SoC connects customer understanding to the design of the business
Customer centricity has become a powerful ambition in business: put the customer at the centre. The intention is valuable. It challenges organisations to stop designing primarily around their own structures, products, processes and internal convenience and instead consider the customer (or better: user of their products and services) more seriously. But the language of customer centricity can also create an unrealistic binary.
If the customer is ‘at the centre’, it can imply that the customer should be the dominant reference point for how the organisation is designed and operated. And because customer centricity is often also treated as an ambition, aspiration or purpose, greater customer orientation can easily become synonymous with being better.
But organisations are complex. And business models have to work economically. And operating models have to be viable. Plus organisations have to comply with regulation, cope with uncertainty, manage risk, develop capabilities, employ people, work with partners, use technology, allocate capital and, in some cases, remain competitive. Customers are not the only parties who have a stake, and not every aspect of a business should be optimised around customer preference.
This does not make an organisation less serious about its customers. It reflects the reality that an organisation is an ecosystem of different legitimate interests. SoC starts from that reality.
The word ‘stake’ is deliberately chosen. Having a stake is not the same as having control. An employee has a stake. A business partner has a stake. A shareholder has a stake. A regulator has a stake. A supplier has a stake. Society has a stake. And the customer also has a stake.
Having a stake means that the products and services, plus the organisation itself matter to that party because it is affected by what the organisation offers and does. It does not mean that this party gets to determine what the organisation does. And regarding SoC, the question is whether and how much the customer’s stake is recognised as a legitimate part of how the organisation, its operating and business model(s) are designed and operated. SoC is much broader than customer preference. It concerns what the customer has to gain, lose, achieve, protect, experience or struggle with as a consequence of how the organisation operates.
SoC connects customer understanding to the design of the business itself. The question is not simply whether customer needs are considered somewhere in the organisation. The question is how the customer’s stake is reflected in the configuration of the business.
This can be seen across multiple levels, such as:
- Business model
- Operating model
- Proposition
- Customer journey
- Products and services
The weight of the customer’s stake can differ
A central principle of SoC is to what extent does the customer’s stake shape the organisation and the way its business is designed and operated. The appropriate weight of SoC may depend on the organisation’s:
- sector or industry
- competitive position
- economics
- strategy
- technology
- capabilities
- regulatory environment
- operating model
- business model
- and the particular customers and outcomes involved
Therefore, SoC does not create a universal prescription for how customer-oriented an organisation is or should be. It provides a way to understand how much of the organisation is shaped by what is at stake for the customer, and why. Paradoxically, SoC can be more respectful of the customer than the rhetoric of absolute customer centricity.
If we say that “the customer is always right” or that “the customer is in control,” we create an unrealistic relationship. Customers know that companies have constraints. They know that products have economics, that regulations can be in the way, that other customers have different needs, and that not every preference can be accommodated.
Customers should and can expect their interests to be understood and taken seriously. SoC provides language for exactly that. It says:
The customer does not have to win every trade-off for the customer to matter.
When something is placed at the center, it implies a privileged position. It becomes the primary reference point around which everything else is organised. But a business is rarely organised around a single interest. A better representation of a real organisation is a system of legitimate stakes. The customer is one of them.