Tag Archives: customer value

Ginni Rometty: IBM’s New CEO On Customer Centricity and Innovation

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CEO successions at large companies, like Unilever and IBM are not spur of the moment decisions.  They are carefully orchestrated and managed – with the bulk of the action often taking place back stage.  

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So are their interviews with the media and analysts – well rehearsed and predictably patterned.  Which is what makes Ginni Rometty’s interview with Fortune, shortly after her appointment as the new CEO of IBM – no palace coup, Sam Palmisano is retiring – so terribly refreshing.

There was none of the usual pabulum about vision, and globalization, and the new normal; just solid insights. 

Allow me to share a few that resonated most with me.

Reinvention: When asked what was the most important thing she had learned from Sam, Ginni replied – “the biggest thing Sam taught me, and not just me but the whole company was: Don’t accept inevitable.” Meaning, you’ve got to keep reinventing, constantly making new markets, like Smarter Planet, Analytics, and the Cloud.  

Personally, I really like this emphasis on creating new markets.  One of the least discussed tenets of customer-centricity is leading the customer, creating new markets, as Swatch, Starbucks, and Tata Nano have done. 

Implementation: It helps if you are the author, or co-author, of the company’s strategy.  Ginni Rometty was an integral part of building IBM’s current strategy, the 2015 roadmap.  Not surprisingly therefore, her dominant focus will be on implementation and execution.  That said, it was still refreshing to hear that reaffirmed – too many companies spend too much time rearranging the furniture, and not enough time following through on their commitments and convictions.

Value Proposition: “What do you stand for” is an easy question to ask.  It’s a very difficult question to answer, especially for companies as large as IBM.  It was very well answered in the interview – IBM stands for client value, R&D, and Innovation.

Several of my blogs have discussed two of these issues in depth – customer value and innovation.  Its one thing to know what the right things are – it’s another to be committed to them.  Given the near death experience IBM had in the 1990s, it’s unlikely that they will take either customer value or innovation for granted.  Or get smug about their achievements.  Both hallmarks of companies primed for long term success.

Learning Mindset-Longer Horizon: In his book “How the Mighty Fall” Jim Collins speaks of the dangers of hubris, the enemy of long-term success.  Of all the elements that comprise hubris, thinking that a company knows all that it needs to know to manage both its current and future operations is the most toxic.  In short, not having a learning mindset.  So one has to take note when Ginni Rometti says rather candidly – there are a lot of things we don’t know yet.

Additionally, both academicians and consultants have railed against short-term thinking, favoring quarterly gains, sometimes at the expense of long-term performance.  This is especially true for activities that form the spine of the business, such as R&D.  Even more pleasing to hear IBM’s newly appointed CEO talk of the longer-term horizon for IBM’s R&D efforts, and to continue historically aggressive levels of R&D spending.

Business-driven Technology Agenda:  This blog has carried several features on customer-driven innovation, on customer-led marketing, and customer centricity.  It has even quoted Ted Levitt on a few occasions, especially his classic – customers don’t buy ¼” drills, they buy ¼” holes.  IBM is a Technology company.  But Technology is at best a ¼” drill.  The sad part is that several companies still love their products and factories more than they love their customers (courtesy Regis McKenna – Real Time).  Based on her interview, it appears that IBM is unlikely to make that mistake any time soon – not just technology for technology’s sake, but for the effect it can and will have on the world.  Ginny Rometti offered the example of Watson, and its potential to reshape healthcare around the world in our lifetime.

A very dear friend and business associate, Gary Kirby (who used to work for Glaxo/Glaxo Wellcome/Glaxo Smith-Kline, and who is sadly no more), and I used to enjoy asking questions like:

Who reads the HBR?

Who follows the advice of leading management thinkers?

What types of companies are most turned on by implementing next-generation management practices?

Regardless of how we cut it, we came to the same, painful realization that smaller companies were often the hungrier, more eager, and took more risks, perhaps because their survival depended on it.  

It’s heartening to note – at least based on the interview – that behemoths, like IBM, are hell bent on showing that they too are hungry, keen, and eager.  That they can be the fountainheads of next-generation management practices.  We applaud them!

Edison’s 150 Questions: A Collaboration and Co-Creation Masterclass

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Innovation, especially collaborative innovation, or co-creation, requires the judicious use of collaborators.  While it is instructive to recognize and applaud modern pace setters like Apple, P&G, Unilever, Lego, and Nike, it is important to recognize that few achievements, if any, are stand-alone; they usually stand on the shoulders of titans of a previous era.  

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The purpose of this blog is to pay homage to one such giant, Thomas Alva Edison, to his understanding of the importance of collaboration, to the importance of picking the right collaborators, and building requisite diversity into his invention and innovation programs. 

First, some stage setting.      

Chapter 5 of my book, Collaboration and Co-Creation: New Platforms for Marketing and Innovation, presents and discusses a framework for implementing co-creation programs.  One of the elements of the framework deals with the issue of collaborators.  Specifically, who, or which customers should the company select and invite to participate in the co-creation project? 

In some cases, the company may not want to impose any restrictions, and all who desire to participate are welcome.  Co-creation projects that have the potential to benefit from a diverse set of ideas and skills found in every-day people generally fit this category.  For example:

  • Frito-Lay’s Crash the Super Bowl Contest: can benefit from the humor and video creation skills of a large number of consumers and non-consumers of the brand.
  • Oxford English Dictionary: suggestions for which words to add to the dictionary to keep it current and alive, don’t just come from connoisseurs of the English language, they come from simple, every-day readers as well.
  • Coca-Cola: several hundred thousand people from all over the world helped Coke make open happiness tangible, not just a few Madison Avenue, advertising agency specialists. 

There are other times, however, when the nature of the co-creation task demands that the set of collaborators be drawn from a pool of specialists.  For example, Nokia Beta Labs makes it intentions very clear, it wants to collaborate with lead users only.  To help determine whether if you are a lead user or not the site encourages you to take a test.  Similarly, since the goal of TopCoder is helping companies meet their systems, software, and design needs, its collaborators are specialists, those who have software/system development, and design skills.  

Additionally, diversity of thinking among collaborators is also important.  Not surprisingly, Topcoder’s  community of 300,000+ software and design professionals come from a diverse set of backgrounds and mindsets, and places, ranging from Ankara to Zagreb!  

While the words and labels associated with collaborators, such as early adopters, innovators, lead users, experts, technology mavens, etc., maybe of recent vintage, the concept that in several cases, it is better to be discriminatory in choosing your collaborators has been around a long time.  Without that focus and specialized inputs, the targeted co-creation programs would have essentially been non-starters.  

Now back to Thomas Edison – extraordinary and brilliant on several dimensions.  Not only was he technically brilliant, he also had exceptional business and organizational smarts. Specifically, in terms of collaboration and co-creation:

  • He realized that in order to implement the many ranging ideas, to “give the world what it needed,” he had to have collaborators; going solo was not an option.
  • Most importantly, he was acutely aware that any odd collaborator would not do – they had to approximately mirror his skills and passions.  In order to achieve that goal he devised a ultra-unique 150-question test, to recruit his collaborators, no exception.  If you would like to transport yourself back to 1921 to figure out if you would have made Edison’s team, visit the Edison museum site.  The test is challenging and humbling, so be forewarned! 
  • Interestingly, most of the questions were from areas other than science.  Presumably, there was greater faith in the ability of renaissance individuals to do better, no matter what the field of endeavor, than myopic moles.  Exactly the opposite of what one observes today. 
  • He also understood the value of diversity, which is why he recruited collaborators from a wide variety of ethnic, cultural, and national backgrounds – a deliberate strategy to invest in wide-ranging perspectives and points-of-view, thereby preventing what we call “groupthink” today.

The brilliance of Edison continues to illuminate, guide, and teach.  The reasons why we need to pay homage to Edison are many.  In the context of collaboration and co-creation, the brief list presented above will suffice.  

It’s not the size of the list that matters though – it’s the strength of its message.  In today’s age, often characterized more by spin than substance, the value of Edison’s focus on fundamentals in building enduring customer value through innovation is priceless!

Marketing Myopia and Other Ted Levitt Classics: Paying Homage To A Prodigious Thinker

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Recently, I was in Hyderabad, India, teaching a course on Customer-Focused Marketing Strategy at the Indian School of Business.  As a pre-reading for the course, I recommended Ted Levitt’s classic article Marketing Myopia – classics do have their place, even in an age of bulimic sound bytes! 

Even though I have read Marketing Myopia several times, I favored discretion over valor and decided to read it one more time, just in case somebody was hell bent on peppering me with tough questions. 

Reading the article again was more than just a born again experience.  It was a lesson in humility.  Here was an article, first written in 1960, that had nailed several things we are still wrestling with today.  Little wonder that the late Ted Levitt is regarded as one of the most widely respected thinkers in the field of marketing and management. His work and writings have changed the way companies think about their businesses, organize for innovation and creativity, and market their products and services. 

A homage to some of Ted Levitt’s best thinking follows:


Marketing Myopia


The article that gave rise to the famous aphorism – “Customers don’t buy 1/4″ drills, they buy 1/4″ holes.”  It still provokes serious thinking.  The big idea – get companies to think of their businesses in terms of customers needs, not in terms of the physical products and services they produce.  Levitt asserted that all companies and industries were once growth industries.  If they have stopped growing it is not because markets are saturated, but because management failed to correctly grasp what business the company was in.  Invariably, companies that run into growth problems suffer from one overarching weakness; they are overly focused on physical products and services – credit cards, cell phones, mortgages, HDTV – and less on customers and their needs.

After the Sale is Over  – - -

Long before there was CRM and Relationship Marketing, Ted Levitt was discussing the importance of cultivating relationships with customers.  The big idea – a sale signals the end of courtship and the beginning of a marriage with the customer.  The quality of the marriage determines whether there will be continued or expanded business, or troubles and divorce.  Levitt considered relationships with customers as an asset.  The more complex the product and service, the more salient the customers’ needs, the more critical and valuable is this asset.  He advised companies to manage and continually invest in this asset, since over time relationships would trump all other aspects of the marketing system, including technology. 

Marketing Success Through Differentiation – of Anything

The big idea – every company should resist the push towards becoming a commodity, by attempting to differentiate not only their products and services, but by differentiating their whole business, in terms of what they offer and how they operate.  What we call reinventing business models today.    To elaborate, the basics of checking and savings accounts at Citi, Bank of America, Chase, and HSBC may be identical, but how these banks do business and the resultant customer experience may be wholly different/differentiated, and hence a non-commodity.

Moral of the story – knowing the catch phrases from the most recent NY Times best seller list may get you attention at cocktail parties.  But knowing the essence of classical marketing and business writings will get you the promotion you desire and significantly add to your bank balance!  Not a bad thing in any age, especially in today’s recessionary times.

AMA’s Future of Marketing Report – Light on Customer-Driven Innovation

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The American Marketing Association (AMA), Decision Strategies International, a global consultancy specializing in scenario planning, and a group of marketing leaders from industry and academics recently completed a project on the role of marketing in 2015 – Future of Marketing in 2015 – an American Marketing Association Special Report.

After nearly a year of secondary research, a survey of business and consumer marketers, and workshops with marketing leaders, the AMA developed four possible future states in 2015 and their potential impact on marketing in the organization.  These scenarios are presented below.  For each scenario, the project also created thumbnail sketches of key goals and objectives of professionals operating in each scenario.  

The four scenarios and the CMO archetypes for each scenario follow:

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CMO Archetypes:

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While the effort of the AMA to peer into the future is laudable, I am personally very troubled by the output, and the lack of emphasis on some fundamental game-changing trends like customer collaboration, value co-creation, customization, and open systems thinking.  

A useful tactic in evaluating the output of a future oriented undertaking is to study the inputs used.  The report states that the scenario building process began with an identification of forces that might shape the role of marketing between now and 2015.  The key issues and trends identified were:
  • Shrinking world, expanding relationships – increase in globalization and technology integration
  • Rise of new class, BRIC by BRIC – creation of new consumer markets
  • Innovation or Invasion – push back due to micro-profiling and and behavioral targeting
  • Command and Control becomes Cultivate and Create – two way conversations providing valuable information for new products/services offerings
  • Channel Convergence and Consequence – traditional media continues to be challenged
  • Talent Turmoil – increasing competition for valued skills and competencies
  • Pressure to Prove – Marketing is persistently challenged to prove strategic value and bottom line contribution.
Only one of the above inputs – “command and control becoming cultivate and create” – comes close to addressing how the concept and dynamics of value creation are changing.  What could be more fundamental than the identification, creation, delivery, and nurturing of customer value?  Yet not one of the archetypes presented above is obsessed with it.  
The Future of Marketing should be a paradigm shift, not a straight line extension of Marketing’s current focus with selling, promoting, and packaging.  Even more disappointing is that the above scenarios and archetypes do little to move Marketing from its current inward product focus to a more outward customer orientation.  
Marketing needs a bolder different future, one that is obsessed with customer value creation.  This bolder future can’t be achieved by a functional focus alone, no matter how cleverly worded – network integrator, sales facilitator, etc.  Because Marketing is not a function, it is a business orientation that shapes how a company creates long term, sustainable value for customers, for society, and for itself.
The Future of Marketing can’t lie in peddling influence and shouting brand superiority.  It must lie in making investments in consumption ecosystems, of which the company is only one small part.  For the future of marketing to be viable, it must part ways with its incarnation of today.  The scenario that is personally most exciting to me is one where an obsession with customer value makes marketing as we know it today obsolete and unnecessary!

That indeed would be a bright new future.

Customer Value: An Enduring Obsession of Market Leaders

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In the crowded world of business jargon, The New Normal, is a fast rising superstar.  Its making a lot of noise, attracting attention, and rapidly gathering followers!  

  • The Economist recently carried an issue discussing the new normal for Modern Economic Theory.  
  • BusinessWeek carried its own version of the new normal – companies rethinking the fundamentals of doing business.  
  • Authors like Scott Anthony and Roger McNamee discuss the new normal on dimensions such as turbulence and uncertainty.  The good doctors then offer their own prescriptions on how to thrive in the new normal.

At a time when pundits and gurus are shouting themselves hoarse that the old rules of business don’t apply, and that a new normal prevails, thinking managers must step aside and ask – have all the old rules gone by the wayside, or do we need to be more circumspect, asking ourselves which rules to retain and which to adapt and modify?

So, is the new normal really never before encountered scenarios and dynamics?  Or is it merely a set of scenarios and dynamics that societies and businesses have been experiencing for several decades now operating in a new context?  

This is not your father’s economy is a standard rallying cry of the new normal protagonists.  But it hasn’t been our father’s economy for a long time now.  Rewind to 1980 and Alvin Toffler’s The Third Wave.  Surely the post-industrial society was a new normal then, not your father’s economy, as some might have said.  It represented a series of disruptions and environments different from the Second Wave (Industrial Revolution).  Whoever interpreted that to mean wiping the state clean was not thinking very deeply.  And if you need proof, all that you have to do is listen to the loud lamenting about shrinking manufacturing bases eroding the stability of some of the richest economies in the world, USA included.

And if you need more proof, talk to the bleeding economists.  The more enlightened deeper thinking variety will tell you that the so-called new normal, the state of the global economy and the economic recession, is a result of those running companies, countries, and governments having forgotten the old normal – in this case John Maynard Keynes and his macro-economic insights.  And merely to refresh our memory, Keynes himself was trying to jump start tired, post-WW II, not your father’s economies!  

There is little doubt that the challenges of running a business continue to change as the context or the environment within which a business operates changes.  Each context/environment throws up a different set of normals.  However, that does not mean that all rules go out of the window.  Businesses that have survived several rounds of new normals, share a common religion; they show undying devotion to three  enduring fundamentals.

  • Updating and Refreshing Beliefs and Assumptions - in Darwin’s world species did not survive because they could not adapt.  In the business world, certain world views, assumptions, and beliefs have to disappear, periodically and regularly, if the company is to morph, survive, and grow.  Companies like P&G, IBM, and MacDonald’s have all faced near death experiences for failing to refresh and update their concept of success and their beliefs and assumptions concerning the key drivers of success.  Once they were able to update and refresh their world view, they emerged as stronger market leaders.
  • Investing – especially in people.  Long term and sustained growth is possible only if companies invest in their value creation capabilities and none is more important than the people a company invests in.  There is no doubt that technologies create value, and proprietary technologies have the potential of creating even higher value.  However, in the ultimate analysis it’s the people that unlock the value of these technologies by creating applications and uses for which the market is willing to pay.
  • Creating, Renovating, and Innovating Relevant Customer Value -  too many words perhaps, but given how often companies forget to put customer value in the driver’s seat we may need more.  In every environment, no matter how uncertain, complex, or turbulent, the fundamental equation of a company’s value remains constant – a company is only as valuable as the value it creates and delivers to its customers.  

When individuals, companies, and countries are bleeding economically, it is easy to suspend one’s own critical judgment and succumb to the belief that the new normal has ushered in a never before encountered set of scenarios, requiring radically different thinking.  Nothing could be farther from the truth.  Paying homage to enduring fundamentals still offers a sound way of navigating today’s troubled waters, much the same way it enabled navigating yesterday’s troubled waters.

The perils of ignoring the demands of changing environments and market contexts has been well documented.  Its time we became equally mindful of ignoring enduring fundamentals as well.  A few lines from Robert Frost best capture the essence of the discussion:

we dance around in circles and suppose

the secret sits in the middle, and knows!

  

Experimentation: Critical to Customer-Driven Innovation Success

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In the Feb. 2009 issue of HBR, Tom Davenport offers advice on how to design smart business experiments. His main assertion is that in too many companies business innovations are launched on a wing and a prayer.  

Tom’s focus is on rigor, and knowledge, and valid conclusions. No arguments there; but there is even a more fundamental issue – a company’s willingness to embrace experimentation.

Several thinkers, like Eric von Hippel, Stefan Thomke, and Michael Schrage have discussed the benefits of experimentation. Going beyond the obvious links with innovation, they discuss how experimentation can help companies create new value for customers faster and more effectively.

Experimentation is an essential ingredient for customer driven innovation. Getting companies to embrace it enthusiastically is key, if the true potential of co-creating value with customers is to be realized. So, the critical question then becomes: How do we get companies excited about experimentation in the context of value co-creation?

Here are a few prescriptions with extremely positive side-effects:

Recommendation 1: Get over the Steve Jobs syndrome 
Too many companies suffer from the White Knight and the one omniscient, omnipotent decision maker syndrome. As brilliant as Steve Jobs is even he could not have predicted that the backbone of iPhone’s mass appeal would be their multitude of diverse open-source apps. Even their latest ad speaks to this phenomenon. 
In an environment where it is difficult to predict where users will take an innovation, involving a larger group of interested users through experimentation is even more critical. And before you dismiss this as being applicable only to technology products – think Arm & Hammer! It did not start off in our refrigerators and toothpastes, but it sure did show up there.
Recommendation 2: Lose addiction to control 
All addictions thrive on the addict’s perceived sense of loss, if the addiction were to be given up. Behavioral economists will have a field day with the psychological addiction companies have to control. Their gain-loss equation is totally focused on what they will lose; not what they stand to gain. Those that have – Mozilla Firefox, Dell, P&G, Hallmark, Under Armour – can testify that less company control often translates into more value for the customer, because you can engage in more “what-if” thinking. In short, you can experiment more, something that Mitchell Baker points to in explaining the success of Firefox in her interview with The Mckinsey Quarterly.
Recommendation 3: Redefine success 
For most companies failure is the deviation from what was expected or planned for. Not so in the world of experimentation, where failures are often the proverbial stepping stones to success. In the world of innovation, experiments that fail can actually have a large number of positive side effects, such as speedy elimination of unproductive alternatives, rapid learning, and building on that learning through more rapid testing. According to Stefan Thomke, early failures can lead to more powerful successes faster; a sentiment that IDEO echoes when they talk of failing often to succeed sooner! 
Recommendation 4: Get serious about play 
Most companies have tired ideas about work and play. The unrelenting focus on tasks, processes, and narrowly defined outcomes are a major stumbling block to turning people loose. And you can’t experiment if you don’t invite your people to play.

Inviting people to play lures them to play innovative “what-if” games and turns passive stakeholders into active collaborators – as Dell did with its customers, Boeing with its engineers and designers on the 737 assembly project, and Toyota with its suppliers. 

Experimentation is essential to customer-driven innovation not only because it enables faster development of products and services better suited to customers’ needs, but also because it enables innovations that companies alone can’t imagine!

Companies that don’t enthusiastically embrace experimentation forego this opportunity to start new conversations on innovation and value creation.  All that remains – to paraphrase George Orwell - is a huge dump of worn-out metaphors, recycled as new and improved thinking. 

Customer Driven Innovation: A Top Priority for the CIO?

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A little late perhaps, but I came across InformationWeek‘s Top 10 CIO Issues for 2009. The list is a blend of technology and business issues.  

Surprisingly, a business issue – Customer-Facing Innovation – got the top vote!

The article tells us that while its essential to be innovating across all parts of a company’s operation, the greatest value in 2009 will come from efforts that directly connect a company’s brands, products, services, and capabilities with its customers. 

The report also goes on to make an interesting prediction.

In 2009, I think we’ll see this term shift from “customer-facing” to “customer-embracing” to signify the move from the largely passive approach of merely facing your customers to the more active and engaged notion of embracing.

Personally, I think the prediction misses its mark – they should have labeled the priority customer-driven innovation! 

But semantics aside, my first reaction was a positive one. Not that we need IT czars or CIOs endorsing our passions. But I thought it could only help if departments other than innovation and marketing embrace and implement customer driven innovation programs.
My initial positive reaction however gave way to gripping anxiety, thanks to Gillian Tett and Krishna Guha. In his excellent FT article, analyzing the current financial crisis, Guha identifies a key culprit:

The adoption of computer-based systems for measuring credit risk, imported from the hard sciences, designed by statistical geeks with little or no understanding of the dynamics of credit markets.

I could not help ask myself the question, what do CIOs know of customer-driven innovation? Are they going to spend the time and effort learning about customer-driven innovation, before trying to intervene? Will they tailor their interventions to suit the needs of customer-driven innovation in different business contexts? Or will they embrace it so tightly in their arms of standardization and efficiency as to suffocate its spirit?
Remember CRM – Customer Relationship Management?
Its widely recognized and accepted that in most companies, CRM programs achieved significantly less than what they were expected to. And while finger-pointing never helped clean up a mess, there is irrefutable evidence that CRM programs failed due to:
  • too much IT involvement, 
  • too much focus on internal processes,
  • too much discussion about dirty data,
  • too many arguments about integration, and
  • too little focus on the customer!

Ironically, in their preoccupation with implementing technological solutions, companies and their vendors lost sight of the obvious – CRM programs are about customers!  They are about getting customers closer to the company, about increasing customer loyalty, by providing them with relevant and unique value that they would find difficult to get from the company’s competitors. Or if they would, they would have to pay a much higher price.

No matter how companies sugar coat the finger-pointing game, at the end of the day we can safely say that implementing market-facing programs, especially those that involve customers, who don’t always behave predictably, are about more than just technological wizardry.

Whiz kids, whether they be yet-to-start shaving ivy league graduates, or overgrown beards at SAP and Oracle with little or no understanding of why customers buy, how their preferences are shaped, and how why they decide to stay with a company or switch, is a sure recipe for failure.  This was true for CRM; and will hold for customer-facing/embracing/driven innovation as well.

So the question is – will CIO’s benefit customer driven innovation, or will they limit and circumscribe it?

Should we evoke George Santayana’s wisdom and remind the various CXO’s of CRM’s history of underachievement so they are not doomed to repeat it, this time for customer driven innovation?  Or should we heave a sigh of relief that it is indeed history, keep our fingers crossed, and hope for the best?

I am for waving banners and marching! How about you?

Barriers to Customer-Centricity

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Have you heard Branford Marsalis‘ rendition of I heard you twice the first time? 

That’s what you feel like telling most companies when you hear their claims to be customer-centric. It is difficult to pick up an annual report without hearing loud assertions of customer-centricity and customer value focus.

But few companies have started the journey in earnest, and fewer still can claim proficiency.

A Gartner Group report informs us that by 2007 fewer than 20% of marketing organizations among the Global 1000 enterprises had evolved enough to successfully leverage customer centric processes and capabilities.
The same Gartner report offers companies a performance tip. It advises that marketers that devote at least 50% of their time to advanced customer marketing processes and capabilities will achieve marketing ROI at least 30% greater than their peers who lack such an emphasis.
But this kind of thinking and exhortation is not new. In the 1950′s and 1960′s thinkers like Peter Drucker and Ted Levitt were urging companies to focus on the customer and customer needs – customers don’t buy ¼” drills, they buy ¼” holes. 
For several years now marketing scholars have been advocating firms to shift their thinking away from a brand-centered way of thinking – managing product portfolios, to a customer-centered way of thinking – managing customer portfolios. Recent research has demonstrated quite conclusively that customer value is an excellent proxy for firm value and that companies investing in customer-centric initiatives enjoy higher financial returns.
The question that naturally arises is: “Why haven’t more companies become addicted to a customer-centric way of life?”

After all, customer-centricity sounds right, it feels right, it even does right (higher financial returns). Why then the lag in evolution?

If we want to go beyond the usual suspects of culture and leadership, we will need to check our assumptions.  Quite a few of them are not true, the most notable being that strategy failures are due mainly due to failures of conceptualization and implementation.  But as I like to explain in my strategy courses, organizations are people, and most strategy failures are human failures.
Three human failures:

1) insufficient appreciation of a significant other,
2) the inability to visualize an alternate reality, and
3) the lack of will,

provide a non-traditional explanation why the signal to noise ratio for customer-centricity is so low.

Do companies really value their customers?
As ridiculous as the question sounds, it must be asked, given all the evidence we are surrounded with. Simply put, if they did, companies would behave differently, in a more customer-centric way. If the customer was a significant other of a company in a social sense, the two would have got divorced and stayed permanently divorced.
How do we explain this? Prayer offers an interesting analogy. For the majority of human beings, prayer is still an exercise of the lip affair, not the heart. Similarly, for most companies, customers are a lip affair, not a heart affair. 
For companies to become customer centric, customers must become a heart affair. As long as companies value their personal odyssey for the next round of higher profits and higher sales more than they value customers, this will never happen.

Type in the words “customer centric” in Google, and the first thing you
find is customer-centric selling.  Not customer-centric innovation, not
customer-centric product development, not customer-centric strategy. 
Just selling.

The bare truth is that for most companies, the customer is a mere invisible means to an ever-increasing end; sales, market share, and profits. And the end is invariably more valuable than the means.

Can companies visualize the separate reality that customer-centricity represents?

Jack Nicklaus reportedly
never played a golf shot without first visualizing it in his mind’s eye.  Research conducted by brain scientists
and cognitive psychologists affirms that the ability to visualize positive
outcomes increases the probability of those needs becoming reality

But what if the company
can’t visualize what it really means to be customer-centric?  After all they can see tangibles like
products, sales, and revenue charts on a daily basis.  And while it may not be ideal or optimum, it is real!

What if this alternate reality is
really more hype than substance, what then?  And since most companies can never quite answer this
question satisfactorily, the alternate reality stays locked and companies stay
home, foregoing the customer-centric journey, despite its promise of greater
prosperity and riches.

Do companies have the will
to put in the hard yards that living a customer-centric life demands?

By all accounts customer-centricity is hard to build and sustain in large organizations. It requires a
significant investment in people, training, resources, realignment of structure
and processes, and breaking down information and power silos, to name just a
few.  This is hard work and could
test the will of even the most determined CEO. 

A few years ago I was in
Athens, attending a global managers meeting for a large agency.  On the last day a great ritual was staged.  In the old Greek tradition we threw
plates in the air (they were paper plates, throwing real china plates is banned), to
symbolize a break from the past.  We committed ourselves to our customers, to innovation, and went home.  On returning home nothing changed, everything stayed exactly the way it was. 

Most companies want to win
at customer-centricity.  They want
the customer to love them more than their competitors.  But rarely do they have the will to do
whatever it takes to earn the customer’s love. 
Up to a point, and no more. 

We don’t need more analysis to understand why there is such a huge chasm between what
companies claim by way of customer-centricity and how they actually conduct
their businesses. 

All that we need
is to acknowledge a cold and brutal fact:

customers are not # 1!

And as the
good bard said – “…ay, there’s the rub“