"Customer demands are getting harder and harder to meet. That's great because it's getting tougher for our competition to survive." — Comment from the CEO of a very successful company
Effective teams, organizations, and leaders exist to serve others. And those who provide the highest levels of service/quality enjoy the richest rewards. That's not just some platitude or warm and fuzzy theory; it's become a well-proven fact. In Firing on All Cylinders I reviewed much of this evidence. I showed that those organizations with the highest service/quality levels have the highest levels of growth in revenue, customer satisfaction and retention, market share, productivity, safety, and employee morale while also reducing costs. So it's not surprising that the best service/quality leaders are also profitable leaders.
Since writing Firing on All Cylinders, the research continues to pour in. My files are bulging with study after study showing that outstanding service/quality performance is one of the key contributors to outstanding financial performance.
It's nothing new. Peter Drucker has been reminding us for decades now that the only reason for the existence of any business is to get and keep customers. Winston Churchill once said, "If you aim to profit, learn to please." A century ago, Russell Conwell would conclude his famous "Acres of Diamonds" speeches by urging his listeners to start their search for riches by "first knowing the demand." He continued, "You must first know what people need, and then invest yourself where you are most needed."
Understanding and managing to current customer expectations means having both the will and the way. We must first agree that our customers' expectations and perceptions of the value they receive from us is a key driver of our business. Then we need to systematically turn soft customer expectations and perceptions into hard, manageable data. That calls for the discipline of a rigorous management system and process.
A service/quality improvement system can be boiled down to three major steps: (1) Identify Current Customers/Partners; (2) Prioritize Expectations; and (3) Gap Analysis. These steps are part of the rigorous goals, measurements, and standards we need to continually improve our current products and services to our existing customers.
But these management steps need to be counterbalanced with the leadership actions of exploring, searching, and creating tomorrow's markets and customers, innovation, and organizational learning.
Lots of Customer Talk, Little Action
"Ninety-five percent of managers today say the right thing. Five percent actually do it." — James O'Toole, leadership professor, quoted in the Fortune article "The New Post-Heroic Leadership"
We have spoken to, or worked with, hundreds of management teams interested in becoming more "customer-driven." Many aspire, some understand, but only a few truly do. Despite all the proclamations, catchy advertising slogans, and customer service publicity, service levels have improved only marginally in the last few years. As Harvard Business School professor Rosabeth Moss Kanter puts it: "Despite the recent media coronation of King Customer, many customers will remain commoners...most businesses today say that they serve customers. In reality, they serve themselves."