Creating Customer Centric Organizations
“The purpose of a business is to create a customer…The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself…The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer” said the messiah of management, Peter Drucker decades ago. And today they are even more pertinent.
While 1950 – 1980 can be described as the era of products, 1981 – 2000 can be described as the era of brands. And while 2000 – 2010 can be described as the era of processes, 2010 – 2025 can safely be predicted as the era of customers. Accordingly, the organizations were structured and rallying around products (Product-centric organizations), brands (Brand-centric organizations), Processes (Process-centric organizations) and customers (Customer-centric organizations). It should however be noted that: (a) All four of them co-existed in each of the respective periods, and (b) the importance given to each of them differed greatly in each of the respective periods. For instance, brands, processes and even customers were given importance even in the product-centric organizations or product era. It was just that while products were given more importance, the other three were given less importance. Similarly, the co-existence of all the other three elements in other three eras.
The reasons are historical and contextual. The ‘Zeitgeist’ part of the logic says that organizations had to concentrate more on manufacturing immediately after World War II as there was pent up demand and the world was not yet introduced to do modern day business competition. And mostly conglomerates were ruling the day with their significant presence in every major industry. Why should companies worry about brands, processes and customers when there was almost an insatiable captive demand? Accordingly, the organizations were structured around products and that was the birth of product-based or product-centric organizational structures. The organizations’ primary responsibility was to manufacture products with reasonable quality in enough numbers. As JS Mill said, It was a typical ‘supply creates its own demand” situation.
And once the competition came on – especially from Japan, Germany, France initially and later from BRIMC countries, South Korea and a few eastern European countries – the platforms for competition have changed and the new points of differentiation have emerged. And the biggest and the most defining differentiating factor for this next two to three decades would who is on top of customers’ mind? And who stays on customers’ mind? The customer-centric organizations. What are customer-centric organizations and how to create customer-centric organizations?
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