Let your customers teach you how to lead

As another week of the Banking Royal Commission ends here in Australia, the disconnect between many financial services groups and their customers has seldom looked more jarring.

We are stuck in a repeat cycle, listening to endless stories of staff putting fees and sales targets ahead of customer interests. Fees for unnecessary services, fees for poor service, fees for no service are widespread.

And this is not just an Australian, or a financial services, problem. Tech firms are notorious for playing fast and loose with their customers’ privacy. Read Google’s justification for tracking your location even when you’ve made it clear that’s not what you want, and it’s hard to believe they have a customer-first culture.

Or take a look at pharma companies and their pricing models: A 100x price increase with no medical benefit is not a strategy that came out of a customer focus group.

It’s a global issue. And one that has two universal themes: it stems from a culture that is defined by senior leadership.

Quick! Invest in leadership development! Ummm….

And the second theme? All of these companies spend millions on leadership development for their senior executives. Yup, look at any major bank, pharmaceutical or tech firm and you will see structured programs, an army of executive coaches, and most likely an annual report trumpeting their commitment to building world-class leaders.

Now, we at Priestman Associates would urge you to be cautious about anyone claiming to draw a straight line between leadership development spend and hard financial results, but this is taking things to the other extreme: give us an excel spreadsheet and some strong coffee and we could find you a stronger correlation between attending a leadership program and appearance in the dock at the Royal Commission than you’ve got between your executive coach and your sales target.

So if investment isn’t the answer then what is? Scrap the programs as a waste of time and money? No, we believe too much in people to advocate that. Instead, make a simple – not easy – adjustment: let your customers teach you how to lead.

Start with the customer

All our clients say they do this. We all do. But what does that actually mean – and what does that look like for your leadership development strategy? Here are three tips, in order of increasing impact and difficulty, that will give your leadership development much better results:

1.     Talk about the customer

How often do you reference the customer in your leadership programs? Are executives challenged to visualise their clients’ experience and perspective? This is pretty straightforward to do. It requires little effort or spend, and often minimal external input, to encourage leaders to think about the customer…

2.     Listen to the customer

…but just thinking about them doesn’t always work. Ever met a senior executive who thought they knew more than they actually did? So listen to the actual customer. Incorporate video of them describing their experience of your company. Better still, bring them into the room, let your executives quiz and hear them. This requires more effort – careful engagement with your customers and considered design of the activity, but the impact on your leaders can be huge.

3.     Let the customer write your leadership strategy

So what does this mean? If you really want customer-focused leaders then start with the customer. Engage with your key customers – and this can include shareholders and regulators – and ask them: what do you want from us? What do our competitors do better? Why do you use us? Where do we excel and what must change?

This is the basis for your leadership strategy: genuinely understand your customer needs, and then use this to define your required leadership capability. Thatis the foundation for your program agenda, your offsites, your coaching. Not a cookie-cutter set of leadership models or an off-the-shelf program, but an authentic customer-first strategy that is tailor-made to you.

The challenges and benefits

This is not easy to do, and there are two obvious challenges. First of all, it requires organisational bravery and humility. Persuading senior executives that you want to ask your customers or your regulator about how to be better leaders is not always straightforward.

And secondly, managing that process requires a reasonably rare combination of skills – high empathy, commerciality, data gathering, marketing and analytics. Not many HR functions or leadership consultants have all those capabilities in depth.

But the benefits are huge. You have a leadership strategy that differentiates you and delivers a competitive advantage. Your leaders gain genuine, invaluable insights into their customers that can massively impact business and individual performance.

And don’t forget the external impact: how do your customers feel if you ask them to define what they want from you? How much more confident will institutional investors and analysts be in your leadership if they are involved? What a great story you would have to tell your regulators about your commitment to the customer.

Talk to us

At Priestman Associates we’ve worked with organisations on all stages of this journey. Some embrace it, some jump in and then back away. Some get it horribly wrong. But all of them end up with a better understanding of what it means to lead a customer-centric organisation.

So do talk to us if you’d like to hear more about our experience of doing this. And if this is something you excel at then likewise, please get in touch: we’d love to learn from you!


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