Without a doubt, this downturned economy has been a struggle for most organizations. Layoffs, reorganizations and new executives seem to be the crutch du jour (perhaps ‘du ans’ is more fitting) to fix downward spiraling revenues. Add to that a layer of new(ish) customer communications and feedback via social media channels and you have yet another complexity to deal with. In the past customer feedback was contained to customer service or a customer satisfaction survey designed to hedge qualitative and quantitative feedback to guarantee an internal pat on the back. With unfettered social feedback, the organization emperor’s kimono is being opened and the proverbial band-aid is being ripped off.
Structured in a top-down hierarchical manner, organizations have positioned their products and services to take center stage. This familiar “command and control” structure is typically the wellspring of alienation between customer and company and often the cause of reduced revenue generation. The challenge of reorganizing is avoid playing musical chairs so that the last person sitting is not the new person reinventing the standard and comfortable hierarchal structure.
What is an organization to do then? Is it possible to design an new organization that reduces the friction between profit generation and customer satisfaction? Is it even feasible to center an organization around the customer? There is evidence that clearly it is achievable, but not without stress, focus, tension… and power withdrawal.
The question is can organizations handle short-term pain in order to achieve long-term gain?
“Bob Thompson: What kind of leader needs to be in charge of these types of shifts? I mean, we’re talking about either a business or a business unit that has decided it needs to make the shift to customer-centric strategy in organizations. You’ve heard a lot of the anecdotal stories about failures of CRM projects or what have you. You’ve mentioned HP as struggling with this idea in years gone by. So what kind of leader do you feel is required to make this work?
Jay Galbraith: It’s going to be one that has a great deal of strength, because they’re going to have to marry this back end and front end, the customer-centric and the product-centric part. And those are inherently tension-ridden relationships, so you’ve got to be good at managing conflict. You have to be good at getting a team of people around the table and getting to a decision. So if you’re someone who waffles, if you don’t like conflicts, you’re going to have a hard time moving toward customer-centricity.”
Harvard Business Review: Silo Busting: How to Execute on the Promise of Customer Focus
“…I’ve found that few companies are actually structured to deliver products and services in a synchronized way that’s attractive from a customer’s perspective. Individual units are historically focused on perfecting their products and processes, and give little thought to how their offerings might be even more valuable to the end user when paired with those of another unit. It’s not just that the status quo doesn’t reward collaborative behavior—although the right incentives are also critical. It’s that the connections literally aren’t in place.”
Business Courier: Reorganizing around customers can produce big gains
“Companies should begin moving from where they are now (typically all or almost all orientation around products or geographies) to these progressive models until they arrive at the right customer orientation level for their business. Most companies are too deeply entrenched in product- oriented models and need to move to the more customer orientation. Simply put, make the customer a larger part of your organizing model.”
Jones Lang LaSalle: Beyond Boundaries: Leveraging Partners to Maximize the Value Chain
“The elimination of inside/outside boundaries by an organization can improve value to customers, increase speed and flexibility and boost competitiveness in the unforgiving global economy. At the same time, greater interdependence with suppliers makes both open collaboration and appropriate oversight more important than ever before.”
“Leaders in corporate infrastructure services are being called to respond to these forces by:
- Understanding the business environment that creates change in the organization
- Knowing the organization’s overall business strategies and aligning service delivery with these objectives
- Increasing customer knowledge and intimacy
- Becoming a master integrator of the delivery supply chain
- Focusing on key strategic activities that make a difference, and partnering for the rest”
“Companies always underestimate how difficult this process is largely because it means creating a customer-centric view,” Galbraith noted. “That is, if you are going to combine products and services for the benefit of the customer, you have to know a lot about who that customer is.”
“ ‘…It requires much more than bundling and cross-selling products,’ he said. It requires major organizational change, including, for example, a new structure, new management processes, new measurement systems, new talent and new reward systems. It also requires leadership that can interact with multiple product and customer unit managers as opposed to handling one business unit at a time. These are ‘tension-filled processes,’ according to Galbraith.”
[Image source: Jezebel]