The factors that enable customer centricity and the changes in the organisation design when moving from a product to a customer centric strategy

Abstract

Launching new products into the market is considered a means of generating growth; however the growth is often short-lived as competitors copy product innovations. Organisations are learning that customers and not products are the most valuable resource and are the source of competitiveness and growth. Consequently, the requirement to change the organisational strategy from product centricity to customer centricity has become a topic of interest. It was identified by numerous authors that to attain customer centricity organisations need to change the design of their entities and related processes by harnessing organisation design competencies. In exploring this topic, a qualitative research approach was adopted. The research was conducted using a two phase approach. The first phase entailed an analysis of published case studies of four companies that have transitioned from a product centric to a customer centric strategy. The companies were from the financial services, electronics, real estate and information technology industries. The second phase of the research entailed conducting semi-structured interviews at a retail bank that was in the process of transitioning from a product centric to a customer centric strategy. Sixteen semi-structured interviews with the key managers across the retail bank were conducted. A central finding of this research was that the transition from a product centric to a customer centric strategy entails the understanding of key enabling factors. These are grouped into 3 categories, namely; technological, customer and organisational factors. Another central finding was the evidence in the changes in the organisation design. Changes in the structure, processes, rewards and measurements as well as people practices were noted. The role of leadership, culture and change management was highlighted. An organisation design capability was also cited as assisting in the transition to a customer centric strategy.