April 2, 2019
Customer focus has always been an important source of business success, but it creates special advantages in today’s environment of disruption. Research indicates that highly customer-focused organizations adapt successfully to rapid (often technology-driven) shifts in customer requirements and in competitor innovation. The bottom line is that customer focus leads to improved revenue, service satisfaction, and operational efficiency.
Customer needs are rapidly evolving. In fact, PwC, in its Pulse interview of CEOs that was summed up in “The disruptors: how five key factors can make or break your business,” observed that customers may be edging out competitors as the biggest source of marketplace disruption. Customers now require their suppliers to provide them with innovative products and services.
To increase customer-focused innovation, we must close two gaps: First, clarify what customer focus is in our situation. And second, balance customer focus with other critical organizational priorities.
Managers need to be on the lookout for and overcome three common obstacles to a customer-focus mindset. They are:
We have all been frustrated when we hear the following kind of statement from service personnel: “That’s how we do things here—that’s our procedure.” This statement is a legitimate stance to take. Standardization promotes reliability and reduces costs.
Unfortunately, when it’s overdone, operational efficiency weakens customer focus. In a global consulting firm, the company’s leadership prioritized execution of standards for client deliverables over understanding customer needs. At one moment, leadership discontinued customer interviews about customer requirements to focus more attention on implementing standards. This decision was made when the industry analysts observed that global consulting was experiencing disruption.
Customer-focused organizations break through the imitations of a narrow view of operational efficiency—they achieve the right balance between customer focus, innovation, and operational efficiency. In fact, the best implementations of design thinking, Lean work methods, and Agile work methods systematically integrate customer focus, operational efficiency, and innovation.