In his book “Managers the Day After Tomorrow”, my business partner Rik Vera states that companies need to embrace Extreme Customer Centricity in order to survive in the Day After Tomorrow. With the smartphone as the most powerful tool ever, customers have literally put themselves in the center of the world and if you don’t follow them into this new reality, chances are you’ll become obsolete.
Rik’s Customer Centricity Model shows that you have to build a strategy that really starts with the desired customer experience. It requires full adherence to new principles to enable a truly customer-centric operation mode: a shift to value-driven behavior, an accompanying culture with new KPIs, a new management style and an organizational structure that allows for more self-steering and working in teams.
Figure 1 Rik Vera’s model of Extreme Customer Centricity
The desired Customer Experience (CEX) should be the starting point in everything a company does. The first and most important interface – hence the next circle – is the employee. As every customer and every desired customer experience is different, the employee can’t be framed by top-down customer processes. Instead, employees need to be really empowered to help, serve and delight customers at all times and under all circumstances. So, processes need to be replaced by value-driven behavior. Employee Centricity is a natural result of really putting your customer in the center, as digital processes and procedures alone will never delight the customer.
But what really is value-driven behavior? Employees have the tendency to look towards their organization to measure or judge them, hence organizations tend to put extensive performance management systems in place. Big corporates build scenarios, if A happens you need to do this, if B happens you need to do that. The big question is, if it is not processes and procedures, what is it that makes employees know whether they are doing the right thing or not? How do we really know we are doing the right stuff? The answer is value-driven behavior. Zappos (an Amazon company) is a perfect example of a value-driven company; people are trained for four weeks on the values of the company and how these translate to value-driven behavior. Two of their most important values are “Deliver WOW through service” and “have fun and create a little weirdness”. This means that employees are empowered to decide for themselves what it takes to WOW the customer. They are even stimulated to color outside the lines to achieve this, no matter how much time, energy or even money is involved.
How to sustain a business model like that? If you go back to the model, one of the outer circles is Logistics, which needs to be of the highest level to support this customer-centric behavior. At Zappos, only 3% of all transactions need customer service support. Next to that, their famous customer support is not being considered a cost center, but as a non-expensive marketing tool. Zappos is known as a very customer-centric company that is fun to do business with.
Although traditional companies refer to their employees as “human resources”, the rate of disengagement amongst employees is sky high. According to the “The Worldwide Employee Engagement Crisis” research, it is as high as 87%. No wonder! Their idea of an employee is still close to that of a robot: someone who does what he is being told, who works on similar tasks every single day, and is completely interchangeable.
It is easy to understand that employees at a value-driven company like Zappos feel much more engaged. First their behavior is more about ‘Why’ than about ‘What’. Second their reward is variable since it is outside-in, coming from a happy customer. Not unsurprisingly, research has shown that there is a very strong linkage between customer satisfaction and employee behavior and attitude.
High time for companies to change their perspective on employees and regard them as their most important assets!
Culture is eating strategy for breakfast
In one of my previous blogs (“Why Digital Transformation is useless without a Cultural Shift”), I discussed the need for a strong culture to accompany this new value-driven customer-centric approach. Culture nourishes this behavior; it stimulates, rewards and keeps inspiring people to continue to satisfy customers. You need to be persistent in doing this, the temptation is strong fall back to the ‘good old recipes’ of strict processes and procedures. You need to move from a traditional culture of control to a culture of trust.
Management for the new normal
The most important task for the manager is not to run ‘checklist management’, but to keep the culture alive. You can’t go on being a process-driven top-down organization anymore. If people understand the values, if you empower and trust them to do so, they will do what they need to do.
There is no standard recipe for companies on what their organization should look like. We all start from Employee Centricity and our core values, and of course these are very specific to every organization. And with these different ‘ingredients’, a single recipe is just not feasible.
Organizational Structure is People-to-Blueprint
Your core values are not just nice slogans to hang on your office’s walls, they are non-negotiables, they are your culture’s foundation. Every single value comprises desirable behavior and employees need to be fully aware what type of comportment is aligned to the set of core values. And yes, in the end this behavior results into new customer-centric KPIs. Values and behavior shape your culture and true leaders know it is what you should hire and fire upon. The recruiting process will change dramatically as well. It is no longer about merely having the right diplomas or experience, you want to hire people that first and foremost fully support all of the company’s values. That’s exactly why Zappos comes up with ‘The Offer’ after about one week, telling newbies that if they quit, they will get paid for the amount of time they have worked, plus a $2,000 bonus.
Traditional companies start from the ‘blueprint’, a carefully laid out organogram of roles, commitments and reporting lines. Employees are trained to fit within this framework and are hired based on blueprint’s criteria. In an employee-centric organization, people are hired based on companies’ values and should be able to develop their own very specific talents. Employees should no longer fit the blueprint; the blueprint should fit the employees. Let employees develop themselves in what they are good at, not just in what they may lack. The blueprint will no longer be something employees are forced into; the blueprint will be the resultant of all combined talents within the organization.
Technological and physical environment
Which collaboration tools you are going to use, to what extent you allow flexibility of work in time and space, results from extreme customer-centricity, employee-centricity, culture, management style, blueprint and how we implement that blueprint. They are NOT the means to get there, they are the tools to shape it. Culture decides the tools, not vice versa. The right tools ENABLE customer-centricity, tools never CREATE customer-centricity.
What does all this mean for you as a business leader? Leadership is more challenging than it has ever been. But it is different.
Management and organizational structure are a result of a customer-centric culture. Profitability in the new normal is to move away from traditional KPIs to customer-centric ones. Your highest assets are not just customers, they are the satisfied customers: they buy more, they buy more often, they buy at a higher price and they serve as your sales and marketing department. It is the good old balanced scorecard, but with new elements.
The value-chain is simple. Employees fit the core values of an organization, they do understand the higher purpose and behave according to the values. They feel engaged and are able to engage customers. Engaged customers bring profit. Employees are given all opportunities to develop their specific talents and the company takes on the responsibility to maximize the impact of those developments on the results.
Needless to say, leadership needs to change as well. The true new leader is a guiding steward. He does not assign top-down tasks, he supports employees to live the values and creates and supports the customer-centric culture. His ideal characteristics can be summarized using ACTS acronym.
A true leader ACTS
A – Authentic. You cannot pretend to live the values, you need to BE the values of the company.
C – Coaching. You need to move from ‘command and control’ to ‘inspire and engage’, it is a change from assignments to commitments.
T – Transparent. Transparency creates trust. There is no more top-down, ‘we are in this together’.
S – Sharing. Information is shared freely; a truly collaborative culture is supported.
Customer centricity really goes hand in hand with employee centricity. The desired customer experience should be at every company’s core and all the other layers really derive from that:
Figure 2 adapted version of Rik Vera’s model from the perspective of employees