How the Best Companies Think About Markets and Customers
We are preoccupied with high-performance organizations. These companies are role models of the business community. So, what are these organizations like and what do they do differently?
i4cp has been studying the people practices of high-performing organizations for decades; we have developed a Market Performance Index that sorts high and low performing organizations, and the respective people practices that get fleshed out in a proprietary “People-Profit Chain” model.
Preceding i4cp’s annual conference in Scottsdale, AZ last week, we created a forum for over 100 HR leaders representing some of the most iconic and high-performing companies across the country. We learned that high-performance organizations are all about alignment with the markets they serve, where opportunities exist, and how customers rise to the top when it comes to allocating capital, headcount, and technology.
While these insights alone may not be the latest news, what was surprising was the volume of empirical evidence supporting the notion that high-performance organizations know better than anyone how to build customer-centric businesses. By a consistent factor of 3:2, high-performance companies outdo low-performers in terms of assessing customers’ future needs, going great lengths to build and protect brand, collecting customer satisfaction data, and having flexible policies that adapt to customer concerns.
I had the privilege of leading an informal discussion with about 20 of these HR leaders, to go deeper on this theme of how high-performance organizations approach their market and customers. These leaders agreed that there is often a missional, well-funded, well-understood objective around the customer. Some refer to this as engagement with clients. Others refers to the objective as dedication to quality care. Others take an approach of building in hundreds of quality checks that greatly reduce the probability of a poor customer experience. And others spoke about the need to adapt to changing customer expectations as generational differences emerge.
As HR leaders, we wondered what high-performance organizations do to build in accountability for a customer-centric culture. Some address this conventionally through leadership performance management and rewards. Others create accountability at the customer level, sharing rewards with all employees who directly impact the customer experience. And others measure customer complaints as a percentage of all transactions, and share this dashboard daily with every employee via their smart phones. We also learned that using advanced analytics, some businesses have directly linked customer retention to growth in profits.
The business climate in the U.S. is diverse, and even the definition of customer is not the same from one organization to another. However, these leaders are unanimous in their belief that the i4cp correlation data is compelling, that organizations must continue to evolve and adapt to changing customer expectations, that customers universally want to be cared for, and that company leaders set the tone for modeling a customer-centric focus.
So, what do high-performance organizations do differently? They build customer-centricity into the mission, they establish accountability for customer experiences, and leaders treat employees the way they want employees to treat customers.