Creating a customer-centric culture
In an earlier post I said that customer-centricity calls for a comprehensive cultural shift within an organization, and that it is hard to achieve for precisely this reason. Since a change of this nature can take years to set in, it needs the stewardship of senior management to ensure that it does not lose direction or momentum midway.
In a 2009 survey of large American companies, it transpired that one in two respondents has a Chief Customer Officer (CCO) in whom is vested the power and responsibility to act in the best interests of the customer. The CCO is the change agent, and it is her job to portray the customer within the organization and to define customer acquisition and retention strategies. For the CCO to succeed she must be positioned as the cross-functional authority on the customer and empowered to cut through departmental silos.
Above all, the CCO must focus on driving profitable customer behaviour, nurturing a customer-centric culture and building value for the customer as well as the company. Clearly, that's a tall order for one person, and is one that requires the services of a small but flexible team dedicated to its fulfilment.
The Big 3: Methodology, Metrics and Technology
What does it take to create a customer-centric culture? In practice, the CCO works with different organizations to align the company's deliverables and behaviour with its customers' needs through a confluence of methodology, metrics and technology.
Broadly, CCOs' best practices conform to the following framework:
• Corporate objective and strategy - to align corporate action to acquire and retain the right customers.
• Customer strategies - to define and implement effective strategies that enable the organization to maximise the value to and from the target customer base.
• Culture management/creation and customer data - to instill a customer-centric culture and provide relevant and timely customer - crucial for effective decision making.
• Customer value and priority - to prioritise resource allocation to maximise returns.
• Customer retention - to build intimate relationships that strengthen loyalty and provide deeper insight to the behaviours and needs of target customers.
• Customer acquisition - to leverage existing insight and relationships to acquire new and profitable customers.
• Kaizen and innovation - to continuously improve and innovate the customer experience, creating and maintaining competitive differentiation.
Since a customer-centric organization and its CCO rely heavily on customer metrics to set strategy and make decisions, it is absolutely critical to define and provide the right measures to the right people at the right time. Metrics are used to:
• Drive continuous learning and understanding of how the company impacts customers.
• Assign accountability and impart urgency for improvement.
• Execute ongoing modification and improvement programmes, facilitating decision making.
• Create awareness and manage customer profitability pipeline and risk.
The role of technology, the third element, is to enable all of the above.
Critical Success Factors
Large scale organizational change management, which is key to creating cultural shifts of this magnitude, must be handled with finesse to be successful. A leading research firm sums this up in more prosaic terms, and recommends that five critical success factors be put in place, namely:
• Create the right environment.
• Take on a broad change agenda.
• Establish a strong operating structure.
• Kick-off high priority activities.
• Look ahead ot the future.
What do they mean within an organization?
The right environment is one in which the CCO enjoys consistent and vocal senior management backing and is judged purely on the basis of progress versus an agreed plan. In return, the CCO must take on a broad change programme and be willing to meet wide ranging challenges including securing buy-in from various parts of the organization and involving employees as change-agents... weaving customer-centric thinking into the very DNA of the organization.
The operating structure must be agile and therefore the core team tends to be small but multi-disciplined. This team must be talented enough to allow the CCO to keep focused at the strategic level. Activities that raise the prominence of the customer - arriving at a holistic view of customer experience, analysing customer economics and establishing a Voice of Customer program - are high priority and must be rolled-out the quickest. Last but not least, since change in culture can take years of effort, the CCO must have the necessary vision and focus to keep up the organization's enthusiasm until the goal is met.
