Advice

Keeping Up With Your Customers

By Suman Sarkar, author of CUSTOMER-DRIVEN DISRUPTION

Few companies survive for 100+ years. What makes you great today won’t necessarily keep you great tomorrow unless you and your strategies evolve with your customers. The companies profiled in behemoth business bestsellers like “Good to Great” or “In Search of Excellence” – companies like GE, IBM, and Coca-Cola — are struggling or on the verge of dying because they took their focus off their customers and stopped re-inventing themselves. Technology had nothing to do with their decline.

Consider GE. Jack Welch grew GE by acquiring over 1,000 other companies. But many of these GE units behaved like monopolies and twisted customers’ arms to increase revenue and profit. Naturally, customer discontent brewed. Customers in the railroad industry complained that GE Rail (now GE Transportation) forced them to buy rail cars and hardware they didn’t need – GE Rail even discouraged sharing customer demand data with other railroads for smoother operations! As soon as they found viable alternatives, railroads moved away from GE.

Great companies focus on their current and future customers’ needs. Delighting current customers is not enough. You have to wow them in the future and your new customers, too — whoever they may be. Unless you’re continuously evolving, you will die.

It’s hard to predict the future in anything, especially when it comes to customers who keep changing what they want. The only way to do it is to become skilled at creating strategies that support your customers’ needs — and then to keep updating those strategies. You can only do that if your whole organization is set up to identify and respond to customers’ needs as and even before they arise.

Consider the transformation of Haier, a Chinese manufacturer of home appliances and consumer electronics. It has reinvented itself four times as customer requirements changed in China and globally. In the 1980s, they improved product quality by partnering with global companies. In the 1990s they focused on innovation driven by customers. The Haier team looked for unique applications of their technologies, such as a vegetable washing machine to clean potatoes. As their competitors in China started achieving service responsiveness, Haier reorganized to keep up with changing customer needs without getting bogged down by growing in-house bureaucracy. They introduced customer-facing teams, each focused on, organized around, and expert at serving a specific market segment or big customer.

Now Haier is becoming an internet company, collaborating not only with customers but with innovators – including competitors.  Haier began modestly in rural China and is now a leading global provider of household appliances.

Business Reinvention

Great companies in any culture evolve to keep their business relevant to changing customer needs by adopting the mindset of continuous reinvention. Haier is a great example — and it’s not surprising that there are few others because visualizing future needs and developing strategies for them is difficult. You have to be willing to throw away strategies that aren’t working now (no matter how well they have worked in the past) and to embrace new strategies. The ability to evolve revolves around three simple things:

  • visualizing future customer needs and developing strategies to support it
  • empowering teams to thrill customers
  • paying attention to detail.

These sound simple. They’re easy to say — but they are extremely difficult to do.

Conclusion:

Disruption can be a death sentence for a company, but it need not be. If you keep changing to keep delighting customers, you will succeed. Doing this requires keeping a sharp eye on your customers’ changing needs and then figuring out how to meet those needs by thinking outside the box, engaging end-users, and collaborating with experts and suppliers.

About the Author:

Suman Sarkar

Suman Sarkar is a partner with Three S Consulting and an international consultant who has advised more than forty Fortune 500 companies in strategy and operations. His new book, Customer-Driven Disruption (Berrett-Koehler, 2019), is a blueprint for showing how companies must adapt to ever-changing global demographics and markets. It draws on the author’s extensive experience and features case studies from companies around the world that have thrived in volatile, highly competitive marketplaces. He has published numerous articles in business journals and his first book, The Supply Chain Revolution, is an Amazon top-seller in its genre.

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