CRM, ERP, supply chains... These are all wonderful acronyms or systems in managing a business, but if you don't change the very foundation of how you think about the customer then none of them make a difference in achieving growth when your competitors are becoming more focused than ever.

For decades, businesses have focused on homogenizing customer experiences - achieving efficiency through mass production. This is no longer the paradigm for business and don't assume that your competitors aren't with the program yet. It's the companies that can transform their models and focus on individual needs that will break through with innovative solutions in this century.

Quite frankly, your organization can no longer hide behind CRM tools and assume that tracking your customers and accounts does anything to deliver an innovative experience. CRM is certainly a helpful tool, but the New Age of Innovation requires deeper thinking and radical strategies.

The Fact is too many companies still look for the most efficient ways to do business by practicing mass production instead of personalization. Organizations are looking at what fits their business plan instead of what fits their customers' needs.

The Problem is that current business models are boxing managers and leaders into thinking across very specific lines and holding on to obsolete practices, just because it's in sync with the way things are.

The Outcome is a company that increasingly frustrates customers and often gets overtaken by smaller, more nimble rivals that know how to get from A to B when it comes to giving customers exactly what they want.

The Solution is to create complete upheaval in the way you develop and deliver your products. Leaders cannot be afraid to fundamentally change the basis of their business. While customer tracking tools are important and helpful, they are not a substitute for complete innovation. These systems won't hold on to your customers if they are repelled by your organization and the way it does business.

The big shift

So what exactly is a fundamental change in business?

For decades, UPS had its customers drop off their packages at a central location to have them processed within their network. Without question, it was an efficient system. At some point, however, the technology to have these packages picked-up at the customer's door emerged. UPS could have continued to use its centrally structured system. Costs would have been lower and the whole network would have remained simpler. Instead, they chose to adopt the new technology and radically change their business model. Herein lies the crux of "The New Age of Innovation" argument... Successful change is rarely reactive. Usually once an organization is forced to change in order to survive, the complacency disease has spread too far.

Examples of forced change: Think Dell's delayed move to retail distribution channels once Apple had already figured out the value of selling electronics in a see-and-touch environment. Perhaps take a look at the Big Three Automakers' glacial move to hybrid vehicles - once their customers were haemorrhaging cash at the pump to fill up that SUV.

A leader's role extends to spotting these emerging opportunities - provided by technology or new ways of thinking - to deliver a more unique customer experience.

N=1, R=G

"The New Age of Innovation" offers two easy concepts:

N=1

This formula stands for one consumer experience (N) at a time. "Value is based on unique, personalized experiences of consumers", according to C.K. Prahalad and M.S. Krishnan from their book "The New Age of Innovation".
Look to Google or Starbucks for stalwart examples of this concept.

R=G

This formula means that the resources to personalize customer experiences (R) can only be found with vendors around the globe (G). No firm can satisfy everybody's expectations. As a result, your organization needs to diversify the way it operates and, perhaps, outsource some of its services or delivery options. The key here is to ensure that your company has effective access to these resources. Don't try to be everything to everyone all on your own.

These are the two pillars of organizational success according to Prahalad and Krishnan.

As a word of caution, however, be sure to avoid confusion as too many managers don't understand the difference between operational efficiency and innovation.

It's great to streamline your operations and function like a well-oiled machine. More power to you. But, never confuse that for fundamental innovation. Operational success focuses on the current business model and the dominant manner in which you deliver your product to your customers. Fundamental innovation focuses on tearing down this whole process and reorganizing it along new paradigms. UPS is the perfect example.

Fundamental innovation gives your operations personnel a lot of work to chew on. New systems and structures will have to have their kinks worked out.

In Our Opinion
The Beacon Group's Advice for entering The New Age of Innovation

Our three tips to understanding what is and what isn't part of The New Age of Innovation.

It's not Web 2.0 - Much like CRM and other nifty tools, Web 2.0, including blogs, forums and other communities for your customers to interact on your website do not constitute a personalized customer experience. They allow you to connect with customers and they make you look hip, but if your buyer's needs are not met by your products then parasite innovation like this won't really do much.

Sometimes it's simple - Madras Cements, a small division of an Indian company, doesn't use sophisticated GPS technology to keep track of its vehicles. Each driver has a cheap cell phone and transmits their location by SMS text message. If that's what it takes to improve processes, then just do it already!

Forget mass outsourcing - We talked a bit about seeking outside resources to fill in for your diverse needs. That doesn't mean outsourcing your organization's soul abroad for cost purposes. It won't solve your innovation problem.