Category Archives: Customer Centric Leadership

How a customer culture has created “The Amazon Effect”: A vision of the Future

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Ever since reading the classic Competing for the Future I realized that a business leader must have one eye on the present and the other on the future. Every organization is running two businesses – today’s business and tomorrow’s business! To build capabilities today for tomorrow’s business requires a cultural capability for agility, change and customer centricity. I call this cultural capability: peripheral vision – the extent to which leadership and staff in the business monitor, understand and respond to trends and changes in the larger environment including technological, economic, social, political, legal and the natural environment (such as climate change). This future oriented cultural capability also leads us to build disciplines around customer and competitor foresight – what will customers’ future needs be and who will be future competitors and where will they be coming from.

The need for organizations to build these cultural capabilities today is demonstrated by what I call the Amazon Effect. Amazon just announced the acquisition of Whole Foods, a natural and organic foods supermarket chain with 465 stores in North America and the UK. What are the implications? With its online technology capability, Amazon now has a bricks and mortar chain that can be leveraged with its delivery capabilities, elevating online selection and ordering of Whole Foods private label products. It will also bring change to the current retail format with new technology like no cash registers – all to add to the ease and convenience for consumers. This will have a huge impact on other supermarkets, food and grocery manufacturers and the entire retail industry.

What would be the impact in the car industry if Apple bought Tesla or in wearable technology if Google purchased Samsung? How is VISA dealing with PayPal and Apple Pay and hotel chains coping with AirBnB? Many of these challenges for established companies are yet to happen – but they will……and soon.

I am thinking about what this means for my own business and what cultural capabilities and strategy we need to build now to ensure its future. What is your Amazon Effect – the thing that would require you to totally reinvent your business? Building cultural disciplines in peripheral vision, customer foresight and competitor foresight will enable you to become prepared to face these challenges, make the changes you need to make, take up future opportunities and run a growing and sustainable business. Without them you will struggle at best, but more likely be consigned to the history books.

Preparing for your future business requires customer-centric leadership that galvanizes all your leaders and staff to build capabilities firmly focused on who your future customers and competitors will be and how the whole organization is geared to adapt and provide ongoing superior value for customers.

Learn more in our award winning book, the Customer Culture Imperative.

Customer Centric Leaders have a Service Focus where Authenticity Trumps Ego

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Lars Bjork, the CEO of Qlik, has built the company with a service focus around a “we” Leadership Style.

My father had a particular view of service. You served your customers, your employees, your family, your community and your shareholders. He would employ people fresh out of jail to give them a second chance. He knew his staff and their families and helped them when they needed help. He knew what his customers wanted and needed and trusted his staff to deliver value. He led his business with integrity and authenticity. He was a highly respected and successful businessman. From his background in retail he told me if you do all of these things right “…the profit will come up through the floor.”

Lars Bjork agrees. He has led Qlik as CEO for the past ten years and has been there from its days as a tiny start-up in Sweden to become a world leader in business intelligence software. Qlik was purchased by a private equity firm in 2016 for $3 billion. It now has around 40,000 customers and offices in 26 countries. Bjork says “leadership, for me, is that you serve the team. And the team is the people who work for you.”

How does that operate in practice? Bjork describes it this way.

“I do a lot of town halls and video. People want authenticity, an unscripted sense of ‘this is how it is’. They don’t want to hear packaged BS. They can see that from a mile away. I try to be transparent and share a bit about my private life – because how am I going to learn stuff from people, how are they going to feel comfortable with me, if I don’t share anything?”

He also asks a lot of questions and listens intently to the answers. This has become formalized with a “listening forum”. This occurs where he brings a dozen people together from different sections. He can’t say anything for an hour. They give him feedback, and he just takes it in. He does not push back or dismiss it. This leadership style is one of authenticity and service.

In our current research involving interviews of customer centric leaders I find the most impressive and effective ones are authentic, service focused, and good questioners and listeners. It doesn’t mean they have no ego. They do, but they are essentially team players and do not let their egos dictate decisions. They often do have to make the tough decisions but they do it, like my father, with authenticity and with a “service” mindset.

Learn more about the power of a customer centric culture in our award winning book, the Customer Culture Imperative.

How a customer culture makes or breaks new product success: A lesson from Comcast

For those of you familiar with our work you will know that we successfully validated the link between a customer centric culture and new product success. Our chart below shows the links between our 8 dimensions of a customer centric culture and the key business performance outcomes.

8 Dimension Performance Links

Essentially organizations that develop a cultural focus that is obsessed with customers, outperform everyone else in the markets in which they play.

I just came across a great example of how this can work in reverse for a company that has not developed a customer culture – Comcast Cable.

Comcast recently announced a major new product – they are now a cell phone provider in the US market:

Comcast New Product Intro

Here is the reaction I found in some comments people who saw this announcement on LinkedIn (the majority of the comments were along the same line….):

Comcast New Product Intro Reaction

This is of course only anecdotal evidence, however, it is going to make it tough to make this product launch a success with an undercurrent of negative feelings towards the experiences many customers have had with the brand in the past….

How you treat your current customers today will have a massive impact on how they will respond to new product introductions in the future. 

Build your company’s customer culture today to ensure you continue to be successful in the future. Learn more in the Customer Culture Imperative, our award winning book.

Adapting to change by putting Customers at the center of everything: Lessons from Macquarie Telecom

Transforming Unhappy Customers into Happy Customers

“The Only Thing That Is Constant Is Change” – Heraclitus 500BC

It’s hard to believe this quote is from more than 2000 years ago… I can’t think of a more relevant quote to describe the times we are living in right now!

From a business context the change we are experiencing is the rapid shifts occurring in customer expectations and behavior. The companies that are embracing this are the ones that are winning and will continue to win in the future.

The question is how do we adapt to this changing customer environment, stay ahead and stay relevant?

Many forward thinking organizations are using increasingly sophisticated customer experience metrics to stay in touch with what their existing customers are experiencing. Specifically they have embedded these processes in a manner that makes it part of their organizational culture – we call this a “Customer Culture”. A great example comes from the work being done at Macquarie Telecom, a leading Telecommunications firm in Australia.

Macquarie’s CEO, David Tudehope, has taken a personal interest in leveraging the Net Promoter Score (NPS) methodology to help drive a customer centric culture. NPS is essentially a simple way to measure customer advocacy. It is based on answering the question – “How likely are you to recommend us?” on a 0-10 point scale. While a great methodology, it is not the right one for every business. What’s more important than the metric is the fact there is a focal point at which all employees can focus on and work together to improve.

For Macquarie, leveraging this methodology has been transformational. It has raised the visibility of the importance of customer experience on customer retention and ultimately business performance. It has also served as a goal that aligns everyone and drives collaboration across the firm.

What have Macquarie learned from their transformational journey that you can apply in your organization?

  1. Engage everyone in the journey – measure every significant touch-point as everyone has an impact on how customer’s experience the company
  2. Be Transparent – display results for everyone to see so teams can see how others are performing and compare results
  3. Celebrate individuals and teams – share great customer stories and celebrate teams with high NPS scores
  4. Integrate into hiring processes – hire people with a desire to create great experiences for others
  5. Customer Success gives employees meaning and purpose – connecting people’s roles with the impact they have on customers provides meaning, inspiration and purpose and will derive up engagement levels and ultimately people’s performance

What are the results?

Macquarie’s NPS is 60+ which means they have many more promoters than detractors (see this post to compare Macquarie’s NPS with the most customer centric companies in the world). While they are not the best in the world (they can still improve), they significantly outperform their competitors in the space they play in.

To read more about how to begin the journey to a customer centric culture, get a copy of our book, the Customer Culture Imperative or learn about the Market Responsiveness Index.

What happens when you don’t have a corporate culture obsessed with customers – Lessons from United

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A man is forcibly removed after not giving up is pre-paid seat on a United Flight

We witnessed one of the most extreme examples of what can go wrong in a business that has truly lost sight of its purpose.

As a former United Global Services member (United’s top tier for frequent fliers) I was appalled at how badly United handled a relative routine situation that probably happens multiple times a day in various cities across the US. What on first pass looked like the removal of a potential terrorist happened to be a paying passenger who was also practicing physician.

United sometimes over sells airline tickets in order to make sure they fill their flights and remain profitable. I am not against this practice, it makes business sense. However when this impacts customers, (and it inevitably will) this becomes a true test of an organization’s customer centric culture. Will it do what’s best for the customer? (A customer centric view) or will it protect a short term myopic view of its profits for that particular flight (a transactional view).

In this case United choose its policy and procedures over doing the right thing for its customers. Clearly there was an upper limit on what was available to be offered to make this situation right for their customers. United claims they offered $1000 to passengers to take another flight so that crew members for another flight could board to go to another plane – there were no takers. Instead of upping the compensation to a point that passengers felt like it was a fair deal, they decided to pick passengers based on their frequent flier status and other connecting flights. Three left peacefully although clearly unhappy and one refused resulting in the social media and traditional media storm that came after a video showed the passenger being forcefully removed.

Company Centric CEO Reaction – Oscar Munoz

Those of us that work in the culture space know that the CEO and top team set the tone and shape organizational culture.

Oscar’s initial response was to apologize for having to “re-accommodate these customers”. While externally he made attempts to diffuse the anger at the situation internally he sent a memo to employees that defended the crew’s actions, calling the passenger ‘disruptive and belligerent’ and praising his staff for going ‘above and beyond‘.

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I understand he wants to stand behind his employees, support them and not throw them under the bus for this incident but really he was trying to “protect” the company and the United Brand. This message also reinforces poorly thought out policies that do not get to the heart of what great companies do – they have a culture that puts the customer first.

Finally, two days later Mr Munoz has accepted responsibility for the disgraceful incident:

“I continue to be disturbed by what happened on this flight, and I deeply apologize to the customer forcibly removed and to all the customers aboard………. “No one should ever be mistreated this way.”

A colleague of mine recently relaid an experience he had in a very similar situation on an Emirates flight. He said they just kept increasing the enticement to get of the plane. Eventually enough people took up the offer. They ended up giving away 2 business class return tickets from Australia to Dubai  as well as accommodation plus $US600.

This price was small compared to what United will now go through…..

United takes a $255 million dollar bath.

The value of United has fallen by $255 million as a result of this one incident and the bad press and social media storm surrounding it. How much were they offering passengers to deplane again?

Eric Schiffer, CEO of Reputation Management Consultants, termed United’s handling of the incident “brand suicide.”

“When you go onto a United flight, you shouldn’t have to be concerned there will be blood or you will get slammed in the face,” Schiffer said. “I think you will see an effect on sales from those who are disgusted by the gruesome action. And it’s catastrophic for a brand’s trust.”

No doubt United will lose customers and it deserves to, what comes next is a question of leadership and culture.

If all employees have a customer centric mindset and are empowered to do what is right by the customer this would not have happened.

That’s what we do at MarketCulture. We help companies understand the importance of putting the customer at the centre of the organization – a mindset that establishes the idea that “What’s best for the customer is best for the business”

Why are so many customer-centric leaders on their own?

businessman thinking in office

Many customer centric leaders we have spoken with are facing challenges they did not expect. While they themselves understand the imperative for a customer culture that will drive future business performance and sustainability and act as role models in leading the business in this way, so often they feel alone and frustrated at the top. Despite their best efforts their leaders don’t see it in the same way.

Why? Because their direct reports are still operating with a functional mindset. Or they see proposed initiatives to strengthen the culture to improve customer experience as extra work they don’t have the time for. Or they don’t understand what it means to be a customer-centric leader and why it is critical in today’s disruptive business environment. And this is spiraled down to middle management and to the people who report to them.

This is perpetuated by managers’ KPIs that are primarily functionally focused. This creates silos, lack of collaboration and lack of effective support for organization-wide initiatives.

This is not solved by ad hoc efforts to get people on board.

It requires a commitment to an organization-wide initiative that measures and benchmarks the current level of customer-centricity and engages leaders at all levels for the their inputs. It requires the development of a customer-centric strategy designed to align people with purpose and job relevance that connects the value they deliver to the customer. It needs to create a focus on easy to understand, credible and robust organization-wide customer metrics that everyone can buy in to. This needs to be part of an implementation roadmap of digestible steps that inspire people to participate in and carry through.

Above all, this must be tangible, meaningful and actionable.

Often the hardest part for a senior leader feeling all alone and frustrated by his or her team members that don’t ‘get it’ is to make a start.

The best place to start is to get a tangible benchmark of where we stand today as a business against the most customer-centric organizations in the world. This assessment involves the participation of all leaders and places a mirror to our business. The Market Responsiveness IndexTM (MRI) is a powerful tool to help you get your team on board. It is an assessment tool that will show you that you are not alone – in fact there are many others in different parts of your business and at different levels that think just like you do.

And they, just like you, want to make a difference that counts.

Customer Centric Leadership in Action – A lesson from Elon Musk

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One of the central tenets of being a customer centric leader is listening to customer feedback and responding with action.

There is no better recent example than Elon Musk’s response to a customer complaining about the Tesla charging stations being used simply as car spaces.

The Tesla customer complaining happens to be Loic Le Meur, a fellow entrepreneur and major tech influencer, with 130k followers on twitter. You could argue that probably holds more weight than just your average customer but clearly the issue was one bubbling up and on Elon’s mind.

Here is the interchange from the two on twitter below:

elon_musk_twitter_response

Loic’s tweet was responded to within 20 minutes and within 7 days the press announced “Tesla to begin charging idle fees to those remaining on the charger beyond a full charge”

As the team at OfficeChai reported:

“Tesla was going to charge $0.40 for every minute a fully charged Tesla would stand at its parking stations after a five minute grace period. This simple change would ensure that people wouldn’t leave their cars at parking stations, preventing others from using them.

And what’s incredible is the pace at which the product change was implemented. Tesla might still call itself a startup, but it hardly is one – it has over 30,000 employees, and large engineering teams. To have a product feature conceptualized, implemented and shipped in a week is nothing short of miraculous.”

Now this might not be the perfect solution but Tesla will listen to customers and refine further as needed.

This is what customer centric leadership looks like in action, in this case led from the top. Elon’s expectation is that everyone in Tesla is listening to customers and responding to continually refine and improve the experience and value being offered.

Are you are customer centric leader? Find out more in our book, the Customer Culture Imperative

 

What is the kryptonite for disruptors?

Established businesses everywhere are under attack. The headlines are full of stories of business disruption. Entrepreneurs everywhere are building companies to unseat the entrenched firms.

While many think the answer is to invest in more technology, lobby government or follow their competitors actually the answer is right in front of them.

Our team in Sydney recently had the chance to sit down with Luke Jecks, the Global CEO of Naked Wines for his perspective. Listen to Luke talk about what he describes as the Kryptonite for disruptors, its a great lesson for anyone in business today:

So what’s the Kryptonite for disruptors? A Customer Culture or as Luke puts it:

“Love your customers”

If you spend time understanding and acting on your customers’ needs you will create loyalty that will keep you as immune as you can be to disruption.

So how did Naked Wines disrupt the wine industry?

Before Luke set up Naked Wines four years ago he was looking for an industry where customers felt disenfranchised. He found it in the Australian wine industry – a market dominated by two large retail chains owned by Coles and Woolworths that between them shared almost 70% of wine sales nationally. Not only did he find wine lovers who felt little connection with the vast array of brands but also boutique vineyards that were being squeezed out of the market by ever-narrowing margins and an inability to finance the next vintage.

Luke knew that if he could create a personal connection between winegrowers and consumers and a financial model that could provide more stability and certainty for wine growers he could build a new business.

He realized that he needed wine consumers as repeat customers and he came up with the idea of “angels’ – that is consumers as angel investors who would pay $40 per month and build up a credit in their account to be used to buy the boutique wines of their choice.

Four years after launch Naked Wines in Australia has more than 50,000 sustained angels, more than 35 boutique winery suppliers with an online communication and ordering system that connects them.

Annual Australian revenue of $30 million and more than $200 million globally is a testament to the fact that the whole Naked Wines team have a culture that enables them to “love” their customers.

Isn’t it time to create a customer culture in your business and build up your disruptor defenses?

 

How one person can make a difference role modeling customer centricity

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Tarpy’s Roadhouse just outside of Monterey, California is renowned for its good food, friendly hospitality and fast service. One person, Niranjan (“Nick”) Subedi, a native of Nepal, shines out as a role model in serving guests at the restaurant since 2000. A phrase known to every Nepali translates to “guests equal god” and offering all you have to a guest is considered a moral duty. Nick remembers every guest and their preferences even when they have not been back to Tarpy’s in a long time. Clint Eastwood, who lives in the area, is a big fan and he like many guests requests to be seated in the area where “Nick” is serving. Nick’s belief is that service is a duty and a pleasure and he shows this in his wide grin and attention to customers’ needs. But more than that he says: “I try to bring the human element to dining, to show that I love the guests”. He lives nearby with his wife in a house he owns “ because of my customers. I owe everything to them,” he said.

“Guests equal god”

It only takes one person like “Nick” Subedi to act as a powerful role model in a business reflecting strong customer-centric behaviors to lead others to do the same. If enough people in your organization follow this example you will have a strong customer culture – and a sustainable thriving business.

Trust – An essential Ingredient for Customer-Centric Leadership

 

Trust it the Foundation for Customer Centricity

Trust is the Foundation for Customer Centricity

A strange dynamic is happening in the run-up to the US Presidential nominations and voting for the November Election. The two front-runners leading up to Super Tuesday were Bernie Sanders (Democrat) and Donald Trump (Republican), both unlikely candidates. Sanders is believed to be a left wing socialist and Trump is an irreverent, anti-establishment, “say it as he sees it” first time politician. Both are seen to be extreme in their views in relation to the ruling Washington establishment.

How has this happened? It’s happened because the existing establishment politicians on both sides of politics have lost the trust of the American people – their customers. You cannot lead without your customers’, employees’ and key stakeholders’ trust in your vision, your ability to carry it through, your authenticity and your commitment to the long haul for their and everyone’s benefit.

Stephen Covey (Speed of Trust, 2006, p.1) says:

“There is one thing that is common to every individual, relationship, team, family, organization, nation, economy and civilization throughout the world – one thing which, if removed, will destroy the most powerful government, the most successful business, the most thriving economy, the most influential leadership, the greatest friendship, the strongest character, the deepest love…….That one thing is trust.”

Today there is a strong movement in all types of organizations to improve their customers’ experience. This requires customer-centric leadership that takes the view that “what’s best for the customer is best for the business.” For that to occur these organizations must have a strong customer culture which can only be developed by leaders who are trusted by their employees. We see trusted leadership in companies like LEGO, Starbucks, P&G, IKEA and the Virgin Group of companies.

What is the level of trust in leaders in your organization?