HOW TO EXECUTE ON THE PROMISE OF CUSTOMER FOCUS by Ranjay Gulati
To fight commoditization, companies in many industries are shifting their marketing focus from products to solutions — packages of previously stand-alone offerings. But this change requires significant structural change in order to release and leverage the knowledge and expertise that traditionally reside in silos. Four sets of activities are necessary to break through common organizational boundaries:
1. Coordination. These activities allow employees to concentrate more on the needs of their customers than of their silos. Coordination may involve the creation of new functional or geographic units, but a less disruptive approach is to layer boundary-spanning, customer-centric structures over existing ones.
2. Culture. Cultural elements like metrics and incentives play an important role in fostering a cooperative environment. For example, people should be evaluated and rewarded based on customer-focused behaviors. Service to the customer should be included among key organizational values.
3. Capability. Coordinated, cooperative environments require both multi-domain skills (ability to work with multiple products and services) and boundary-spanning skills (ability to forge connections across internal boundaries). But because such generalist capabilities are not widely rewarded or developed, it takes a deliberate effort to create generalist training opportunities and attractive career paths.
4. Connection. The final component in the silo-busting effort is to forge new links externally. For instance, it may be possible to cut costs by outsourcing, or to create even higher-value solutions by working with a complementary partner.