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Book review: Politicians have long understood that one secret to getting elected is sensing where the consensus is heading and adopting that position as your own.
Customer-Driven IT: How Users Are Shaping Technology Industry Growth
By David Moschella
Harvard Business School Press
288 pages, $29.95
Politicians have long understood that one secret to getting elected is sensing where the consensus is heading and adopting that position as your own. Among pols—and the people who write about them—the strategy is called "jumping out ahead of the parade."
Without the cynicism, your company must adopt the same approach to new products, especially technology-based products, contends David Moschella, a long time technology industry consultant. The key: Find out what your customers are yearning for and deliver it.
What he is advocating is a huge shift in thinking about markets. Consider the Internet: Prior to its wholesale adoption, hardware suppliers and software companies typically released new products, and customers—be they consumers or businesses—would either find ways to use them or they wouldn't. The customers determined whether or not they needed the new Pentium III, say. Academics describe this as a supply side-driven marketing model.
But once people got used to the Internet, the industry was forced to move to a demand-driven model: "Give us what we want and we will buy it," say customers. "If you don't, we won't." Products and services that made it easier to get onto the Net (such as broadband) and to surf the Net (such as Google) thrived. Those that didn't, didn't.
As Moschella writes, "firms such as Amazon.com, E*Trade and eBay [are] not IT suppliers in any traditional sense. They [are] selling books, financial services and Cabbage Patch dolls. Yet . . . for many consumers the ability to access these new types of services [is] a much stronger incentive to get on the Internet than anything that Microsoft, Dell, Cisco or even America Online [is] offering."
The upshot is clear, in Moschella's view. While better browsers, more powerful PCs and niftier networks all remain important to increasing technology sales, the real driving force behind increased revenues now originates from consumer demand.
If you buy this argument, what follows is twofold. First, your company must become consumer-centric. Sure, technology executives have always said that, but truth to tell, most companies do not back up the words with action. Second, and more important: To succeed in the future, you need to figure out what customers want almost as soon as they figure it out themselves—or better yet, before they do.
While Moschella is terrific at framing the argument, he is not as good at identifying areas where you can get out ahead of the parade. He lists 10 possibilities—everything from corporate online ordering to new ways of handling entertainment that can be distributed via the Web. But insights are lacking and details are few.
No matter. The most valuable contribution he makes is recognizing and making crystal clear the blurring of the lines of demarcation that have existed since the days of ENIAC, the first computer. Before the Internet, the world of IT could be neatly divided between suppliers and customers. If Moschella is correct, those days are over. Both share power as industry movers and shakers, and they need to be treated as such.
Reviewed by Paul B. Brown, the author of 13 business books including Customers for Life: How to Turn That Onetime Buyer into a Lifetime Customer (written with Carl Sewell). A revised and expanded version has been published by Doubleday. Please send comments on this review to email@example.com.