The vital role of innovation-led growth in customer success

This article was transcribed from Shalaka Verma's presentation at October 2021’s Customer Success Festival APAC.

I want to share with you what it means to prioritize innovation-led growth, why this is important to customer success, and how it can play a pivotal role in your organization’s growth story.

The pillars of customer success

Microsoft’s core mission is to empower every human being and organization on this planet to achieve more. I’ve been working at Microsoft for a couple of years now, and I think this is a very humbling mission. It helps us to align our goals with our users’ success and growth and write a win-win story for everyone.

Within Microsoft’s mission lies the customer success team’s core mission, which is to drive demand generation through the continuous creation of value for our customers. This is the heart of customer success and the reason for our team’s existence at Microsoft.

Coming to the key part of our mission – which is value creation for our customers – I view it as the sum of three major pillars:

Value enhancement
Value innovation
Managing the perception of value

The first pillar of value creation: Value enhancement

Sweating the assets is a pivotal part of enhancing the value we provide to our users. We need to make sure that we’re using the tech, product, or service to its full capacity and generating the maximum value possible from the investment that the customer has already made. It’s fundamental to show value in this way before moving to the next stage of a sales conversation with any user.

The second pillar of value creation: Value innovation

Your ability to reimagine solutions and form actionable insights plays a pivotal role in value innovation. This pillar is incredibly important for customers, and perhaps even more so for the company itself; it ensures that product teams are focused on creating roadmaps and product features that matter.

The customer success function plays a pivotal role in bringing needed innovations to the customer and deciding which upcoming product features to prioritize. Our ability to do this kind of backend work translates into greater cost optimization and value innovation for our customers.

The third pillar of value creation: Managing the perception of value

The last pillar is managing value perception. COVID has shown us how vital this can be; in the pre-COVID era, the ability to work remotely was not mission-critical for most of us. It was good to have, it kept employees happy, but it wasn’t part of many organizations’ core missions. The pandemic and ensuing restrictions changed remote work from good to have to be mission-critical.

Our ability to anticipate this kind of perception change and pivot quickly to expedite the best outcomes is crucial for customer success. We can't afford to be laggards when our customers’ value perceptions shift.

Why is customer success critical to leading innovation?

You may be wondering what customer success can bring to the table to help drive all the value that I just mentioned. Let me tell you.

You know the classic saying: “When all you have is a hammer, everything looks like a nail”?

Well, customer success teams are like a fully kitted-out toolbox. We bring a great mix of specialists and generalists to the fore, so we can tackle each problem with an appropriate tool.

Customer success teams also have closer relationships with their customers than almost anyone else in the company. The easy flow of communication that these relationships allow is vital for verifying assumptions before we drive any kind of innovation that will affect our users.

What does an innovator look like?

While we’re on the topic of how customer success teams can drive innovation-led growth, let me take a moment to explain what it means to be an innovator.

The Harvard Business Review published a great article a while back, which talked about how innovators function. It turns out there are a few traits that are common to innovative folks, and these are, in my opinion, good guiding lights on how customer success professionals should think about their skills.

The first trait the article lists is the ability to ask the right questions. This boils down to knowing the unarticulated needs of the customer and trying to solve the right problem. It reminds me of a particularly insightful quote from Einstein. He said, “If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and five minutes thinking about solutions.”

That's how important it is to ask the right questions.

Another key trait of innovators is association. This is part of applied learning. It’s the ability to look at past experiences, interactions, and failures, and draw from each of these buckets as you tackle new challenges.

Active observation is another major trait shared by innovators. This is where the innovator begins to question the status quo and object to certain assumptions. People tend to fall into the habit of trying to solve a problem in a certain way because that's how it’s always been done. An innovator will come along and find an opportunity to disrupt this status quo and reimagine the solution.

Next, there’s the experimental part. An innovator is a doer who knows that there are certain points at which they will fail, and is resilient enough to recover and learn from those failures. In their next experiment, they’ll apply what they have learned from their failure to increase their chances of success.

Last, but by no means least, an important trait listed by the Harvard Business Review is networking ability. Good innovators are great at collaborating with people who have different perspectives. They’re also open about their shortcomings and any gaps in their knowledge so that other people can fill them in. At the same time, innovators are very generous in sharing their knowledge and points of view, benefiting everyone else in the room.

How innovators approach problems

I find that there’s a typical way for innovators to view problems: they are always almost always pessimistic. For example, I'm very passionate about quantum technology. It’s probably nine years from becoming a reality, but I'm very pessimistic because once that happens, the digital future that we have built – everything we take for granted in terms of our security, banking, healthcare, and supply chains – is at risk.

Despite being pessimistic about problems, innovators are optimistic about solutions. Less innovative people are often limited by their understanding of the capabilities that exist and how they will progress, and they generally underestimate the progress that can be made in certain timeframes. Being cognizant of that tendency, being pessimistic about problems, and then being optimistic in envisioning the solution are three ways in which I think innovators operate.

Innovators are also characterized by the ability to solve problems efficiently. If you Google the World Economic Forum's survey on essential professional skills for 2025, you’ll find a list of about 30 key competencies – around 70% of them belong in the problem-solving category.

Another thing that sets innovators apart from the crowd is their ability to respond constructively to new challenges. People can very easily get stuck in certain routines and resist change when it comes along, but innovators are generally comfortable in the face of change. Being aware of natural resistance and transcending it to constructively respond to change is what the innovator does best.

Challenges and opportunities in implementing innovation

Creating a culture of innovation looks so easy if you think about it as just a set of traits that every individual should have. With the right coaching, everyone in your organization can be an innovator. So where’s the challenge?

The top challenges that I hear about, especially in smaller organizations, are a lack of time and a lack of capital. If you don’t have the resources to innovate, that can be a huge barrier.

The second major challenge people come across is human resistance to change. You can come up with the greatest innovation your org has ever known, but as we’ve seen, it can be tricky to break people out of set ways of thinking and tackling problems.

The third big challenge is balancing present and future needs.

Often, innovations work more like arrows than Formula 1 cars; they don’t just zoom ahead. Instead, you have to pull back a bit before you can go forward. Businesses often struggle with the pulling back part because it doesn’t look great in their quarterly figures.

The fourth challenge is getting your employees invested in innovating for your company.

Innovation takes a lot of human brain capital, so you need to ask yourself if your employees are passionate about improving your organization. Is there anything in it for them? Are they motivated enough? Will they be rewarded for bringing in innovations? If the answer to any of these questions is no, you have a little more work to do.

Company culture can also be a barrier to innovation. Many organizations view innovation as just a ‘research thing’. Innovation is considered the core job of a select few rather than an inherent responsibility of every single employee, and it’s often seen as an additional effort instead of an integral expectation of every role.

There’s also often a lack of appreciation for incremental innovation. We tend to think of innovation as involving high risk to capital and high rewards. These kinds of radical innovations do exist, but they’re the organization's biggest bets and they’re very hard to democratize, so they get siloed in certain research units within the organization.

Outside of radical innovation, there are incremental innovations too, to which a lot more people can contribute. These could come in the form of process innovation, collaboration innovation, or innovations in employee engagement. There’s a lot of scope for incremental innovation, which is the driver of most organizations’ progress. However, we tend to underestimate its power and not be very intentional about it.

Building a culture of innovation

The blockers that we’ve just seen can only be overcome through innovation-led company culture and leadership. These two elements are essential in activating innovation in any organization or business unit.

Talent

Innovation starts with bringing in the right talent. We need to look honestly at how diverse our human capital is and nurture that diversity. Be intentional about hiring and creating a team that drives innovation.

Openness and inclusion

Getting the team right is only half the battle. You need a culture of openness and inclusion, where people feel empowered to speak up and provide diverse points of view. Every member of your team also needs to hold themself accountable for making their seat at the table count.

Building a culture of trust

Innovation thrives in a culture of trust. When you have a lot of innovative folks on a team, disagreements will inevitably arise. With a culture of trust, everyone can feel safe in the knowledge that even if their points occasionally get shut down they are not necessarily wrong.

Every member of your team should also know that even if they are a minority voice on a certain matter, their point of view will still be taken into consideration before any final decisions are made.

Develop an appetite for risk

In a culture that’s focused on success, people tend to steer away from risks to avoid failure. But when we steer away from risks, we lose out on opportunities to innovate. That’s why we must create an appetite for risk in our teams.

I like my team to always have at least one innovation-led initiative on the go. Ideally, each individual should come up with one such initiative every quarter. That initiative may fail, but if it does, we can bring back learnings and distribute them for the whole team to learn from.

Dealing with ambiguity

Most innovation-led initiatives don’t have a clear goal, so being very tactical or scorecard-driven is not necessarily a recipe for success. When dealing with such uncertainty, you need inspirational leadership, people who will inspire you to pursue a goal despite the risks involved. They will energize you for the promise that your initiative carries, irrespective of any ambiguity.

Be a role model for innovation

If senior leaders don’t bring any new ideas to the table, if the team isn't seeing leaders fail, learn, and be resilient in the face of failure, then the whole notion of innovation will become meaningless chatter. We need leaders who can serve as role models of innovation. This is the final cornerstone for building a culture of innovation.

How to make the shift to innovation-led growth

I’m going to share with you a few tactical points that we use to nurture innovation at Microsoft. You can use these ideas too, to guide the move toward a culture of innovation in your company.

Approach innovation strategically

You need to be strategic in your approach to innovation, keeping an eye on both your long-term and short-term goals. Ask yourself, are we solving for now? Are we building for the future? Make sure there’s a healthy balance between the amount of time spent on each.

Motivating your team to drive innovation

A great way to get buy-in from your whole team and drive a culture of innovation is to gamify it. You can run internal hackathons, brainstorming sessions, and quizzes. If you make it into a game people will become naturally competitive and want to bring something new to the table. It also takes the stress off, and stress-free people innovate better.

While you’re gamifying, you can reduce stress even further by embracing ambiguity and reducing your reliance on success metrics.

If you’re able to reward people for the new ideas they bring to their teams, that will help foster an innovative culture, so bring innovation into the mainstream and create rewards for first-of-a-kind solutions. You don’t have to give monetary rewards – lunch with a leader and movie tickets can be great incentives too.

Upskilling your team

Making sure that your team has the skills to come up with effective solutions is essential in a culture of innovation. I tend to take a two-pronged approach to skill: one prong focuses on technical skills, while the other focuses on core skills.

I always try to approach technical upskilling very tactically. Because tech is a fast-changing space, there is no point in creating a two-year-long technical upskilling plan only to figure out six months down the line that the industry has changed direction or something better is on the horizon. Keeping an eye on industry trends and building shorter-term upskilling goals in line with that is key.

The core skills prong deals with the competencies that an individual can carry across roles throughout their career: things like critical thinking, problem-solving, and communication. It's about skilling for a lifetime. A lot of these skills are experiential, so leadership often needs to intervene to create the right learning opportunities.

I like to think of skill sets as a tree. You have the roots, which are the deep skills that will serve you across multiple domains. The skills you use every day in your work form the trunk. And on top, you have the spread of the tree canopy, which is like the breadth of possibilities that your skills can bring.

You need to strengthen the roots and keep exploring the canopy so that people can broaden their horizons for innovation. That's how to nurture talent in your team and retain it across diverse roles within the organization.

Carve out opportunities for creativity

Chatting with colleagues and bouncing ideas off each other is one of the greatest ways to come up with innovations. Unfortunately, these opportunities for creativity are vanishing as people talk less and less about ideas that are not immediately related to the task at hand.

Carving out dedicated time for brainstorming sessions is key to fostering a culture of innovation, especially in hybrid workspaces where such opportunities may not pop up naturally. Organizing virtual off-sites and spending five or ten minutes on a gamified brainstorming session in every team meeting are great ways to start.

The cross-functional importance of innovation

To round things off, I’d like to take a minute to talk about why innovation is so important for the cross-functional success of your organization.

One of the major benefits of leading an innovation-first team is that as people move across departments, they will carry their skills and ingenuity with them. That drives innovation throughout the entire fabric of the organization and is a huge win for everyone involved.

Innovation leads to cross-pollination. When you bring together learnings from other business units and create new associations, new sets of questions, and new experiments, you come up with new solutions. This accelerates incremental innovation and democratizes intrapreneurship for the betterment of your whole organization.