How Can Companies Shift From An Internal Focus Towards A More Client-Centric Culture?
Remembering your business exists to serve your customers – not the other way around
Welcome back to the Upstream Full-Stack Journal, where we go upstream to explore how connecting Strategy to goal-setting via Product Management can make radically increase your effectiveness.
In this edition:
4 perspectives on client-centricity
My take on 3 reasons why you need to start your strategy from a client need
We’re now in “The Age of Customer Capitalism”
The Three Foundations Approach to Client-Centricity
Turning A Customer Obsession Into Multiple Successful Startups
POLL: How client-centric do you feel your organization is?
I spent years in IT Consulting before joining the team at one of the top-20 U.S. banks, KeyBank.
Over that time, I’ve been amazed how great an impact one of the smallest things has on everything a company does:
How everyone across the company, from leadership (especially leadership) down to the engineer, thinks about customers, and factors them into their daily priorities.
I’ve come to see this as one of the most important things any company or startup can do, and oddly, all-too often overlooked.
My experience is the bigger and older the organization, the less likely it appears to have a client-centric focus.
I’ll share a recent piece I’ve just published via Bootcamp on Medium, and a few other links that can help make the importance of customer-centricity clear, and how to start shifting in that direction.
3 Reasons why successful strategy always starts from a clear client need
The paradox of winning through listening
A luxury brand leader
I knew a senior executive at a global luxury brand that dominated its sector across every major city throughout the 80’s and 90’s.
Wherever luxury goods were sold — London, Paris, New York, Palm Beach, Beverly Hills — the brand was there, and was essentially a category of one.
As an executive who spent nearly every day in a store on a continuous basis, making sales and talking to people, they had an evolved sense of what resonated with their best customers. This awareness informed their regular trips back to the factory, where they made recommendations on styles, designs, and lines that would sell best across each market.
The executive and design leadership in place at the time was receptive, and this constructive working relationship proved an effective formula that resulted in double-digit sales increases every year, creating a global brand renowned for its refined style that extended to lucrative licensing agreements.
Until there was a change at the top.
Pushing the design envelope…
Despite not spending time in stores or being close to customers, the new leadership team had very different ideas about the brand’s direction.
They had some very strong ideas to “improve” the brand through a broad set of avant-garde, cutting-edge design “upgrades.” When presented with one particularly “edgy” collection, the executive I knew expressed skepticism whether the new approach would be embraced by their core customers.
They were brusquely informed:
“Enough. The customers will buy what we tell them to buy.”
Fast forward a few years, and things rapidly unraveled as sales plummeted, store after store closed, and the brand was subsequently sold off for a fraction of its peak value.
Decoding failure
What happened? How could things have gone so wrong?
What was the “edgy” design strategy missing, and for that matter, so many other business strategies?
A central focus on working backwards from, and consistently delivering, great experiences for their core customers.
Why is starting from your core customer so central to strategy?
Here are three practical reasons why putting the client at the center of your strategy makes practical, bottom-line sense for your business:
Because you can only optimize for one thing at a time
Because you can’t make your clients do what you want them to do
Because it’s the only way to effectively serve the right customers
Read the full story here via the excellent Bootcamp publication on Medium.
The Age of Customer Capitalism
Originally introduced in 2010 by Roger L. Martin (the leading strategy expert whose “Designing Strategy” course I was fortunate to take) in his HBR piece “A New Age of Customer Capitalism,” and further refined and expanded in the chapter “Stakeholders” in his 2022 book “A New Way to Think,” Martin lays out how after having moved through the first two ages of capitalism:
#1–1932 — Managerial Capitalism: Companies should be run by professional managers
#2–1976 — Shareholder Capitalism: Companies exist to maximize shareholder wealth
We’ve now arrived at the third, and current age of capitalism:
#3–2010 — Customer Capitalism: Companies exist to maximize customer satisfaction
As we’ll see, putting customers at the center of your strategy results in a number of positive downstream effects.
Read the piece here on HBR:
https://hbr.org/2010/01/the-age-of-customer-capitalism
The Three Foundations Approach to Client-Centricity
Leslie Witt, Chief Product and Design Officer at Headspace Health sits down with Coe Leta Stafford of IDEO U on the Creative Confidence Podcast.
One of the highlights of this conversation is the how to set your organization up for client-centricity through the “oxygen, water, food” framework Leslie learned at Intuit and refined at Headspace.
Listen to the replay here:
https://www.ideou.com/blogs/inspiration/how-to-build-a-culture-of-customer-centricity
Turning A Customer Obsession Into Multiple Successful Startups
Her piece with Hiten Shah, CEO of Nira, Dottie Schrock goes deep on how Hiten has successfully turned his customer focus into multiple great products and successful exists.
Read the full story here on the Productboard blog:
TL;dr
Starting from a client-centric need makes bottom-line business sense.
How might you encourage your teams to be more client-centric in their approach over the coming week?
That’s it for this round!
Join me next time as we continue to go Upstream and use Strategy to make you more effective everywhere.