Five Insights on How to Build a Customer-Centric Organization

Changing a culture takes time. When I first started Beyond Philosophy some ten years ago, one of my first clients was Yorkshire Water, a water utility in the North of England. Over the ten years I have seen them change to become a customer-centric organization that leads their market.

I always remember my first conversation with their then CEO, Kevin Whiteman. He said he wanted to improve the “feel” of service. He explained they had undertaken a lot of work on the rational physical experience but reconsidered this only got them to satisfaction. He wanted to go much further.

Like the Water industry in many parts of the world, they are monopolies. I was puzzled, why did Kevin want to improve their experience and become a more customer-centric organization? I challenged Kevin: “Why would you want to provide a great experience, your customer can’t go anywhere else”?

Kevin’s reply has always stuck with me. He told me that when you focus on the customer it acts as a focal point for the company. Yes, making money is important, but people are motivated by doing things for customers. Also, everyone wants to work for the “best” company and thus we attract the best people, so recruitment costs are lower. Finally the regulator wants happy customers. Therefore if we please the customers we please the regulators, if we please the regulators this impacts what they allow us to do.

He was right.

Over the ten years I have seen Yorkshire Water transformed. Kevin understood that to change customer experiences, he needed to change the organization. Yorkshire Water implemented new customer-focused measures, defined new strategies, recruited customer-focused people, undertook training and embraced their partners in improving their experience to customers. I have seen them change before my eyes.

Reality check

At a first meeting with clients I usually informed “We want to change our experience”. We spend time talking about their situation and what they are trying to achieve. After this I then raise the thorny issue of customer centricity and its connection to customer Experience.

“It’s great you want to improve your experience,” I say knowing their response to my next question will determine the success of their venture. “You do realize the reason why you are delivering the experience you are today is due to your current organization? Therefore part of what you will have to do is improve the customer centricity of the organization. I assume you will address this as part of your task, otherwise the changes you make will only be temporary”.

It’s like time stops still for me. I can see almost see them process my challenge and think “Oh goodness, he’s right, how can we do that?” I’ve learned that their next response determines the success of the change, as the conversation can go one of two ways.

Some metaphorically get up from the chair and hunt a convenient bucket of sand to put their head in. These we call “the Ostrich.” They really wish I had never mentioned customer centricity. The following conversations are filled with “Yes buts…” and “it’s different in our industry,” as they twist and turn trying to do everything but address the “elephant in the room.”

The response we hope for — which doesn’t happen very often — is “Yes, we understand that and want to address this as well”. This type of person who is open to learning “the Apprentice.” They may challenge the thinking but they do so in an effort to see how robust the argument is. I love these people. I love talking with them and seeing their lights come on as we connect the dots between customer centricity and customer experience.

Advice for “Apprentices”

The concept is a simple one but often ignored. If your organization is “product centric” or “internally focused” you will provide a customer experience that is also “product centric” or “internally focused. If your organization is “customer centric” you will provide a customer-centric experience.

In our book Revolutionize Your Customer Experience (Palgrave MacMillan), we reveal our research and models on customer centricity. We show how all organizations are on a journey from “Naïve to Natural” in the way they are oriented around the customer.

Most organizations are on this journey not because they want to be, but rather they are being forced to. “Back in the day” there were effective monopolies and markets were growing rapidly so organizations didn’t need to worry about customers. Today is much different. Competition is global; the internet has commoditized many businesses which is forcing organizations, reluctant in many cases, to focus on the customer experience. This in turn raises a major issue. These organizations do not have the skill, knowledge or culture to achieve this.

Our research also shows that the customer experience is affected by nine “orientational” areas. An organization can be at different stages in each of these nine areas.

These areas include the type of people you recruit, the measurement you have in place, the process, leadership and culture, etc. – all affecting the customer Experience. You should consider the journey from Naïve to Natural to be an evolution; in fact each orientational area is an evolution. Therefore you can be Naïve in measurement but Transactional in people.

The way forward
The challenge is where are you today and where do you want to be? Let me be clear, we are not saying you must be a Natural organization; you can make money from being Naïve and Transactional. What we are saying is you need to determine where you are today, you need to understand what Natural means and then make a decision about where you want to be.

To discover this we undertake detailed organizational assessments. Based on ten years of experience, here are five tips for building a customer-centric organization:

1. Make sure you are serious. It is vital to define if the organization is serious about changing their experience or are they just joining the pack of companies saying they are focused on the customer, but aren’t really. The actions of senior executives, not their words, this will tell you if they are serious or not.

2. Improve the senior executive’s understanding of customer experience concepts. The biggest tip we can give you is your senior leadership will think they understand what a customer experience is about, but the reality is they probably don’t. In our assessment we specifically assess the senior leaders understanding of the subject. Invariably the senior leaders understand, in part, what they need to do but they do not have the complete picture. We have never found they understand what it takes to be a “Natural organization.” This is a major issue. It means the senior leaders are limiting their company’s progress as they cannot lead them into a place they do not realize exists.

3. Implement customer experience councils.
Organizational silos can breed a product or functional view of customers. It is critical everyone in the organization pulls together to look at what is good for customer. Putting in place customer experience Councils where the end-to-end experience can be reviewed helps breaks down these barriers.

4. Change your measures Measurement always lags behind.
Many organizations find it difficult to change measures. Moving to a focus where customer measures account for 20-40% of people’s bonus is normally met with a great deal of resistance, yet this is crucial in any customer experience change.

5. Design emotional engaging experiences.
Most organizations are transactional. They focus solely on the rational aspects of the experience. We know that emotions account for over 50% of a customer experience and yet this is ignored by most organizations. At a conference I attended recently I was very gratified to hear senior leaders and co-presenters of Telus, a Canadian Telco, and Comcast, a Cable company in the US, inform the audience they have now embraced the emotional side of the customer experience and that they regard this as a key differentiator. We agree. In fact we wrote about this in our first book in 2002. Sometimes it just takes a little while for people to catch on!

We hope these insights are of use. Oh, one last thing. Let’s hope that any Ostriches out there are from your competitors and not your senior executives!

“Republished with permission from CustomerThink.com”

Beyond PhilosophyFive Insights on How to Build a Customer-Centric Organization