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Tuesday, July 30, 2013

Five Traits of Customer Focused Organizations

The importance of the quality function within the organization has been evolving along with that of the customer. Organizations focused on their customers consistently outperform their competition. A truly customer-focused organization sees things through the “lens of the customer” not the “lens of the organization”.

Customer-driven organizations share certain traits.

Flattened hierarchies. When customers are the focus, a larger percentage of the resources are directly or indirectly involved with customers, reducing the number of bureaucratic layers in the organization structure. Employees will be empowered to make decisions that immediately address customer issues, reducing the need for structured oversight. The traditional functional hierarchy, with departments focused on singular functions, is best replaced with horizontal process or product-based structures (often referred to as value streams) that can quickly respond to customer need.

Adaptable processes. Customer’s demands are at times unpredictable, requiring adaptability and potential risk. Customer-driven organizations create adaptable systems that remove bureaucratic impediments such as formal approval mechanisms or excessive dependence on written procedures. Employees are encouraged to act on their own best judgments.

Effective communication. During the transformation the primary task of the leadership team is the clear, consistent, and unambiguous marketing of their vision to the organization. The behavior of senior leaders carries tremendous symbolic meaning, which can quickly undermine the targeted message and destroy all credibility. Conversely, behavior that clearly demonstrates commitment to the vision can help spread the word that they are serious.

Measuring Results. It is important to verify that you are delivering on the promise to customers, shareholders, and employees. These measurements form the basis of the improvement efforts, and should include internal processes as well as external outcomes. Data must be available quickly to the people who use them and be easy to understand.

Rewarding Employees. Employees should be treated as partners in the improvement effort. Rewarding individuals with financial incentives can be manipulative, implying that the employee wouldn’t do the job without the reward, which tends to destroy the very behavior you seek to encourage. Recognizing exceptional performance or effort should be done in a way that encourages cooperation and team spirit.

For too many organizations, the journey from traditional to a customer-focused organization begins with recognition that a crisis is either upon the organization, or imminent. This wrenches the organization’s leadership out of denial and forces them to abandon the status-quo. Their actions at this point define their success. The successful organization will establish a customer-focused vision, and develop plans to attain the vision.

The common thread in the evolution of quality management is that attention to quality has moved progressively further up in the organizational hierarchy. Quality was first considered a matter for the line worker, then the inspector, then the supervisor, the engineer, the middle manager and, today, for upper management. Quality will continue to increase in importance, in tandem with customer relations. Ultimately, it is the customer’s concern with quality that has been the driving force behind quality’s increasing role in the organization. As Juran (1994) stated, the next century will be the century of quality.

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