BUSINESS STRATEGY

REVIEW

© LONDON BUSINESS SCHOOL ISSUE 4 - 2013 75w w w.LONDON.EDU/ BSr

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Customer is king

Sahar Hashemi

has always put

the customer frst

I was brought up with the advert featuring Victor Kiam, head of Remington

Products, in which he said, “I loved the shavers so much I bought the company.” Some things haven’t changed since the 80s. A decade or two later, Will King created King of Shaves because he was allergic to foam shaving products. Te moral of the story: many entrepreneurs start companies out of the frustration of not fnding what they want for themselves and create products they love or need as customers. Approaching a business this way, customer service becomes the essence of what you do rather than a nice extra. Te customer is your core compass in making decisions.

Growing apart

I started both my businesses because of an unmet personal need: Cofee Republic because I couldn’t fnd skinny lattes and Skinny Candy because I couldn’t fnd guilt-free sweets. So in both businesses the focus was entirely on my own needs, ie the needs of the customer. We worked backwards from there. Every decision was driven by the question, “As a

customer would I want this?” To be honest, there was no other insight we could aford. Market research and focus groups were too pricey.

But as our business grew, we hired more big company types and slowly lost that wholehearted customer focus. We focused on customers as all companies do, but not in that unique entrepreneurial way. It became “us”, the company, trying to sell things to “them”, the customers.

Why? Te new people weren’t hired because they loved the product. Tey were hired because we could now aford to give decent salaries and it was a fast-growing, exciting business. Where did their loyalty lie? To their immediate boss, to the appraisal system and to the org chart, of course.

I hired a hot-shot marketing director from a household brand and was excited to work with him on new products. From the moment he arrived, all he did was tell me why such and such idea would not work because of extensive research commissioned at his previous job. It was classic in-the-box thinking. In the

midst of this, I saw that he was bringing a cup of Costa (our UK competitor) in to work every morning. I assumed he was tracking some new thing they were doing as it was customary to visit competitors. But, no: his commute didn’t take him past a Cofee Republic. He admitted he hadn’t visited a store for two weeks. I was mortifed. What coud be more important that visiting stores, trying the cofee and searching for inspiration?

Tis is a pitfall faced by many large organisations. As the structure grows, the people on top grow further and further away from customers and the real needs of the business. I recently attended a breakfast with Sir Terry Leahy, formerly of Tesco, who mentioned that by the time the CEO gets market reports from customers, he gets only the fairy tale, i.e. the information goes through so many flters that it becomes happy fction.

Getting past the fairy tale

So how can those at the top of large organisations avoid hearing only fairy tales? It’s simple. Tey need to get as close as possible to customers in real time, not through research reports and scores (these have their place, but they are more historical than predictive or creative). Whatever your level, you need to go out and see for yourself.

Tis is what Toyota calls genchi genbutsu (“go and see”). My experience on the customer council at E.ON is a great example of this. I normally shy away from boards as my experience from Cofee Republic was that, frankly, issues discussed at board level have nothing to do with customer. But E.ON assured me that the council’s sole purpose was to keep the business focused on issues that mattered to the customer, so I agreed. And the frst thing I did was change utility supplier to become a bona fde E.ON customer.

Te council was made up of outsiders (led by Allan

How to be your own customer

Business is personal and even more so for many entrepreneurs, says Sahar Hashemi

Leighton), the management team who could execute change and most importantly two customer advisors who worked at the call centre and were at the coalface. It’s rare to have this level of diference in seniority around one table, and for all these groups commit to meeting together every month for over a year. Our only agenda was to improve things for customers, so all we focused on what the customer would directly beneft from, such as the length and clarity of utility bills.

It reminded me of how it was at Cofee Republic at the beginning. It was amazing having issues brought up in the presence of people who could do something about them. Sadly, it is rare to have so much attention paid to what the customer sees rather than the usual targets that rule organisational life. Tere was also follow up. New ideas didn’t get lost in the day-to- day of business as usual.

Te most fulflling part for me was watching how, over time, barriers to change were chipped away by the relentless focus on the customer. Tanks to a CEO who allowed us to challenge the status quo, “it’s impossible” slowly changed to “that’s quite a challenge,” to “I think we’ve found a way”. It takes outsiders to break down the barriers that big companies have to innovation because it’s difcult to do it without a total disregard for “how things are normally done”, industry standards and company jargon.

Te experience left me wanting to encourage more of these pop-up boards where the organisation puts the customer on a pedestal. And it left me hoping that more companies choose to rewrite the fairy tale and make the customer genuinely king.

Sahar Hashemi (saharhashemi@gmail.

com) co-founded Coffee Republic and

helped turn it into a business with annual

sales of £30m. She also founded and sold

Skinny Candy and is a best-selling author.

Her latest book is Switched On. Visit

saharhashemi.com

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