Employees across organizations often voice the same frustration: they would love to make the customer the top priority in their job, in their role, and area of responsibility, but their performance is measured on KPIs that are internally focused. That tension between wanting to be customer-centric and being held to functional KPIs that are not is a reality many companies are battling with.

What Customer-Centricity Actually Means

The definition of customer-centricity by Phil Geldart is a powerful one. Customer-centricity occurs when everyone in the organization makes decisions with the customer in mind. Being customer-centric is all-encompassing: it means making the customer the top priority and the focus of every function and deliverable.

The KPI Dilemma

Companies genuinely want to become more customer-centric, but a functional KPI and scorecard mentality often gets in the way.

A classic example is measuring the efficiency of a manufacturing line. Running a machine as long as possible without disruptions maximizes its efficiency and therefore satisfies the performance measurement tied to it. But multiple changeovers to accommodate customer needs (e.g., an express order, a change in SKU demand, a change in design) will hurt that efficiency metric, and with it, performance.

Since a line operator is measured on how efficiently the line runs, will they think and act customer-first? For most, the answer is no, because the KPI structure doesn’t allow it.

A Chicken-and-Egg Excuse

This is, at times, an excuse framed as a chicken-and-egg situation. If management were to acknowledge customer-centricity, such as customer satisfaction for example, as a hard metric, operators and employees would be motivated to make different choices.

While this is true, a customer-first mentality shown by management is indeed key, there is also another part of the truth that is often sidelined.

The Case for Bottom-Up Dialogue

Every company, by default, should pursue contradictory KPIs: efficiency targets versus increasing sales, profitability goals versus product quality metrics. Well run businesses constantly re-evaluate these factors, and determine how and where to allocate limited resources to accomplish their overall goals. This tug of war is deliberate. It requires dialogue, exchange, and discourse on the right course of action to achieve the best results with limited resources. Is it better to run the machine flat out, or should customer requests be accommodated at the expense of efficiency targets?

So the problem is not necessarily only that customer-centricity is not engrained in a company’s DNA top-down through management directives, but that the discourse is not initiated bottom-up.

What is the responsibility of the individual employee here?

That discourse of what to prioritize should be triggered by each employee: asking, in any given situation, whether the organization should follow the KPI, or whether it would better serve company goals to focus on the customer and forgo a hard functional target. Some call this an entrepreneurial mindset: asking what one would do if it were their own business. It could equally be described as being a good corporate citizen, a custodian of company resources, interested in maximizing the return on invested resources.

The Real Capability Gap

So, are employees to blame for their company’s lack of customer focus? No. What is to blame is the lack of capability building needed to make employees that corporate citizen (or entrepreneur, if you prefer), able to fulfil their role to challenge, review, assess how to allocate company resources effectively. How to balance customer focus with financial and operational targets. How to resolve situations with apparent conflicting targets (efficiency versus customer satisfaction).

Learning how to handle these situations, how to initiate, articulate, and maintain a constructive dialogue is key to activating a customer-centricity mindset within organizations. The top-down mindset to put the customer first is important. The bottom-up ability to think and act customer-centrically is paramount.

My team and I at FIVIS help organizations to unleash their customer-centricity mindset. If it is something you struggle with, let’s talk: info@fivis.io