Is mindset holding you back? Sometimes businesses get stuck. They just cannot get themselves out of a way of thinking that prevents them from considering alternative options – even when they are staring them in the face. A ‘dominant logic’ runs through an organisation; no matter how clever the people, they seem to be hard-wired into a certain way of thinking.
On the high street, think about names such as House of Fraser, Debenhams and Superdry. It has been suggested that these organisations need a shift in mindset, a change in how they see and evaluate the world. Others have made that shift, such as Argos and The Body Shop, and are starting to reap the benefits. But making the shift is easier said than done.
But it can be done. Take Argos, hit by the financial crisis and the emergence of digital retailers, its growth strategy was not delivering and they seemed to have got themselves into a rut. However, the arrival of a new CEO, John Walden drove a change in organisational mindset to become a business of “technology with a human touch” – a technology driven company, with 1,000 locations across the UK where you could interact with a human. That thinking required a significant change in how the leadership looked at the world, how it engaged the senior managers in developing a new blueprint and bringing in new capabilities to develop the new vision of Argos.
“A ‘dominant logic’ runs through an organisation; no matter how clever the people, they seem to be hard-wired in to a certain way of thinking.”
How to change a whole organisation’s mindset? Sometimes the dominant logic is so strong as to what guides people’s motivations and decisions, that it takes a lot of effort to change. One important lever that a CEO can pull to change mindset and focus, is to reconfigure the executive team. And an example of this in recent times has been the establishment of the Chief Customer Officer (CCO). Customer-centricity is the order of the day and the CCO gives the customer a seat at the executive table. The CCO has accountability for putting the customer at the heart of the value proposition and delivering a seamless, multi-channel customer journey.
Developing a Customer Mindset
But what does it actually mean to create a Chief Customer Officer? or others such as Chief Experience Officer (CXO)? Is this just a shuffle of the seats around the top table? Or is it something more profound?
In our experience, we have seen both versions. For some, the change is more cosmetic with simply a change in job title but no significant change in behaviour, whereas for others there is a true shift in what we call “primacy” in the business, which generates a meaningful shift in mindset and consequently behaviours.
A Shift in Primacy
A shift in primacy is when there is a change in where the power lies in the organisation. Primacy identifies the part of the organisation that “calls the shots” and provides the momentum for others to follow.
In an earlier OE journal “Getting Even Closer To The Customer”, we explored the unintended consequences of a power shift in the executive team to become more customer-centric, as sometimes it can mean a dislocation of the power relationships around the table.
To change primacy in an organisation, you first need collective acknowledgement by the Executive that it is the right thing to do for the business. Success will depend upon the maturity of the team and the quality of their relationships; the credibility of the individual who is bestowed the additional authority, and how that authority is used.
But note, that the successful Chief Customer Officer does not have unilateral power. Rather, they are required to confer with interested parties and gain their commitment to the decisions made. They must be able to influence; to persuade and convince others of how to look at and think about the world through their particular lens, and how the organisation should move. Hazel McLaughlin covers more about harnessing diverse mindsets and the importance of avoiding group think in her article.
Successful CCOs are not blinded by the technological developments required to deliver the value proposition in a multichannel world, but instead keep the technology as the servant of the customer. As Martin Newman said in his book “100 Practical Ways to Improve Customer Experience” (1):
“I keep hearing the term “digital transformation”. Maybe that’s the answer? No, it’s a misnomer. Digital is technology. It’s the conduit and enabler to delivering the appropriate customer experience. It’s not the starting point. It should really be called customer-centric transformation, as that would then set the agenda for leveraging technology to put the customer first”.
“…there is a true shift in what we call “primacy” in the business, which generates a meaningful shift in mindset and consequently behaviours”
Making the Energy Switch with Care
A shift in mindset through a shift in primacy means in effect, a redirection of the corporate energy of the business, which can unleash either a positive or destructive energy, or just plain sap the energy out of the business.
I have seen this with one business that acquired a competitor. By keeping the businesses separate, and investing the power of its two Managing Directors, instead of creating a constructive, healthy competitive environment, the two businesses battled against each other, even more vehemently than when they were external competitors.
To address this, an era of integration was introduced, creating a new business model with the power vested in the functions, whereby the marketing, buying, operations and property directorates each had responsibilities for both brands, with the aim of creating synergies between the businesses. This however began to sap employee’s energy.
So to establish a more positive mindset, they created a balance whereby some functions remained centralised, whilst creating separate commercial brand business units, providing sufficient power in the Business Unit MDs, representing the customer. Within days of this move, the excitement amongst staff and managers was palpable. The potential energy that had been suppressed for the previous few years was unleashed generating an immediate uptick in market share. So do be aware as to where you direct your energy.
However all of this is just the start. Whether you shift the power to Business Unit MDs, or establish a CCO, they all signal a shift in power and energy. You then need to reinforce this shift by working on other available levers:
- Ensuring power resides with customer-accountable rather than product-accountable roles
- Establishing a target culture that is customer-obsessed, and then quantifying the gap you need to bridge (see ‘Mind the Culture Gap” article in the OE Cam journal “Digital Transformation”)
- Harnessing diverse mindsets (particularly top teams to avoid groupthink through team profiling and harnessing difference (see Hazel’s article)
- Designing a new organisation that embraces new technologies (see “Managing the Journey towards AI” article in the OE Cam journal “Explore the possibilities – Go on Safari”)
- Using communication and engagement to build an appetite to be braver, embrace risk and use design-thinking methodologies, as described in Julie Brophy’s article
- Encouraging the mindset to filter down through the organisation using the habit loop to embed learning; forming habits through nudging – see Mariam’s article
- Embracing the mine of information that can be extracted by Data Scientists and Data Analysts. But ensure that the data is directed to ensure informed decisions are made for the customer, rather than getting lost in all the ways in which data can be used. Better to be customer-led and data-informed. Amazon is a great example of this.
Rewiring the organisational mindset can be hard, and needs some hard levers to make it happen. Shifting where the power lies at the top of the business is one place to start, that can trigger a change in behaviour further down the organisation. But it does need to be complemented with other levers to ensure the shift is sustainable.
“A shift in mindset through a shift in primacy means in effect, a redirection of the corporate energy of the business, which can unleash either a positive or destructive energy, or just plain sap the energy out of the business”
1. “100 Practical Ways to Improve Customer Experience; Achieve end-to-end customer engagement in a multichannel world” by Martin Newman with Malcolm McDonald (2018) Kogan Page