Article: Build organisations around customer needs

C-Suite

Build organisations around customer needs

In conversation with Robert S. Kaplan, Prof. of Management Practice at Harvard Business School about building customer centric organisations
 

Customers are like a mirror to the organisation and companies can very easily let their advantage slip by not being close to their customers

 

Companies evolve organically as a response to market forces. In the process, they develop new capabilities that could potentially be the big competitive differentiator. What means can managers adopt to identify any new crucial differentiators and build on these for strategic advantage?

This identification of competitive differentiators for companies is very crucial. Often, the most important way to identify competitive advantage is to look outwards…talk to customers. If you understand why customers chose you to do business with over competitors, you have the most accurate response to the competency question. Customers are like a mirror to the organization and companies can very easily let their advantage slip by not being close to their customers. The big danger for companies that are not close to their customers is that trends catch them by surprise.

Can you give us any example of such competency search leading to meaningful strategic advantage?

Apple is a great example of a company that constantly aligns its technological capability with its ability to really understand the customer better than competitors. This understanding comes primarily as a result of some serious customer surveys, data gathering & analysis and numerous other channels to connect with the customer. Companies that think they know best are rarely able to take full advantage of their internal competencies.

How do you restructure the organization around a new set of identified strengths and who owns the process of change?

The best way of looking at this is to build an organization around customer needs. The time taken by different organizations to adapt to changes in trends and in developing associated competencies is a function of the industry they are in - like services companies adapt to change very quickly, while automobile companies, where cycle times run into years, are at the other end of the spectrum. The onus for change management lies primarily with the CEO. And good CEOs, the ones who spend time with and listen to their customers set the tone for effective change.
 

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Topics: C-Suite, Strategic HR

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