CDI – Customer-Driven Innovation (Episode 32)

Interview with Sebastian Hartmann, Global Lead Technology Strategy & Global Lead Portfolio & Investment Steering at KPMG International.

For all the bad rep that three-letter acronyms get, we have to agree that sometimes it helps to wrap a concept into three letters. Today we will talk about CDI.

CDI stands for “Customer Driven Innovation” – the idea that you should actively seek out the clients that will push you the most to innovate, and then have them push you some more.

I discussed Customer-Driven Innovation with Sebastian Hartmann, who is leading technology strategy at KPMG International since three years and is now also building a new team for the firm’s global innovation portfolio and investment steering. With his global role for a firm with more than 220,000 employees, I had to start by asking: “How do you keep sane understanding the speed of change with all the innovations happening in technology at the moment?”

He laughed and replied: “I have given up on the idea of keeping track of all technological innovation myself. Of course, we leverage extensive market and trend data, and we use automation and AI-based approaches to sort and make these insights more actionable. But the most important sources of information are our clients – and all our colleagues connected with them.”

So, not surprisingly, Sebastian said that he was keeping his focus on trying to understand the problems and situations of the clients of KPMG. Innovation happens when this deep understanding meets the art of the possible. These days that often means client challenges, insights and technology coming together in novel ways.

We then started talking about how KMPG is steering away from a business of charging per hour and is instead offering “solutions.” Solutions can be traditional or digital services, or products, or a mix of it all. So they might be based on hours, but they could also be designed as subscription models, managed services, business-processes-as-a-service, or even software-as-a-service.

And that is when Sebastian added: “Our clients are helping us on this transformation journey for our business. They are increasingly ready to explore alternative ways of working with professional services firms – and together with our clients and ecosystem partners we co-create next-generation solutions.”

And that is what Customer-Driven Innovation is. But Customer-Driven Innovation is not just about letting clients tell you what they need and thus helping you innovate new solutions. It is about identifying the 1% of clients that can PUSH you to deliver novel solutions to new (or old) problems. Solutions that open up new markets, new clients, and new growth for your business.

Sebastian described it well: “It’s quite often about finding the customers and partners that stretch you.”

They might not be your biggest customers, or your oldest, or most loyal customers – but they are the customers who stretch you to do things that you otherwise might not have done.

At times it can feel counter-intuitive to seek out customers who will push you to deliver solutions you are not able to offer. It will feel safer and easier to seek out the customers asking you to deliver what you have done many times before. But just as it is true that “what got us here will not get us there,” it is also true that “what we deliver here will not be what the clients will be asking for there.

When hearing about the idea of letting clients actively push you to deliver new products and services, the knee jerk reaction from many companies will be: “Oh, yes, we do that”, but I am going to challenge that response.

Are you really and actively seeking out the clients that could push you to disrupt yourself? Are you truly going out of your way investing time to develop, design and deliver the solution that only one client is asking for – who may be far ahead of the curve? Are you consciously utilizing the true potential of Customer-Driven Innovation?

When I look back at my own business as a speaker, I am a bit embarrassed to notice how I have spent more time taking care of my biggest, best, and most fun clients instead of deliberately seeking out the clients who could push me to develop new products. And I have a feeling I am not the only one. 

I asked Sebastian Hartmann for what to think of when embracing a Customer-Driven Innovation approach. He said:

“First: Find the clients (and other partners) in your ecosystem, who can explore new frontiers with you.

Second: Build a trusted relationship with them to make it easier co-create and stretch the known “solutioning” space together.

Third: Leverage each other’s energy and capabilities to push into new territory.

Fourth: Make sure that the work you do is actually strategic for the future of your business – so stay calm, test the hypotheses, and involve more clients as quickly as possible.”

So why is CDI so important right now? Sebastian: “It’s important to understand that with the speed of innovation that we are seeing now, products and services are expiring faster than ever – and that makes it more important to catch and shape the next demand wave early. Curate and support the clients who may help you to look beyond current markets – and see what is coming next.”

So, Sebastian emphasizes the increasing importance of identifying the customers who can be your mentors, your scouts, and your guiding lights. Find them, support them and deliver the benefits they are looking for (or more), and you are well-positioned for the future.

Which of your clients are crucial for your CDI? What can you do to push them to push you even further?




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