Customer Centric Organizations

I am working with a client right now on how to lead and organize truly customer centric enterprises - and came across this comment from Nick Wreden (on his Fusion Brand blog) concerning the work of Ranjan Gulati and James Oldroyd.

"The two most important elements in establishing a customer-centric organization are an enterprise database and a workforce that can both willingly share information and make a willing commitment to customers, rather than to products or organizational fiefdoms. It is a long, hard slog to become -- and maintain -- a customer-centric organization, but the result is a much more profitable brand.

Based on a two year study of Continental Airlines, Royal Bank of Canada (RBC), telecommunications giant SBC, casino Harrah's and 13 other firms, "The Quest for Customer Focus," by Ranjay Gulati and James B. Oldroyd, outlines four steps necessary to become a customer-centric organization.

One key conclusion: it is the organization, and not the marketing department, that shapes and drives the brand: "Getting close to customers is not so much a problem the IT or marketing department needs to solve as a journey that the whole organization needs to make," the authors wrote....

The difficult journey to a customer-centric organization consists of four steps:

Communal coordination: A central, enterprisewide database is key. This is a two-part process. The first involves retrieving and standardizing information from all customer touchpoints. It sounds easy and logical, but the technical and cultural challenges are immense. It took Continental four years of dedicated work to achieve this goal; almost a year was spent on data standardization alone. Harrah's took six years.

Serial coordination: Essentially, this step consists of creating business analytical capabilities that leverage the customer information repository. The business analysts then pass the analyses to the appropriate unit. Sounds easy on paper, but the authors point out that "serial coordination is not spontaneous and is fraught with obstacles. Traditional roles and structures create natural barriers to spreading information and lessons learned. Some changes to a company's social and organizational structure will be required to overcome them".

Symbiotic coordination: Now the task grows even harder - from analyzing past customer data to predicting future customer behavior. This requires a two-way flow of information among the analysts and multiple business units. They collaboratively participate in four activities: "creating models to predict customer behavior; experimenting with various interventions designed to alter customer behavior; measuring the results of these interventions; and using feedback from the front line to improve the models and subsequent campaigns".

Integral coordination: In this stage, the organization can use customer information in daily interactions with customers, aided by employees who do more than pay lip service to customer service. One example: a flight attendant apologized to a customer for a flight delay he had experienced earlier that day. Continuous training is key. SBC conducts almost continuous training programs while Harrah's is putting more money into an enterprisewide marketing training program. Changing incentive programs helps. Harrah's spent $40 million in 2004 rewarding employees who demonstrated a customer focus, while SBC changed its compensation structure to encourage cross-unit cooperation".

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