Riddell: The center is the focus
Not Business As Usual
A recent conversation with a business associate featured a comment about my personal emphasis on customer satisfaction. The gist of his comment was that this focus was too simplistic. His main point was that this simplistic view really only served to obfuscate many other business details that merited equal discussion supported by academic pursuit and specialized professional assistance. Given that many livelihoods are founded on attempting to bring some clarity to initially confusing situations, I understood the underlying rationale, but as I explained to him, I could not more forcefully disagree. Here’s why.
First and foremost, it is critical to understand just why any business exists in the first place. As has been referenced before in this column, the renowned business scholar, Peter Drucker has written that the sole purpose of any business is to find and retain a customer. Profits, wealth, and everything else that comes from running a business is simply the result of successfully pursuing this purpose. Therefore, it stands to reason that it would be impossible to find, much less retain, any customer if that customer is dissatisfied with a company’s offering. If this seems intuitively obvious and simple to you, it’s because it is. Some consultants and academics tend to dislike this simplicity because it undermines their attempts at unravelling false complexities that form the basis of compensation justifications.
But if you think about it, using customer satisfaction as the starting point for any endeavor automatically gives form and direction to all aspects of the organization. Please consider for a moment that most people have at least a cursory awareness of the traditional organizational chart. Usually this chart is drawn up such that the president/CEO is at the top and through a series of connected boxes, functions with decision making authority are laid out in a map of responsibility. Nowhere on this chart, however, is the direct connection made with the singular source of revenue to the company—the customer.
Let’s consider for a moment a different org chart design. This chart starts with a circle. In this circle is the prominent word CUSTOMER. Surrounding this central circle are a number of additional circles with functional titles. These include manufacturing, sourcing, finance, sales, marketing, etc. Like spokes in a wagon wheel, lines of reporting flow back and forth between the central customer circle and the functional circles. Now picture one great circle outside all the functional circles connecting all these functions through a line of communication. Now you have an organization chart that defines not only the direction of the company but also joins everyone at the hip in the pursuit of this direction. Suddenly, with this type of structure in place, nonproductive squabbles and turf battles are replaced with the simple requirement of what is the best solution for the customer. Measuring the ability to improve customer satisfaction in any functional area then becomes the objective criteria for evaluating the effectiveness of the particular function.
The interesting aspect of this idea is that it works independently of company size or industry. What it is dependent upon however is the courage and leadership to implement it. If you find yourself constantly reacting to market forces upon which you have no control and are tired of always feeling like you are playing catch up, take some time to at least consider this organizational idea. I contend that it is a sustainable and workable model in an era characterized by rapid change and shifting customer preferences.
Following a successful international business career, John Riddell turned his attention to small business/entrepreneurial pursuits that included corporate turn-arounds, start-ups, teaching, authoring business and sports columns and serving as VP for the Chattanooga Chamber of Commerce directing its Center for Entrepreneurial Growth.
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