Customer Centricity Framework

 

In today’s competitive world being customer-centric is essential.  The question is: How customer-centric? 

Most organizations have no understanding of how customer-centric they are, or how customer-centric they need to be.  The customer dimension is missing because historically it was never needed.  The product-centric model business based on economy of scale, command and control culture and specialization of labor has existed since the time of Adam Smith. Smith's seminal work, ‘The Wealth Of Nations’ published in 1776, fuelled the Industrial Revolution and created the supply economy of the 20th Century.  Companies made products and then sold them to customers.  “You can have any color you like, as long at it’s black!” said Henry Ford.  PTTs advised ‘subscribers’ that if they were lucky they could have a new line in 3 months.  The balance of power rested with the supplier. 

But intense competition. market deregulation and more recently the global recession have propelled us into a demand economy, where customers are increasingly in control.  We now need a different model.

“The definition of insanity is doing the same thing over and over again but expecting different results.” - Albert Einstein.

Retaining a product-centric model in a highly competitive demand economy is not only insane, it is the biggest cause of poor customer experiences, employee frustration, internal politics and wasted cost.

This is not revolution or even quantum physics.  It is simply a matter of deciding how customer-centric you want to be and then aligning your organization at that level through your planning processes. 

To achieve this you first need a definition of the customer dimension.  At Round we have defined 4 levels from product-centric to truly customer-centric and we use a baseball model to represent that journey.  Each Base is a milestone on the journey and a point around which the organization can align its operational and strategic capabilities to create consistency.  The Bases also provide a language missing from organizations that helps identify disconnects and misalignments as well as diffuse conflicts.

“This is the first time I have ever been able to define a business objective in words of one syllable (To get to 3rd Base) and not only does everyone know what it means, they also know how to get us there.”   CEO, T-Mobile.

1st Base - Product-centric: This is the world of Adam Smith and Frederick Winslow Taylor: functional organization models with a command & control culture and where managers are obsessed with costs, productivity and utilization – all internally focused.  Metrics are largely based on volume and assigned to individuals so that they can be held accountable.  This is not a great place for customers or those who serve them.

2nd Base - Customer Service Focused: 2nd Base focuses the organization on the customer, turning the business perspective from internal to external.  Constantly improving the customer experience is the key to reaching 2nd Base.  The company becomes a learning organization, engaging customers in the process of driving change through empowered customer teams that operate within clearly defined change governance to prevent chaos.  This process helps eradicate errors and inconsistencies, driving down operating costs while enthusing customers and those who serve them.  Customer satisfaction and customer retention are key outcome metrics that help create this change.  Managers have become leaders and the customer-focused culture is applied across the organization. At 2nd Base the customer joins you on the journey; so do employees as this is a great place to work.

3rd Base - Customer Value Focused: Once customers understand that you are serious about learning and improving, they will begin to provide more insight and trust you to use it to further define and optimize products, services and offerings for them.  This is the focus of 3rd Base and requires a deeper understanding of customer needs and the ability to create tailored products and services to meet them, further reducing costs.  CRM failed because it is a 3rd Base idea that was implemented in 1st Base organizations. If customer and employee loyalty begin at 2nd Base then reaching 3rd Base creates raving fans of both and customers are ready to become an extension of the organization.

4th Base (Home) - Customer-centric: Being truly customer-centric is the ultimate state where the customer is in control.  This is not self-service, though it may play a part.  Being customer-centric means the customer owns the proposition and defines what they buy, when they buy it, how it is designed, configured and packaged and perhaps even how much they pay – and when.  4th Base is not for all companies.  Few organizations would currently allow their customers the level of access to their product development, operational processes, business rules, systems and data that would be required achieve this.  However the seeds of change are being planted in the aerospace industry where Service Science/Service Dominant Logic principles are being applied to the complex and expensive supply chain from component supplier through aircraft manufacturer to airline.

Once the journey has been defined for your organization, you need only to decide where you want to be and then align your business at that point through your existing planning processes using Capability Maturity Management techniques. 

Round's baseball model provides the missing customer dimension that is vital for creating alignment and guiding change.  Mapping capabilities to the 4 Bases generates a unique profile.  This is the organization's customer centricity DNA.

The capability profile provides a view of the organization that is totally new, showing:

• How aligned the organization is regarding the delivery of its vision and customer strategy
• Where its strengths and weaknesses are
• Where investment is required and how to scope it

Round’s RUTE Methodology applies the framework in a practical way to allow organizations to make lasting business change.  Round's capability maturity management tools, such as CCDirector, embody the framework to facilitate the assessment, planning and management of the organization's strategic and operational capabilities that create the customer experience. Training and coaching services help to sustain the change through new operational and management behaviors. 

Why Baseball?

Business change is inherently complex and to engage the whole organization in the process of change requires a simple but powerful metaphor.  Sporting metaphors certainly work well as managing customers is a team game. But baseball is the only sport that is both structured and incremental in its strategy.  It is also the only sport that is coached by managers on the field of play and tactics change pitch by pitch - just like in business.

Please contact us if you would like to be sent more detailed information about Round’s customer centricity framework.