Why aren’t Public Service Organizations Customer-Centric?

The Department of Motor Vehicles (Photo credit: UCSF)

Why aren’t many public service organizations like health, tax, education, transport and treasury or utilities such as power and water authorities customer-centric? Public service agencies differ markedly. Some have an exclusive franchise – public schools, police and roads that are taxpayer funded or water and electricity transmission monopolies that are customer funded. Others operate in competitive markets such as postal and parcel services.

But the case for customer centricity is compelling.

The Case for Customer Centricity

Countless studies have documented the link between organizational culture and organizational performance. Specifically, many studies show that a customer-centric culture drives superior service and value for customers resulting in an experience that creates customer satisfaction and advocacy. This in turn drives exceptional organizational performance in terms of productivity, new product/service success, innovation and financial performance.

Government departments and public service organizations have clearly defined missions to provide a service to their constituents. Each reports to a government official who is part of a central, state or local government that represents a community – much of which is made up of customers that experience the service. Poor experience leads to complaints, that in turn, ultimately affects votes for public officials if service is consistently bad.

Public service organizations that do not understand their customers’ changing needs, or worse, don’t care about their customers, will receive complaints that require additional resources to solve. This creates stress for both employees and customers and takes resources away from their core roles. The momentum and complexity of global change are challenging all organizations, including government agencies, to move faster, work smarter, use their resources more effectively and think further ahead.

Most senior leaders of these organizations know this!

What’s the problem?

Many public service organizations try to focus on their customers, but wonder why their customer service programs have not really worked. A key reason is that senior leaders do not understand the difference between customer focus and customer centricity.

If you ask different people in your organization whether it is customer focused or customer-centric you will probably receive a variety of answers. If you then ask them what they mean by that you will probably get many more. Often many senior managers believe their organization or department is customer-centric while others will strongly disagree.

Another reason is that public service organizations do not measure customer centricity and make it a key performance factor for assessing leader and team performance.

The best starting point is to agree on what customer centricity is and then measure it for your organization. This will get everyone on the “same page” and create the mindset and benchmark that enables you to focus on things you should do to strengthen it.

What is customer centricity?

Research tells us that customer centricity requires a particular culture – a shared system of values and norms (mindset and behaviors) that focus all employee activity on improving the customer’s experience. Values define what is important and norms define the appropriate mindset and behavior that leads to what people do.

Leaders of customer-centric organizations have found that customer centricity is defined by the capability of an organization to understand, predict and respond to customer, market and external environment changes. It is based on the mindset: “what’s best for the customer is best for the organization” and a set of employee behaviors where the customer is central to the decisions they take and how they are implemented. This does not mean that you give customers everything they want, but by understanding their current and future needs you are best able to deliver value that will satisfy them in meeting their objectives in a way that meets your own goals. Customer centricity should transcend all departments and functions and be an integral part of the way employees behave and perform.

How do you measure it?

There are now valid measurement tools available to benchmark your organization’s level of customer centricity. Based on empirical research two tools can be used to assess where you are. The Market Responsiveness Index is relevant to competitive environments and benchmarks the capabilities of your organization on 7 factors. The Customer Responsiveness Index (CRI) is relevant to the vast number of non-competing government agencies and utilities and benchmarks the capabilities of your organization on 6 factors. Both tools reach into a global database to enable you to compare your level of customer centricity against the best… and the worst. But more important they enable all staff to understand what customer centricity is and what actions you can take to embed it in your organization as a sustainable culture.

Three steps for getting started

The following three steps will create some effective momentum:

1. Hold a forum of leaders designed to create awareness of what real customer centricity means. This may include a debate on whether your organization is customer-centric with one team taking the positive stance and the other team taking the negative view. This will expose different views and help people understand what “being customer-centric” means.
2. Measure and benchmark your organization’s level of customer centricity and identify strengths and weakness on the customer-centric factors that drive your performance.
3. Conduct a leadership workshop designed to review your strengths and weaknesses and develop plans to act on the most important priorities ensuring that all leaders are involved.

These 3 steps will lead you to actioning a customer-centric plan based on an objective understanding of where you stand, some milestones and targets to be achieved and a roadmap to get there.

You will find some valuable tools, case studies and examples to help you through these steps in The Customer Culture Imperative: A Leader’s Guide to Driving Superior Performance, McGraw-Hill New York, 2014 by Linden R. Brown and Chris. L. Brown. (The foundation of the research is in Appendix 1, pages 273-287.)