Woodlawn Associates

Management Consulting

Strategy & Management

Listening to the Voice of the Customer

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Strategy is a hard thing to define.  People often ask me what we do as strategy consultants.  A simple, but unsatisfying, answer is that we help companies figure out what to do to create value.  But that’s not especially elucidating, either.  How do we help them determine what to do?

Among other things, we talk—and listen—to customers.  We have delivered valuable, actionable insights to clients by doing voice-of-the-customer (“VOC”) research.

For example, consider one of our clients, which had dutifully built its products largely on the basis of customer feedback.  We recently interviewed a cross section of their current and potential customers.  Our client was started to find a large difference between what customers and non-customers valued.  They hadn’t realized that, by designing their product to be desirable to current customers they had ended up with a product suited only to one segment of the overall market.  They are now designing a refresh that should allow them to reach a much larger effective market.

Here’s another example of how voice-of-the-customer research can create value.  A few years ago, we were interviewing channel partners for a consumer products company.  Asking about the relative importance of various product attributes, we kept hearing about the importance of one particular attribute that our client was not even aware of.  After reviewing our findings, our client decided to make performance on this attribute a key part of its product development and marketing investments.  This client has gone on to become one of the largest and most successful companies in its industry.

It’s surprising to me the number of companies that try to make big, strategic decisions without having a crystal clear understanding of what buyers value, what they are struggling with, or how competitors are addressing their problems.  This is where VOC research can really add value.

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Modeling 101: Clear, Accurate, and Auditable Spreadsheets

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Spreadsheets are important tools for all manner of organizational analysis and decision making.  Considering their importance, it is critical they are clear, accurate, and auditable.  We’ve built hundreds of models and in the process we’ve developed a set of guidelines that help us ensure our models reach these goals.  Here are our top seven recommendations:

1. Focus on Organization

A fundamental question for any model is how to organize it.  Starting with a well-organized structure can save many headaches down the road.

First, ask yourself:

  • How can I break the model into logical sections?
  • How should I label sections?
  • Who is my audience for this model? Would this make sense to him or her?
  • Would the user understand if I moved certain sections to different sheets?

Once you have the basic outline, work your way through the calculations linearly.  We typically build models with logic that starts at the top of a sheet and works linearly downward.  Enforcing a structure like this ensures the modeler’s logic is sound and makes it easier for the user to see that A leads to B leads to C and so on.  Models with logic moving higgledy-piggledy over a worksheet or workbook are easy to foul up and hard to understand.

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Read it for Love or Money: Our Vote for Best Book of 2014

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We have, at the end of past years, summarized what we found to be the best business books of the year (see our list for 2012—we didn’t get to it for 2013). This year, one book stood significantly above the rest:  How We Learn: The Surprising Truth about When, Where, and Why it Happens, by Benedict Carey.  Josh initially read it for personal reasons—it was recommended by two of his kids’ middle-school teachers.

How We Learn summarizes modern research on effective learning. It repudiates some folk wisdom (for example: always study in the same, quiet place) and provides other very useful insights and techniques. We heartily recommend it whether want to help your children in school or apply the techniques at work.

Here are our key takeaways:

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Ignorance

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I recently read a delightful little book, Ignorance, by Stuart Firestein, chairman of the department of biology at Columbia University, and had a chance to discuss it with him over dinner a few weeks later.  The book is about how Firestein thinks science (and other research and scholarship) really works.  In my experience, many of the same principals apply in business.

Firestein thinks we hold mere facts too dearly: “When I sit down with colleagues over a beer at a meeting, we don’t go over the facts, we don’t talk about what’s known; we talk about what we’d like to figure out, about what needs to be done.”

He uses the term “ignorance” not as a pejorative but as a description of a state: “the absence of fact, understanding, insight, or clarity about something…not an individual lack of information but a communal gap in knowledge…it is a case where data don’t exist, or more commonly, where the existing data don’t make sense, don’t add up to a coherent explanation, cannot be used to make a prediction or statement about some thing or event.”

What we really want to do with science, research, or analysis is (a) understand where we are ignorant, (b) conduct research to elucidate, and (c) open up new areas of ignorance.  We want to refine our mental model of the world.

At one point, Firestein lists some questions he and his students have asked other scientists probing the boundaries of their ignorance.  As I read his questions, my mind went to business, and I wondered if I could create a similar list in that domain:

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Best Business Books 2012

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Every year between Christmas and New Year’s I look forward to catching up on some reading.  This year I’m reading Nassim Nicholas Taleb’s Antifragile.  Looking for some suggested reading yourself?  Here are my personal nominations for Best Business Books 2012:

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