Chapter 3: Leading a Customer Centric Strategy

Build a Customer-Centric Structure and Culture

“The uniquely cross-functional nature of effective customer-experience efforts puts a premium on smart governance. Adequately addressing the challenge requires a dedicated effort on three levels. First, a customer centric leadership structure must ultimately report to the chief executive and should be designed to stimulate cross-silo activity and collaboration. Second, leaders must commit to demonstrating behaviors and serving as role models to deliver customer-experience goals to frontline workers and refine and reinforce those goals over the long term. Finally, it is necessary to put in place the correct metrics and incentives that are critical for aligning typically siloed units into effective cross-functional teams.”^[1]

Research conducted by customer service provider Arvato revealed that businesses tend to rate the customer experience their company delivers higher than consumers do.^[2]

Despite the attention to customer experience that is widely stated in corporate missions, visions, and values, actions speak louder than vision statements. When it comes to resources and budget, CEOs tend to prioritize technology over people or process. Even when company leaders recognize that customer service could be better, they often will look to the latest technology to provide the solution without delving deeper into customers’ true wants and needs, or gathering insights from frontline staff.^[3]

Leaders have a huge impact on building a customer-centric culture. The leader must be customer obsessed and share those values and goals with the company employees.  Does the leader walk the talk? Does the leader put customers first?  Are products, services, and processes created with customer needs and wants shaping results? If the company is focused on short-term results or is investing in areas that do not improve the customer experience, employees will pick up on this and leaders will get behaviors from employees that are not customer focused.  Leaders who want to deliver exceptional customer experiences need to invest in employee incentives that will steer performance toward exceptional service.

Watch “A Customer-Centric Culture Needs a Leader” YouTube video below to learn why leadership is so important to creating a customer-centric culture.^[4]  Closed captioning is available on YouTube.

Understanding Leadership & Organizational Culture

Before we can fully understand how to build a customer-centric culture, we must first establish the foundations that shape it—leadership and organizational culture.

Defining Leadership

What is the difference between “management” and “leadership”? Sometimes the terms are used almost interchangeably, but there is an important difference between them. Management includes various aspects, one of which is the leadership function. Learning to distinguish between the two can help individuals evaluate and develop their leadership skills.

Leadership is about establishing a direction and influencing others to follow. Management is about successfully administering the many complex details involved in a business’s operations. Leadership pursues change and challenges the status quo, whereas management seeks to control and provide stability within the existing circumstances.

Both management and leadership are necessary skills, and they often overlap with one another. In most settings, the role of a manager includes both leadership and management functions. Leadership skills are needed to set the vision, and management skills are needed to implement a plan to achieve that vision. Recognizing the difference between leadership and management, however, can help individuals focus on developing their skills in both arenas. The greatest success comes when strong leadership is paired with effective management.

Leadership Styles

It’s fairly easy to open the doors of a business, assign tasks to employees, and serve the first customers—but that doesn’t mean the service will be excellent. What if your instructions are unclear, ignored, or interpreted differently by each employee? Maybe your team doesn’t like your approach and starts to disengage. On top of everything else, you don’t simply want to complete transactions; you want to inspire your employees to deliver outstanding customer experiences. How do you accomplish this goal? How do you become an effective leader, and what style should you use to motivate others to achieve organizational goals?

Unfortunately, there are no definitive answers to questions like these. Over time, every manager refines their own leadership style, or way of interacting with and influencing others. Despite a vast range of personal differences, leadership styles tend to reflect one of the following approaches to leading and motivating people: the autocratic, the democratic (also known as participative), or the free rein.

• Autocratic style. Managers who have developed an autocratic leadership style tend to make decisions without soliciting input from subordinates. They exercise authority and expect subordinates to take responsibility for performing the required tasks without undue explanation.
• Democratic style. Managers who favor a democratic leadership style generally seek input from subordinates while retaining the authority to make the final decisions. They’re also more likely to keep subordinates informed about things that affect their work.
• Free-rein style. In practicing a free rein leadership style, managers adopt a “hands-off” approach and provide relatively little direction to subordinates. They may advise employees but usually give them considerable freedom to solve problems and make decisions on their own.

At first glance, you’d probably not want to work for an autocratic leader. After all, most people don’t like to be told what to do without having any input. Many like the idea of working for a democratic leader; it’s flattering to be asked for your input. And though working in a free rein environment might seem a little unsettling at first, the opportunity to make your own decisions is appealing to many people. Each leadership style can be appropriate in certain situations.

To illustrate, let’s say that you’re leading a group of fellow students in a team project for your class. Are there times when it would be best for you to use an autocratic leadership style? What if your team was newly formed, unfamiliar with what needs to be done, under a tight deadline, and looking to you for direction? In this situation, you might find it appropriate to follow an autocratic leadership style (on a temporary basis) and assign tasks to each member of the group. In an emergency situation, such as a fire, or in the final seconds of a close ball game, there is generally not time for debate—the leader or coach must make a split second decision that demands an autocratic style.

But since most situations are non-emergency and most people prefer the chance to give input, the democratic leadership style is often favored. People are simply more motivated and feel more ownership of decisions (i.e., buy-in) when they have had a chance to offer input. Note that when using this style, the leader will still make the decision in most cases. As long as their input is heard, most people accept that it is the leader’s role to decide in cases where not everyone agrees.

How about free rein leadership? Many people function most effectively when they can set their own schedules and do their work in the manner they prefer. It takes a great deal of trust for a manager to employ this style. Some managers start with an assumption of trust that is up to the employee to maintain through strong performance. In other cases, this trust must be earned over a period of time. Would this approach always work with your study group? Obviously not. It will work if your team members are willing and able to work independently and welcome the chance to make decisions. On the other hand, if people are not ready to work responsibly to the best of their abilities, using the free rein style could cause the team to miss deadlines or do poorly on the project.

The point being made here is that no one leadership style is effective all the time for all people or in all corporate cultures. While the democratic style is often viewed as the most appropriate (with the free rein style a close second), there are times when following an autocratic style is essential. Good leaders learn how to adjust their styles to fit both the situation and the individuals being directed.

Transformational vs. Transactional Leadership

Theories on what constitutes effective leadership evolve over time. One theory that has received a lot of attention in the last decade contrasts two leadership styles: transactional and transformational. So-called transactional leaders exercise authority based on their rank in the organization. They let subordinates know what’s expected of them and what they will receive if they meet stated objectives. They focus their attention on identifying mistakes and disciplining employees for poor performance. By contrast, transformational leaders mentor and develop subordinates, providing them with challenging opportunities, working one-on-one to help them meet their professional and personal needs, and encouraging people to approach problems from new perspectives. They stimulate employees to look beyond personal interests to those of the group.

So, which leadership style is more effective? You probably won’t be surprised by the opinion of most experts. In today’s organizations, in which team building and information sharing are important and projects are often collaborative in nature, transformational leadership has proven to be more effective. Modern organizations look for managers who can develop positive relationships with subordinates and motivate employees to focus on the interests of the organization. Leaders who can be both transactional and transformational are rare, and those few who have both capacities are very much in demand.[12]

Defining Organizational Culture

Organizational culture is a term that can relate to any organization at all, from a church to a university. When talking about the culture of a business, you’ll often hear the term “corporate culture.” Corporate culture is, according to INC Magazine: the shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature. Corporate culture is rooted in an organization’s goals, strategies, structure, and approaches to labor, customers, investors, and the greater community. As such, it is an essential component in any business’s ultimate success or failure.[1]

Like families (or nations), corporations have cultures. Sometimes those cultures “just happen.” All too often, when corporate culture is not intentionally created, the culture winds up being disjointed or even antagonistic. Employees are all working toward different goals, in different ways, with different approaches. For instance, although Antonio is dedicated to the idea of crafting quality products, Leila is eager to sell as much product as possible (even if the quality is only so-so). Meanwhile, Tyler thinks the company should start making a wider range of products and is trying to push his ideas forward during sales meetings.

The idea of corporate culture developed from our knowledge of national, regional, and family cultures, and many theories exist about what makes a good (or poor) corporate culture. To get an idea of what a corporate culture looks like, think about families you know well. Some are formal whereas others are easygoing. Some work together toward shared goals whereas others encourage individuality and independence. Some are always having fun whereas others seem to be in a permanent state of internal conflict. We can describe corporate cultures in similar ways.

Although some businesses give little thought to corporate culture, many successful companies have cultures that are intentionally created or tweaked. Sometimes corporate cultures are the result of a founder’s personal vision. But just as often, corporate cultures are created through a collaborative effort that involves not only upper management but also managers and employees.

Corporate Culture as a Competitive Advantage

Why is it so important to have a strong, positive corporate culture? There are three good reasons:

• A strong culture helps employees, customers, and the general public to identify your corporate values. Say, for example, that your company culture values innovation. In that case, your employees will know that they will be encouraged to come up with new ideas—and your customers will know that your products and services are likely to have a creative or unique quality.
• Companies with strong, coherent cultures attract high-quality employees who believe in the same values as the corporation. Once those employees come on board, they start to feel that they “belong” because they are part of a shared culture. Employees who feel that their jobs are a great match for their personal values are more likely to be loyal to their employers. After all, they are doing what they enjoy doing for an organization that shares their ideals and goals.
• A strong corporate culture can help a corporation to build its brand. For example, Starbucks has built a culture and brand that includes very public dedication to international fair trade. Customers who care about fair trade are more likely to buy from—and stay loyal to—Starbucks.

With strong leadership and a clear organizational culture in place, the next step is ensuring that customer experience becomes a true priority across the business. Once customer experience is established as the guiding focus, companies can then develop a service vision that unites employees around shared goals.

Make Customer Experience a Priority

Leaders in customer experience pursue a range of approaches to overcome such complexity of making the customer experience a priority. Several elements form the core of their successful efforts. They include the following:^[5]

1. Set up a dedicated team for customer experience. This allows a company to maintain a continuous focus on customer experience across segments, brands, geographies, and functional areas.
2. Establish C-suite engagement. Given the cross-functional collaboration required, the CEO must make the customer experience an active priority.
3. Fit the customer-experience team into the organizational fabric. If not, customer experience transformation efforts may drown in a sea of organizational confusion.

“Disney makes use of a simple leadership framework that links the delivery of business results to customer satisfaction and measures that satisfaction via two key indicators: “propensity to return” to a Disney experience and “propensity to recommend.” Disney’s framing also stipulates that the way to satisfy customers is through engaged employees. For Disney’s business leaders, the logic is clear: their task is to develop excellent employees, who in turn help to create satisfied customers, leading to business results.”^[6]

Apply Leadership Principles

To create a customer-centric organization, leaders apply the following principles:

1. Model specific behaviors.  Managers must walk the walk.  Customer centricity is taught to agents and should be supported in the company vision, mission, and values as well as modelled by management.
2. Foster understanding and commitment among employees and managers. Making a connection between improved customer satisfaction and bottom-line financial results will help all employees understand the importance of exemplary customer service.
3. Develop capabilities and skills. Train agents in customer-centric behaviors, but also train management so they are able to coach and support the team.  Hire for fit.
4. Reinforce behaviors through formal mechanisms. Financial incentives can help, but nonfinancial recognition schemes are more powerful.

Watch “The 8 Habits of Customer-Centric Leaders” YouTube video to learn what customer-centric leaders do.^[7] Closed captioning is available on YouTube.

https://youtu.be/Iqo6IEgnD2E

Create a Customer Service Vision

Companies with strong service cultures take the time to clearly define what outstanding service means to them.  They do this in their mission and vision statements, in their employee training, in their advertising, and in the behavior of their managers and leaders. They ensure their products, services, and processes are designed with consumer wants and needs in mind. Being customer-centric means that every department in the company understands that the customer comes first and everything they do is to obtain, retain, and build relationships with customers.

A customer service vision is a shared definition of outstanding service that gets all employees working in the same direction. A strong customer service vision has three characteristics:^[8]

1. It’s simple and easy to understand. A vision should not be too complicated or too long; it should bring clarity so all employees can understand it and act accordingly.
2. It’s focused on customers. Focusing on profit or expanding market share may be the end goal, but customer focused companies achieve those goals by focusing on their customers.
3. It reflects who the company is now, and who the company aspires to be in the future. It should be grounded in reality so the vision feels authentic to employees. It’s about what is working for the company now and what the company will build upon for the future.

Example vision statements:

Amazon – “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.”^[9]

Disney – “To make people happy.”^[10]

IKEA – “To create a better everyday life for the many people.”^[11]

Loreal – “To provide the best in cosmetics innovation to women and men around the world with respect for their diversity.”^[12]

Microsoft – “To help people throughout the world realize their full potential.”^[13]

Starbucks – “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”^[14]

Zappos – “To provide the best customer service possible. Deliver ‘WOW’ through service.”^[15]

Engage Employees with the Customer Service Vision

Employees need to know that organizational success is defined by the customer service vision. Engaged employees help fulfill the vision with the customers they serve. There are three questions you can ask employees to evaluate employee engagement in a customer centric organization. ^[16]

1. What is the customer service vision? Employees need to know it and where it is.  It may be in a book, online, written on a poster, or in some other location.
2. What does the customer service vision mean? Employees should more than just memorize it, they should be able to explain it in their own words.
3. How do you personally contribute? Employees should be able to describe how their individual role contributes to fulfilling the vision.

The customer service vision should be formally announced or introduced by the CEO or a high-ranking manager.  Companies must hire for the right fit; hire candidates who agree with or have personal goals aligned with the company vision. Training should then be provided to employees to help them understand how their role aligns with the company’s customer service vision. Ensure employees receive some one-to-one coaching from their immediate supervisor as needed. The goal is to verify that employees can answer all three of the above questions consistently. Finally, empower employees to enable them to provide excellent customer service and care and sure company leaders are demonstrating their belief in the vision through their everyday behaviors, discussions, and decisions they make.

Empower Employees to Deliver the Customer Service Vision

Employee empowerment means giving employees the authority, right technology, systems, and freedom to go the extra mile to make customers happy. This requires thorough training of customer service teams to enable employees to identify and act on the opportunities to enhance the quality of support. Giving employees ownership for their own work will not only boost motivation but also increase service quality, team productivity, and quick decision-making.”^[17]

Empowerment doesn’t mean allowing employees to do whatever they want. It means enabling them to deliver service that’s consistent with the customer service vision. Empowered employees need resources to serve their customers, best-known procedures for serving consistently and efficiently, and the appropriate level of authority to handle unusual or unexpected situations.^[18]

Empower employees in the following ways:

• Educate the frontline call center agents on branding, culture, and values so they deliver service that is consistent with these values.
• Provide agents with a 360-degree view of customers so they can make data-driven decisions.
• Equip agents with the right tools so they can resolve issues at the first point of contact.
• Cultivate innovation by encouraging autonomy and creative problem-solving.
• Make agents an integral member of the organization so they are proud to provide amazing service.^[19]

Watch the “Customer Experience: Empower Employees with Decisions” YouTube video below to learn more about employee empowerment.^[20] Closed captioning is available on YouTube.

Set SMART Goals Aligned with the Customer Service Vision

Set goals that are SMART – Specific, Measurable, Attainable, Realistic (Relevant), and Time-bound. Goals for agents should be clear and attainable. Goals for the contact center should be realistic.  All goals should be time-bound and performance measured.

If agents are rewarded, for example, for the number of calls they complete each day, then employees may rush to finish a call to take another one.  This may reduce customer satisfaction and may leave some customers without their problems resolved. That would be an example of setting a bad goal. If time is measured on each call and an expectation or limit is set, then some agents might transfer the call or end the call before the customer issue is resolved, leaving the customer with a poor image of the company’s customer service. Again, an example of a bad goal.  Good goals rely on intrinsic or internal motivation while bad goals rely on extrinsic motivation like incentives.

Create Quality Standards

1. Customer expectations. But these are always changing so companies must continually innovate. Meeting customer expectations is a combination of people, processes, and technologies.
2. The organization’s mission, vision, and values. Quality standards should support or align with these.
3. Stakeholders such as government, suppliers, employees, shareholders, industry associations, community (and customers, but customers are in a category of their own).

“Customers frequently rank consistency as a primary driver of good customer service. To monitor the quality and consistency of your team’s replies, consider implementing quality assurance or conversation reviews. Providing ongoing feedback through reviews can ensure that your entire team is delivering excellent customer service.”^[24]

Sometimes there is resistance to creating quality standards as some managers feel these standards are too rigid and unnecessary.  The best way to combat resistance is to demonstrate what quality is and the costs when quality is lacking.

 Use Metrics that Matter

“Enhancing your organization’s customer-centricity would be next to impossible without data. In order to make decisions that will positively impact your customers, your front-line staff, managers, and executives must be referencing real-time and historical data. Enhance customer-centricity by:^[25]

• Utilizing point-of-service (POS) and customer relationship management (CRM) software that provides comprehensive metrics.
• Empowering front-line with real-time and historical data so they can make informed decisions that enhance the customer experience.
• Analyzing key performance indicators (KPIs) and making decisions based on these metrics.
• Creating a culture of continuous data-driven improvement.
• Ensuring that metrics are aligned to the customer lifecycle and key touchpoints (e.g., Customer Lifetime Value, Net Promoter Score, etc.).
• Connecting staff feedback and performance evaluations to metrics.

Modern, customer-centric organizations recognize the importance of measuring customer experience and staff behavior more than quantitative metrics. Adopting a customer-centric approach to management does not imply that there should be no productivity-based measures in place. Instead, it means that oranizations should emphasize more on improving customer satisfaction. ^[26]

Watch the “How to Reduce AHT in a Call Center” YouTube video below to learn more about reducing average handling time in a call center.^[27] Closed captioning is available on YouTube.

Of course, every company should measure performance in alignment with quality standards, and much of this is done through metrics and using technology.  There are other ways to assess the quality of service interactions, some of which include: observation, role-play, coaching sessions, recorded interactions, customer input, and mystery shoppers who use services and provide reports.

When measuring the degree to which quality standards are being met it is important to consider the scoring system as it should directly reflect your quality standards and behaviors you want to encourage. A flawed system may, in practice, under-emphasize critical behaviors and over-emphasize non-essential skills. You’ll need to test and modify accordingly.^[28]

References

(Note: This reference list was produced using the auto-footnote and media citation features of Pressbooks; therefore, the in-text citations are not displayed in APA style).