This article builds on my previous article “Stuck in the ‘if it’s working and profitable, why fix it mode”. In that article, I ventured into the concept of customer centricity by bringing a balanced comparison between product centricity and customer centricity. The essence of the article was to encourage and motivate organizations to step out of their comfort zone, i.e. product centricity. Though product centricity is and has been profitable for many years it’s no longer adequate in a competitive environment. Organizations need to push boundaries and take a “go” at customer centricity, which is more profitable and sustainable. In the same article, I also acknowledged that customer centricity is not for every organization. However, even those organizations that cannot be customer centric can benefit tremendously by adopting some of the customer centricity principles. At the end of the day; all organizations are in business to maximize profits in a sustainable way.
This article is Part 1 of a series I have called “The Roadmap to Customer Centricity”. The purpose of the series is offer suggestions and tips on how organizations can get “unstuck” from the “if it’s working and profitable, why fix it mode” and be on their journey to customer centricity. Organizations that are already on their customer centricity journey can still benefit by taking some of these tips and advance their transformation.
Research shows that the implementation of customer centricity is one of its major hindrances due to the complexity. In some cases it means losing money in the short-term to make a greater profit in the long-term. The strategies that many organizations have in place are geared towards maximizing shareholder value in the short-term.
Therefore, it becomes clear that for an organization to transition from product centricity to customer centricity there has to be a reframing of the mind and a total paradigm shift. For instance, an organization would need to transition from a short-term focus to a long-term focus. It will also need to focus on creating value for all stakeholders, and not just shareholders. The question to ask is “where should this shift and the reframing of the mind start?” The answer to this question leads me to the introduction of my first tip to creating a customer centric organization: Leadership.
Leadership plays an integral role in the transformation to customer centricity. Through my research work concluded last year and published into a book (Ritz, 2015), it was established that customer centricity and the effective management of customers in general were not treated as a priority by company leadership. It was strongly argued that if organizations wanted to see true change in the management of customers, the top leadership needed to be the change agent. The next section of this article provides some tips on how leadership can be the catalyst of customer centricity transformation. Leadership holds the keys and sets the stage for a customer centric business model.
Leadership role in customer centricity transformation
Leadership could put more effort to set the right tone for customer centricity transformation. Below I provide a few tips that I believe are quite significant, but it must be noted the list is not exhaustive.
- Determining the organization’s strategic direction and articulating the desired outcome
It’s important that leadership defines the new strategic direction it will take to facilitate the transformation. This means choosing and aligning projects and initiatives that will advance the new strategic direction resulting in the desired outcome. To be successful, the desired outcome should be articulated upfront to facilitate measurement.
- Leading through change management
It is well known that transformation initiatives are quite complex and result in failure at times. Leadership must appreciate the importance of managing change effectively in an organization. Knowledge, control mechanisms and change management plans should be formulated and adhered to. To begin, the business case and logic behind the transformation to customer centricity should be explained to bring clarity in the organization. There should be complete understanding of the implications of the new way of doing business. Training and coaching will play a key role to ensure behavioral change takes place. The main idea is to ensure the entire organization is aligned and committed to the new vision and strategy. No one should be left behind – it is an organizational effort.
- Defining the higher purpose
According to Sandra Van der Merwe; author of Breaking Through: Implementing Disruptive Customer Centricity (2014), organizations should aspire to live beyond meeting their stated financial goals and objectives. Instead, they need to move past this standard norm. Customer centricity requires leadership to identify and clarify what this higher purpose is. It’s this overall big picture that would distinguish the organization from the rest through a robust vision and mission.
- Shared Values
Customer centricity requires leaders to be responsible and accountable for the organization’s economic well-being. In addition, they are also responsible for considering the impact the organization has on social and environmental contexts in the community in which they reside and conduct business. This implies embracing a shared value approach with all stakeholders inside and outside the organization; taking both the long-term and short-term views.
- Provide “real” support
The journey to customer centricity requires substantial investment. Leadership must not consider any resources spent on the transformation as an expense but as an investment. Many leaders miss the mark here because they prefer to focus on the short-term instead of the long-term. Leadership must support customer centricity transformation by committing the necessary resources, whether they be financial or non-financial. This kind of commitment will achieve true transformation as it propels the entire organization to be a part of the change and; therefore, bring the change
Of course the above tips offer just a glimpse of what leadership needs to do to transition to customer centricity. However, it is my hope that you find these tips useful and that you start asking the necessary questions that lead to true discussions of where you are taking your organization as a leader. In conclusion, I would like to emphasize that customer centricity or customer management is not the responsibility of the frontline staff, or a departmental issue. It is a leadership issue and it takes leadership to influence the entire organization by offering unwavering support for customer centricity. Leadership is the necessary catalyst.
Join me in Part 2 of the series, “The Roadmap to Customer Centricity” in my next article.