When we truly listen to our customers, and build our strategy around their wants and needs, we consistently succeed.
Strategy Starts with Delighting Our Customers
I’m a long-time practitioner of the Balanced Scorecard ® methodology, largely because it always starts with the customer. Well, and it also has never failed me or the organizations I’ve served.
Too many companies base their strategy on financial objectives. While certain financial goals are necessary, such as percent revenue growth or improved profit margin, strategy takes a much wider view. To me, the financials are simply outcomes from delighting our customers.
This is all worth mentioning because companies, on average, deliver only 63% of the financial results that their strategies promise. That’s according to Harvard Business Review. Will you be satisfied with 63% of promised results? Or are you looking for a better way to approach strategy and execution?
We always start strategic planning by identifying new ways to delight our customers and then determining the processes that we need to add, change, or delete to achieve those customer objectives. We then look at the organizational structure, people, tools, systems, data, and culture that will ensure that we achieve the process changes and improvements that result in delighted customers.
Oh, and then we can figure out what financial results to expect. So, to reinforce our point, financial results are simply an outcome of delighting our customers.
Customers are People, Organizations, and Data
We all serve individuals and/or organizations. Those are our customers. But there is also data that represents our customers in our internal systems. That data may be sales leads, orders, demographic characteristics, and countless more.
When we “listen” to our customers, that means two things. First is hearing what the customers say. That happens through dialogue, reading messages, observing behaviors, and more.
But “listening” to our customers, today, also involves digesting the data that describes the customer. For most organizations, that data resides in internal systems. I’ve coached numerous companies through strategic planning and execution, and they are often shocked to realize how much untapped value is in their customer data. And the value increases when we add the right external data.
I’ll tease an upcoming article by telling you that we built a predictive model for a company several years ago, marrying internal data and external data that we subscribed to, and predicted with 97% accuracy which sales leads would become customers. Stated differently, we leveraged data about our customers to drive process improvements, putting approximately $50 million on the bottom line.
Going back to the Balanced Scorecard methodology, we used data to drive process changes that enabled us to delight more customers, resulting in dramatic financial results.
Conclusion
A data aware strategy starts with understanding our customers, both the people or organizations, and the data that describes them. We leverage that combined knowledge about our customers to add, change, or stop processes so we can delight our customers, resulting in desired financial outcomes.
We’ll continue this theme of the data aware strategy as we explore the following in coming weeks:
- How does our strategy articulate our differentiated customer value proposition?
- Can we describe our strategy through objective measures?
- How will we align our entire organization with our strategy?
- Do our data assets reflect what is crucial to our strategy?
- How will we leverage our data to accurately predict future business outcomes?
As always, if you are working on your strategy already, or just don’t want to wait for the entire set of articles, email Emily Ford at Emily@WolffStrategy.com and she’ll be happy to set up a free 30-minute consultation with me.
Larry Wolff is the founder & CEO of Wolff Strategy Partners, a boutique consulting firm specializing in Enterprise Strategy Management, Digital Transformation, IT Leadership, and Executive Coaching. Larry has served as CEO, COO, CIO, Chief Digital Officer, and management consultant for public, private, international, and emerging growth companies. His specialties include corporate and IT strategic planning, technology led business transformation, business and IT turnarounds, merger integration and large-scale project rescues. His methodologies span industries and scale to companies of all sizes.
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