Today’s business leaders find themselves in constant pursuit of innovation, but the best leaders understand that not all innovation is equal—in value or impact.
As a consultant, I’ve spent many meetings listening to leaders enthusiastically share their innovation strategies. I hear them at every event and in every earnings report. And while an admirable cause, few “innovation programs” are delivering innovation that matters to their customers and shareholders.
Truly innovative companies have learned that it’s not the size of the budget, the team or the “change” that creates value. They understand that real competitive value is created when they focus their innovation on those things that only they can offer their customers.
At my recent keynote at Dreamforce, I discussed the three core tenants of delivering innovation that matters. I encourage you to share, refine and engage your teams in a similar discussion by asking two interrelated questions: “Are we building and creating something that someone else already does better?” and “Is that preventing us from spending every dime we have innovating the things that only we can do for our customers?”
If the answer is yes, read the following case study regarding Salesforce. Salesforce has become a platform many companies are dependent upon. It is also one where many believe—falsely—that they need to significantly customize to create competitive differentiation. Spoiler alert: often those customizations make it harder for your team to operate and harder for your customers to engage.
Salesforce: a case study
Salesforce is predominantly and historically known for its CRM capabilities. But over the last seven years, it has invested deeply in a growing set of solutions and products to create a powerful experience and innovation platform to help organizations modernize and meet the needs of an ever-changing world.
All too often, however, the companies I speak with about Salesforce automatically assume the platform can’t possibly manage the complexities of their business, which is not exactly a modern business mindset. As a result, they typically begin every discussion about Salesforce voicing a common set of frustrations: Salesforce licenses are expensive, adoption is a challenge and measuring ROI is elusive.
When I hear one of these concerns, I often respond with a simple question:
If your organization gave you a million dollars tomorrow and challenged you to create value with Salesforce, how would you spend it?
The answer tells me everything I need to know about their approach toward innovation.
Would they enable their teams to better serve their customers? Would they integrate new data source with Salesforce to better understand their customers and their customers’ needs? Would they spend it customizing a technology platform like Salesforce, a platform already widely considered to be guided by best practices?
Granted, this question is purposefully leading , but I use it to illustrate the cost—not the spend—of customizing a platform like Salesforce. The cost of not doing the things we should be doing because we don’t want to take on the real challenge of modernizing our business practices. Many of these executives are often afraid to change “how” their teams work. “That’s how we do it and have always done it,” they say. But I remind them none of their customers have ever called to say how their nine-step, custom, internal sales process was the driver to really put them over the top and win business.
The inherent cost of customization
When companies focus on customization of any cloud application, they are likely making two critical mistakes.
Adding cost to an already expensive application license—both now and over the long term
Spending resources on customizing an application widely considered a best practice and likely forgoing the bigger opportunity to invest in creating real differentiation that matters to customers
The truth is, real business transformation is hard and that’s why so many companies take the easy road of transforming the technology instead. There is an old saying in consulting that makes this point beautifully.
An old process deployed on new technology is, simply put, a really expensive old process.
Nobody starts a technology project looking to deliver something that is more expensive, but thinking you need to map a platform like Salesforce to your current antiquated processes is doing exactly that. Instead of modernizing behaviors and processes, for the better, many companies are changing the tech because it’s perceived as easier and less risky.
Three things to do with your budget instead of customization
It’s a mistake to focus innovation budgets on customization and non-differentiated “innovation.” Instead, try the following:
Buy the best practice
Salesforce as a company invests an enormous amount of time and resources in building out common workflows, intelligence and automation and provides these as the foundation for their cloud products and solutions. Salesforce invests in building best practices for you. Instead of looking at all the customizations you can do in the platform, look for opportunities to adopt their provided solutions and instead think about the ways to change your business to map to this gold standard.
Partner for the specialized
There is a huge dynamic ecosystem that has developed around Salesforce. This ecosystem continues to wrap the core Salesforce platform with adjacent capabilities, skills and technology that create incremental value for your company and your customers. Look to this ecosystem as the first stop for any gaps you find in the platform. Likely someone has already identified that gap and built a solution that will help you bridge gaps and ensure seamless upgrades.
In fact, our own research and publication, The State of Salesforce 22-23 report, has consistently found the most successful Salesforce customers are embracing the broader ecosystem and taking advantage of the investments partners like IBM, Copado and others are already making.
Invest in differentiation
To understand how to invest in differentiation, we need to first define it. I believe differentiation is where your business adds unique value to your customers, employees and partners. In other words, if you’re a CMO, do you invest in a customized email campaign flow built into Marketing Cloud? Or, is it more important to focus your team on creating targeted offers only you can provide and then building those out for your most valued customers? Your business has a unique vision, culture and set of programs. Focus your investment in these areas and value will follow.
I continually see the most successful companies who use Salesforce approach the platform with this new, modern mindset. As they shift their mindset to that of a modern company, they implement the platform as a best practice, retool their associates and processes and actively shift their time, skills and budgets to create and innovate those products, offerings and capabilities that are differentiated and unique in the eyes of your customers.
The end goal isn’t innovation, it’s value that matters
Let’s take a step back and look at that list of concerns again. Like the example above, if you shift your mindset to that of a modern business, assessing everything through a lens of value—value to your shareholders, your employees, your partners and, of course, your customers—you begin to see those challenges as symptoms indicating a different approach is required. Consider these shifts:
Licenses are no longer seen as expensive, they are just part of the cost of a pre-built best practice.
Adoption isn’t a challenge. It’s a barometer for value and every decision made and dollar spent should be assessed through the lens of the value created.
Finally, ROI is not elusive. Focus your innovation dollars on moments that matter. Today’s business climate is too competitive to spend scarce budget customizing technology to fit old process.
I hope this framework helps you rethink your approach and how your business can capture your next wave of value. I was invited to speak directly about this topic on stage at Dreamforce 2022, alongside industry experts from Forrester, AmerisourceBergen and Delta Airlines. I encourage you to check out the recording of our discussion here.