Should we shift the conversation from customer-centricity to person-centricity?

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Customer-centricity and employee engagement are collectively being recognised by organisations as an important strategic orientation that are key to improving business success[1].

Yet, there is very little recognition and discussion about how true person-centricity can drive improved business outcomes, i.e., the strategic and collective alignment of employees, customers, stakeholders, partners and suppliers.

What is true Person-centricity and how can it benefit organisations?


We believe embracing true person-centricity is about having an integrated strategic people orientation through the alignment of customers, employees & broader stakeholders and this can be a game changer if designed and implemented in the right way. This means delivering value to all people involved in enabling your strategy, not just your customers, but the collective of customers, employees, partners, suppliers, stakeholders and the community.

We only need to look to companies like Virgin to understand the value true person-centricity delivers. They have been intrinsically embracing a person-centric orientation for years, where they have achieved success through building their strategy, culture and operations around creating mutual value for their customers, suppliers, employees and stakeholders.

The benefits of Person-centricity also speak for themselves including:

• Greater shareholder returns due to improved business performance
• Improved innovation due to greater trust between suppliers, employees, customers and stakeholders
• Reduced costs associated with employee, customer and supplier churn; or disengagement which may lead to greater operational and strategic inefficiencies
• Improved organisational reputation associated with less complaints, industry chatter, trust, perception of being a good corporate citizen and reduced risk of legal disputes
• Mutual value for all parties in the relationship, which results in improved productivity, profits and loyalty
• Improved customer experience due to the alignment of all parties in delivering the value required to meet customer needs and outcomes

Therefore, why isn’t everybody embracing true person-centricity?

Person-centricity can mean different things to different people. For some it means a focus on employees, whereas for others it’s a focus on customers. This means organisations often prioritise their efforts on improving only one piece of the person-centric pie. Or they have the key people strategies in place but not integrated into their organisational strategy and ecosystem. This in turn can make it challenging to have effective oversight and alignment, which can often result in misaligned initiatives, ineffective investments and less favourable business results.



Person-centric approaches are also challenging to achieve due to:

• Low employee engagement rates. E.g., national employee engagement rates currently sit at 14%[2], despite Gartner research indicating HR leaders in Australia’s top 3 priorities[3] are prioritising the building of critical skills and competencies, building the leadership bench and improving the employee experience.

• Lack of progress globally and nationally on improving the customer experience. E.g., Studies[4] indicate companies are struggling to improve the customer experience, as they are focused on front-end and tactical changes, rather than the transformational improvements required. This indicates there is a lack of progress in delivering improvements to what matters most to customers, thereby impeding the relationship between the customer and organisation.

• Prioritisation of cost reduction over value creation by many procurement functions. E.g., the number one priority of a Chief Procurement Officer was perceived to be cost reduction[5], rather than supplier value and the supplier’s/partner’s influence on improving customer and supply chain outcomes.

While these indicators at the surface level can be considered disparate in nature, at a systemic level they are connected by cause and effect relationships. For example, low employee engagement rates are likely to influence the customer experience (CX), i.e., the less engaged your people are, the less likely they are to care about going above and beyond to meet your customer needs.

Additionally, an organisation’s prioritisation on making transactional improvements to its CX is likely to result in it having a transactional relationship with its customers, resulting in the transfer of less value between each party and less profits.

Similarly, if an organisation’s procurement focus is on cost reduction and they partner with a supplier to deliver a key service or process that influences their customer experience, the supplier is likely to only deliver the minimum requirements to meet its procurement agreement, which could impede the quality of the service delivery.

Therefore, if you think of person-centricity as a paradigm of interconnected people segments, if one relationship in the paradigm deteriorates or is poor, this will have a flow on effect on the other people relationships and business outcomes.

What are the key elements of true person-centricity that are instrumental to improving business outcomes?

If we take a step back and look at the core of true person-centricity, we are essentially talking about human relationships and how they contribute to business outcomes.

There are arguably three key interconnected elements that are pivotal to driving improved business outcomes.

Trust
In the words of Stephen Covey, “Without trust we don’t truly collaborate, we merely coordinate or, at best, cooperate. It is trust that transforms a group of people into a team.”

If we think about the term team in this context, team could encompass your suppliers, distributors, retailers, service providers, employees, customers, strategic partners, industry stakeholders, government stakeholders and shareholders. The drivers of trust are likely to be similar for all people relationships (e.g., transparency, communications, understanding of needs, competency, values), however the value each party requires from the relationship are likely to be different.

For example, understanding what employees value in their relationship with your organisation is different to what customers and suppliers value.

However, in both cases, the process of understanding and applying value is the same. For example, building the knowledge to understand the other party’s needs, enabling the environment to deliver on what matters most to each party and employing the processes of listening, empathy and improvement to continually enhance these relationships.

This means:

• Creating a cultural environment where people can share information openly and the ability to co-create and solve problems using an blend of different skill sets, functions and experiences.

• Creating and embedding the cultural hallmarks to enable this trust, such as an open dialogue between all parties and identifying collective outcomes to solve problems

• Coaching managers and teams to address relationship complexities to improve trust and performance
Building the processes and competencies to build trust-based relationships through listening, empathy and closing the feedback loop



• Creating a more open way of decision-making to include the diversity of insights from different people and using data to inform insights, rather than relying on HIPPOs (highest paid person’s opinion)

• Providing an open environment where it’s ok to challenge the status quo, whether this is for employees to seek to improve products, processes, thinking or how they solve customer problems

• Or for suppliers to challenge ways of doing things to ensure value is delivered to the mutual customer and to achieve outcomes that have a win-win relationship for both the organisation and supplier
Modernising industrial practices to more effectively manage and improve these people relationships to ensure they are delivering mutual benefits, rather than being one-sided. This also means evolving HR, procurement and customer contractual policies and contracts to ensure value is delivered to each party, rather than a command and control one-sided list of requirements.

Knowledge:

• Understanding the drivers of building a successful relationship for an organisation’s people segments, such as the key elements of value you are delivering to each of these parties (e.g., common purpose, money, training, commitment to achieving business goals)

• Understanding the needs of each people segment and how these can be met through the alignment of teams, skills and processes
Distinguishing between what people say they want and understanding what they actually want. This includes developing the process to obtain this information, understanding how to use it and actioning this information in the right way to improve the ongoing relationship. For instance, what people say they want in research can often be different to what they actually want, which is demonstrated through monitoring behaviour, in conjunction with research feedback

• Sharing knowledge with others to build trust, rather than creating purposeful silos to achieve individual, team or business unit goals

• This also includes collaborating with partners to share knowledge on customer, industry and other insights, which will improve the delivery of the relationships and meet common goals that drive value for both companies

• Having the underlying processes in place to build, share and action knowledge, such as a robust Knowledge Management capability to store information, plug gaps, analyse, action, share and make decisions from it.

Environment to truly partner and collaborate to drive innovation

Creating a truly person-centric environment goes beyond evolving towards business approaches, such as ‘agile’, ‘innovation hubs’ or ‘design thinking’ processes. While at a surface level, these ingredients appear to provide the right environment for innovation, this is likely to fail if you do not enable the right cultural environment to truly collaborate and partner with your people segments.

For example, if there is a command and control relationship between your organisation and your suppliers due to the orientation of your procurement strategy being focused on cost reduction or the set up of your supplier performance management process, this will enable a cost-efficient working relationship but not a true partnership that creates value.

This is because both partners will most likely be constantly reviewing the clauses in the contract, rather than understanding the broader value and purpose of the relationship to enable the achievement of common goals.

In a similar way, if your organisation’s decision-making process is very hierarchical and rigid, this is likely to make it challenging to drive continuous improvement and true innovation. This is due to having less diversity of input in the decision-making process, the speed required to make a decision based on information being distributed up the hierarchy and the lack of empowerment and encouragement of new ideas.

Also if there is mistrust between employees due to political territories or conflicting KPIs, this is also likely to impede the environment to truly partner and collaborate.

So what are the common ingredients organisations are using to build the right cultural environment to enable true person-centricity?

• Building robust knowledge and diagnostics processes to understand their people relationships (e.g., research, understanding the relationships through the eyes of the other party, monitoring people behaviour and outcomes)

• Designing and embedding an integrated performance management approach and system to align and focus efforts on improving these relationships and their influence on business outcomes. This not only drives collective accountability to drive trust and reduce silo-ed thinking, but it also enables employee behaviour change

• Developing a culture of continuous improvement, underpinned by fit-for-purpose operating models, data-driven decision making, diversity of thinking, the blending of different skill sets opposed to disparate vocational skills; and a true focus and alignment on purpose and values.

Summary


Above all person-centricity is about shifting the relationship and treatment of customers, employees, suppliers and stakeholders from being percentages and numbers to individual humans; and relationships being two way, rather than from the perspective of your organisation. This requires taking a step back and understanding what the value looks like from the other side, rather than the fine line of nudging these relationships in a specific direction for one-sided gains.



[1] http://www.mbvermeer.com/insights2020/ & 2018 Trends in Global Employee Engagement, Aon, 2018

[2] State of wellbeing report, Gallup, 2018

[3] Gartner 2019 Future of HR Survey.

[4] Forrester, 2018 US Customer Experience Index & Cited by CMO magazine, November 2018, Forrester Predictions Event 2019 Event, Sydney

[5] The Deloitte Global Chief Procurement Officer Survey 2019

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