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

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

A previous article described the different options or centricities that an organization can use. Customer, Product, Competitive and Internal describe how organizations see themselves and how they act. Ideally, an organization would have a center, but too often organizations are situationally schizophrenic – meaning they pick and choose centeredness when it suits them. This makes understanding your centricity at this time important. This is the subject of this post.

Customer Centricity, where we say we live

When given the choice, most companies mean they are customer-centric. In other words, they exist to understand and meet customer needs. Gartner defines customer orientation as “the ability of people in an organization to understand the situation, perceptions, and expectations of customers.” An organization feels good about itself and its role in society when it claims to be customer-centric. After all, where would you be if you weren’t attracting, retaining and growing your relationships with customers?

While most companies would like to start with customer-centricity, many only become customer-centric when all other concerns: product, competition, financials, internal, etc. are taken into account. Consider customer-centric retailers with adversarial relationships with their suppliers and employees. Amazon justified its fuel inflation surcharges imposed on its resellers as a customer-centric decision. It’s not, it’s just pure power play, a form of competitive centricity. When asked why they are tough on suppliers, they respond with the need to offer the lowest price to their customers. The lowest price does not mean the lowest profit.

How do you know you are customer-centric? Here are some thoughts:

  • When you engage and listen to customers about the good, the bad, and the other, you can be customer-centric. The other is competition and too often we only hear from customers when they validate our worldview, our plans or our internal biases. Talking to customers is not the same as listening to customers.

  • When you admit that your products and solutions won’t solve every customer situation, you may be customer-centric.

  • When you change your internal organization, adjust compensation, or reallocate resources in the face of customer needs, you can be customer-centric.

You are focused on the customer’s situation when you use the voice of the customer as justification for a decision in your favor. Customers become a smokescreen or proxy for internal power struggles. It turns customer focus into customer cynicism, because I bet you can find customers asking for the exact opposite decision.

Internal Centricity, where we eat and make our beds

If customer focus is what people profess publicly, then internal focus is what most organizations consistently practice. I then mention internal focus, not only because it’s the opposite of customer focus, but because that’s where most businesses live – an internal battle over priorities, plans and resources.

  • When you think you know more than your customers or anyone else in the organization, you are internally focused. When you think you know more, you think you have a superior position in relation to customers and others. You are inwardly focused when you want to be the “smartest, biggest, or most important” person or group around the table.

  • When winning internally and beating another group is more important to your career than winning externally and beating the competition, then you are internally focused. If you have to look good by making others look bad in comparison, then you are focusing on the inside. If your organization believes that such forms of divisional Darwinism or theater of success create good leaders, then you know what matters.

  • When you think, budget, plan, or “strategize” with your group first, then you are inwardly centered. If you’re only able to compromise after your concerns have been taken care of – like my budget request has been met – then you’re inward-focused.

Financial centricity is another form of internal centricity. Organizations that manage themselves “by numbers or metrics” use finance and budget as the language of internal competition and centrality. If the CFO is the final decision maker and only decides the numbers, you are focusing on the inside.

Organizations with a large corporate staff, or high walls between groups, or paternalistic relationships between executives and the rest of the organization are internally focused. Great companies that focus on the inside fail, often unknowingly. When bureaucracy builds faster than revenue or profits. When greater control is the only answer. When success depends on who you know or love rather than what you do, you’re on the road to disaster. It’s only a matter of time before someone laments – everything worked, until it didn’t. A phrase that should be the epitaph of companies, including those that are currently destroying economic value.

Customer and Internal – the story of two centricities

Every business wants to be customer-centric. Customer orientation is difficult and the decision never impacts the customer. Internal centrality is simpler, direct, immediate and therefore the default for just about every organization. Something to consider when considering your centricity.

Related Items:

Centricity – a belief that anchors your business and its potential

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