The Customer Copernicus - Preview

Copyright Material - Provided by Taylor & Francis Not for redistribution

10

INTRODUC TION

It’s unnatural for other reasons too, reasons we will explore in depth. But before we explain, let us share some evidence we have gathered to show what’s being described here is real. We asked over 400 CEOs and executive team members of large compa- nies how they viewed the drivers of performance in their companies. 10 We frst asked them to name the top three contributors to performance from a list of 12 factors that were suggested to us during in-depth interviews with 50 executives. 11 Four were mentioned signifcantly more than the others – customer understanding and response, people, operational excellence and innovation (see Figure I.1). Further, the most common combination of three priorities were cus- tomer understanding and response, operational excellence and people (47 respondents reported this combination). However, our survey suggests that while people say being customer- led is important, few make it happen. In practice, customers lose out to other more infuential stakeholder groups and other priorities. While 62% of businesses claim being customer-led is one of the main drivers of their success, our data suggests only 24% behave in accordance with this belief and as a result enjoy superior results. Many who claim they are acting in a customer-led way are, in reality, making different choices and doing differ- ent things. There is a saying/doing gap. The bottom line is that executives Importance of factors contributing to competitive performance Customer understanding and response People Operational excellence Innovation Technical superiority Culture 20.1% 20.8% 30.8% 40.0% 52.0% 62.7%

18.3%

Brand

15.6%

Financial management Relationship with channel partners

12.7% 13.0%

Market position Scale

8.5%

Relationship with financial institutions and/or regulators

5.6%

Figure I.1 Performance drivers: Espoused beliefs. (Source: Charlie Dawson, Seán Meehan & KarineAvagyan. 2017. The BeliefTrade-Off:Customers or Effciency First? Lausanne: IMD Business School.) https://www.imd.org/contentassets/ e60e4c757a6e49ddbf86daa6302f9348/imd_article_thebelieftradeoff_ v2.pdf