In much of the business literature available today, the principle
The customer is number 1!
is a foregone conclusion. It is one of the givens in business, that isn’t questioned, and upon which much of the strategy and action items are based. Whether reading six sigma principles, or the latest marketing book, this principle is at the heart of many of the principles and tactics taught.
My personal experience in multiple industries and roles is that this is not only incorrect, but dangerous.
Creating a lop-sided organization
Setting the customer as number 1 leads to unbalanced policies, which in turn compound an organizations decisions towards one specific party. This creates, over time, a lop-sided organization.
The customer is extremely important. The reason a business can exist is because of its customers. But no only its customers.
Customers are the group of people we are trying please, to satisfy, and to excite. But they aren’t the only group we want to serve.
In fact, if everything is geared towards customers, resources get pulled and policies get created that take value from other stakeholders in order to make available for customers.
Businesses will begin to focus on the feedback of specific large customers, edging out smaller ones in order to get more business, and in the process create a very narrow revenue stream. This increases risk and lowers sustainability.
Employees may not be able to have a decent quality of life if customer’s demand an “always available” service from a small business. They will grow tired and resentful, as customer’s demand more and more.
What I have found instead is that each process, department, product, or other output of a company should have a specific (and often non-customer) number 1.
In order words, when creating the different components of a company, a longer-lasting and sustainable company will have the customer set as number 1 for some specific products, processes, or policies, but not all.
When it comes to on-time delivery of an item, the customer may be number 1. You want to get that delivery to them, on time, in the manner they want it, and with correct paperwork or deliverables. However, when considering other aspects of running the business, the supplier, or the employees, or the local parks department should be considered number.
The focus dictates the outcome
Setting different “number 1s” will drastically impact the design of specific processes, which drastically impact the design of the business and its output, reputation, sustainability, and ability.
When it comes to culture and benefits, the employees should be number one. Set systems in place to please and wow the employees like you might try to do with customers. Don’t find the lowest cost in order to please customers or owners. Instead, increase the service to the employees like you might increase service to a customer.
When it considering how you collect and share information with suppliers, treat it like they were customers. Make surprisingly easy, even refreshing. Discuss projects and try to “win them as a supplier”. Make them the main focus of specific processes and procedures.
Rather than forcing some system on them, include them in its design. You wouldn’t call your customer and say “this is the only we deliver, take it or leave it”. Yet we do this with suppliers. Imagine the value that could be unlocked with each supplier with a new type of relationship and focus.
These can examples can extend to your banking partners, investors, owners, industry leaders, local academic institutions, and more. Rather than stating the entire company be set with the customer as number 1, consider each process, who it is supposed to serve, who will be impacted by it, and who has a stake in it. Set the correct part as the main focus.
The part who is the focus of the design of a system, or process or product, will impact the priorities used to create that thing. You will end up with very different outcomes depending on who you are designing for. The focus very much impacts the outcome. Compound this decision by all the processes, procedures, documents, tools, products, and relationships a company has, and you can remake a company with this one change alone.
Soon you will realize that incredible value, ideas, innovation, and capability opens up with employees, suppliers, local partners, industry leaders, and even competitors. Don’t go narrower with your company’s focus, go wider.