Next week’s NRF Big Show features several sessions focused on the idea of being “customer centric.”
If you’re like me, you roll your eyes a bit every time you hear that phrase, mainly because many organizations, despite the best intentions, are only taking the half-steps necessary to being truly customer-centric, and because several unprecedented forces are converging to redefine what it even means to be an organization today.
Businesses of all types have invested heavily over the past two decades to become more focused on their customers, but the unprecedented pace of change in customer demands, competitive pressures and technology innovation are forcing profound changes and diluting the impact of their investments. Tomorrow’s leaders must therefore rethink their operational and organizational models to compete, differentiate, and grow profitably.
What does that mean, exactly? It means that organizations must look beyond their own four walls and orchestrate an adaptive network of partners to offer the products, services and experiences that customers demand. This next phase in organizational transformation is based upon a collaborative ecosystem that is open and interconnected, and exists to serve one purpose – the customer.
We see this in our business, where innovative retailers and brands are overcoming organizational barriers to embrace change. Some examples: Cole Haan partnering with Uber, Pinterest, and ApplePay to control distribution and own the customer experience; Department stores Nordstrom, Neiman Marcus, and John Lewis reinventing their stores by partnering in unexpected ways with Tesla Motors, Rent the Runway and Kuoni Travel respectively.
Strategic partnerships, even between companies that are considered competitors, are expected to expand much more widely, even from other industries, to mix products, services, and experiences that solve customer problems. At the same time, companies are taking a much more “outside-in” approach when it comes to market insight and innovation.
This concept is borne out in forthcoming research from Salesforce and Accenture, which shows that 59% of retailers surveyed cite “market insight or innovation” as the most important stepping stones to becoming network-centric. One senior executive from an apparel retailer tells us that, “It is everyone’s responsibility to be aware of trends. There is no central think tank to come up with ideas and research.”
Indeed, corporate history is littered with companies doomed by an insular culture focused more on its own agenda than offering customers what they actually want.
We know that taking a narrow view of the competition and the market, and being just a little bit better is no longer good enough. In fact it can be downright dangerous. Organizations today must embrace a comprehensive understanding of the broad marketplace – continuous tracking of customer expectations, tech innovations, competitors, and disruptors, including all levels of the organization and all partners.
This involves having the courage to let go of some outdated ideas; for instance that your competition is always your enemy, and that good ideas always come from a small group of internal stakeholders.
Tomorrow’s leading business will acknowledge that they do not have all the capabilities, perspective and expertise required to best serve customers.
Here’s the cold truth – you can’t know everything, and you can’t do everything. The sooner you accept that, and start collaborating with outsiders to deliver complementary capabilities, the faster you will become truly “customer centric.”