Conventional wisdom dictates that for an organization to become customer-centric, all functions must make meeting customer needs their priority. This is often too simplistic and simply not practical. Each function has its own priorities and goals that are often in conflict with other functions. Manufacturing is charged with production and cost goals, sales has to meet its numbers, product management is trying to meet P&L goals, and marketing is trying to meet customer needs. These goals don’t often line up. And then when financial pressure builds up, customer experience related priorities are often thrown out the window, and everyone puts their heads down to deliver the Quarter or make the number for the year.
Delivering a consistent experience that provides unique value to customers requires careful design and unerring execution. And a key to this design is usually alignment of functional metrics. This is perhaps best explained through an example. In a recent project, we were helping a global maker of small appliances design an experience that could keep their promise of consumer-centric innovation. While renowned for their prowess in inventing new technologies, the company needed to spark growth by creating rapid consumer-relevant innovations at highly competitive prices. The key to the promise is the consumer relevance of innovations and competitor-beating prices. This required the following alignment-driving additions to functional metrics:
- R&D – From number of patents to also include success of new innovations and ability to reach/exceed targets
- Product Design & Development – From singular focus on number of new products launched to also include share-gain and margins of new products
- Marketing – From number of campaigns, CPM, social media following and other tactical metrics to also include improving brand equity ratings (differentiation and relevance) and ratings on innovativeness and value
- Sales – From sales volume to also include percentage of sales from new products
- Supply Chain – From to supply-at-lowest-cost to also include time-to-market from concept approval to launch
- Finance – From financial reporting to also include dollars re-invested in NPIs from cost-out programs
As you can see, the customer promise becomes the thread that weaves together the efforts of various functions and turns them into cohesive efforts that mutually reinforce each other. But unless you embed this thinking into metrics, it is hard to get the functional alignment required.
