Seal-centric

"The customer is at the heart of everything we do"

Organizations are customer-centric in the same way that sharks are seal-centric

This has been a favoured line of mine for some years now. Many organizations claim that the customer is at the heart of everything they do. Customer-centricity is one of their 5 core values, along with collaboration and integrity and innovation and whatever. So it must be true.

But is the customer genuinely at the heart of what organizations do? In a strictly legal sense: No. If the organization is a commercial enterprise then it is owned by its shareholders. They have the final say over what the company should do and who it should do it for. In a public company, they are represented by the board and the board has the power to remove managers of that company. Now if you have a dispersed or apathetic set of shareholders or a supine board, then power ultimately sits with management. It definitely does not sit with customers in a direct sense.

One way that boards communicate what they see as important to executives is through incentives - esp. the variable portion of CEO pay that is tied to performance measures. So if companies were truly customer-centric then metrics like customer satisfaction would be the major performance measure for CEOs right?

To compare this to reality, I looked at the FW Cook Top 250 report that analyses incentive structures at the largest 250 companies in America. What are CEOs rewarded for focusing on?

• Total Shareholder Return

• Profit

• Capital Efficiency

• Revenue

• Cash Flow

These are things that investors care about a lot but customers not so much. Which is exactly what you’d expect if you looked at the legal structure of most companies rather than their websites or propaganda corporate values videos.

Let me present you with a modest proposal: You get to say that “customer centricity” is one of your core values when you CEO gets the majority of their bonus from an independently collected, verified, and audited customer satisfaction measure.

That last bit is important: the measure needs to come from a third party because which of us has not had a desperate customer service rep pleading with us to give them a 10 on an NPS survey or else they get fired? Call me old-fashioned but 1. I prefer my data gathering to only have limited levels of emotional blackmail and 2. Goodhart’s Law is very much in effect and 3. Managers should note that staff using emotional blackmail on customers because of managerial diktat is not great for your brand.

This all matters because the comforting lies that we tell ourselves and each other prevent any real change or improvement to our situation. Don’t tell me your values. Show me your bonus plan and I’ll tell you your values.

“Don't tell me it's not worth trying for
You can't tell me it's not worth dying for
You know it's true (you know it's true)
Everything I do
I do it for you
Yeah, yeah”