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Happy Thursday!

A few months ago I was having dinner with a client who had just returned from Silicon Valley, and was grappling with the question “who is my Uber?”.  To clarify, my client was trying to figure out what company was going to potentially disrupt their current business model. My immediate response, which I shared with my client was that that was not the right question.  To understand what I mean here are my thoughts on Uber.

Amidst protests in different global cities over regulations imposed on taxis, but not on Uber drivers, the organization contends that they are a technology company.  This is a unique position to take, but I completely understand why.  In its simplest form Uber has restated the customer problem.  Instead of “How can I get a cab?”, Uber is solving the question “How can I get from point A to point B”.  By restating the problem, they have done a few things.  First, they have created two customer groups; the person who needs the ride, and the person who can provide the ride.  Second, this now allows them to leverage their technology platform to bring these two customer groups together.  Many organizations have created technology that solves this problem, not only in the transportation industry.  It is so prevalent that it forms the basis of the app economy.  Individual business owners who are suppliers of services and use technology to connect directly with their customers.

Last year I was on a flight and I watched an interview with the head of operations for Uber. What I found interesting is that he referred to the technology as a logistics platform, not just ride share. This makes sense when viewed as a problem of moving from point A to point B.  For example, we are all familiar with UberEats app that delivers food.  To date, the platform has been used to bring together people who need a flu shot, and people who can administer the flu shot among other things.

This is by no means an in depth explanation of the Uber business model.  I have deviated from my first point to illustrate that the questions my client should be asking are “what problem is my company currently solving for its customer?”, and “is there another way to solve this by leveraging technology and innovation within my operational model?”

As a business it is important to pause and go back to these types of questions.  As organizations grow they oftentimes move from an external to an internal focus in attempts to become more operationally cost effective.  While this is important, it is absolutely critical that the customer value proposition, which directly links to how an organization enhances its customer’s situation, remains a central theme.  This may seem obvious, but there are instances, particularly in markets with few competitors, where companies take value away from the customer.  Case in point, I recently viewed my bank statement and saw charges for Interac transactions.  As a customer, I believe my bank should help me to build and to manage my wealth, not penalize me when I access my funds.  The latter being part of their value proposition (No one is going to put money in a bank that they can never access).

Ultimately, businesses succeed when they met or exceed customer expectations.  The customer forms these expectations based on what the company says it will deliver.  To that end, there should be frequent points in the business lifecycle where an organization critically assesses if it is doing what is says in the most innovative way possible.  Additionally, as part of that exercise is to assess if the customer problem exists as it did previously.

Your Challenge for This Week:

1. Think about the problem you are solving from your customer.  Please note that when I say problem I mean the customer delta that moves them from one condition to another that is more favourable.
2. When you come up with the problem see if you can drill down further (e.g. and Insurance companies don’t only provide mutual funds for investment, or claim payouts, they are ultimately help clients build wealth).
3. Assess how you deliver to your customer.  Is there a more innovative way this can be done?  If yes, determine if this it can be implemented.
4. Based on your operations, are you adding costs to your customers?  You can also do this exercise for your internal customers as well. For example, I worked with a large national organization to address the reliance on external consultants. It was as simple as having to speak to the individual groups that drove internal customers to seek out external consultants.  If the internal groups integrated on the back end, and provided one point of contact for the internal business clients that would have been an improvement.

Have a wonderful week!

Hazel.