By David Brousell
Global Vice
President, Research, and Editorial Director
Manufacturing
Leadership Community| Frost & Sullivan
Putting the customer at the center of your business model
may sound like an obvious thing to do. After all, what sort of business would
you have without customers? But the idea of customer-centricity goes way beyond
being responsive to customer demand, achieving higher customer satisfaction
ratings, getting a product delivered on time, or focus-group testing a new
product.
To hear C-suite executives describe the challenge of
becoming truly customer-centric, the full embrace of the idea is nothing short
of a revolution in how executives and their organizations think, behave, and
act. And it is a revolution in which they must take up arms, so to speak, if
they are to avoid being overwhelmed by the disruptions of advanced technologies
and the dramatically changing balance of power with customers.
A new study of attitudes in the C suite by IBM underscores
both the opportunities and challenges facing organizations in their adoption of
customer-centric business models. The study, called the “Customer-activated
Enterprise”, encompassed face-to-face interviews with more than 4,000 C-suite
executives across 20 industries in 70 countries. The basic conclusion:
Conventional structures have broken down, power has shifted to the individual
consumer, and organizations that don’t fundamentally re-think their business
models risk being left behind.
“In two-thirds of the organizations that outperform their
peers, leaders are not just managing customer experiences; they are reorienting
their organizations, strategies, and investments to cultivate contemporary
relationships across all manner of customer interactions,” said Virginia M.
Rometty, IBM chairman, president, and chief executive officer, in a statement
in the report. “In brief, leaders’ priorities are shifting from
intra-enterprise efficiency and productivity to a new agenda led by the front
office and focused on extra-enterprise engagement, transparency, collaboration
and dialogue with audiences and all the individuals within them.”
[A report by the Manufacturing Leadership Council, issued in
the fall of last year, called Leadership: The New Struggle for Customer-Centricity, came
to many of the same conclusions about the changing shape of
customer-centricity.]
Over the next three to five years, CXO participants in the
study said they anticipate major shifts in how innovation is conducted, in how
organizations value and interact with customers, and in how their own
organizations are structured and run. Sixty-eight percent of the participants,
for example, said they expect that customer interaction will be digitally or
socially based, compared with face-to-face interaction. Fifty-four percent said
they expect a focus on customers as individuals, as opposed to treating
customers as a category or a market segment. And 52% said they expected their
companies to exhibit “organizational openness” rather than being primarily
focused on operational control.
In its analysis of attitudes about customer-centricity, IBM
said that three major themes emerged:
- opening up to customer influences
- pioneering digital-physical innovation, and
- crafting engaging customer experiences.
Under customer influence, IBM said the study revealed that a
growing number of CEOs believe that customer influence should not be confined
to traditional activities such as new products or services. Now, customers
should be involved in helping develop business strategy, IBM said, but the
challenges in doing so are considerable.
“Accepting customers as stakeholders in determining an
enterprise’s future has huge cultural and organizational implications,” the
report said. “These businesses can’t just be customer-centric. They must be
customer-activated. That requires creating fully reciprocal relationships with
customers. It means being ready —and willing — to change course to pursue those
paths that create mutual value. And it requires finding ways to include
customers in key decisions.”
The real action in innovation, the report said, is at the
intersection of the digital and physical worlds. A strong majority of CXO
participants in the study, 60%, said they are looking to partners to help
create business value, with almost half saying they are sourcing innovation
from outside the company. But here, too, are formidable challenges.
“Two-thirds of enterprises have a weak digital-physical
strategy — or none at all,” the report states. “Some organizations are
reconfiguring their offerings to capitalize on social networks and mobile
connectivity. Others are reshaping their operating models to inject customer
input into every aspect of the buying and selling chain. But they’re often not
doing both at once.”
Nearly seven in 10 CEOs, the study went on to say, recognize
the “imperative” to embrace the social/digital intersection. And over half of
the CEOs said they must understand and engage customers not as categories or
market segments, but as distinct individuals.
“The members of the C-suite collectively need to step
outside their comfort zone to create new and engaging customer experiences,”
the report said. “Their real challenge: can they collaborate to make this
happen?”
That, of course, requires C-suite executives to change their
behavior, which is no easy task. But the fact of the matter is that behaviors
of all sorts are changing as we speak. Some will be progressive and some will
be regressive, as we are currently witnessing in Eastern Europe. But the old
rule will still apply: The strongest today will not necessarily survive
tomorrow. The most adaptable will capture the field.
To access the IBM report, vist http://www-935.ibm.com/services/us/en/c-suite/csuitestudy2013/
No comments:
Post a Comment