Customer-Centricity in Organizations
Professor E. J. Bondoc
May 9, 2012
In recent years, some companies have been shifting their focus on customer-centric designs. Managers need to consider whether this type of business design or strategy fits the needs of their business as it is not a “one-size fits all” kind of design for every company (Kate & Galbraith, 2007).
Customer-Centricity in Organizations
This paper analyzes customer-centric design within the framework of an organization, and its benefits as well as disadvantages. It will also shed light on how this form of organizational design and strategy is gaining ground today in the business world, and why so many companies are now attributing their success to it. Customer-centric organizational design and strategy is gaining ground today in the business world, and many companies are attributing their success to it. Not to confuse customer-centric with customer-focused, the distinction between the two according to Kate & Galbraith (2007), is customer-focused design and strategies involve how products and services are developed, and how sales and services take place; customer-focused designs, processes, and systems improve an organization, but they do not transform it. Transforming an organization involves an impact on the structure, capabilities, processes, rewards and people (all the components of the STAR Model) on only products, services and sales. On the other hand, customer-centric designs and strategies do transform an organization because they have an impact on the Star Model as a whole. A customer-centric organization integrates and brings together products, services, and experiences from within and beyond the company to provide solutions to the complex and many needs of its customers (Kate & Galbraith, 2007).
Put simply, customer-centric
means putting the customer at the center of everything that a company does and doing everything with the customer in mind. It means thinking from the outside in (Watson, 2011). Before making any decisions within the company, leaders need to consider how that decision will impact the customer. Companies need to design their products from the customer’s perspective. They need to consider how the customer will use it, under what conditions they will use it, and how they can make it easy for use by the customer. Customer-centric also entails the company’s sales process to make it easy for the customer to purchase goods and services. For example, a dry cleaning business may offer home and office delivery services as a convenience to customers. The ultimate reward of customer-centricity is customer loyalty, consistent revenue streams and higher margins (Watson, 2011).
A customer-centric design also involves learning to see, living the customer’s life, and empathizing with the customer according to May (2009). He stated that businesses will have to observe or watch the customer. At the company, Whirlpool, designers study their products as they are being used in the home because the customers cannot always express the problem they are having with a particular product. For example, in one study, three separate cameras were placed in the home to capture the difficulties in finding and replacing the water filter in a new refrigerator design; this led the designers to the solution. In addition to watching and recording videos in the customers’ kitchens, designers also accompany their technicians on service calls to gain insight into quality and dependability (May, 2009).
May (2009) advised that businesses will also have to infiltrate and become the customer. For example, when Harley-Davidson sales dropped in the mid-1980s, the senior management team was directed to attend biker rallies and go on the Harley rides. Willie Davidson, Vice President of Design and grandson of the founder, observed that every Harley had been...
References: Kates, A. & Galbraith, J. (2007). Designing your organization: Using the STAR model to solve 5
critical design challenges
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