Keeping in tune with the customer

In the UK, where I’m from, there is candy called “rock” or sweet rock, which can be made with a promotional name appearing in it. So with Brighton rock, for example, you can see the letters spelling out Brighton all the way through the candy, edge to edge.

The same way you see a name through a piece of rock, a CIO can see through an organization 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 logical, and an imperative, that the CIO’s perspective and touch extend through to the organization’s end customer. I’m spending 80 percent of my time focused on issues that have the external customer at their heart. The days when IT was primarily a project provider to the business are not completely gone everywhere, but we have to do more than that. We’ve got to look at everything through the lens of customers both internal and external and help them get where they need to go through the aid of technology.

Admittedly, I have a different background than many CIOs. I have been a general manager and CEO of other businesses, plus CEO for our international business group. So some may say it’s natural or easier for me to focus on the customer. But I find it difficult to understand how a CIO can do his job unless he understands the mission of the business and shares in developing it. In the same manner, how can a surgeon do her job if she doesn’t understand how the whole body works?

CIOs who don’t participate in and influence what the business is trying to do for its customers will only develop technology that matches or improves the status quo. Instead, if you really understand the business, you can help leapfrog the status quo and create paradigm shifts that will truly help differentiate the company.

Geeks, pricing and RFID

At Best Buy we have to understand how our geeks, and the blue-shirt staff in our stores face off with customers everyday, meet them in their homes and ensure that they can solve their problems. By understanding these customer aspirations, we were able to develop scheduling, routing and dispatch systems that made our geeks 100 percent more productive.

One of the critical capabilities when you grow a company to 1000-plus stores is your pricing strategy – it’s how you stay ahead and drive value. We developed a price optimization 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 with the potential to fundamentally change retail operating models. It’s up to us as CIOs to embrace these disruptive technologies in our thinking and figure out how to use them to the advantage of our customer. Imagine if a customer could walk into a store, find everything she wanted, select and purchase an item online and walk out of the store without having to wait in a checkout? 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 are embedded in the business’s core functions, where they focus the IT change lens 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, and we encourage our people to put that on a blog and share both the issue and solution. This is the best way for 100,000 plus people to learn quickly. It’s become the greatest training aid.

Going global

Our customer focus becomes even more interesting as we expand globally. We’re in China, Canada, Europe, and we’ll be in both Mexico and Turkey in the next 12 to 18 months. We’re being careful; we want to learn from other people’s mistakes, and one of those mistakes is going too fast and imposing operating models instead of getting inside the heads of consumers and interpreting what they need. You can’t look at new countries through a U.S. centric lens. You have to break away from traditional orthodoxy and think like a customer wherever those customers are. We carry out research, talk to other retailers about their customers and talk to customers about what they want.

Customers in the U.S. are accustomed to touching everything, picking up telephones, switching things on. In China, everything is 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 U.S.

Knowledge transfer also works in reverse. The Chinese expect much faster response to changes in technology. We change our telephones once or twice every 18 months. The Chinese change theirs every quarter; phones are a fashion item. That brings different challenges around customer data privacy, storage and data flow. Then you think, wouldn’t it be a good idea if we had that capability here in the U.S.? Going global isn’t about scale, it’s about skill—transferring skill and knowledge about customers backwards and forwards. Strategic CIOs who focus on the customer have an opportunity to influence how their entire industry relates to the end customer. Over the last 25 to30 years, retail has shifted from mass marketing, where we bought everything in mass and sold it at a price, to today’s personalized customer marketing, based on psychographics and demographics (enabled by IT). But I think we’re moving into a different and even more exciting space that I am calling co-creation. The journey no longer ends in the store, it ends in the home. Consumers want ‘connectedness’, linking PCs with TVs and telephones, through Wimax and VOIP ultimately. 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 environment here and elsewhere in the world. It’s my team’s role to understand these issues and search for ways to make that experience seamless from the customer’s perspective. The only way we can do that is to take the time to ‘think customer’.

Robert Willett is Best Buy’s CIO & CEO of Best Buy International, and a CIO Executive Council member.

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