Monthly Archives: February 2010

Why is customer-centric strategic planning so atrocious?

Calling corporate customer-centric planning deficient is paying it a big compliment. From Fortune companies to entrepreneurial businesses, and our practice spans both, well under 10% of companies understand even the most rudimentary techniques for letting customers drive the strategic equation, and the true number may be less than 5%. Senior managements at the remaining 90 – 95% plus:

a.) Want to become more customer-centric, but can’t find their way out of traditional, company-centric planning approaches
b.) Are still playing the we-them power game
c.) Let financial planning drive their companies
d.) Are content to spout lots of “customer-this, customer that” bromides
e.) Believe letting middle management implement CRM or CEM or Social CRM or whatever new fad is out there will get them close enough to customers?

Unfortunately, customer-centricity starts with aligning strategies with customers through effective customer-centric planning processes – before it moves through aligning process with strategies and technology with process. Lacking well thought-out, customer-responsive business strategies, companies can’t move off the dime in customer-centricity terms – unless their CEO is Jeff Bezos, Fred Smith, Richard Branson, Steve Jobs or someone else with customer-centricity so baked in their brain they can skip planning and go straight to execution.

Why do we have this problem and what should we do about it?

A Five-Minute “Must Read” Piece Concerning Customer-Centricity – from Harvard Business School

The Harvard Business Schools “Working Knowledge” newsletter just published an intervieww with faculty member, researcher and pundit Ranja Guloti. The piece is titled, “The Outside-In Aprroach to Customer Service,” with “customer service” referring to all customer interactions (http://hbswk.hbs.edu/item/6201.html). It’s a five-minute read that imparts exceptional wisdom about achieving customer-centricity based on Guloti’s years of tracking both Outside-In and inside-out companies. Everyone concerned about customer-centricity should read and absorb this.

Gulotti makes many incisive points, including levels of customer-centricity achieved along the long journey there. But the two that struck me most are: 1.)  his differentiating between the constraints of nearly ubiquitous  inside-out thinking about customer needs - and how Outside-In lifts these constraints, creating opportunities for truly innovative thinking; and 2.) how organizational silos prevent understanding of problems from converting to action. To the latter point he says:

“As I delved deeper into companies seeking to become more customer-centric, the biggest gap I discovered was the one between awareness and action.”

We see some of our own clients experience “the gap.”  Despite prior alerts that O-I process redesign changes “what” work is done and “who” (functionally) does work – requiring organizational change – we have clients that understand what needs to change and why, yet freeze-up when it’s time for action. The primary culprit? Not being able to bridge functional silos.A primary reason we’ve now adopted an online maturity modeling instrument is to better preduct when “freeze-up” is likely to occur and when not (it’s often tough to read).

Anyway, I’ll shut up so you can read it.

Warning: Computer Virus Alert X 2

What do computer virus attacks have to do with customer-centricity and customer experience? Not much. To the jerks that just launched the so-called “Softmetalgroup” virus -which locks down your whole computer – “customers” are victims.  No customer-centricity required to lock down your machine while dangling in front of you non-stop offers to “let you out of jail” if you’ll just buy their virus removal program, and then download pornography if you refuse their “offer.” Hell of a customer experience, though.

Double bad luck

You expect that from hackers and other computer miscreants. But in the title I said “Alert X 2.” Technically, “X 2” isn’t another virus alert, but an antivirus alert. While you don’t expect hackers to have an ounce of concern for the havoc they wreak, you do expect your anti-virus company – the one that failed to detect the malicious Trojan horse that triggered to whole sorry affair – to give a rip. But I had the misfortune to be using Spyware Doctor + Anti-Virus from PC Tools, which apparently doesn’t. At least not a big rip.

Infected on a Monday

My computer didn’t cough or sneeze beforehand. About 10:00 a.m. this past Monday morning it just seized up. Tried to activate Spyware Doctor, but the virus had disabled it. Tried to get on the web, but the virus blocked access. Then I tried rebooting in Safe Mode. Still couldn’t run Spyware Doctor but could get to the web. So I uninstalled Spyware Doctor and ran it off the web onto my computer for a two hour plus full scan. Didn’t find a thing. So I Googled the virus and discovered various people near the end of their rope trying to get rid of it. Checked several sites claiming to offer instructions on how to get rid of it. Funny, they were all PC Tools sites, actually. Hmmmm. Can’t stop it from infecting. Can’t detect after infection. But still trying to sell software to get rid of it (you know, free scan but you pay for the software before it will disinfect you). But if it doesn’t find anything, how’s it gonna get you to buy it…? Oh, and I found another site that listed the primary malware files with instructions about how to remove it manually. It was brain surgery in the registry, and I have trouble taking out a sliver with tweezers, so I passed.

Frustrated by a Tuesday

So I went on PC Tools’ website, logged in, and filed a support ticket. No response. Filed again. No response, except to say I already had a ticket number. While waiting, I downloaded client files onto my laptop so I could get at least some work done, while waiting…and waiting.

Finally, I went back on the site looking for an alternative method of contact. I’d seen “Live chat” before but couldn’t find it again. Then I lucked out. I found Live Chat by not signing in but proceeding as if I was still a free trial user. But you can’t use Live Chat unless you are a registered user. Very cagey, showing Live Chat to trial users to get them to pay, but hiding it from people who have already paid. So I got on live chat.

Request after request from them to do stuff you can’t do from Safe Mode, the only place I could do anything. A couple of dropped connections later, the day slipped into Tuesday. They kept trying to send me a “findmalware.exe” file or some-such that embedded Windows protection kept rejecting. Then we remembered FTP, and I was able to import and execute the program, which found pages of infected files. I sent the report to them, and they said I’d hear back from the engineers who were going to evaluate the mess in 24 – 48 hours. Sorta like an ambulance crew driving to an accident and stopping for coffee every 50 feet.

Disillusioned by a Wednesday

I tried to get a status report late Tuesday, but the “chatters” were in the Philippines and the engineers here in the U.S., so all I could get was, “they received your file.” Another technology company that doesn’t know how to use technology, at least not for customers.

Tried for a status again midday Wednesday, after not hearing from them. “They received your file…” I had a sinking feeling my work station wasn’t going to get fixed, at least not by PC Tools, and I had video conferences scheduled for which I needed it. So I threw in the towel and followed a recommendation from Bob Thompson, who runs this here site, and went up on MalwareBytes.com. Cute name. Neat anti-virus stuff, too. Downloaded it, ran it, and was infection-free in 20 minutes.

But I was still honked and pressured a “chatter” to actually call engineering for a real update. “They’ll be e-mailing you shortly.” Can’t wait. And I actually did receive an e-mail a couple hours later. Guess what? My computer was infected. Yup. And they reeled off a long list of files they wanted me to track down and send them for evaluation. How nice. But the file names looked familiar. Guess what. Same file names, at least some of them, from the list of files for the manual removal routine I read back on Monday. And this from a company actively promoting its ability to disinfect computers of the “softmetalgroup” virus. Smelled like dead fish. Or rotten eggs.

Now who treats customers worse? The hackers or PC Tools? And remember before you answer, I didn’t have to pay the hackers.

How High Up the Management Ladder Can Customer-Centric Process Exert Influence?

  

Of course, management always thinks process is for those “beneath them.” It’s hard to imagine anyone of “Director” rank or higher (never mind the VP level) submitting to having their own work and decision-making influenced by process guidance, except with respect to production quality principles.

But Outside-In is process of a different color. It can and sometimes does provide management guidance for decision-making affecting customers. On more than several occasions C-level execs have adopted our O-I mantra – “Adding value to customers in ways that add value back to the company.” And when they start saying it, they start thinking it – especially when we’ve managed to involve them in a strategic planning process designed to produce customer-centric outcomes.

Driving this question is Toyota – which would have a much brighter near to mid-term future had a pervasive, customers-first process culture guided strategic planning and strategic decision-making, both of which became progressively more customer-insensitive over the past 10 years (at least). And despite those saying Toyota has only to straighten out production to rebound, I don’t think they’ll get much bounce without changing a culture that supports hiding known mechanical problems from customers (and regulators), which resulted in destruction of life and property.

But do you believe that a customer-first process culture – especially one that identifies customer needs, preferences and opportunities before going to literal “process”- can penetrate management thinking on a widespread basis? And if “yes,” what will it take?

The Emporer Toyota Has No Clothes (no more fig leaf of customer-centricity)

Toyota might have been a customer-centric company for parts of the 80s and 90s, or it may never have been customer-centric, which I now suspect.  Toyota thought that understanding what customers wanted to drive; converting that understanding to car design; and then superbly manufacturing cars that fit customers tastes; made it customer-centric – and bulletproof. But two fundamentally flawed asuumption have stripped Toyota of its body armour.  

First, Toyota got caught breathing its own fumes – believing its vaunted Toyota Production System was so scalable the company could grow at will. As stuck accelerator pedals and failing brake systems demonstrate, bad assumption. And these maladies follow a string of other problems that had already stripped Toyota of its top quality ranking.

But second, and I believe much more important long-term, Toyota failed to realize there’s more to customer-centricity than excellent products (which it can no longer claim). Research that David Mangen Ph.D. and I conducted several years ago identifies that customers now consider product excellence and service excellence two halves of the same coin. Without one, companies have neither. And even if it grasped this fundamental truth, Toyota failed to realize that “service” was about far more than fixing cars.

Going back 10-years, Toyota started failing to deliver one of the most important service components – honesty. I won’t go into the whole litany of Toyota subterfuge here. I’m saving it for a full article I’ll write once I’m confident all the major discoveries are discovered. But turns out Toyota has been hiding serious defects from customers and government agencies for years. The company’s behavior has been outright smarmy, going back to 2002 when it tried to pawn off sludge collection in engines to drivers failing to change oil. And even after the U.S. DOT forced them to extend engine warranties to 8 years, they tried to obstruct customer filings. And today, they continue obfuscating like mad. Fortunately, the DOT and perhaps even more so the Japanese Ministry of Transportation, are up to their tricks.

I’ve read many comments from Toyota loyalists (most of whom don’t yet know what Toyota’s been doing, unless they’re reading the excellent investigative reporting in the New York Times), to the effect that “Toyota will snap right back.” From mechanical problems, perhaps. But from deeceptive business practices, I seriously doubt it.

And as a sidebar for process folks reading, Toyota has provided living proof that neither the Toyota Production System nor Toyota’s Lean culture created a customer-centric company – one that puts honesty and integrity with customers on a pedestal, towering above business instincts to put profits first - especially when that means putting customer lives at risk.