Note: This post was written by my fellow CVCI Board of Directors member – Ray Sheen. Ray is the President of Product & Process Innovation. It was posted on April 13, 2015, here.
People have used the phrase “a culture of customer-centric value creation.” When I ask what that means, the answers become fuzzy. So, I offer this perspective to provide a starting point for the conversation.
As I work with individuals across many industries, companies, and levels, I find that their approach to business situations can often be categorized in several ways. I believe that two essential categorizations concerning customer-centric value creation are whether they have an internal or an external focus on their work and whether they approach their job as an employee or an entrepreneur. Let me describe each of these in a little more detail.
Internal or External Focus
Most people try to do an excellent job with their work. Whether it is pride or self-preservation, they want their work to be acceptable. But how are the standards of good performance determined?
A person with an external focus will look to their customer for those standards. If their work supports the activities of a customer-facing process, their customer is the business customer. If their work supports the actions of an internal process, their customer is the business unit or department that receives the output of their process. Either way, an externally focused person looks outside their process activity to determine acceptable performance.
A person with an internal focus will look to the job description, the procedures, or the checklist to determine what to do. They do what their instructions say, nothing more and nothing less. They do not concern themselves with the impact of their performance on the customers of their business process.
Employee or Entrepreneur
For this discussion, entrepreneurism is not based on whether someone has started a company; rather it is based on their attitude about their role in the organization. Do they see themselves as an owner responsible for company success, or are they an actor playing a role?
An employee sees themself as a role or a position on an organizational chart. They have a prescribed area of responsibility. They have specific assets or activities for which they are responsible. Within their area of responsibility, they are willing to act – even improvise- but will not work outside their area without specific direction. Their attitude is that they have a job and will do it well.
Individuals with entrepreneurial attitudes are not focused on their position in the organizational chart. Instead, they are aware of what is happening across the company. They strive to improve the organization’s ability to reach its goals. They feel personal ownership for organizational success. Wherever they see opportunities, they act to take advantage of them or influence others to act.
So let’s place these two characteristics in a simple four-block diagram. When we do this, we begin to see patterns in the behaviors of individuals.
Risk Avoider
This is the employee with an internal focus. Their goal is to do their job correctly, as defined by the organizational chart and procedures. They often take great pride in their work. However, they do not step outside the boundaries of their work process. They are content with the status quo, and they resist change. I believe that this is the majority of the workforce in most companies. And they are not a value creator!
Problem Solver
This is the employee with an external focus. Their goal is to ensure that the process in which they are involved is running smoothly. They look beyond the requirements of their specific activities and determine if their customer is satisfied with the results. If the customer is unsatisfied, they seek to satisfy the customer through the assets and resources they control. These individuals often act as the voice of the customer within the organization.
Empire Builder
This is the entrepreneur with an internal focus. Their goal is to increase their power and influence in the organization. They look beyond their current position for opportunities to take on additional responsibilities. When these individuals have good people skills, they are viewed as leaders in the organization. They are regarded as power-hungry tyrants when they do not have good people skills. Often this is because they believe the work is not being done well by others and that they could do it better.
Customer Value Creator
A customer value creator is an entrepreneur with an external focus. Their goal is to create as many satisfied customers as possible. They seek to understand customer needs and interests and provide value propositions that address those needs and interests. They can be disruptive in an organization because they often advocate changes. Internally focused individuals will often see them as a threat to the existing organization, and employees will often see them as undisciplined.
A Culture of Customer-Centric Value Creation
Based on this model, several questions immediately arise.
- How many people in the organization must be value creators to establish a customer-centric value creation culture? 100%? 50%? 10%?
- Can you have too many Value Creators?
- Can you convert people in the other categories into Value Creators? Training? Incentives? Coaching?
- What, if any, operational or governance controls should be imposed on Value Creators?
I don’t have the answers to these questions. I have not seen the inner workings of enough customer-centric value-creating organizations to discern a pattern. But I do believe a framework like this will help us understand the culture change that must take place for most organizations.
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