Calling All Business and Political Leaders -

By Daniel Bausor

Step back ten years and leaders from all walks of life, from those in business to party political leaders, were in a very different place: they were in control of their organisations and their customers. They were the ones to set the agenda with customers and constituents following swiftly behind. Fast forward to today and digital disruption has taken hold, bringing with it an avalanche of information and data. All power is with customers as they hold all the cards, while in contrast power has ebbed away from business leaders and politicians in the Customer Economy.

In today’s Customer Economy, even politics is being transformed by the power of the customer. Whatever your views on Brexit, everyone would agree that it has been a divisive issue that has transcended communities and political parties and has been fuelled by the power of the customer (i.e. the voter).

This has pitted voters against the will of a traditional, some would argue outdated, Parliament and political system. Now, there is a ‘C-change’ in business and politics where the ‘C’ frmly represents the customer. Those leaders who centre their organisations around the customer from ‘customer voice’ - where digital systems can instantly relay customer attitudes, online interests and buying behaviour – through to a customer-led culture which co-creates innovative products and services with customers are the ones which will drive sustainable growth and success.

But if the benefts of prioritising the customer are so clear, why are all companies not following the example of organisations like US videoconferencing company, Zoom?

The current leadership make-up of many corporate organisations represents an obstacle for growth. According to the Global Accounting Network in 2018, 51% of the FTSE 100 CEOs had a background in fnance, meaning that many leaders have limited exposure to existing and prospective customers, focusing instead on the fnances of the business. This theory is supported further by Peter Cheese, CEO of global professional body The Chartered

Institute of Personnel and Development (CIPD), who argues that “Part of the problem is that too many businesses have lost sight of their purpose and their customers with a singular focus on fnancial outcomes and the fnancial stakeholder. Understanding all of the organisation’s stakeholders is critical, and in particular, their employees who ultimately are responsible for delivery of the value to customers.”

It is important to note that the view of what a customer is has completely changed from the traditional, siloed view of a paying customer. In order to succeed, organisations in the Customer Economy need to think holistically of a customer as an employee and partner too, blurring boundaries of the past.

Employees are central to a customer-led culture. This is where leaders must nurture an army of employee advocates who put customers front and the centre of everything they do.

A good example of an organisation with a customer-led culture is the Ritz Carlton hotel chain. Its founder, Horst Schulze is the godfather of customer experience in the hospitality sector and shares an inspirational leadership story for CEOs.

He famously coined the phrase for Ritz-Carlton staff to pride themselves on the mission, ‘we are ladies and gentlemen serving ladies and gentlemen’. Horst Schulze is a customer-led leader who created a C-change in fostering a guest-led culture which resulted in great service and sustainable growth. He honed in on the roles that the extended hotel team played.

For example, Horst told employees that they were empowered to make any decision up to the value of $2,000 which really shocked staff. However, his thinking was simple – it was worth spending $2000 to keep a customer.

The Ritz-Carlton culture was all about creating customers for life and driving customer lifetime value.

Times are changing as businesses and CEOs realise that traditional priorities such as shareholders, quarterly profts and corporate structure just aren’t sustainable in the new Customer Economy. In August 2019, The Business Roundtable, made up of CEOs from nearly 200 major US businesses including Apple, Amazon and Bank of America, issued a statement committing to a more customer-centric focus. In this statement, they redefned the ‘purpose of a corporation’ as investing in employees and delivering value to customers, rather than serving shareholders and maximising proft, underlining the new customer-centric direction in which the business world is moving. This is a signifcant shift in a more customer-led attitude from this infuential group of global organisations.

As part of this shift, many companies are moving to smaller, cross-functional agile working teams that are more collaborative. Such teams are characterised by open-lines of communication, allowing them to move faster and adapt more quickly to achieve customer-led company and individual objectives. Engaged employees need to have a clear understanding of the customer and how their individual and company-wide roles contribute to the customer-led mission, values and objectives of the organisation. It is these engaged employees who are wedded culturally to the customer who will co-create the successful and sustainable, customer-led organisations in the Customer Economy.

Signify (formerly Phillips Lighting) recognised the infuence of its customers, collaborating with them on the research, development and design of the Philips Hue Outdoor Light strip, a completely new smart lighting product, in 2018. This consumer lighting innovation proved a worthy investment, winning numerous design awards and garnering Signify its highest ever rating on Amazon.

And this revolution is not isolated to the tech industry; even traditionally proft-focused sectors such as fnance are reinventing themselves to prioritise the customer. Starling Bank set itself apart from its competition with an innovative, digital platform which provided an intuitive customer journey, based on their actual usage. This approach proved to be highly effective, with Starling Bank gaining just under a million customers within three years and being voted Best British Bank by the public at the British Bank Awards in 2018.

Similarly, in the world of Politics, there is much to learn from companies like Zoom and Starling Bank which are customer-led and integrate customer data in every pore of their organisation to satisfy the needs of their customers.

According to Clive Humby, the famous creator of the Tesco loyalty card, ‘data is new oil’. In politics, even the terminology isn’t customer friendly. For example, take the word ‘constituent’ for voters sounds like a clinical procedure rather than voting customers. However, now there is a direct contact between MPs and their customers i.e. voters.

This is epitomised by the website www.theyworkforyou.com where you can instantly connect with your MP, know exactly which way they’ve voted. To Clive Humby’s point on the importance of customer data, now there are highly sophisticated voter database programs. These programs can visualise voter data such as maps and charts or campaigning tools that leverage the data, exemplifed by the successful campaign of Emmanuel Macron who used the services of the French company Liegey Muller Pons.

This transparency of information has changed the game. And yet, there’s still a remarkable lack of understanding and willingness of some MPs to acknowledge that they are serving voting customers. The traditional two party, siloed system no longer fts in the Customer Economy as a hard and fast segmentation of customers.

For example, you may be a Conservative in terms of values with free market economics but have an affliation with the Green Party on sustainability highlighting the blurring of customer boundaries. In essence, customers in any walk of like don’t ft into discrete boxes which is perhaps a good argument for cross-party consensus on key issues. A successful example is in Colombian cities such as Medellin where political coalitions have been instrumental in signifcantly reducing the violence that tore the city apart for many years.

Last but not least in terms in the political spectrum, behaviour from MPs has shown to be lacking in terms of language and treatment of one another – which has alienated voters from Parliament. Certainly, such behaviour would not be tolerated in the business world. The workplaces of customer-led companies from US video conferencing frm Zoom to John Lewis Partnership represent a good benchmark of what Parliament should aspire to.

Zoom has created a corporate culture centred entirely around the customer. The San Jose based tech company is constantly adapting its business model based on customer feedback. It uses systems designed to be intuitive and simple too, and invests heavily in its Customer Success team to improve user experience and resolve issues. This approach hasn’t just boosted customer loyalty, with annual revenues in the last year of over US$330 million, also, it has had a positive impact on employees. Zoom’s CEO Eric Yuan has been named as the highest-rated CEO on employee review site Glassdoor, with an employee approval rating of 99%.

So what skills do the CEO and leader of today need to possess now?

The nature of the Customer Economy means that leaders must be far better communicators. They have to hone their listening skills, face-to-face and online, and be able to respond directly to internal customers, that is, employees as well as external customers. This must be done with genuine empathy, insight and authentic leadership to create the ‘C-change’ to be a successful customer-led organisation. Another driver for leaders to be customer-led is that millennial employees who are fast becoming the dominant customer bloc, want to work for customer-led organisations with a clear purpose linked to customer needs. Leaders need to be far more human and essentially more authentic replacing the corporate leadership bravado of the past with a vision to nurture employee advocates as part of a customer-led culture.

Furthermore, it’s important for leaders to be customer-led in every aspect and lead by example with customer-led key performance indicators (KPIs) for themselves and employees which are directly linked to needs of customers. A good example is a KPI on net revenue retention where a company with high, net recurring revenue means that its existing customers are essentially less likely to defect when it comes to renewing their contracts with them. Also, the net amount of money (i.e. total money less expenditure) brought in from its existing customer base is less likely to shrink and might actually grow.

Such leadership across these areas demonstrates living proof of the organisational value of being ‘customer frst’ rather than pure lip service which customers of all genres are quick to see through with such availability of data.

Clearly a customer-centric approach not only benefts the customer; also, it allows businesses to thrive. Recently, Forbes reported that customer-led companies which had invested heavily in improving and simplifying their customer experience outperformed those who had not. Those investing in the Dow Jones Index during the 10-year period from 2009 to 2018, would have seen their portfolio increase by 184%, those investing in the S&P would have experienced an increase of 207%.

In contrast, if you had invested in the 10 companies ranked in Siegel+Gale’s World’s Simplest Brands report, you would have outperformed the average of the major indexes by a staggering 679%. Putting the customer frst is no longer a ‘nice to have’, it makes business sense and drives sustainable, proftable growth.

In order to share in the benefts of the Customer Economy, businesses and indeed political parties must genuinely understand the needs and expectations of the customer, and be willing to centre their organisations around them, with no areas off limits. Prioritising customers includes removing rigid departmental siloes in order for customer journeys to be made easier.

This includes providing effective digital channels and creating customer-led cultures that empower employees to assist customers directly without unnecessary complications. Ultimately, it is up to individual businesses, political parties and their leaders as to how they choose to ride the rising wave of customer infuence.

Those that adapt and make real changes to how their organisations run are fnding themselves reaping the rewards of the Customer Economy: improving customer experience and loyalty; and achieving sustainable growth as a result.

Those leaders keen to focus on short-term proft and stick to the traditional business models of a bygone age risk losing their customer base to more progressive, rival organisations. Consequently, there needs to be a C-change in CEOs being customer-led to move away from the short-term, one-dimensional, fnancially-led goals which are just not going to cut it in the Customer Economy. The takeover by customers cannot be ignored so business leaders and politicians need to listen properly to them and act on what customers are telling them. Otherwise they risk becoming obsolete and the latest victim of the customer revolution.

Daniel Bausor, Co-author of ‘The Customer Catalyst: how to drive sustainable business growth in the Customer Economy’