Tag Archives: competition

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

inhalethefuture_exhalethepast

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.

What’s the difference between customer focus and customer culture?

aligned customer culture

Ask any business leader if they and their business is customer focused and you will invariably get the answer – “of course”! But, you’ll find, as I have, that the term ‘customer focus’ means different things to different people.

It ranges in its meaning from ‘good customer service’ to ‘identifying the needs of customers and delivering products and services that meet those needs’ to ‘ensuring that the whole organization, and not just frontline service staff, puts its customers first’. In this last meaning, every department and every employee should share the same customer-focused vision. For this to occur, an organization must have a culture based on the belief that what’s best for the customer is best for the business. It is this meaning of customer focus I call customer culture.

A customer culture is embraced by every individual, team and business unit. It is embedded in people through induction, leadership, processes, rewards, key performance measures, a common language, and an expected way of doing things. What’s more, customer culture is a discipline – a shared set of behaviors and skills that can be developed, refined and practiced to become habits that lead to better personal and business results.

A strong customer culture delivers a customer experience that is consistently excellent along the whole service chain. The ultimate aim is to have the customer make your business the center for everything they do for your particular offering. You can’t get to the ultimate unless you start with the right culture – a customer culture.

Does a customer culture matter?

It may sound like a simple question with an obvious answer. For most of us the answer to this question is intuitive: yes, customer culture matters! We are all customers and when we reflect on our most fulfilling business relationships we sense these companies are focused on our needs and helping us be satisfied and successful.

But, does customer culture really matter to business performance? Our answer is a resounding Yes! After spending 3 years researching this question we have scientific evidence to show that it does matter. It has a deep impact on an organization’s business performance and sustainability. In fact, you only have a sustainable business if it is driven by a customer culture.

How do you get it?

Although companies like Amazon and Zappos provide great inspiration, they are examples of companies that were born with a unique deeply innovative leader who embedded a customer culture from the start. But, what about companies that must transform from an inward looking culture to one that is externally focused and embraces the customer like many of the telecommunications and energy incumbents that have a monopoly legacy? Or companies like HP or Starbucks that were born with a customer culture, lost it along the way and are having to work hard to get it back.

Research and experience show there are 4 stages to getting and keeping a customer culture: Initiation, Implementation, Embedding and Reinforcement. I will talk about each stage in my next four blog posts.