The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s...

22

Transcript of The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s...

Page 1: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York
Page 2: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

the

customer

culture

imperative

A LeAder’s Guide to drivinG

superior performAnce

Dr. LinDen r. Brown

anD

Chris L. Brown

New York Chicago San Francisco Athens London Madrid Mexico City Milan New Delhi

Singapore Sydney Toronto

Page 3: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

v

Contents

Preface vii Introduction xi

1 What’s Best for the Customer Is Best for the Business 1 2 Customers’ Rules 37 3 Customer-Inspired Innovation 57 4 Relentless Positioning 75 5 Competing for the Future 97 6 Tectonic Shifts 115 7 The New Math: 1 + 1 = 3 or 4 or even 10 141 8 How Leaders Get Their Ducks in a Row 161 9 How to Make It Happen 185 10 Leaving a Legacy 243 11 Will You Be Ready? 265

Appendix 1: The Research Program 273 Appendix 2: Customer Culture: A Leader’s

Measurement and Action Guide 289 Notes 293

Index 311

Page 4: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

1

Chapter 1

What’s Best for the Customer Is Best for the Business

There is only one boss: the customer. And he can fire everybody in the company, from the chairman down, simply by spending his money somewhere else.

—Sam Walton (1918–1992)

Customer focus is a term both overused and underdone. It sounds good in a mission or vision statement, but many leaders don’t

really know how to achieve a customer-focused culture, nor are they doing anything specific about improving it in a sustainable way. Many other leaders may know how to do it but feel it may not be worth the effort and time required to achieve it.

There are many reasons the leadership of companies talk about customer focus. They believe their customers and employees want to hear the “customer first” story. It sends the right message. Most leaders believe, at some level, focus on the customer is an important part of running a successful business. They understand that with-out customers there is no business.

So why do leaders of companies talk the talk but do not walk (or run) the walk?

Page 5: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

2 The Customer Culture Imperative

The reality of being truly customer focused—that is, fostering a customer culture—is difficult. The task is challenging, particularly when companies have developed habits and structures that work against it. Internal focus on operations, processes, and working in silos creates habits that can be hard to change.

As companies grow they become more complex: communication becomes difficult and frequently confusing, and processes are set up to maintain quality and improve efficiency; often these get in the way of doing the right thing for customers. Silos develop, and internal politics result in people acting in their own best interests above that of the customer and the business. We have all experienced being sent from one department to another by customer service representatives who are not empowered to take ownership of our problem.

Sometimes people are compensated in ways that work against the best interests of customers. There is no better example of this than the 2008–2011 mortgage crisis in the United States and elsewhere, where mortgage salespeople were incented to sell mortgages to people who could not afford them. Obstacle after obstacle arose to make doing the right thing for customers less and less achievable.

Another reason for the lack of customer culture is the short-term behavior driven by an investor focus and reporting of quarterly results. An underlying customer culture that provides a sustainable business focus will lead to more integrated thinking and reporting based on medium-term performance trends.

Many of today’s professionals are specialists with highly devel-oped technical skills in their areas of expertise. This can and does lead to a narrow focus without a broader understanding of how they affect the value received by customers.

In larger organizations it can be easier not to put the customer first, particularly when the customer problems may involve difficult longer-term issues that need to be resolved. Some professionals even view customers as inhibitors to getting their jobs done—an annoy-ance to minimize. For example, the university academic may lament the fact that he has to teach students rather than focus 100 percent on research, or a surgeon may dislike having to communicate in person with her patients. Others focus on profit to the exclusion of customer interests. When this attitude takes hold in organizations it

Page 6: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

What’s Best for the Customer Is Best for the Business 3

becomes a significant roadblock to a customer culture, regardless of what the mission states.

Against this backdrop, developing a customer culture is a chal-lenging transformation for most organizations, but the rewards for getting it right are massive. It is an imperative of leadership to lead a customer culture change. Active senior leadership is critical to its success. The role of senior leadership in customer culture change is laid out in Chapter 9.

The Drive toward the Ultimate Customer Experience

The rapid globalization and digitization of industries have resulted in exponential increases in the competitive intensity and market shifts for many business sectors. That has resulted in rapid commoditi-zation and cannibalization of core products and services and the creation of new markets. The result is falling margins, stagnating growth, and large numbers of layoffs. The quest for differentiation and value creation has never been greater.

We are now seeing the emergence of a new cross-functional endeavor known as customer experience and the hiring of chief cus-tomer officers to implement it in many of the Global Top 1000 firms. This function is designed to look at the entire customer interaction cycle that occurs with a company. Every touchpoint is evaluated with the goal of improving the customer’s experience and creating loyalty, customer advocates, and repeat business.

This shift from a one-off product sales to ongoing engagement with customers is a significant challenge for new leaders taking on these new roles. In response, the Chief Customer Officer (CCO) Council was established in 2008 by Curtis Bingham to help new leaders collaborate and share techniques designed to transform their customers’ experiences.

In order for customer experience initiatives to be successful, how-ever, every employee must buy in to the concept of customer culture and his or her role in contributing toward the customer experience. Leaders of the company need to develop and believe in a culture that behaves in a customer-focused manner rather than just saying it.

Page 7: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

4 The Customer Culture Imperative

A perception is created by every interaction with a company over time. One way of thinking about it is to use the banking analogy developed by Stephen Covey in The 7 Habits of Highly Successful People. Every interaction results in either an emotional deposit (a good experience) or an emotional withdrawal (a bad experience).1 So a customer will probably feel differently at one point in time than at another about a company depending on the latest experience, which is usually the most top of mind.

This can result in a “death by a thousand cuts” for companies that consistently provide bad experiences. As competition increases and alternatives emerge, customers shift their business to others that provide better value and better customer experiences.

The importance of customer experience varies across industries, but as products and services appear more and more similar, custom-ers will increasingly distinguish companies based on more than just their core offering. The prerequisite for consistently good customer experiences is a strong customer culture.

Figure 1.1 shows customer culture as the foundation that creates customer experience that in turn provides customer satisfaction and advocacy. When customer advocacy is created, you have consumers or business customers who are trusted, influential, and talking about your business in a positive way. You can think of advertising as the

Figure 1.1 Customer culture driving customer experience and profitable growth

CustomerExperience(Evolving)

The Creation

Customer Satisfaction& Customer Advocacy

(Changing)

The Outcome

Sales Revenue GrowthProfit GrowthProfitability

The Results

Customer Culture(Building)

The Foundation

Page 8: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

What’s Best for the Customer Is Best for the Business 5

cost of not having advocates. So these customer attributes and actions impact business performance positively in terms of revenue, profit, and profitability. A strong customer culture will create a positive cus-tomer experience, customer advocates, and superior business results.

Customer culture is both an attitude and a skill set that translate into how people think, what people do, and how they behave. People are the critical ingredient. For customer culture to take hold in an organization it must form an integral part of the corporate culture.

It is because of these changes in the business environment that we see customer culture as imperative to driving future market lead-ership and sustainable business performance improvement, which results in enduring organizations.

Customer Culture: “Are We There Yet?”

On August 6, 2006, at the Spanish Bay golf clubhouse at Pebble Beach, California, we were listening to our friend and business col-league John Stanhope vent his frustrations about his inability to create a strong customer culture in his company—a large, long-established telecommunications business. Recently he had asked him-self the question, “Are we there yet?” His answer was a resounding “No!” He was lamenting this fact and asking us what needed to be done and how does one know when one gets there.

What was inspiring was that John was the chief financial officer of his company. We collaborated with John over the following three years on a customer culture journey with his finance group of more than 2,500 staff members across a wide range of financial and admin-istrative functions. The results were outstanding—a clear vision and mission of how to create more value for customers and the business, a common language around a “value service culture,” and enhanced collaboration toward a common customer value creation goal. We saw substantially increased staff engagement and a real buzz in the offices, great stories about customer service, and staff members rewarded for customer-centric behavior. By 2010 the group had become one of the most customer-centric finance functions we had seen.

John was so passionate about this that it inspired us along the way to look more deeply at what is involved in actually developing a

Page 9: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

6 The Customer Culture Imperative

strong customer culture, how to measure it, and what must be done to get there.

What Is the Evidence?Thus began a three-year research project. We started by pouring over more than 200 separate in-depth academic research studies cover-ing primarily the marketing, management, and social sciences dis-ciplines. We interviewed scores of business leaders on the subject of customer-focused culture and reviewed countless business articles on the subject. There is a large body of academic work that has con-cretely and empirically established the link between business perfor-mance and alignment with customers and markets.

These studies highlight the importance of a business being aligned to customer needs with respect to competitors’ offers. The studies also highlight the importance of changes in the wider environment that impact customer needs and the cultural capability of a firm to deliver superior value to customers that creates sustainable profit-ability. Many of these studies recognize the central role of culture—of behavioral habits that create alignment with customers and competi-tors and drive business performance.

From a distillation of this research we identified several catego-ries of behavior that studies showed to be drivers of superior business performance and sustainable growth.

We then conducted a large-scale empirical foundation study to measure the validity of customer culture, reflected in people’s behav-iors, and its link to business performance as measured by profitability, profit growth, sales revenue growth, innovation, new-product suc-cess, and customer satisfaction. This study is described in Appendix 1.

The overall correlation we found between customer culture and business performance is high at 0.57, as shown in Figure 1.2. We compare this correlation with other commonly known correlations and see this is almost as strong as ‘temperature and nearness to the equator’ - indicating the further you are from the equator the colder it is. In contrast, the correlation between SAT score and college grade point average is 0.35.

Through our own experience and research we have discovered that strong customer-focused behaviors of an organization reflect a

Page 10: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

What’s Best for the Customer Is Best for the Business 7

culture that is embraced by every individual, team, and business unit. It is embedded in people through orientation, leadership, processes, rewards, key performance measures, a common language, and an expected way of doing things. Individual and team decisions are based on the belief that “what’s best for the customer is best for the business.”

We found that customer culture is the foundation for driving future business results such as sales growth and profit. A firm’s cur-rent level of customer culture is an important predictor of future results. It is an early-warning indicator of both the risks and oppor-tunities related to retaining customers and the capability of acquiring new ones.

What Are the Customer Culture Factors that Drive Performance?Our study found seven critical cultural traits of customer culture. These determine if a business can create customer advocates and win in the marketplace. They expose the risks that a company’s capabili-ties will not support its strategy. The names we have given these seven traits and their associated behavior summaries are given in Figure 1.3.

Figure 1.2 Customer culture and business performance are highly correlated

Customer Culture& Business

Performance

Temperature &Nearness to

Equator

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0.00

Asprin &Reduced HeartAttack Fatality

Str

eng

th o

f R

elat

ion

ship

Ibuprofen & PainReduction

SAT Score &College GPA

Height andWeight in

U.S. Adults

Page 11: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

8

Figure 1.3 The seven customer culture traits

“Peripheral Vision”:Our thanks to Prof.George S. Day atThe WhartonSchool of theUniversity ofPennsylvania, andcoauthor of a bookof the same name,who suggested thatthe term “peripheralvision” aptlydescribes our factorthat represents awider vision of thestrategic trends thatmust be monitoredin a firm’s externalenvironment.

Traits Behavior Summary

Customer Insight The extent to which employees monitor, understand, and act oncurrent customer needs and satisfaction

Customer Foresight The extent to which employees monitor, understand, and act onpotential customer needs and opportunities

Competitor Insight The extent to which employees monitor, understand, and respond tocurrent competitor strengths and weaknesses

Competitor Foresight The extent to which employees monitor, understand, and respond tonew market entrants and potential competitors

Peripheral Vision The extent to which employees monitor, understand, and respond totrends in the larger environment (Political, Economic, Social, and Technical)

Cross-FunctionalCollaboration

The extent to which employees interact, share information, work with,and assist colleagues from other work groups

Strategic Alignment The extent to which employees understand, and enact the vision,mission, objectives, and strategic direction of the company

Page 12: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

What’s Best for the Customer Is Best for the Business 9

These traits also have a decisive impact on sales growth, profit growth, profitability, customer satisfaction, new-product success, and innovation. In Figure 1.4 they show each trait as a driver of particular business performance outcomes. These customer culture traits predict better, sustainable business results. Each trait drives predictable and measurable improvements in sales, profitability, and new-product or new-service success.

We have come to realize that customer culture is a discipline—a set of behaviors and skills that can be developed, refined, and practiced to become habits that lead to better personal and business results. We now describe each of the seven disciplines that reflect a strong customer culture.

1. The Customer Insight DisciplineThere are two customer traits reflected in workforce behaviors and prevalent activities that give a company a deep and dynamic under-standing of current and prospective customers. Without these strong drivers, the company cannot stay in touch with its market and is at high risk of losing customers, market share, and profitability. The first of these is related to satisfying the needs of current customers; the second discipline relates to a company’s ability to obtain new

Figure 1.4 Customer culture drivers of business outcomes

FactorsCustomer

Satisfaction Innovation

New-ProductSuccess

ProfitGrowth Profitability

SalesRevenueGrowth

Customer Insight

Customer Foresight

Competitor Insight

CompetitorForesight

Peripheral Vision

Strategic Alignment

Cross-FunctionalCollaboration

Page 13: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

10 The Customer Culture Imperative

customers profitably and anticipate future needs. We have called this first discipline customer insight behaviors.

Customer insight: Does the company understand its current customers’ needs? Does it know how satisfied or dissatisfied they are with its products or services? Does it act on this knowledge? Does it communicate to customers its actions resulting from their feedback?

Link to strategy: Strength in this discipline is particularly relevant to a strategy designed to focus on existing customers in order to retain them, create customer advocates, and increase the average revenue per customer.

Driver of business performance: This measures a business’s ability to improve customer satisfaction and retention and impacts customer advocacy and sales revenue growth, innovation, and new-product success.

For most companies this is at the heart of their strategies. Think about the many ways customers interact with your business every day. Every one of those interactions presents an opportunity for your staff members to demonstrate their understanding of the customer’s environment. Whether it is as simple as respecting a retail customer’s time by offering a callback option to resolve a problem or as com-plex as managing the expectations of enterprise customers by imple-menting leading-edge technology. All staff behavior is driven by your culture and the expectations placed on everyone to know his or her customers and treat them in a certain way.

Zappos, the online footwear retailer, requires all new employees, regardless of their role, to work in the customer-service call center as part of their training program. At Le Touessrok Hotel, on the island of Mauritius, the executive chef requires his staff to learn each guest’s special diet requirements. At Telstra, Australia’s largest tele-communications company, senior executives receive daily updates of the company’s customer advocacy score based on feedback from 40,000 customer interactions from the previous day. Verbatim sum-maries of these interactions are sent to the source of the customer

Page 14: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

What’s Best for the Customer Is Best for the Business 11

interaction within Telstra in close to “real” time. On the company’s intranet the prime space shows the daily advocacy score as the focal point above the space that shows the company’s stock price.

2. The Customer Foresight DisciplineThis second customer discipline relates to a company’s ability to obtain new customers profitably and anticipate future needs. This discipline is related to customer foresight behaviors.

Customer foresight: Does the company gather information on potential customers? Does it target them based on its opportunity for competitive advantage? Does it understand and invest in meeting future needs of prospective customers? Does it understand and act on unarticulated needs?

Link to strategy: Strength in this discipline is particularly relevant to a strategy designed to obtain new customers in order to increase the customer base and grow the size of the business.

Driver of business performance: This measures a business’s ability to acquire new customers and meet future customer needs and specifically impacts innovation. It will drive future sales revenue growth

Your company’s ability to attract new customers is based on its willingness to embrace new ways of providing service. Will it lead the market by launching new services before customers recognize their own changing needs?

Intuit, the financial software company, makes sure that 80 per-cent of the participants in its usability studies are noncustomers; the company wants to know what these people think. Allen Medical Systems, a maker of medical equipment, puts its people in hospital operating rooms to learn what equipment is needed for a particular kind of surgery as part of a product development project. While in the operating rooms, they routinely ask what might be needed for related surgeries. A continuous stream of new products is the result.

Page 15: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

12 The Customer Culture Imperative

3. The Competitor Insight DisciplineThere are two competitive traits reflected in workforce behaviors and prevalent activities that give the company a deep and dynamic understanding of its competition. Without these strong drivers, the company cannot stay in touch with its competitors’ strategies and is in danger of losing market share and profitability. The first of these is related to understanding and acting on the strategies of current competitors; the second relates to a company’s ability to foresee new competitors that could impact its markets in the future. We have called this first competitor discipline competitor insight.

Competitor insight: Does the company monitor, understand, and respond to its competitors’ strengths and weaknesses? Does it factor competitors’ current strategies into its own strategies? Do staff members understand how they contribute to the firm’s current value proposition and competitive advantage, and do they act to support it?

Link to strategy: Strength in this discipline is particularly relevant to a strategy designed to defend and take market share from competitors, strengthen short-term competitive advantage, and consolidate current competitive position in the marketplace.

Driver of business performance: This measures a business’s ability to implement differentiated value propositions, improve profit margins, and achieve ongoing revenue growth, profit growth, and profitability.

Your company’s understanding of its customers’ alternatives is crucial to its ability to compete. Which service offerings are competi-tive, and which are not? How do customers perceive your offers: are they simple and transparent and clearly better than the alternatives? Are staff members in all functions factoring into their work the value propositions of current competitors to produce additional value for the business and its customers?

Speedo, a maker of both recreational and competitive swim-suits, gathers information from channel customers, past employees,

Page 16: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

What’s Best for the Customer Is Best for the Business 13

public and industry reports and forums, consumer research, and discussions with retired industry “old-timers” to develop an in-depth understanding of key competitors’ strategies. This includes their value propositions, capabilities, cost structures, profit drivers, the strengths and weaknesses of their competitive positions, and the cultural drivers of “how they compete and react.” Speedo has found that its strong product and brand quality are becoming less important advantages than customer service, product availability, and product styling—aspects in which their competitors have been beating them. These findings have been widely discussed within the company, resulting in a new strategy focused on customer service, new designs, point-of-sale merchandising, more efficient warehous-ing and distribution, and a new product-returns policy. Speedo has regained its competitive advantage and increased its market share and profitability growth.

4. The Competitor Foresight DisciplineThis second competitive trait relates to a company’s ability to foresee new competitors that could impact its markets in the future. New innovative competitors have an impact on uncovering latent needs of customers and influencing their perception of their future needs. We have called this discipline competitor foresight.

Competitor foresight: Does the company consider potential competitors when making decisions about customers? Does it identify market shifts in order to foresee potential competitors? Do staff members contribute to competitive intelligence relating to potential new competitors, and how they might affect future customer needs?

Link to strategy: Strength in this discipline is particularly relevant to two types of competitive strategies:

a) One designed to defend competitive position and preempt new competitors in the medium to longer term in industries experiencing market shifts

b) One to increase market share by creating a new competitive advantage in a new emerging market.

Page 17: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

14 The Customer Culture Imperative

Driver of business performance: This measures a business’s ability to account for future competitors and their strategies and create new products and value propositions. This behavioral trait impacts innovation and new-product success.

How does your company stay ahead of potential competitors? Which businesses should your company cannibalize before your future competitors do it for you? How does your company address the threat of future competition? Are staff members actively aware of and signaling new competitive threats and their likely impact on your customers and businesses?

Orica, a global specialty chemical company, foresaw the emer-gence of Indonesian and Chinese competitors. Armed with this fore-sight, it moved to protect its current market and expand into new markets. Known for its technical expertise and product safety record, Orica introduced new services to augment its core chemical products, a move that reduced costs for its customers and repelled new for-eign competitors. With support from well-selected alliance partners, it launched ChemNet, an online chemical trading business, to expand its product and service reach in the wider Asia-Pacific market.

5. The Peripheral Vision DisciplineThis trait reflected in workforce behaviors and prevalent activities gives the company a deep and dynamic understanding of its broader external environment. Without these strong drivers, the company will miss opportunities and risk the loss of customers due to market and industry shifts. Changes in technology, economic conditions, government policies, and society all impact current and future cus-tomer needs. We have called this trait peripheral vision.

Peripheral vision2: Does the company monitor, understand, and respond to the political, economic, social, technological, and natural environment trends emerging on the periphery that could affect its customers and its business? Are all staff members encouraged to scan their respective fields of expertise for new ideas relevant to the changing external environment? Does the company act on this flow of new ideas?

Page 18: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

What’s Best for the Customer Is Best for the Business 15

Link to strategy: Strength in this discipline is particularly relevant to an innovation strategy reflected in two types of strategies:

a) One based on new products and services as the means for growth and profitability

b) One requiring a new business model to cope with disruptive technological changes

Driver of business performance: This measures a business’s ability to scan for, be aware of, and act on threats and opportunities emerging in its external environment. It impacts innovation. Those companies that have it show capabilities of effective innovation that drive future sales and profit growth from new market opportunities.

Experience shows us that new ideas and resulting innovation can come from internal and external sources—staff in all depart-ments, suppliers, contractors, customers, and competitors. Are your staff members actively encouraged to signal threats and opportuni-ties observed in the external environment? Is there a mechanism for logging these and taking action on those that have merit? Are your people rewarded for communicating ideas related to the changing external environment that are acted on by the company?

Ericsson, the Sweden-based global provider of telecommunica-tion and data-communication systems, has used scenario planning as a means of clarifying its corporate vision for many years. This involves painting several different pictures of possible futures using different assumptions about regulation, globalization, technological change, market uptake of new types of telecommunication prod-ucts and services, the convergence of industries and regions, and the emergence of national markets such as China and India. As a result, Ericsson has been much quicker to move resources into China and other Asian growth markets than have its traditional Western competitors, such as Motorola. Ericsson has also been in a strong position to compete with rapidly emerging Chinese competitors. The firm’s scenario planning continues. Ericsson is already planning for what life and business might be like in 2020.

Page 19: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

16 The Customer Culture Imperative

These five externally oriented disciplines—customer insight and foresight, competitor insight and foresight, and peripheral vision—are focused into action for the entire company, business units, and teams through two enabling disciplines: collaboration and alignment.

6. The Collaboration DisciplineCollaboration is another category of workforce behavior that enables a strong customer culture and makes it possible for the company to transform the information generated by the externally oriented traits into value for customers and shareholders. Without strong col-laboration within a business, valuable information is squandered and business opportunities are lost. Also, the impact of value delivered to customers is weakened. We have called this discipline cross-func-tional collaboration.

Cross-functional collaboration: Do colleagues from different work groups share information and work together? Are “silos” tolerated or even encouraged? Are your people working cross-functionally to solve customer problems and deliver better service to customers? Are mechanisms in place to encourage cross-fertilization of ideas, practices, and value creation? Do staff members receive individual recognition for initiating end-to-end solutions for the customer? Is internal competition managed in a way that it creates better customer solutions rather than destructive silos?

Link to strategy: Strength in this discipline is relevant to all business strategies by enhancing innovation and delivery of value to customers and strengthening competitive advantage.

Driver of business performance: This measures a business’s ability to leverage its resources and advantages across its organization to deliver differentiated value. This impacts customer satisfaction, innovation, new-product success, sales growth, profit growth, and profitability.

Virgin Radio has 19 radio stations in several countries. Each sta-tion operates autonomously and has 30 to 50 staff members covering

Page 20: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

What’s Best for the Customer Is Best for the Business 17

all functions of the business. These businesses are close-knit teams of people who know one another’s roles and how they complement one another to produce a number-one-rated radio station. This is done through careful orientation and training and weekly cross-functional review meetings to create improvements in line with weekly customer feedback and ratings results. People in each function know how they affect consumer experience and advertiser customer value. If cus-tomer feedback requires a substantial change to a station’s program format, as happened with the launch of Virgin Hitz in Dubai, it is able to make a complete change of format in less than 24 hours.3

That level of adaptability can only be implemented if there is strong cross-functional collaboration.

7. The Alignment DisciplineThe final category of workforce behavior that enables a strong cus-tomer culture and makes it possible for the company to create and deliver value for customers and shareholders is its level of internal alignment. Without strong alignment within a business, there are inefficiencies that affect customers and lack of employee engagement that affects business performance and customer satisfaction. We have called this discipline strategic alignment.

Strategic alignment: Is the firm’s strategic direction discussed regularly with all employees? How quickly are work group priorities changed when the firm’s strategic plans change? Do staff members fully understand and buy in to the company’s vision and values and see how it relates to them personally and how they work? Can all people in the business tell you how they are working differently to implement a customer-focused strategy? Are people adapting their behavior in line with their business unit’s strategy?

Link to strategy: Strength in this discipline is relevant to all business strategies by enhancing delivery of value to customers and strengthening competitive advantage.

Page 21: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

18 The Customer Culture Imperative

Driver of business performance: This measures a business’s ability to align its people to its vision, mission, values, and strategy. It impacts customer satisfaction, sales growth, profit growth, and profitability.

Jason Kreiser, Allen Medical’s general manager, drives strate-gic alignment at every opportunity. “We have a very simple mission statement that everyone knows,” he explains. “Our mission is to be the global leader in innovative patient-positioning accessories for the operating room.” All quarterly reviews and town hall meetings with employees begin with the mission statement; all acquisition, licensing, and capital investment decisions are tested against it. The mission to be innovative “drives everything we do,” says Kreiser. “If it’s not innovative, we don’t do it. We’re not into me-too products. About 18 months after we introduced this mission and worked to get the organization aligned with it, we went from growing at the market rate of 2 percent or 3 percent per year to growing four or five times the market, year in and year out.”4

Click on one of the links below to continue reading The Customer Culture Imperative.

Chapter 1 to be continued....

Page 22: The Customer Culture Imperative - Professional · the customer culture imperative A LeAder’s Guide to drivinG superior performAnce Dr. LinDen r. Brown anD Chris L. Brown New York

Copyright © 2014 by McGraw-Hill Education. All rights reserved. Except as permited under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

ISBN: 978-0-07-181982-4

MHID: 0-07-181982-7

The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-182114-8,MHID: 0-07-182114-7.

eBook conversion by codeMantraVersion 2.0

All trademarks are trademarks of their respective owners. Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark. Where such designations appear in this book, they have been printed with initial caps.

McGraw-Hill Education eBooks are available at special quantity discounts to use as premiums and sales promotions or for use in corporate training programs. To contact a representative, please visit the Contact Us page at www.mhprofessional.com.

TERMS OF USE

This is a copyrighted work and McGraw-Hill Education and its licensors reserve all rights in and to the work. Use of this work is subject to these terms. Except as permitted under the Copyright Act of 1976 and the right to store and retrieve one copy of the work, you may not decompile, disassemble, reverse engineer, reproduce, modify, create derivative works based upon, transmit, distribute, disseminate, sell, publish or sublicense the work or any part of it without McGraw-Hill Education’s prior consent. You may use the work for your own noncommercial and personal use; any other use of the work is strictly prohibited. Your right to use the work may be terminated if you fail to comply with these terms.

THE WORK IS PROVIDED “AS IS.” McGRAW-HILL EDUCATION AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. McGraw-Hill Education and its licensors do not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free. Neither McGraw-Hill Education nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages resulting therefrom. McGraw-Hill Education has no responsibility for the content of any information accessed through the work. Under no circumstances shall McGraw-Hill Education and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages. This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise.