Are humane organisations more customer-centric?

Customer-centricity involves technology, data analytics, the right mindset and leadership style, and a culture shift

Organisations need a new approach to leadership and culture to survive and thrive in the fourth Industrial Revolution – one which will lead to better employee engagement, performance and talent retention, resulting in better customer-centricity and increased revenues.

They need to become more humane – focused on people and purpose, aiming to achieve a strategic alignment of all stakeholders instead of short-term profit maximisation. Such organisations operate at Level 4 (and occasionally Level 5) of The Management Shift framework. Each level is characterised by specific thinking patterns, behaviour, language used, leadership style and organisational outcomes. There is a particularly significant shift from Level 3 to Level 4 where employees become highly enthusiastic, engaged and collaborative. High performance begins at this level. Level 5 is where passionate people combine creatively and with inspiration to make a difference for the world and produce innovations that were thought to be impossible.

Levels 4 and 5 lead to positive ripples, humanised/humane organisations, improved performance and long-term profit. Levels 1 to 3 produce a negative vortex of energy that leads to diminished engagement and lower performance. Although they may produce short-term gains, individuals and organisations will implode at these lower levels, and the majority of organisations operate here.

While many companies strive to improve customer-centricity, according to research by the Chief Marketing Officer Council only 14% of marketers say that customer-centricity is a hallmark of their companies.

The 5 levels of The Management Shift framework could be mapped to approaches to customer-centricity as shown in Figure 1 below. At Level 1 customer-centricity is virtually non-existent. With all the blame and fear going on in an organisation delighting customers has a very low priority. At Level 2 customer-centricity is sporadic. Efforts to get insights into customers’ preferences and needs are patchy, random and uncoordinated. At Level 3 customer-centricity is compliant. Insights about customers are gained through set rules, procedures and practices. Employees do what is expected of them but they would not normally go the extra mile for a customer.

After Level 3 customer-centricity changes significantly. At Level 4 customer-centricity becomes genuine. Employees often go the extra mile to provide exceptional customer service or gain insight into customers' needs and preferences. They would offer products and services to genuinely meet customers' purpose and needs and they are able to identify with customers’ emotional needs. At Level 5 customer-centricity becomes intrinsic. The desire to delight customers becomes embedded in individual mindsets and organisational culture. The desire to provide value and serve customers is authentic and greater than the desire to meet financial targets. Insights about customers’ needs are shared openly. As a result financial targets are often exceeded.

Figure 1. Approaches to customer centricity mapped to the five levels of The Management Shift framework

Good practices for fostering customer-centricity focus on issues such as securing the volume and variety of data on customers’ needs, profiles and preferences or implementing processes and operational capabilities for targeting customers with personalised communication and offers. Some organisations do not have the technology for such data analytics, but perhaps an even greater barrier to customer-centricity is a lack of customer-centric organisational cultures.

To achieve such a customer-centric culture, in addition to sophisticated technology and data analytics capabilities, organisations need the Level 4 (and 5) mindset, leadership style and humane organisational culture where customer satisfaction becomes more effortless and as a result organisations secure their longevity and attract as well as retain engaged and motivated employees.

Vlatka Hlupic is professor of leadership and organisational transformation at Hult Ashridge Executive Education, and CEO of The Management Shift Consulting