This is the last post in a series on the sins of poor leadership. The first installment focused on not moving fast enough to replace poor performers, either for performance or behavioural reasons. The next post detailed the second sin—how the avoidance of face-to-face communications and regular one-on-ones leads to lack of respect for the CEO and poor commitment among the leadership team. The third deadly sin—not understanding the needs of your customer—is one that many CEOs and business leaders know is debilitating but keep repeating anyway.
Everyone in the corner office realizes how important it is to know and understand their customers, whether it is retail shoppers or B2B customers. Understanding the needs and wants of a customer gives an organization the opportunity to produce products, services, and an experience that directly fulfils the customer's needs. What’s more, the better the customer understanding, the better you can out manoeuvre the competition.
For example, trendy teens (often with money from Mom and Dad) shop at Hollister, Gilly Hicks, and other boutique retailers because the clothes fill their social and style needs, and the shopping experience is designed directly for them. Hollister appeals to a definite market niche, using young models to signify the classic California "Dude and Betty" look.
For a B2B example, consider Textron Marine and Land Systems, which has an enviable backlog of business and orders for its various products. Military Armoured Vehicles, used to protect Allied forces in hostile situations where roadside bombs have all but destroyed the once ubiquitous military Hummer vehicles. By getting close to their customers, the service men and women on the ground in hostile areas, and understanding the changing nature of IEDs (improvised explosive devices, also known as homemade roadside bombs), they are able to build vehicles that deflect and counter such terrorist threats. By better understanding their customer's amphibious needs, the team at TMLS were able to innovate and recreate the old hovercraft for modern warfare.
But many CEOs and business leaders somehow forget the importance of being close to the customer. They get caught up in internal politics, useless meetings called by their corporate owners, endless debates about NOP, EBITDA, sales dollars per employee, and budget meetings. With all this internal focus, there is no time left to sit with customers and do what business leaders should be doing—listening and understanding customer needs and requirements.
For instance, sales leaders are often asked: How much did we sell this week? A better question is: What did you learn about our customers' requirements this week? Sales dollars are an outcome of understanding and fulfilling customer requirements better than the competition.
Looking at the average CEO's calendar will tell the real story. No matter how often the organization broadcasts a "Customer First" slogan, the CEO's day is filled with internal meetings, not customer meetings. Maybe that's their job, but if the customer is not at the heart of many of these meetings, then are they really creating value or just managing numbers?
Those CEO's who get caught up in the internal aspects of their job and pay little attention to the external aspects actually do great harm to their company by not putting the organization's focus on the most important ingredient in sustainable business success, the customer.
What lesson can talent development leaders learn from this?
Just as many organizations forget the mantra “Customers First,” they also neglect their “Talent First” promise to consider the needs of employees. And even though there is mounting evidence that engaged employees perform better, too little is done to improve the employee experience. Talent development professionals are well-positioned to remind organizational leaders that they can boost their bottom line by simply remembering the needs of customers—and employees.