Much has been written about the ‘How’ of customer-centricity, but not a lot about the ‘Why’. There is proof, of course, of the advantages. Research has shown that customer-centric organizations had a 36% higher return on investment than their industries’ median performance because they were focused on a specific purpose. (Corporate Culture and Performance, by Kotter,Heskett). The transformation of Best Buy’s customer strategy has been well-documented (Reorganize for Resilience, by Gulati). But it is easy to look at the evidence as “not applicable to our company.” Where’s the tangible proof?

Remember the Fosbury Flop? It was the 1968 Olympics in Mexico City. Ray Fosbury shocked the world and captured the gold medal by breaking the world record for the high jump by jumping over the bar backwards (facing up). Prior to that time, all high jumpers had used a face-down, straddle technique of rolling their legs over the bar during their jump. Today, virtually all Olympic-caliber high jumpers use the technique that Fosbury invented.

Customer-centricity is as transformative as Fosbury’s game-changing technique. Becoming customer-centered provides purpose to the corporate mission. But it cannot be started with a ‘2 + 2 = 4’ mindset. It is a difference maker because it is a unifying force for entire organizations. It will bring about cross-pollination of perspectives between departments, resulting in teamwork built around integrated mindsets, rather than segregated, silo mentalities, to work through complex customer strategies.

The leaders of customer-centric organizations must have a fundamental belief in becoming the best, coupled with the realization that they will not get there via the traditional product-centered path from the past. They have the attitude displayed by Yogesh Chander Deveshwar, Chairman & CEO, ITC. “Either we become world-class or we leave the business.” (1,000 CEOs, by Andrew Davidson, editor).

Y.C. Deveshwar took over a ‘rudderless’ business and re-oriented it. Under his leadership (since 1996), ITC has transformed itself by focusing on a corporate strategy that synergizes shareholder value creation with societal goals. Yogesh Deveshwar’s vision for the company is “A Commitment beyond the Market” and excellence in sustainability practices. It is that kind of vision that structures all customer-centric organizations.

Customer-centricity starts with the knowledge that performance will improve because it provides organizations with purpose and empowers employees to focus on customer outcomes. But the impact, both external and internal, is clearly measurable after it is implemented. Next week we will introduce you to a method for proving that customer-centricity is really better.

Here’s a personal story that happened recently.

Actual scenario: We have been using a company that delivers bottled water to our office for almost five years. A competing delivery service provided us with a free trial and offered to lower our monthly costs. We were ready to change. However, I telephoned our current company, found the name of our account representative (who had never called or visited our offices) and made him aware of the lower offer. He immediately offered a 15% discount–no hesitation. His explanation for lowering the price was that we had been a “good customer” for years. Since the prices were comparable, we stayed with the original supplier.

“What if?” scenario: How do you think we would have felt if the incumbent supplier had proactively called our company with the price reduction? Pleased with the lower cost? Happy with the recognition as a good customer? Shocked to find out that someone was monitoring our account and actively working on our behalf to keep our pricing competitive? Willing to tell the story to others? “Yes” is the answer to all of these questions.

Keeping “good customers” happy and motivated should be part of any customer-centered approach. Instead of silence, there should be a process to regularly review performances for these customers rather than waiting for them to call or, even worse, to leave without calling.  This should not be a judgment call. It should be automatic to treat loyal customers favorably. It’s an old story that many companies still never seem to learn. We know it in hindsight, but we never initiate the offer.

Every organization should have a system that questions itself with “What should our customers be asking us for?” Proactively giving the best to your good customers will reward your organization with benefits that will outweigh any short-term effects. This customer-centered company model will make your business healthier, with stronger organizational values, and will avert disaster in the future because of customer closeness.

Have you had experiences in which suppliers proactively called you with unexpectedly good news? Please share them with us.

Disruptive innovation (The Innovator’s Solution, Christensen and Raynor) is easy to identify in hindsight, but much more challenging when it appears as relatively small changes that surround your organization. All ideas seem to be small ideas when they begin, especially when being accustomed to success lead your company to inertia and perhaps arrogance. The danger, of course, from a supplier’s standpoint is that not responding to these changes can cause you to set your expectations too low about what the customer wants. It is easy to think that customers simply want what we have been giving them all along. For valid reasons, psychological research has created the nomenclature “status quo bias” to define the fact that people basically like to leave things the way they are.

There are undoubtedly ideas in the everyday operation of your organization that are trending toward obsolete. They are just hard to see in the present and frankly, it is difficult to “ferret out ingrained assumptions that people never stop to question.” The more we are able to clear out the cobwebs in our minds, the less disruptive the years ahead will be.  Because we are faced with so many more complexities and alternative trends than in the past, the solution must be fact-based to overcome the blind spots. “Success in business ultimately depends on dealing with the facts,” writes Miller.

Make sure that your organization is prepared for change by putting some customer-centered monitors in place that will condition everyone to look for new ways by questioning the old ways. Put your own “GPS” system in place to recognize when a better route is available. Set up a process to pull information from the marketplace and to evaluate change on customers’ terms, not yours. This process is not about gloom and doom. Just the opposite—it will be a great platform to start discussions of ways to strengthen your organization by consistently looking for ways to outperform.

Flexicurity is what Matt Miller calls it (adapted from the buzzword originated in Denmark’s labor market). It is the confidence to search out Dead Ideas that your company is operating under and replace them with dynamic Destined Ideas which will shape a new direction. These ideas have a phenomenally greater chance of survival if they are grounded in what your customers need. So the flexibility of your organization delivers the security for the future. Imagine a delivery model in which your customers never felt they had to sacrifice anything because you were keeping them at the leading edge of new ideas. It’s powerful, isn’t it?

It is really difficult to gauge the impact of change while it is happening. You are too close to it. Don’t let success lead to arrogance, which holds you back from the willingness to question how long yesterday’s ideas will stay viable. The only remedy is to develop a system to help you be aware of challenges to your current ideas and to allow your organization to be adaptable to its customers.

Ranjay Gulati, author of Reorganize for Resilience: Putting Customers at the Center of Your Business, shares some very perceptive insights in a recent interview (http://bit.ly/aHk8QU). He correctly advises that customer-centricity starts with a sense of curiosity about the customers of a business. If companies want to stay ahead of the commodity trap, their leaders must instill a mentality of constantly learning about customer needs and how they are changing.

Bain & Company Chairperson, Orit Gadiesh, echoes the same emphasis on curiosity and business success. (Harvard Business Review http://bit.ly/bnA3FG). She says, “To forge strong relationships and find solutions…it pays to ask lots of questions.” This is “the only way to get to a workable solution to any problem. Having access to a multitude of outside perspectives makes me…better.”  It is true that asking lots of questions will yield lots of new information that can be used to solve customer needs.

The passive, more slowly-paced reactions of the past no longer work. So, ask yourself whether you are an armchair leader or an explorer. If your organization’s sense of discovery has waned, find a solution that will jump-start the passion about customers again. This culture shift is stronger than simply listening to customers. Be aggressive. Peter Drucker, quoted in The Starfish and the Spider, believed that “the purpose of learning is (not) to qualify oneself for a new and bigger job,” but rather “is self-improvement. It qualifies a person to do his present task with continually wider vision and continually increasing competence.” Curiosity is the basis of how ideas both begin and evolve.

The end result of this sense of curiosity is organizational flexibility. As Gulati writes in his book, customer-centricity drives companies to “become adept at monitoring fluctuations in customizing solutions real time” and to “anticipate changing customer needs and offer value-based solution before customer can articulate them. In other words, all elements within the organization become aligned to adapt to customer needs. “The goal is to immerse yourself in customer problems so you can offer up unique solutions.”

Customer-centricity will not happen unless your organization is curious about customers and what they will need in the future. If you want your company to be customer-centered, create a culture that is continuously looking for ways to learn more about customers. Don’t become complacent. Be an explorer.

I recently finished A Technique for Producing Ideas, by James Webb Young. Written in the 1930’s, it is an interesting reminder of how we can develop our creativity for our customers. Young’s writing has a genuine, matter-of-fact quality. It is refreshing to know that the old model for finding new ideas has not substantively changed. He first defines an idea as “a new combination of facts.” The success in generating innovative thinking becomes stronger when our “ability to make new combinations is heightened by our ability to see relationships.”

Young compares the idea-searching process to what occurs in a kaleidoscope. This toy has little pieces of colored glass in it, and, when viewed through a prism, they reveal new geometrical designs. Every turn of the cylinder shifts these bits of glass into new patterns. The more pieces of glass that are introduced, the more possibilities that will be available for new and exciting combinations. The same possibilities exist for inspiring customer-centered ideas in all organizations. A greater variety of experiences that our teams have will inevitably lead to fresher ideas within our organizations.

Too often, we mistakenly believe that ideas which will benefit customers will arrive magically and so “we sit around hoping for inspiration to strike us.” Young shows us that, instead, new combinations develop through persistence and use of a repeatable method. As he observes, “this (idea-generating) technique can consciously be cultivated.” He suggests a formal process for documenting specific information, which can be synthesized or “digested” when searching for new ideas.

Finally, he suggests to stop straining for ideas, but rather, to use a “period of rest and relaxation” while still “constantly thinking about it.” Think of how we gain new insights into solving a puzzle which we return to after a break. As long as we stay focused on what the customer values, time away from idea generating will actually bring fresher insights.

The takeaway from James Webb Young and more contemporary firms, such as IDEO, is that ideas most often happen through a systematic and collaborative process. Our ability to combine our experiences and direct them to improvements on behalf of our customers is essential to customer-centricity. Like a kaleidoscope, the more facets that we consider, the richer the opportunities for those customers. However, we cannot forget that generating new ideas involves an operative technique that we have to work at.

Organizations that want to develop an effective process for designing new, customer-centered solutions need to educate teams of employees to make the most of ideas and encounters they have experienced. When they embrace the fun and the complexity of patterns and relationships, as in a kaleidoscope, employees feel more comfortable with unleashing their creativity to benefit their customers.

The concept of “engagement” is clearly winning the race for the hottest idea in customer consulting circles these days. It is overshadowing customer “experience” and customer “delight” in the pantheon of business improvement words. Be cautious, however, and don’t believe that a single word can change your operation.

Bob Gilbreath, in The Next Evolution of Marketing, shares the definitions of engagement put forward by the Advertising Research Foundation, Forrester Research and his own company, Bridge Worldwide. These and other consultants’ descriptions all use words such as involvement and interaction and turning on a prospect and they explain the advantages for the supplier in terms of customer retention and recommendation. I have yet to see any of these manifestos explain the benefits that the customer receives.

These consultants and suppliers mean well. They are trying to invoke participation by customers in a community, which they, as a supplier, are willing to host. However, the advocates frame all of their literature around the belief that “active” customers are more loyal and will buy more and the cost of switching to a competitor increases over time. Isn’t that about the seller, rather than the customer?

Engagement, as commonly deployed, is too programmatic. It is transactional, not strategic. The problem is that when most organizations implement their version of engagement, it turns out to be one-way. It is from them to their customers, particularly in the realm of social media. How many companies are following the customers who are following them? Wouldn’t an engaged organization want to truly know about the customer they are trying to engage? It has become so diluted that the subliminal definition of collaboration or engagement is that the other party is buying from your company.

Over ten years ago, Seth Godin in Permission Marketing and Unleashing the Ideavirus, told us to “stop marketing AT people.” Rather than creating interruptions for customers, it is better to provide value that will grow your relationship with them. It’s a feeling of interdependence, not one-way. Value becomes the mortar to hold together the connection. The touchstone is that it must be on the customers’ terms, not yours, at a level that is both emotional and fun for them.

It is presumptive to believe that all customers want their supplier to be involved with them. I propose that Apple evangelists would still love the company because of its products and innovative thinking. Apple does not have to “manage” engagement because they build customer advocacy into everything they do.

Too often we become enmeshed with buzzwords to the point that we lose our objectivity. Engagement is a marketing term, an attempt to soften the words “selling” and “advertisement.” Do not undertake an engagement program unless you can define how it will benefit the customer. There is a false belief that markets and customers will shift behavior in large groups if engagement is available. What lasts are the fundamental values in your organization to take care of customers as individuals. Are you customer-motivated, or are you focused only on a new way to sell? Is your engagement one-way, or, are you truly trying to interact with your customers?

Be very reluctant to toss the word “engagement” out casually. Eventually, the word will lose its impact. The better metaphor for connecting with customers is dance—cooperation with a partner for a single purpose. In this customer-centered view, you would not “win” and “keep” customers and they would not be opponents, but rather, partners, moving in the same direction, enjoying the moment together, interested in each other. The actions taken include anticipation of customer needs and performing together to achieve success. Carried out properly, customers will never want to leave you.

Margaret Wheatley at www.margaretwheatley.com has an interesting take on keeping pace with change in her article “What Do We Measure and Why?” She challenges traditional business measures because they do not produce the behaviors that connect employees to their work and a shared sense of what they want to create for their customers. Visionary leaders understand that, in terms of measurement, “What was ‘right’ keeps changing.” But even though the established measures are no longer working, feedback is still important to “vitality and adaptability” just as in any living system.

Leaders need to set the tone for their organizations around gathering and applying the information necessary for them to “adapt and thrive” rather than assuming that the product or service offerings will continue to enjoy the same success in the future. They must support the approach to customers that is “context dependent” instead of unchanging. This culture learns new questions to ask in order for the business to hone its performance and it fosters an environment in which customers and organizations can “coevolve” and stay connected. I encourage you to read her article.

What has value to your customers? That is where their feedback is so important. Value equates to how the individual customer feels about doing business with you. It is your “fit” with their needs and it is embodied in an emotional connection. Execution involves a deep understanding and a high degree of flexibility because “fit” is judged by your delivery in its broadest, most proactive, sense. What if you could promise your customers that you will always look for better value for them—and mean it? If you are not articulating this philosophy of customer flexibility to your organization, you are voting by your silence for business-as-usual and showing customers you are really product-centric.

The challenge for the future is to keep up with changing customers’ expectations. The solution is a customer-centered system flexible enough to continually re-evaluate how you deal with your customers. With this deep-rooted customer focus, organizations learn to focus on adaptability and growth, rather than stability and control. If your customers are changing, and they are, you must have a customer-centered system that allows you to anticipate their needs and to change with them if you want to sustain superior performance. Capability of changing with your customers is the most powerful message you can send.

What we don’t see is the environment that allowed these ideas to germinate and blossom—a creative, customer-centered culture. Roger Martin, in The Design of Business, dissects several world-famous stories of innovation, including Cirque du Soleil, Apple’s iPod and Steelcase’s acquisition of IDEO. What they have in common is a leadership strategy committed to the belief that designing from the viewpoint of the customer will strengthen what the organization will offer. 

Target’s CEO, Bob Ulrich, for example, transformed an organization in “one of the dullest and dreariest industries in America: discount retailing” by “embracing design as a competitive advantage,” writes Martin. Target bought the patent to the now-famous Clear Rx™ medicine bottle by Deborah Adler because it was designed to be intuitive, and therefore safer, for the consumer. There are customers today who only have their prescriptions filled at Target because of these bottles.   

Target’s VP/Creative Director, Minda Gralnek, put it best. “The pharmaceutical industry often talks about addressing “unmet medical needs,” but it invariably means discovering new drugs, not redesigning the packaging in which they are sold.” (@Issue Journal, vol.12, no.1, www.atissuejournal.com) Adler deconstructed the standard prescription drug bottle to discover dozens of improvement areas. How versatile is your organization in defining “unmet customer needs” broadly enough to discover improvements which your customers will value?   

The caution-sign graphic with this post illustrates what must happen. Companies know their direction (the bottom vertical line) but are stuck at the inflection point. New ideas are simply not developing from a traditional product-centric approach. The solution is to shift (illustrated by the horizontal line) to a customer-centered approach. By thinking expansively about “unmet customer needs,” any business can take off with a fresh, invigorated energy that will lead to a much higher performance. 

Many organizations are bothered that they cannot make change happen by simply tweaking their existing systems. But tomorrow’s success does not come from yesterday’s thinking. Dramatic change can only happen through commitment to a heuristic system which enables organizations to focus on designing products and services driven by customers’ needs. That is how breakthrough thinking takes off.

Default procedures essentially manage customers’ behaviors by limiting the number of choices given to the customer. Sometimes, this can be positive. A chime in your car reminding you to fasten your seat belt encourages good behavior. A default to a standard shipping method is convenient and probably serves the needs of the majority of customers. However, they can be frustrating for consumers, as when forced-choice alternatives, such as agreeing to software installation screens, can alienate customers.

Or, when there are too many options, decision-making can become paralyzed. As John Sviokla put it in his “Design Your Customers’ Decisions” post on his Harvard Business Review blog, the presence of “excessive options” is a key reason that “an average of 60% of all online shoppers abandon their purchases mid-stream.” Amazon.com is legendary for framing options in a personalized context, such as “Someone like you also bought this other book.” As a result, it believes that its recommendation engine “increases the average purchase by 20%.”

An ideal metaphor for restrictive default procedures is a speed bump. In order to achieve sensible driving in restricted areas, speed bumps force drivers to slow down or encounter unpleasant jarring. Speed bumps were introduced in November 1979 in Brea, CA. If you are like me, you feel that they represent the epitome of frustration because they are not adaptable to individuals. Now, Mexican-based Decano Industries is developing a device which automatically lowers into the ground when drivers go the speed limit or slower. If they drive too fast, the bump stays up. What a proactive, customer-friendly innovation!

Default procedures offer companies the chance to save their customers time, money and maneuvering through complexity. In every process, however, leaders should not lose touch with reality. In Wired to Care Dev Patniak remarks that leaders should “transcend abstractions and imagine themselves in the shoes of the people they serve.” Sviokla puts it this way: “In a world of excess choice, an easy place to differentiate is in the careful design of the decision process itself.” (Sviokla).

There is a trend toward more personalized or “smart” defaults, such as always requesting non-smoking hotel rooms or automatically adapting decisions in online environments based on answers to previous questions. Car makers, for example, can recommend to online shoppers a sportier steering wheel style based on the selection of a high-horsepower engine during an automobile configuration. There are many other great examples in a December 2008 Harvard Business Review article, “Nudge Your Customers Toward Better Choices,” by Goldstein, Johnson, Herrmann and Heitmann. Thinking like a customer is the key to the great care and persistence and experimentation needed to perfect a procedure. If the end result is more customer-centered, it is worth it. It is the logic and authenticity of the customer experience that matters.

Customers’ relationships with suppliers will be exponentially stronger if they feel that those organizations understand them and have streamlined the interactions they are experiencing. Organizations that design customer-centered default procedures will be rewarded with loyalty and trust.

Remember the paging system for restaurants that was introduced in the 1980’s by JTECH and others? (Creating Competitive Advantage, by Jaynie Smith) The electronic signaling technology was originally created simply as a way for restaurant employees to communicate in order to get customers to open tables more quickly. But when these lighted buzzer devices were handed to the customers, the idea resulted in fewer patrons walking away from the restaurants that used them and more convenience for customers who did not have to listen for their names to be called from a waiting list. Life became easier.

Now, Somtu MMS (mobile messaging system) has a new service in which text messages, such as “Your table will be ready in ten minutes” can be sent to your mobile device (Tuned In, by Stull, Myers and Scott). Life got even easier for customers (and a little cooler) and the 1980’s solution could be obsolete in the future.

No organization can afford to stand still. The best way to avoid inertia is to think like a customer. Because innovation is on a continuum, companies must constantly evaluate where they are. As Margaret Wheatley and Myron Kellner-Rogers observed in A Simpler Way, “there are no windows of opportunity (that will eventually shut) but infinite possibilities.” Searching for these possibilities helps businesses learn how to sustain the energy for customers which they had when the company first began.

The mindset that organizations should embrace is one of invention, not survival. Learn to experiment. Be inquisitive and willing to ask questions. Work is not a test in which you must fear not getting the solution right the first time. “Look for what works, not what is right.” (A Simpler Way). Once you start, you never will want to stop. Wheatley and Kellner-Rogers said it this way: “The surprise within the surprise of every new discovery is that there is ever more to be discovered.”

So, build a company whose culture is grounded in tinkering with existing systems to discover what is possible. Encourage teams to have “constant awareness” by asking these types of questions:

• How can we make this product or service more valuable to the customer?
• Are we evaluating each customer touch-point by the same criteria that the customer uses?
• What transparency can we add to ensure that customers fully understand our processes?
• How might we better anticipate customer needs?

Don’t lose your inquisitiveness about how to improve. Your customers don’t want you to stand still. They want you to pull them into the future with new ideas and services. That is why they are buying from you now and will rely on you in the future. Customers recognize that the sense of discovery in your organization means that you won’t be the same as you were a year ago—you will be better.