Short-term thinking has plagued businesses for years, but in today's economic conditions, it is even more dangerous. Now is the time for change, not to stand still.
Organizations in a survival mode resort to quick fixes such as downsizing and postponing expenses. Their leaders don't realize that they cannot recycle the ideas of the past and hope to live off of an old reputation. They cannot see the change happening, but it is there — like standing on the shore, watching a ship on the ocean move almost imperceptibly, until minutes later we realize that it has, indeed, moved dramatically.
"The history of misguided business decisions are based on the wrong set of priorities," noted David A. Price in The Pixar Touch. These misguided strategies don't consider customers because managers mistakenly rationalize that "we've got more important things to do." The right set of priorities—now more than ever—should focus your decisions on what is important and valuable to your customers.
Ian C. MacMillan and Larry Selden, in a December 2008 Harvard Business Review article suggest that forward-thinking organizations will exploit the economic downturn by "identifying and meeting emerging customer needs that competitors can't—or don't even see." While your rivals "mindlessly cut costs" and "incumbents hunker down" the authors recommend a strategic offensive directed toward segmentation of customer groups and innovation for specific groups, rather than approaching all customers as a single, generic segment. The best way to identify these emerging customer needs is by thinking like a customer.
In another take on the current business climate, this week's Business Week (March 23, 2009) magazine is devoted to companies that are pursuing game-changing techniques in this down economy. I highly recommend it because it is filled with remarkable stories of companies who are not willing just to survive. "The smart ones are looking to position themselves for the future." For example, Jeffrey Immelt, General Electric's CEO, believes that the period we are experiencing represents a fundamental "reset" that may change the way we do business "for the rest of our careers." The magazine cites a number of organizations, including Cisco, Mastercard, Umpqua Bank, and many others that are "forging new strategies...that will get them where they need to go." The key point is to take action now. John Chambers of Cisco, said it best: "Without exception, all of my biggest mistakes occurred because I moved too slowly."
My one criticism of the Business Week articles is that they are too weak on the benefits that will accrue from proactively improving what matters most to customers. The magazine brilliantly observes, "In the past, solving customers' problems was often just talk. Now, it is critical." However, it does not emphasize strongly enough how thinking like a customer during today's difficult times will lock in customer loyalty that will sustain growth for years to come. The theme of doing more and doing it now not only applies to internal excellence, but to evaluate improvements and how they will impact customers.
The term ‘customer-centric' should be an "action verb" not a warm and fuzzy state of being. Successful organizations use proactive, creative ideas to design the future that their customers want. Short-term mindsets cause a necessary focus on the financial and operational components of your business. But the real changes that will "move the rock" in your growth will ultimately be judged by their impact on your customers.
