2012-02-06

The road towards sharp customer-focus goes via people management (part 1)

Eric Fraterman

This is the first of two blog entries on this topic.

Developing a sharper Customer Focus for a sharper competitive edge is a means for sustainable competitive differentiation and thus a profit strategy. In a previous blog entry here, called People>Service>Profit Chain , I emphasized the critical importance of People in achieving a sharp Customer-Focus. In this entry I am pointing again towards the importance of People Management.

By way of context, let’s define Customer Focus first: It is an aligned whole-organization approach to customer satisfaction and service, leading to loyalty and advocacy.

In a Customer Focused organization, Leadership, Processes and People are customer-aligned. In broad strokes this means that:

• Every action is shaped by a relentless commitment to meeting and exceeding customer expectations regarding product and service quality.
• Customer touching and supporting internal processes are constantly evaluated and improved to meet or exceed those expectations.
• Employees are aware of their role in maintaining a valued relationship with their external and internal customers.

But what exactly does that mean and how do you do it?

Here are the first four of eight pragmatic building blocks of a Customer-Focused culture (the remaining ones will be covered in my second entry on this topic).  As you will see, several of them deal with aspects of People Management; this is a clear strand that runs through these components.

 
1. Define Customer-Focus
Customer-Focus means different things to different people and to different organizations.  As an organization, begin by defining in practical specificity what you mean by Customer-Focus, beyond the above definition. Which customers are you focused on? What does Customer-Focus look like in various parts of the organization? What kinds of decisions, behaviors and actions do you expect as a result of Customer-Focus?

Two examples of high profile companies come to mind here: The Gold Standard service approach of the award winning Ritz Carlton hotel and resort chain and Starbucks where Customer-Focus trickles throughout the company in everything they do both internally and customer-facing.

2. Make a business case
It is critical to make a business case for pursuing a Customer-Focus culture and investing in it. Often the required information is found in identifying the value of a customer and using customer satisfaction / loyalty surveys to analyze the customers at risk and their value. University of Southern California management professor Theresa Welbourne: "...companies that closely mesh their external brand with their employee experience outperform peers ... tight alignment between a company's external message and its employment "deal" -- the rewards and experience a firm offers to workers -- leads to increased employee engagement and retention, a superior customer experience, and a 15 percent higher market premium compared to industry peers."

3. Set goals
Once you've defined what you mean by Customer-Focus and made the business case, capture goals for the organization related to improving its Customer-Focus. These have to be defined based on a thorough and systematic capturing of the Voice of the Customer by means of quantitative surveys and derived competitive benchmarks.

Just as you do for employees, write SMART (specific, measurable, achievable, relevant and time-bound) goals for the organization that help advance its focus on customers, and presumably customer satisfaction. These goals need to be more than just organizational slogans. You need to be prepared to commit time and resources to achieving them, and hold your senior leaders accountable for results. Remember that no organization shall rise above the level of its leadership! Then communicate these high-level goals to the entire organization. It is not sufficient to rely solely on managers to "cascade" these goals down to the organization. They need to be known and visible to every employee in the organization and as detailed in part 8, development of a communication strategy is a key catalyst to achieving Customer-Focus.

4. Make Customer-Focus everyone's business
Next, make customer-focus everyone's business. Every employee in the organization should have an individual goal that aligns with or contributes in some way to the organization's Customer-Focus goal. This is how you "marshal the troops" and you create a culture. Get every employee to think about how they can contribute to improving Customer-Focus, either externally or internally. They should directly and visibly link their individual goal to the organization's goal so they have a clear context of the framework within which they work.

 
In my next entry I will cover:

5. Cultivate competencies that drive Customer-Focus;

6. Develop Customer-Focus;

7. Reward and celebrate Customer-Focused accomplishments;

8. Communicate, communicate, communicate.

 

Building a Customer-Focused culture takes time and effort — but the payout for your organization, customers and shareholders is significant. There is ample empirical research that provides evidence of the linkage between sharp Customer-Focus and above average and sustainable profitability. As you can see, a key ingredient is leveraging your People Management processes (like hiring, performance appraisals, employee development planning, and compensation and rewards) to help focus everyone in the organization on demonstrating Customer-Focus and achieving such organizational goals.

PS: A good and practical read is the book That’s Customer Focus by Ray Miller.

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Eric Fraterman is a Customer Focus Consultant with a wide and deep experience in more than twenty industries and six countries over 25 years. He helps organizations create a Customer-Focus advantage for gaining and retaining business through exceptional customer service and experience.He can be reached at [email protected] .Website: www.customerfocusconsult.com     LinkedIn: http://www.linkedin.com/in/440216ericfraterman