Customer focus has been largely an empty promise for many organizations. Connect customer focus to those promoting big data and you are likely to see two ideas that have simply not yet lived up to their potential. Plenty of hope and money have been invested, but execution in both areas has been dismal. There is plenty of proof, for which a remedy is at hand.
Consider the fact that established retailers send their winter catalog to you at your home in Florida, Arizona, Texas or elsewhere below the Mason-Dixon Line, promoting the new parkas and snow apparel. But no swimsuits, flip-flops or beach towels suitable for your balmy weather.
You travel for business way too much, so you know a lot about being a customer of hotels. Like thousands of other managers and professionals, our research reveals your top priority from that overnight stay at the hotel for tomorrow’s business meeting is….a good night’s sleep. This should not be news to hotels since they beg you to complete their satisfaction surveys. You may think they really want to know about your experience. Not really. Their true goal is to get a high “net promoter score” or NPS. That number provides a ranking of all your competitors. But there is no question on the survey about how good your sleep was. So, while it is possible to get a high NPS, it is still quite possible to create high dissatisfaction. Talk about misalignment!
Look at the strategic plans of any 10 organizations where leaders say they are customer-focused. You will find priorities to be improved such as market share, profitability, sales and revenue growth, time to market, use of social media, data security and other matters the organization values. Where in those plans do you see the defined desired-outcomes wanted by customers, the way satisfaction of those outcomes will be measured and numerical goals for improvement? Mostly absent.
Speaking of values, there is an excellent chance “customer satisfaction,” “diversity” and “pay for performance” are among the top core values managers of those 10 organizations espouse. Examine the evidence of execution. While the organization tends to have written policies covering many of its priorities – allowed hiring criteria, authorization to spend money, eligibility for travel expense reimbursement – it is rare to find a written customer-satisfaction policy in place and deployed. How important, then, can satisfaction really be? An example of a customer-satisfaction policy used effectively by a number of especially insightful leaders can be found here.
On the diversity side of things, it is not news that women make up about 51% of the world population. One of American women’s common complaints is that there is no place near the driver’s seat in their car to hold their purses. Good luck finding design criteria specifically addressing women’s priorities across all enterprise products. It is beyond comprehension why we continue to see venues for masses of people (airports, theaters, stadiums, restaurants) still forcing women to interminably stand in line to access basic facilities. Perhaps our satisfaction and diversity values are not all they could be. Or we’ve missed the whole meaning of big data.
If we are going to reward performance, seemingly a terrific idea, who determines what “performance” means? Rarely is it customers. Managers make those decisions, usually based on the most employee-disliked management tool of all time: performance reviews. No customers need be involved. Despite all the airline woes that have made it into YouTube infamy by millions of viewers, is it possible employees hated by customers get raises but those loved do not? Yup.
There are endless examples of giant disconnects between leaders’ aspirations and organizational practices regarding customer focus. These come from observing organizations in both the commercial and not-for-profit worlds where leaders have made statements on their intent, which are at odds with behavior and results.
Research conducted by Indiana State University, American Society for Quality and others have concluded that the main barriers to success rest with management and include (a) vague direction, (b) ignorance of readily available data, (c) ignorance and absence of a system to achieve customer-centered change and (d) failure to achieve successful execution of intent. Clearly, there is huge opportunity to better fulfill our leadership promises. All within our control.
Enlightened leaders who actually have a passion to create customer joy may be an endangered species but they do exist. If you are one, how do you cut through the bull and warmed-over platitudes and turn aspiration into reality?
The first steps a leader can take to actually achieve sustainable enterprise-wide customer focus and organization success include a strong readiness to:
- Discard the notion that customer-centeredness is the province of a specific department, function or level of employee. If we don’t engage everyone, from top to bottom, we have not achieved alignment.
- Accept the overwhelming finding that customer focus begins and ends with culture, driven by the organization’s top leader(s). To quickly assess your customer-centered culture (C3IQ) and see what actions need attention, take 5 minutes at https://www.c3excellence.com/product/c3iq/ .
- Immediately stop a few counterproductive behaviors. Those will involve putting the brakes on all customer-satisfaction surveys (see the article, “Are Your Surveys Only Suitable for Wrapping Fish?“). Don’t begin again until you know that the products used by anyone surveyed have already been designed to satisfy their priorities regarding desired outcomes, functional performance and subjective appeal. In other words, if women and Hispanics are major user groups for riding lawnmowers, why does the placement of seats assume users are over 5’8”? Replace the reactive with the proactive, design versus surveys.
- Amend your strategic plan to assure there is alignment among stated customer priorities, core values, deployment vehicles such as policies, measures of success and numerical improvement goals. If something is really valued, it is measured, has numerical goals to attain, and has unambiguous ownership to achieve them.
- Personally and broadly apply the 6 Levers for cultural transformation described briefly below.
The 6 Levers
Saying the leader’s job is to win the war is not helpful. Admonitions to take action are always constrained by the absence of systems and mechanisms to be deployed. So it is when leaders are told they need to better communicate intent and then hold folks accountable for putting that intent into action. The question is how to do that effectively and sustainably. A big part of the answer resides with the 6 Levers.
The alignment of language, values, measures, power, assumptions and modeling are the main levers every leader can and must apply for dramatic and durable change. If greater customer focus is what you want, the speed and size of result will depend on how many levers are used simultaneously and consistently.
One CEO and his leadership team at a financial institution used just the first three and saw a revenue increase of $48 million in the first six months, simultaneously creating significant customer satisfaction including growth in wealth. The director of a state Department of Revenue used all six. The Department cut response time to customers by 90%, jumped from a ranking of 25th to among the top five of 50 states, gained an avalanche of customer kudos, saved several million dollars and won their Baldrige Award, all within 24 months. Results were sustained over both political parties and three administrations. Your results could be greater.
Language is at the top of my list of leaders’ levers for transformation. Because it connects all the other levers, we’ll put special emphasis on that here. The principle is that an effective leader actively works to remove ambiguity. Why and how?
Complaints about “poor communication” within organizations are common. Remedies are not. If big data were properly applied to this, it would tell you that managers of every stripe have spent more years in math training than in linguistics. By a long shot. There is usually only one correct answer to a mathematical problem. We’ve been well-taught to eliminate ambiguity in calculations. Those who didn’t learn this basic principle were well-qualified to work for Enron. The fact is that, for the rest of us, we would not tolerate an answer other than 12 to the question, what is 5 plus 7? But we easily accept differing answers to questions regarding the following:
- Who is “the customer”?
- What does excellent “service” mean?
- What is the most important product you personally produce?
- What is the top desired outcome wanted by customers of that product?
Language, unlike math, is fraught with ambiguity. There is ample proof that this matters, that it can be corrected quickly, that results can be tangibly stunning and that the solution is durable.
When we wish to be customer-centered, it is essential that everyone agree who “the customer” is in every context. They don’t. Ask any 10 managers at random. You are likely to get several different answers. Who, then, are we to focus on? There is a simple way out of this and you are unlikely to have heard it before.
A customer is always determined in relationship to the specific product he or she is a customer for. That means we always have to know what “the product” is before we can know who the customer is. It is inappropriate and unacceptable to think solely about the enterprise’s purchased or funded products. A car is a product but so are its designs, specifications, myriad plans for production and distribution, marketing brochures and 100,000 other related products. Is the car buyer a customer of all these products? Nope. Name the product first and the customers for that product will jump to mind.
Creating additional confusion is that there are more customers (think employees) inside the enterprise using car-related products than there are customers for the car itself. Does being customer-centered mean we should seek to understand and satisfy every customer of every product, no matter where they reside? Absolutely! That leads us away from exhortation and directly into daily application. But it means every employee must be taught to do the following:
- Identify all the products they personally create. A typical HR department discovered they created over 175 products, primarily for use by other employees. A similar result occurs when any other function creates an inventory of products (such as engineering, IT, marketing communications, quality, distribution and so on).
- Prioritize the products regarding their importance to the employee’s mission, the mission of the department they are a part of, the criticality to the strategic objectives of the enterprise and the need to make improvements to achieve demonstrably better customer satisfaction. The HR department in the case referenced above discovered more than six important “missing” products others in the enterprise needed but HR had never identified or provided, along with more than a few viewed as seriously deficient by their customers.
- Identify the customers for each product in terms of three roles they could play with it: end user, broker and fixer. End users personally use the product, brokers pass the product from producer to end user and fixers alter, correct, install or modify the product for end users.
Global thinking about customers leads to massive ambiguity. Could the car buyer, driver, passenger, mechanic and government regulator all be different customers for a specific car? You bet. If so, who shall we focus on and do they each have the same priorities regarding the product? Fuzzy thinking about who the customer is has predictably caused businesses to fail, since there is disagreement about who to satisfy when priorities conflict. This a job for what we can think of as micro-data, revealing what specific kinds of customers want. Know which voice that person is speaking from when you ask about their priorities. To learn more about how to do that, see the article “Voice of the Customer in a Widget-free World“.
Always put the interests of end users first. This will often cause a change in the power dynamic because brokers and producers usually have the most power to determine and change the design of products; end users often have least.
Values, Measures and Modeling
These three levers are frequently out of alignment with each other. Don’t tell me what you value, show me what you measure. When we say something is important and a key value, but have no measures of success in place for it and no follow-through, we can create chaos and confusion.
Lumber Liquidators offers an example of misalignment. Its stated core values include financial performance and sustainable wood sourcing. The core values were not ranked in importance by leadership prior to 2015. Only financial performance, meaning profitability, was rewarded. It should be no surprise that chaos, conflict and confusion would reign. The result was that Lumber Liquidators was found to be the most egregious, intentional violator of sustainability practices required by the Lacey Act. It is important to note that management may not have consciously intended destruction of endangered species in pursuit of profit. But its failure to use the Levers we are discussing resulted in the company being fined over $13 million in October 2015, the CEO resigned and serious efforts to transform alignment among values, measures and modeling then began.
None of us leaders should require a crisis to consciously seek balance among priorities. The 6 Levers, discussed in chapter six of Mastering Excellence, are one strong set of leadership tools to use. Another is the visual framework representing the 8 dimensions of excellence which separates customer priorities from the enterprise’s, shown below.
8 Dimensions of Excellence
Define All Work As Products
Once upon a time, we lived in an industrial world where a large part of the workforce personally produced tangible products. We could call them widgets. Less than 15% of the North American workforce personally creates widgets today. Our labor and commerce statistics– let’s call that big data– does not yet fully recognize that reality. That non-manufacturing part of the economy is now frequently referred to as the service sector. When we are leaders of an enterprise where all– or the majority– of employees create no widgets, it is natural to seek great service in our pursuit of customer focus. It also leads to failure.
Leading others to improve service is dependent on reaching consensus on what “service” means. If we asked those same random 10 managers, previously asked who “the customer” referred to, what “service” means, we will likely get close to 10 different answers. When we don’t have agreement on what service means, how easy will it be to replicate it, measure it, improve it, use it as a differentiator and otherwise create consensus for engaged action? Not so good.
The fix for this ambiguity is straightforward and key to how to remove ambiguity. The conventional mantra, “define all work as a process”, takes us entirely off the mark. Rooted in industrial age thinking, it makes us think about our activity. In fact, by referring back to the 8 Dimensions of Excellence graphic, that adage will likely increase our internally-biased focus on Dimension 8, the producer’s process. This is not where we want to be. Go to Dimension 3.
Our new mantra is to define all work as specific products. This requires thinking of what we give customers that are countable deliverables we can make plural. Using our linguistic skills, we want to consciously reorganize our brain cells away from activities and verbs (that often end with an …ing), and move toward deliverables and nouns (that can end with an ‘s’). The following excerpt from Mastering Excellence: A Leader’s Guide to Aligning Strategy, Culture, Customer Experience & Measures of Success (2017) provides examples of what this shift would mean:
The transformation to thinking of work as products is perfect for the knowledge age we are now in. Products (what we deliver) are also the essential link between process (how we do what we do) and outcomes (why we do it).
Specific customers jump to mind the moment we identify a specific product. So achieving customer-centeredness is a natural and much easier challenge to address than could have been done without that construct.
Voice of the Customer
Knowing who the customer is for a specific product and being clear about which of the three roles the customer plays with that product eliminates two-thirds of the ambiguity about customer focus. It also leads seamlessly to that third ambiguity: uncovering with certainty just what it is they want regarding that product.
Exactly how to best uncover what customers want, sometimes referred to as the voice of the customer (VOC), is a bigger topic than we can adequately cover here. But we can say for sure what not to do: rely on surveys. We can also identify the three kinds of expectations all customers have regarding all products:
- The desired outcomes to be experienced by using the product
- The subjective appeal and function of the product
- The objective characteristics of the product
Our preferred method for uncovering these priorities is through specially designed focus groups. This means we make a concerted and consistent push to use micro data to foster the customer-centered culture. Such micro data can easily coexist with big data, often making the big data far more intelligible and relevant to mutual enterprise and customer success. The focus group method used is powerful but so simple to learn that our clients can generally master it with only a couple iterations.
The expectations above are numbered to show that they are usually held in this priority by end users. That is, the desired outcome of “good night’s sleep” we discussed early in the article is of paramount importance to business travelers staying at a hotel. Similarly, “good health” is usually the top outcome wanted by customers working with providers of our healthcare industry. In both cases, enterprises do a poor job of measuring the degree to which customers experienced those outcomes. In fact, healthcare providers do a far better job measuring the undesired outcomes customers want to avoid: death and morbidity. While this is important, it can lead to the absurd conclusion that if the patient does not die or get sicker, he or she is in good health. Don’t believe this scenario occurs regularly? Ask your local healthcare provider if they measure the incidence of mortality from heart procedures. The answer will be yes (though they may be reluctant to tell you what the measure says). Then ask what they measure upon patient discharge that proves the customer is in good health. Good luck with that. They will want to say the customer is in better health but they will be unable to tell you if that is synonymous with good health. The difference matters.
It should now not be a mystery why customer focus, customer experience, big data, satisfaction surveys and related efforts to achieve outward-looking excellence have such a disappointing record of success. All depend on knowing who the customer truly is in every context, making sure the end-users (versus brokers) have power to change the design of products and assuring customer priorities get uncovered, measured and improved.
Success is clearly a matter of changing the culture of the enterprise. The 6 Levers and an underlying system for transformation are necessary elements to employ. Considering the examples of eye-popping results that are achievable within two years, and then can be sustained, we can reasonably expect similar success.
The last two Levers are a good place to end. The first is assumptions, of which there are two kinds. Inspiring and audacious leaders use aspirational assumptions to communicate a compelling vision of the possible. Putting a man on the moon with a safe return, delivering user-rated products routinely within two days of placing the order, and doing self-diagnosis of an infectious disease with your cell phone are such examples. Others called it pie in the sky, giving all the reasons those outcomes were unobtainable.
The nay-saying barriers a leader will listen for and seek to crush are called Vital Lies. These are constraining assumptions about what cannot be done. They include self-deception, denial, myth, rationalization and excuses. Vital Lies are widely believed but have no basis in fact. One of the most frequent is “we can’t control that.” The beautiful thing about such an assumption is that absolves the believer from the necessity to take any action. So it also becomes a self-fulfilling prophecy. The leader using the assumptions lever will vigorously state his or her vision of what is possible and challenge the Vital Lie believer to bring forth evidence to support that possibility. It can be amazing how easily the facts will emerge to prove the leader’s view.
In the final analysis, the last lever is the one most telling about the direction, pace and effects of any anticipated transformation initiative. Modeling is rooted in our own personal behavior. When we model the desired behaviors we wish to see in others, we can name the specific products we personally create (or, when things with it go wrong, we are the ones who get blamed), name the end-users, brokers and fixers for that product, know what those varied customers have as highest priorities for that product and are working to close the gaps.
Modeling involves many other elements and a critically important one is to align recognition and consequences to the behaviors we want to encourage or extinguish. The 6 Levers will enable you to turn the promise of the customer-centered culture into the real model of excellence you have been dreaming of.