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Organisational culture: two recipes for ruthless customer focus

Published 23rd March 2017 by Melissa Farrington
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Don’t believe the hype: organisations are not all hurtling towards the same community-focused, collaborative, non-hierarchical  vision in a race-against-the-clock battle to stand out as the organisation doing things differently.

That’s not to say more modern cultural structures aren’t growing in popularity, but there are plenty of organisations that thrive with more established and traditional variants.

Which culture is best? Well, it’s all about context: about what works for your organisation, taking into account its unique history, existing traits, makeup of the workforce, future opportunities and looming threats.

To illustrate this point, we look at two company cultures that couldn’t be more different and yet, for their differences, they are both focused on the same outcome: customer happiness above all.

Their cultures are so different because their customers value very different things. For all organisations, knowing exactly who the customer is and what they value are crucial considerations when undergoing any cultural change work.

McKinsey: ruthless, dizzying commitment to client needs

McKinsey is the archetypal management consulting firm that is, according to BusinessWeek, ‘ridiculed, reviled or revered depending on one’s perspective.’

It has a reputation for ruthlessness: an article in the Guardian in 2005 said that at McKinsey “hours are long, expectations high and failure not acceptable.”

It is also one of the most successful consulting firms on the planet, with 11,000 employees and annual revenues of over $8bn.

The core parts of its well-known culture were developed by a senior employee, Marvin Bower, in the 1930s. The major driving force is, of course, extreme customer loyalty.

Here are some of McKinsey’s cultural values that put the focus on the customer:

  • Community client recruitment: McKinsey expects their consultants to integrate with the communities in which their clients exist to develop meaningful relationships before establishing a consulting need
  • CEOs only: the company will only work with CEOs, but these can be CEOs of holding companies down to divisional CEOs. The key point is that they want to work only with people who have ultimate decision-making capacity to make a meaningful impact on the company
  • Client first, company second: consultants are expected to always put the interests of their clients above company revenues, to the point they should turn down business if they don’t think the client will take their advice
  • Up-or-out policy: employees that are not promoted are asked to leave, reducing the headcount directly by approximately one-fifth every year. The thinking, presumably, is that employees putting customer interests first will get promoted above others.

Articles have been written about the premium organisations pay for McKinsey’s consulting services over its competitors - it’s got a reputation as the pre-eminent choice in a market of well-known competitors.

And when you’re a CEO facing serious organisational problems, maybe McKinsey’s clear culture - which could be summed up as a ‘ruthless focus on the customer’ - would appeal enough to make you cough up 20% more than you’d pay another company.

Zappos: liberal-minded, collaborative focus on delighting customers

This online retailer of shoes and clothes, owned by web giant Amazon since 2009, is the poster child for the modern lean organisation driving customer value by focusing on engaged employees.

Its tagline, “Powered by Service,” is indicative of the enormous emphasis they put on pleasing the customer. Those taking customer calls, for example, do not have scripts and do not have limits on call length.

Here are some of the other cultural nuances at Zappos that put the focus on the customer:

  • Customer calls for all: the Customer Loyalty Team (CLT) receives between 5,000 and 10,000 emails, calls or web chats per day. There are 600 permanent employees in the CLT but every employee must spend 10 hours with the CLT every year, so they know what it’s like to deliver on the front line to customers
  • 10 liberal-minded cultural values: they focus on continuous improvement, embracing change, passion, determination, doing more with less and the pursuit of growth and learning, all designed to lead to the very best customer service. Read them all here
  • Large severance bonuses: because Zappos believe in the power of cultural fit to drive a culture of engagement, and also accept sometimes recruitment processes get things wrong, they offer recruits a generous severance bonus if they want to leave - no questions asked. In June 2016 The Balance reported the figure was $3,000
  • Free reign for customer service: employees are encouraged to use their creativity to deliver fanatical customer service and there are some well-known stories doing the rounds, including the best man who was going to have to attend the wedding barefoot until Zappos intervened

One of the important lessons to take from Zappos is that a great existing culture does not mean further cultural change will be easy, even if it seems a logical extension of the status quo.

The company is transitioning to holacracy:  this trademarked system of devolved decision-making is growing in popularity, but it’s not all plain-sailing. 14% of the workforce left in response to CEO Tony Hsieh’s email that they if people aren’t on board with holacracy, they should leave.

It’s surprising, maybe, that in an environment defined by collaboration, connectedness and shared values based around providing the best possible customer experience, moving to holacracy ruffled a lot of feathers, but it goes to show that streamlined working cultures with strong cultural fit do not make further change plain sailing.

Saying that, there’s a lot we can take from Zappos about how to build an inclusive, engaged culture focused on serving the customer at all costs.

Is one culture better than the other?

Neither of these cultures are right or wrong - they are both designed to attract a specific type of customer and also a specific type of employee who will thrive in the environment.

McKinsey want their customers to completely and totally trust the company will act in their best interests. And we all know people who would love the long-hours and career-driven ruthlessness. We also know others who would hate it.

The takeaway is this: be absolutely clear on what your customers want, and how your cultural facets shape employee behaviours to provide it.