The Secret Sauce to Success Amidst Disruption: Building a Customer-Centric Culture of Innovation

A large majority of organizations rarely focus on gathering and utilizing customer-centric knowledge. So much so that they even introduce a product without having vital insights on the customer and their unmet needs, and they are often clueless about them. Consequently, many product development initiatives fall flat as managers struggle to filter and evaluate ideas.

Most organizations, today, are developing initiatives around Customer Experience Strategy and Customer Journey Mapping. Customer-centric Organizations are deeply focused towards value creation for their customers. They understand the unique customer insights needed to make customer-centric decisions, are able to gather those customer insights, and are aware of the way to utilize the insights in creating value for their customers. By using customer insights, Customer-centric Organizations drive their product innovation success rate significantly higher than the industry average.

In order to develop this capability, organizations need to first utilize a customer-centric research process to gather the customer insights required to drive value creation. This is accomplished when:

They know the desired unique customer insights needed to make customer-centric decision.
They are able to gather the required customer insights.
They realize the proper time and way to utilize the insights in making value creation focused business decisions.

Building a Customer-centric Culture of Innovation warrants a methodical approach. A potent approach to building such a culture of innovation encompasses 3 key phases:

Qualitative Insights: Apply Customer-Centric Fundamentals – The first phase commences by organizing an intensive day-long workshop for each cross-functional product team. The teams engage in a unique customer journey where they employ a “jobs-to-be-done” lens to analyze their market, and identify valuable, qualitative customer insights needed to drive customer-centric decision making.
Quantitative Insights: Quantify Opportunities that Exist – This phase entails conducting quantitative research to rank the most critical customer insights needed to develop customer-centric data model. The insights available through this data set help the company in making customer-centric business decisions for years to come.
Implementation: Leverage New Customer Insights for Growth – In this phase, managers and employees across the organization are trained on utilizing the insights to devise market and product strategies, and to encourage customer-centric growth.

Let’s take a deeper dive into the first phase of this process.

Qualitative Insights: Apply Customer-Centric Fundamentals

The first phase commences by organizing an intensive workshop for each cross-functional product team. It is typically a day-long session where the teams engage in a unique customer journey. They employ a “jobs-to-be-done” lens to analyze their market and identify valuable, qualitative customer insights needed to drive customer-centric decision making. The qualitative customer insights developed during the first phase serve as an indispensable, long-term guide in the journey to a customer-centric mindset.

During phase I, each product team is trained on customer-centric philosophy in a workshop settings. The workshop participants participate in qualitative research discussions designed to obtain critical customer information and fresh insights. Upon completion of the initial phase, the product team is able to develop a shared innovation vocabulary and gather customer insights to make customer-centric marketing and product development decisions.

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Organizational Silos 101: Breaking Barriers to Performance Excellence

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Despite the emergence of new devices and software products designed to unite employees in more ways than ever before, the threat of Organizational Silos Primer pic1 organizational silos is still very real. While silos deter customer experiences and producing correctly functioning products – the root of the problem is that many managers fail to spot those silos as they formulate in front of their very eyes.

What are Silos? Organization silos describe the isolation that occurs when employees or entire departments within an organization do not want to or do not have adequate means to share information or knowledge with each other. Siloed teams often end up working in isolation from the rest of the company. This leads to a plethora of internal and external problems for employees, executives, partners, and customers.

In Organizational Design, it is critical to also consider the risks of unintended silos within the organization. Having organizational silos can lead to duplicate work, inefficiency, bugs and generalized employee disenfranchisement at a granular level. Work is being done without regard to how the work impacts other departments. Departments start having tunnel vision, solely focused on their own functional area. In the end, there is a breakdown in communication and transparency leading to organizational dysfunction on multiple levels. This can greatly affect the company’s ability to deliver excellent Customer Experience.

Breaking Down Organizational Silos: The 5 Key Symptoms

Understanding the 5 Key Symptoms of Organizational Silos will guide companies in breaking down silos and limiting their effect on performance, goals, and targets.

Broken Customer Experiences. This is the most obvious sign of a siloed team. Eventually, this symptom will ultimately make the company undesirable.

Internal Unfamiliarity. There is internal unfamiliarity when employees or colleagues are not on a first name basis. Employees are not familiar with the majority of the people outside the team and what they do.

The Us vs. Them Mentalities. When your department sees other departments as competitors and obstacles to success, then there exists the us vs. them mentality. In the us vs. them mentality, protectionist thinking exists. When this happens, information is not shared for fear that another team’s gain will be their loss. This leads to the creation of cliques with its own distinct culture that is not aligned with the company’s overall mission and culture.

Disenfranchised Employees. Having employees who feel that they are not part of the team is a symptom of organizational silos. Disenfranchised employees are unhappy, unproductive, and pose the risk of sharing negativity with coworkers.

Task Duplication. Have you seen people of different teams working on similar assignments and projects? That is a symptom that there are organizational silos within your company. When there is task duplication, this can lead to inefficiencies and loss of productivity.

Companies can immediately break down barriers to communication and collaboration once the key symptoms are detected. Silos in business have two sides to the coin. The good side is variety, ownership, accountability, specialization, and efficiency. However, on the other side, the bad side means short-sightedness, inaccessibility, and inefficiency. This can harm your organization.

Organizations must be able to deal with silos inside a business. This can be done by expanding our perspectives and motivation in the work we do.

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Customer-centric Culture: An Imperative in Today’s Age of the Customer

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The use of the internet and other online tools have turned consumers to be more empowered and are now shopping differently. Customers are customer centric culture 1 becoming more demanding and accustomed to getting what they want. With greater access to reviews and online ratings, customers are better equipped to switch to new products and services. Consumers now want to buy products and services when, where, and however they like. They expect companies to interact with them seamlessly, in an easy, integrated fashion with very little friction across channels.

As customer expectation continues to evolve – accelerated by the amplifying forces of interconnectivity and technology – markets are becoming increasingly fragmented with demand for greater product variety, more price points, and numerous purchasing and distribution channels.

Companies should be able to adapt to these increasingly disparate demands quickly and at scale. Staying close to the customer experience across an increasingly diverse customer base changing over time is no longer a matter of choice. It is a business imperative and a matter of corporate survival.

The Age of the Customer now calls for companies to be a customer-centric company. Successful ones have discovered that building a customer-centric company depends, first and foremost, on building a customer-centric culture.

The Case for Customer-centricity

In the Age of the Customer, business as usual is not enough. Customers expect companies to interact with them seamlessly. Customers want companies to anticipate their needs and technology must have lowered barriers to entry to allow unorthodox competitors to disrupt markets.

The Age of the Customer has made it imperative for companies to have a customer-centric culture. A customer-centric culture can empower and control employee behavior. It is a culture that prioritizes the common understanding, sense of purpose, emotional commitment, and resilience. It is a culture where leaders and employees understand the company’s brand promise. Finally, and most importantly, a customer-centric culture is a culture that is committed to delivering exceptional customer experience.
Companies with a customer-centric culture must integrate, within its core, primary and secondary cultural attributes essential to complete its customer-centric culture framework.

The Corporate Culture Framework: Its Primary and Secondary Cultural Attributes

In a corporate culture framework, the primary cultural attributes are critical in building a customer-centric culture. It also has 4 Secondary Cultural Attributes to complete that transformation.

The 4 Primary Cultural Attributes

Collective Focus
This is a shared vision articulated on what it means to deliver great customer service. Significant resources are devoted to communicating the customer value and all employees understand their role in delivering value.
External Orientation
External Orientation is having a full understanding of the company through the customer’s eyes. Outside-in perspectives are taken, seeing themselves as customers see them.
Change and Innovation
In Change and Innovation, the corporate value system is in place that values failing fast and learning quickly. The notion that mistakes are learning opportunities is embedded in the organization.
Shared Beliefs
Shared Beliefs is an attribute where employees share a common ideology and commitment to core values. The company strongly encourages strong service mentality and the desire to help others.

The 4 Secondary Cultural Attributes

Risk and Governance
In Risk and Governance, the company must have a strong collective focus and shared beliefs about the boundaries of acceptable risk and appropriate behavior.
Courage
A customer-centric culture with this secondary attribute has the resilience to bounce back when things don’t go as planned.
Commitment
Commitment is the third secondary attribute where employees show dedication to the customer-centric ethos.
Inclusion
Inclusion, the fourth secondary attribute, is one attribute that reinforces values diversity, authenticity, and uniqueness.

Inculcating these attributes has become imperative to achieve a successful transformation towards a customer-centric culture. Organizations just need to master the necessary practices to instill these attributes and the essential reinforcement to ensure that it is sustained.

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Do You Know How to Transform Your Organization into a Learning Organization?

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In this era of rapid change only organizations that are evolving and continuously learning can flourish. Successful organizations discover how to tap their people’s commitment and capacity to learn at all levels.

A Learning Organization is a place where people continually expand their capacity to create the results they truly desire, where new ideas and thinking are nurtured, and where people are continually learning to see the whole together. A Learning Organization is established on the principles of innovation, free flow of ideas, and a consistent focus on transforming the ways of doing business.

Learning Organizations adopt 5 distinct practices to succeed, which form the “building blocks” of such organizations:

Systematic Problem Solving
Experimentation
Learning from Experience
Learning from Others
Knowledge Transfer

Five key characteristics distinguish a Learning Organization from the rest. These attributes serve as the guiding principles and practices that these organizations study and integrate into their DNA. A blend of these core characteristics helps organizations adopt a more interconnected way of thinking:

Systems Thinking
Personal Mastery
Mental Models
Shared Vision
Team Learning

By adopting and mastering these core characteristics organizations become communities that employees can commit to. Let’s, now, discuss the first 3 characteristics in detail.

Systems Thinking

Systems thinking allows people to study businesses as bounded objects. Learning Organizations possess information systems to assess the performance of the organization and its components as a whole. Systems thinking states that all the characteristics must be present together in an organization for it to be a Learning Organization. However, some experts consider that the characteristics of a Learning Organization are gradually acquired, rather than developed simultaneously.

Personal Mastery

Personal mastery is an individual’s commitment to learning. It is about becoming more productive by applying skills to work in the most constructive manner. It involves clarification of focus, vision, and to interpret reality objectively. Training, development, and continuous self-improvement are the sources of individual learning.

Mental Models

Mental models include assumptions and generalizations retained by individuals and organizations, which go undetected, as mental models limit peoples’ observations. Learning Organizations need to identify and challenge these models. For a learning environment it is important to replace confrontational attitudes with an open culture that promotes inquiry and trust, introduce mechanisms for uncovering and assessing organizational theories of action, and discard any unwanted values.

Role of Leadership

Productivity and competitiveness relies on knowledge generation and processing. Therefore, organizations not only have to invest in new machinery and systems to improve production, but also focus on knowledge generation and learning of their people. Learning Organizations require a new view of leadership. Leaders in Learning Organizations create workplaces that help people keep building their capabilities to understand complexity, clarify vision, and improve shared mental models.

Peter Senge describes the 3 key qualities of leaders to be critical in leading the Learning Organization:

Designer
Steward
Teacher

Designer

The key roles of a leader as a designer in Learning Organizations is designing the policies, strategies, and systems. The designer also outlines the governing ideas — the purpose, vision, and core values — for the people. They plan and develop the learning processes whereby people throughout the organization can deal productively with the critical issues they face, and cultivate personal mastery of the team members in the desired learning disciplines.

Steward

According to Peter Senge, the notion of management in this modern age should be replaced by “stewardship” — whereby control and consistency should be swapped with partnership and choice. The leader as a steward tells ‘purpose stories’ about their organization and relate those stories. They explain the reasons of the tasks that are required to be performed, the need for the organization to evolve, and the purpose of evolution. They learn to listen to other people, involve them, and develop vision — both individual and shared.

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Sustained Solutions to Profitable Growth: the Dimensions of Intelligent Innovation

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Over the last decade, companies have made greater strides in retooling their innovation intelligent innovation1 engines. Leaner and faster, products are developed from concept and delivered to customers in record time. But even a Ferrari does not know where to drive.

There are plenty of opportunities to enhance execution. Yet, inspiration and insights are increasingly getting to be a challenge for innovation executives. Innovation executives know that a new approach is needed. To boost performance to the next level, executives need to simultaneously loosen and tighten approaches to innovation management. We must start looking outward and opening ourselves to customers, collaborators, and our own creative side. At the same time, we need to tighten it through continuous improvement by attempting to embed an innovation culture to the organization.

Intelligent Innovation is considered a comprehensive approach that can support the next phase of Innovation Performance Improvement. The practice of Intelligent Innovation must complement the strengths of the current control regime to achieve innovative excellence.

Why Intelligent Innovation

Innovation Performance Improvement has been driven by initiatives that are highly analytical, inward-looking, and focused largely on retooling the innovation engine. There are 3 Stages of Performance Improvement. First is Management Control where innovation was treated like any other process and controlled with traditional management techniques. The second is Cost Control where innovation is redesigned to minimize cost. And the third is Profit Control where innovation was managed as projects with each project needing to be profitable in its own right.

Each successive stage built on the previous one. These stages are called “control regimes.” While these have built a critical foundation for future progress, they cannot deliver the desired results on their own.

To boost performance to the next level, Intelligent Innovation must be put in place. Intelligent Innovation completes the 4 Stages of Innovation Performance Improvement.

Intelligent Innovation and its 4 Dimensions

Intelligent Innovation cuts across 4 critical dimensions. It complements the strengths of the current control regime with excellence in 4 dimensions.

1st Dimension: Customer Insight
Customer Insight is considered the most important performance improvement level. It improves customer understanding with regards the evolving needs and critical priorities of customers. It can also increase customer participation in the innovation process.

Understanding what the customers want is important to drive ideation and execution.

According to Henry Ford, “If I’d only listened to customers, I’d have developed faster horses.”

By listening to customers, the more we learn what our customers need or want. And by knowing what our customers want, our organization will be in a better position to uncover tacit priorities that will fuel the most attractive development and innovative options.

2nd Dimension: Global Network
Global Network allows intelligent innovators to leverage dispersed knowledge across the globe. Each site or external partner is integrated into a seamlessly managed innovation network.

By having a Global Innovation Network, our organization will have the impetus to grow faster than its market.

3rd Dimension: Future Foresight
A well-tuned future trends capability can be a powerful strategic and competitive weapon in today’s global environment. It can identify tomorrow’s market opportunities and risks to drive innovation. Detailed and imaginative, this envisions the future competitive environment which better prepares our organization how to approach it.

4th Dimension: Innovation Organization
A critical element of success is the way organizations foster an innovation culture. An Innovation Organization carries within its DNA the intelligent innovation principles – senior management commitment to innovation, knowledge sharing, cross-functional teaming, freedom to pursue ideas, and innovation-friendly incentives. These are all embedded in the organization.

Intelligent innovators must work hard to unlock the innovation potential within the organization and use the tools available to direct organizations to take advantage of market opportunities. With a clear destination in mind, an innovative organization can accelerate its potential to gaining the winning edge when it comes to innovation, customer excellence, and profit.

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The 8 Most Critical Levers to Pull to Manage & Sustain Change

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Most Transformation initiatives fail to achieve their anticipated objectives.

Change Management is all about engaging and rallying people — at all levels in the organization — to make the transition and sustain that change. It is critical to ensure that the entire workforce is eager and ready to embrace the required new behaviors. More often than not, the technical side of a change initiative is well planned, but it’s the implementation part that fails — particularly, changing the mindsets and behaviors of the entire workforce to enable change to stick.

Managing change is not an occasional affair; it is an iterative process that works on motivating human behavior to accept and adjust to a desired state of mind. The process is naturally evolving as it adapts in accordance with the feedback from the people.

Change Management demands a thorough yet organized approach to enable the “people side” of change to work — essential for accommodating and sustaining Business Transformations. This entails assisting people incorporate new mindsets, processes, policies, practices, and behaviors.

A methodical approach to make the entire workforce accept and support change constitutes 8 critical levers:

Defining the Change
Creating a Shared Need
Developing a Shared Vision
Leading the Change
Engaging and Mobilizing Stakeholders
Creating Accountability
Aligning Systems and Structures
Sustaining the Change

Now, let’s discuss the first 4 levers in detail.

1. Defining the Change

The first step entails outlining the rationale, scope, and results of the change initiative for the enterprise, key departments, and roles. There is a need to define critical elements, including the requirements from the initiative, the execution planning, and the adjustments needed to encourage people to work better.

The project sponsors need to clearly outline the essence of the proposed Transformation initiative, to realistically embed Change Management into the design of the program, and develop effective Change Management plans. An initial baseline of the expected effect of the program on people should be performed. The baseline also helps analyze the impact of the change program — in terms of skills inventory, head-count indications, adjustments in accountabilities and relationships, shifts in incentives and pay structures, and future learning needs.

2. Creating a Shared Need

Once the change and its impact has been delineated, the next thing to do is to create a shared understanding of the rationale for Transformation across the organization. To create a shared need for the Transformation endeavor, the change sponsor needs to build awareness of the necessity for change amongst the senior team, key stakeholders, and the entire organization; demonstrate to the people the benefits of change; and set up a feedback mechanism across the organization. The alignment afforded by developing a shared need for change helps build a strong footing for Transformation.

3. Developing a Shared Vision

An essential element of implementing transformation entails delineating a clear vision that outlines critical actions and the anticipated outcomes. It helps in encouraging and involving the workforce in the Transformation initiative, giving them a sense of purpose by becoming a part of something bigger. The vision of the organization after Transformation should be coherent with the company values and mission.

4. Leading the Change

This lever entails developing change leadership and implementation skills needed to drive and enable sustainable change. Engagement and commitment of senior leaders is essential for leading change. They are responsible for planning their and the entire workforce’s actions, demonstrating or role modeling the new mindsets and actions, designating program sponsors — e.g., business unit leaders who are enthusiastic about the Transformation initiative and also act as change agents — motivating others to support transformation, and setting up a road map for the change leaders to steer the organization to achieve the anticipated performance milestones.

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Why Knowledge Management Strategy Is Important for Business Sustainability

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In today’s business environment, learning and knowledge have become key success factors internationally and intangible resources are of vital knowledge management strategy importance. The struggle between competing firms has moved from tangible resources to intangible resources where knowledge and the ability to use knowledge have crucial roles.

Organizations are becoming more global, multilingual, and multicultural with people being required to work smarter and faster. People have become more connected with them being expected to be “on” all the time and the response time measured in minutes instead of weeks.

Indeed, today’s work environment has become more complex with businesses being threatened by the vulnerability, uncertainty, and crisis that could have been prevented if Knowledge was better managed. Better KM can help companies anticipate uncertainties and design strategies to lessen their impact.

While managers would like to take a strategic approach to avoid an impending crisis, often they find themselves fire-fighting. With a Knowledge Management Strategy, corporate executives can better manage the complex, chaotic, and non-predictable environment, in which companies must achieve performance.

Putting Strategy on Knowledge Management

Knowledge is important to efficiency and productivity. Hence it is critical that organizations manage their Knowledge effectively and strategically. Having a strategy for Knowledge Management will provide companies a plan to better manage information and knowledge for the benefit of the organization.

Effectively, a good KM Strategy can gain senior management commitment to KM initiatives and attract resources for implementation. In the end, it can provide the basis against which the organization can measure its progress.

Taking the 3 Knowledge Management Strategies to Fore

Companies are now feeling the pressure of the need to be more competitive. Taking on a Knowledge Management Strategy can lead competing firms to take the high road to success.

KM Strategy 1: Reckless Negligence
Reckless Negligence is doing little or nothing to improve capabilities in information, data, and KM. This is one strategy that has ceased to be viable in today’s business environment.

KM Strategy 2: Knowledge Competence
The goal of Knowledge Competence is to be an efficient and effective company with sufficient emphasis on responsible management of Knowledge. To date, at least 50% of the companies in the world are in this category.

KM Strategy 3: Knowledge as a Competitive Advantage
The goal of Knowledge as a Competitive Advantage is to up the ante in the spirit of continuous improvement. Undertaking the third strategy involves making KM a critical capability of the organization. At least 20% of the companies in this world are in this category. This is often adopted by Knowledge-Intensive Industries.

Essentially, our company must create a robust Knowledge environment. However, this can only be achieved when 8 KM critical success factors are put in place.

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Understanding Enterprise Architecture: Is it Really Important Today?

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Information Technology works best when it is tied tightly to our company’s overall business goals. On the other hand, business unit executives Enterprise Architecture have remained doubtful about IT’s ability to support them in creating value. Despite the best intentions of managers of both sides, companies continue to struggle to integrate IT systems and to determine whether IT actually improves performance.

This problematic tension between the IT departments and business units has inflicted on many companies for years.

One approach to closing this gap is the discipline called Enterprise Architecture (EA).

What is Enterprise Architecture (EA)?

Enterprise Architecture (EA) is a logical framework that establishes the links between business strategy and organizational structures, processes, databases, and technologies. The goal of EA is twofold. The first goal is to add value through its support of business goals. Second is to enable companies to measure the value added.

If a company wants to capture better customer information in order to energize an effort to sell additional higher margin products and services to existing customers, the company can use an EA system to align its customer relationship management, information retrieval, and sales planning software. EA applications can also be set up for staff training, account management, and frequent assessments of the campaign’s efficacy.

Enterprise Architecture (EA) has been known to add value through its support of business goals, improve operational efficiency, and agility. There are identified changes visible upon the application of Enterprise Architecture on organizations.

The architecture of an enterprise is described with a view to improving the manageability, effectiveness, efficiency, or agility of the business, and ensuring that money spent on IT is justified.

The 4 Key Elements to Gaining Enterprise Architecture Maturity

Application of Enterprise Architecture (EA) requires certain levels of maturity. This is necessary for EA to be able to deliver greater impact on bottom lines. The amount of value our company gets depends on the level of maturity of the EA efforts.

There are 4 key elements to Enterprise Architecture Maturity that must be addressed.

Strategic Alignment. The first key element ensures that the design of EA functions is included in both technology and the strategic planning process.
Leadership and Talent Development. The second key element relies on the training and development of Enterprise Architects who understand the business and can further strengthen the organization’s EA capability.
Performance Management. Performance Management accurately measures the results of EA efforts that show an impact on the business.
Organizational Design. Organizational Design is the foundational element of Enterprise Architecture. It involves the frameworks, the tools, and the methodologies necessary in developing a functional capability.

Enterprise Architecture is not an easy task. But, is it worth it?

Based on a survey conducted by Booz & Company (now PwC), executives of 60 financial services companies and government agencies were asked to evaluate EA’s effect on performance.

Organizations that had implemented Enterprise Architecture (EA) reported that the approach had impact and value. It has decreased their cost, reduced complexity, reduced risk, and increased agility.

In this world where operational efficiency, risk mitigation, and agility have become essentially important to achieving competitive advantage and business sustainability, companies have no other recourse but take the road to achieve Enterprise Architecture (EA) maturity and readiness.

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Knowledge Management 101: A Practical Guide for Beginners and Practitioners

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“Knowledge has power because it controls access to opportunity and advancement.” – Peter Drucker

The 21st century is undoubtedly a century of knowledge. The everyday usage of available advanced information and business technologies, and internet in business activities just show how rampant corporations are engaged in information exchange and Knowledge Management.

In the light of globalization, companies are now exposed to an unpredictable and complex competitive environment. Pressures are put on companies to adapt quickly to survive in the competitive market. The vital strategic resource is Knowledge. Companies have started to realize the major value of an intellectual resource. The central role of Knowledge Management in making a quality decision has never been emphasized as much as today.

Intellectual resources and Knowledge are now contributing to revenue generation and increasing reputation. It has contributed to creating barriers to entry of potential competitors, increase customer loyalty, and create innovation. In today’s world, the success of the organization now depends largely on continual investment in learning and acquiring new Knowledge that creates new business and improves current performance.

Understanding Knowledge Management

Knowledge Management (KM) is a multidisciplinary approach to achieving organizational objectives
It is an integrated approach to gathering, analyzing, storing, and sharing knowledge and information within an organization. It ensures that the right information is delivered to the appropriate place or person at the right time to enable informed decision making.

An enterprise-wide ability must be created to transition data and information into critical knowledge. This is to ensure service stability, maintainability, and performance leading to organization wisdom.

Knowledge Management evolves around 3 primary spheres that are closely integrated with each other.

Technology. Technology provides a secure central space where employees, customers, partners, and suppliers exchange information, share knowledge and guide each other and the organization to better decisions.
KM Processes. KM Processes include standard processes for knowledge contribution, content management, retrieval
People. This refers to the participation of team members in knowledge sharing, collaboration, and reuse to achieve business results.

At Flevy, we’ve developed a Knowledge Management Primer that examines and discussed the purpose and nature of the key components of Knowledge Management. It demystifies the KM field by explaining in a precise manner the key concepts of KM tools, strategies, and techniques, and their benefits to organizations.

The quest to set up a Knowledge Management system requires an understanding of the essential elements integrated within the Knowledge Management Approach. This includes an understanding of the DIKW Model or Pyramid, the importance of Knowledge Assets, and the structure and priority of information based on its Knowledge Hierarchy.

What is Knowledge Hierarchy

Operational Knowledge. The focus of Operational Knowledge is to gain operational effectiveness. It helps organizations understand how service performance, compliance, and overall IT operational effectiveness is managed.
Tactical Knowledge. Tactical Knowledge is focused on service value. It helps organizations understand how to manage and ensure service value.
Strategic Knowledge. Strategic Knowledge is focused on benchmarking and advanced analytics. It helps organizations understand the effects of operational decisions.

In the Knowledge Hierarchy, it must ensure that resulting knowledge is well defined, specific, comprehensive, and with high average quality information.

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Aiming to Become a Customer-centric Organization, Then Where’s the Customer Department?

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Transforming a product-driven firm to a customer-driven enterprise is inevitable in order to stay ahead in today’s extremely competitive markets. The days of mass marketing, mass media communications, and little-to-none direct interface with customers are long gone. The emphasis, now, should be on maximizing customer relationships and becoming customer-driven organizations rather than merely selling products. The technological advancements of this age offer potent tools for organizations to utilize in order to engage with the customers directly; gather and mine information; and tailor their products and services appropriately.

Leading organizations are making huge investments in data analytics and transforming their strategies to focus on the customers’ evolving needs. They are striving hard to improve their customer retention and deepen their relationships utilizing rich customer insights, tailoring products according to the personalized needs of the customers, and presenting the offerings in a variety of store formats.

The Customer Department

To become customer-centric organizations, companies need to transform their traditional marketing function into a new unit called the “Customer Department.” The Customer Department should be created to deliver maximum profits to the customers and nurturing customer relationships instead of pushing products.

This necessitates transforming the organizational structure, culture, strategy, and reward programs in line with the shift in focus from managing transactions to cultivating customer relationships. Specifically, there is a need to add the position of Chief Customer Officer (CCO)—under the CEO—and various Customer Managers underneath the CCO. The roles and responsibilities of these positions should be:

Chief Customer Officer (CCO)

The most prominent shift in a customer-centric organization is replacing the traditional Chief Marketing Officer (CMO) role with the Chief Customer Officer (CCO) role. Reporting to the CEO, the CCO is primarily responsible for devising and executing the customer relationship strategy, directing all the client-facing roles, and fostering a customer-driven culture in the organization. The main tasks of the CCO position include ensuring smooth flow of customer information, increasing productivity utilizing various metrics, and regularly interacting with the customers to understand their concerns.

Customer Managers

In a customer-centric organization, the Customer Managers (CMs) are in charge of various customer segments. They are accountable for enhancing the value of a customer relationship by ascertaining customers’ product needs. To make this role effective, there is a need to realign resources—people, budgets, authority—from product managers to the CMs.

The main tasks of the CM position include defining customer needs, extracting and interpreting customer insights utilizing various sources—e.g., mining customer forums, blogs, and online purchasing data—, and striving to improve the lives of the customers.

Additional Responsibilities of the Customer Department

Customer-centric organizations make the Customer Department accountable for some of the critical customer-facing functions which were once considered an integral part of the Marketing Department. These functions include:

Customer Relationship Management (CRM)
Market Research
Research & Development (R&D)
Customer Service

Customer Relationship Management (CRM)

Traditionally, the CRM function belongs to the Information Technology Department owing to the technicalities involved in managing the CRM systems. The function demands evaluating the customer requirements and behaviors—which is a core function of the Customer Department alongside gathering and analyzing data necessary to execute a customer-development strategy.

Market Research

In customer-centric organizations, the Market Research function goes all the way from the marketing unit to other units that deal with customers—e.g., Finance for payments, Distribution for delivery. These organizations take a more granular view of customers’ behaviors, and gather and incorporate clients’ feedback to further improve customer lifetime value and equity.

Research & Development (R&D)

The R&D function should also report to the Customer Department, as, nowadays, the traditional R&D-driven new product development models are conceding to creative collaboration between the client (users) and producers. It’s not a good idea anymore to pack tons of features into a product and cause feature fatigue to customers. What’s more appropriate is to seek and incorporate customers’ input into product features by involving them into the product design process.

Customer Service (CS)

CS is another function that should be handled by the Customer Department to guarantee quality of service and to nurture long-term relationships. This important function isn’t worth outsourcing overseas as this often causes negative impact to the clients and organizations alike, due to poor customer service.

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