How do you build a better candy bar? You start by building a better organization, based on teamwork. I know this from personal experience.
Too often organizations that are striving to be customer-centric ignore a critical component: aligning the people in the organization to the strategy.
Consider the typical org chart: A group of functional department heads report to the CEO; each business unit maintains its own hierarchy, success measurements and core competencies. The problem is that there’s very little opportunity for the different units to share customer insight. Without that, your business has little hope of turning things around.
However, with a customer-centric marketing (CCM) organization that has moved from a hierarchical structure to a matrixed one, you can bring the voice of the customer in through every level.
A tasty job
A recent employer and well-known purveyor of gourmet foods tapped me—from the sales department—to participate on a matrixed project. Our mission: Develop the next great candy bar.
The CEO selected the team, which reported directly to her. So it had the senior-most support and mandate to proceed. I joined a group representing product design, test kitchen scientists, manufacturing, distribution, marketing, finance and merchandising.
The challenges our group faced were wide-ranging. The brand’s retail stores needed another point-of-sale product. The wholesale division was competing with other upscale confectioners who were producing gourmet chocolate bars. The direct sales channels wanted a fresh new add-on item for cross-sells. On the production side, manufacturing capabilities, shelf life and delivery issues had to be considered. High on the list was the question posed to the test kitchen wizards: Can we capture in a chocolate bar format the taste the brand was famous for?
Customers had been telling us for some time that they loved our chocolate, and wanted it in other styles and formats. Using customer purchase data to initially direct the effort, the matrixed team met weekly to tackle issues ranging from production capability, shelf life, pricing and packaging to the most critical of all: product taste. The team members selected as “champion” and team leader a person with a wide ranging view of the organization, plus the right personal attributes to lead a “diplomatic” collaboration effort. With a wide range of backgrounds and skill sets, we agreed to check our hierarchical titles and rank at the door.
Among many joint efforts, at least once a week the entire team participated in taste testing. Tough, but someone had to do it. In a top-down organization, taste tests would typically be limited to the production kitchen team, who would deliver what they believed to be the final product to management. I never ate so much chocolate, but the world-class quality made the job more palatable!
In the end, a well-designed product launched to rave customer reviews with a shorter-than-normal development timeline. We met the sales channel goals with resounding success. The matrixed team concept remains as part of the company’s culture, carrying over into other aspects of managing the business—with customer data at the core.
Expertise is prized
In a matrix organizational model, cross-functional teams focus on customer segments and share knowledge with the mandate and resources to define customer facing products and communication. “Who knows what” on the team is more relevant to achieving internal goals than “who reports to whom.”
As companies move from matrixed projects to a matrixed organization, the transition requires more than assembling cross functional teams. HR will be charged with identifying individuals with not only the proper business credentials but also key interpersonal skills in the areas of negotiation, communication and collaboration. Some staff may be repurposed, roles and degree of influence altered or new hires inserted to make this shift around the customer.
With people realigned based on their skill set, how do CCM organizations address the complicated issues of performance appraisals and compensation? Standards have yet to be developed for this new paradigm, and there are quite a few measurement tactics being tried.
One excellent tool is data driven enterprise scorecards. Scorecards track Key Performance Indicators (KPI) over time against a defined set of company measures, such as customer segments, sales growth and ROI. By utilizing KPI as the primary success measurements companywide, an organization can level the playing field, removing the discrepancies that exist today. How the company performs vis-à-vis customer needs is paramount, and individual performance is measured consistently across the organization by similar metrics.
In another instance, a company has employed 360-degree evaluations for the team, including not only senior management appraisal but also evaluations from the other members of the team. In this case, the team was measured as a group against the company KPI, instead of individual evaluations.
A CCM organization is a knowledge-based culture that enables communication where none may have existed. In such an organization, you can see the core competencies and people work together in partnerships, as cross functional teams march toward common goals. CCM goals, centered on a 360-degree customer view, inevitably make the organization more flexible, proactive and smarter. The result? Improved ROI, an equitable compensation plan—and more satisfied employees. CCM organizational winners put the customer relationship at the center of the organization. How sweet is that?