12.1 The Customer-Driven Organization
12.1 The Customer-Driven Organization There are three basic types of organizations in the world: engineering-driven, sales-driven, and customer-driven. Figure 12.1 presents the differences between these types of companies. The first, the engineering-driven company, sells what it knows how to make. The second, the sales-driven company, makes what it knows how to sell. In both cases, the focus of the organization is internal; they look at what they can do or what they know. Both are recipes for failure. The only corporate structure that promises long- term success is the customer-driven organization. The focus of such organizations is outward. They look at what the customer needs and wants. Figure 12.1. Company driver types. As we can see in Figure 12.1 (a), the flow of information in the engineering-driven organization is from engineering out to the market by way of the sales force. This is typical of high-technology organizations. They have the mistaken belief that technology can sell itself. These companies are successful as long as the market has a need for the product. When the market evolves to something new, as seen in the figure where there is an evolution from A to A', the company misses the change and wonders what happened to its market share. This is part of the reason for the burst of the dotcom bubble. Dotcoms focused not on what the customer needed, but on what they could build. At the peak of dotcom mania, companies looked at what they could sell over the Internet. Sure, we had the technology to create icecubes.com , but does anyone really want to buy ice cubes over the Internet? The second type of organization is sales-driven , as shown in Figure 12.1 (b). In this type of organization, communication is still from the inside out. The driving department is sales. The focus is not on the customer, but on what can be sold. Here, too, the organization misses the change in the evolution of the market. One might assume when looking at the sales organization that sales would be most in touch with customer needs. Unfortunately, the focus is usually on making quota for the quarter. These organizations are driven by short-term gains, not by a long-term strategy. The sales-driven organization brings to mind a documentary I once saw on elephants. At one point, a female elephant died. Her mate, not understanding that she was dead, tried everything he could to rouse her. It was obviously to no avail. She just lay there, a huge dead carcass. This reminds me of sales-driven organizations. A sales-driven organization, just as with the engineering-driven organization, lacks a strategic view of its market. Sales is a lagging indicator. If you depend on it to tell you if you are doing things right, you won't know that something is sick until it is dead. I have seen this happen time and again. Sales start to slump, so management puts more pressure on the sales force. This doesn't work, because the market has shifted. Customers are no longer interested in the products, but management doesn't see the change. They have no insight into the market. They just don't understand why they can't sell this stuff anymore. They try everything they can to revive the corpse, but it just lies there, a big stinking carcass. The only type of company that succeeds in the long term is the customer-driven organization. Figure 12.1( c ) shows the flow of information for customer-driven companies. In this scenario, the organization actually listens to the customer it intends to serve. As the market changes and evolves, the company changes with it. It builds what the customer wants. If it doesn't know how to build what the customer wants, it learns how to build it. If it doesn't know how to sell what the customer wants, it hires the talent to sell it. It changes to fit the market. Notice how this corresponds to our description of BI in Chapter 3. Organizations with low-level intelligence are reactionary; these are the sales-driven organizations. Other low-level organizations are emotional; these are the engineering-driven organizations that fall in love with their own technology. Both lack data and the appropriate mechanisms to analyze the data. They have no insight into their customers. When they do gather data, it is used to validate a decision that has already been reached. Customer-driven organizations, on the other hand, gather data concerning the characteristics of their market. They analyze the data and use this for the basis of their decisions.  |
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EAN: 2147483647
Pages: 113