In previous postings I began a series on the sins of poor leadership. The first article, Part 1, focused on not moving fast enough to replace poor performers, either for performance or behavioural reasons. The 2nd Deadly Sin of Poor Leadership detailed 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 3rd Deadly Sin of Poor Leadership is one that many CEOs and business leaders know is debilitating, but somehow get tripped up by it over and over again. While this is the third and last in this series on poor leadership behaviours, it is by no means the mildest, and in fact may be the greatest cause of poor business performance.
Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them. ~W. Edwards Deming
Everyone in the corner office realises how important it is to know and understand their customers, whether it be retail shoppers or B2B customers. Understanding the needs and wants of a customer gives an organization the opportunity to produce products, services and a customer experience that directly fulfils the customer’s needs. And the better the customer understanding, the better you can out manoeuvre the competition.
Young, trendy teens (with money from Mom and Dad) shop 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. At Hollister they appeal to a definite market niche, using young models to signify the classic California “Dude and Betty” look.
On the B2B side of the business equation, Textron Marine and Land Systems 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.
But many CEOs and business leaders somehow forget the importance of being close to the customer. It seems to me they get caught up in internal politics, useless meetings called by their corporate owners, endless debates about NOP, EBITDA, sales $$ per employee, and budget meetings that take up so much of the day, and very few of these meetings have the customer on the agenda! With all this internal focus there is no time left to go sit with customers and do what business leaders should be doing – listening and understanding customer needs and requirements!
Too often the question asked of heads of sales is “How much did we sell this week!” instead of “What did you learn about our customers’ requirements this week?” Sales dollars are an outcome of understanding and fulfiling customer requirements better than the competition.
Looking at the average CEO’s calendar will tell the real story. No matter how much the slogans broadcast “Customer First”, 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 organisation’s focus on the most important ingredient in sustainable business success, the customer!
Written and Posted by: John R. Childress
Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid
Read John’s blog,