In April, 2014, more than 150 customer experience, data, marketing and business leaders participated in the first Customer 360 Symposium run by Ashton Media.
This is the fourth of six posts based on a presentation given by Corporate Anthropologist, Michael Henderson who shared fascinating insights into the nature of culture and why more organisations should be tapping into this to improve customer engagement.
Last time, Michael talked about the cultural elements of control, relationship and development.
In today’s post, Michael looks at the connection between organisation culture and strategy.
The 3 fundamental business strategies
If you’re familiar with the discipline of market leaders, that’s the work by Fred Wiersema and Michael Treacy, back in the 90’s, they’re fundamentally talking about three business strategies – operational excellence, customer intimacy and product leadership.
1. Operational excellence delivers best price to market
2. Customer intimacy delivers best service to market
3. Product leadership delivers best product to market
What we know is that those are only sustainable as strategic options for your organisations as a triangle.
A tricycle represents all organisations that have a combination of these three strategies. You can’t run a business without all three being present. The trick is to choose which one is your lead front wheel that’s going to direct you in terms of where you’re going in the marketplace.
What is your lead front wheel?
The problem is that it’s the culture that sits on the tricycle and pedals. Strategically when you go, “we’re all about customer intimacy and we’re going to have a nice back end operation looking after the accounts. We’re going to tie in a little research and development here just to tweak the products every now and then”, and the culture is not actually aligned. In other words, it doesn’t have its focus on the same front wheel that your strategic plan does. Guess what?
That’s not a rhetorical question. The tricycle goes off on its own little journey or the cyclist gets off and walks away. Or the cyclist only pedals with half the energy and if your competitor is pedalling with more energy, you lose.
The combination of these two factors is absolutely critical, making sure you’ve got the right mixture of control, relate and develop, lined up with your strategy because each and every one of those impacts on customer experience.
If you’re promising customer intimacy but you’ve developed a control free culture, customer intimacy goes down the toilet. Just talk to Microsoft, they’ll tell you the history of that. They lost contact with the marketplace. They were heavily influenced on what they controlled and developed but missed where the market was going.
It’s tragic right, because what a contribution Microsoft made to the planet. Do you remember the early days? The breakthroughs? We were in awe weren’t we? It’s just amazing and you can see how quickly it can drift off just by not having your eye on the ball and not connecting the two up effectively.
Let’s talk about the GFC
Let me give you a case study of this. I’m going to talk about the GFC. I’m from New Zealand so I know a lot about this. We’ve had a GFC. I think the world has claimed the GFC started in 2008 if I remember. Early warning signs 2007. Of course New Zealanders were ahead of the game, we’ve had a GFC going on for nearly 200 years now. So I’m fully qualified to talk about this.
I think Australia’s only just realised what GFC means in the last 12 months from what I’m hearing. Your dollar and our dollar are sort of on the same exchange rate at the moment, it’s incredible! So I understand. I kept looking across the ditch at you guys [Australia] thinking GFC must stand for getting finance from China. I think you’re getting a bit of a reality check now so I’m here from New Zealand to share with you some war stories about the GFC and what’s coming for you.
Culture has a significant role to help you get through that. That is exactly what we’ve done in New Zealand. Most of the organisations have pulled together and with real focus, you make it through. So hopefully this is a hopeful story, not a sad story for you.
So GFC, what’s happened? What I did was I travelled the world looking at how organisations respond to a challenge outside of their tribal circle. In this case, it was a global economic one. What we found was that most organisations responded to the GFC with some of these types of processes and approaches.
How did most organisations respond to the GFC?
They started outsourcing. How many of you have got an organisation that’s done some of that over the last five or six years? Yeah, a good number of you.
They started retrenching. I think that’s HR’s cover up code for sacking people because we can’t afford to pay you anymore. How many of you have been through that over the last five or six years? Yep. Some of you looked worried when I said that. Maybe it’s still going on. My apologies, I didn’t mean to remind you.
They started automation. How many of you had a new technology brought in to replace the old way of doing it? You’ve gone from paper or stone to carvings to computers, etc, apps? Yep, likewise.
They started restructuring. This is the classic one isn’t it? Decentralise or centralise depending on what decade it’s in. It’s about every ten years we change our mind don’t we? The banks are geniuses at this aren’t they? Going out to the suburbs and the outer regions, no we’re not, oh yes we are, no we’re not. It’s just difficult to keep up with.
Does that all look familiar? How many have got clients that have been through the same thing? Yeah, me too, most of my clients have been struggling with this over the last decade.
Greater efficiency was the only deliverable
Here’s the interesting thing about it. All it actually delivered was greater efficiency. All those activities from a customer’s perspective, because that is what we’re here to talk about, all it actually delivered was efficiency.
It kept you in the game, which was good right, ’cause you’re still here, you’re still alive; the tribe didn’t die with the lion circling, the economic lion circling on the outside. You kept yourself alive and good on you, well done, but the problem is, from the customer’s point of view, no additional value was added. You just were efficient.
And the problem with that was, guess what all your competitors were doing? This stuff as well right? So you got no further ahead. There was no distinguishing advantage of doing business with you as a customer than anyone else out there.
The problem with that is, in the world we live in with the techno wizardry we’re all exposed to on a regular basis, unfortunately customers expect efficiency. It’s entry to market. If you don’t have that, you shouldn’t be playing the game anyway.
And it’s because of these sorts of gadgets, just think of your grandparent’s time having the gadgets that we have now in our hand and the things we can do in our hand now. Makes sense right?
Customers are used to having efficiency literally in the palm of their hand now so if your organisation can’t even play that game, they immediately start to write you off. They expect efficiency.
All that effort, all that money, all that time we’ve spent just getting more efficient by outsourcing, restructuring, etc, has left us still at ground zero. We’re no further ahead. What are customers looking for from cultures and modern organisations nowadays?
In the next post, Michael talks about today’s customers and what they are looking for from cultures and modern organisations.
View the full presentation here:
Mark Abay - Content Director, Ashton Media
Mark is Content Director at Ashton Media. It's his job to create interesting and engaging conference programs that stretch the thinking of our attendees. Mark works closely with our industry advisors to ensure the conference content is aligned with the needs and interests of our audiences.