Customer-Centric Strategies for Modern Organizations
Focus on the Customer
The Customer Comes First: Meeting customer needs is the foundation of any successful organization. The customer is 1st, 2nd, and 3rd in organizational priorities. Customers have become more demanding and have more choices. Some studies in the 1960s found that size was the most important predictor of management style (the larger the organization, the more likely it was to adopt bureaucratic structures). Contingency theories suggest that size is important, but the firm’s situation and culture are, too. Firms, no matter how big or small, must be open organizations.
Characteristics of Open Organizations
- Uncertainty over matters and events outside the organization.
- Innovations in technologies, processes, products, and services.
- Differences in size between organizations.
Peters and Waterman studied the 62 most successful companies in the USA with these characteristics:
- A bias for action rather than planning or waiting for something to happen.
- Keeping close to the customer by learning from them.
- Encouraging the development of leaders and innovators by supporting creativity and risk-taking.
- Focusing on core competencies.
- Practicing a value-driven approach by concentrating on achievements rather than technological or economic resources or organizational structure.
- Recognizing that the main productivity gains could be achieved by employees rather than through capital investment.
Manager Plus 2000
Will practice cooperation and collaboration with everybody, inside and outside the firm, from colleagues and subordinates to customers and suppliers. Managers will deal with self-managed teams. Organizations are judged on their outcomes, and they depend on looking at customer requirements with loyalty, fresh eyes, and reshaping the organization to meet their needs. The pyramid will be first with customers, self-managed teams, middle managers, and finally, senior management.
Customer Strategy
Organizations need to know the specific requirements of each customer and how these requirements can be segmented, also being aware of how many different people are involved in the purchasing decision and the different kinds of requirements that they might have. It’s critical to know customer purchase criteria and understand how well a company meets these needs relative to those of its competitors. Products and services have to be based on a fundamental advantage in cost or skills. Companies interact with customers to include their preferences in products or services (Dell, etc.).
New Forms of Organization: The Shamrock Organization
This form of organization is composed of three different groups of workers who are treated differently and have different expectations:
- Core workers: They are the nerve center of the organization in the sense that they are essential to its work and success.
- Contractual fringe: May or may not work exclusively for the company; they’re contracted to carry out certain tasks for which they are paid a fee based on the results. This is effective for the business because they only pay for what is done.
- Flexible labor force: Pool of part-time workers who are available for use by the organization.