Why your organisation is not customer-centric even if it is customer-centric

This is a long post and a philosophic one so you might be better off doing something else unless you have an avid interest in customer-centricity and getting to grips with it. Furthermore, you might not like what I share here. It may disturb you and you find yourself annoyed even angry at the nonsense I am speaking. You are warned, now let’s begin.

Cutting through the confusion/tiresome debate around customer-centricity

There is much speaking/writing/debating on customer-centricity. Listening/reading/taking part in this ‘conversation’ it occurs to me that there is so much confusion about customer-centricity and the term has either become discredited or will be if we carry on as we are carrying on. So I write this post to bring clarity and workability to customer-centricity.

It occurs to me that the confusion around customer-centricity arises as a result of two distinct ways of talking about/making sense of customer-centricity being collapsed into each other. It is because of these two distinctions that it is possible for an organisation to be customer-centric and ‘not customer-centric’ at the one and the same time. There are subtle nuances around these distinctions which provide more distinctions. For the sake of brevity I am only going to explore/share the two big distinctions and ‘uncollapse’ them.

Customer-centricity as means (vehicle to get you to your end destination)

As I understand it, the marketing literature that brought ‘customer-centricity’ into the mainstream is concerned with customer-centricity as a means – as a vehicle for attaining marketing objectives. The business literature followed so that when ‘business strategists’ talk about customer-centricity they are talking means of accomplishing business objectives. When these marketers, these strategists, talk about customer-centricity then they talk about the course of action that the business takes (strategy). And they talk about organisational design – the way that the business should be organised (structure, roles, KPIs, management information etc) around customer segments rather than products.

In a product-centric company management is concerned with finding ways of selling more products to whoever can be made to buy the products. And the measure of success at playing this game is market share. Furthermore, in a product centric company the company will be organised around products. Business unit A will focus on one category of products from manufacturing/sourcing through to selling/servicing. Business Unit B will focus on a different category of product. When it comes to information you will find that it easy to get hold of information on/around products. For example, you will be able, easily, to find out how much of a particular product was sold; you will not be able, without considerable effort, to find out which products a customer bought across the entire product range supplied by the company as a whole. Then there is understanding / insight: you are likely to find that there is a lot of understanding of products but understanding/insight regarding customers (the context of their lives, what matters to them, how they buy etc) will be shallow.

According to the theorists and consultants the management of a customer-centric company should be concerned with ‘share of wallet’ not market share. The organisation should be organised around customer segments. And the strategy should be concerned with generating deep insight into customers and using this insight to come up with products, services, solutions even experiences that get customers to buy more from the organisation whilst costing less to serve. This may mean sourcing/creating new products to meet newly identified unmet needs. Or it could mean coming up with better value propositions: re-jigging how and what you communicate so that these customers buy more from you. The theory goes that if you do this then your organisation will keep more of your customers and they will ‘recruit’ new customers for you through word of mouth marketing.

So this school of customer-centricity, customer-centricity as means to, is concerned with changing organisations from being product centric to customer-centric. Or from an ‘inside out’ orientation to an ‘outside in’ orientation. So the talk deals with formulating customer-centric strategies, changing/transforming the organisation, putting in CRM systems…….

Notice that when taking about customer-centricity as means there are no moral questions, no moral considerations. In this clearing one grapples with formulating the right strategy, the right organisational design, picking the right CRM systems and bring about the desired change.

Customer-centricity as ends (‘for the sake of which’)

This is where it gets interesting. It is possible and some people do talk about customer-centricity in terms of ends/purpose. You see it is possible and necessary to ask the question: why, for what purpose, are we going to all this effort to move from being product-centric to customer-centric, from ‘inside-out’ to ‘outside-in’? Heidegger came up with the distinction ‘ for the sake of which’, which I want to use. All this effort to be customer-centric (as means) what is it for the sake of?

Read the literature that is used to by theorists, consultants and technology vendors and you find your answer: for the sake of the profit motive, for the sake of making higher profits. So the fundamental centre of the game of business has not changed at all. The be all and end all of the game of business continues to be the profit motive: making the numbers to enrich shareholders. Just the means has changed. That is fine. And consistent with customer-centricity as means.

Now throw into the mix a very different bunch of people. People who have a different understanding and speaking of customer-centricity. These people say that for a company to count as customer-centric, it has to be run ‘for the sake of contributing to / enriching the lives of customers’. These people are not naive, they get that for a company to survive it has to be profitable and it has be concerned with making profit. And they argue that the key difference is that the profit motive is secondary: a requirement to play/stay in the game rather than the raison d’etre of being in and playing the game.

Look, you and I have to be concerned with food/eating yet that is not the reason we choose to live, that is not what our lives are about. Or consider Steve Jobs. Jobs claimed that he never did it for the money. He claimed that he was driven, obsessed with, creating products that he loved to use, his family friends loved to use, products that he could be proud. Yet, Jobs was enough of a pragmatist to know that Apple needed to be profitable. When he came back and took the helm at a bloated and almost bankrupt Apple, Job was ruthless in making tough decisions including cutting product lines, distribution channels and firing employees that did not meet the standards/requirements set by Jobs.

Where did it customer-centric as ‘for the sake of contributing to / enriching lives of customers’ originate? As far as I can tell there are two sources – the Scandinavian school of relationship marketing and the Services school coming out of the USA. I am thinking of the likes of Gronroos, Berry, Parasuraman, Heskett, Sasser, Zeithaml and Bitner. Read through this literature and you will come across moral values and considerations, including customers as ends in themselves and not just simply means, even if they are well disguised. Why disguised? I say because these guys were seeking to get traction and influence the powerful ‘hard’ types in business.

Why it is that your organisation is not customer-centric even if it is customer centric and how it explains the lack of authentic customer loyalty

By now you should get why it is that one person can say that an organisation is customer-centric and another person can say that this very same organisation is not customer-centric. And they can both be right, be speaking ‘truthfully’: one is talking about/pointing at customer-centricity as means and the other is speaking about /pointing at customer-centric as ends where the ends is for the sake of contributing to / enriching the lives of customers.

According to surveys, executives consider their companies to be customer-centric and yet few customers consider companies to be customer-centric. The executives are standing in the clearing customer-centricity as means and customers are standing in the clearing customer-centricity ‘for the sake of contributing to / enriching customer lives’. So is it any surprise that standing in two different spots they see very different views and come up with different answers?

I say that vast sums have been spent in the name of customer-centricity and they have not delivered the promised land. Why? because companies have continued to play the same game (the profit motive) and simply changed the means: customer-centricity as means. They are not at fault. They have been encouraged in following this path by legions of marketing theorists, business strategists, consultants and technology vendors. Yet, this path can never lead to the promised land. Why?

Because when the customer talks about a company being customer-centric he is talking about and pointing at a company that shows up for her as being in business ‘for the sake of contributing to / enriching the lives of customers’. And so few companies are playing this game.

Let me tell you a story

An angel disobeyed God (so goes a story by Tolstoy) and is punished – thrust naked into world, a churchyard of a small Russian village. A poor cobbler passing by, ignorant of the angels divine origin, saves him from freezing to death; gives him clothing, food and shelter; and keeps him on as an apprentice. Several years pass.

Then one day this fallen angel smiles in such a way that his face radiates an extraordinarily dazzling light. The cobbler begins to wonder about his guests origins and asks him why such a radiant light shines about him. The angel then reveals himself for what he is, explaining that the only way he will be able to go back to Heaven is to learn what people live by.

He says that his understanding had begun when – having turned into a man – he was rescued from freezing in the churchyard. Now, continues the angel, he has finally realised that human beings cannot live each for himself, that they are necessary to one another, and that love is what they live by.

And finally

As customers we may not want relationships with companies, with businesses. Yet we can tell when we are loved. When it occurs to us that a company, an organisation, loves us then we cannot help but form a bond, an attachment with that company. When I think of such bonds of attachment I think of USAA. It occurs to me that this company does exist for the sake of contributing to and enriching the lives of its customers – military personnel and their loved ones. Clearly customers ‘feel the love’ and reward USAA with their loyalty. Which may explain why USAA is the leader/the exemplar of customer loyalty in the categories it operates.

Do you love your customers? Do you love your customers like USAA does? Or do you love the profit motive and fake love for your customers?

Do you know the difference between a good strategy and a bad strategy? (Part IV – Objectives)

This is the fourth in the series of posts on strategy making using Richard Rumelt’s masterpiece: Good Strategy Bad Strategy.  If you have not already done so then you may get value out of the reading the first three posts:

Do you know the difference between good strategy and bad strategy?  (Part I)

Do you know the difference between good strategy and bad strategy?  (Part II – Fluff)

Do you know the difference between good strategy and bad strategy?  (Part I – Failing to face the problem)

What passes for strategy and strategy is so often simply muddled thinking or why so many websites generate a poor user experience

One thing that I have noticed is that so many websites are poor – from the users perspective.  Why is that?  I have my point of view which I pleased to see validated by Mark Adams of PortalTech Reply in the May edition of Internet Retailing:

“If your strategy, for example, is to use mobile to generate significant revenues the key considerations, technology choices and approach are going to be very different from setting out to use mobile as brand engagement channel…….. Often the strategy is to accommodate selling, loyalty, brand engagement, in-store integration, social marketing, payments and so on with no clear path on how each of these areas are going to be addressed and at what point.”

Sounds like a ‘dog’s dinner’ of aims/objectives masquerading as strategy to me.  That got me thinking that it is worth sharing what Richard Rumelt has to say on the matter of aims, objectives and strategy.

What does Richard Rumelt say about aims, objectives and strategy?

Richard Rumelt says that strategic objectives are one domain that differentiates good strategy from bad strategy:

One of the challenges of being a leader is mastering this shift from having others define your goals to being the architect of the organisation’s purpose and objectives.  To help clarify this distinction it is helpful to use the word “goal” to express overall values and desires and to use the word “objective” to denote specific operational targets……. Good strategy works by focusing energy and resources on one, or very few, pivotal objectives whose accomplishment will lead to a cascade of favourable outcomes.

In his book,  Rumelt identifies two pitfalls in the areas of objectives: ‘dog’s dinner objectives’; and ‘blue sky objectives’.  Let’s take a look at each in turn.

Dog’s dinner objectives

This is what Rumelt says (keep in mind my earlier comment on poor websites and the quote on mobile):

A long list of “things to do”, often mislabeled as “strategies” or “objectives”, is not a strategy.  It is just a list of things to do. Such lists usually grow out of planning meetings in which a wide variety of stakeholders make suggestions as to things they would like to see done.  Rather than focus on a few important items, the group sweeps the whole day’s collection into a “strategic plan”.  Then, in recognition that it is a dog’s dinner, the label “long term” is added so that none of them need be done today.

I absolutely love this paragraph, it strikes as pointing at the ‘truth’ in a similar way to the Dilbert cartoons and leaves me saying “How true!”.  How does it strike you?

Blue sky objectives

Back to Mr Rumelt and his wisdom on strategy:

“The second form of bad strategic objectives is one that is “blue sky”.  A good strategy defines the critical challenge.  What is more, it builds a bridge between that challenge and action, between desire and immediate objectives that lie within grasp.  Thus, the objectives a good strategy sets should stand a good chance of being accomplished, given existing resources and competence.……  By contrast, a blue-sky objective is usually a simple restatement of the desired state of affairs or of the challenge.  It skips over the annoying fact that no one has a clue as to how to get there.

The purpose of a good strategy is to offer a potentially achievable way of surmounting  a key challenge.  If the leader’s strategic objectives are just as difficult to accomplish as the original challenge, there has been little value added by the strategy.”

Lets revisit 1997 and Steve Jobs return to the helm of Apple

Back in 1997 Apple was burning through its cash and was expected to become bankrupt in months.  The imperative was survival – increasing the cash pile and cutting costs to buy time to focus on product renewal.  What did Steve Jobs do?  The very first thing, the most thing, he did was to persuade Microsoft, the arch enemy, to invest in Apple.  By doing so he was able get his hands on $150 million (in return for non-voting shares).  This dismayed the Apple faithful, left them stunned and led to heckling and booing.  Something that Jobs had not experienced before.  Nonetheless it was a masterstroke as it bought him time to:

  • Cut the number of products from 15 to 4;
  • Streamline distribution by selling  through an exclusive national dealer as opposed to many retailers;
  • Focus marketing on a single message “Think Different”;
  • Terminate licensing deals that enabled other manufacturers to undercut Apple with Mac clones.

Result: operating expenses were cut nearly in half. Within months, Apple was back in the black and could focus on developing and bringing to market ‘killer products’ worthy of the Apple brand as personified by Jobs.

It occurs to me that Steve Jobs was more than creative or a showman (like Richard Branson).  He was a master strategist he focussed relentlessly on the essence.  How different to so many others who call themselves strategist and claim to put forth strategies.  What do you say?

Is eliminating the bargaining power of customers more important than working on the Customer Experience?

Listening to the Steve Jobs biography by Walter Isaacson I am left with the impression that nothing was more important to Steve Jobs then using technology to produce great products that delivered a great user experience.  Good enough was good enough, even great, for many in the computer industry.  Only insanely great was good enough for Steve Jobs.  Anything less was simply not good enough, it was not ‘art’ and not ‘worthy of artists”; great artists don’t want to put their names on good enough art.

Given that Apple, Amazon, Zappos, USAA, SouthWest Airlines, Zanes Cycles, Richer Sounds, Salesforce.com, O2, American Express.. have shown what can be done by focussing on the customer, why aren’t companies focussing on the Customer Experience?  According to Mindshare the biggest issue with companies and executives is turning VoC into changes in the business such that a powerful impact is made on the Customer Experience.  Why is it an issue?  Because of ‘Other Priorities’.  What can these other priorities be?

Clearly THE priority is the share price and the way to hit that is to focus in revenue generation and profitability.  How do you increase that?  The standard framework is that put forth by Michael Porter in the Five Forces model.  According to this model, the companies that do well are the ones that:

  • Reduce/eliminate the bargaining power of customers”;
  • Reduce/eliminate the bargaining power of suppliers;
  • Reduce/eliminate the threat of new entrants;
  • Reduce/eliminate threat of substitute ‘products’; and
  • Reduce/eliminate competition by ‘taking out’ competitors

Do you notice what is implied in this framework?  Do you notice that the assumption is that the company and the customer are in competition?  The aim is to reduce the bargaining power of the customers.   It occurs to me that the Tops are not sitting there fretting over customer and the Customer Experience.  It occurs to me that they are sitting there figuring out how to outmanoeuvre customers, suppliers, competitors and regulators.

The financial crisis, the BP Gulf of Mexico oil spill and the phone hacking scandal (in the UK) have shown that regulators are easy to ‘buy’/outmanoeuvre.  That leaves customers, suppliers and competitors.  Isn’t the best way outmaneuvering customers to set up barriers to entry (patents, ‘buying off’ regulators, buying/holding key assets…), buy up/share the market with the competition and creating a difference where no difference exists through advertising and PR?

As I was mulling this over  the folks at The Simple Dollar emailed me this graphic about how AT&T and Verizon are doing extremely well due to the duopoly that they have created and maintain.  I can’t help but think that to arrive at this place is business nirvana for just about every CEO and his band of merry men (the Board of Directors)!

VoC: what’s wrong with VoC and how do you get it right? (Part II)

In the previous post I shared the first part of my discussion around VoC with Erich Dietz, VP of Business Solutions at Mindshare Technologies (specialists in customer surveys and enterprise feedback).  The key point of that post was captured in Erich’s words: “No-one is really doing VoC surveys with the customer in mind!”   In this post I wish to share/discuss with you the other big issue that came up in my conversation with Eric.  Before that lets just briefly summarise best practice in soliciting customer feedback.

Lets assume your organisation is following best practice in soliciting customer feedback

Lets assume that you:

1. Have come up with the right incentives to encourage feedback – incentives that encourage your customers to give up their time and make an effort to give you feedback on what matters to them and how you are doing in meeting those needs;

2.  Have made giving feedback a natural extension of the already occurring conversation – e.g. using the call coming into the contact centre to engage the customer in a dialogue and invite her to share her experience, to give feedback immediately after the call;

3.  Have purposefully and cleverly designed the survey process so that it is short and easy by only asking a small number of questions that really matter that can help improve the customer experience – questions that you do not have answers to already or those that you cannot get answers to by trawling through your internal systems and/or speaking with your employees who touch the customer;

4.  Are making effective use of VoC technologies to allow customers to provide feedback through their preferred channels/devices e.g. email, phone, IVR…..

5.  Major in soliciting unstructured feedback and minor in structured feedback – that is to say that you primarily set out to get unstructured feedback and reinforce this with some structured questions which enhance the value of the unstructured feedback e.g. “How many contacts did it take for you to get your issue resolved?”

6.  Have in place a team/process/platform for converting this feedback into actionable insight into what matters to your customers –  what is working well and what is not working or your customers: policies, processes, products, services, customer facing employees, technology….. 

The question is this, “Is this enough?”   Erich and I agreed that this is not enough.  For all this work  to generate value it is necessary, critical, that your organisation (Tops, Middles, Bottoms) act – act decisively to make changes that improve the customer experience, engender customer happiness and thus cultivate both customer advocacy and customer loyalty.  Is this happening?

The second major issue: too many companies talk about the Customer Experience and don’t act, don’t deliver!

Acting decisively on VoC generated customer insight to improve the customer experience by making the proper changes – policies, processes, people, technology, retail store environment etc – is the second big failing in the VoC arena.  What do I mean?  If I understood Erich correctly then he said something remarkably similar to this: “Too many companies say that they are committed to improving the customer experience and yet don’t deliver on this commitment, this promise!”

When I probed into this to ask Erich why this is happening, why companies are failing to act on their VoC insight which they are collecting and paying for, Erich said that he had heard just about every excuse there is.  Probing further, Erich stated that the top two reason/excuses offered by clients tend to be:

  1. Other priorities; and
  2. Lack of resources.

I could hear the frustration in Erich’s voice.  Clearly this is a man who cares about the Customer Experience, he exclaimed his frustration “These are companies where revenues are flat, profits are flat, the customer experience is poor and yet ‘other priorities’ are important than improving the customer experience!”

Making VoC insight pay: what’s missing the presence of which makes all the difference?

Here is what I say: can you imagine Steve Jobs saying that anything was more important than designing great products – products that would wow customer through a great end-to-end user experience? 

I was listening to Steve Jobs biography and there is passage that speaks to the situation that Erich is describing here.  The passage, the quote from Jobs, goes something like this: “At too many companies design is simply veneer, at Apple design is the essence of what we do.”  So I would say that my observation is as follows:

Look at Customer Experience masters (e.g. Apple, Starbucks, Amazon) and you will find that the Customer Experience is the essence of what the organisation is designed to do and compete on.  Look at everyone else who is speaking and touting their love of the customer and the customer experience and you will find that for the Tops in these organisation Customer Experience is simply a veneer: lipstick on a pig!

Part III coming next

In the next and last post, I will set out Erich’s recommendations on how to do VoC right so that your organisation generates value – for you and your customers.  Thanks for listening to my speaking!


Transforming Service through the radical reconceptualisation of Service

We are trapped in out-of-date limiting unhelpful concepts

In my last post I asserted that dead concepts are limiting how customer service, customer experience, customer-centricity show up.  My point was that what we see, how we see it, what we focus on, what we do and the results that show up cannot be ‘greater than’ the concept we live/act from.  I say that service sucks because our concept of service sucks.  Put differently given the existing concept of service that holds us prisoner it is enviable that service sucks.

In this post I want to put forth into the world radically new conceptualisations of service.  My intention is that these reconceptualisations will jolt you out of being prisoner to the existing conceptualisation of service that his holding your prisoner – even if you do not know that you are being held prisoner.

My intention is not only to shock you, it is also to give you openings to transform your relationship to service and thus transform the way that you and your organisation think about and act when it comes to service.  If you do that then there will be a transformation in the way that your service shows up for your customers.  Are your ready for this jolt?

Radical reconceptualisation 1: Maz Iqbal on Service

Service is a gift that one human being bestows on a fellow human being.  The fundamental basis and the desired outcome of Service is human dignity itself: honouring our shared humanity – the best of our shared humanity as in when we move-touch-inspire and elevate one another. The kind of humanity that can move us to tears of joy.

Service requires the calling forth of my humanity and putting it into the world.  And as such Service is founded on vulnerability.  My vulnerability in the sense of putting myself at risk for the sake/benefit of my fellow human being – I may be ignored as if I am an object and not  human being, I may be misinterpreted, I may be criticised, I may be rejected…  And my recognition of the vulnerability of the person I am serving: he could be out of his depth, place his trust in me to do the right thing by him; he could be in a bind and expose his vulnerability by asking me to bend the rules, to make an exception; he could be in a bind that he needs the job done and I know he will pay any sum I demand; he could be and often is vulnerable in so many ways.

Service necessitates that I be totally present in the present and to the presence of the person I am serving.  Only when such presence is present is it possible for me to be responsive to the need of the person I am serving – modulating my being, my actions, my speaking and my listening such that I show up as ‘caring’ and ‘trustworthy’ in the world of the person I am serving.

Service comes forth most easily from those of us who get joy, fulfilment, satisfaction out of reaching out and touching the lives of our fellow human beings, for the better.

It is critical to get that Service is a mode of being in the world, a certain state of consciousness, it cannot be faked: if I am in this state of being then the majority of techniques and tricks that are usually imparted through training are unnecessary; if I am not in this state of being then all the techniques and tricks will not make enough of a difference for me to show up as being caring in the world of the person I am serving.”

Radical reconceptualisation 2: Werner Erhard on Service

“My notion about service is that service is actually that kind of relationship in which you have a commitment to the person. What I mean, in fact, is that for me what service is about is being committed to the other being. To who the other person is.

To the degree that you are, in fact, committed to the other person, you are only as valuable as you can deal with the other person’s stuff, their evidence, their manifestation, and that’s what’s service is about. Service is about knowing who the other person is and being able to tolerate giving space to their garbage. What most people do is is to give space to people’s quality and deal with their garbage. Actually, you should do it the other way around. Deal with who they are and give space to their garbage.

Keep interacting with them as if they were God. And every time you get garbage from them, give space to garbage and go back and interact with them as if they were God.”

My question of you

Are you up for transforming service?  Are you up for being a leader when in the area of service and through service generating the kind of loyalty you crave?  If you are then I have provided you with two openings.  I can hear you thinking that it is not easy, it is a BIG ask.  Yes it is.

Let me share a secret with you: one of the keys to Jobs success was the ‘reality distortion field’ – not being bound by people’s existing concepts of ‘reality’ and ‘what is possibility’.  Jobs was a master of inventing, projecting, living into and from the possibilities that he created in the face of no agreement from just about everyone around him.  Do you have that kind of passion, that kind of courage?  Leadership requires both the ability to invent radical-inspiring possibilities and the passion-courage to act, to make them real.

The one difference that makes all the difference

The C-level doesn’t get it

In a recent post Jeannie Walters she highlighted the 4 challenges facing customer experience practitioners.  Which challenge is first in the list?  “The C-Level Doesn’t Get It”.  She goes on to write:

  • “In fact, an overarching (and repeating) lament was “How do I get them to GET IT?””
  • “No matter how you say it, it seems to be an ongoing, uphill battle right now.”

The difference between philosophy, strategy and tactics makes all the difference

Now that may not make sense until you get that there is world of difference between philosophy and strategy and tactics.  Philosophy is the ground zero of existence – it is your raison d’etre of being.  Strategy is simply a course of action that you have selected in order to achieve what matters to you – your higher order objectives.  Tactics are simply the how of strategy; tactics do not have to connect up to constitute a strategy and often they do not in many organisations when functions develop their own silo ‘strategies’ that optimise the parts and end up suboptimising the whole.

Now here is the issue: almost all companies have approached customer-centricity/customer experience/customer focus as a strategy (at best) and/or simply tactics to grow revenues and profits. Very few companies have embraced creating superior value for customers as their business philosophy – the reason for existence.  And that makes all the difference. The acid test for differentiating between philosophy and strategy is to look for the “in order to”.  Think of the early Christians who accepted being eaten by lions rather than renounce their faith: these Christians could have renounced their religion in order to live – the pragmatic business person would say that the sound strategy was to renounce the religion.  Starbucks ended up doing that for a while and then Shultz resumed the mantle of CEO to help Starbucks to rediscover its founding philosophy: the customer experience.

What we can learn from Steve Jobs and Apple on this distinction

The points that I want to make are excellently spelled out in a post by James Allworth.  Here are the aspects of his post that really speak to me and to the central point that I am making in this post (anything in bold is my work):

Everything — the business, the people — are subservient to the mission: building great products. And rather than listening to, or asking their customers what they wanted; Apple would solve problems customers didn’t know they had with products they didn’t even realize they wanted

When describing his period of exile from Apple — when John Sculley took over — Steve Jobs described one fundamental root cause of Apple’s problems. That was to let profitability outweigh passion: “My passion has been to build an enduring company where people were motivated to make great products. The products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It’s a subtle difference, but it ends up meaning everything.”

When he returned, Jobs completely upended the company. There were thousands of layoffs. Scores of products were killed stone dead. He knew the company had to make money to stay alive, but he transitioned the focus of Apple away from profits. Profit was viewed as necessary, but not sufficient, to justify everything Apple did.

An executive who worked at both Apple and Microsoft described the differences this way: “Microsoft tries to find pockets of unrealized revenue and then figures out what to make. Apple is just the opposite: It thinks of great products, then sells them. Prototypes and demos always come before spreadsheets.”

Similarly, Apple talks a lot about its great people. But make no mistake — they are there only in service of the mission.  A former Apple product manager described Apple’s attitude like this: “You have the privilege of working for the company that’s making the coolest products in the world. Shut up and do your job, and you might get to stay.”

Apple hasn’t optimized its organization to maximize profit. Instead, it has made the creation of value for customers its priority. When you do this, the fear of cannibalization or disruption of one’s self just melts away. In fact, when your mission is based around creating customer value, around creating great products, cannibalization and disruption aren’t “bad things” to be avoided. They’re things you actually strive for — because they let you improve the outcome for your customer.

A final word

The hardest thing for ‘experts’ and ‘Tops’ to do is to unlearn – to let go of the accepted wisdom and habits that have been forged over many years.  Yet that is exactly what is required today for companies in competitive markets to prosper.  And it is certainly required if companies want to excel at the Customer game – create superior value for customers through superior value propositions that make customers lives simpler, easier, richer.  Are professional managers up to that task?  Here is what James Allworth writes in his post:

“Anyone familiar with Professor Christensen’s work will quickly recognize the same causal mechanism at the heart of the Innovator’s Dilemma: the pursuit of profit. The best professional managers — doing all the right things and following all the best advice — lead their companies all the way to the top of their markets in that pursuit… only to fall straight off the edge of a cliff after getting there.”

What do you think?