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Think You're Customer-Centric? Think Again

In his new book Reorganize for Resilience: Putting Customers at the Center of Your Business, Harvard Business School professor Ranjay Gulati gives companies advice for becoming truly customer-centric.

The key word being "truly."

"Customer-centricity sounds like motherhood and apple pie. Every company should be customer-centric, and no company is going to say we want to be anti-customer-centric," says Gulati, who I spoke with last week. "This idea has been around forever, and a lot of people feel like it's just a marketing idea. But part of my endeavor is to show this is very hard stuff."

While it's hard stuff, it's also worth it.

"In a marketplace like today, customers have more choices and more information, and services start to look like each other, in what we call a sea of sameness," explains Gulati. "If you don't have an ability to transcend beyond the features and functionality of my product versus yours, then you have a problem."

So how does a company transcend that sea of sameness and figure out how to truly serve its customers? Here are three keys:

  • Ask the right questions: Most organizations believe they are customer-centric when they are asking questions, but they're communicating with customers through a product lens. Instead, Gulati says companies must ask deeper questions such as "what problems are customers dealing with?" and "what are the issues happening in the life of my customers?"
  • Make the creative leap: Customers often won't be able to tell you exactly what they need. Says Gulati, "Steve Jobs was not going around saying, 'Tell me how to make an iPhone.'" But based on asking the right questions and carefully listening, companies can figure out the innovations that will best serve their customers.
  • Get your organization to act: "The hardest one is getting the organization aligned to act around what we think customers want," Gulati says. "Most companies are organized around 20th century constraints of production and distribution. Companies that are organized around product and geography fundamentally don't orient themselves around customers, especially if the customers span products and geographies."
So which companies are asking the right questions, making creative leaps and taking action? Next week, we'll take a look at companies that Gulati says are getting the customer-centric approach right.
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