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Is Delighting The Customer Profitable?
Isn’t the purpose of business to make money? Isn’t all this stuff about “outside-in innovation” and “delighting the customer” missing the obvious point that the bottom line of a firm is about making money? Won’t all these efforts to do more for customers raise costs and so undermine profitability? Isn’t there in effect...
Earlier in the week, I responded to the three-barreled question, “Does Outside-In Innovation Need Confident Top-Down Leadership?” with a complex three-barreled answer.
The answer to whether delighting the customer is profitable is much simpler: yes!
Delighting the customer through outside-in innovation is not just profitable. It’s hugely profitable. That’s ultimately why it has become a business imperative. It explains why its conquest of the business world is inevitable. It’s not because the customers are more contented or because the people doing the work are ha...
Just look at the ten-year share price of exemplar firms like Apple [APPL], Amazon [AMZN] and Salesforce.com [CRM], with increases of around ten times to fifteen times. Compare that to traditional stalwarts like GE [GE], Walmart [WMT] and Intel [INTC], which struggle even to hold their share price constant.
Or look at the studies at the team level in software development where good implementations routinely result in two- to four-times gains in productivity.
Why is delighting the customer so profitable?
Delighting the customer, aka outside-in innovation, is more profitable than traditional management (top-down inside-out management thinking) because there are gains on both prices and costs.
On pricing, firms that delight their customers have higher margins, because the customers just have to have the products and services that they love and they are willing to queue up for it and pay extra for it. Again, look at Apple: Philip Elmer-DeWitt reports that in the mobile phone market, Apple's share of the world...
Costs also tend to come down for a number of reasons. One of the most important is that firms that delight their customers compete on time and get work done faster.
By contrast, in traditional hierarchical bureaucracies, with multiple vertical layers of authority and many different departments and divisions, work jams are occurring all over the organization on a daily basis: typically no one recognizes them or does anything about them. Work sits waiting in queues. Approvals hold t...
The firm that has delighted customers also has the advantage of an unpaid marketing department. Its customers are delighted to sing its praises to friends and colleagues: the firm has only to sit back and watch. And the firm doesn't have to spend time and money dealing with disgruntled customers or counteracting negati...
Why does anyone argue the opposite?
There are three common arguments often deployed to make the opposite case.
For some people, the idea that delighting customers is more profitable than a direct attack on making money is counter-intuitive. Surely a direct focus on making money will result in better results? Why not identify the goal clearly and go for it directly?
This line of thinking ignores the principle of indirectness (or obliquity), which shows that in a complex interactive environment, a direct focus on a single goal can elicit reactions which tend to prevent the achievement of that goal.
The harder a CEO is pushed to increase shareholder value, the more the CEO will be tempted to make moves that actually hurt the shareholders. Take the poster boy for shareholder value maximization, Jack Welch. He is famous for transforming GE from a fi rm with a market capitalization of $13 billion in 1981 into the mos...
Then there is the notion that delighting customers implies always doing more than what the firm is already doing. The reality is that delighting customers often implies doing less. The trick in delighting customers is focus: aim for the simplest possible thing that will delight buyers. Don't load products down with fea...
Moreover as noted above, by focusing on time and delivering products and services sooner, the costs of operations tend to come down of their own accord.
The least plausible of the arguments is that laid out in an article entitled, Stop Trying to Delight Your Customers by Matthew Dixon, Karen Freeman and Nicholas Toman (HBR, Jul-Aug 2010, pp 116-122). The authors did a study which they say shows that trying to delight your customer is counter-productive. What the study ...
The article is talking about a quick fix to a traditional command-and-control culture. Obviously, that doesn’t work. The idea that a command-and-control bureaucratic culture is fundamentally incompatible with an organization dedicated to delighting its clients is never addressed. The study sheds no light on the possibi...
The real reason for resisting the shift towards customer capitalism is inertia. Delighting the customer means a fundamental shift in the way we think, speak and act in the workplace. For a comprehensive treatment of the principles and practices involved in delighting customers and outside-in innovation, read my book, T...
If you would like to get together with others who are intent on understanding why delighting the client is more profitable and how to make it happen, please join me, Rod Collins (author of Leadership in a Wiki World, Seth Kahan (author of Getting Change Right) and others for two days on May 12-13 in Washington DC. Cool...
The HMS Erebus and a sister ship left England in 1845 to find the Northwest Passage. They were never seen again — until a team of Canadian searchers discovered the wreckage in the Arctic last year. What followed was a dispute over the facts of, and credit for, the historic find.
The curt notice from the Canadian prime minister's press secretary gave no hint that history had been made.
“Prime Minister Stephen Harper will participate in a photo opportunity,” read the one-sentence advisory from his spokesperson Carl Vallée, on Sept. 9, 2014. The event was scheduled for 10 a.m.
Nearly nine years into his tenure as prime minister, Harper rarely took questions from the press. Pictures only; reporters were not welcome. On this morning, his message management machine was quietly shifting into high gear.
As expected, few reporters from the Parliamentary Press Gallery made the trip to the Parks Canada building in Ottawa. Those who got there in time saw a room decorated with a large map of the country, with the phrase “A STRONG CANADA” repeated across it in both official languages.
Harper sat in front of the banner at the head of the table. On his right was Ryan Harris, a senior underwater archaeologist with Parks Canada. Environment Minister Leona Aglukkaq, whose portfolio includes oversight of Parks Canada, was to the prime minister's left. Next to her, in a prominent spot, sat John Geiger, CEO...
“This is truly a historic moment for Canada,” an elated Harper said.
To the shock of those gathered, the prime minister announced they had found the wreck of one of Sir John Franklin’s ships. Six years of searching in the Arctic and the investment of millions of dollars of public money had paid off.
A year after his two ships sailed down the Thames River in 1845 on their way to look for a Northwest Passage, Franklin’s vessels were beset in ice in the High Arctic. All 129 men aboard died, most in an excruciating battle against frostbite, hunger, and other ailments. Over the past 160-plus years, dozens of expedition...
"The ships were called the Terror and the Erebus," 1847, (1905).
“Franklin’s ships are an important part of Canadian history given that his expeditions, which took place nearly 200 years ago, laid the foundations of Canada’s Arctic sovereignty,” Harper said.
The discovery of a wreck was a personal and political triumph for Harper. As part of his Arctic sovereignty initiative, his government began funding expeditions in 2008 to find Franklin’s ships. Harper also made annual visits to the Far North. Aglukkaq, who joined him that day, is from Nunavut and is the minister respo...
Now they were together to share a discovery steeped in historical and political import.
As designed, the press was caught off guard. News of the major find began to spread in the moments after Harper’s statement. Reporters rushed to the Parks Canada building. They were desperate for someone to interview.
Into the spotlight stepped Geiger, a former journalist and the co-author, with anthropologist Owen Beattie, of a modern classic of the Arctic exploration genre, Frozen in Time: The Fate of the Franklin Expedition.
The moment the ship was discovered this past weekend, said Geiger, “we were surrounded by ice — we were in a noose of ice — and so it was a real sense of connection, of immediate connection to Franklin and the men on those two ships.
"A few of us said a prayer to sailors lost at sea at that moment because we felt a real personal bond."
Except Geiger was not there. He was on a different ship roughly 65 nautical miles away from the vessel that discovered the wreck.
Geiger’s role as a prominent spokesperson continued at a “technical briefing” for reporters following the announcement. None of the experts directly involved in discovering the shipwreck, or the artefacts that led to the find, were made available to media as part of that briefing.
In one of his answers, Geiger connected the discovery to a central Harper government theme: the importance of government cooperating with the private sector to make big things happen.
The tightly scripted media rollout would see Geiger give interview after interview about the find, talking freely about the moment of discovery, and about the prime minister’s deep passion for the north. It would culminate months later with Geiger and Harper being awarded medals in separate ceremonies to mark their imp...
Meanwhile, those who actually found the wreck, along with others who spent years on the search, seethed in anger as they watched what they saw as a historic moment being misrepresented to the public.
The Franklin shipwreck is one of the biggest, most celebrated discoveries in 21st-century marine archaeology. It also cleaved open a nasty dispute over the facts of — and credit for — the historic find. As the news went public, the civil servants, researchers, and others who played major roles in the discovery said the...
Geiger, who has close ties to the prime minister and is a financial contributor to the Conservative Party of Canada, was placed front and centre over others who were directly involved in the discovery and subsequent exploration of the wreck.
More than 10 sources with direct knowledge of the discovery tell BuzzFeed Canada that they felt Geiger's comments to the press often created the impression that he was there for the moment of discovery and had been involved in the find. Documents obtained from these sources, as well as from access to information reques...
In fact, emails between Geiger and the Parks Canada official in charge of the expedition show that as searchers aboard a Coast Guard icebreaker zeroed in on Erebus, Geiger, who was unaware of their progress, was demanding that the icebreaker be diverted to free his vessel from ice floes. Had Parks Canada officials comp...
These and other facts caused those who had spent years looking for Franklin’s ships to express surprise and then frustration at the prominent role given to Geiger and the RCGS.
BuzzFeed Canada conveyed these concerns in a list of questions submitted to Geiger and the RCGS. He initially replied with a general written statement from RCGS that said, "No reasonable person would take any of the remarks made a year ago to suggest that RCGS or its representatives were responsible for the find."
It concluded: "RCGS has no intention of parsing past statements or looking at individual statements out of context but suffice to say that we have always intended our statements to properly credit all project participants."
Asked to describe where he was when he first learned a Franklin wreck had been discovered, including the date and approximate time, Geiger did not answer the question fully.
“I was on One Ocean Voyager,” he said, citing the name of the expedition vessel he was aboard. He did not respond to a follow-up request for the specific date.
Geiger also said his statements to the press were never meant to imply that he was part of the team that found Erebus.
"I was not near the Erebus site at the moment of discovery and I don’t believe I have ever represented that I was," he said. "I was on another ship involved in the search, in the ice somewhere north of the Royal Geographical Society Islands at the time."
The initial RCGS statement also emphasized that it was not trying to imply that Geiger or the organization “were responsible for the find.” Yet in July, Geiger was one of just four people awarded the highest honour bestowed upon those involved in the expedition. At a ceremony in Whitehorse, the governor general present...
Bob Park and Doug Stenton with the artefacts (davit shoe and chain cable scuttle plug/cover) in the science lab on the Laurier.
"Having been involved in the execution of the search since 2008, I know very well what the three other recipients honoured for the Erebus find did to deserve such an award," Park said, "but I'm quite unaware of any role played by John Geiger in the design or execution of the search that would warrant his receiving the ...
In interviews, those involved in the discovery said they concluded that Geiger’s relationship with the prime minister must have led to him being given the most important role in communicating the find and its significance to the public. They also cite his connections as the reason they believe he was given a medal for ...
Geiger said that at the ceremony "the presenters mentioned my Arctic books, my service as a past volunteer (governor and president) of the RCGS, as well as my role on the 2014 expedition."
Expedition partner Jim Balsillie, who founded and was the major funder of the Arctic Research Foundation, became so frustrated with what he saw as a misrepresentation of the RCGS' role in the find that he sent a letter of objection to Aglukkaq and copied it to the Prime Minister’s Office.
"I am troubled that Canadian history is not being presented accurately and I have expressed my concerns to the [RCGS's] CEO in the past," he wrote.
The letter focused on a documentary that aired on CBC's The Nature of Things.
"The narrative, as currently presented, attempts to minimize the role of the Government and its respective agencies and private partners," he wrote, referring to Parks Canada and other key players. "It also creates new and exaggerated narratives for the exclusive benefit of the Royal Canadian Geographic Society and its...
Among other concerns, he objected to a statement made by Geiger that suggested he and the RCGS had been part of the search effort for years, rather than months.
"The CEO of RCGS makes a claim that his organization has been doing the search 'for years, catching a break this year' when in fact they joined the Victoria Strait partnership in April of 2014 as a support partner to help with communication and outreach activities."
In an email reply, Geiger said that "RCGS had no editorial control over the film. In fact, I wrote to the British and Canadian co-producers before broadcast asking for changes similar to those raised by Mr. Balsillie, albeit with limited success."
Balsillie says he was warned by civil servants involved in the expedition that his decision to go public with his concerns could lead the Prime Minister’s Office to try to “destroy” him and his friends.
“There’s been a level of control around this project that strikes me as odd,” Balsillie told BuzzFeed Canada.
From the beginning, the 2014 Victoria Strait Expedition to find Franklin’s ships had a strong political component. Harper prominently linked his government with the mission in the 2013 speech from the throne. That speech begins each session of Canadian Parliament, and sets out the government’s priorities.
And so in August 2014 the best-equipped flotilla in the history of expeditions to find Franklin’s ships made its way north. The marine archaeology unit of Parks Canada led the effort. The expedition planned to bring four ships together in the High Arctic: the CCGS Sir Wilfrid Laurier icebreaker; the Royal Canadian Navy...
What follows is the story of what really happened in the days before and after the discovery of Erebus, and how those who helped make a historic find were angered by what they say are attempts to rewrite history to suit personal and political ends.
Captain Bill Noon (right) on the bridge of the Laurier.
Up on the icebreaker’s bridge that morning, there was no radio squawk. No crew banter. Not a tremble from the three huge diesel electric engines that sit deep in the CCGS Sir Wilfrid Laurier’s boiling belly.
Just after breakfast, the Canadian Hydrographic Service, which surveys Canada’s waterways to produce navigation charts, went to work scanning the seabed of the High Arctic with its high resolution multi-beam sonar. Some 90% of Canada’s Arctic is still not charted to modern standards. The service's thankless but crucial...
Marine archaeologists from Parks Canada launched their 10-meter aluminum boat, Investigator, to work the approach to O’Reilly Island. They watched a seabed crisscrossed with scours and gouges carved by ancient ice fields scroll slowly past on a laptop screen.
Captain Andrew Stirling flies an ice reconnaissance mission.
To improve the accuracy of their work, the hydrographers needed a portable global positioning station set up nearby on land. Scott Youngblut, the hydrographer-in-charge, climbed into the Laurier’s helicopter with Captain Andrew Stirling, a veteran pilot with more than three decades’ experience flying in some of the tou...
Stirling set the chopper down on a small, unnamed island in eastern Queen Maud Gulf.
Youngblut set up his GPS. Stenton and Park studied tent circles, the rocks that Inuit placed to hold down the animal skins that form their Arctic hunting shelters. Stirling walked the island’s perimeter with a shotgun slung over his shoulder, on the lookout for predatory polar bears. He also scanned the ground, hoping ...
Stirling spotted an unusual shape lying against a rock. He called Stenton and Park over for a look.
Davit shoe in front of ship plan.
Stenton examined the object, a hairpin-shaped fixture of rusting iron slightly longer than his forearm. He moved his hand to reveal a fading number 12 and a double broad arrow stamped in the metal. It was part of a davit, used to lower boats from the side of a ship. Stenton knew the markings certified that the ship bel...
The group got back into the helicopter and headed to the icebreaker with the davit piece and another tantalizing artefact they found: two half-moon–shaped pieces of wood, weathered grey, that made up a plug for a deck hawse. A hawse is an iron pipe that a ship’s anchor chain slips through into a locker below deck.
Noon waited on the flight deck to meet the helicopter, just as he did every time Stenton and Park returned from fieldwork. It was the captain’s ritual. He liked to have first look at whatever the archaeologists brought back.
“I’ve got something cool to show you,” Stenton whispered to Noon once they got off the flight deck.
They brought the artefacts to the ship’s bridge for a private showing, “where they caused a lot of immediate excitement,” Noon wrote in his log.
A Franklin ship was close. They could feel it.
Roughly 65 nautical miles north-northwest of Noon and those aboard the Laurier sat the Vavilov. It was surrounded by heavy ice floes as far as the eye could see.
The ship is 117 meters long and equipped with amenities such as a gift shop, fitness room, hot-water spa, and pool. It was scheduled for a 10-day role in the mission.
On board was a piece of Canada’s most cutting-edge marine technology in the form of a yellow robotic sub called Arctic Explorer. The Russian ship also carried a retinue of well-heeled passengers, including people from oil giant Shell Canada and the W. Garfield Weston Foundation. The foundation was created with shares f...
They were expedition partners of Geiger’s Royal Canadian Geographical Society, which publicly announced its role in the Parks Canada–led search mission just two months before the search began.
The chartered cruise ship and the Laurier had briefly rendezvoused in late August. Then the Laurier steamed off into Queen Maud Gulf while the Vavilov made a turn for the north, where Franklin’s ships had first been abandoned.
Geiger soon became frustrated with the situation aboard the Vavilov. They were surrounded by ice and unable to make progress. Emails show he pressed Andrew Campbell, the Parks Canada vice president overseeing the search operation, for permission to deploy the 7.4-meter-long, torpedo-shaped Arctic Explorer robot sub.
Campbell’s decision to let field experts make the call that the Laurier not move to help the Vavilov ensured that Captain Noon and his crew could stay focused in their search for Franklin’s ships in an area of high interest, and without delay.
Captain Stirling found the davit part two days later, on Sept. 1.
On Sept. 2, Parks Canada marine archaeologists loaded up Investigator and zeroed in on the seabed near where the davit piece was found. They hauled a “tow-fish” sonar device behind the boat on a long cable. It provided the grainy images that slowly cascaded down the divers’ laptop as they motored slowly up one search l...
Their sonar pings quickly began to bounce off a large object standing upright on the bottom, in just 11 meters of ocean.

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