Tag Archives: Customer-Centricity

Customer Centric Leadership in Action – A lesson from Elon Musk

tesla_charging_station

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 setup 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 wine growers 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 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 customerculture in your business and build up your disruptor defenses?

If you are interested in creating this type of culture in your organization why not attend one of our MRI Accreditation Workshops held all around the world!

 

How one person can make a difference role modeling customer centricity

tarpys

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.

Lessons from REI: Aligning your People

We have just completed one of the busiest weeks in retail in the United States, with Black Friday for the physical stores and Cyber Monday for the online retailers. This week now blends together with doorbuster deals bombarding us constantly online and instore in the week leading up to Thanksgiving as well as weekend afterwards.

What is different this year is that some major stores have decided to stay closed during this period. In the land of the consumer this a really big deal!

One chain in particular stands out, REI, the outdoor recreation retailer with more than 12,000 employees and 140 stores around the US decided to close this past Black Friday. See below, their CEO, Jerry Stritzke’s 30 second announcement:

 

“We believe that being outside makes our lives better. And Black Friday is the perfect time to remind ourselves of this essential truth.” – REI CEO, Jerry Stritzke

So what is behind this decision? I believe it is to better align REI’s core values with its actions in the market. REI’s core mission is “to inspire, educate and outfit for a lifetime of outdoor adventure and stewardship.”

What better way to live that mission and align all of their people around it than closing on a day that allows their own people get outside and live the company’s mission.

Now that all sounds great but how does that help their customers? No doubt some customers may be inconvenienced by their physical stores being closed. However they will still have a small number of staff manning their website so they are not completely close for business.

REI are reacting to growing concerns by their customers and others that retail in general is overshadowing the core purpose of thanksgiving which is to celebrate with family and friends. They are betting that this decision will pay off over the longer term by aligning their people with their mission while also meeting the changing expectations of their customers.

Ultimately if you want your people and customers to really buy-in to what your company is about you must walk the talk, for me this is strategic alignment in action!

Interested in what it takes to be truly customer centric? Learn more here

Why aren’t Public Service Organizations Customer-Centric?

(Photo credit: UCSF)

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.)

Why smashing hierarchy and driving collaboration is essential to customer experience

Source: BRW Australia Photo: Nic Walker

Dr David Cooke, MD of Konica Minolta Australia.  
Source: BRW Australia Photo: Nic Walker

When Dr David Cooke was appointed managing director of Konica Minolta in Australia he was faced with a culture of strict hierarchy, strong silos and task oriented behavior.  He realized this was the first thing that had to change.

Why? Because the market for multifunction copiers and printers was changing. The market for these products was declining and the demand for outsourced solutions and services was emerging. The hardware was less important than it was in the past, customers just expected the devices to all work well and be built with high quality engineering. Quality products did not differentiate, customers wanted more, they wanted more sophisticated services and solutions to help them manage the costs of running their fleets and value add solutions that would streamline workflows and improve their operational effectiveness.

These new market conditions required a more flexible, agile and collaborative culture that focused on the changing customer needs if Konica Minolta was to thrive in the future. So his vision of KMA as the “company that cares” for its customers and its community was a means to differentiate KMA from its large competitors, promote a unified company view of improved service and value for customers and one that he felt his staff could buy in to.

His view was validated by a staff survey that benchmarked the level of customer-focused culture in the business by measuring market responsiveness on a 7 factor index. It showed that there was some work to do, but that staff were overwhelmingly ready for change, wanted transparency of information across the organization and expected the senior leadership to lead it and show the way.

David immediately looked for tangible initiatives that would demonstrate a unified company with increased collaboration and communication. In the first few months of his tenure he made the following changes:

  • the large corner office that was originally the haven of the previous managing directors was re-purposed as a “quiet lounge” for all staff
  • he moved into a glass fronted office next to the lunch room where he could wave or nod to his staff as they used this heavily used walk-way.
  • he replaced several of the functional heads with new leaders to strengthen the cultural change program and break down the silos
  • he increased transparency in the HR function by moving it from closed office walls to join others in the open plan office and appointed a new leader to facilitate the change program
  • he promoted an external focus by encouraging all staff to work for non-profit community organizations by enabling them to take days off to directly contribute

David’s approach to creating a less hierarchical structure, sharing of financial results and customer successes across the business is leading to more engaged staff, better customer service and growth in revenues at a time when overall market revenue is declining.

What’s the secret? Customer Focused Leadership – leaders that genuinely care about creating value for customers, the business and the communities that operate in.

6 questions on customer focus every leader must answer

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There has always been a lot of talk from business leaders about being customer driven, customer focused, customer centered in their business activities but what does that really mean?

Here are some key questions and answers to help leaders wanted to improve their organization’s level of customer focus:

1. Why be customer focused?

a. It pays – countless studies tell us businesses with high levels of customer focus sustain a growth path and are much more profitable

b. It’s more satisfying – a pat on the back from a customer makes the hard work all worthwhile

2. How does a customer focused business and team think?

a. It has a shared belief that “what’s best for the customer is best for the business”.

b. The customer is at the heart of all decisions – it is enacted by saying “How will this decision affect the customer; how will it benefit the customer?”

3. What do customer-focused people and teams do?

a. They get feedback from end customers and act on it

b. They get feedback from service provider partners and act on it

c. They gain insights on what bugs customers

d. They understand what will create real added value for intermediate and end customers

e. They realize that it’s the customer’s perception of what is valuable that counts, not their own view of what’s valuable

f. The biggest challenge is for us to gain a customer’s perception of what is really valuable

4. How can we measure how customer-focused we are?

a. Measure what people do in the business that affects the value delivered to customers – adding customer perceived value is a positive; doing non-value work is a negative

b. This comes down to how we behave – in relation to customers and competitors; how we collaborate with each other and our partners

5. What leads to loyal customers spending more and not considering the competition?

a. Personal relationships that create advocates

b. Consistent high value service delivery

c. Continually interacting with customers, listening for feedback, asking, customers how we are doing

d. There is great satisfaction in understanding a customer’s real need and helping them satisfy it

6. Who creates value for customers?

a. Everyone – if you are not creating value for customers, you are draining the business of its potential and future

b. The user experience is affected by everything the business delivers or does not deliver

c. Customers don’t care about your processes, they want a solution to their real problem

d. We should all be focused on solving the end user’s business problem/needs