Category Archives: Customer-Centricity

This is why many business leaders waste half their effort and don’t even know it!

There is an old adage in advertising that says: “I know that half my advertising is wasted, but I don’t know which half”. In many cases, we know that all of it is wasted.

So it is with strategy and culture. Most senior business leaders spend considerable time on strategy – and rightly so. We do need to know where we are trying to go. But much less time – and sometimes virtually none – is devoted the other “half”: culture.

Some pundits believe “culture eats strategy for breakfast”. But that is beside the point. Business leaders need strength in both or at least half their effort will be wasted – and sometimes all of it. The strategy sets the direction and culture delivers (either well or poorly) the value of the strategy to the marketplace.

Our experience in many organizations across the globe is that the biggest missing piece is a customer-centric culture that is aligned with a customer-centric strategy. Repeatedly we find a lack of alignment between the stated strategy and what people are doing. Also, we see, more frequently, strategies that attempt to address and create customer value but the culture is not aligned with delivering to meet customer needs and desired customer experiences.

Aligning Customer Strategy and Culture

Aligning customer strategy and culture

You just need to see the disruption occurring in so many industries and almost from observation you can predict impending corporate collapse. Which retailers will survive? Which health services will prosper? It will be only those that develop a strategy centered on customer value and experience with a customer-centric culture across the entire organization that has the capabilities to deliver it.

If you have a question about the adequacy of your culture and believe you are not in the right-hand top box in the diagram, you should start by measuring it and benchmarking where you stand against the world’s best customer-centric companies. To discover the next steps on what you need to do, have a look at the groundbreaking book: The Customer Culture Imperative.

Is there a customer-centric gene?

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Recently I was talking with Dmitry Pukhov, co-founder and owner of a very successful event catering company in Moscow. When I asked him about customer-centric leadership he said the core characteristic is a desire to help people that comes from the heart. He said he believes that we all have a gene that can create a drive to provide service to others. But only some people have developed this gene – through their upbringing, experience, interaction with others who use it and mentoring from customer-centric role models.

There is some scientific evidence to support this. Research shows that people who are more caring and compassionate towards others share a common gene variation linked to the receptor for oxytocin (sometimes referred to as the “love” hormone) that plays a key role in the formation of social relationships and impacts our capacity for empathy. The science suggests that those with the “GG” variant of this gene are better with people and generally more caring.

But all is not lost for those of us that don’t have the “GG” genotype. There is also evidence to suggest that compassion and empathy can be developed through socialization with people that role model it and experiences that elevate it.

I asked Dmitry why his business is so successful – it has grown rapidly over the 12 years since he founded it – and he told me it is because being customer-centric and service focused has always been the driver in his business. He recruits people that exhibit the customer-centric gene and invests in the ongoing development of the gene in all his staff.

Are you using your customer-centric gene or is it dormant? If you want to know what to do to develop it, refer to our book: The Customer Culture Imperative.

Customer Centric Leaders have a Service Focus where Authenticity Trumps Ego

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Lars Bjork, the of CEO 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 becoming 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.

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 it’s time for the banks to shift their corporate cultures

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Image Source: htmvalerio

Big banks and investment houses around the world have been guilty of bad behavior stemming from unacceptable corporate cultures that have led to the disaster of the global financial crisis in 2007-2009. This was followed by the London foreign exchange scandal in May 2015 when six global players agreed to pay $US6.5 billion in fines for their misbehavior. On a smaller, but still significant scale, behavior of the big four Australian banks has come under scrutiny and evidence indicates that they have failed the culture test. A banking enquiry was instigated in Australia with several recommendations made, but not yet implemented.

A big part of the answer to poor corporate culture lies in the large banks developing a strong customer-centric culture. This is a culture where the well-being of their customers is a central philosophy and value that guides decision-making. It is a philosophy embodied in a bank’s vision and purpose that is well beyond making money. It is a mindset acted out at all levels that says “what’s best for the customer is best for the bank”. This doesn’t mean that the banks give their customers everything they want. It means that they understand the needs of their customers and deliver what they promise embodied in their strategy to deliver value and a good experience.

The leaders of big banks will tell you they are customer centric and do this. They point to improving customer satisfaction and net promoter scores. That may be evidence of improving customer centricity, but it does not give us the direct evidence of a strong customer culture. To show that evidence they have to measure it directly – not just some type of anecdotal absolute measure, but using a valid tool that compares their customer culture with the best in the world like Amazon, Virgin and Lego. These companies and others have a powerful purpose that aligns vision, values and strategy around serving their customers and communities that is embedded as a culture in everyone in the organization at all levels and all functions. It is led, role modeled and reinforced in their decision making by their senior leaders.

There is such a valid benchmarking tool available called the Market Responsiveness Index (MRI). This tool based on extensive research and validation testing now enables a bank to benchmark itself in a global database of more than 250 organizations on 8 decisive cultural capabilities. It points out cultural strengths and weaknesses and guidelines for fixing them. It provides credible evidence of a bank’s level of customer culture. This can provide the checks and balances that banking leaders need to be confident that their culture is as it should be – serving customers and the community (profitably).

The Customer Culture Imperative – an award winning book – provides the framework for measuring customer culture directly and the research that underpins the MRI benchmarking tool.

This can help bankers sleep at night as well as the rest of us in the community. And it can allay the fears held by regulators of potential ongoing problems that stem from poor cultures in large banks.

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?

Lexus – a beacon of customer centricity

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The auto manufacturing industry will soon be under siege – impacts are already being felt with easy consumer access and convenience of services like Uber, better public transport, parking costs and restrictions in increasingly large cities around the globe and technological advances in communications propelling less commuting between home and work.

Traditionally auto dealers have focused on each transaction – just getting a sale – and not on nurturing the long term relationships with their customers that will make them lifetime brand loyalists.

Lexus is an exception. Nick Dieltiens, a customer centricity consultant based in Europe, tells us of his experiences when working with Lexus in Europe. First the mindset. It’s not about the “car”, its about the “customer’s journey”. This is illustrated by the fact that on the rare occasions when a Lexus broke down in the French Alps, Lexus arranged for a helicopter to be flown in to collect the stranded family and fly them to their destination.

Also, customer service people at Lexus in Europe are empowered to make the decision to take back a car if the customer is not entirely satisfied with the purchase. Nick tells the story of a senior Lexus executive taking back a car from a customer because the remote control would not connect to the customer’s garage door and the issue could not be fixed. So the executive purchased a Mercedes at a discounted price and provided it to his customer at that discounted price.

The next car the customer bought was a Lexus.

The customer culture in many Lexus dealerships in Europe is strong. Staff are trained to observe Lexus vehicles on the road. If one is see with a broken tail light, they would wave down the driver where safe to do so, give them their car, take the car to get the light fixed free of charge and return the car to the owner.

You may think this costs Lexus a lot of money. It may cost a little more in the short term, but it pays off in a big way with high customer loyalty in car servicing and repeat purchase.

The most important investment by Lexus is in building and retaining a customer culture! This will be essential for all auto companies if they want to grow their businesses in future.