Competitiveness Crisis
For the sixth consecutive year, India has fallen in its rank on WEF-Global Competitiveness Index (GCI). Dropping 22 positions from year 2009, India now at 71, is the lowest ranked among the BRICS economies. The Confederation of Indian Industry (CII), the Indian business leaders and the Government of India face a formidable challenge dealing with many factors contributing to what WEF has called ‘India’s competitiveness crisis.’ Implemented with sustained vigour and discipline, two watershed initiatives—‘Digital India’ and ‘Make in India’—can bring about a quantum jump in India’s Global Competitiveness.
Notwithstanding the above, ‘Customer Satisfaction’—voted in the year 1994, as one of the top three priorities by 79% of the respondents CEOs[i]—does not appear to be under sharp focus either at the CII or by Corporate India. Presumably, business leaders truly believe that the Indian companies are sufficiently customer-focused to justify any discussion or targeted action beyond what is currently being done.
The Reality Check: Customer Orientation Rank Plummets by 32 positions
Most business leaders, the top brass at CII and the related government authorities would find it difficult to believe what WEF Reports reveal about India’s standing on ‘Degree of Customer Orientation’:
- A drop of 21 positions from the year 2009 to 2013—from rank 57 to 78.
- A steep fall of 32 positions in one single year, 2014—from rank 78 to 110. India is now the lowest ranked among the BRICS economies.
- India lags behind the BRICS countries by very high rank differentials. Brazil is ahead of India by 49 positions, South Africa by 43, China by 40 and Russia by 27 ranks.
WEF ranking of the countries on ‘degree of customer orientation’ is based on the collective perception reflected in an executive opinion survey carried with the help of a local partner organisation—CII, in case of India. None-the-less, as revealed by a targeted empirical research the ground reality seems to be no different. It is not an uncommon phenomenon to find even well-equipped and well-intentioned companies often failing to deliver the promised quality of customer service. Why does this happen?
Companies turn Schizophrenic: Gaps in Promise and Performance
Post-1991, as the Indian companies braced themselves to face the tidal wave of competition customer satisfaction and product quality were brought under sharp focus. Over the years the quality of customer service did go up.
Paradoxically, as the economy revived after a dip, attention to quality of customer care began to wane. High-pitched posturing on ‘maximising customer satisfaction’ remained but most companies could not resist the temptation to revert to the long-held fixation to the idea that enhancement of ‘shareholders value’ is the primary focus for a company’s performance.
Picking up cues from the senior management’s behaviour—business ethics forsaken for short term gains; turned a blind eye to violation of company’s core values; changed priorities inconsistent with declared customer policy—many executives found it wiser to change the contour of their self-interest. Organisational and human dynamics started revolving around the quantitative targets relating to revenue and profit maximisation.
When the employees perceive weakening of customer-centric culture and see violation of companies core values going unpunished many paralysing changes begin to take place. Employees’ sense of objectivity is lost, emotional engagement goes down, perceptionof self-interest gets distorted and initiative suddenly becomes risky. With such a climate at the workplace—best described as ‘organisational schizophrenia’— that robs people of the willingness to put in stretch effort, no company can ever deliver quality customer service.
The Way Out: A Paradigm Shift
For the customers of a company, customer orientation manifests itself in high degree of responsiveness to its commitments, level of competence, systemic empathy and the way complaints are handled. On experiencing positive interactions the customer considers the company’s culture as customer-centric and the relationship as a success. If a company wants to preserve predictability of its employees’ behaviour and sustain competitive differentiation the leadership will do well to bring about a paradigm shift.
1. Customer First—In Word and in Action
Maximising shareholder value and customer satisfaction at the same time is just
not possible. Since there is enough evidence now available the company’s board can convincingly put it across to the shareholders that they stand to gain in the long run if the company pursues ‘customer first’ policy. The CEO will have to say this upfront.
2. Culture of Discipline
If competitive differentiation has to be sustained companies must establish a culture of discipline. Culture of discipline requires people to take disciplined action religiously consistent with the company’s mission and core values. It is a rigorous culture and “to be rigorous means consistently applying exacting standards at all times and at all levels, especially in upper management.”[ii]
Putting it All Together
This is what Dr. R. Gopalakrishnan says about the research carried out for my book, Organisational Schizophrenia: Impact on Quality of Customer Service.
“Gopal’s research has been with real companies, and done among real people. His case studies are the stuff of which your company and my company are made, every day with so many customers. He does not lament the situation, but offers his suggestions about what leaders can do about it. He has some important messages.”
The book has been widely acclaimed by many book reviews as unique and a useful read for executives at various levels of hierarchy and management functions including the CEOs. Described as an evangelist in one of these reviews I am happy to offer any assistance that I can provide in the process of improving the country’s rank on ‘Degree of Customer Orientation’. Organisations like CII and various chambers of commerce across the country can do a lot in promoting this new perspective so urgently needed in the strongly emerging age of customer capitalism.
[i][i] AnandViswanathan, ‘Caring for Customers’,Business Today, 7October 1994, 70.
[ii]Jim Collins, Good to Great(New York, Harper Collins, 2001), 52–54.