Can’t Compete with Start-Ups? 3 Tips to Increase Your Organization’s Customer Centricity
We all know business and financial acumen are critical to the success of organizations, but there’s more to winning in business than maximizing your P&L and cash flow. Leading a successful business in today’s hyper-competitive world is all about putting the customer first—anticipating their needs, understanding what drives their success, and using customer-based insights for sound decision-making. In short, being customer centric.
However, in large, complex companies, even leaders with great business acumen struggle with putting the customer first. There are two main reasons:
- As companies become larger, layers of management and functional specialization are added, putting distance between most of the organization’s employees and customers.
- As companies become more successful and complex, leaders spend more and more of their time on internal issues.
Disruptive, start-up organizations don’t face the size-related time constraints their larger competitors do, and this is a distinct advantage. Leaders of small companies have the time and ability to remain agile and more customer focused as a result.
How do you get your company to be more customer centric? Here are three key tips:
1. Determine whether your organization is too inwardly focused by asking, “Are leaders in my company spending enough time with customers?”
Have your senior leaders open their calendars in your next senior staff meeting. Do a quick audit of how many meetings your team members are having in any given week, and the topics of those meetings. It’s likely that for non-sales leaders, more than 95 percent of their meetings have very little to do with customers, and instead focus on “control” and “inspection” of internal issues. Many of you can open your calendars right now and see internally focused meetings that are repeat scheduled every week or every month from now until the end of time. These meetings start to look like the furniture after a while—you just accept them as a fact of life. But they don’t have to be.
2. Foster an environment where salespeople are not the only ones who talk to customers.
As a senior leader in a large organization, especially as a non-sales leader, you must fight the forces that lead to an inwardly focused, product-centric, risk-mitigation time suck. In your role, you have the power to control both the quantity and topics of meetings in your organization, and you must exercise this power. Salespeople should not be the only ones in regular dialogue with customers.
For example, one of our technology clients suffered from a classic lack of customer centricity: It had become inwardly focused, product centric, and technically arrogant. Only the sales force spoke to customers, and every other functional leader managed internally. Customer satisfaction was dropping and market share was shrinking, and the sales force became the “complaint receiving force.” Customers had become the sales force’s problem, and other functions had no empathy or skin in the game.
One day, an SVP looked at his entire leadership team’s calendars in a meeting. He discovered, to his horror, that all of his non-sales leaders spent practically zero time with customers. All of them were booked from Monday morning to Friday afternoon with internal meetings. So he made a bold move. He mandated that leaders needed to delegate 30 percent of their scheduled meeting time to direct reports, and use that freed-up time to spend with customers. The time saved then was reallocated to a 30 percent increase in customer meetings. What happened as a result? Two things:
- The sky didn’t fall. Direct reports took over the meetings and had an opportunity to take on more responsibility.
- Customers were shocked and delighted. Imagine your company’s engineering leaders speaking to your customer’s engineering leaders? Or (gasp!) imagine your finance department talking to your customer’s finance department to discuss how to be better partners? This is actually what happened.
John Quelch, professor of Business Administration emeritus at HBS, recommends this precise solution. Quelch has stated that CEOs should be looking to customers, and not market research, for insights and should spend at least 10 percent of their time with their company’s clients. Face time with the client is essential for truly understanding and meeting the needs of the customer.
3. Ensure that time spent with customers is quality time.
For this technology company, it wasn’t enough to just spend more time with customers. It also carefully planned how employees would spend this time. Historically, if non-salespeople had one hour with a customer, they would use those 60 minutes to show 60 slides and discuss their internal product roadmap or other internal priorities. Instead, they had to break these bad habits and create new capabilities—they had to learn how to have “blank sheet of paper” discussions with clients about the client’s business. They asked open-ended questions about the client’s business challenges and how they measured success. They ultimately asked how they could be a better partner to their client and learned lots of new and useful things. Not surprisingly, new revenue opportunities began to appear, and the new, open-ended dialogue with customers sparked fresh, innovative ideas.
In the case of this tech organization, customer satisfaction and market share increased within a few quarters as a result of its tough time and resource allocation decisions. So what’s the secret sauce to becoming more customer centric? Getting in front of the customer. Remaining relevant means understanding the customer and meeting their needs, and this requires that non-sales leaders develop an outwardly focused, market-sensing, and customer-centric perspective. This takes time. To be successful in today’s world, leaders need to prioritize time away from internal priorities and time with customers.
Daniel Parisi, executive vice president, global partner of BTS USA, is a business strategy and leadership expert with particular acumen focused on the customer. Training magazine named him one of the Top 10 Young Trainers in 2008. In 2007, Marshall Goldsmith selected Parisi to join the “Distinguished Thought Leaders Library” for his pioneering work in executive strategy simulations. Parisi is a featured business speaker for the “50 Lessons” video library series on learning and leadership. Since 1995, Parisi has focused on creating highly customized executive development solutions for leading Fortune 100 clients in North America. His client work has accelerated strategic alignment and building capabilities to drive execution for senior leaders at HP, Texas Instruments, Walmart, and Intel. He also coaches customers on other topics such as post-merger strategic alignments, accelerating adoption of a customer-centric culture, and the CPG industry value chain. For 15 years, Parisi has led large BTS USA regions: the West coast from 2002 to 2012 and managing director of the BTS East Coast region from 2013 to 2014.