With Brighton rock, you can see the name of the seaside resort spelled out all the way through the sweet, from edge to edge. And in the same way that you see a name through a piece of rock, a CIO can see through an organisation end to end. In fact, I can’t think of any role other than that of the CIO which touches every single facet of the business. So, it’s imperative that the CIO’s vision and touch extend through to the organisation’s end customer.
I’m spending 80 per cent of my time focused on issues that have the external customer at heart. We’ve got to look at everything from the perspective of customers – both internal and external – and help them get where they need to go, aided by technology.
Admittedly, my background is different from that of many CIOs. I have been a general manager and CEO of other businesses, as well as CEO for our international business group. As a result, some people tend to draw the conclusion that it’s natural or easier for me to focus on the customer. But I find it difficult to understand how CIOs can do their jobs unless they understand the mission of the business and share in developing it. In the same manner, how can a surgeon do his job if he doesn’t understand how the whole body works? CIOs who don’t participate in or influence what the business is trying to do for its customers will only develop technology that matches or improves the status quo. If you truly understand the business, you can help to create paradigm shifts that will differentiate it.
At Best Buy, we have to understand how our geeks, as well as the blue-shirt staff in our stores, face off with customers every day, meet them in their homes and ensure they solve their problems. By understanding these customer aspirations, we were able to develop scheduling, routing and dispatch systems that made our geeks 100 per cent more productive.
One of the critical capabilities when you grow a company to 1,000-plus stores is your pricing strategy – it’s how you stay ahead and drive value. We developed a price optimisation capability that implements pricing strategies by store location, delivering tens of millions of dollars per year.
Then there are technologies such as WiMax and RFID that boast the potential to change retail operating models fundamentally. It’s up to us as CIOs to embed these disruptive technologies into our thinking and figure out how to use them to the customer’s advantage. Imagine if customers could just walk into a store, find everything they want, select and purchase an item online, and walk out of the store without having to wait in a checkout queue. That’s the direction we’re going in, and it will be enabled by RFID.
However, it’s not enough for just me to have a customer focus. All of my IT team members are involved in the business’s core functions, where they bring the IT change lens to bear on the customer value proposition. They participate in understanding consumer attitude surveys, spend time in the stores, and work with our major vendors who are trying to find ways of being more effective with consumers. When we introduce a new product to the stores, each store will have a different experience with that product. We encourage our people to put that on a blog and share both the issue and solution. This is the best way for a greater number of people to learn quickly. It has become our greatest training aid.
Global customer focus
Our customer focus becomes even more interesting as we expand globally. We’re in the US, China, Canada, Europe, and we’ll be in both Mexico and Turkey soon. As we infiltrate these diverse markets, we do so cautiously: we want to learn from the mistakes of others, and one big mistake is going too fast and imposing operating models that do not meet consumer needs.
You can’t look at new countries through a US-centric lens. You have to break away from traditional orthodoxy and think like a customer, wherever those customers are. To achieve this, we carry out research, talk to other retailers about their customers and talk to customers about what they want, observing and noting cultural differences. For example, while customers in the US are accustomed to touching items on display, in China everything is showcased behind glass cases. The people in the stores are employed by manufacturers and vendors and are product-centric. The implications for the in-store systems are significant if we want to import the open display approach we have in the US.
Knowledge transfer also works in reverse in China, where the people expect faster responses to changes in technology. In the US, we change our telephones once or twice every 18 months, while in China phones are a fashion item and the Chinese change theirs every quarter.
These variations raise different challenges for our understanding of customer data privacy, storage and data flow. Going global isn’t about scale; it’s about skill – transferring skill and knowledge about customers backwards and forwards.
Strategic CIOs who focus on customers have an opportunity to influence how their industries relate to the end customer. Over the past 25-30 years, retail has shifted from mass marketing, where we bought everything in mass and sold at a price. Today’s personalised customer marketing is based on psychographics and demographics, each enabled by IT. We are moving into a more exciting space, which I call ‘co-creation’. The journey no longer ends in the store, it ends in the home.
Consumers want connectedness – linking PCs with TVs and phones through WiMax and voice-over-IP. They want to partner with a trusted brand to aggregate content and co-create the solutions.
As the ambassador of the customer, Best Buy’s role is to represent their needs with the vendor community to help create that interactive environment here and elsewhere in the world. It’s my team’s role to understand these issues and search for ways to make the experience of co-creation seamless for the customer. There is only one way to achieve this, and that is by taking the time to ‘think customer’.