Winning Through Customer Focus

Customer focus is the breakfast of champions in high-performance organizations (HPOs)--defined by the Institute for Corporate Productivity (i4cp) as those with superior levels of revenue growth, market share, profitability, and customer satisfaction. Conducted in partnership with American Management Association, i4cp's latest study in this area, The Customer-Focused Organization, showed that HPOs are significantly stronger when it comes to keeping promises to customers, providing better products and services than their competitors, and centering their organizations on the pursuit of excellence in customer satisfaction.

The People-Profit Chain™ from i4cp discovered 25 KPIs that drive high performance and found that HPOs are 2.9x more likely to align the organization's structure and process to better serve customers. Want to make your organization more customer-aligned and customer-friendly? Here are four ways to do it:

1) Place the customer at the heart of everything

HPOs provide a firm foundation for a customer-aligned culture by defining the organizational mission and values that specifically reference customers. For example, the first shared value developed in IBM's ValueJam was "Dedication to every client's success." At Nike, the customer is foremost in its mission statement: "To bring inspiration and innovation to every athlete* in the world. *If you have a body, you are an athlete." And, at Amazon, the customer focus dominates: "Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online."

2) Plan the work; work the plan

HPOs are 3x more likely than lower-performing organizations to collect customer data and use it to create a formal strategy for developing and maintaining customer focus. The plan becomes the customer focus roadmap--HPOs are 4x more likely to set customer satisfaction goals and translate them into actionable, measurable-by-milestone activities. This connection between customer data and business strategy is a hallmark of high-performers.

3) Choose talent carefully

High-performing organizations have the customer in mind when they hire and promote. This seems obvious when it comes to positions with customer-facing responsibilities, but this practice should be applied broadly. For example, a less apparent, but very powerful approach is applying a high customer focus standard to the hiring and promotion of leaders across the organization. Why? Because leaders should also understand customers. HPOs are almost twice as likely as low performers to have leaders with in-depth knowledge of customers--a core leadership KPI identified by i4cp research. i4cp member Cargill uses a one-week deep-dive leadership experience with a key customer as a part of its leader development efforts, building greater leader capabilities with the added benefit of generating much greater customer understanding.

4) Move beyond satisfaction to engagement

No, this does not relate to employee engagement (although this message clearly applies to the employee work experience as well). Creating active customer engagement is a powerful customer focus enhancement strategy. HPOs are 3x more likely than lower performers to get customers engaged through approaches like participation in rewards programs, customer feedback, social media exchanges, customer education, and customer discussion forums. Building and maintaining customer engagement, while not among the most extensively used approaches, is highly correlated to market performance.

While it seems inevitable that we all must operate in environments of ever-heightening competitive intensity, one way to stand out is through customer focus. The good news is that there are practices that differentiate high performers from low performers--winning organizations will be the ones that take these practices to heart and implement them effectively.

For access to the other 24 KPIs that correlate to high performance, download a complimentary copy of The People-Profit Chain™.