding it, Dougherty says, "almost requires a blank slate. People have to have an open mind and be willing to learn new things, to be able to see the value of the voice-of-the-customer approach."

The cross-functional nature of the work can present a unique challenge. Dougherty and Moore often work with functional team members who may not be accustomed to direct involvement in customer research. "It's a different kind of idea…that engineers and quality control experts are directly involved in interviewing customers, but it's the crux of the CCPD approach," Moore explains. "It can be a stretch for people who have never been through it before, but once they go through the process, they are usually our biggest proponents. It’s exciting to see the “aha” moment in their first customer interview,” she notes. “They can then share the value of CCPD with other teams who haven't yet been through it."

Sustaining a VOC Focus Long Term: 5 Tips for Success

Based on Dougherty and Moore's years of experience with the customer-centered product definition process, here are the top five factors in developing a successful CCPD program:

Strong leadership

Leadership must drive the customer-focused culture; it has to be more than just a process. It has to be something people live and breathe and it's critical that support comes from the top.

"At Siemens, the customer is at the center of everything we do. Being with teams that are so focused on wanting to understand customer needs is exciting. It's a defining way for our organization to come together. Customer-centric product development is one way that companies can truly differentiate themselves." -- Deirdra Dougherty

Dedicated steward

You need a dedicated steward to make sure the process is implemented consistently with the highest quality to maintain its value to the end users over time and to ensure that it assists with decision making.

Demonstrated value

You have to demonstrate the value of the process to the organization, for example, through things such as cancelled projects. And you need communication mechanisms in place to communicate value to team members.

Defined process

Well-defined procedures for the process must be in place. In larger organizations, these procedures help drive compliance and ensure consistency in how the process is implemented and results are analyzed.

"Kudos to Sheila [at PDC]. Her guiding light helped keep us focused in doing the workshops." -- Kendra Moore

Cross-functional support and participation

Support from other organizations -- particularly marketing and R&D -- is vital. Anyone participating in the process must understand why it's important.

"We see a lot of interest from our sales organization. Our regional sales representatives are asking to have their customers involved because the CCPD process is an excellent way to involve customers and deepen long-term relationships. We have found that CCPD opens a wonderful window into the needs of the clinical laboratory…..we can create solutions that really delight our customers." -- Deirdra Dougherty