2013. 2015. 2017. … The Year of the Customer!
How many years have to receive this label before companies start acting like it’s true?
Harvard Business School professor Len Schlesinger calls it nonsense. “It is ALWAYS the year of the customer!” he declares. So, how do companies deliver? “It’s actually quite simple. Find out who your customers are, find out what they want, and try to give it to them.”
Len’s life’s work has been, literally, all business: teaching it, running it, helping it grow. He regularly consults with the world’s biggest brands, governments, and non-profits. He’s held Chief Operating Officer positions at Au Bon Pain and L Brands (formerly Limited Brands). From 2008 to 2013, he served as the 12th President of Babson College. And, he’s served as a member of the Harvard Business School faculty for more than three decades.
A few weeks ago, I visited Harvard Business School to have a conversation with Len for my latest episode of Outside In (listen to it here). I’ve known Len for some time, but this was my opportunity to understand why, in his view, so many companies still haven’t cracked the code on becoming truly customer-centric.
What’s in a title?
Customer centricity is a notion that’s been on the minds of senior leaders for more than 20 years. Yet, so many companies have struggled to achieve it. Why? “The vast majority [of companies] start with taking care of shareholders and hope that there’s money or time leftover for customers or employees,” Len explains.
In other words, far too many companies treat customers as an afterthought or as transactions from which to extrapolate data. But at the same time, Len is “naturally suspicious” of the growing number of chief customer officer roles in business today. A “Chief Anything” automatically implies “status,” he says; it puts that person on a pedestal and “communicates the absolution from responsibility” for everyone else to serve the needs of customers and employees. What’s more, this “great avoidance mechanism” in Len’s view builds “significant overhead” and rarely “translates into fundamental behavioral change inside the organization.”
For those in the C-suite, that’s probably tough to hear! But, he offers some practical, deceptively simple advice: don’t focus on your title. Spend time “trying to build the capabilities of the organization to do its work” and “recognize that customer centricity has to be built into the fiber and fabric of the organization as opposed to an episodic level of attention to customers.”
It’s time to humanize big data
Lots of companies use Net Promoter Score (NPS) to infer how likely customers are to recommend their company to others. The higher the score, the more favorably customers look upon the company.
If used effectively, Len acknowledges that NPS “has the capacity to be a very powerful tool.” Its popularity is driven by its simplicity. It’s one number. However, that simplicity, he says, often disposes people to abuse it. And therein lies the danger; NPS can “be manipulated just like any other customer interface score.”
Len questions to what extent “insights” are translated into day-to-day managerial organizational behavior that affects growth. “We have an absolutely incredible capacity to generate data on customers,” Len affirms. “Very little of that data would be classified as an insight.”
Len says there is no question that customer behavior and the customer relationship are related to profitability. And I agree. While insights are certainly informed by many sources there’s no question that, in order to become truly customer-centric, businesses simply need to be more human. From personal stories and perspectives emerge the most resonant ideas and insights – the ones that stick with you, help build consensus, lead to action, and create growth.
“It is ALWAYS the year of the customer”
Len laughs when he recalls the countless times he’s heard senior executives declare to their teams, “It’s the year of the customer.” But in business, there’s nothing funny, or profitable, about platitudes. Len’s truth bears repeating: “It is ALWAYS the year of the customer.”
Genuine customer centricity is within every company’s grasp. But, as Len points out, they just have to embrace it. “The reality is, the more obvious it is, and the more evidence we have of its obvious nature, the more it becomes a fundamental leadership question. And culture question.”