It goes like this. If the Customer is the Primary Value Focus of any successful company, those who work within the company must constantly be concerned to optimize the Customer Value that they help provide – and do so in a manner that is profitable for the company. It stands to reason that employees will only do this, reliably day in and day out, if they are engaged and energized, if they understand what is expected of them, and if they are trusted to get on with it.
From the company’s perspective, what matters is speed of innovation and response, co-ordination of systems, and the ability to create synergy with Customers. In this environment, it is clear that decisions need to be made and managed dynamically, always closer to the customer in any transaction. Opportunities arrive within ever more punitively narrow timeframes. The options are stark. Deliver, or watch the value adding chances pass by to be scooped up by competitors.
The required positive response is clear. Provide much greater empowerment for people to make decisions fast. There is no time to keep referring decisions back for approval because corporate agility will be forfeited and competitors will be able instantly to steal several marches.
But if more people in the organization have the mandate to make decisions and the requirement to make them faster, how can you ensure that the decisions they make are the right ones?
Let’s begin with basics. Decision-making is central to corporate performance. It is where value is created or destroyed. It governs resource allocation and the speed at which strategies can be executed. Organizations make countless decisions on a continuous basis, from the solution of simple operational problems to the resolution of complex issues involving trade-offs between multiple and sometimes conflicting objectives. It is the cumulative effect of these decisions that governs corporate performance.
It is a competitive imperative that organizations move decision-making closer to ‘the customer’ in any transaction. In this milieu, decisions need to be made ever faster and, quite frequently, without complete information to support them. Dynamic customer responsiveness, therefore, carries with it the risk of sub-optimizing performance.
The challenge becomes one of improving responsiveness while maintaining the quality of the decisions that are made. Organizations meet the challenge by process reengineering, new teamworking regimes and flattened hierarchies. These measures get the lead out of everybody’s pants. However, seemingly unbridled decision-making licence all the way down the line can scare the (unleaded) pants off a company’s top brass. So, maybe understandably, these reforms are frequently constrained by strict performance management regimes that seek to control the distributed decision-making powers. In other words, the lead goes back in and everything slows down again.
Actually, it’s a bit worse than that. These well-intentioned restraints tend to emphasise cost control rather than value creation and error protection rather than intelligent enablement. They stifle the initiative and creativity that separate winners from losers. You know the old adage. The person who does not make mistakes does not usually make anything. Enterprises need creativity and initiative in depth, not just as a layer at the top. Coarsely applied controls can render the promise of employee empowerment hollow and block the breakthrough customer service levels they were intended to enable.
Enlightened organizations realize that better decisions do not come from greater control, but from better coordination. These enterprises accept that they cannot tell employees what to do in all circumstances. Conditions change too fast for that. Decision-making needs to be made based on broader guidelines. They understand that an environment which promotes the right decisions is critical to executing strategies and maximizing shareholder value.
In such organizations, the position of the CEO or business leader is somewhat paradoxical. He or she needs to be, at one and the same time, absolutely essential to the enterprise … and entirely unnecessary.
That is, leadership is no longer about command and control. It is about enablement. Having chosen the highest quality people at every level of the enterprise, the leader empowers them to use their intelligence, energy and enthusiasm, day in and day out, for the good of the organization. So an excellent leader doesn’t need to be there to issue orders and check up on everything.
Relating differently to customers explicitly requires new organisational structures and new ways for employees to think about and carry out their roles. Our expertise includes:
Organisational advice – helping you re-organise based on a chosen Customer Strategy
Employee Value – gaining clarity around roles and relationships
Knowledge transfer – online and offline training to equip your people win in the new environment
Many customers will willingly move closer to your business and enter into high-potential relationships. There’s a potential win-win-win here for your employees, your customers, and your business. Be sure not to miss out!