Adopting the consumer’s mindest

When I think of disrupting markets, the first trend that jumps out is the shift from valuing inputs to valuing outcomes. As the world grows dramatically more asymmetric, the winner is no longer the one who spends the most, but the one who performs the best. This has directly led to the widespread consumerization of enterprise markets, reshaping technical and corporate power structures.

The consumer market is a Wild West of volatile challenges and ruthlessly quick feedback loops.  Consumers don’t have ponderous requirements – they may not know exactly what they want, but they know it when they see it. Consumer products succeed and fail quickly, and demand rapid iteration, agility and a healthy dose of intuition. Neither do consumers have an unlimited supply of money to throw at their problems. This all adds up to a focus on innovation, value and outcomes that is happily spilling over to other markets.

In technology, the old hierarchy has been reversed: consumer grade is now the benchmark, and the savviest enterprise and government-focused companies are striving to catch up. Amazon, one of the ultimate consumer companies, is a standard-bearer for both logistics and cloud services, two classically enterprise industries. In end-user enterprise technology, exquisite architectures and restrictive interfaces are giving way to commoditized architectures and personalized, responsive app platforms. After years of underserving users, companies realize that empowering them is an investment in better outcomes.

It’s no longer important to have an expensive ERP system that took years to develop – the question is “what has it done for me lately?” Consumers rightly expect better outcomes for less money over time. Consider smartphones: today’s top-of-the-line model is ten times as powerful and half as expensive as it was five years ago. In an era of heightened austerity, globalization and competitiveness, that’s a lesson for everyone.

This focus naturally leads to a re-examination of traditional hierarchies and infrastructure. For example, Chief Innovation Officers and IT departments used to exist as their own authorities, ostensibly providing direction to business units, but often maintaining complex toys for themselves. Now, they are under mounting pressure to tangibly support those business units’ objectives.

Another example is the explosion of the rental economy. This reflects many aspects of the consumer market, including shrinking budgets, expanding choice and great improvements in on-demand efficiency. The larger point, however, is that people are re-examining whether owning (and thus maintaining) something is automatically a worthwhile investment – not just housing but everything, from transportation to fashion to software. Governments and struggling corporations, now forced to do more with less, can take a cue from consumers, who have always managed to do so.

In an era when everything is seemingly bigger, more interconnected and less personal, the consumer is actually more influential than ever before. As a result, large organizations that might have once considered consumer problems to be trivial are now scrambling to adopt the consumer’s mindset: a healthy disregard for arbitrary inputs combined with an unwavering focus on results.

In a series of blog posts, leading voices from the Forum’s Technology Pioneers and Global Growth Companies share their views on innovation and growth. The series is part of the Technology Pioneers and Global Growth Companies Communities’ Workshops in Palo Alto, California, 27-29 June 2013.

Author: Shyam Sankar is President of Palantir Technologies, USA

Image: A woman is seen using her mobile phone in New York City REUTERS/Lucas Jackson