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Six Differences Between Customer-Focused Companies and Operations-Focused Companies

Customer Experience

Six Differences Between Customer Focused Companies and Operations Focused Companies image CS Focused vs Ops Focused Low resBetter Customer Experience

Some companies really understand customer service. They know how to hire for it, train for it and deliver it. Other companies claim to give customer service, but in reality, they are grounded in an operations mentality with rules and policies that allow for little flexibility, preventing them from being anything more than just average or satisfactory. Here are a few observations of the differences between customer-focused companies versus operations-focused companies:

Empowerment: A customer-focused company empowers employees to make decisions that are for the benefit of the customer. They have guidelines versus rules and take the approach that if it isn’t illegal, immoral, won’t cost the company money (although sometimes that’s still okay), and won’t harm the company’s reputation, then consider doing it to take care of the customer. The operations-focused company requires a manager’s approval for anything that is outside of their policies or typical way of doing business.

Hiring: A customer-focused company hires people who fit the culture, which means they have the personalities and core-values that align with the company’s vision and mission. Certain jobs may require skill, but skill alone won’t get the applicant hired. An operations-focused company will hire for skill, filling a position with technical strengths. The applicant’s personality may or may not fit with the corporate culture.

Training: A customer-focused company spends time and money training for soft skills such as relationship building and customer service. The company recognizes that it takes both, technical and soft skills, to break away from being average. The operations-focused company spends most of their training dollars and time on technical skills and product knowledge.

Leadership: The leaders of a customer-focused company set the vision and mission of the culture, and then they lead by example. The leaders of an operations-focused company sets the vision and mission of the culture, but sometimes will have the “Do as I say, not as I do” approach. Sometimes their behavior is incongruent with what they want to achieve, often leaving the employees confused and less than motivated.

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People First: The customer-focused company knows the importance of putting people first – specifically employees. They develop a culture of happy, engaged and fulfilled employees that deliver a better customer experience. Customers like this and continue to come back. An operations-focused company develops a culture focused on systems, procedures and the bottom line. While this is important to any company’s success, they miss the culture part of the equation.

Customer Service: The customer-focused company looks at customer service as a philosophy to be embraced by every employee of the company, recognizing that there are both external and internal customers. The operations-focused company sees customer service as a department.

Comments on this Article: 62

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  1. Jane says:

    Couldn’t agree more, NICE!

  2. Tim Frankl says:

    Great article, puts it all in perspective!

  3. Jeff says:

    Where can I find empirical proof that Customer Service focused businesses are more profitable and successful? I believe they are – but having the numbers sure would be useful for “making the case” to numbers-oriented “by the book” owners / managers.

    • Robert says:

      Apple, Disney, Four Seasons, Fairmont….to name a few.

    • Shep Hyken says:

      There is a study done of publicly held companies who accelerate in customer service. This study is tied to the ACSI (American Customer Satisfaction Institute) which is run by the University of Michigan. Here is a link with some info you might find interesting: http://www.theacsi.org/national-economic-indicator/financial-indicator

    • Alan Waxman says:

      In 1984 the company of which I was part, Lenscrafters, launched the first full scale management training program. It was a three week program 4 days of which was devoted to training managers and their people in what constitutes quality and legendary customer service. We considered it critically important to practice a set of behaviors that delibrately addressed the behavioral shift that created profound awareness on the customers part. Examples of which were: An employee could never make decision that would hurt the company as long as that decision was in favor of the customer. Even a small and short term loss in profits was overshadowed by the customers referrals of friends and new customers. One of the companys mottos was….”we will take back dead dogs and babies!” And these light hearted and very liberal policies resulted in employee empowerment….the permission given to any employee at any level to do the right thing to keep a customer and keep them “enthsiastically satisfied all the time.” Lenscrafters is the largest optical retailer in the world and every employee is given the power to keep it that way through customer satisfaction and amazement. And, while Lenscrafters prices are noticeably higher in certain instances, the customer is paying for empiracal proof, one on one, that the behavior makes it worth it in a most demonstrable way. When one asks for that quantitative proof, it comes in the form of employee “buy in” to the philosphy and authorized empowerment to walk the talk.

  4. Dawn says:

    Great capture of the essentials in a way that may help open the eyes of some operations culture leaders!

  5. Stephen Grey says:

    Broadly, I agree with the basis of Shep’s article, however it is always dangerous to pitch one approach against another because no single approach holds the key. In my experience, operational efficiency is critical to success, not least because speed and accuracy are foundation stones of a great customer experience. Operational efficiency also helps to manage costs and this, in theory, contributes to competitive pricing (and profit). It is also essential to ensure compliance with regulation, an area in which guidelines just don’t cut it.
    Focus on customer journey/customer experience represents a positive evolution from ‘The Customer is King’ via customer satisfaction and customer delight. Organisations are finally realising the benefits of having their faces towards customers instead of their backs and the pressure for this change has come from customers themselves, who are more savvy, have higher expectations and are more mobile than they used to be.
    Just a few comments on the specific headings; to complement not challenge:
    Empowerment: the framework should provide a sense of direction, a sense of purpose and a sense of value (contribution) to the business. Empowerment should ensure that authority to act (e.g. make decisions) matches accountability for the task. Within this approach, it is okay for some ideas, issues or questions to be escalated: there’s nothing wrong with collaboration or controllership.
    Hiring: the (real or perceived) culture of an organisation, if publicised, will attract applicants who feel they would like to be a part of it. However, it is important to prepare job specifications and candidate profiles carefully. How many people proclaim their interest in working for Google or Microsoft because they believe they can spend 10%-20% of their time thinking up new ideas over a game of pool? In any organisation, skills, behaviours, experience and shared values should compose the candidate profile. I think the UK reading of personality may be different from the USA view.
    Training: The main flaw in most training is the failure to link the theory with reality. Soft skills such as building empathy and understanding are increasingly important but trainees need ongoing support to apply what they have learned in a pragmatic and effective way. ‘Hit & Run’ training has limited value.
    Leadership: The quality and blend of leadership with management is also evolving away from the ‘do as I say’ culture. Employee engagement is firmly on the agenda and brings with it increasing awareness of the need balance direction and example with involvement, encouragement and support.
    People First: See also ‘Leadership’ above. Success in achieving employee engagement should feature in a balanced scorecard, together with the hard data (costs, SLAs etc) and the impact of all topics on customer experience.
    Customer Service: Customers experience services over time and across multiple touch-points. These must be aligned in terms of quality and delivery and be the focus of cross-functional effort.
    A great catalyst from Shep. Let’s hope it stimulates a great conversation.

    • Shep Hyken says:

      Years ago Dr. Ted Levitt at Harvard said the function of a business is to get and keep customers. The goal is to make money. A business can’t be successful if they confuse the function with the goal. There must be a balance between operations and customer-focus. However, the best companies are making operational decisions that focus more on the customer. Of course there will be decisions made about expenses and profitability. Customer-focused companies have the advantage of customers who are less price sensitive because of the value the company provides.

  6. Laura says:

    I personally think it is the other way around. The difference lies in the corporate culture leading to a more customer-focused attitude or a more operations-focused attitude.
    Having said that, I really like the comparison and agree with Shep Hyken that the customer orientated companies have a better chance at success.

  7. Steve Gross says:

    Shep…when I started reading your article I honestly thought you had read some of my previous communications…You are right on in every aspect The customer focused business is very different than the operations run enterprise…Guidelines vs Rules empowers employees to truly engage with the customers needs
    A couple of points for past contributors…Jeff take a look at Harvard Business Review…”The service-profit chain”….Stephen Grey, many good points like compliance issues, but a true service focused businesses priority is their customer…it does pay handsomely at the bottomline

  8. Gary Royston says:

    Great input Stephen. I just wanted to add that in my profession there is hardly any use of a call centre or menu driven system and customers can talk direct to the correct person for the correct enquiry or query. Furthermore we consistently receive positive feedback on the experience our customers have had and conversion is always healthy. So many organisations especially communications companies seem to be very ignorant of the dreadful menus their customers have to go through to get to a member of staff who are then reading a text script. It is these organisations that need to stop having customer service departments and embrace the idea of good customer experience and so ensure that these customers want to return.

  9. Innocent Odey says:

    Very enlightening and true! I’d just like to see numbers on the growth in business, made by the change in focus from operations to customer service

  10. Erika Paredes says:

    In my opinion, an operational focus is not contraditory to a customer focus. A customer-focused company empowers employees to do their work through well-designed systems, systems designed for “their operation.” I do agree, employees need to be empowered to do their work effectively and efficiently, I do agree employees should not be restricted from doing their work, so they can focus on the customer.

  11. Laura Pegoraro says:

    This is an incredibly one-sided, narrow view of the Customer Service vs. Operations debate. Customer Service and Operations should work together to provide an excellent customer experience while making sure that it makes sense for the company.

  12. Jakki Geiger says:

    Thanks for sharing your thoughts on this topic, Shep.

    I suggest a 7th difference, which is often overlooked. The executive teams at truly customer-focused companies reconize the importance of empowering employees with clean, consistent and connected customer information. They don’t want their employees wasting time manually pulling together customer information from differenent systems into a spreadsheet to figure out which customers have which products, where they buy from, what their previous customer support issues have been, and what their interests and preferences are. They give their employees direct access to the customers’ total relationship with the business to do their jobs effectively.

    • veera says:

      truly agree. Data is king and if it is in the hands of the frontline employee, customer service will be truly enhanced. in today’s highly connected, hi tech age, this may sound easy…however, my experience has taught me that it is easier said than done.. Having the right relevant data is important

  13. Terry Wildemann says:

    This is a brilliant and on target article. Tasks are fulfilled by people. When employees feel as important as the external customer the tasks are done with a positive focused energy. When tasks are fulfilled by employees who are undervalued, unappreciated, and considered to be “task doers” the energy is empty, dull and robotic.

    • Nhan Nguyen says:

      You are absolutely right. ‘Task doers’ will harm the organization’s business growth in long term

  14. Ashutosh says:

    Seems like we are talking about a world where operation driven organisations have already reached peak of their efficiency and we’re looking for an option. I’d like to read how the vision of ‘customer facing’ company(which every company is) can be amalgamated to improve operational efficiency and customer satisfaction at the same time

  15. Suchindra Kumar Singh says:

    I feel customer service focused business are more profitable. It is runing long term business.

  16. Ajay Antony says:

    very well written..distinctions

  17. Georges-Michel de Campos says:

    The initial article clearly questions the very structure of the organization. The actual question is not how to chose from the 2 options or how to get the appropriate mix of them. The central point is all about how to empower the Customer facing person in order to allow him/her make instant Customer facing décisions. And to achieve that, we come to the question : who is entitled to what ? In other words : “How to build an organization with roles that combine both Customer facing execution and operational decision making.

    • Ashutosh says:

      The central thought as pointed by you, struck me once or twice during first reading. Read it again and realised that infact all the six differences point to the central thought people empowerment, thanks!

    • Lillian Hernandez says:

      I could not agree more with Georges-Michelde Campos.
      In my humble opinion both options are essential for growing a successful company. Both strategies are like water is for coffee. Very valuable information this is. Thank you for posting all your ideas and opinions it helps me grow professionally while enriching my knowledge.

  18. Andri says:

    Great insight. Very inspiring

  19. Arlen Meyers, MD, MBA says:

    Try putting patient customer focus ahead of operations in healthcare and you will lose your accredication.

  20. Marta says:

    Ultimately, it is all about the customer. No happy customers, no organization. Internal and external customer satisfaction can direct the development of the operations. I have seen it done well…it can happen, but it takes commitment from the TOP.

    • Ashutosh says:

      Cant deny that a willing TOP is the major influence, but if this becomes the ground rule, fate of all organisation would rest in hand of few(sad reality). Waiting for someone to spearhead a revolution from middle management

  21. Thomas Stelter says:

    Loved the comparisons between customer service and culture. People first. Published an article (http://j.mp/1iH3Tpa) about customer-first product development on LinkedIn that adds to this posts points. Thanks for sharing!

  22. James Bond says:

    Ladies & Gentlemen, please read these three Great books: The Future of Competition, Good to Great and The Bible! Jesus teaches us all the topics you are mentioning in your comments: Co-Creating unique value with customers, Culture of Discipline, and the Servant Leadership by washing disciples(customer’s) feet. The hardest part is showing up and stick with the Basics. He will do the rest and help you to make miracles in the market place when you get out of your boat and take a leap fo faith! You will find peace and unexpected mercies when you are least expected… And watch your company flourish! Cheers, 007

  23. Dan says:

    I have a problem with your labels. the very best and most successful groups I have worked with were Operations companies. “Operations” as in focused on the guest but set a high priority on ground up creativity, culture and innovation. Leadership from Operations rather than corporate kingdoms made for an exciting and bottom line successful company. “Operations” as in on the firing line with direct customer contact and impact. To me, Operations is a positive while Corporate or Power focused would be a negative. Those organizations that care more about executive growth and success than actuall making a difference

    • Shep Hyken says:

      Consider this… Operations may be the name of a department. Operations-Focused is a philosophy.

  24. bshlensky says:

    i agree with your points but there should be no conflict . For example systems can and need to build in empowerment , flexibility, and management discretion . In particular good systems will build in tools for great employees to innovate and to service great customers . However they can also tell you how you are making money

  25. Brad says:

    Most companies say and aspire to be customer focused. Yet, to accomplish that end they need to have replicable operational processes and measure gains and output, hire, onboard and train new people and then lead the company to greater and greater heights. Customer focused with operational excellence can be one in the same.

  26. aman says:

    Thanks for this…………

  27. Shekhar says:

    Perfect elaborations. The biggest draw back in customer service industry is the professional training,Induction and team management. One of the attributes for attrition in customer service is the lack of the one or the mix of the above mentioned factors.

    Companies/HRs have monotonous systems and processes for training and recruitment and it is more mechanical. Its is the attitude of one size fit for all. Organizations does not employ feedback systems on training and induction. Even if it is there no amount of time is spent on analyzing it. The trainers/supervisors are many a times are disinterested lot which leads to slack in initial days. It would definitely hurt by ways of either customer dissatisfaction or high attrition levels. Organizations should spend a considerable time and energy if it does want to be retaining the external as well internal customers.

  28. Ivars Boiko says:

    Very inspiring article.
    Some points may be discussed, but in general all is true.

  29. K C Girotra says:

    Shep, Very good article. Nicely summed up.

    I had an interesting experience – thirty years back, I was carrying out Business Excellence maturity level assessment of a watch manufacturing company in India. Those days formal imports into the country were prohibitively expensive yet smuggled goods were easily available
    When I asked the CEO of the firm “What are your challenges?” he mentioned “our managers are too operations-focused”. I asked him to elaborate. He said “my General Manager is trying to improve cycle time of a particular operation by 10% when the capacity is lying idle!” He added “Since smuggled watches are taking away our share, therefore our resource focus has to be on business i.e. finding ways to serve a more aware customer, for example through new futuristic and competitive products”.
    He added, “One day even formal imports will not be expensive therefore sooner rather than later the Company would have to find business solutions rather than operational efficiency to remain competitive.
    To me this sums up the problem of an operations-focused company

  30. Neil Sze says:

    I can not agree more

  31. antonio sagansay says:

    yeah! to have a business and to be leader of the business it must be you visual and can be creative put it to the heart what you have done on the company and in terms of love you job…

  32. Rick Nauseef says:

    I firmly agree with the customer first mentality. But in an environment that has that idea as an operations philosophy but a runs employees in an operational mode, ie. putting out fires. How do you make this work?

    • William Phillips says:

      Pessimistically you may be stuck. Optimistically, I’d say that you don’t have to be at the top to be a leader in customer satisfaction. When you’re putting out fires, work customer orientation your driving force. Make customer orientation a part of everything you do. It’s a case of do what you can no matter how little it may be. Who knows, it might catch on.

  33. Bill Cole says:

    K.C., your watch CEO story points out that operations is a part of business. If pieces of the business are not following the business strategic needs, it is probably wasting time, energy and money.
    Most business people realize it is much easier and less expensive to keep an existing customer than to gain a new one. So like K.C.’s watchmaking CEO, look at a broader strategy than being customer focused. This would be a market focused strategy with a culturally market focused organization.
    However do not confuse being market focused as the same as being customer compelled.
    Attending to one customer that is always demanding special requests requiring your people to jump through hoops does not make your company customer focused. A planned strategy and a corresponding culture that provides flexibility for dealing with customer variations within boundaries is a customer approach.

  34. Philip Diniz says:

    Outstanding article! Simple/true comparisons.

  35. RNK says:

    100% agree with Shep. The organizations must realize that there are certain situations where “going by the book”, works well and should be followed. However, that may not be true always. The changing dynamics, customer expectations and the objectives/requirements would demand a different approach, which organizations should be flexible to address to be successful. I do not think people have recognized this fact in the right spirit.

  36. Nadia McDonald says:

    This is a very informative article. I’m going to continue my research on this.

  37. Sumi Rasouli says:

    Great article. There is no denying how important and impactful customer focus is to an organizations bottom line. Having said that operational excellence cannot be ignored – I’m sure that was not the intention of this article.
    A peaceful marriage between the two approaches would certainly be ideal.

  38. Pravin Bancharam says:

    well thought points. naturally the operations-focused guys’ salary will be paid by the customer-focused rep. So be always customer-oriented, the mantra in today’s competitive world.

  39. Joe Marzano says:

    Shep stoked a good conversation, thank you. Someone pointed out, and I agree, that customer-focus and operations-focus are not mutually exclusive. They are both, in the right balance, part of a success formula. Out of balance, I have found that they can and will break even the best intended enterprises.

    The article points out what are artifacts of any organization’s chosen cultural answer to this question: why do we exist and what do we believe in fulfilling that existence?

    Call them vision and values, or purpose and attitude, in either case what everyone does in regard to engaging inside and outside stakeholders will determine what results.

    I have worked for and consulted with some extraordinary public and private organizations and leaders over my career. Every one of them regardless of scale and sophistication has struggled to align people around the desired culture.

    We all have access to great thought leadership and information, and we all know the stories of organizations that were or are leaders in their fields, and mostly we want to emulate them.

    Then we face the reality of engaging and changing minds, and overcoming dogmatic perceptions. The answer is not in the artifacts, no more than the cure of a disease is not in the symptom. That only gives us facts to help diagnose. The real power is in relentlessly respecting and nurturing a chosen collective culture.

    Think of it as the virtuous version of the Broken Windows Theory … everyone from board through C-Suite to front line paying attention to and empowered to defend the common cause. Anyone who sees that, inside or outside, will know it and the right people will be attracted to it. Many will gladly pay (time and money) to become raving fans, which I think is the ultimate gold medal award.

  40. Bill Stewart says:

    Why is it that the larger the corporation, the more operational they become? Maybe it’s because they need it to be rocket science and use excel spread sheets to explain what they can’t describe. It’s not about just the bottom line, nor just the customer. It’s about having a company full of team members that feel they are a part of something. If you don’t have that, you can’t have the other two. Creating an atmosphere where all the pieces of the puzzle feel they are a part of something great is always the first step. Big companies have big trouble accomplishing this. Customers will always feel more comfortable doing business with people who feel that they are the company. Then the profits (and bottom line) will follow. Pretty simple.

    • Joe Marzano says:

      Fundamentally, no nefarious reason Bill. Being large does not make it bad, but it does make it extremely complicated. As an organization grows and scales, it develops necessary systems and processes that allow it to keep growing. There are more moving parts, greater distance between parts, and more chances for entropy and chaos to occur. As a result, the pendulum swings toward operations control, sometimes too fast and at the expense of relationships. As I commented earlier, great organizations balance customer and operations focuses. The CEO’s job is largely to be head architect and champion for the right balance at the right time.

  41. Tracey says:

    We read about, we talk about it but nothing seems to change in those organizations that claim to be customer focused but in reality are operations focused. They continue to miss the boat and not pay attention to the messages…

  42. Toni Sheppard says:

    A really interesting date and article – thank you. Joe I agree completely.

    In my experience the main points to consider are that the operational elements of a business are often vital to the effectiveness of the business functions and commerciality. A customer focused business does not forget this and actively embraces improvements in operations to improve customer experience and engagement.

    The critical point is that a customer focused business does not use the operational elements as a reason to say ‘no’ and does not bring these into the conversation with a customers EVER either as an excuse or a reason for poor customer service. Both have to work in synergy with each other and the customer doesn’t need to know how. They just have to know that you are championing their requirements.

  43. Pasquel Terwillegar says:

    Great article – I agree to a point, I think that’s why my boss and I work well together, he is very “by the book” and I am very “customer service driven” so we tend to balance each other out with our guests and crew members :-) I think it is fundamental to have a team of managers with different strengths that can work together to give our guests the best experience possible.

    • Joe Marzano says:

      So true, diversity of thought is vital especially at the top including the board and C-Suite, by recruiting and retaining people from different backgrounds, experiences, skill sets, ages, genders, and understandings of how the world works. Too many organizations seem to over-strive for harmony and think collaboration equates to unanimity.

      As a result, no one has the will or skill to question and challenge process and program, so the organization develops group “stinking thinking”. They risk being blind-sided by change or adversity. I’ve seen those cultures form in even the best organizations with really smart folks. Better to have one mind on cause and mission, diverse ideas on the best pathways to get there.

  44. Irene Mckinnon says:

    I like the emphasis that people come first.

  45. joyce isaac says:

    Personally I have seen the entire thing plat out. Adherence to policies and rules makes the team focus only on whats written on paper. The customer gets a short shrift, with business getting hit. Mind you it happens over a period of time, hence difficult to react to immediately. In the meantime, the competition has already benefitted. BTW Very nice article, very meaningful.

  46. shridhar says:

    I think the key is that operations be aligned to customer needs. As long as the right connection between customer needs and operations exists, all the rules operations would make to fulfill customer needs would make a great company.

  47. Raghunathan says:

    Excellent article , Most often organisation vision mixes these two and try to use as per situation .
    Bottomeline is very imporatnt to organisation and without customer focus .. It’s difficult to sustain very long …..

  48. Jan says:

    For me this is a no brainer – it’s always about the customer. without customers businesses would not exist, but contrasting that is having good employees adds to the success of an organisation. Corporate interest driven by a quest to generate profits to satisfy their investors often lose their focus in their drive to promote incresed productivity, typically at the expense of their employees. Nothing is important than to provide opportunities for employees to grow and prosper along with the business. Most investors rarely take into account that it is their “it’s all about me” attitude in running a company that eventully takes it’s toll and results in the demise of the business. One importanr factor that ecapes notice is the importance of the workforce and it’s contricution to the bottom line because who are those who work for a living? They are customers, that’s who. When businesses introduce new technology into their operation such as robotics, all they are doing is eliminating jobs; thusly they are ultimately shooting themselves in the foot – cuts made in reducing the consumer base. If big business keeps doing this then they will eventually run out of consumers – no one will have any money to spend on goods and services; so who will industry get to to buy the products which are produced? So, in order to keep an even an evan keel on all the economies, domestic or international is in the best interest to ensure the future is kept robust and flourishing

  49. Gift Nxumalo says:

    In Costomer Service you need honesty,trustworthy,intergrity,transparency,responsibility and accountability.

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