John Sills John Sills Senior Consultant, The Foundation
Customer-led Growth: the Route to Lasting Success?

Customer-led Growth: the Route to Lasting Success?

John Sills, Senior Consultant at The Foundation considers what it really means to be a customer-centric organisation and how this is best translated into growth, taking in a few lessons from the recent general election along the way.

Anyone who’s worked in a large organisation over the past few years will have become used to hearing phrases such as ‘customer-first’, ‘customer-centric’, and customer-led’. As the demand for transparent government and business increases, so do customers’ expectations, meaning that being a customer-led company is no longer an optional extra. It’s central to long-term sustainable growth – with the alternative often being short-term, rapid decline.

To help us get a better understanding of what it takes to be customer-led, we recently held an event at which we heard from three individuals who have worked in organisations where the customer has been vital to success: Tim Mason, ex CMO of Tesco; Alexander Hoare, a family owner and ex CEO of Hoare’s Bank; and Andrew Haldenby, co-founder and Director of Reform, a respected independent political think-tank.

There were three important headlines that emerged from what we heard:

1.      What does being customer led really mean? 

There is a common mis-conception that it is about chasing customer opinion, but this can be distracting or even directly unhelpful. In fact, being customer led means having a tight grip on what customers truly value, and understanding where their alternatives leave them eager for more.

As is often cited, Henry Ford understood that essentially customers want to travel fast, but that the horse could only be made to go so quickly.  He didn’t need market research to tell him to invent mass production; he needed the drive to give customers something better and to transform the world.  By making cars affordable he gave customers what they truly valued, including compromises they were happy to make like only being able to buy in black.

Politics on the other hand is suffering and it stems from this misjudgement.  The main political parties have lost sight of our desire for strong and authentic leadership.  Instead they reflect what market research tells them will win backing from marginal voters.  The SNP, UKIP and Green Party have stepped in with strong views, and even though their opinions are on what used to be the fringes, they have amassed huge support.

You only have to look at the huge chasm between the opinion polls and the recent election result to see that chasing customer opinion isn’t always the best way to really understand what your customers truly value.

2.      The way you define success is crucial

If you merely count outputs, either money in business or votes in politics, then you will increasingly miss what causes those results to improve.

For an organisation to focus on what its customers care about, giving their employees the best chance of creating something that compels them to want more, it is helpful to have a purpose to pursue. Success needs to be measured first against this purpose, with financial results or the seats in Parliament showing how well this is being translated into action against the alternatives.

By being more purposeful, organisations give themselves a better chance of spotting disruptions and taking early action rather than getting sucked into a spiral of supporting increasingly unsustainable revenue and profit growth.

3.      Accountability to the purpose is tough to establish and is ideally ‘built-in’

If the purpose can be part of the fabric of the way the organisation works then it stands a better chance of staying on track over the long term.

Hoare’s bank, for example, ensures owners and leaders stay true to their ideals not through exhortation but by continuing to be an unlimited liability partnership.  This means their personal economic viability depends on prioritising quality over profit, with a customer-led culture built into their every day existence.

Of course, becoming customer-led isn’t an over-night change for most organisations. It takes commitment, courage, and some challenging conversations. But for most, the liberating feeling of doing the right thing, followed by the financial and reputational rewards of a lasting successful business make those initial bold choices wholly worthwhile.