How Do Businesses Weather Tough Times?

Image by khalid almasoud via Flickr

We're all trying to navigate our way through turbulent economic waters. Why do some businesses resiliently sail through with relatively little damage while others find themselves sinking? That's the question Ranjay Gulati sought to answer in the book Reorganize for Resilience: Putting Customer's at the Center of Your Business.

Harvard Business Review recently inteviewed Gulati, whose research found that resilient companies have an "outside-in perspective," giving primary consideration to the customer in every part of their business.

Gulati was surprised how exceptional outside-in companies are:

"When I began this research, I naively assumed that all firms must indeed have an outside-in orientation whereby they put their customers first in all their decisions and actions. After all, that is what business is about. Much to my surprise, I found that this was the exception rather than the rule for most businesses."  

While the "Voice of the Customer" is a buzz phrase tossed about by many companies in today's marketplace, many businesses are struggling to effectively change their inside-out menality. Gulati highlights five "levers" needed:

• Coordination—Alignment of activities, processes, and information across units within an organization
• Cooperation—Alignment of goals, attitudes, and behaviors across units within an organization
• Clout—Assignment of power and decision rights to customer-facing individuals as well as those responsible for integration of activities across units within the organization
• Capabilities—Development of customer-facing generalists along with product specialists
• Connections—Expand the source of inputs and also complementary offerings beyond internal production units to external strategic partners

Gulati's message is a great reminder for all of us. Giving lip-service to being customer-centered is not the same as organizing our business (administratively, organizationally, operationally) around the customer's expectations.