Four Traits of Customer-Centric Leaders
A while back I worked with the head of a European bank who endeavored to shift his organization to be more commercial and customer-centric. His bank had been languishing in the middle of the pack for a number of years and his belief was that by fundamentally shifting the ways in which his organization engaged with customers, the firm would realize better results. He had a customer-centric vision for what he wanted his organization to look like and a logical plan for getting there, but he wasn’t clear on how to fully engage the breadth of the organization to put his plan into action. He knew that his vision wasn’t enough. True change requires connecting the rational plan to individuals’ emotional engagement.
Becoming a customer-centric leader starts with understanding and agreeing what is encompassed in the role of a leader. Our view is that a leader exists to mobilize others to execute the strategy and deliver results in order to create value. In the context of customer centricity, value is created by engaging with each customer as an individual—where they want, when they want, how they want—no small feat! To do this effectively means changing systems, processes, capabilities, individual mindsets, and ultimately culture.
While customer centricity starts in the heads of executives, it is their behavior that ultimately leads to successful transformation. Customer-centric leadership behavior acts as the catalyst for the wider organization to not only be engaged, but also excited. Our research suggests that there are four drivers that help leaders move their customer-centric vision out of the clouds and into everyday business:
1. Customer-centric leaders provide direction and purpose
The first driver focuses on setting the right direction and sculpting the organization’s vision for customer centricity. Sitting behind this vision must be a strategy that delivers differentiated levels of customer experience. Not a strategy for strategy’s sake, but a strategy for the customer’s sake. The strategy must be robust, take into account myriad organizational changes, and be based in reality. The “reality test” is critical as many leaders assume that their plans are appropriate for their customers and global markets without diving into real data.
TIPS TO SET DIRECTION
• Start with analytics. Understand your capabilities, resources, clients, stakeholders, and competitors.
• Check your strategic options against the values and long-term purpose of the business. Will your plan take you in the right direction?
• Don’t plan the strategy in a vacuum. Instead, make sure you consider the context of the wider organization, including other functions, service areas, and industries.
• Embrace uncertainty and contingencies. Identify scenarios based on what you’re both likely, and unlikely, to face, and create plans that respond accordingly.
2. Customer-centric leaders understand their employees are also their customers
The second driver is about engaging and exciting the organization toward the direction established. The easy part is creating a rational, clear plan of action. The hard part is mobilizing an entire organization toward that vision. This is more than asking, “Is my organization engaged?” Your entire organization must believe that they are headed in the right direction, are driven by the overall purpose of customer centricity, and want to go on the journey. When they are willing to give their discretionary time and effort to make it happen, you know that you have created a tipping point where managers, team leaders, and employees are emotionally engaged as opposed to simply understanding the direction.
TIPS TO ENGAGE & EXCITE
• Build a team that is aligned with your vision and strategy. Pick team members who are influential at all levels, not just senior people.
• Align individual interest with organizational performance. Give team members a chance to benefit when the business prospers.
• Step in and step back. Give your team enough structure and support to navigate uncertainty while still encouraging them to use and develop their own creative process.
3. Customer-centric leaders drive disciplined execution
Leadership is not a one-time activity, but an ongoing effort of engagement. The third driver is recognizing and driving the leadership activities necessary to execute the plan. The distinction here is between the organization’s project plan for customer centricity and the leader’s prioritized activities to make sure the project plan gets executed. Leaders must mobilize others in following through on the plan and have the ability to create a culture of accountability to ensure that customer centricity lives at all levels in the organization.
TIPS TO EXECUTE
• Commit to stopping or delegating one activity a week to allow yourself “space” to focus on customer centricity. You can’t move forward unless you let go of the past.
• Identify and assess the knowledge, skills, process, and mindset required from each role (leader & team) in order to achieve peak performance.
• Create an environment that helps people learn. Allow people to make mistakes and be sure to reward incremental success.
• Set expectations. Invite commitment. Measure progress. Provide feedback.
4. Customer-centric leaders understand this is cultural, not just a project
The final step is to sustain momentum of the customer centricity gains that have been realized. Like all organizations, there will likely be a “next challenge” that the leader must embrace. If the focus is taken from customer centricity, the likelihood is that the effort will at best slow down and at worst, die. A major mistake leaders make when moving to a customer-centric vision is to assume that once the plans have been developed and cascaded, their work is done.
Sustaining momentum for the long term requires visible leadership energy for customer centricity. The leader must be seen and heard, expressing a genuine sense of urgency, commitment, and passion. Without these, it’s difficult for organizations to embrace the call to action. Finally, maintaining momentum requires visibility of progress toward customer centricity. How is the organization doing for all stakeholder groups? Have we highlighted both value creation outcomes as well as steps along the way?
TIPS TO SUSTAIN MOMENTUM
• Ensure that you celebrate and communicate the small wins as well as the large accomplishments. Progress on the journey should be rewarded.
• Create, distribute and actively use a dashboard of key measures that allow you to track progress toward the achievement of your direction.
• Stay authentic. Leadership visibility is less about communication events and more about individual conversations.
Individually, the drivers are important. But it’s the combination of all four that create true customer-centric leadership. Each driver impacts the next. For example, if your team isn’t engaged and excited about the customer-centric direction you’re championing, find out whether the broader team is connected to the purpose and understands the strategy. Clarifying the direction will help. And if the organization is truly engaged and excited but execution is still failing, the question to ask is whether leaders are executing their prioritized leadership tasks in cascading the customer-centric direction consistently and effectively.
Moving through the Vision to Results framework (see Figure 1) is both sequential and iterative. It logically flows from top to bottom while at the same time “looping back.” Team members assimilate change at different rates; while one segment of your organization may fully embrace the customer-centric direction, others may be negatively impacted by changes and therefore will be slower to adapt to the change. As well, team members can initially get on board with a change and be enthused, only to find out later there are negative implications. In that case, the customercentric leader will need to go “back up” to Engage & Excite.
The effective customer-centric leader recognizes where team members are and engages with the Vision to Results framework at the appropriate level.
Ultimately, leadership is about mobilizing individuals in an organization in the pursuit of value creation. Mobilizing your organization toward customer centricity no doubt creates value; the challenge is getting there.