Rotman Management — Spring 2017

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Funding the Journey. Initiatives in this category fund the
transformation and the external support it requires by closing
performance gaps. Examples include consolidating market
research suppliers; reviewing supplier pricing and terms; cut-
ting or reallocating tactical, backward-looking, descriptive,
low-ROI project spending; and attacking duplicative expenses
and teams.

Winning in the Medium Term. These initiatives, which require
more lead time, are the building blocks of the functional strat-
egy. Examples include building knowledge management sys-
tems; measuring the return on CI spending; developing learn-
ing agendas for executive teams and boards; experimenting
with data sources and methodologies; and enabling CI to use
strategic planning and budget tools.

Organizing for Growth. Initiatives of this type enable the
function to execute and sustain the transformation. Examples
include expanding roles for the most talented employees; re-
working job specifications, forming executive recruiting part-
nerships, and targeting new talent pools; developing career
paths; developing rotation programs for future leaders; estab-
lishing functional training and development programs and ty-
ing functional compensation to performance.
Developing a truly external orientation is a struggle for many
companies. Taking a hard look at the maturity of the CI func-
tion may be a good place to start. But a CI function that’s treated
simply as a provider of traditional market research can’t become

a strategic player on its own. The effort to tap this overlooked

source of competitive advantage must begin at the highest levels

of the organization, with executives setting the tone for the pro-

cess. By measuring, interpreting, and applying knowledge from

customer experiences — and using this information to fuel deci-

sions — companies can elevate both their CI function and their

position in the marketplace.

Fighting Organizational Introversion

How do companies end up so isolated, even from their own cus-

tomers? We have found that large, established companies tend

to rely too much on existing business models and neglect to ex-

plore new possibilities. As a result, they generate future growth

options at a much lower rate than smaller, younger companies.

We found that large, established companies are about 20 per-

centage points less exploratory than their younger peers, and

as a consequence they underperform those peers by nearly six

points in sales growth and more than two points in long-term to-

tal shareholder returns.

Fortunately, this trend is not inescapable. A minority of

large, established firms manages to balance exploration and ex-

ploitation. So, how can you avoid or reverse the tendency towards

introversion? We offer the following four tips for renewing your

external orientation.

TIP 1: CAPTURE EXTERNAL CHANGE SIGNALS. Getting the right in-

formation in the door is the crucial first step: Invest in captur-

ing granular, real-time, and implicit data on customer trends

The Stages of CI Maturity

SOURCES: “SOURCES: “The Consumer’s Voice - Can Your Company Hear It?” BCG report, November 2009; BCG, Yale CCI, and Camblar, 2015 Customer InsightsThe Consumer’s Voice - Can Your Company Hear It?” BCG report, November 2009; BCG, Yale CCI, and Camblar, 2015 Customer Insights Benchmarking Study Benchmarking Study

Traditional market

research provider

2009: 90% of companies 2009: 10% of companies

2016: 80% of companies 2016: 20% of companies

Business

contributor

Strategic insight

partner

Source of

competitive

advantage

1 2

3 4

• Tactical focus


• Service provider


• Marketing scope


• Insufficient or
  inconsistent budget
  
  
  • More strategic focus
  
  
  • Business collaboration
  
  
  • Commercial scope
  
  
  • Budget input but
    no control
    
    
    • Mostly strategic focus,
      prescriptive
    
    
    • Trusted advisor
    
    
    • Cross-functional scope
    
    
    • Some budget control
      
      
      • Focused on foresight
        predictive
      
      
      • Partner with C-suite
      
      
      • Enterprise perspective
      
      
      • Significant budget
        and control
      
      
      
      
    
    
    
    
  
  
  
  

FIGURE TWO