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Executive Interviews: Interview with Christopher Meyer on Customer Centric Organisations
December 2010 - By Dr. Nagendra V Chowdary

Christopher Meyer
Christopher Meyer
Strategic Alignment Group

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  • 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.

    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.

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