The Quality Revolution was meant to be customer focused, instead became process centric and one of record keeping. Nonetheless, Total Customer Value Management can learn from the Quality movement. There is much to learn.
The Customer Department
Value Creation is all about how it impacts CEO thinking on short term vs long term, and how he can add value to customers, employees, and build the Value Creation principles in departments in the company. We have talked about creating value in training, in leadership and in making the customer your partner and making him your ambassador.
We have suggested to the CEO to change the focus of departments such as HR and IT to become customer focused and become line managers. We have dwelt upon reducing the focus of executives on routine tasks and concentrate on important value creation jobs, instead outsource routine work.We have talked about the future, self-tuning companies and agility, adaptation and ambidextrousness, moving from selling to customers to becoming his buying aide.
CEOs must have a Value Creation strategy in order to implement all of these. This includes many of the steps mentioned above.
One major step is to change your companies and which should be part of your strategy is to break silos and make the customer the focus of all departments, and make the customer experience seamless.
If companies truly wish to give the Customer his deserved place in the company, they have to start a Customer Department. This department will have all functions that are necessary for and/or relevant to the Customer. The functions include product development and products, manufacturing delivery and delivery chain, supply chain, IT and even manufacturing.
Thus instead of having an operations department headed by a COO we should have a Customer Department headed by a Chief Customer Officer or a Chief Customer Value Creator (CVCO).
Why is a Customer Department needed?
First to break silos and unnecessary demarcations in companies where the convenience of the company comes ahead of the convenience of the Customer (lets say the delivery departments focus is on cost cutting and not on working out methods to suit the customer).
- Second to have one point of control for the Customer
- Customer reporting: the Value we added to the Customer, and his value to us. Have these gone up?
- No more billing goof ups at the finance department
- A proper and dynamic customer strategy
- Customer Improvement programs
- Promises and procedures to ensure the Customers Bill of Rights is honoured
- Seamless delivery
- Service Department
- Customer relation problem to solve customer problems
It needs one COO type of coordinator or manager, who should be called the Chief Customer Officer or a Chief Customer Value Creator (CVCO).
Non customer related work (like tax, treasury, employee information such as leave due, leave taken, attendance, functional training like finance for non-financial mangers) are not part of the Customer Department.
The COO acts as the Chief Customer Officer or the CVCO, whose role is to ensure that Customer tasks are divided within the Customer Department, and the departments become Customeric.
Executives are taught to focus on the Customer and his needs. Continuous Customer improvement programs are put into place. The COO ensures that the Customer comes first and divides the department and thereby the company. Employee Value Creation programs are started.
The COO or CVCO reports Customer scores along with why scores are improving or not, and to correlate with market share and profits.
The CEO focuses on the Customer Department and non-Customer Departments and reports Customer and financial data to the Board. The CEO assigns key performance indicators and customer score driven bonuses.
I am curious how many feel this will help make the company more customeric.
Founding Editor, Journal of Creating Value
President - Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies. Total Customer Value Management (Total CVM) transforms the entire company to focus on Creating Value for the Customer by aligning each person's role in Creating Customer Value and getting shareholder wealth and Value.
I notice more and more that the Customer is taken for granted or allotted a by the way mention in new business strategies. Forbes and many others have written about this and bemoaned the fact, and warned companies not to ignore the customer.
Here is an excellent review on Gautam Mahajan's book on Value Creation written by Colin Shaw, founder and CEO of Beyond Philosophy. Colin is an international author of five bestselling books and an engaging keynote speaker..
In my book, Value Creation: The Definitive Guide for Business Leaders, I added a 4th A (Ability) to what Management gurus talk about in the 3 Aís to ready ourselves for the future
Customers tend to buy or use those products or services that they perceive create greater value for them than competitive offers. It is essential for executives and leaders to create higher value for their Customers than competition can.