Ethos and Ideology: Inside the Minds of Leaders Running Customer-Centric Organizations

In my previous post, titled Lessons from the Road: What One Bad Driver Can Teach Us About Customer Lifetime Value (CLV) Marketing, I deconstructed how to make the case (both from a practical standpoint as well as a mathematical one) for a business model rooted in maximizing customer lifetime value.

With this transformation in mind, I now take up an important related question: How do successful companies structure their organizations to ensure customer centricity?

And my answer, in a single sentence, is that the right mindset is both more important and more predictive than any org chart. Let’s dive in further, though. Company leaders—and very often the people they hire—typically fall into one of two categories:

• Fixed Mindset leaders: At the executive level, fixed mindset leaders are individuals who possess (or, to be more accurate, who believe they possess) all the knowledge and skills to run their businesses successfully, but who are otherwise resistant to new/outside ways of thinking or anything they might perceive as unnecessary change. Fixed mindset leaders are often confident on the outside, but commonly fear failure more than they desire success. “Don’t Mess with Good” is a phrase that might be the motto of those with a fixed mindset.
• Growth Mindset leaders: Growth mindset leaders see greater risk in treading water than they do in swimming toward new goals and places. They focus on getting better rather than proving how good they already are. Growth mindset leaders believe that they do not possess all the knowledge and skills necessary to run their businesses successfully. As such, they tend to form strong teams, prefer disagreement over “groupthink,” and listen carefully to counter opinions. “Great is better than Good” is a phrase that might be the motto of leaders with a growth mindset.

Note: For more information on this topic, I recommend reading Carol Dweck’s Mindset.

Leaders with a Growth Mindset Obsess About Customers

Why bring up psychology in an article about org structure? Because empirical observation has taught me that the companies that are most receptive to an idea like Customer Centricity are—naturally—those that led by individuals with a growth mindset.

Here’s why.

In looking at a company’s open (or staffed) positions, fixed mindset leaders hire roles like Vice President of Cost Reduction or Chief Sales Officer. By contrast, companies with growth mindset leaders typically staff positions like Vice President of Customer Advocacy or Chief Innovation Officer.

Companies with fixed mindset leaders focus on the 99% of their jobs that they did right. Companies with growth mindset leaders focus on the 1% that they could have done better.

Companies with fixed mindset leaders obsess about revenue, and celebrate the sales leaders who generate the biggest chunks of it. Companies with growth mindset leaders obsess about customers, and celebrate those that enjoy the most success or improvement.

Good Structure Starts with a Good Mindset

If you were hoping to find an org chart in this article, you can stop reading. For companies that are customer-centric, the org charts they have are the result of the way they think—not the cause. Simply put, customer centricity starts with a mindset that imbues every part of the organization and every decision its leaders make.  

Whether you’re a prospective client or a prospective investor, you can evaluate how customer-centric a company is by doing a few simple tasks:

• Look at job titles: What seems important to the company? What type of roles tend to be in positions of power and influence?
• Inquire about compensation packages: If the company has a bonus pool for employees, what determines distributions? Is it something like company revenue? Customer satisfaction? Customer retention?
• Ask mindset-related questions: Ask the CEO about his or her management philosophy. What drives decision making? Where will the business be in 2 years, and how will it make the leap from priority to execution?

The extent to which a company, and its leaders, are customer-centric is a question whose answer often “hides in plain sight.” Keep your eyes open, but don’t just focus on org charts.

Stay tuned for more updates in this series about how firms can best embrace Customer Lifetime Value and Customer Centricity—and the all-important mindset required for success with such a strategy.