How to Lead a Customer-Centric Organization

Servant leadership is a term and philosophy coined by Robert Greenleaf. He found that the most effective leaders focus on others rather than on themselves. Throughout my career, I have been a servant-leader. It is an essential component in creating a winning atmosphere.

A servant-leader focuses primarily on the growth and well-being of people and the communities to which they belong. While traditional leadership generally involves the accumulation and exercise of power by one at the “top of the pyramid,” servant leadership is different. The servant-leader shares power, puts the needs of others first and helps people develop and perform as highly as possible."— Robert Greenleaf

All businesses, including not-for-profits, exist to increase value for shareholders. There are two necessary conditions for this to occur: satisfied customers and an engaged workforce. The CEO is a servant of customers and employees.

If we want to be good leaders, it is our job to help the people we lead or work with be good at their jobs. This doesn’t mean doing their work for them; it means we help them get the resources, the information, and the support they need to perform at their natural best.” — Simon Sinek

Servant leadership is different from many other leadership theories. A servant-leader leads from the front. These leaders are concerned with putting followers first and the outcomes that are likely to emerge. Servant leadership works best when leaders are altruistic and have a strong motivation to help others. Also, it is important for followers to be receptive to this style of leadership. Servant leadership results in cultural, community and societal change.

In the 1990s, while leading Scarborough Public Utilities, a $400 million water and electric utility, my team embraced this approach from the top to the bottom. We created a customer-centric organization, where the customer was at the top of the organization chart, and the CEO was at the bottom.

A Servant-Leader is Customer-Centric

We became a genuinely customer-centric utility — our ratepayers were both the shareholders and customers.  Our Board consisted of the mayor and two members elected by the citizens of the municipality. Our team provided reliable, high-quality supply at the lowest possible rate. To build credibility, we had to add value to every customer, as they each had specific needs that we would meet.

The leadership action: shape the organization and systems around the customers rather than bend the customers around the organization. Our team focused on what they did best (taking care of customers), and my focus was to problem solve, clear the path for their growth and develop supplier relationships that align with our mutual objectives.

A Servant-Leader Understands the Customer

Our leadership team—supervisors to C-suite— had a monthly meeting dedicated to “serving customers better.” We would invite a customer in to speak about the impact of our service on them. I recall the effectiveness of the Cinram representatives. They were Canada’s largest producer of recorded CD (compact discs). The standard for measuring outages is that an outage needs to last for a minute. However, they simultaneously recorded 5,000 CDs. A momentary interruption meant that they had to pitch all 5,000 CDs — we did not even count this as an outage.

Another memorable serving customer better meeting, feature residents bring in their rust stained clothes. Scarborough PUC’s water system was built using cast iron pipes. It these cases they had been in service for 70 years.

We developed a new metric, working with Roy Billington at the University of Saskatchewan called — customer interruption costs. Our premise was if the customers expect service, what does it cost them when they do not have it, or it is not at the quality they expect. We used this for establishing capital and maintenance investments on behalf of our customers.

A Servant-Leader Motivates the Workforce

Our diverse 550+ workforce became an agile, customer-focused team. We were a process-driven organization. We had complete alignment of vision, strategies, activities, ongoing improvement, and private sector partnerships driving incredible results for customers. These results included a new culture; the following reductions: annual customer interruption cost by $22 million, operating costs by $21 million, yearly water losses by $600 thousand; and an increase in working capital from $18 million to $100+ million. We were the best in class regarding service, reliability and rates. We provided a 7% rate reduction to our industrial and commercial customers.

Some twenty years after the amalgamation of the City of Toronto, former Scarborough PUC employee, many who have gone on to be very successful, have commented on our beautiful years and our many accomplishments.

To indeed serve the customer the leader needs to understand first hand the customers’ problems. I attend many customer meetings to support team members and provide any required details on how we would tackle the problem. By being together in the room, we built a stable relationship with customers and with each other from the start. We showed customers that we were committed to them as a team.

Being a servant-leader requires creativity and an investment of your time. You need to be willing to go where you ask your people to go. Our customers were very busy people, so we found ways to engage them personally.

I also made it a priority to attend reviews as often as I could. I enjoyed working alongside our subject experts and, as a team, we successfully supported our customers’ goals. In turn, they knew me as a knowledgeable, interested, and active member of their team.

As a servant-leader, we must have no agenda other than to support and help others—in my case, a hardworking team of utility professionals.

A Servant-Leader Creates the Right Work Environment

Accenture has identified the 40 factors that are statistically shown to influence advancement, including 14 that are most likely to effect change.

Workplace culture cannot be quantified, but it is possible — and essential — to measure the factors that can contribute to a more diverse and equitable work environment. Business leaders can accelerate the pace of change by pinpointing the factors that are most relevant to the workplace culture of their organizations. Accenture has identified 14 elements that are particularly strong, and that can act as catalysts of positive cultural change. These 14 “cultural drivers,” are denoted with an asterisk (*).

Bold Leadership

• Gender diversity is a priority for management*
• A diversity target or goal shared outside the organization*
• The organization clearly states gender pay-gap goals and ambitions*
• Progress on gender diversity is measured and shared with employees
• Leaders are held accountable for improving gender diversity
• A diversity target or goal shared inside the organization
• The leadership team is diverse

Comprehensive Action

• Progress in attracting, retaining and progressing women*
• The company has a women’s network*
• The company's women’s network is open to men*
• Men are encouraged to take parental leave*
• Employees trust that the organization pays women and men equally for the same work
• The proportion of women in senior leadership has increased over the last five years
• The organization is fully committed to hiring, progressing and retaining women
• Progress in improving gender equality in senior leadership
• There is a clear maternity policy in place
• Women are encouraged to take maternity leave
• There is a clear parental policy in place
• The organization hires people from a variety of backgrounds
• Leaders act to get more women into senior roles

An Empowering Environment

• Employees have never been asked to change their appearance to conform to company culture*
• Employees have the freedom to be creative and innovative*
• Virtual/remote working is widely available and is standard practice*
• The organization provides training to keep its employees’ skills relevant*
• Employees can avoid overseas or long-distance travel via virtual meetings*
• Employees can work from home on a day when they have a personal commitment*
• Employees are comfortable reporting sex discrimination/sexual harassment incident(s) to the company*
• Employees feel trusted and are given responsibility
• Employees have the freedom to be themselves at work
• Leadership has a positive attitude toward failure
• Leaders set a positive example around work-life balance
• Networking events with company leaders take place during office hours
• Employees can decline a request to work later without negative consequences
• Employees can decline a request to attend early-morning/late-evening meetings without negative consequences
• Sex discrimination/sexual harassment is not tolerated at work
• The company has made progress in reducing tolerance of sex discrimination or gender-biased language
• Company training times and formats are flexible
• Supervisors respond favourably to flexible working requests
• The organization respects employees’ needs to balance work with other commitments
• The organization has made progress on building a workplace where no one feels excluded

10 Characteristics of a Servant-Leader

1. Listening — A servant-leader listens first.
2. Empathy — A servant-leader sees the world through the eyes of the others.
3. Heal — A servant-leader wishes to make the injured healed.
4. Awareness — A servant-leader is aware of their physical social and political environments.
5. Persuasion — A servant-leader persuades by the use of gentle nonjudgmental argument to create change.
6. Conceptualization — A servant-leader visualize the big future.
7. Foresight — A servant-leader uses the past and present to plan for the future.
8. Stewardship —A servant-leader takes responsibility.
9. Commitment to people — A servant-leader places a premium on the individual.
10. Building community — A servant-leader seeks to create union or synergy. (Spears, 2002)

The Agile Leader — A Servant Leader Plus

Today’s complex business environment requires a servant-leader plus! A servant-leader makes altruism the central component of their leadership process. It provides a counterintuitive approach to the use of influence — leaders should share control. Servant leadership is not a panacea. It may not be effective when subordinates are not open to being guided, supported, and empowered.

This new type of leader is known as an Agile Leader.  Agile Leadership is a leadership style where the leader values the need to adapt to continually changing conditions, with the ability to embrace new active behaviours based on new requirements and the challenges of a chaotic, even volatile marketplace driving a magnitude of change, with the potential to confound by its daunting complexity and uncertainty.

Agile leaders (“We need Learning Leaders who can stay flexible, grow from mistakes, and handle a magnitude and diverse range of challenges.”)

• Agile leaders possess the ability to sense an organization’s needs for significant change and respond to opportunities or obstacles through planning, swift execution without losing momentum or alignment.
• Agile leadership is inclusive, democratic, and exhibit a greater openness to ideas and innovations. With a passion for learning, a focus on developing people, and a keen ability to define and communicate.
• The core of the Agile leadership style’s intent is not just surviving in the midst of chaos but quickly adapt and create a new future through demonstrating imaginative and insightful leadership when the status quo is challenged.

Competencies Demonstrated:

• Sustains profits— Seeking profitability and personal wealth with a keen sense of risk to achieve financial success.
• Seeks Innovation— Thinking expansively and demonstrating profound imaginative insight to identify wise but innovative solutions.
• Embraces Change— Being responsive and open-minded in unpredictable times with a willingness to adapt to rapid change.
• Thrives in Chaos— Enthusiastically thriving under seemingly a chaotic demand and overlapping priorities and displays a preference for multi-tasking.
• Focus on Results— Making personal sacrifices and expending extraordinary dedication and work ethic for one’s career.
• Drives Achievement— Desiring to achieve exceptional results under competitive scenarios for high ambition’s sake.

Final thoughts

Pay attention. Listen. Communicate. That is the key to making sure your team and customers felt valued and empowered to make the right decisions. Not only will those you lead start to perform at their natural best, but you will too.

Failing to develop leaders is the single most expensive mistake a leader can make.

All organizations, no matter their size, need leadership development and succession planning. While it is less likely that you will have potential successors for every role in a ten-person company, you can minimally cross-train.

Traditional performance management systems consume an enormous amount of an organization's time and money. Based on various estimates, the cost of lost time due to regular performance evaluations ranges up to $3500/employee per year.

Moreover, the impact of these review programs has been dismal. Many of these review processes have been found to hurt organizations rather than help. According to Gallup analytics, only 14% of employees strongly agree that the performance reviews they receive inspire them to improve.

For leaders, this is not merely a question about your front line — it is about how you develop future managers and leaders. Our ladder of leadership helps you create the leaders you will need for tomorrow.