What does it take to drive a top-down plan for customer-centricity?

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Feb 16, 2017
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COLLOQUY Staff

Through a special arrangement, what follows is a summary of an article from COLLOQUY, provider of loyalty-marketing publishing, education and research since 1990.

To effectively establish an enterprise-wide customer-centric mindset, change management is the key, and change management initiatives work best when driven from the C-suite, according to Clay Walton-House, who leads the customer retention and loyalty practice at Lenati.

“The C-suite needs to make the case for change,” said Mr. Walton-House. “Customer-centricity can tie directly to profitability — and employees need to be aware of that connection. It’s crucial to engage all departments, especially those with limited or no customer contact.”

The top-down approach, according to Mr. Walton-House, offers specific benefits:

  • Streamlined approvals. At the management level, approvals must typically be obtained both vertically from supervisors and horizontally from peers in other departments. The C-suite can bypass potential obstacles in navigating the organizational chart.
  • Clarity of message, since the directive comes from a single authoritative source.
  • A sense of priority and urgency, because when organizational leadership points the way, employees are motivated to follow.
  • Faster acceptance by employees, as they follow the strategic direction from the C-suite.

He said three key action steps help ensure successful change: defining, measuring and implementing.

“An explicit, clear-cut definition of customer-centricity ensures enterprise-wide consistency and enhances employee buy-in,” said Mr. Walton-House. “From senior leadership, this requires an explanation of what customer-centricity means in practice and how the principles apply specifically to the organization.”

Measurement criteria should move from product-driven metrics — such as units produced, units shipped or sales volume — toward metrics like customer lifetime value and share of wallet. Said Mr. Walton-House, “Setting up this type of measurement reveals where opportunities exist at the customer level — not the product level — which is the essence of customer-centricity.”

Finally, implementation involves linking employees to specific tactics that pertain their areas of responsibility.

“Throughout the process, employees need reinforcement — not just slogans, but reminders of why it’s important and their role in its success: ‘Here’s how you influence customer value, and here’s how you can increase it,’” said Mr. Walton-House. “Tying customer-centricity to the bottom line, regardless of department, makes the message both meaningful and impactful.”

DISCUSSION QUESTIONS: What do you see as the main hurdles or overlooked steps toward creating a customer-centric organization? How do leaders most frequently lose focus?

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Braintrust
"Companies can't suddenly decide to be customer-centric -- it is ingrained in the founding DNA."
"There is no doubt that senior leadership commitment to a specific change is critical, but it’s not usually senior leadership that serves customers."
"What is missing here is exactly how you engage employees to change their mindset. This is frequently the element missing in this type of initiative."

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19 Comments on "What does it take to drive a top-down plan for customer-centricity?"


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Peter Sobotta
Guest

It takes a bottoms-up approach. Companies can’t suddenly decide to be customer-centric — it is ingrained in the founding DNA. That is the reason Walmart.com could never compete directly with Amazon in terms of the customer experience. Walmart finally realized this and purchased Jet.com in hopes to close the gap.

And that’s the power of being truly customer-centric. It must be authentic and can’t suddenly be decided in a board room.

Ralph Jacobson
BrainTrust

You know, talk is cheap. We have done research that shows 80+ percent of CEOs say they’re customer-centric, while 80+ percent of their customers feel the brands don’t understand their needs. The creation of awareness, (both internally at the organization and externally with customers) of the brand’s customer-first approach needs to be executed with a relentless, consistent drumbeat of communication. Leaders must exhibit this focus in a genuine way that gives credibility to the effort. Then staff will believe in the culture.

Gene Detroyer
BrainTrust

Gordon Bethune, former CEO of Continental Airlines wrote “From Worst to First.” It is this story precisely. How to make a company with tens of thousands of employees customer-centric. I recommend it to any CEO who is serious about implementing customer-centricity. I use it for my leadership students.

The steps:

  1. Be serious about it. It isn’t words, it is action.
  2. Measure, measure, measure the Key Performance Indicators (KPIs). They aren’t what you think.
  3. Give people at the lowest rung independence to make customer-oriented decisions.
  4. Reward to organization for any increased standings in KPIs.
Ian Percy
BrainTrust

Bethune’s book sounds well worth reading, Gene. Thanks. On point two about “measure, measure, measure,” I’m hoping “They aren’t what you think” alleviates my concern about being strangled by metrics. If management tries to measure the behaviors of those who, naturally out of their own heartfelt beliefs, truly put the customer first, and then turn those behaviors into an obligatory employee training program, I predict failure. Nothing kills love faster than trying to measure it and make people do it.

To be clear, this is not an anti-measurement sentiment. We just need to measure the right things.

Gene Detroyer
BrainTrust

The key is to measure the results, not the activities. Are we meeting the KPIs, which are very different than revenues, margin and profits? For Continental it was such things as on-time performance and lost luggage. Things that were critical to the customers’ decision to choose one airline over another — or one retailer over another.

Adrian Weidmann
BrainTrust

Being customer-centric means that your customer-facing employees are empowered to do the right thing for the customer that is standing right in front of them at that moment. All too often employees operate out of fear and indifference and only recite policies that were created by lawyers and corporate MBAs to protect the company rather than help the customer. Empowerment relies on trust and respect — and corporate board rooms have little use for these traits in responding to Wall Street.

Ian Percy
BrainTrust

“…corporate board rooms have little use for these traits in responding to Wall Street.” You sure have that right Adrian! Well said.

Max Goldberg
Guest

Every organization talks about being focused on the customer, yet few are nimble enough to pull it off. There must be a mindset of challenge and change — challenge to constantly find what consumers want and change to rapidly implement those desires. Management needs to model the behavior it wants from all employees. It needs to hire change agents and adopt a willingness to try ideas suggested by them. And management needs to create an atmosphere where innovation is encouraged and accepted.

Shep Hyken
BrainTrust
A customer-centric culture starts at the top where leadership defines the customer service and experience vision. The next challenge is to communicate it to all employees. Part of that challenge is moving the employees into alignment with that vision. That takes more than communication. It takes training. A mistake that companies make is thinking they only need to train customer-facing employees. For a culture to be a culture, everyone must be properly trained. The people working in a warehouse will be trained differently than customer-facing employees, but everyone is trained. Another challenge is long term sustainability. To accomplish this, communication and training must be ongoing. For example, if you have a car in perfect alignment, over time it will eventually go out of alignment. That’s why you bring your car in for service. Employees who are in alignment with the vision today, without a tuneup (as in additional training), will eventually go out of alignment. I once interviewed the CEO of a retail chain.and asked what his most important job was. His response was simple:… Read more »
Camille P. Schuster, PhD.
BrainTrust

Implementation is the challenge. Training employees, at every level, need to understand how a consumer-centric approach affects their job, access to relevant information and the resources necessary for action. In addition, new metrics need to be used to evaluate success and care needs to be taken to link metrics with desired results. If either of these steps are ignored or not fully implemented, the change will not happen. This is not a journey for the faint of heart or a decision that can be ignored once made.

Lesley Everett
Guest

What is missing here is exactly how you engage employees to change their mindset. This is frequently the element missing in this type of initiative. I agree with the statement ” … employees need reinforcement — not just slogans, but reminders of why it’s important and their role in its success.” However, “reminders” are not enough. Personal development training needs to be provided that enables employees to be crystal clear about their value, then to be consistently respected and valued by their line managers and be empowered to do what is needed to truly be customer-centric in their own authentic way. This is the “what’s in it for me” factor and this will get results.

Ian Percy
BrainTrust
Hmmmm … this phrase at the outset of this article kind of threw me: ” … change management initiatives work best when driven from the C-suite … ” Not sure how well that philosophy is working for the Oval Office, but I digress. There is no doubt that senior leadership commitment to a specific change is critical, but it’s not usually senior leadership that serves customers. They are typically busy trying to appease shareholders who too often don’t care how the money is made, just that it is made. There is a big difference between compliance with a customer-centric initiative and a commitment to it. Power can enforce compliance but no power is capable of forcing commitment. Commitment is a spiritual choice each individual has to make because they deeply believe the “change” or desired behavior and mindset will be worthy of that choice. Top-down change management doesn’t work any better than a bottom-up strategy. The word “centric “means it come out of the center spreading out through every dimension of the organization. The trouble… Read more »
Phil Rubin
BrainTrust
2 years 4 months ago

There’s no doubt that customer-centricity starts at the top: not just the C-suite, but the CEO and ultimately, the board. We see many clients (companies) where there is a shift to customer centricity — including from some of the world’s great brands — but too often it’s nothing more than lip service or messaging.

For customer-centricity to be genuine, it means that the company’s business strategy includes the customer as a top priority. By our assessment, this prioritization means that the customer commitment is a top-3 or at worst, a top-5 priority within a company’s business plan. This type of commitment means it’s measurable, and talked about not just internally but externally. The external communications are essential and ensure accountability from shareholders and Wall Street, the ultimate scorecards (for public companies).

Roger Saunders
Guest
If a firm doesn’t come from a customer-centric origin — from the DNA, as Peter Sobotta points out — the CEO has to understand that everyone’s in the dark and looking for the switch. Give associates a clear vision of why the change is needed. Help them understand the importance of seeing through to the end-customers. Capture a baseline view of how the customer perceives the chief reasons to patronize your store or service most often. Compare those reasons against your key competitors. Follow that by setting quarterly objectives — not on the entire list of KBIs. Instead, set up 3 or 4 per quarter, and ask the entire organization to focus on them, having them set the goals for the quarter and providing all involved with benchmark measurements and the resultant benefits as shown by customer responses. Steven Burd, former CEO of Safeway, effectively employed the fewer objective steps to improvement while leading the chain. When the organization is comfortable with the thrill of being Customer-centric, encourage them to “Reach for the stars.” As… Read more »
Doug Fleener
Guest

Good stuff. This is great in theory, but most companies don’t bring it down very well from the clouds to the ground level. That’s why I believe one of the biggest areas of focus needs to be turning customer-centricity into specific behaviors and actions for frontline employees created by frontline employees. It’s more than a training. It’s a new way to engage, serve, and likely sell the customer.

Vahe Katros
Guest
Vahe Katros
2 years 4 months ago

Title Question: “What does it take to drive a top-down plan for customer-centricity?”

A: Empathy and a visceral understanding of the goals and challenges your customer face doing business with you, especially your core customers — especially during the moments that matter. A real interest in learning why your former customers left you.

Q1: What do you see as the main hurdles?

A: Executives living in an echo chamber surrounding by yes-men/people

A2: Creating a message that the financial community can accept and a willingness to take the hit.

A3: The fact that most most leaders are amazing negotiators, believe me.

Q2: What are the overlooked steps toward creating a customer-centric organization?

A: Burning your boats.

A2: Telling your family you won’t be around for awhile.

Q3: How do leaders most frequently lose focus?

A: Think about your New Years resolution to change your lifestyle. How’s that going? Life happens. Also, Hofstadter’s Law: It always takes longer than you expect, even when you take into account Hofstadter’s Law. Douglas Hofstadter.

Manmit Shrimali
Guest

A culture shift is the biggest hurdle for any change — analytics, customer-centricity, and change management. Talking the talk is not sufficient. Show financial impact to C-suite. Reflecting from past engagement, combining organization data and building model that quantifies impact of customer experience and centricity are the sure fire way to walk the walk. When you can show impact of customer centricity efforts on sales and revenue, you no longer need to do any convincing.

Brandon Rael
BrainTrust

While a top-down direction is critical from an executive sponsorship perspective, as well as driving overall corporate change, those closest to the customers will provide the insights and direction in order to be successful. Executives certainly could provide the overall leadership and company culture, however, it’s those who are on the operational side of the business, and who actually interact with the consumers, who could be the most impactful.

A bottoms-up approach could certainly help drive insights about the most loyal customers.

Companies could ill afford to make any missteps with the customer experience, as:

1. The choices for the consumer are vast;

2. Consumers have greater authority over the shopping journey;

3. Friction = lost customer loyalty and business;

4. Critical to driving a superior customer experience, are leveraging the measurable and tangible analytics, KPIs and insights that are not so apparent from an executive level.

Scott Magids
Guest
2 years 4 months ago
As many have pointed out here, KPIs are important, but the most important decision is what metrics we decide to collect. Yes, we need to know what and how much we are selling and to whom, but that data is not going to help create a customer-centric organization. By the same token, traditional customer-focused data derived from a “how satisfied are you” survey will not change the culture — that information only tells you whether your customers like you or not. It doesn’t tell you why they like you and what you can do about it if they don’t. Our research has shown that highly satisfied customers still aren’t delivering on the loyalty, sales and margins companies are looking for. A true customer-centric strategy does not simply measure a customer relationship, it defines that relationship and makes a concerted effort to truly understand who the customer is beyond standard demographics. We need to understand the emotional connection that brings that customer to our door and keeps them there. That’s where leaders begin to lose focus… Read more »
wpDiscuz
Braintrust
"Companies can't suddenly decide to be customer-centric -- it is ingrained in the founding DNA."
"There is no doubt that senior leadership commitment to a specific change is critical, but it’s not usually senior leadership that serves customers."
"What is missing here is exactly how you engage employees to change their mindset. This is frequently the element missing in this type of initiative."

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