Monthly Archives: September 2010

On why organisations are reluctant to open up to customers

I read an article in the Telegraph today by the chaps who wrote the delightful Yes Minister and Yes Prime Minister tv series.  One part of the article – Yes Minister Sir Humphrey has all the solutions -  struck me as being highly relevant to the topic of opening up the enterprise to customers.  Here it is:

“From: Sir Humphrey Appleby

To: Bernard Woolley

Subject: Transparency

I understand your anxiety about the new government’s fixation on ”transparency’’, but you are distressing yourself unnecessarily. It afflicts all incoming administrations. It used to be called ”open government’’, and reflects the frustrations they felt when they were in opposition and could not find out what was going on, combined with an eagerness to discover and publicise the deception, distortions and disasters of their predecessors.

But it does not last beyond the first few months. As time passes they realise they have more to lose than to gain from public knowledge of what they are up to. Each month increases their tally of catastrophic misjudgments, pathetic deceptions, humiliating retreats and squalid compromises. They very soon come to understand that sound and effective government is only possible if people do not know what you are doing. The Freedom of Information Act was the greatest blow to firm and decisive administration since the execution of King Charles I. Quite soon our new masters will realise that secrecy may be the enemy of democracy, but it is the foundation of government.”

From the customer perspective transparency is great, for organisational leaders it does not look that attractive.  We all want to look good and avoid looking bad.

Every Customer Experience / CRM change agent should read this book

Any and every person involved in organisational life can benefit from reading this book.  It is a must read for anyone who is a change agent.  Everyone working on getting a better alignment between the customer and the organisation will benefit from reading and applying the insights of the book.

The book is written by Barry Oshry and it is called “Seeing Systems: unlocking the mysteries of organizatonal life“.

If all the people working on / impacted by Customer initiatives – Strategy, Insight, Experience, Engagement, CRM – read and applied the insights then I am confident that their organisation can save a lot to money, time, effort and heartache.

Incidentally Barry also has a blog: The Seeing Systems Blog

The critical flaw at the heart of modern customer relationship thinking

When I was working as a Senior Consultant with The Peppers & Rogers Group the customer paradigm was explained through the analogy of a small grocer (or florist) serving his/her local community.  The thrust of it was that the grocer got to know the customer- the person, his circumstances, his shopping history, his attitude, his values, his beliefs, his preferences – and used this knowledge to offer him the right products, at the right time, at the right price in the right way.  The end point – this is important – we have the technology to recreate that kind of business relationship with our customers.

What the analogy leaves out is the social context.  In days gone by the local grocer (or any other shopkeeper for that matter) was living in the same community as his customers.  He was likely to come across his customers in the social life of the local community.  Some of the customers used to be fellow students at school, others went to the same church, others frequented the same pub, others were friends of friends and so forth.

In short the grocer’s relationship with his customers was much a social one as an economic one; he experienced his customers as rounded multi-dimensional human beings not as one-dimensional economic objects nor as abstractions on a revenue statement. Because of the shared local context the customers also invested in the grocer – they knew the grocer in a rounded context and not just as an economic entity, a grocer.

Furthermore, the owner was also the CEO and the person having the daily contact with customers – listening, talking, interacting, serving customers.

That situation today for Mr Multi-National Enterprise (Mr MNE) is completely the opposite.  There is no social relationship between Mr MNE and the customer – they typically live and move in very different social circles.  The customers do not have to support Mr MNE (like they did with the grocer – else no local grocer) and Mr MNE can find other than local customers – the world is full of potential customers.  And importantly, Mr MNE is completely divorced from the customers – he never has to see, talk with or serve a customer.

So whilst the technology exists to gather information, the all-powerful social context that is necessary for building enduring mutual win-win relationships is absent.  And that is the critical failing at the heart of modern customer relationship thinking.  It misses the fact that relationship are a natural by-product of a social context.  That social context  is missing from the modern corporate world and it cannot be recreated in the typical tenure of the CEO.

Does power lead us to dehumanise our customers?

I read an article on how power leads us to dehumanise others and wondered is it as simple as that:

  • Is that why large organisations can come across as being scornful of their customers?
  • Does that explain the phenomenon of organisations becoming more and more disconnected and less and less respectful of their customers as they succeed and become established in the market place?
  • Does that explain why monopoly suppliers act as they do?

You can read the article here.

Incidentally, an infamous experiment was carried out by Zimbardo and his colleagues at Standford University – The Standford Prison Experiment – which suggested pretty much the same thing. You can find that here.

Why customer efforts tend not to deliver what the customer wants

Many large organisations have been soaked by the waves of CRM and Customer Experience.  Money has been spent on CRM software, teams have been set up to change processes, call centres have been outsourced or brought back in-house, CRM teams have been set up and some organisations even have Directors and VP’s of Customer Experience.

Yet the divide between what customers expect and what they experience when interacting with large organisations continues to be a large – customers are not satisfied.  Churn rates are high in industries where it is easy for customers to change supplier. And many CRM and Customer Experience team leaders are burnt out and/or have become cynical.

This got me thinking on why it is so hard for organisations to become customer centred.  Then I thought about it differently:  why do must CRM and Customer Experience teams struggle to make a significant impact on the quality of the experience that the customer receives? The answer is quite simple if we use a computer analogy.

The possibilities and limits of a computer system, in the final analysis, are set by the operating system; computers are simply pieces of metal or plastic without the operating system.  That means that we cannot take a software application such as Microsoft Word and make it run on a UNIX operating system – they are simply incompatible.  That is what is just so.  Microsoft Word has been designed to work with the Microsoft family of operating systems e.g. XP, Vista, Windows 7.

Now the funny thing is that I have never come across an instance when someone has attempted to run Microsoft Word on a UNIX platform.  Yet that happens all the time in the world of business.  That is what many organisations are doing when they attempt to impose CRM and Customer Experience programmes into / onto the organisation.

Organisations also have an operating system that primarily consists of strategic objectives, executive mindset, culture (what we consider to be important, how we do things around here), organisational structure (typically functional), business processes and the technology infrastructure.

Many, if not most, organisations are running operating systems that are simply incompatible with CRM and Customer Experience programmes.  These operating sytems are used to talking at the customer not listening to the customer; ‘changing/moulding’ the customer to meet the organisation’s needs not changing the organisation to meet the customer’s needs; treating all customers the same not treating different customers differently; focussing resource on conquesting new customers rather than doing the hard work of building sustainable relationships with existing customers and so forth.

Which is why most CRM and Customer Experience teams and initiatives struggle and many fail to deliver.

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