I had the honour of delivering the opening keynote speech at EDGE 2018 on Hamilton Island, where I talked about extreme customer centricity and the fact that companies need to embrace this to survive the digital tsunami.
With the smartphone as the most powerful tool ever, customers have literally put themselves in the centre of the world and if you don’t follow them into this new reality, chances are you become obsolete.
In his book Managers the Day After Tomorrow, my business partner Rik Vera uses the customer centricity model below, showing that you must build a strategy that really starts with the desired customer experience.
It requires full adherence to new principles to enable a truly customer-centric operation mode: a shift to value-driven behaviour, an accompanying culture with new KPIs, a new management style and an organisational structure that allows for more self-steering and working in teams.
The desired customer experience (CEX) should be the starting point in everything a company does. The first and most important interface – hence the next circle – is the employee.
As every customer and every desired customer experience is different, the employee can’t be framed by top-down processes. Instead, employees need to be really empowered to help, serve and delight customers always and under all circumstances.
So, processes need to be replaced by value-driven behaviour. Employee centricity is a natural result of really putting your customer in the centre, as digital processes and procedures will never delight the customer.
But what really is value-driven behaviour? As human beings, we always have a strong urge to know and measure if we are doing things right.
Employees have the tendency to look towards their organisation to measure or judge them, hence organisations tend to put extensive performance management systems in place.
Companies build scenarios: if A happens you need to do this, if B happens you need to do that.
The big question is, if it is not processes and procedures, what is it that makes employees know whether they are doing the right thing or not? How do we really know we are doing the right stuff? The answer is simple: it is value-driven behaviour.
Zappos (an Amazon company) is a perfect example of a value-driven company; people are trained for four weeks on the values of the company and how these translate into value-driven behaviour. Two of their most important values are “Deliver WOW through service” and “have fun and create a little weirdness”.
This means that employees are empowered to decide for themselves what it takes to WOW the customer, they are even stimulated to colour outside the lines to achieve this, no matter how much time, energy or even money is involved.
How to sustain a business model like that? If you go back to the model, one of the outer circles is Logistics, which needs to be of the highest level to support this customer-centric behaviour.
At Zappos, only three per cent of all transactions need customer service support. Next to that, their famous customer support is not being considered a cost centre, but as a non-expensive marketing tool. Zappos is known as a very customer-centric company that is fun to do business with.
Although traditional companies refer to their employees as “human resources”, the rate of disengagement amongst employees is sky high.
According to the The Worldwide Employee Engagement Crisis research, it is as high as 87 per cent. No wonder!
Their idea of an employee is still close to that of a robot: someone who does what he is being told, who works on similar tasks every single day, and is completely interchangeable.
It is easy to understand that employees at a value-driven company like Zappos feel much more engaged. First their behaviour is more about Why than about What, second their reward is variable since it is outside-in, coming from a happy customer.
Not unsurprisingly, research has shown that there is a very strong linkage between employee behaviour and attitude and customer satisfaction.
High time for companies to change their perspective on employees and regard them as their most important assets!
Culture is eating strategy for breakfast
In one of my blogs Why Digital Transformation is useless without a Cultural Shift, I discussed the need of a strong culture to accompany this new value-driven customer-centric approach.
Culture nourishes this behaviour; it stimulates, rewards and keeps inspiring people to continue to satisfy customers.
You need to be persistent in doing this, the temptation is strong fall back to the ‘good old recipes’ of strict processes and procedures. You need to move from a traditional culture of control to a culture of trust.
Management for the new normal
The most important task for the manager is not to run ‘checklist management’, but to keep the culture alive. You can’t go on being a process-driven top-down organisation anymore. If people understand the values, if you empower and trust them to do so, they will do what they need to do.
There is no standard recipe for companies on what their organisation should look like. We all start from Employee Centricity and our core values, and of course these are very specific to every organisation. And with these different ‘ingredients’, a single recipe is just not feasible.
Organisational structure is people-to-blueprint
Your core values are not just nice slogans to hang on your office’s walls, they are non-negotiables, they are your culture’s foundation.
Every single value comprises desirable behaviour and employees need to be fully aware what type of behaviour is aligned to the set of core values.
And yes, in the end this behaviour results into new customer-centric KPIs. Values and behaviour shape your culture and as we learn from Zappos’s CEO Tony Hsieh, it is what you should hire and fire upon. The recruiting process will change dramatically as well.
It is no longer about merely having the right diplomas or experience, you want to hire people that first and foremost fully support all the company’s values.
That’s exactly why Zappos offers $2000 after four weeks of on-boarding not to come working for the company if one doesn’t feel comfortable with the core values.
Traditional companies start from the blueprint. Employees are trained to fit within this framework and are hired based on blueprint’s criteria. In an employee-centric organisation, people are hired based on companies’ values and should be able to develop their own very specific talents.
Employees should no longer fit the blueprint; the blueprint should fit the employees. Let employees develop themselves in what they are good at, not just in what they may lack.
The blueprint will no longer be something employees are forced into, the blueprint will be the resultant of all combined talents within the organisation.
Technological and physical environment
Which collaboration tools you are going to use, to what extent you allow flexibility of work in time and space, results from extreme customer-centricity, employee-centricity, culture, management style, blueprint and how we implement that blueprint.
They are NOT the means to get there, they are the tools to shape it. Culture decides the tools, not vice versa. The right tools ENABLE customer-centricity, tools never CREATE customer-centricity.
What does all this mean for you as a business leader? Leadership is more challenging than it has ever been. And it is different from what it used to be.
Management and organisational structure are a result of a customer-centric culture. Profitability in the new normal is to move away from traditional KPIs to customer-centric ones.
Your highest assets are not just customers, they are the SATISFIED customers: they buy more, they buy more often, they buy at a higher price and they serve as your sales and marketing department. It is the good old balanced scorecard, but with new elements.
The value-chain is simple. Employees fit the core values of an organisation, they do understand the higher purpose and behave according to the values. They feel engaged and can engage customers.
Engaged customers bring profit. Employees are given all opportunities to develop their specific talents and the company takes on the responsibility to maximise the impact of those developments on the results.
Needless to say, leadership needs to change as well. The true new leader is a guiding steward. They do not assign top-down tasks, they supports employees to live the values and creates and supports the customer-centric culture.
This true leader ACTS:
A - they are Authentic, they cannot pretend to live the values, they need to BE the values of the company;
C – they are Coaching, they move from ‘command and control’ to ‘inspire and engage’, establishing a move from assignments to commitments;
T – they are Transparent, and transparency creates trust;
S – they are Sharing, and when information is shared freely, a truly collaborative culture is supported.
With over 20 years of experience in IT and training, Nancy Rademaker – partner at Nexxworks – has always and above all passionately focused upon people: how technology influences their behaviour, how it helps them share knowledge and how it enables them to create and innovate.