New shock is normal, and they are not pleasant. For some people this strategy has a tremendous impact, this strategy relies not directly into the hearts of view of who it will get very great surprise, and not easy to get lost.

We have enough to deal with in terms of financial crises, currency fluctuations, technology interfere with, the restructuring of work, shortage of essential drugs, a populist revolt, the pandemic might be, and terrorist threats without adding the devastating earthquake in 2010 and exceptional weather events. Et tu, Mother Nature?

Coping with the unexpected is essential leadership. In any business, the ability to recover quickly separate the winners from the losers, whether they react to fumbles in a game of sports or curve ball thrown by external events. I summarize the challenges of managing volatility in a simple equation: MTBs = or MTBs are the mean time between surprises, which shrinks. MTMD is the mean time to make decisions, which should be fast.

Here are four strategies to expedite response and minimize the impact of interference.

• Reserves. Leaders must know the benefits of alternatives. Even if Plan B is not always able to be trained and ready to go, mental flexibility can prevent rigid specifications and expectations of the bottlenecks for quick redirection. Great innovators are often pursuing a parallel path of development. Great stress the efficiency of the company but to build in slack and cross-train their people, such as Cemex not. Although the trend of the recession-push during this recession is to walk a tight, some overlap and redundancy makes it easier to react quickly.

• Communication. Information must flow quickly and spread virally, whether by email or phone chain, twitter alerts, or buddy system. Social networks in which people feel responsible to adjust the action quickly. Collection and dissemination of data in a short cycle also improves the ability to change quickly.

• Collaboration. human relationships, commitment and resilience helped the company quickly recovered. When people care about each other, have common goals, and feel empowered to act, they can competently and maintain high performance volatility. In a major power outage that shut down airports in the Northeast United States in 2003 (up to volcanic ash, the second worst disasters to hit airlines since the 2001 terrorist attacks), Continental Airlines employees dedicated to their destination on time of arrival and empowering them to conduct almost anything except the safety risk to achieve it. They develop many creative solutions to keep their aircraft flying while their competitors are hundreds of flights were canceled.

• The values and principles. clear standards and values can serve as a guidance system to direct decisions without bureaucratic slowness. People know the right thing to do without being told and without waiting for permission. Of P & G is the first organization to evacuate employees (and their families) from Lebanon after the military action, the general manager of a particular area that the costs will be supported, because P & G values.

Similar strategies to help deal with my colleagues in the fall volcanic ash. When I arrived at the honcho for a global health summit about my canceled flight, a team in Europe has been in high security mode set up Plan B and C. He said, "The crisis like this shows how we can be innovative and creative. This also allows us to show our character in the service of our partners and constituents Maybe we can adjust the schedule and opened to a larger audience .." They did.

Companies have a lot of changed my mind, this innovation appeared better than big ideas. many companies are chasing the big innovation is playing an important role in the company's future, but companies often inhibit themselves by focusing on finding the next big thing, when in fact, the next small thing might be more profitable.
Is directly related to the effectiveness and speed to compete, calculate how much costs have been wasted when he took out something new, compared with existing add and make it more than ever.
In fact the company will dibenturkan the value of employee creativity.
The more that employees are encouraged to think creatively and apply creativity, which is more flexible and agile practices in a company to be responsive. When you take the pressure from the people to come with a "great" ideas, encourage creativity you can bring incremental innovation. As a result, new services or products offered may appear, but it's more likely that you will optimize your operating costs, quality, efficiency, and speed.

In essence, innovation is applied creativity. And, it was my belief because I've seen over the years is that most employees can be encouraged to be creative, if you want them to be.

How you can push a little innovation?

Think small. The beauty of small innovations is that they focus on immediate concerns, rather than on the game to find the product changes. Encourage people to find solutions to problems, or better ways of doing things.

Try asking the question: How do I streamline billing accounting? How to solve customer service problems on the phone without supervisory intervention? How to find the product engineers more time to spend time with customers? Using a question like that would make people generate ideas. Not every idea will be brilliant, but that's the point. You want to collect ideas, improve them and select the best for implementation.

Implement locally. Since most small innovations is limited to the department or function, putting them into action as soon as possible. If the idea does not work as expected, do not leave immediately - See if you can tweak it. The implementation itself can be creative and sometimes takes several tries to create innovative ideas to work as expected, or unexpected.

Promote widely. You need to recognize the people who think and supporting innovation. Many organizations provide incentives for such efforts were, from gift certificates along the way to substantive innovation bonus to positively affect the entire company. What is important is to identify the right people, and to do so in a timely manner.

Encouraging small innovation management is only part of the equation. Implementation of innovation is very important. No amount of creativity can be applied to slip deadlines, blown budgets, customers are not satisfied, or not balanced profit and loss. You need to focus on the details to get things done.

You may also find other benefits from your small innovations: press into the collective brain of your employees. They are collaborators, and by treating them like that you make people know that you welcome their ideas and will reward them.

The business challenges of implementing a tool kit can be daunting
— Stefan Thomke and Eric von Hippel

It costs a lot to listen closely to what your customers want. And much of the time, they can't tell you their exact needs. So turn the tables and let customers innovate for you, say Stefan Thomke and Eric von Hippel in this Harvard Business Review excerpt. The idea: Take advantage of fast moving customers by creating toolkits that allow them to develop and test their ideas for improvements.
by Stefan Thomke and Eric Von Hippel

"Listen carefully to what your customers want and then respond with new products that meet or exceed their needs." That mantra has dominated many a business, and it has undoubtedly led to great products and has even shaped entire industries. But slavishly obeying that conventional wisdom can also threaten a company's ability to compete.

The difficulty is that fully understanding customers' needs is often a costly and inexact process. Even when customers know precisely what they want, they often cannot transfer that information to manufacturers clearly or completely. Today, as the pace of change in many markets accelerates and as some industries move toward serving "markets of one," the cost of understanding and responding to customers' needs can easily spiral out of control.

In the course of studying product innovation across many industries, we have discovered that a number of companies have adopted an intriguing approach, which at first seems counterintuitive. Essentially, these companies have abandoned their efforts to understand exactly what products their customers want and have instead equipped them with tools to design and develop their own products, ranging from minor modifications to major new innovations. The user-friendly tools, often integrated into a package we call a "tool kit for customer innovation," deploy new technologies like computer simulation and rapid prototyping to make product development faster and less expensive.

A variety of industries use this approach. Bush Boake Allen (BBA), a global supplier of specialty flavors to companies like Nestlé, has built a tool kit that enables its customers to develop their own flavors, which BBA then manufactures. In the materials field, GE provides customers with Web-based tools for designing better plastic products. In software, a number of companies let people add custom-designed modules to their standard products and then commercialize the best of those components. Open-source software allows users to design, build, distribute, and support their own programs—no manufacturer required. Indeed, the trend toward customers as innovators has the power to completely transform industries. In the semiconductor business, it has led to a custom-chip market that has grown to more than $15 billion.

Tapping into customer innovation can certainly generate tremendous value, but capturing that value is hardly a simple or straightforward process. Not only must companies develop the right tool kit, they must also revamp their business models as well as their management mind-sets. When companies relinquish a fundamental task—such as designing a new product—to customers, the two parties must redefine their relationship, and this change can be risky. With custom computer chips, for instance, companies traditionally captured value by both designing and manufacturing innovative products. Now, with customers taking over more of the design task, companies must focus more intently on providing the best custom manufacturing. In other words, the location where value is both created and captured changes, and companies must reconfigure their business models accordingly. In this article, we offer some basic principles and lessons for industries undergoing such a transformation.

A costly problem, a radical solution
In a nutshell, product development is often difficult because the "need" information (what the customer wants) resides with the customer, and the "solution" information (how to satisfy those needs) lies with the manufacturer. Traditionally, the onus has been on manufacturers to collect the need information through various means, including market research and information gathered from the field. The process can be costly and time-consuming because customer needs are often complex, subtle, and fast changing. Frequently, customers don't fully understand their needs until they try out prototypes to explore exactly what does, and doesn't, work (referred to as "learning by doing").

Not surprisingly, traditional product development is a drawn-out process of trial and error, often ping-ponging between manufacturer and customer. First, the manufacturer develops a prototype based on information from customers that is incomplete and only partially correct. The customer then tries out the product, finds flaws, and requests corrections. The cycle repeats until a satisfactory solution is reached, often requiring many costly and time-consuming iterations.

To appreciate the extent of the difficulty, consider product development at BBA (now International Flavors and Fragrances). In this industry, specialty flavors are created to bolster and enhance the taste of nearly all processed foods because manufacturing techniques weaken the real flavors. The development of those added flavors requires a high degree of customization and expertise, and the practice remains more an art than a science.

A traditional product development project at BBA might progress in the following way: A customer requests a meaty flavor for a soy product, and the sample must be delivered within a week. BBA marketing professionals and flavorists jump into action, and the sample is shipped in six days. A frustrating three weeks ensue until the client responds with, "It's good, but we need it less smoky and more gutsy." The client knows precisely what that means, but BBA flavorists find the request difficult to interpret. The result is more frenzied activity as BBA struggles to adjust the flavor in a couple days. Depending on the product, BBA and the client could go back and forth for several more iterations. This represents a huge problem because clients often expect BBA to get the flavor right the first time, or within two or three iterations.

To make matters worse, BBA bears most of the development risk. The company collects revenue only after both the client and consumers are fully satisfied. R&D expenses could be just $1,000 for tweaking an existing flavor, but they could go as high as $300,000 for an entirely new family of flavors that require not only chemists and flavorists but also sales, marketing, regulatory, and quality control expertise. On average, the client eventually accepts only 15% of all new flavors for full market evaluation, and only 5% to 10% make their way to the marketplace. Meanwhile, margins in the flavor industry have been falling because of increased competition and cost pressures from customers.

In response, BBA's CEO Julian Boyden and VP of Technology John Wright investigated the option of shifting more innovation activities to customers. The company developed an Internet-based tool containing a large database of flavor profiles. A customer can select and manipulate that information on a computer screen and send his new design directly to an automated machine (perhaps located at the customer site) that will manufacture a sample within minutes. After tasting the sample, the customer can make any adjustments that are needed. If the flavor is too salty, for instance, he can easily tweak that parameter on the profile and have the machine immediately produce another sample.

It is important to note that outsourcing product development to customers does not eliminate learning by doing—nor should it. What it does is make traditional product development better and faster—for two reasons. First, a company can bypass the expensive and error-prone effort to understand customer needs in detail. Second, the trial-and-error cycles that inevitably occur during product development can progress much more quickly because the iterations will be performed solely by the customer.

But developing the right tool kit for customers is hardly a simple matter. Specifically, tool kits must provide four important capabilities. First and most important, they must enable people to complete a series of design cycles followed by learning by doing. Computer simulation, for example, allows customers to quickly try out ideas and design alternatives without having to manufacture the actual products. When the simulation technology lacks the desired accuracy, it can be supplemented with rapid prototyping methods. Second, tool kits must be user-friendly. They should not require customers to learn an entirely new design language. (Flavorists, for example, think in terms of formulations and chemical compounds, whereas customers think of tastes such as smoky, sweet, fresh, and so on.) Third, they must contain libraries of useful components and modules that have been pretested and debugged. These save customers from having to reinvent the wheel. Instead, people can focus their efforts on the truly novel elements of their design. Fourth, tool kits must contain information about the capabilities and limitations of the production process that will be used to manufacture the product. This will ensure that a customer's design will in fact be producible.

Customers as Innovators

Five Steps for Turning Customers into Innovators:

Develop a user-friendly tool kit for customers. The tool kit must enable customers to run repeated trial-and-error experiments and tests rapidly and efficiently. The technology should let customers work in a familiar design language, making it cheaper for customers to adopt your tool kit. The tool kit should include a library of standard design modules so customers can create complex custom designs rapidly. The technology should be adapted to your production processes so that customer designs can be sent directly to your manufacturing operations without extensive tailoring.

Increase the flexibility of your production processes. Your manufacturing operations should be retooled for fast, low-cost production of specialized designs developed by customers.

Carefully select the first customers to use the tool kit. The best prospects are customers that have a strong need for developing custom products quickly and frequently, have skilled engineers on staff, and have little experience with traditional customization services. These customers will likely stick with you when you are working out the system's bugs.

Evolve your tool kit continually and rapidly to satisfy your leading-edge customers. Customers at the forefront of technology will always push for improvements in your tool kit. Investments in such advancements will likely pay off, because many of your customers will need tomorrow what leading-edge customers desire today.

Adapt your business practices accordingly. Outsourcing product development to customers will require you to revamp your business models to profit from the shift. The change might, for instance, make it economically feasible for you to work with smaller, low-volume customers. Tool kits will fundamentally change your relationship with customers. Intense person-to-person contact during product development will, for example, be replaced by computer-to-computer interactions. Prepare for these changes by implementing incentives to reduce resistance from your employees.

Attention analysts! In Customer Equity: Building and Managing Relationships as Valuable Assets lies a new standard for measuring company success. Standard marketing dogma now centers on brand building or mass marketing. The customer equity approach tosses out this old thinking and looks at how existing data and technologies give us a new way of looking at the customer. The authors have created a framework for managing and measuring customers as a company's financial assets.

by Robert C. Blattberg, Gary Getz, and Jacquelyn S. Thomas

How can an asset as wispy as customer value be measured? And should it be measured? In this excerpt, the authors explain not only how it can be done, but why it must be done.

There are two fundamental reasons for companies to move to a customer equity approach. First, several critical new technologies are converging to make customer asset-based management feasible. Second, these same technological capabilities, along with other changes in how markets work in today's turbulent business environment, are making it a requirement to manage marketing to maximize the value of a company's customer assets.

Because you can
Customer equity management is now possible because of intersecting advances in four areas: affordable information technology, low-cost communications, sophisticated statistical modeling, and flexible fulfillment.

Customer equity depends on technology because it requires the ability to build and use databases of customer purchases. Computing costs are continuing to decline to the point at which small businesses can have computing power sufficient to manage large databases at a fraction of what it would have cost in the 1980s. The ability to work with large, sophisticated databases is improving; software to manage customer relationships now exists, and its capabilities are expanding.

The rapid growth of the Internet as a medium for targeted communication allows firms to reach and communicate with customers at less than one-hundredth of the cost of more traditional techniques. Using direct marketing through the mail costs anywhere from $400 to $1,000 per 1,000 mailings. Communication through the Internet to customers equipped with e-mail is virtually free, and the speed of transmission allows customers to retrieve communications almost instantaneously. Firms have access to their preferred customers at costs that early direct marketers could only dream about, combined with unprecedented ability to tailor messages to individual recipients and provide electronic coupons to selected prospects. Furthermore, software is being created using artificial intelligence to develop automated two-way communications with customers based on their specific responses to queries.

In addition, technologies ranging from checkout scanning to Internet cookies are making it increasingly possible to track customers' buying behaviors. Now companies can predict future consumer behavior using the best possible indicator: current behavior. Instead of relying on focus groups and surveys to ask customers what they want (or think they want), firms can examine actual purchase histories. As more and more online customers grant companies permission to use their personal data in return for anticipating needs, this trend toward greater availability of behavioral data should only accelerate.

Companies must use advanced analytical tools to turn these data into insights. Techniques such as collaborative filtering track customer buying patterns and make recommendations about which types of books, movies, or other products the customer might want to purchase. Modeling methods for determining customers' sensitivity to price and responsiveness to offers, central to improving the efficiency of marketing offers, have become both more sophisticated and more available.

Because you must
Table 1-1 highlights several disruptive changes to the world of marketing that make customer equity management a necessity, along with the underlying trends that drive these disruptions.

Information-based targeted marketing is becoming more efficient and effective than blanketed mass marketing.

# As one result, mass marketing strategies that achieve targeted profits by counting on more-profitable customers to subsidize less profitable ones will fail as the more attractive customers are stolen away by competitors' targeted acquisition efforts.

# As customers gain near-perfect information on their alternatives, switching barriers are dropping dramatically.

# Companies that use the deluge of available data on customer purchase behavior are acquiring new customers, retaining existing customers, and cross-selling more effectively than those who do not, and can link their insights with cost data to do so efficiently as well.

# Companies can no longer depend on orderly vertical channel systems to control customers' buying behaviors.

In a world characterized by these five forces, companies that understand the asset value of each customer, and that tailor their marketing efforts (and their costs) to acquire and sustain the highest-value assets, will trump less-focused mass marketers.

In this Harvard Business Review excerpt, Werner Reinartz and V. Kumar report that there is little correlation between customer longevity and company profits. Long-time customers have expectations for (and often receive) more attentive service, greater discounts, and tend to be resistant to cost-cutting changes, such as moving from phone to Web communications. The authors suggest measurement tools to evaluate customer behaviors and strategic management tips to make customers more profitable.

As valuable as segmentation is, even more valuable is correct identification at the individual level. Knowing that 60 percent of your loyal customers are profitable is useless if you don't know which ones to court with what level of service. At the corporate service provider, for example, we were able to predict how profitable and how loyal any particular customer would be with 30 percent more accuracy than we obtained using traditional methods like RFM [recency, frequency, and monetary value]. That kind of misinformation carries a high price. Our mail-order company, for instance, was sending mailings to people it should have ignored, ignoring people it should have been cultivating, and sending the wrong material to people.

From measurement to management
So what is the next step? After analyzing your customers' profitability and the projected duration of their relationships, you can place each of them into one of four categories, as shown in the matrix "Choosing a Loyalty Strategy" [see sidebar]. Now, what kind of relationship management strategies should you apply to the different segments? For the customers who have no loyalty and bring in no profits—we call them "strangers"—the answer is simple: Identify early and don't invest anything. But for customers in the other three quadrants, the choice of strategy will make a material difference to the segment's profitability.

We've found that the challenge in managing customers who are profitable but disloyal—the "butterflies"—is to milk them for as much as you can for the short time they are buying from you. A softly-softly approach is more appropriate for profitable customers who are likely to be loyal—your "true friends." As for highly loyal but not very profitable customers—the "barnacles"—the emphasis has to be on finding out whether they have the potential to spend more than they currently do.

Turning true friends into true believers. Profitable, loyal customers are usually satisfied with existing arrangements. At the mail-order company, for instance, we found that they tended to return goods at a relatively high rate, reflecting their comfort in engaging with the company's processes. They are also steady purchasers, buying regularly, but not intensively, over time.

In managing these true friends, the greatest trap is overkill. At the catalog company, for instance, we found that intensifying the level of contact through, for example, increased mailings, was more likely to put off loyal and profitable customers than to increase sales. People flooded with mail may throw everything out without looking at it. Sent less mail, however, they are more likely to look at what they get. Indeed, the mail-order company found that its profitable, loyal customers were not among those who received the most mailings.

What's more, companies need to concentrate on finding ways to bring to the fore their true friends' feelings of loyalty, because "true believers" are the most valuable customers of all. At the grocery retailer, for example, we found that customers who scored high on both actual and attitudinal measures of loyalty generated 120 percent more profit than those whose loyalty was observed through transactions alone. It wasn't just a business-to-consumer phenomenon, either: Those of the corporate service provider's customers who exhibited loyalty in both thought and deed were 50 percent more profitable than those who expressed their loyalty through action alone.

Companies can do several things to make loyal customers feel rewarded for their loyalty. The French grocery chain lets loyal customers opt in to e-mailings of special recipes, price promotions, and the like. It also grants them preferred access to company-sponsored seasonal events. For instance, they get exclusive early access to semiannual, weeklong wine festivals in which they get to buy many of the better wines, which are available only in limited quantities. Such measures are already having an appreciable impact on the purchasing volumes and profitability of loyal customers.

Enjoying butterflies. The next most valuable group comprises customers who are profitable but transient, and some industries are full of these kinds of purchasers. For instance, many of the direct brokerage company's most valuable customers were what it called "movers," investors who trade shares often and in large amounts. Aware of their value as customers, these people enjoy hunting out the best deals, and they avoid building a stable relationship with any single provider.

The classic mistake made in managing these accounts is continuing to invest in them after their activity drops off. Any such efforts are almost invariably wasted; our research shows that attempts to convert butterflies into loyal customers are seldom successful—the conversion rate was 10 percent or lower for each of the four companies we studied. Instead of treating butterflies as potential true believers, therefore, managers should look for ways to enjoy them while they can and find the right moment to cease investing in them. In practice, this usually means a short-term hard sell through promotions and mailing blitzes that include special offers on other products, an approach that might well irritate loyal customers. The corporate service provider, for instance, telephones those it has identified as butterflies four or five times shortly after their most recent purchase and follows up with just one direct mailing six to twelve months later, depending on the product category. If these communications bear no fruit, the company drops contact altogether.

Smoothing barnacles. These customers are the most problematic. They do not generate satisfactory returns on investments made in account maintenance and marketing because the size and volume of their transactions are too low. Like barnacles on the hull of a cargo ship, they only create additional drag. Properly managed, though, they can sometimes become profitable.

The first step is to determine whether the problem is a small wallet (the customers aren't valuable to begin with and are not worth chasing) or a small share of the wallet (they could spend more and should be chased). Thanks to modern information technology, which makes it possible to record the spending patterns of individuals, this is much less of a challenge than it once was. Our French grocery chain, in fact, does it rather well. By looking closely at POS data on the type and amount of products that individuals purchase (say, baby or pet food), the company derives amazingly reliable estimates of the size and share of the individual customers' wallets it has already captured in each product category. Then, a company can easily distinguish which loyal customers are potentially profitable and offer them products associated with those already purchased, as well as certain other items in seemingly unrelated categories. For instance, our corporate service provider might sell add-on software or memory upgrades for previously sold systems. Our mail-order company might send a do-it-yourself catalog to a customer who had previously bought a kitchen appliance.


When profitability and loyalty are considered at the same time, it becomes clear that different customers need to be treated in different ways.

High profitability

Butterflies

good fit between company's offerings and customers' needs
High profit potential
Actions
aim to achieve transactional satisfaction, not attitudinal loyalty
Milk the accounts only as long as they are active
Key challenge is to cease investing soon enough


True friends
good fit between company's offerings and customers' needs
High profit potential
Actions
communicate consistently but not too often
Build both attitudinal and behavioral loyalty
Delight these customers to nurture, defend, and retain them


Low profitability

Strangers
little fit between company's offerings and customers' needs
lowest profit potential
Actions
make no investment in these relationships
Make profit on every transaction

Short-term customers

Barnacles
little fit between company's offerings and customers' needs
lowest profit potential
Actions
measure both the size and share of wallet
If share of wallet is low, focus on up- and cross-selling
If size of wallet is small, impose strict cost controls
Long-term customers


There is no one right way to make loyalty profitable. Different approaches will be more suitable to different businesses, depending on the profiles of their customers and the complexity of their distribution channels. But whatever the context, we believe that no company should ever take for granted the idea that managing customers for loyalty is the same as managing them for profits. The only way to strengthen the link between profits and loyalty is to manage both at the same time. Fortunately, technology is making that task easier every day, allowing companies to record and analyze the often complex, and sometimes even perverse, behavior of their customers.

You don't have to make cutting-edge products to deliver cutting-edge customer service. Consider the case of Hartness International. Its founder is 79 years old. Its headquarters, in bucolic Greenville, South Carolina, is worlds away from the bustle of Silicon Valley or Austin, Texas. And its products aren't very glamorous: Hartness makes case packers - the high-speed machines that load bottles of soda, syrup, or ketchup into cartons before they get shipped to stores.

But what Hartness lacks in product appeal it makes up for with an appealing commitment to great service. This company is obsessed with customers - in particular, with solving their problems as soon as they happen. That's because for Hartness's customers, time really is money. Problems with case-packing machines can bring an entire bottling line to a halt, costing a customer as much as $150 per minute. Even if a technician arrives 24 hours later, that's still a loss of 1,440 minutes, or $216,000. (Once a technician does arrive, Hartness reports, repairs can take as little as 10 minutes.)

Back in 1974, when Tom Hartness started the company with his sons, Pat and Bob, he vowed to hire only service technicians who were also licensed pilots. That way, whenever Hartness had to fix a machine, technicians wouldn't be held hostage to airline schedules - they could fly one of the company's four planes. Today Hartness has 5,000 customers in 90 countries.

"We've always been renegades in customer service," says general manager and CEO Bern McPheely, 46, a 20-year company veteran. "We're always asking, How can we get to customers the moment they need us? Airplanes simply aren't fast enough anymore."

What is fast enough? Videoconferencing. In 1995, McPheely began discussions with PictureTel Corp., the videoconferencing pioneer, about new ways to diagnose problems remotely. His question was basic: "What if we could see the machines?" His colleagues said the technology didn't exist. He said, "Let's create it."

Three years later, the Video Response System (VRS), developed through the company's Hartness Technologies subsidiary, is up and running at more than 50 installations in six countries, serving such customers as Coca-Cola, Anheuser-Busch, and Unilever. The VRS consists of a wireless camera, hardware that includes PictureTel components, a keyboard-sized remote control, a wireless antenna, and a high-resolution monitor with a second camera on top.

Forget same-day service. How about minutes-later service? With VRS, Hartness engineers can conduct live, interactive repairs immediately after a malfunction occurs. And the company estimates that it could handle up to 80% of its service calls with a short video exchange. Indeed, VRS has proven so compelling that Hartness Technologies has sold the system to companies that don't even buy Hartness case-packing equipment - including Chrysler, Hewlett-Packard, and Tyson Foods.

"People are telling us we've created the next fax machine," marvels Bern McPheely. "We developed VRS for our specific needs but wound up creating a new technology for the whole world."

But VRS doesn't just help Hartness watch its machines from afar. It also helps the company focus on the future of customer service. Hartness has learned that there's something more valuable than solving customers' problems - namely, helping customers solve their own problems. Every VRS interaction is like an impromptu coaching session. Hartness technicians don't just visit a plant and fix a glitch; they work with the customer's technicians to fix the glitch - which means that the customer learns more about the equipment. The system can also store a video record of the session, so that if the problem recurs, the customer can solve it without Hartness's help. "That's the ultimate form of customer service," McPheely says.

Hartness has learned a second important lesson: There's a fine line between service and sales. The company created VRS to help fix its machines; recently, though, VRS has become a critical tool for selling them. Last year, Hartness demonstrated one of its latest products, the OctoPack, for employees at a Heineken brewery in Holland and at a large Canadian brewery. The brewers wound up buying four machines each - creating $2.4 million in new business.

A third important lesson is closely related to the second: No matter how good you are at working with customers, you can never predict exactly how they're going to use what you sell them. A Unilever lab in Owings Mills, Maryland uses VRS to solicit feedback on bottle designs from factories around the world. Cryovac, a global manufacturer of packing materials and equipment, uses the system at trade shows to demonstrate its machines.

Ultimately, Bern McPheely argues, VRS isn't a tool to service customers - it's a way to see the future. "As the world becomes more interrelated, you can't afford to live within your own walls," he says. "Every company in every industry faces the same problem at some point. Someone says, 'If only we could see it, we could fix it.' VRS puts you in the position to see what you need to see - immediately.

Chuck Salter csalter@mail.bcpl.lib.md.us is a writer based in Baltimore. For more information about Hartness, call 847-297-1200 or visit the Web (www.hartness.com).