Home Management Performance Management for Agile Organizations: Overthrowing The Eight Management Myths That Hold Businesses Back
The Customer-Focused Enterprise
Customer-focused enterprises are nimble; on the one hand, they honor their QA system and use clear, simple, and practical processes to accomplish their many tasks and activities. On the other hand, the business is agile, adaptable, and flexible enough to change direction in response to the ebb and flow of the marketplace. This duality is synonymous with the competing values model of performance I discussed in Chap. 1. To reiterate: The three main competing values-sets are internal versus external, flexibility versus control, and process versus outcome. Being able to successfully accommodate these polar opposite values is one way of evaluating organizational performance. It’s also the basis for the customer- focused enterprise.
Being a customer-focused enterprise means being ambidextrous. The quality systems used are characteristic of internal, controlling, and process-driven values. An external, flexible, outcome-driven set of values supports the other dimension of the competing values model of performance. The agile employee is a problem-solver who can see past a blind adherence to organization policies and processes. It’s not that they are disobedient and disrespectful of company protocol. The agile employee endeavors to juggle company needs for standardization and orthodoxy with customer needs.
To illustrate this juggling act between pleasing the customer and satisfying the business, consider the salesperson’s role. People who work in sales are the “meat in the sandwich.” They are crammed between two important and demanding entities: company and customer. Further, salespeople have two bosses: their manager and their customer. Conflict arises when the manager and customer have different expectations about a product or service. A conflict can be based on a number of issues including price, delivery, or after-sales service. In these difficult circumstances, the salesperson has four options:
In this case, the customer represents the external, flexible, outcome- driven dimension. And the boss is the custodian of the internal, controlling, and process-driven dimension. The salesperson is in the middle.
This dilemma isn’t limited to people working in sales and customer service; it affects a growing number of employees. As businesses become leaner and resource strapped, greater numbers of employees within the company deal directly with customers. Employees in technical roles such as engineers, tradespeople, and accountants, for instance, work closer to customers and clients than previously. Those people paid to work directly with customers have a more extended set of responsibilities than in the past. Salespeople are more involved than they once were in after-sales service matters. And the opposite is the case too. Employees in customer service roles are now expected to promote and sell other products and services during their customer interactions. So more people are caught up in this brokerage role between the organization they work for and its customer-base.
But in the main, salespeople and customer service representatives are brokers between the company and its customers. So in their boundary- spanning role, employees working directly with customers are agents who are frequently forced to negotiate organizational needs and customer expectations. This would suggest that as employees in this role, they require considerable managerial support.
To help with the burdens of this brokering role, managers should invest time and resources assisting employees coping with this dual demand. Also, the customer-focused employees must be willing to be adaptive and learn when and how to display appropriate initiative and enterprise; in other words, be agile. It’s in everybody’s interests to strive for this customer-focused attitude, and not just default to playing it safe by following internal policies.
But how is this achieved in practice?
There are four managerial strategies to support customer-focused behavior. First, the employee needs to have a clearly understood role. This role clarity builds their confidence to deal with the inevitable conflict between the competing demands of the customer and the company. Second, a consistent, fair, and valid incentives system for desirable customer-focused behavior needs to be applied for all employees within the business. Third, a comprehensive, well-implemented, and easy-to-use customer relationship management (CRM) system captures and utilizes important information and data to make informed customer decisions. And fourth, all staff are exposed to tailored, timely, and relevant customer service training and coaching, based on real-life scenarios. With a QA system in place, these four practices are the factors that balance two sets of competing values: a compliance-driven organization and a customer- focused enterprise.
Three additional elements are important too. An effective internal customer service culture—based on the systems model of organizational performance—removes in-house barriers. These obstacles are usually a result of the specialization practices we covered in the last chapter. There needs to be a commitment from management to adequately invest in technical and administrative resources, and people development practices. This obligation helps to create a smooth and responsive customer interface. And finally, all of these initiatives need committed and sustained leadership.
The majority of books on customer service concentrate on how employees should interact with customers. Little is said about the bigger picture; that is, what needs to be done to cultivate a customer- focused culture. These books don’t usually devote much time to overcoming the competing values of compliance and adaptability. Instead, many of these books talk about putting systems in place to improve customer responsiveness; that is, the emphasis is on QA and the internal-focus.
Also, there’s not a lot written about the challenges of rewarding and recognizing good customer-focused behavior. Perhaps this is because it’s complex. First, how do you reward someone fairly and consistently for great customer-focused behavior? How do you ensure that the reward is suitable? Just knowing where to begin is difficult enough. For instance, should someone be rewarded for following the system or accomplishing a great outcome? It’s easy to suggest both, but then how does a manager ensure that the reward is commensurate with the deed? Second, you have issues around the implementation of rewards: Where and when to start, and how often and how much? Though by not recognizing exemplary customer-focused behavior, leaders send a signal to the “troops” that the company isn’t seriously focused on the customer.
I’d suggest a good place to start addressing these questions is through a cross-functional project team. Invite the team to consider how the organization ought to respond to these issues and ask them to report their findings. When this has been done, I’ve usually been pleasantly surprised by what comes back.
In any event, recognition before reward is the easier of the two incentives. One of the simplest, most effective—and often neglected—ways, for instance, of recognizing exemplary behavior is to mention it during regular staff meetings to acknowledge the effort publicly. If time is set aside at meetings for saluting commendable customer work, the leader is recognizing and reinforcing this kind of behavior.
Furthermore, I’d suggest trying this approach: At regular meetings, start on a positive note. Ask each person for an instance of customer- focused behavior they’ve observed in the previous fortnight. Not everyone will be that observant, but some will have examples to share. This exercise can be insightful, and sends a strong signal about the leader’s priorities. Although this simple form of recognition doesn’t answer the questions I pose around rewards, and specifically, their consistency and reliability, it’s a good starting point.
Dealing with out-of-the-ordinary customer demands is another challenge not dealt with adequately in the management literature. These “left field” requests require more than good negotiation skills. The qualities needed in these unique situations are many and varied. For instance, the employee needs to
These are only a few of the traits needed. There are doubtlessly many others I’ve missed. Nevertheless, bundling someone off to a one-day customer service training course is not the answer to dealing with unusual customer requests.
Instead, drawing attention to these unique requests is useful. Using exceptional customer demands as a learning opportunity, can be very helpful. How could we deal with this situation in the future, if it happens again? What are the important lessons learnt here? These are two great questions for discussion internally. Regrettably, managers use the excuse they’re too busy dealing with the next crisis to spend the time learning from these incidents that are nuggets of learning.
Yet another challenge is the limited career paths for people working in sales and customer service. Usually, there isn’t a defined career path for these employees. Vertical promotion in these roles is comparatively limited. Plus, the prevailing wisdom is that to advance to general management, a person needs exposure in several areas of business. These career limitations often result in good people with ambition moving on and leaving the company, looking for other opportunities. High turnover isn’t unusual in sales and customer service. And loyal customers—not to mention the company—are often left in the lurch when this happens. Retention of good staff in sales and customer service is an issue for lots of businesses. The answer to this predicament lies with the flexible deployment practices we spoke about in the last chapter.
And finally, there’s often significant resistance to sharing valuable customer-based information across the business. This can be especially problematic when extrinsic rewards don’t favor information sharing. I came across such an example and wrote about it in one of my previous books, Attracting and Retaining Talent.5
A well-known international commercial retail travel agency I consulted with was concerned about a lack of teamwork among travel agents in the retail outlets. They wanted me to “fix” the problem. I asked the managing director how he rewarded his staff. He told me that at the end of each month a table was published with each agent’s name and the value of sales they had made during the month. Bonuses are paid on the basis of these figures. “Can you see the problem with this bonus system?” I asked. So determined were these travel agents to improve their sales figures, they wouldn’t share useful information with others.
Once he’d accepted this dilemma, this managing director cited an example of a salesperson “stealing” a lead from a colleague’s desk, while they were out to lunch. The salesperson decided to call the customer and book the flight for them in their colleague’s absence. Not mentioning this to their colleague, the person who had “taken the initiative” was credited with the sale. The individually-based reward system worked against teamwork in this, and many other cases in the business.
To be customer-focused, I’m not suggesting we neglect QA. Like the other seven dysfunctional practices, QA is only dysfunctional to the extent that it interferes with an enterprise’s ability to be agile. The QA industry has proliferated. Virtually everything in business is now subjected to QA. Scientific management—as much as anything else—paved the way for our modern version of TQM. The modern employee is taught to follow a system or process for pretty much everything they do at work. This obedience mentality can asphyxiate initiative and enterprise. The customer and their heightened expectations require more than compliance, however. Despite QA being driven by a focus on the end-user, the practice has overtaken its original aim. Organizations need to be ambidextrous: they must be able to comfortably accommodate the competing values of control and enterprise.
This is the end of Chap. 5. In Chap. 6 we look at the third myth: The
job description helps the employee understand their organizational role.
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