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Customer Experience

November 26th, 2009

Management Imperative #1: Invest In Culture As A Corporate Asset

Why do companies create capital expenditure approval processes and develop strict cash management procedures? To manage their corporate assets. But executives often spend little time, if any, focusing on another critical asset, their corporate culture. Leadership guru Arthur F. Carmazzi does a great job of describing the value of corporate culture:

“The ability to do more than expected does not come from influencing others to do something they are not committed to, but rather to nurture a culture that motivates and even excites individuals to do what is required for the benefit of all.”

Think about it: Corporate culture can amplify the value provided by just about every employee. How much is it worth to make employees 1%, 5%, 10%, 25%, or 50% more effective? When you consider this type of impact, it’s clear that corporate culture is, in fact, a real corporate asset. While it doesn’t show up on the balance sheet like other assets, executives need to treat corporate culture like they do other long-term assets.

Here’s how execs can manage their corporate culture assets:

  • Track employee goodwill. When companies buy other companies, they often account for part of the price as “goodwill;” acknowledging that items like brand name and competitive positioning can be long-term assets. Following this approach, companies should track ”employee goodwill.” How? By surveying employees and reporting the results like you report the balance sheet; analyzing quarterly snapshots and changes over time. Think about creating a metric from  questions like “How committed are you to helping the company achieve it’s mission and objectives?” “How likely are you to recommend this company as a place to work to your family and friends?”
  • Develop a Voice Of The Employee program. I often write about the importance of a strong Voice of the Customer (VoC) program. Firms need to infuse customer insight throughout all of their activities. Companies should follow the same approach in designing a Voice of the Employee (VoE) program. What are the key elements to a VoC, and therefore also a VoE, program? LIRMing, which means designing processes for Listening, Intepreting, Reacting, and Monitoring. Companies should listen to employees in many different ways; similar to the five levels of a VoC program.
  • Establish a vocabulary around culture. Culture is often seen as a “squishy” topic. To make it more tangible, execs need to use a consistent set of terminology and concepts. Edgar Schein’s research can help, especially his work on the three cognitive levels for organizational culture: 1) attributes that can be seen, felt and heard; 2) items that can be depicted by company slogans, mission statements, and different operational creeds; and 3) tacit assumptions that are unseen and not cognitively identified. In my research on customer-centric culture, I identified the 6 C’s of customer-centric DNA: Clear beliefs, Compelling stories, Consistent trade-offs, Collective celebrations, Constant communications, and Commitment to employees.
  • Actively manage it. Just like with any asset that can gain or lose significant value, companies need to actively manage their corporate culture. This requires execs to spend their time and make investments on it; trying to optimize the ROC (return on culture). In Organization Development and Change, Cummings and Worley provide the following steps for cultural change: Formulate a clear strategic vision, display top-management commitment, model culture change at the highest level, modify the organization to support organizational change, select and socialize newcomers and terminate deviants, and develop ethical and legal sensitivity.

The bottom line: Don’t squander your corporate culture asset.


About the Author

Bruce Temkin

Who is Bruce?

Email: btemkin@forrester.com
Twitter: http://twitter.com/btemkin
Resume: Click here to download (.pdf)

I am a customer experience change agent; helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, marketing, interaction design, customer service, and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey.

My current position is Vice President & Principal Analyst at Forrester Research focusing on customer experience. My work consists of two parts: 1) researching leading-edge approaches to customer experience (here is my 2008 research agenda); and 2) helping large organizations improve their customer experiences. I also end up speaking to a variety of audiences (from keynote speeches at large events to workshops with executive teams).

Bruce D. Temkin VP & Principal Analyst, Customer Experience
Forrester Research, Inc.| p: 617/613-6044
400 Technology Square, Cambridge, MA02139

Blog: Customer Experience Matters


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One Comment


  1. Hammer 64

    great idea.



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