Monthly Archives: December 2009

How Can You Negotiate the Politics of Aligning Your Company with Customers?

When we help companies turn themselves Outside-In (customer-centric), corporate politics frequently present the highest barrier. While traditional process redesign focuses on “how” companies work, Outside-In process, the mechanism for turning companies O-I, changes “what” work is done; “who” does it; and how technology supports it – along with the “how.” And that’s where politics enter the picture.

 Changing the “what” and the “who” can both alter the org chart, and usually do. With corporate power and control a zero-sum game, change creates winners and losers among functions, managers and often senior executives. Too many companies try to avoid these potentially disruptive changes by letting customer interests modify “how” work gets done, but stopping there. They may wind up more customer-considerate – but that’s a far cry from customer-centricity, which lets customers drive the work companies do and the functions doing it. And it’s far short of achieving the customer-delight so many companies pursue.

How do you help get your company get over the hump to tackle the “what” and the “who?” First, if you’re going to move your company from company-centric, inside-out to customer-centric, Outside-In, make sure it has the requisite capacity for change – at the executive level particularly – before you try. If it doesn’t, find a new gig with one that does. But if it does have the capacity, and it’s worth the struggle, these two steps may very well help:

1. Map out how many layers of supervision and management separate decision-makers from customers – not just in terms of customer intelligence sifting its way up through the layers until it reaches decision points, but also how many layers high-level decisions affecting customers must work through before reaching the execution level. Many senior executives get the picture. They’re acting on filtered information; and their intentions either aren’t being carried out or get carried out by multiple functions acting on multiple interpretations that produce a mixed bag of customer experiences. That’s not how companies delight customers.

2. Redraw the map with all but top-level strategic decisions made by a single customer advocacy (or customer operations) function sitting one level away from customers – and all the internal support the advocacy function needs provided under customer advocacy guidance. In most companies, this shift will eliminate or shrink layers of staffing extending all the way up to the VP level.

Unfortunately, most C-level executives don’t understand how work flows beneath them, including how much strategy implementers change or even disregard their intent. And an even higher percentage can’t accept higher revenue projections based on achieving customer-centricity – but they’ll jump all over cost-reduction opportunities. I agree the latter approach is more than a bit cynical, and talking about further downsizing staff is tough. However, better to streamline the company and survive than trying to maintain an unsustainable status quo. Plus, doing the right things for the wrong reason is always better than continuing to do the wrong stuff. And bottom line, it’s in company best-interests to get to customer-centricity.

In our experience, willingness and commitment to change structurally pushes organizations over the hump from uphill roads with a change barrier at the top onto downhill paths – to customer-centricity. It’s the tipping point.

“Winner” companies get to the downhill side. “Losing” companies stay stymied, stuck going uphill. And in the long hangover anticipated to follow our current recession, the difference between “winner” and “loser” outcomes will widen into a yawning gap, with lots of “loser” companies leaving the scene.

Just ask Circuit City, CompUSA, Chrysler, GM, Siebel Systems, Sun Microsystems, WaMu, United Airlines and innumerable B2B sellers that continued making good products while customers stopped beating paths to their doors about the risk of staying company-centric. These organizations could (or would) change their management hierarchies to permit customer-centric business to take root. Consequently, they’re dead or needing buyouts (or bailouts).

Is Social Media Responsible for Declining Customer Service Satisfaction?

According to Accenture’s 2009 survey of customer satisfaction with customer service, only 40% are satisfied with the service they’re receiving. Of course, without seeing the questions or knowing the scoring method applied, that means little in absolute terms – except that 2008’s number was 45% and 2007’s 53%. And considering the survey’s “n” was 5,000, these variances are statistically significant. Customers’ satisfaction with the service they’re receiving is down significantly over the past two years.

Is this about social media?

The question is, “Why?” By giving customers opportunities to vent and share their dissatisfactions, is social media accentuating negative aspects of service. Or have recession layoffs triggered the satisfaction plunge. Or are customers expecting more? Or are other factors at work.

Without conducting primary research myself, I can’t confidently say these are the only possibilities. But now that I’ve lured at least some readers into the story by including “social media” in the title, I will share my opinion that social media matters about as much here as a pimple on the face of humanity. Hey, I love social media, at least Linkedin. And we profit from it. But knee-jerk supporters are getting dangerous close to giving SM credit for sliced white bread – the stuff that probably caused the pimple on the face of humanity.

Then what is it about?

The default opinion is certainly the economy. And no doubt that’s the case for customers in industries where service cutbacks have been common. However, based on two decades plus monitoring customer behavior in the marketplace, I’d say “the recession” has powerful competition for being the root cause.

Today, as we approach 2010, customer expectations are growing at an awesome rate (if you’re a seller, at an alarming rate). We are not 2008 customers. We know we have many sellers, even whole industries, in a tight spot. They need us more than we need them. So we demand more and more. And after the treatment we’ve received at the hands of financial services companies, health insurance companies, through-the moon prices “star chef” restaurants, Needless Markup fashion stores, exorbitant consulting and legal fees and the like – we’re up for turning the tables. Most customers would not say they’re extracting “revenge,” but that’s exactly what many are subconsciously doing.

Why is distinguishing this phenomenon from direct recession affects on service so important? Because the recession will go away…eventually, unless we do something really stupid with the economy. But customer empowerment and increasing customer demands on companies aren’t going away. Not for the foreseeable future.

A whole lotta companies don’t get this. They’re going to be blindsided. And some will become victims of the recovery.