4 Essential Steps to Building a Customer-Centric Model

Ed O’Boyle

By Ed O’Boyle and Amy Adkins 

Customer engagement represents the emotional and psychological attachment between your company and your customers. It is vital to business growth and vitality, and can accelerate your company’s revenue, sales, profitability and share of wallet. 

Every B2B leader we’ve worked with understands the importance of customer engagement and has a strategy in place to improve it. Yet a recent report from Gallup has found that B2B companies have only managed to engage 29% of their customers. Where’s the disconnect between strategy and outcomes?

The very best B2B leaders we’ve worked with take a customer-centric approach to engaging customers. This approach puts their customers at the core of everything and is about more than focusing on customers or having a defined customer experience. We believe that customer centricity provides the surest path to customer engagement.

Although an increasing number of B2B companies realize they need to be customer-centric to compete in today’s market, not all have figured out how to put this model into use. We have found that developing a customer-centric model essentially comes down to four phases: Discovery, Diagnostic, Analytic and Sustainment. Within each of these phases, there are also common tasks that companies can follow to understand and act on the voice of the customer. 

1. Discovery: This phase involves an evaluation of the current state of your customer relationships. Some of the tasks associated with this phase include:

• conducting stakeholder analyses to identify the current customer landscape
• identifying your organization’s needs and priorities
• exploring your existing world, including account structure, the language and culture of your organization and any prior metrics used to evaluate customer relationships to date
• building or refining a customer engagement strategy
• creating a customer list and relationship map

2. Diagnostic: This phase incorporates qualitative and quantitative analyses. Some of the tasks associated within this phase include:

• conducting a key account review
• gathering key account review findings to make insights into customer accounts
• using key account review insights to make recommendations
• sharing best practices based on insights and recommendations
• carrying out an ethnographic study of customers
• identifying key priorities for customers

3. Analytic: This phase encompasses the findings and insights from the Discovery phase to identify the key drivers of the customer experience and how your company is performing on those key drivers. Some of the tasks associated with this phase include:

• identifying the key drivers that propel the customer relationship forward
• gauging the company’s success with the key drivers
• linking the key drivers to customers’ key priorities and conducting a gap analysis
• making connections among the findings of the Discovery phase

4. Sustainment: This phase pinpoints specific steps to take to improve your customer experience. Some of the tasks associated with this phase include:

• creating an action plan to transform the customer experience
• identifying quick wins for ways to improve the customer relationship
• implementing a results communication strategy across your organization
• communicating progress with customers to ensure they understand your organization’s efforts to improve the relationship

Of course, there is one predominant factor in a customer-centric model: people. It is critical that every employee understands what customer centricity means for your business and how they can deliver on it. This applies to your employees at all levels, including leaders, managers and individual contributors.

Leaders: Leaders must hear the voice of the customer to improve the company’s relationship with the customer and to improve business outcomes. They must take accountability for generating a holistic culture shift and for creating processes to build strong, vital relationships that support business results. 

Managers: Managers are in the best position to set the tone for improving customer relationships by targeting the key drivers that best link to customers’ overall experience.
Individual contributors: Individual contributors who work day in and day out with client contacts are the face of your organization. Helping individual contributors understand the importance of improving the customer relationship is the ultimate catalyst for creating change. 

As your company moves through the four phases outlined previously, you must provide employees with the education, training and tools they need to play their part in the customer experience. For example, during the Discovery phase, your leaders should develop an in-depth understanding of customer engagement and impact, and how both work to strengthen customer relationships. Or, in the Diagnostic phase, your managers should attend a course or similar training to learn how to set up their account teams for success. 

Ed O’Boyle is Global Practice Leader, Workplace and Marketplace at Gallup. Amy Adkins is a Writer and Editor at Gallup.com.

Ed O’Boyle

Gallup

As Gallup’s Global Practice Leader, Ed O’Boyle oversees strategic vision for the company’s Workplace and Marketplace practices. He is responsible for turning ideas into innovation using Gallup’s leading-edge science and discoveries as a guide. Ed was instrumental in developing the company’s B2B framework, which empowers clients to achieve exponential increases in performance through customer engagement and impact.

Managers & Leaders light a fire

Are You a Leader or a Manager? There's a Difference

The terms leadership and management are often used interchangeably, but there is a huge difference between a leader and a manager.

c.ronnie/Flickr

 

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Leaders aren't always managers and vise versa. It is a rare individual that is both of these things. They have very different skill sets, both critical to success at a high-growth business.

Understanding who your leaders are and who your managers are will help you create an organizational structure that not only addresses core business functions and needs but also morale and culture, which are equally if not more important. It will also help you identify where there might be gaps or people in the wrong "seats on the bus," to quote Jim Collins.

Leaders have a unique ability to rally employees around a vision. Because their belief in the vision is so strong, employees will naturally want to follow them. Leaders also tend to be willing to take risks in pursuit of the vision.

Managers, on the other hand, are more adept at executing the vision in a very systemic way and directing employees on how to do so. They can see all of the intricate moving parts and understand how to make them harmonize. Managers are usually very risk-adverse.

Deep down, a lot of entrepreneurs are leaders and not managers. I'm one of those. I don't think that I manage well, and if I had to focus solely on that it would be extremely painful for all involved. Conversely, if a manager is expected to lead a company, that company will be managed into a nice, tidy grave.

It's true that some managers can inspire and some leaders can systemically execute, but these are not their core strengths. For a start-up, the entrepreneur really has no choice but to be both leader and manager, which is usually okay since it's probably just him/her and one or two others.

Understanding which you are will help you make important, early choices about whom you need to grow that complement your strengths and ensure the success of your business.

OtterBox founder and CEO Curt Richardson created the first prototype of a waterproof case in his garage in the early '90s. OtterBox evolved into a leader in protective cases for mobile technology. 

CEOs are Terrible at Management

 

 

Yahoo CEO Marissa Mayer: Is she listening to eople management, people inside her company? (Image credit: Getty Images via @daylife)

A new study shows that CEOs are doing a lousy job when it comes to people management. The study, a joint project by the Center for Leadership Development and Research at Stanford’s Graduate School of  Business, Stanford’s Rock Center for Corporate Governance and The Miles Group, a consulting firm in New York that focuses on C-suites and corporate boards, found that both CEOs and boards are overly focused on the bottom line, at the expense of mentoring and engaging their boards. The survey polled 160 CEOs and directors of North American public and private companies.

One of the questions to boards of directors: Rank the top weakness of your CEO. “Mentoring skills” and “board engagement” tied for first place. “This signals that directors are clearly concerned about their CEOs’ ability to mentor top talent,” said Stephen Miles, CEO of The Miles Group, in a statement. “Focusing on drivers such as developing the next generation of leadership is essential to planning beyond the next quarter and avoiding the short-term thinking that inhibits growth.”

It makes sense to me that boards are preoccupied with financial measurements. But the study found that the attention given to talent development and mentoring was at rock bottom. The survey asked boards and CEOs about the weighting they give to various aspects of CEO performance. The most important thing, rated at 41%, was “accounting, operating or stock price performance.” The weighting given to people performance was incredibly low, with “succession planning” getting just a 5% rating and and “workplace safety” just 2%.

The researchers say that CEOs need to reach beyond numbers and care about people management. Two other statistics from the survey that underline how disengaged CEOs are from concern about employees: When asked about their CEOs’ greatest strengths, 70% rated “decision-making skills” at the top. At the bottom: 27% said “compassion/empathy,” 23% said “mentoring skills/developing internal talent” and just 23% said “listening skills.” The lowest-rated skill was “conflict management.” Likewise, when asked about CEOs’ biggest weaknesses, 24% said “mentoring skills” and 22% said “sharing leadership/delegation skills.”

Also striking is the fact that a sizable majority of directors (83%) and boards (64%) agree that the CEO evaluation process should rely on a balanced approach between financial performance and nonfinancial measurements. “Unfortunately, the truth of the matter is that the CEO evaluation process is not that balanced,” said Stanford’s David Larcker, co-director of the Center for Leadership Development in a statement. “Amid growing calls for integrating reporting and corporate social responsibility, companies are still behind the times when it comes to developing reliable and valid measures of nonfinancial performance metrics.”

More results from the study:

-          Directors don’t rate their CEOs highly. Only 41% of directors say their CEO is in the top 20% of their peers and 17% say their CEO is below the 60^th percentile.

-          A sizable minority, 10%, say they have never evaluated their CEO.

-          CEOs who are evaluated, agree with the marks they get. “Shareholders have to wonder at the objectivity of the evaluation process,” said Larcker. “It’s hard to believe that boards are pushing CEOs on their evaluations if they pretty much agree with their evaluation.”

-          Many directors forgive CEOs for legal and regulatory violations. This is one of the most striking results of the study. When asked about unexpected litigation against the company, a significant minority of directors, 27%, said that it would have no impact on a CEO’s performance evaluation, while 24% said that regulatory problems would have no impact. Shouldn’t CEOs be held accountable for legal and regulatory lapses? At least directors were unforgiving about ethical violations and a failure to be transparent with the board. A full 100% said their CEOs would get worse performance evaluations in the face of ethical problems.

I agree with the study’s authors that in the ideal world, CEOs would care about people management and they would be grooming successors to step in should something go awry. But I also understand boards’ and bosses’ preoccupation with the bottom line.

Also I can think of two recent examples of companies where the CEOs left abruptly under unexpected circumstances and the companies reached outside for replacements who, thus far, have arguably done a good job—better, perhaps, than someone from inside would have done. At Yahoo last year, Scott Thompson had been CEO for just four months when activist investor Daniel Loeb, who opposed Thompson’s appointment, sent a letter to the board revealing that Thompson had lied about his credentials. Thompson, who was an outside hire from PayPayl, had zero time to groom a successor, so Yahoo reached outside again and hired Marissa Mayer from Google. Though she’s been in the post for just a year and may still hit roadblocks in her efforts to revive the struggling company, Yahoo’s stock has risen from $15 when she took the helm to $26.

Another example: Struggling big box retailer Best Buy lost its CEO, Brian Dunn, suddenly last April after his inappropriate relationship with a female subordinate came to light. An insider, director G. Mike Mikan, served as interim CEO for four months. Then the company hired Frenchman Hubert Joly, who had been running a Minneapolis travel company called Carlson. Though Best Buy’s stock fell from $20 when Joly came on board to $11 in January, he has managed to revive the company’s fortunes and bring the share price back up to $26. It’s not clear that an insider could have done a better job.

Maybe I’m guilty, like directors and CEOS, of focusing too much on the bottom line here, but in the end, that’s what shareholders value. Though I agree with the Stanford study authors that in an ideal world, CEOs would channel more of their energy toward listening to the people inside their companies and developing talent from within.

  Susan Adams Forbes Staff

Your Optimism Might Be Stifling Your Team

By: Liz Wiseman

I admit that I'm prone to an optimistic outlook, a belief that most problems can be tackled with hard work and the right mindset. I've read the research that indicates that positive thinkers tend to do better in school, work and life. Perhaps I even assumed that optimism was infectious and that people wanted to work with a confident, hopeful leader. In the true spirit of optimism, how could this possibly go wrong?

Then I found out from a colleague that he didn't find my optimism nearly as reassuring as I did. We were in the middle of a high-stakes research project with a small window of opportunity to write an article for a prominent academic publication. To pull this off, we needed to complete a complex analysis, do a round of additional research, and actually write the article, all while working on several other projects and operating on a thin budget. 

To me, this seemed like a feasible, interesting challenge, and I enthusiastically dove in. Then at one critical meeting, a more junior colleague turned to me and said, "Liz, I need you to stop saying that!" 

"Saying what?" I asked. 

"Saying that thing you always say — 'How hard can it be?'" I looked puzzled. He explained, "You say that all the time. 'How hard can it be? We can do this. After all, how hard can it be?'"
I recognized what he was saying and began to explain my logic: While I was working for Oracle Corporation, a small but rapidly growing company, I had been thrown into management at the tender age of 24 and was told that I was now in charge of training for the entire company and was tasked with building Oracle University and making it work in globally. I learned to say to myself, "We can do this. After all, how hard can it really be?" Now, I explained how this growth mindset had worked beautifully for me and many of my colleagues over the years. Yet steadfast, my colleague reiterated, "Yes, but that is what I need you to stop saying." 

"But why?" I probed. 

He paused and said, "Because what we are doing is actually really hard, and I need you to acknowledge that."

He wasn't opposed to the idea that our enormous task was doable; he simply wanted me to acknowledge the reality of the challenge and recognize his struggle. He didn't want me glossing over the challenge with my coat of optimism. So I did admit, "Yes, what we are doing is hard. It is really, really difficult." I then assured him that I would do my best to stop saying that thing.

Meanwhile, in the back of my mind I told myself "Sure, I can stop saying that. After all, how hard can it be?" 

Is it possible that a can-do attitude that worked so well for you as an individual contributor may actually work against you as a leader? When you play the role of the optimist, you may undervalue the struggle the team is experiencing or their hard-fought learning and work (or give the impression that you do). Your staff may wonder if you have lost your tether to reality. And, when a leader seldom focuses on the problems, it leaves more junior managers to worry about those risks. In fact, by being too optimistic, you may actually be putting your employees in the role of having to play the "sensible pessimist." Or worse, you might be sending a message that mistakes and failure are not an option because, after all, "How hard can it be?" And yet wise managers know that mistakes are inevitable, and that failure is just the price of creativity. 

Having coached many executives, I know that senior leadership ranks are filled with glass-half-full types (in fact, one might need to be an optimist to cope with the inherent pressure of these positions). Consider how Nike, Inc.'s chief of global design, John Hoke, sparked a transformation in his organization once he realized the restrictive impact his and his management team's optimism was generating. John gathered his senior leaders for a week-long offsite to explore new thinking in design and how leaders can multiply the talent inside their organization, which I helped facilitate. As I described the profile of the optimistic, creative, energetic leader, John and his team quickly recognized their own reflection and were curious how they might be inadvertently diminishing capability and ingenuity in others. John asked that we pause our agenda to better understand how his own hopeful style of leadership might actually be causing some angst. His team explained the extraordinary pressure they felt to deliver flawless design, every time. With the London Olympics around the corner and a brand promise to sustain, the group insisted that there simply was no room to fail. 

With John's encouragement, we decided to define a space for experimentation. We rapidly laid out their various work scenarios into two buckets: One where failure was OK and the other where success had to be assured. The group debated each until they agreed on every scenario. Within an hour, they had created a playground — a safe space for their teams to struggle and potentially fail without harming their stakeholders or their business. This thinking rippled across Nike's design community and sparked leaders like Angela Snow, VP of creative operations and Casey Lehner, senior director of global design operations, to introduce the "risk and iterate" performance goal that encouraged each team member to identify something they would take a risk with and then iterate solutions throughout the year. This effort legitimized the possibility of failure and created safety for designers to tackle the scary problems. 

John Hoke and his management team didn't lower their aspirations or become less optimistic about the capabilities of their team. But, by acknowledging the downside and recognizing the messy, iterative path of innovation, they liberated their team to go bigger and reach further. 

Go ahead and be optimistic. But first, be sure to acknowledge the downside so your team is free to explore the upside.

Liz Wiseman

Liz Wiseman is president of The Wiseman Group, a management research and development center in Silicon Valley and author of Multipliers: How the Best Leaders Make Everyone Smarter.