people & culture
How to X-ray your organisation for
customer-centric health
Steve Macaulay and Sarah Cook
are concerned about the ill-health of
many organisations when it comes
to focusing on their customers. And
here they have some advice on how
to conduct your own customer-centric
health check - and you can go online
(www.customermanagement.co.uk)
to complete your own healthcheck
questionnaire
B
24
usinesses that survive and grow are those which
stay truly customer-focused: a healthy business is a
customer-focused one. If you were able to take an
X-ray or a scan to your organisation, what would you find?
Weak or broken bones? Cancerous tumours? Build-up of
toxic deposits? Lack of nourishment and intake deficiencies?
Unhealthy fat?
How healthy is your organisation? Take one aspect of illhealth which affects the customer, and often gets overlooked.
Research by Gallup shows that disengaged staff deliver poorer
levels of customer satisfaction than those that are truly
engaged. Problems such as this can accumulate over time, and
cause immense damage.
This article looks at: The nature of organisational health;
why maintaining a customer fit organisation is difficult;
frameworks for diagnosing organisational health and fitness
We will examine strategic health management and
implementation skills, how to translate a company’s health
check into tangible aspects of responsibility and accountability
to drive towards a truly customer-centric organisation. A health
check is more challenging than it first appears. Familiarity can
cause managers to overlook or excuse difficulties, resulting in
ignoring difficult health issues, or failing to overcome inertia
and hostility to change. Fear, insecurity and authoritarian
management can stifle free talk about looming problems which
affect the customer and the organisation.
Railtrack, Marconi, and many well-established car companies
are examples of companies which have encountered serious
health problems. At Railtrack, for example, it took a major
accident to cause a fundamental review; at the time of the
court findings on the Hatfield disaster the successor company
Network Rail’s chairman said: “In the three years that (Network
Rail) has been in-charge of the nation’s railway infrastructure,
it has made sweeping changes to its priorities, to the company
structure, and to its people and processes”.1
September/October 2006
people & culture
One acid test of how removed your senior people may be from customers is who replies
when a customer writes to the CEO? Remoteness frequently leads managers to rarely
see the customer face-to-face. This can mean that management decisions are far from
customer-friendly, such as rules and regulations that work well for the organisation but not
the customer
Managing for the good of the customer
We have long held that there are five essentials for customer
focus, and we expect a healthy organisation to deliver on these:
l Make what matters to the customer your priority.
l Make positive personal contacts with the customer.
l Find ways to improve.
l Do what you say you will.
l Have well trained and motivated contributors who work well
together.
We suggest that making a habit of checking the following data
will give you vital clues on how you are doing: Speak to targeted
customers using a structured format; review or undertake
customer research; hold stakeholder focus groups; examine what
all your measures tell you; regularly consider the implications of
what customer, employee, process and improvement measures
are telling you.
There are a number of tools you can use to surface issues
and scan your organisation. We have found that one of these,
the Seven S Framework, developed by consultants Mckinsey, is
a wide-ranging and valuable tool. We have also suggested two
other useful tools.
Toolkit One: Seven S Framework
The Seven ‘Ss’ is a valuable holistic health diagnostic. It looks
at seven critical overlapping areas of an organisation: Structure;
Strategy; Shared values; Style; Staff; Skills; Systems.
We worked with one organisation in the automotive
industry to undertake a customer health check, using the
Seven S Framework. By holding a series of customer, dealer
and employee focus groups, it soon became clear that there
were some parts of the business that were weak or broken, yet
had got overlooked. Managers were so caught up in their own
organisation that they did not appreciate the extent to which
these problems were hindering the successful retention of
customers to the brand.
l Structure - organisational structure gets tampered with at
frequent intervals, often with little benefit to the customer. A
key question in any reorganisation is how will this benefit the
customer?
l Strategy - the strategy of an organisation shapes its
structure and its long term well-being. What senior managers
do with any strategy is critical and what they really believe
about customers shows in their behaviour.
l Shared values - where do customers feature? Many
businesses espouse customer-oriented organisational values
but do people really live them? First Direct is a good example
of an organisation that recruits and develops its employees
against a clear set of customer-oriented values.
Examples of organisations measuring expectations, values
and practices in relation to the customer include: FedEx has
developed nine Service Quality Indicators, all tied to customer
expectations; Barclays Bank bases its rewards to managers on
comprehensive feedback from colleagues, staff and customers.
l Style - a customer focused leadership style is one which
is very active in satisfying and supporting employees and
customers. Herb Kelleher at Southwest Airlines, and Carl
Sewell at Sewell Village Cadillac became legendary examples
of leaders with a genuine customer obsession which enlivened
and enriched their employees, their customers and the
businesses.
One acid test of how removed your senior people may be from
customers is who replies when a customer writes to the CEO?
Remoteness frequently leads managers to rarely see the customer
face-to-face. This can mean that management decisions are far
from customer-friendly, such as rules and regulations that work
well for the organisation but not the customer.
BUPA is an organisation which knows that the success of its
increased customer-focused efforts rests on careful attention
to its employees. It has successfully developed its performance
management systems to link the attainment of customer
satisfaction, individual and team performance.
l Staff - the quality of an organisation rests on its people.
Customer orientated organisations such as the department
store Nordstrom in the US emphasise the attitude and
interpersonal skills needed to interact effectively with
customers.
l Skills - it is generally now accepted that a key criteria of good
managers is their ability to relate to others. Yet too many
managers are promoted on the basis of their technical rather
than interpersonal qualities. To what extent is this true within
your organisation?
l Systems - he systems which organisations use to interact
with their customers need to be designed with the customer
in mind. An example of part of one internal audit looked
at the HR systems for customer orientation, reviewing:
recruitment of new staff; measurement of performance;
planning career development; reward of customer-orientated
behaviour
Wayne Burrell of Enterprise Rent-a-Car, the largest car rental
company in the world, knows the value of customer-led reward
systems: “Customer satisfaction won’t be taken seriously in your
business until you tie it into your promotion and reward system”.
To reinforce this point, he refused to promote a high-selling
manager on the basis of poor customer satisfaction ratings.2
Toolkit Two: Cultural DNA Audit
Group norms, standards and values can strangle or promote
customer-friendliness. Culture and change often appear together,
yet there is frequently insufficient insight into how to change
an organisation’s culture to become more customer-friendly,
partly because it is so elusive. One way to understand culture
is to use an analytical map. Gary Neilson and Bruce Pastrnack3
call their map, DNA, to explain the personality of different
organiaations. Like DNA in a body, organiaational DNA is a
series of interlocking aspects of the organisation which make up
the body and soul of that organisation.
September/October 2006
25
people & culture
We worked with one organisation in the automotive industry to undertake a customer health check,
using the Seven S framework. By holding a series of customer, dealer and employee focus groups, it
soon became clear that there were some parts of the business that were weak or broken, yet had got
overlooked. Managers were so caught up in their own organisation that they did not appreciate the extent
to which these problems were hindering the successful retention of customers to the brand
They see this organisational DNA made up of decision
making, information flows, motivators and rewards, and
structure. The analysis of DNA is best considered individually
and then discussed with groups of managers. Which profile
does your company best fit? Neilson and Pasternack distinguish
unhealthy profiles, which their surveys suggest are in the
majority, and healthy profiles which serve the customer well.
Toolkit Three: Customers’ Expectations
It is vital to include stakeholders, particularly customers’ views,
in a full health check that an organiaation undertakes.
In announcing M&S’ recent improved results Stuart Rose,
Chief Executive, explained the company’s turn-around. He said
that the business needed to listen to its customers to launch
the process of regeneration. It needed to relearn that customers
were looking for quality and value and take steps accordingly.
The business tool the Performance Prism puts stakeholders
at the heart of a customer and business strategy, on the
basis that organisations develop strategies to deliver value to
stakeholders. The Performance Prism provides a structure that
encourages managers to answer five inter-related questions
when reviewing organisational performance:
lStakeholder satisfaction - who are the stakeholders and
what do they want and need?
lStrategies - what strategies do we need to deliver value to
stakeholders?
lProcesses - what processes do we require to deliver these
strategies?
lCapabilities - what capabilities do we require to execute
these processes?
lStakeholder contribution - what do we want and need
from our stakeholders to enable all of the above to happen?
The answers to these questions help form a solid
action plan.
At express delivery company DHL UK, the executive team
set out to improve its business by revamping its business
performance review process. In a series of facilitated workshops,
the team identified the wants and needs of its stakeholders,
and how each contributed to the success of the business. They
developed a set of questions structured around the Performance
Prism and anchored them to what made the business perform
successfully. To answer these questions, performance measures
were identified which would provide the necessary data.
The next stage was to extend and develop a culture of regular
performance review, with all operations and sales managers
structuring their local performance reviews in the same way.
And finally...
26
Once ill-health sets in, failure to pick up problems and
opportunities at an early stage could be disastrous for you and
the customer. It is often said that if you don’t understand and
manage your business, it will manage you. The same could be
said of tracking of monitoring the health of the organisation.
September/October 2006
HOW’S YOUR HEALTH?
Unhealthy Profiles
Healthy Profiles
lThe Passive-Aggressive Organisation
seems responsive, but aggression and
difference of opinion is buried and
works against getting things done for
the customer.
lThe Over-managed Organisation has
too many layers for today’s needs,
and its preoccupations become
internal, not external.
lThe Outgrown Organisation
represents ‘tight clothes’ in a
growing, changing body, where
central controls and outdated ways
of operating do not match today’s
needs and consequently customers
get left behind.
lThe Fits and Starts Organisation
dissipates its considerable talent
and energy as it pulls in lots of
directions, getting results haphazardly
by throwing disproportionate and
disruptive effort into getting things
done.
lThe Just-in-Time Organisation
is ‘can-do’ and agile, but rather
inconsistent in performance. Keeping
a constant eye on its goals it is
often responsive to customer needs.
However, it runs the risk of firing off
in wrong directions and burning out
its people, but when it does succeed,
it does so well.
lThe Military Precision Organisation is
a master of processes, measurement
and control and takes pride in
minutely managing the details of
execution and delivery. This works
very well until new or different needs
emerge and the response then seems
clumsy or inappropriate.
lThe Resilient Organisation maintains
flexibility and restless energy as
it keeps its objectives in view,
riding through any problems, and
responding to customers’ changing
needs with confidence and agility.
How do you change an unhealthy to a healthy profile? The first step is a precise and
honest discussion. The second is a detailed and step-by-step plan to systematically
go through the components of the organisation and start to change all conflicting
parts of it which point away from the customer. For example, are you rewarding cost
control and profitability and ignoring customer satisfaction?
Online healthcheck questionnaire
If you want to check the health of your organisation then go to our website
www.customermanagement.co.uk and complete the special healthcheck
questionnaire based on the Seven S Framework
AUTHOR INFORMATION
Steve Macaulay and Sarah Cook. Steve is a
Learning Development Executive at Cranfield
School of Management. Sarah is Managing
Director of customer and leadership
development specialists, The Stairway
Consultancy Ltd. Steve can be contacted
on 01234 754426 Sarah on 01628 526535,
or via email s.macaulay@cranfield.ac.uk , or
sarah@thestairway.co.uk
Key
1
etwork Rail Press Notice
N
September 2005
2
uropean Conference on
E
Customer Management 2006
3
esults: Keep What’s Good, Fix
R
What’s Wrong, and Unlock Great
Performance, Capstone 2006