Why Customer Obsession May Blind You
We are taught that if we want our business to be successful we have to focus on our customers. But if this is wrong?!
Wait a second! Why, on heaven’s earth, should customer obsession be a bad thing? Isn’t it what modern firms preach? Especially in an Agile setting? Isn’t customer obsession THE ingredient of success for a company such as Amazon as described in Working Backwards?
Well, yes, it is important, it can be vital, essential even. And yet it can be myopic and fatally misleading because it can entice us to miss what matters more. Let me explain.
The purpose of a firm
Delighting the customer is one of THE drivers of Agile. Customer delight goes beyond satisfying the customer, which, in these days, may not be sufficient anymore to thrive in a competitive marketplace. The times of a seller market are long gone. We have a buyer market where the customer can get all relevant information about available products and services at a fingertip. Companies that haven’t realized this yet, risk being kicked out of the market unless they operate a monopoly. Delighting you customer not only requires that you know who your customers are you also need to understand their expectations and, even more important, their needs today and tomorrow. As self-explanatory as this sounds, way too often stakeholders are still mistaken for customers. But it is not for stakeholders teams generate value for, it is for the customers. This makes it mandatory to know your customers and their needs. No wonder the Albert Einstein of management, Peter Drucker, explains that “there is only one valid purpose of a corporation: to create a customer.”
The generators of customer value
Granted, under these circumstances, customer obsession may appear to be the logical if not only choice. But not quite. Customer focus gives you a direction; provided you understand what it really takes you there: People, i.e., those doing the work, those who actually generate the value for the customer.
Therefore, the question is HOW you can best generate value for the customer. In other words, what does it take to develop and nourish an environment where teams can excel, become high-performing teams? Let me give you hint: it is not the traditional pressure from above. If managers truly want to motivate their teams, traditional top-down pressure can easily become poison. It takes strong and inspiring leadership which not only enables and empowers teams but also spark and nurture an environment of safety, trust, respect and open communication (see also the findings of the Learning Consortium for the Creative Economy (2015)). It starts by treating employees not as human resources but as human beings. Simple and yet immensely challenging considering that budget and controlling processes don’t have room for human beings and only human resources as cost factors.
The meaning of business value
There is a huge difference in focusing on costs and efficiency gains vs. value generation. This, too, is true for generating value for the business. However, business value is more than short-term profits even though EBIT remains to be the most popular key performance index especially for publicly traded companies. Business value takes into account short-, mid- and long-term financial results as well as investments in and outcomes of product, process and people innovation. Such a broad view of business value benefits customers, employees and the business alike.
Lifting the veil
Where does this leave us? Customer focus is important. As well as caring for your employees and securing sustainable business value. Working backwards can be valuable. But it is no substitute for leading from the center. Agile evangelist Steve Denning accurately describes such a core in his book The Age of Agile: “In the emerging age of Agile, the dynamic focuses on human beings creating delight for other human beings. When an organization – or a society – is populated by people with this mindset, it can be at one with itself, at one with those for whom the work is being done, at one with those who are doing the work, and at one with the wider society in which it operates. In such a world, the meaning of “the dignity of man” – and woman, too – is fresh and invigorating.”
So, let’s lift the veil of myopia of customer obsession and reveal the beautiful face of holistic success.