The extended enterprise needs to be precisely focused on customer needs.
Let’s think about the customer for a minute–not your customer but you, the
customer. What isn’t working for you?
The cell phone company whose
calling plans and rules are so complex you’ve started looking at carriers
with no-contract deals and voice over IP alternatives.
The national bookstore chain
that sends you coupons by e-mail, but when you show up at the store says
you aren’t in their savings club, causing you to give up and buy online
from their competitor.
The supermarket that wants
you to use its loyalty card so it can know everything you buy but never
seems to have in stock the one thing you would buy every week, so you go
elsewhere.
Companies
like these are awash in technology but put at risk their most important asset: the
customer.
We in business are well aware that behind the scenes there is some
fundamental disconnect between the power technology gives them and their
business plan for using it. So what technology gives, technology takes away: Their
customers will leave eventually, and they can do so easily today because of
technology.
Peter
Drucker, the famous management writer who coined the term 'knowledge worker' once said, “The purpose of a business is to create a customer.”
Is that
really the purpose of our companies? Or are we focused intently on our
navels? Do we milk a product with needless modifications long past its useful
life? Do we hide from customers behind mind-numbing, anger-inducing telephone
trees? Do we leap out of small print and shout, “Gotcha!” at our most loyal
customers? Do we barrage them with a confusion of e-mail and snail mail simply
because we can?
If you’re
not guilty of these things (are you sure you’re not?), why do they seem so
prevalent among other companies?
Perhaps it’s a sort of deer-in-the-headlights
reaction to the frenzy of changes in technology and the competitive landscape.
Perhaps it’s because their executives are living in the short-term; they know
they will be here personally for this quarter’s numbers announcement, but can
they even imagine being here in five years?
Perhaps
it’s because they lack the tools to understand what they’re doing to the
customer and why. We don’t let our suppliers treat us this way. Companies today (think
Wal-Mart and Toyota) get actively
involved in the business of their suppliers. They seek to understand how those
suppliers work internally, to make sure what their suppliers do syncs with what
they do.
Recovering
from a customer-be-damned spiral requires a new mindset or course, but this
means more than cute slogans framed and hanging on the wall. We need a broader
perspective: We need to see our business as an extended enterprise, that
is, one that doesn’t begin or end at our four walls.
What this
means in a global, knowledge-based economy is that what we need to know very
likely resides on the outside. Most smart people don’t work for us. It is no
longer about dictating terms to a supplier, but rather learning what the
supplier might know that we don’t. In the same spirit, are we ignorant of what
our customers know?
We
haven’t been terribly good at listening to them. We often lack an “operational”
picture of our customers. That means we don’t see what the customer does with
our offering, and how and why. This is not about a customer’s SAT score. This is about aligning our
business to the needs of the customer.
We need
to understand who their customers are, what technology they employ,
whether their processes might be better designed, who their competitors are,
and where their threats and opportunities lie. And in all of this, we need to
know how we might help them get where they want to be. This applies to business
and consumer customers (yes, consumers have processes for washing clothes,
mowing yards and brushing their teeth).
We need
to understand how our processes affect those of our customers. Are our
units or divisions warring with each other for pieces of a static pie, or
studying the customer and potential customer for new ways to please them? Are
we operating inefficiently, because no one is assessing the impact of time and
cost on the customer?
Are we
still producing the same things the same way because that’s what we know, even
though the customer has moved on to something new? Are our business goals, our
activities and our technology converged, or is everyone doing his own thing?
It becomes
clear rather quickly why companies alienate us. It’s not deliberate. Who would
adopt that as a strategy? Rather, it results from a misalignment or dysfunction
in policies, procedures, processes and people.
The enterprise is not extended.
It’s not hard to spot the roots of disaffected customers in our organizational
structures, incentives and goals, information flows, and technology investments
and management–if we look at them from our customers’ point of view.
In short,we are doing it to the customer–and to ourselves.
FAISAL HOQUE is chairman and CEO of BTM Corp. BTM innovates new business models and enhances financial performance by converging business and technology with its unique products and intellectual property. © Faisal Hoque