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The “Customer-First” Org Model – Part II

November 28, 2011
This is Part II of a three-part discussion about organizing your business around a “Customer-First” mentality. You can’t train “attitude” when you hire, but you can set up your business so it is structured in a way that makes it easier to attract and retain people with the attitude you need to serve and keep your customers.

As promised from Part I last week, this week we are going to be a bit more visual. Last week we quoted a study from Bain & Co (“Closing the Delivery Gap“) that called out just how few customers agree with the CEO’s perception of the customer experience they are providing. We then laid out the four core elements of the “Customer-First” Org as:

  1. Serve Your Real Customer – know if you customer is external or internal, and start thinking about “serving” as “customers” those who report to you too.

  2. Invert the Risk Factors – Try to achieve a “zero-risk” perception of your Brand for your external customers, and make the ownership risk higher as you move away from the external customer. i.e. Executives own much more of the risk than front-line staff engaging customers.

  3. Remember Who Owns Your Brand – Brand ownership starts with your external customers. Acknowledging this and practicing it is the key to creating an ownership culture among your employees.

  4. Evolve from “Owner” to “Mentor” – hardest element to adopt for the micro-manager, but critical to making the model work. Rather than conditioning everyone to expect your involvement in every decision, delegate both responsibility and authority in equal amounts and invest your time in mentoring your teams on the culture you are trying to build.

When I was in the process of building the operations for Lands’ End in Japan, I realized after a year of frustrating arguments about the merits of the “Japanese” way versus the “American” way were getting us no where, and changed tack to talk about the “Lands’ End Way”. It meant that my role as the manager of a team of 200+ people was to mentor the culture, not keep an eye on how every single person was doing their job. Given the importance of the customer we wanted to convey (Japanese catalogs did not have guarantees until LL Bean and Lands’ End entered the market), I realized there was no more important person in our business than the phone reps who spoke with our customers every day. 

The key about any version of this you might deploy is that not only includes “Customers” in your org chart, but makes it visibly clear that they carry the most weight in your company.

A few things to note:

- Every level in the org has a clear role: to support their “customer” who sits above them in the org chart

- The share of risk belongs at the top (aka “the bottom”). “Shareholder Value” proponents may not subscribe to this, but “guarantees” to shareholders are a bad deal for customers and employees. “Satisfaction drives profit, not the other way around” as Peter Drucker used to say.

- As an executive or senior manager, you’ll increasingly find yourself focused on two things: ensuring resources (including the best people) are available to your teams and providing mentorship on the culture and the strategies you create to drive the business. What could be easier or more rewarding?

The key takeaway here is that in order to build a more customer-centric culture, you need to take real, credible action around setting yourself up to make it a reality. New policies, training or workshops won’t help you if you don’t put the structure in place to support it long after the consultant leaves the premises. By committing to a structure that is inherently “customer-first” and making it visible to all stakeholders, you have a much greater chance of success because the focus on the customer becomes an organic one where the perception of reward, rather than risk, for doing what’s best for the customer is the norm.

Now, take a look at your own internal org charts – would it be that crazy to turn them upside down? You might find that you had it upside-down all along….

Next Issue:  For Part III we will look at some best practices and some specific actions any leader can take to start the transformation to “Customer-First”.