When I wrote my second book, Firing on All Cylinders: The Service/Quality System for High-Powered Corporate Performance in the early nineties, customer service and quality improvement was becoming a key focal point for both the public and private sectors. Movements like Total Quality Management, Continuous Quality Improvement, and related customer service initiatives were helping many organizations toward dramatically higher levels of performance. Rigorous quality award frameworks and processes in Canada, the U.S., Japan, and Europe highlighted what outstanding organizations were doing and how dramatically they were pulling ahead of their peers.
Unfortunately, those were the exceptions. Most attempts to improve customer service were too narrow and superficial. They failed to focus the organization’s culture and core processes on serving customers. They suffered from a real lack of strong leadership to back up all the marketing hype and rhetoric.
So the re-engineering movement took over and eventually fueled the high bubble of the late nineties. Just as the “dot com” companies thought they were rewriting the laws of economics, these expensive new tools promised to enable average organizations to leap over their industry and competitors toward new heights of service and quality. All that was needed were big capital investments and even bigger consulting contracts to have outside experts slam-dunk “change management” programs on the organization.
But new technology such as automated phone systems, CRM (customer relationship management), call centers, and e-commerce alienated many customers. That’s often because they were designed to increase organizational efficiencies, not serve customers the way they wanted to be served (e.g. CRM too often looks like an exercise solely designed as Cost Reduction Management). Walls between these technologies and the rest of the organization compounded the problem. When front-line producers and servers also felt alienated and poorly supported by their organization, the customer was served a lethal service/quality cocktail. A culture of “if we don’t take care of the customer, maybe they’ll stop bugging us” can easily seep insidiously into the front-lines.
High-performing organizations are highly customer-centered. Since 1994, an ongoing University of Michigan study has found “the statistical relationship between customer satisfaction and market valuation is very strong.” Other research has shown that improving customer retention by just five percent doubles the profit margin.
I am delighted to see plenty of signs that the pendulum is swinging back again. Many organizations are rediscovering their customers. Whether they are running internal staff support organizations or line operations, leaders are recognizing that they have drifted into planning, priority setting, and change from the inside out. They are now moving their organizations back toward changing from the outside (customers) in.