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The focus of customer-focused companies

Over the last month I’ve put out a few posts on the concept of customer-focused organizations and why I think the academic concept of market orientation is vitally important to understanding what it means. My first post provided some thoughts on customer centricity, my second post outlined my argument in favor of market orientation, and my most recent post went into detail on some of the detailed characteristics of a customer-focused organization.

As promised, this post will extend the discussion to the antecedents of market orientation – the organizational factors that allow for the creation of a strong and balanced customer focus. Antecedents are distinct from the indicators (aka, characteristics) of market orientation I discussed previously. Indicators tell you how much of something you have while antecedents tell you how to get more. Many companies make the critical error of thinking the two things are the same. For instance, conducting an annual customer feedback survey is an important indicator of being customer focused; however, simply implementing a customer feedback survey will not make you more customer focused. It only works if motivated by the correct underlying factors and philosophies.

So what are the factors that lead to true customer focused behaviors? The concepts discussed below are taken from one of the foundational frameworks for market orientation (Kohli, Jaworski & Kumar 1993). These concepts have been empirically tested by a vast array of subsequent research and hold up pretty well. The authors found three general categories of antecedents along with a few key sub-dimensions under each one:

  1. Senior management factors
    1. Committed to and take action on being customer-focused
    2. Willingness to take risks and tolerance of some failure
    3. Positive attitude toward change
    4. Marketing leaders are trusted by other senior management
  2. Interdepartmental dynamics
    1. Interdepartmental cooperation
    2. Formal and informal connections between departments
    3. Openness to ideas from other departments
  3. Organizational systems
    1. A balanced approach to organization structure (this is a complicated topic but generally you want some hierarchical departmentalization, but not too much of it).
    2. Market-based incentive structures with a focus on long-term organizational health (another complex topic I’ve blogged about a few times)
    3. Low incidence of "office politics"

So, how does this information help us craft a more customer-centric organization? I think it does two important things. First, it focuses on the factors that actually matter to creating an honest and long-lasting customer orientation. It cannot be bought or tricked into existence by a few external flourishes or a fancy marketing campaign – customers will see right through that eventually. It has to be built from the inside; from the very heights and depths of your organization.

Second, it illustrates that customer orientation is not easy. The list of items above are not easily created, which is why some people talk about customer orientation being in an organization’s DNA – it is hard to create the above factors if they don’t already exist. This may be dis-heartening, but it’s actually good news for the organizations willing to make the commitment and put in the hard work. It means that true customer orientation will continue to be a strong, positive differentiator in the marketplace, which is why we continue to see the Walker Index drastically outperform the general marketplace. 

So get to work. The rewards are out there waiting to be captured!

Troy Powell, Ph.D.
VP, Statistical Solutions
 
List of all posts in this series:

  1. Re-centering on customer centricity
  2. A broader orientation for being customer-focused
  3. Characteristics of a customer-focused company
  4. The focus of customer-focused companies
  5. The moderation of customer focus

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