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Executive Interviews: Interview with Christopher Meyer on Customer Centric Organisations
December 2010
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By Dr. Nagendra V Chowdary
What according to you are
customer-centric organizations? Can
you give a few illustrative examples of
customer-centric organizations across
the world? What differentiates these
companies from the rest of the
companies in their respective
industries?
Most of the iconic examples come
from retail and hospitality because
customer experience makes or breaks
these businesses. In US retail,
Nordstrom is a great example along
with Amazon. In hospitality, Four
Seasons is recognized as a global
leader. Internationally, both UPS and
FedEx are great examples.
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What is far less visible are the many
small and mid-sized companies
around the world that compete by
providing a superior experience to
that offered by their larger
competitors. For example, a small
company in my backyard, Retail
Solutions, provides supply chain
data and analytics to retailers and
consumer product companies. They
compete head-to-head with larger
firms such as Nielsen and win
because everything from legal
contracts to their data is driven by
customer experience requirements.
What differentiates these firms? They
trust that delivering a superior
experience, over time, will
differentiate them and drive success.
Go back to Zappos. People have sold
shoes for centuries and selling shoes
over the Internet is not itself a
revolutionary idea. What is
revolutionary is making it such a
positive and easy experience for
customers and employees that it
overcomes the instant gratification
and visual advantage storefronts
have.
How to make organizations
customer-centric in every sense? Of
course, companies like P&G, IKEA,
etc., have pioneered the concept of
Co-Creation as propounded by CK
Prahlad and Venkata Ramaswamy
(Future of Competition). Yet what is
needed is an overhaul of approach
from 'Inside-Out' approach to
'Outside-In' approach? How do you
think companies should go about
making their organizational DNA
customer-centric?
An in-depth answer to this question
requires a treatise! Let me give you
one element that's not often
discussed and that's organization
structure.
Most organizations operate by a
hierarchical model where those at a
higher level can overrule those below.
It's very good at control and evoking
obedience. It also is stuffed with socalled
"middle managers" who's
principal job is to maintain control,
often at the expense of initiative. It
served Henry Ford when he was
converting farmers to factory workers.
But as the proportion of knowledgebased
work versus routine work
grows combined with more capable
knowledge workers, it's increasingly
less relevant. Delivering great
customer experience is rarely routine.
What we've observed is that superior
customer experience organizations
use what we call a center-edge
structure. In this structure, the center
defines strategy and policy including
crafting a collaboration information
network and supporting process
architecture. The edges have local
operating accountability as well as
responsibilities for coordinating
directly with other edges and
initiating change without going
through the center. There is virtually
no middleman in these structures.
The middleman is replaced by a constantly circulating group of senior
experts and instigators. Think of
them as white blood cells that
naturally convene on critical issues
and problems.
The root of this organization structure
comes from several sources.
Knowledge industries such as
academia and consultancies use this
structure naturally. The Open Source
movement that spawned Linux used
it as well.
By shifting most operating resources
to the edge, a firm dramatically
increases those who are in regular
contact with the environment,
marketplace and of course,
customers. By changing the role of
the center and making the edges
accountable for coordination beyond
their boundaries, it drives the outside
environment in and across the firm.
(For further information see
Competitive Strategy: 7 Reasons to
Shift Assets from the Center to the
Edge)
It is argued by some that customer
experience management is required
only in service-sector or serviceoriented
industries such as retail,
banking, insurance, telecom, airlines,
and ITES, etc. Do you concur with
this argument or do you think that the
customer experience management
concept can be extended equally well
to the manufacturing sector as well?
The difference between service and
manufacturing is that service lives or
dies by customer experience whereas
in manufacturing, it creates the
competitive differentiation to win.
Lattner Boiler Company makes small
steam boilers. Boiler customers’
buying criteria start with functional
requirements and cost. If smart,
they'll also look at service, support
and total lifetime operating cost. In
today’s world that likely narrows the
supplier list to two or three
competitors. What becomes the basis
of choice now? Experience! If I'm an
existing Lattner customer, am I
dangling because on the last
purchase, they forgot to include a
critical component? Am I delighted
with them because their website gives
me access to critical service manuals
easily? In other words, manufacturers
have to meet the basic requirements
but that just gets them on the short
list of suppliers vying for the sale.
Superior customer experience gets
you to the top of the list.
1.
The Multi-Branding Strategy Case Study
2. ICMR
Case Collection
3.
Case Study Volumes
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