Becoming customer-focused amidst internal politics
Photo by Kevin Curtis
The future of professional services is meaningful, human-centered, and digital. However, there is a difference between the value customers experience and what service providers claim to deliver. In this article, we open the discussion to two fundamental questions. First, we ask why service providers struggle to serve their customers meaningfully. Second, we elaborate on the resulting change leadership challenge.
Customer focus is a critical driver of future success
A bold focus on customer value enables professional service providers to be successful in the future. Most service providers want to be meaningful for their customers, but daily practice shows that realizing that ambition is not as easy as expected. There is a gap between the dream and the current reality.
To bridge the gap between promises and actual service, an organization must change its mindset, proposition, positioning, and operations to serve the expected customer experience.
Common strategy to improve internal collaboration
We conducted an online survey of 150 senior executives at service providers in the Netherlands. We asked the participants about their strategies to improve the customer focus of their organizations.
A key strategy to increase customer focus is to improve internal collaboration between departments. Empirical academic research supports this strategy.
Focus on internal collaboration emerges in a variety of ways, such as
Sharing customer information with colleagues in other departments
Multidisciplinary working groups to discuss customer issues and solutions
Frequent formal collaborative meetings between different departments to discuss customer issues
From our research and professional experience, we question whether focusing solely on internal collaboration is sufficient to improve customer focus. We briefly explain our doubts.
Internal consultation is a common and accepted form of collaboration to discuss customer issues. However, the objective of these meetings is rarely about how to make a meaningful difference for customers. These meetings and task forces are often about finding appropriate solutions for current service delivery problems and aligning internal processes across different departments to prevent future flaws and failures. In other words, sharing customer information and aligning cross-departmental responsibilities is to sustain the current delivery process. And these processes rarely have customers at the epicenter of operations.
Aligning different functional departments is better known as silo-busting and is a significant challenge to overcome to become meaningful for customers.
The best practices we found in our research for silo-busting are:
Creating a mutual understanding of the current service delivery processes and failures
Setting cross-functional priorities and goals
Allocating a fair distribution of goals
Establishing a trust to share crucial information.
One thing gets clear from these best practices: energy and effort are on internal processes instead of optimizing customer interactions and placing the customer in the center of attention.
Two hurdles to cross for effective collaboration
Becoming customer-oriented means shifting from problem-solving and firefighting to making a meaningful difference for your customers. That is more than just a change of semantics.
Firefighters are the local heroes if internal collaboration is about solving current service delivery issues. They receive appreciation for this competency. However, if making a meaningful difference is the higher purpose of cooperation, it requires different traits:
being an open and creative mind,
having strong relational skills
being persistent in going for what is meaningful for customers.
It is a different game. And to play this game, two significant hurdles have to be taken. I'll stipulate these hurdles.
Improve shared knowledge about customers
Knowing your customer sounds evident for a service business. However, senior executives give their organizations a low to average score on 'we do have enough knowledge about latent needs from customers' and 'we have an adequate solution to distribute customer knowledge throughout our organization.' Despite all the CRM and Big Data efforts businesses have gone through over the last decade, customer insights and a clear go-to-market strategy are still a significant source of concern.
Service providers rely on individual staff members and customer data input in systems and processes. This information is usually restricted to operational matters 'to keep the machine running' instead of data to gain valuable insights about customer needs, behaviors, and decision-making processes.
Service providers must develop new processes and practices to learn about their customers to improve this flaw. Fortunately, these practices don't always come together with technology investments. It can be as simple as getting out of the office and conversing with customers to learn about their lives, worries, and dreams. And translate these insights into valuable solutions.
I've seen it work. Having dialogues with customers is a significant change, involving new methodologies and uncertainty about what you may encounter. It requires a vast amount of willingness, curiosity, and bravery to go out and understand your customers. But it's worth the effort!
Align structure and governance for effective collaboration
The current structures and control systems are the second barrier to customer orientation. Existing functional structures and systems define most organizations' targets, budgets, and resources. Managers are accountable for their departments' results, with an assumed positive effect on the results' predictability. But it withholds exploring paths for effective collaboration across the boundaries of individual departments.
The first phase to improve effective collaboration consists of joint customer-centric goals, an easily accessible information platform, standard processes, and an aligned mindset between departments. Implementing these changes has consequences for many people. Instead of being in control of personal objectives, people become dependent on colleagues' efforts and multiple departments' results. It is another mindset.
This dependency brings trust into play. Trust is a prerequisite for commitment and a precursor to better customer results. A reconsideration of the management structures and practices, evaluations, and self-perceptions are only a few pieces of the puzzle.
Overcome the hurdles to make a difference
Developing an excellent service organization is often associated with time-consuming systematic and cultural change. I worked with clients on programs with various customer-centric names, such as 'Service innovation,' 'Customer first,' or 'New value propositions. Only a few of these engagements led to sustainable improvements. The typical patterns of these engagements explain this in large:
First, senior leadership announces a customer-oriented vision as a sustainable competitive differentiator
Then, a small team gains quick-win results from pilots to substantiate the opportunity and generate positive energy
To slow down and exterminate the program when it is ready to scale up to a more significant part of the organization.
Applying this standardized approach is a common pitfall. Effective change management is situational; no single process guarantees success. However, being aware of the difference between change and mental adaptation is crucial. The aspired change will become irreversible when going from quick-win results to broad implementation. Underestimating the impact and complexity of this process is the main reason change initiatives fail.
Fulfill preconditions for customer-oriented internal cooperation
In this article, we opened the debate about two fundamental questions. First, we asked why service providers struggle to access more meaningful services. Second, we have delved deeper into the resulting change leadership challenge.
Answering the first question, we argue that improving internal collaboration between departments to resolve customer issues is the first step, but not necessarily enough to improve service providers' customer focus. We have identified three causes to explain this statement:
1. Collaborate to create meaningful value. Internal consultation finds solutions to problems in the current service delivery process. Usually, internal collaboration is not about developing better solutions or more added value to customers. It takes a different mindset and behavior to change from solving problems to creating value.
2. Understand your customers. Accurate insights about customers' needs and habits are lacking. And if it is in place, the infrastructure to disseminate the knowledge internally is not in place. As a result, internal collaboration relies on personal knowledge and information available in systems for service delivery. New techniques, practices, and systems encourage employees to learn more about customers and their needs.
3. Organize meaningful collaboration. Effective internal collaboration requires structures, systems, and rewards that support collaboration across departments. This conflicts with the departmental structures and mindset within many service providers. Trust is the basis for an organization that enables effective internal cooperation between colleagues and their willingness to achieve cross-departmental results.
The biggest challenge to achieving greater customer focus is managing three lateral processes:
Get more reliable customer insight,
Implement systems and structures to share these insights, and finally
Develop the right meaningful mindset amongst employees.
Getting the conditions for effective internal collaboration towards more meaningful services is a significant change. It is more than just pushing the buttons and waiting for the transition. There is no single approach to guarantee significant customer-centricity improvements. Still, you should consider some critical points of attention to increase the chances for successful change toward true customer-centricity.
Research methodology
Between May and June 2014 we conducted an online survey and collected responses from 150 persons, all of them working in financial service businesses and located in The Netherlands. The distribution of the studied industries is shown in the pie chart below. The respondents were asked to give 2 scores on 26 different statements. The first score reflects their perception on how important they value the given statement for their company and the second score indicates their perception of how their company is currently performing on the given statement. The results were plotted in a matrix with importance and performance on different axes. In this whitepaper, we focused on the statements that were perceived as important and we examined then the differences in performance.
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