Importance of Customer Centricity

Big companies have a problem. As they get bigger and the number of employees grows, it takes more time and resources to coordinate internal activities. As I have mentioned in prior posts, good managers (and executives) have to be like broken records, constantly repeating the corporate goals and priorities to ensure alignment across functions, business units and geographies.

However, there are only so many hours in a day and the more time managers spend coordinating internal efforts, the less time they have to be externally focused, that is, spending time with customers. Said another way, as companies grow they lose the concept of “customer centricity.” What is customer centricity? Basically, it is ensuring you are know your customers well, spend time learning about their issues in their environments, and ensuring you are developing solutions (products, services, etc.) that solve their problems. The best managers are able to both be customer centric and use the customer to align the internal organization.

3 Signs your company is not customer centric:

  1. Decisions are made without having the customer in mind. I was once working with a team on a new product sold to government end users. This product was based on a new technology that my company had created and built upon our world class IP portfolio. This product would be new in the market place and it would be very difficult, if not impossible, for competitors to create a similar product. Sounds like a slam dunk, right? There was only one problem; When we tested the new product with customers, they didn’t want it because they weren’t willing to pay for the value it created. Unfortunately, the team brought the product to market anyway because a very senior executive created some of the patents that were used in the new technology. The result? The product failed in the market spectacularly.
  2. Your company is losing market share to competitors who have a stronger relationship with customers. If you hear from customers that your company is “hard to work with” or “doesn’t listen to my needs” pay close attention. This is often the first sign that you are not meeting needs and that you are allowing competitors to steal your customers by focusing on your lack of attention.
  3. Your company is chronically under performing the market. Companies that lose their focus on customers lose in the market place. If you work for a public company, this will result in missed quarters and decreasing stock price. My experience is that when this happens, senior leaders respond in the exact wrong way; they turn inward, ramp up the meetings, and cut travel budgets. This, of course, creates distance from customers and makes the problems worse.

The issues listed above are, sadly, common in large customers. If you work for a company that exhibits any of the above behaviors, do the following to re-engage with customers and drive a more customer centric culture:

  1. Add an empty chair to each meeting. Jeff Bezos, in the early days of Amazon, famously had an empty chair in every meeting. The empty chair was to symbolize the customer. At multiple times in each meeting when a decision was being made, Bezos would point to the empty chair and say “What would the customer want?” This forced his team to have a strong customer mindset and ensure all decisions were made with customers in mind.
  2. Spend time with customers- in their own environment. There is no substitute for spending time directly with customers. Don’t bring customers to you, instead go to customers. Importantly, try to engage with customers in their “native habitat.” That is, get out of conference rooms and spend time with different types of customers (not just executives, owners, etc.) at all levels of the organization. If you sell building products that are installed during the construction of a building, go to a construction site and watch your products being installed. If you sell software, spend some time with the people who use your software on a daily basis. Resist the urge to “teach” or “sell” and just watch. If customers do not know about your features, you may need to enhance your communications or training programs. Further, make sure you are spending enough time with customers. I set a goal for my team (and myself) to spend at least one day per week with customers, no excuses. This will keep your team from spending all of their time on internal issues. I make my team spend time with customers even when the business is struggling (when most companies would ban travel to save money) because this, to me, is the most critical time to engage with customers so we can continue to perform.
  3. Structure core processes around the customer. As companies grow they seek to become more efficient by optimizing processes to reduce waste. This can result in processes that are good for the company but bad for customers. Instead, seek to develop processes that start and end with the customer. A good exercise is to start with a blank piece of paper and ask your team “how would our customers want us to create our new product introduction/customer support/sales planning processes?” For example, in my current role, I am transforming an internally focused New Product Development process that has a (very dangerous) minset of “we are smarter than our customers so we know what they need” into a process that invites customers to co-develop products alongside our Product Managers and Engineers so that customers get to develop the products they will eventually use. This new process (although difficult to instill at first) is embraced by both the internal teams and customers which has resulted in much higher levels of collaboration and customer engagement, not to mention higher sales and faster adoption of new product launches.

One of the biggest challenges senior leaders face in any organization is balancing internal needs with a strong focus on the customer. I would argue this is a false choice as if you start with a strong sense of customer centricity and build your internal processes around the customer, you will not only ensure internal and external alignment but will unleash profitable growth.

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