In last month’s post I identified The One Rule for strategy in a customer-driven organisation.
Everything relates to delighting customers
The use of the word delighting is important: it means achieving the customer’s desired outcomes.
The word everything is important as well as it’s likely to be the source of a number of questions or objections that might be arising. Let me deal with the ones that I can think of…
Objection 1: strategy is about more than customers
I’ve used the The One Law of Simplicity to illustrate the point that a well-designed customer strategy needs to focus on the important or meaningful stuff and take the obvious stuff – turning a profit, managing costs etc – as a given. I’m happy to admit that there are some organisations for whom the most important stuff is the obvious stuff and this may not have anything to do with customers. That’s OK, it just means that your organisation isn’t currently customer-driven although I would contend that it’s not a sustainable strategy in the long term.
Organisations I have worked with in the past have mostly had to focus on issues such as reducing operating costs but very often these become the whole focus of their strategy. This isn’t surprising as it’s not easy to do these things and they take a long time (two years or more) and occupy senior management time to such an extent that thinking and acting about customers gets seen as a marginal activity. As a result, keeping up with new competitors and customer attitudes doesn’t get the attention it deserves.
Objection 2: our customers don’t want five star service
A common misinterpretation of focusing on delighting customers is to assume that it means a massive investment in the front line to enable customers to provide a rock star service. However, my definition of delighting means achieving outcomes so if I go to Pizza Express I don’t expect a cordon bleu experience with legions of waiting staff attending to my every need, but I do expect staff to pay enough attention to my having a good time while I’m in their restaurant. This doesn’t require an investment in anything other than recruitment, training and modelling good behaviours.
Objection 3: customers don’t always know what they want so why let them drive the business strategy?
I’ll admit, no-one’s ever said that to me in exactly those terms but I often feel that companies make the assumption that if you are focusing on customers you’re doing that at the expense of other value-creating competencies. It’s possible to cite Sony’s introduction of the Walkman or, indeed, Ford’s development of the automobile as innovations that had nothing to do with customer demand at the time. However whilst I won’t claim that either Ford or Sony were at the time running particularly customer-driven organisations, they were anticipating the outcomes the customers would come to desire. In the case of Ford, people were said to want a faster horse, not a motor car, but in fact their outcome was to get to their destination quicker. Companies that choose to be customer-driven needn’t lose their capacity for innovation – in fact anticipating customer needs and innovating accordingly becomes increasingly necessary.
Objection 4: if you focus on customers, you’ll miss the next industry disruption
Ah, disruption – that Clayton Christensen has a lot to answer for – mostly for providing a thoroughly useful and ground-breaking book on the subject. This stated that there was an inevitable trend for companies to add functionality to their products in order to satisfy customer requirements, which resulted in them being unable to respond to newer, lower-cost competitors.
My view on this is that it’s only a problem for companies who don’t focus on their customers and – very importantly – their non-customers at the same time as keeping an eye on technology developments and how they might threaten products and services. It’s not easy but then if you have a strategy department (or you’re in one) that’s what the focus should be.
Objection 5: that’s fine for customer service but I have other departments to look after
When I was head of strategy for the customer service unit of a major telco I defined what I thought was a customer-centric strategy. It had many elements that were to do with customers but it also had many aspects that were to do with rationalising and harmonising the contact centre operations. These were driven by the requirement to reduce cost-to-serve which was the overriding need at the time in an organisation whose contact centres had previously grown in a largely uncontrolled fashion. I’m not losing too much sleep over this as, in addition to lowering costs, the customer was getting a much more consistent service.
However, after a while it was clear that the clients of the contact centre – the customer facing sales and marketing units were continuing to heap pressure on the customer service area to further reduce costs. My solution to this was to get them ‘inside the tent’ for the definition of the next version of the strategy. This worked up to a point, but if I had the opportunity to do the work again I would develop the strategy across the whole organisation which would have surfaced the conversation about what was really driving the business and whether continually driving down cost to serve was delivering the best service for customers.
To make customer strategy effective it has to permeate all areas of the organisation. And that means that the process for developing the strategy and who’s involved in it needs to change. This is something that I’ll explore in future posts.