In today’s competitive market place there can be few organisations who do not desire to be customer-focused, and even fewer who do not recognise how important employees are in delivering this. The bad news is that still few are truly succeeding. As the UK economy is increasingly being led by the service sector rather than manufacturing, this focus upon the impact of the employee is becoming a key issue for those who want to maintain a competitive advantage.

In this article the authors investigate the reasons for the gap between realisation of this situation, and delivering against it. They also examine the steps that can be taken to bridge this void.

Organisational alignment

Most organisations have vision and or mission statements. Many also have values which underpin these. However, few organisations:

base their values on customer feedback
involve their employees in the development of values
link these values to their brand
encourage their employees to align their behaviours to the values
reward their employees for ‘living the brand’

As a consequence organisational values such as ‘honesty’, ‘teamwork, ‘partnering’, ‘creativity’ although espoused by businesses, become no more than empty words: meaningless to both the customer and the employee.

Heskitt et al have researched and developed the service-profit chain which shows the inter-connectivity between internal and external service and profitability. Research is not new but many organisations still do not recognise that employees need to live the brand promise in order to both attract and retain profitable customers.

Organisations such as Virgin, Nike and US retailer Nordstorm, have succeeded in creating strong brands with powerful brand promises. Through listening to customer needs and via consultation with employees they have been able to identify brand values which form the backbone of how they do business with the customer and how employees are managed.

Top team clarity

The ‘inside out’ concept starts at the top of the organisation. Employees look to the top team to model the desired behaviours. The authors have worked with many Boards who have encouraged employees to ‘live the brand’. Yet their own behaviour has been far from consistent with the desired brand values. Little wonder that the values are not adopted on a wide spread basis.

Organisations such as Barclays and AT&T have developed leadership behaviours and employee competencies which directly reflect brand values. These in turn are linked to customer needs.

Members of top teams need to regularly assess to what extent their behaviours are aligned to the brand. They need to also encourage this process across the organisation.

Feedback instruments such as 360 can help in identifying how well an individual’s behaviours match the desired organisational values. 360 provides a fully rounded picture of the perceptions of a person’s behaviour based on manager, colleagues, customers and team members feedback. Experience shows that in order to set a positive role model, leaders in the business need to receive, act on and communicate the findings of their own 360. Round tables of senior managers and staff as well as ‘town hall meetings’ and open forums also encourage a climate of openness and listening.

Listen to customers – both internal and external

Many companies today particularly in the service sector carry out some form of customer satisfaction measurement. When it comes to budget setting, the vast majority of organisations approve the budget for asking their customers for feedback on how they perceive the organisation’s performance. However, very few companies develop budgets around what should be done as a result of the survey findings. It is this “lack of resources” that prevents the vast majority of companies successfully implementing countermeasures based around the customer feedback and is the major reason for lack of service improvements.

This problem is not caused by a lack of desire by companies to improve things for customers, but a lack of alignment between a desire to listen to customers and their corporate strategies. Although many companies do have a strategic vision of being “customer focused”, or “customer led” they struggle to implement this through functional strategies such as the Marketing and Customer Care strategies.

One of the trends over recent years has been to believe that the implementation of a Customer Relationship Management (CRM) system will deliver the corporate vision. Yet many CRM system have failed to deliver – why?

Recent findings on the progress of CRM programmes include:

CRM is a fantasy in most organisations …. Over 60% of CRM projects end in some form of failure – Gartner Group
80% of all CRM initiatives fail, and provide no reasonable ROI – vSente Consultancy
More than 90% of Meta clients are examining the financial justifications for CRM … many are taking a step back – Meta Group

Fundamentally CRM is a software package that will manipulate data to provide one view of the customer and further guidance on how to:

segment their customers
how to target their customers
how to package their products to the customer
how to sell their customer base
how to bill their customer

CRM does have some success with this, but the crucial element that gets overlooked with CRM, is that on its own it does not help you understand your customer needs. It is always about what you as a supplier can do to your customers, and not what you can do with your customers. To be “customer focused” you need to work in partnership with your customer and allow them to opt into the relationship. Once customers have opted in, trust and co-operation can be developed which in return brings mutual benefits. In addition for CRM to be successful employees need to ‘buy-in’ to the process and to want to make it work. Again, a high degree of trust and co-operation are required here too.

Building trust

So how do you gain customers’ and employees’ trust? You have to start with looking at what are the key elements of any relationship, and these are true for both the customer / supplier and employee / employer relationship:

accessibility
responsiveness
kept informed
knowledgeable people
promptness
promises kept
follow up
no surprises
do it right first time

This list essentially provides a checklist for any customer or employee satisfaction measurement, as only when you are performing well against these will your customer / employee start to trust the relationship. The actual words of the questionnaire would be developed around talking to both employees and customers to ensure that the questions are phrased in a way that is meaningful to the customer, and actionable by the company.

Maximise the value of customer feedback

So what are companies doing today? Research by Customer Champions into companies across Europe indicates that the vast majority are gaining customer feedback, but as the diagram below illustrates, it is what happens after that data has been collected where the real challenges start.

The first problem area seems to be the communication of findings to employees; an essential aspect if the company is to achieve its ambition of being customer focused. After all, it is these employees that will be delivering the countermeasures against issues raised by customers. The authors have found that companies often recognise they have problems to resolve with the customer but they score relatively poorly on how well they communicate and develop improvement plans to both their customers and their employees. It appears that once a poor communicator, companies are sadly consistent in this aspect of their business, no matter who the audience are.

This poor communication of customer feedback results in individual employees not understanding how it impacts their roles and responsibilities, which in turn limits their ability to drive any change within the company and their desire to ‘live the brand’.

The inevitable conclusion to this lack of communication leading to lack of activity is that all parties will not perceive any value in providing feedback, and instead will simply look to build relationships with other parties.

In order for this gap to be closed, work needs to be done on translating customer feedback into the context of desired behaviours. This has to be looked at from all parties’ points of view i.e. Company, Customer, and Employee:

What does the company see as the desired behaviours of its customers?
What do both the customer and employer see as desired behaviours of the employees?
Are these aligned?
What are the employees’ desired behaviour of the company?

Clearly identifiable desired behaviours will result in allowing employees to have clear roles and responsibilities – a key driver in employee loyalty.

Frequency of feedback

In too many companies the listening to customers is taken as an annual event, with this single snapshot of customers’ views being taken as the definitive view of the customer. Ironically this point is often made when the answers received do not match up with expectations, and the research is seen as having “taken place at the wrong time”, but strangely this is never raised when the findings exceed expectations!

Customer feedback, whether external or internal, needs to be a continuous event. The annual customer or employee satisfaction measurement programmes may be taken as providing some of the headlines, but it is more regular feedback that will not only provide the detail behind the headlines, but also provide evidence of the impact of any countermeasures that have been deployed.

Having established the need for frequent feedback, the next issue is to link employee and customer feedback. This has to start with a strong belief that it is employees who ultimately deliver what the customer needs. This view was seized upon by Harley Davidson who carried out extensive research into what their customers wanted, and then empowered their employees to deliver it. John Russell, Vice President and Managing Director (Europe) for Harley Davidson Motorcycles sees what he describes as “Superior Customer Engagement” being delivered through “Liberating people to do what’s right for the customer – instinctively”.

Southwest Airlines are frequently recognised for their exceedingly high levels of customer satisfaction. Their mission statement detailed below, clearly states how they see this being delivered through their employees:

"Southwest Airlines is dedicated to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of SWA. Above all, Employees will be provided the same concern, respect, and caring attitude within the Organisation that they are expected to share externally with every Southwest customer."

Linking the two different views of internal and external customers is a powerful way of assessing the impact of the brand. Likewise in order to get a full picture, best practice is to include suppliers as an audience as well as evaluating how customers see your competitors to identify strengths and weaknesses.

Acting on survey findings

As well as communicating the feedback of customer and employee surveys, senior management need to ensure that service providers are involved in the resolution of customer issues. This can be encouraged via the use of service improvement teams and action groups. Often training and coaching interventions need to be designed to support desired behaviours. Organisations such as BUPA have successfully developed leadership programmes, supported by 360 findings, to allow individuals to refine and test customer-value based leadership behaviours. They have also included all employees in brand awareness workshops with the intention of allowing employees to see how their behaviour impacts on the customer.

Embedding customer-orientated behaviours

In order to sustain a customer focus, organisations need to ensure that customer and employee feedback is regular and that brand values are in-line with customer and employee needs. One organisation with whom we worked recently found that its customer values and desired employee behaviours that had been developed five years ago needed to be revisited and updated in the light of customer and employee feedback. The benefit of clear customer-orientated values and behaviours and of regular feedback is that it provides a framework against which employers can:

recruit new staff
measure performance
plan career development
reward customer-orientated behaviour

thus helping to create a customer-focused culture.

Ultimately the effectiveness of this approach can be assessed via such measures as the balanced scorecard, increases in the number of loyal customers, profitability and growth.

How customer-orientated is your organisation?

Self assessment checklist

Does your management team meet with customers at least once a month? (even when there isn’t a problem)
Does customer service appear at least once a month on the top team’s agenda?
Does the management team give equal weighting to customer data as they do to financial data?
Do you have a formal customer satisfaction measurement programme?
Does the customer satisfaction measurement programme involve regular, monthly feedback from customers?
Are the customer feedback and employee feedback programmes aligned?
Are your organisation’s values based on customer and employee feedback?
Have behaviour codes and competencies been developed based on values?
Do individuals receive 360 degree feedback on how well their behaviours are aligned to the brand?
Do all employees have a good understanding of how their job provides added value to the customer?
Do individuals receive encouragement from their manager to ‘live the brand’?
Do all employees have a good understanding of what are the current customer concerns?
Are service providers involved in service improvement planning and implementation?
Do all employees have a good understanding of what is being done to remove customers’ concerns?
Do employees sometime act as customers, to experience for themselves what it is like to be a customer of theirs?
Are training interventions in place to increase customer awareness and align people’s behaviour to the brand?
Are employees selected for their customer orientation?
Are employees rewarded upon customer feedback and service orientation? (this can be non-materialistic recognition as well as financial)?
Is the balanced score card used to measure customer orientation and performance?
Is there a clear link between customer satisfaction, employee satisfaction and profitability?

Take the next step

To discuss how to create a customer-orientated culture, please contact Customer Champions.

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