A CEO needs to take initiatives to create a market and customer focused company. Firstly he must convince Senior Management of the need to become customer focused: The CEO personally exemption exemplifies strong customer commitment and rewards those in the organization who do likewise. For example, former CEOs Jack Welch of GE and Lou Gerstner of IBM are said to have spent 100 days a year visiting customers, in spite of their many strategic, financial and administrative burdens; and IBMâ€™s top 470 executives are personally responsible for more than 1,300 customer accounts.
A Senior Marketing officer must be appointed and a Marketing Task force has to be formed which include the CEO , the vice presidents of sales, R&D, purchasing manufacturing finance, and human resources and other key individuals.
Consulting firms have considerable experience in helping companies move toward a marketing orientation for which outside help and guidance can be sought.
The Companyâ€™s Reward measurements and System has to be changed. As long as purchasing and manufacturing are rewarded for keeping costs low, they will resist accepting some costs required to serve customers better. As long as finance focuses on short term profit, it will oppose major investments designed to build satisfied loyal customers.
The company needs a strong marketing vice president who not only manages the marketing department but also gains respect from and influence with the other vice presidents. A multidivisional company would benefit from establishing a strong corporate marketing department.
Develop strong in-house marketing training programs. The company should design well-crafted marketing training programs for corporate management, divisional general mangers marketing and sales personnel, manufacturing personnel, R&D personnel, and others, GE, Motorola and Accenture run these programs.
Install a Modern marketing planning system: The planning format will require managers to think about the marketing environment, opportunities, competitive trends, and other forces. These mangers then prepare strategies and sales and profit forecasts for specific products and segments and are accountable for performance.
Establish an Annual marketing excellence recognition program: Business units that believe they have developed exemplary marketing plans should submit a description of their plans and results. The winning teams would be rewarded at a special ceremony. The plans would be disseminated to the other business units as â€œmodels of marketing thinkingâ€. Such programs are carried on by Accenture, Becton-Dickenson, and DuPont.
Shift from a department focus to a Process Outcome Focus: After defining the fundamental business processes that determine its success, the company should appoint process leaders and cross-disciplinary teams to reengineers and implement these processes.
Empower the Employees: Progressive companies encourage and reward their employees for coming up with new ideas. They also empower them to settle customer complaints in order to save the customerâ€™s business. IBM, for example, lets its frontline employees spend up to $5,000 to solve a customer problem on the spot.
Many companies are beginning to realize that they are not really market and customer driven but they are product and sales driven, Companies such as Baxter, General Motors, Shell and JP Morgan are attempting to transform themselves into true market driven companies. This will require:
1. Developing a company wide passion for customers.
2. Organizing around customer segments instead of around products.
3. Developing a deep understanding of customers through qualitative and quantitative research.
The payoffs are considerable. Two researchers recently concluded: We found that the more aggressive a companyâ€™s customer-focused strategy, the higher its productivity. Those with a customer focus were almost 7% more productive than their competitors.
The task is not easy. It will not happen as a result of the CEO making speeches and urging every employee to â€œthink customer.â€ The change will require a change in job and department definitions, responsibilities, incentives, and relationships.
Although it is necessary in a hyper competitive economy that an organization be customer oriented, it is not enough. The organization must also be creative. Companies today copy each othersâ€™ advantages and strategies with increasing speed. Differentiation gets harder to achieve, let alone maintain Margins fall when firms become more alike. The only answer is for the firm to build a capability in strategic innovation and imagination. This capability comes from assembling tools, processes, skills, and measures that will enable the firm to generate more and better new ideas than its competitors.
Companies must watch trends and be ready to capitalize on them. Motorola was 18 months late in moving from analog to digital cellular phones, giving Nokia and Ericsson a big lead. Barnes & Noble was late in recognizing online ordering of books and music, giving Amazon the lead. Nestle was late in recognizing the trend toward coffee houses such as Starbucks. Coca-cola was slow in recognizing beverages trends toward fruit flavored drinks as Snapple, energy drinks such as Gatorade and designer water brands.