Gartner : How do you know where the organization’s center is?

Where does your organization focus? What is the last and most important consideration it uses to make tough decisions?

A prior post outlined the various options or centricities an organization can use. Customer, Product, Competitive and Internal describe how organizations see themselves and how they act. Ideally an organization would have one center, but too often organizations are situationally schizophrenic - meaning they pick and choose centricity when it suits them. This makes understanding your centricity at the time important. That is the focus of this post.

Customer Centricity, where we tell ourselves we live

Given a choice, most companies want to say that they are customer centric. That is, they exist to understand and meet customer needs. Gartner defines customer centricity as "the ability of people in an organization to understand customers' situations, perceptions, and expectations." An organization feels good about itself and its role in society when it says its customer centric. After all, where would you be if you did not attract, retain, and grow customer relationships.

While most companies would like to start with customer centricity, many become customer centric only when all other concerns: product, competitive, financial, internal etc. are addressed. Consider customer centric retailers with adversarial relationships with their suppliers and employees. Amazon justified its fuel-inflation surcharges placed on its resellers as a customer centric move. It is not, it is just a pure power play, a form of competitive centricity. When asked why they are hard on suppliers, they respond with the need to offer the lowest price to their customers. Lowest price does not mean lowest profit.

How do you know that you are customer centric? Here are few thougths:

• When you engage and listen to customers about the good, the bad and the other, then you might be customer centric. The other is competition and too often we only hear customers when they validate our worldview, plans or internal bias. Talking to customers is not the same as listening with customers.
• When you admit that your products and solutions will not solve every customer situation, then you might be customer centric.
• When you change your internal organization, adjust compensation, or reallocate resources in the face of customer needs, then you might be customer centric.

You are situationally customer centric when you drag out the voice of the customer as a rational for a decision in your favor. Customers become a smokescreen or proxy for internal power struggles. This turns customer centricity into customer cynicism as I bet you can find customers asking for the exact opposite decision.

Internal Centricity, where we take our meals and make our beds

If customer centricity is what people publicly profess, then internal centricity is what most organizations persistently practice. I mention internal centricity next, not just because it's the opposite of customer centricity, but because it is where most companies live-an internal battle for priorities, plans and resources.

• When you believe you know more than your customers or anyone else in the organization, then you are internally centric. When you believe you know more, then you believe you have a superior position relative to customers and others. You are internally centric when you want to be the 'smartest, biggest, or most important' person or group at the table.
• When winning internally and beating out another group is more important to your career then, winning externally and beating the competition, then you are internally centric. If you must look good by making others look bad in comparison then you are internally focused. If your organization sees such forms of Divisional Darwinism or Success Theater as creating good leaders, then you know what matters.
• When you think, budget, plan or 'strategize' by putting your group first, then you are internally centric. If you are only able to compromise after your concerns are taken care of - like my budget request was met - then you are internally focused.

Financial centricity is another form of internal centricity. Organizations that run themselves 'by the numbers or metrics' use finance and budget as the language of internal competition and centricity. If the CFO is the final decider and they are deciding only on the numbers then, you are internally focused.

Organizations with large corporate staffs, or high walls between groups, or paternalistic relationships between executives and the rest of the organization are internally focused. Great companies that become internally focused fail, often without knowing it. When bureaucracy builds faster than revenues or profits. When greater control is the only answer. When success rests with who you know or likes you than what you do, then you are well down the path to disaster. It is a matter of time before someone laments - everything worked, until it didn't. A phrase that should be the epitaph for companies, including those currently destroying economic value.

Customer and Internal - the tale of two centricities

Every company wants to be customer centric. Customer centricity is hard and not ever decision impacts the customer. Internal centricity is simpler, direct, immediate, and therefore the default for just about every organization. Something to consider when you consider your centricity.

Related Posts:

Centricity - a belief that anchors your company and its potential