A maturity level consists of a predefined set of process areas that guide the organization to achieve specific goals and progressively become more customer-oriented. A maturity level also provides a way to determine an organization’s performance, since more customer-centric matured organizations deliver notoriously higher business results.
Experience shows that organizations making efforts to become more customer-oriented do their best when they focus on a manageable set of process areas that enables the organization to achieve a goal at a time. Therefore by implementing a set of process areas that articulates a specific goal, the organization gets ready to move to the next maturity level, thus progressively completing a customer-centric maturity path.
My research on the customer-centric management Maturity model sets up the following five maturity levels, numbered 1 through 5:
Maturity Level 1: Initial
Low maturity organizations are poorly equipped to respond to the customer’s needs with anything other than vague corporate statements and slogans. Customer-oriented processes, if any, are usually ad-hoc and inconsistent.
The organization usually does not provide a consistent framework to support customer-oriented processes, and customer satisfaction depends on the heroics of certain people in direct contact with the customer and not on proven processes or best practices.
Generally managers and supervisors in low maturity organizations are ill prepared to cope with customer-oriented activities. Their customer-focused training is sparse and, when provided, covers only the more legal or financially sensitive practices.
Many managers do not fully understand the impact the customer has on their work and what they can do to raise the unit performance upon more customer-oriented practices. Moreover, they often lack the skills and place little emphasis in evaluating and improving the unit customer-oriented capabilities.
Despite the lack of a “customer-centered way of doing things”, maturity level 1 organizations often produce products and services that work, but they frequently exceed the budget and schedule expected in their plans.
Most organizations at maturity level 1 lack the processes to repeat their successes and they are prone to abandon formal customer-centered activities in a time of stress or financial crisis.
Maturity Level 2: Foundational
At maturity level 2, units and/or project workgroups establish the foundation for the organization to become more customer-oriented by institutionalizing selected processes.
Maturity level 2 organizations focus on establishing few basic customer-oriented activities and practices within units to address specific customer related problems and deliver quick and visible results.
Unit managers or project team leaders define a customer-oriented strategy, create work plans, and monitor and control the work to ensure the outcome is delivered as planned. Activities and practices quality assurance is institutionalized, people involved develop the competency to measure and analyze customer performance.
Units or project teams identify who their target customers are, establish a continuous communication with them and develop and manage customer requirements. They also ensure that processes are planned and executed in accordance with the overall strategic business goals.
Units or project team leaders involve relevant executive members and periodically monitor and control the progress in the implementation of process areas. Implementation performance is shared with senior management.
Focusing at the unit or project level also establishes a foundation to ensure that existing customer-oriented activities and practices are retained during times of stress or financial crisis.
Maturity Level 3: Organizational
At maturity level 3, process areas are well defined and understood, and embed customer-centric best practices.
The organization’s set of standard customer-oriented process areas is established and improved over time and they are used to establish consistency across the whole organization. This way the organization is better positioned to gain a competitive advantage and ensure that the products and services portfolio meet the customer needs.
At maturity level 3, the organization’s customer-centric strategy becomes a “super-strategy”, which means it becomes the strategy from which all the organization’s remaining strategies—financial, tech¬nology, innovation, manufacturing, marketing, sales—derive from. By doing so, maturity level 3 organizations get rid of the misalignment between the business strategies and the customer-centered strategy.
In maturity level 3 organizations executive team members, project team leaders and key employees are provided with the customer and business performance information needed to make better customer-oriented decisions.
Maturity Level 4: Analytical
At maturity level 4 the organization establishes quantitative objectives for customer value and process areas performance and use them as criteria for overall business management. Quantitative customer-centered objectives are based on the needs of the customer and also the results obtained from the customer analysis.
Customer analytics tools and practices, as well as information technology systems that provide deep customer knowledge, become crucial for maturity level 4 organizations.
Organizations conducting continuous customer value and needs analysis use that knowledge to establish process areas perfomance baselines. These baselines are then used for planning, for targeting improvements, and for predicting the organization’s business results. Maturity level 4 organizations are thus able to make more accurate predictions about future performance and better decisions for enhanced customer performance.
Maturity Level 5: Innovative
At maturity level 5, the organization continually improves its customer performance and process areas based on fine-grained customer data quantitative analysis.
The entire organization is focused on continual improvement and change management is an ordinary business process performed in an orderly way on a regular basis.
At maturity level 5, the organization is concerned with overall organizational performance using multi-dimensional customer data collected from across multiple units and touchpoints from within and outside the organization. Analysis of the customer data identifies shortfalls or gaps in customer performance anywhere in the organization and they drive organizational improvement.
Data on the effectiveness of customer-centered process areas (derived from analytical practices) are used to manage innovation practices. Innovative practices that demonstrate the greatest potential for improvement are identified and evaluated in pilot applications. If they prove effective, they are deployed throughout the organization.
The culture created in an organization routinely working at the maturity 5 level is one in which everyone strives to improve their own capability, develo pan entrepreneurial mindset and contributes to improvements in the performance of their workgroup, unit, and the organization.