After an extended period of growth through acquisition under the leadership of Jack Welsh, Jeffrey Immelt assumed responsibility for the leadership of GE in 2000 and one of the early changes he introduced was to re-establish the importance of customer and innovation culture as the key contributors to future growth strategy. An article in the Harvard Business Review outlined GE’s rationale for this strategic re-positioning of marketing and the specific action that was taken by GE to secure this transformation. Immelt’s marketing culture advocacy slowly became typical of the position adopted by an increasing number rapidly growing organisations.
A strong link has been established between a sustainable customer culture and enhanced organisational performance. How is a customer culture established? By tuning into the customer demand process to ensure that every link in the customer value realisation process is in tune with and responsive to evolving developments associated with: customer need shifts, competitor action, socio-political change and change in the relative importance of supply channels. These are sustained by monitoring progress, undertaking culturally aligned recruitment, intensive induction training and openness to new ideas and perspectives.
A recently launched book “The Customer Culture Imperative: A Leader’s Guide to Driving Superior Performance” (authored by Dr Linden Brown and Chris Brown) presents extensive research and anecdotal support for the importance of marketing’s re-emergence as a growth driving lever and provides a detailed process for establishing and sustaining an effective marketing culture. Apple, Google, Facebook, GE, Amazon.com and many others are landmark exemplars of organisations primarily driven by innovation embedded in a customer culture. A diverse panel at the book launch highlighted key aspects necessary to establish and sustain a customer centric culture.
John Parkin from Telstra suggested that customer centricity is about ensuring that every link in the end-to-end customer value delivery process is treated with equal importance — each link needs to be empowered to act intelligently and courageously, even when this may involve disregarding rules that do not serve the customer’s interests: “…in attempting to close her recently deceased mother’s account, a customer was initially informed that only an account holder can close an account.” It required a customer responsive staffer to take a courageous initiative and disregard the rule that in the circumstances was illogical in order to satisfy this customer’s need. Inappropriate rules are an increasing cause of customer value realisation process malfunction and are likely to become more of an impediment as competitive contexts become more complex. In an attempt to reduce costs in sectors such as banking, we have de-skilled our front line customer service roles; it’s time to either re-skill or automate these front line roles in a more customer friendly manner than we have so far achieved.
John Stanhope of Australia Post referred to the leadership challenges flowing from the need to respond to significant shifts in market demand. In the case of Australia Post, the dramatic rise in parcel traffic related to online purchasing and the equally dramatic collapse in hard copy mail required a strategic rethink of Australia Post’s customer value supply channels to ensure the maintenance of competitiveness in an environment of increasing customer expectations and technological change. The importance of closely monitoring reactions to changes and rapidly adjusting the channel structure in response to feedback sustains the competitive viability of supply channels. Some time ago, a major toothpaste brand became a minor brand because it failed to respond to the shift in toothpaste purchasing from pharmacy to supermarkets.
Professor Adrian Payne of the AGSM discussed another key point raised by the Browns: the importance of benchmarking to provide feedback that highlights to decision-makers progress being made in efforts to improve customer responsiveness. Professor Payne also highlighted how leading customer-centric companies are committed to ensuring that they recruit staff that fit into their customer culture. He referred to the example of a successful airline that sourced behaviour feedback from multiple applicant touch points. The induction process for new staff members and the organisation’s continuing receptiveness to suggestions made particularly by new staff members are other important contributors to rejuvenating and sustaining a customer culture.
Dr Judith MacCormick of Heidrick & Stuggles emphasised the leadership role that a board can play in ensuring that their company establishes and sustains a customer culture. Experience suggests that the more senior the executive is who demonstrates authentic commitment to an initiative the more likely that the initiative will succeed. In a large national technology-driven organisation that introduced an account management system to better service its large customers, account teams were established in NSW and Victoria. The Head of Commercial Operations in NSW participated in every development activity provided feedback and encouraged suggestions from the appointed major account team members. The opposite was the case in Victoria. It is not difficult to guess which team achieved the greater relative success. Imagine the impact on organisational behaviour if the board is seen to acknowledge through its behaviour the importance of customer centricity. Dr MacCormick also made the interesting suggestion that boards should consider the advantages of establishing a marketing committee.
Evidence is mounting that mergers and acquisitions are re-emerging as a key growth strategy. The high failure rate associated with mergers and acquisitions in the past has been partly due to a failure to establish a shared customer culture, so re-emphasising the importance of a customer culture is particularly timely. The Browns’ book is an essential source of guidance in responding to the imperatives of the period ahead, irrespective of which strategies are adopted to drive future growth. It also establishes the capacity and potential to prosper by facilitating the evolution towards becoming a stakeholder-centric organisation.
