How to Become Customer CentricBy Faisal Hoque | Posted 2008-04-21 Email Print
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DeWalt proves that focusing on customer needs and experience, and aligning organizations toward meeting those needs, will lead to greater business advances.
Partners and networks provide ideas and capabilities the organization lacks. Remember, most smart people work somewhere else. In addition to its in-house capability, Black & Decker has an open mind toward acquisitions that will bring new products and product categories, as well as human talent.
Customers have ideas, too. They are the ultimate reality check. No innovation strategy will work without a laser focus on customers, and this focus must adjust as existing customers need change, new customers appear and competitors seek to entice them all away. A deep understanding of the customer is necessary. DeWalt executives surely know the old construction saying, “People don’t buy a quarter-inch drill; they buy a quarter-inch hole.”
Customer-centric innovation begins with a “business architecture,” a map of all business processes and how they affect the customer. With this picture of the business, the company can then ask: What would work better? Is the enterprise genuinely serving the customer or does it just pay them lip service? Is the organization properly configured? Are there redundancies and inefficiencies that cause delays or raise costs? Does it need better information at any point? “Best state” models can be created and tested before any changes are made.
Research at 342 companies by Wharton School Prof. George Day revealed that success comes from three sources: giving customers priority and empowering employees to serve them; aligning the organization through incentives, accountabilities and structures; and generating relevant information. Of the three, Day found that orientation and configuration are more important than information. That’s why customer relationship management (CRM) software systems often fail: Companies are just sifting data without changing the way they work.
Management 101 strategies of this nature can directly affect the bottom line. DeWalt’s U.S. power tool revenues have grown from $150 million in 1991 to more than $2 billion today, and its share of the professional power tool market has grown from just over 10 percent to 50 percent. Such is the power of customer-centered innovation.
FAISAL HOQUE is the chairman and CEO of BTM Corporation. BTM innovates new business models and enhances financial performance by converging business and technology with its unique products and intellectual property (IP). © BTM Corporation
To learn more about Innovation, visit http://www.btminstitute.org