15 December 2010 622 words, 3 min. read

Customer-centricity lost : it’s all about industrial revolution

By Pierre-Nicolas Schwab PhD in marketing, director of IntoTheMinds
Think about it for one moment. Three-hundred years ago, when you needed let’s say a tool, you just had to go to a craftsman who had specialized in manufacturing that very tool. At that time, such a craftsman was mastering […]

Think about it for one moment. Three-hundred years ago, when you needed let’s say a tool, you just had to go to a craftsman who had specialized in manufacturing that very tool. At that time, such a craftsman was mastering all the facets of the job: he was able to work the metal, forge it, was carving the wood and eventually assembled the two pieces to make the desired tool.

How does it look like today? Tools have more or less kept their shapes. It’s still an assembly of a piece of wood and a piece of metal, more or less of the same shape, but the way those two pieces are made has changed dramatically. Assuming that the tool is made in China, I bet that the piece of wood is sent from one plant to another where the piece of metal is made to finally be assembled. The piece of metal is probably preformed and also shipped from another plant which has specialized in manufacturing pre-formed shapes of metal for different usages. Once it has been delivered to the assembly plant the pre-formed piece of metal is finalized. One worker performs an operation and passes on the result to a next worker who also does something on it, and so forth and so on.

Everyone is getting micro specialized and performs only a fraction of a task and gets paid for his performing of a micro-task.

What’s the link with customer centricity? Well, it goes like this.

Three-hundreds years ago our tool maker was mastering the whole process. Not only was he in charge of the manufacturing but also of the commercial part of the job and of the after-sales part. He was recommending a tool to a client, was perhaps adjusting (today we would say “customizing”) it to his very needs, manufactured it and finally repaired it after a while. That way he was constantly in touch with his customer and knew who he was serving.

The industrial revolution and the Taylor’s theories changed all this. With the division of all tasks into sub-tasks and the subsequent micro-specialization of each individual, the firm as a whole lost the link with the customer. We have no longer customers. We have internal customers. And we’re loosing the link with the customer-payer.

This situation has given birth to new theories on how to make the customer more central in an organization. Consultants are selling methods, tools, principles which firms buy in the hope of getting back in touch with the customers. After all, as Peter Drucker said, the purpose of a firm is “to acquire and keep customers”. How do you want to keep them if you don’t know them? Beyond the mere value of the object we’re looking for something else and the relationship with the vendor may be a piece of the answer.

My take:

No matter how hard you try, no matter how much money you pay for consultants advices, fact is that smaller organizations are better at keeping the link with the customer. This is why large corporations are constantly trying to mimic SME’s behaviors. I’m actually wondering, while writing this, whether losing customer focus isn’t a growth pain after all.

I remember to have read once that strategists in the army have found out that the maximum number of individuals in an organization should be less than 150 if you want to keep control and be able to know everyone. It may sound silly but what about re-clustering your organization into smaller groups in an attempt to be more autonomous and behave like a SME? That may be a good step toward re-centering around your customers.



Posted in Strategy.

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