Why customer-centric Strategy is overrated and a culture of Execution is everything

Culture Eats Strategy For Breakfast
—Peter Drucker

Over the years I've heard many times that "[insert breaking trend] is a strategy" to compete, grow, differentiate, etc. And I have to fess up that I've said the same thing myself, dating back to my early days in the CRM industry some 15 years ago.

Let me get this straight. CRM is a strategy. CEM is a strategy. Social media is a strategy. Analytics is a strategy.

Oh, and let's not leave out my personal favorite: Customer-centricity is a strategy, too.

What's left? Everything is a strategy! I could include most of topics discussed on CustomerThink, including digital marketing, sales methodologies, and more.

"Strategy" used in this way is meaningless puffery to make something seem more important. Nothing in this post will change that fact. But strategy should mean something if you use it in the context of a specific business -- your business.

What strategy should be is a long term and high-level plan for accomplishing an important business goal. A strategy should include things like resource allocations, big choices of what to do and what not to do. Tactics, on the other hand, are all about execution -- getting the plan done.

Looking at popular trends this way, are they really strategies for a specific company to win? How can it possibly be true that your company will get a competitive advantage with CRM/CEM/Social/Analytics when these same, um, strategies, are available and used by anyone.

In my view, none of these qualify as strategies, and neither does the fuzzy notion of customer-centricity. They are ideas, methods and tools that you can use to support a real business strategy for your organization. CRM, social media and analytics are centered around technologies, and CEM (for now) around a methodology. They are all important, but can't generically do anything for your company.

CX as strategy: Same but different?

So, that begs the question, what does matter?

First, let me be clear that I do believe it's critical to have a real business strategy for differentiation. Be it on product excellence, customer experience, cost, convenience or whatever -- every business should have a plan to focus its resources to maximize its success.

Since customer experience (CX) is the hot thing right now, let's discuss that for a moment. In recent research by Forrester and others, roughly 90% of executives say they want to differentiate on CX.

I find this interesting... 90% of companies are going to be different by using the same strategy as everyone else!

Of course, that's not how I'd say it if I was one of those companies. I would say that I intend to do a better job of providing a differentiated CX, by providing more responsive customer service, supporting new digital channels, hiring and training clerks in my stores ... or whatever it was that made my customers happier to do business with me, and not my competitors.

All of this, of course, is still not a unique strategy, because my competitors probably are doing the same thing. Who isn't trying to solve these problems?

Still don't believe me? Then consider a new Forrester report, which says the analyst firm predicted in 2012 that "C-level execs [would] officially name customer experience a top strategic priority."

Forrester cites an IBM 2012 CEO study to corroborate that it's coming to pass:

• CEOs named "customer obsession" as the top leadership trait required to steer their organizations effectively.
• 66% listed "customer relationships" as a key source of sustained economic value.
• 73% said that they’re investing heavily in "customer insights."

Wow, it's great that all things customer are coming to the top of CEO agendas. But it also means that many if not most firms in an industry will try to do essentially the same thing: obsess about customers, build loyal relationships and leverage customer insight. Strategic advantage: none.

The hard truth is the vast majority of companies that win don't have a unique strategy, quite the opposite. They are doing what everyone else is doing, but have figured out how to execute better. Yes, there are exceptions, but please let's not all try to be Apple. And Zappos, the oft-quoted example of CX excellence, is not at all unique in its strategy, just the fanatically way they execute against a CX strategy of "Delivering Happiness."

Execution = Culture

That's why I've come to the conclusion that "strategy" is an abused term and overrated as the key to business success in general, and customer-centric success in particular. Execution is what separates the winners and losers.

In the customer-centric world I've been researching for the past 15 years, I've found that better execution is driven by 5 interrelated organization habits: Listen, Think, Empower, Create and Delight.

As you can see in the chart below, there is a logical flow to these habits, but it's not a linear step-by-step progression. Rather, it's a systematic approach to make customer-centricity a part of how business is done, day in and day out. Sorry, there's not just "one thing" that will lead to success.

There's a word for this: culture.

In a business context, I see culture as not just some ethereal notion of values and beliefs (yes, they do matter) but rather a set of behaviors. As some have put it more colorfully: "Culture is how we do things around here."

Peter Drucker also wrote (in The Age of Discontinuity): "Lack of creativity is…not the problem of organization. Rather it is organizational inertia which always pushes for continuing what we are already doing."

Anyone who has worked in large organizations knows this to be a fact of life. Change is incredibly difficult because the organization is used to doing things a certain way.

The key to customer-centric success, my research has found, is making that inertia work for you by creating a new culture of customer-centric habits. Measurement and reward systems -- depicted by the gears in the center of my diagram -- are critical to re-enforce the behavior you seek.

Trust me when I say this, slogans on the wall won't do it, and neither will "strategy" proclamations.

I'll be writing more about these five habits in future posts. For now, I suggest taking a hard look at whether you have a unique strategy for differentiation. If you do, great. But odds are, you don't. In either case, a culture of execution will be the key to success.

Enjoy your breakfast!