What is Customer focus?

The first Quality Management Principle supporting any quality management system is Customer Focus. And in many ways, it is the most important. As we saw last week, the other basic principles establish a management system as suitable for a sustainable organization: that is, a social organism which uses rational self-reflection to adapt to its environment. But Customer Focus is what points that management system (and that organization) towards Quality. Quality means that your customers get what they want; and you can't get there without focus. For this reason, ISO 9000:2015 defines that:

The primary focus of quality management is to meet customer requirements and to strive to exceed customer expectations.* [2.3.1.1]

But why does it really matter? How do you do this? And who counts as your customer?

Why does customer focus matter? 

Of course at the most basic level, customer focus matters because if you treat your customers badly they will take their business elsewhere. And if they go to your competitors, you'll go out of business. 

But there is more than that. Customers are the whole purpose for an organization. Peter Drucker famously observed, "There is only one valid definition of business purpose: to create a customer." And logically, this makes sense. The only valid purpose for a nursery is to support gardeners. The only valid purpose for a hospital is to treat and cure sick people. The only valid purpose for a car dealership is to enable people to drive cars. And so on. Customer focus means paying attention to the one thing that gives all our work meaning.

How do you focus on customers?

There are as many ways to focus on customer needs as there are customers or needs. But a few simple ideas are basic.

First, you have to know what your customers really need (or want), and what you are able to provide. If those line up, that's great; if they don't, you might want to do something to correct the mismatch.

What is more, if you work as part of an organization (and not as a sole proprietor), you have to make sure that everyone in the organization is working on the same thing, or at least pulling in the same direction. This is trickier than it sounds, because sometimes organizations end up serving the demands of their own procedures rather than acting in a way that benefits their actual customers.

We discussed this risk in a blog post a couple of years ago, when I described the work of John Seddon. Seddon has made a career out of prodding executives to see their businesses from the outside, the way a customer does. His first step when working with a new client is to send top management out to the front office to watch a single order come in, and then to track that order through its whole life-cycle. Invariably, the order winds its way through a dozen departments; the whole path is so complicated that it takes way longer than it would have taken if one person had handled the job from start to finish. Also, with every additional step there's another chance for error. This kind of work cycle, which is all too common in the largest organizations, is a direct consequence of forgetting to focus on the customer's perspective.

Again, customer focus can take thousands of forms depending on the specific details of what work you do and who your customers are. But start by seeing things from their perspective.

For that matter, … who exactly are your customers, anyway? 

Who is your customer?

We can start with a definition, but we won't end there. ISO 9000:2015 defines a customer as a:

person or organization that could or does receive a product or a service that is intended for or required by this person or organization. [3.2.4]

So far, so good. But who else do you have to consider?

Direct and indirect customers

Some customers are indirect; that is, they don't walk into your store or pay you directly, but they buy your goods from one of your customers, or from a distributor. I have a friend who makes custom light fixtures by hand, and many of his sales go through a distributor for practical reasons—so he can focus on creating the works instead of marketing them.

Then there are people who look like customers but don't end up buying from you. Another friend works in retail, in a niche that requires a lot of customer consultation. Her store is recognized as the best local source for expertise in their line of work. Of course most people who get their information there also shop there; but once in a while people will come in and learn everything they can from the sales staff … only to spend their money somewhere a few dollars cheaper. Are these people "customers"? In a sense perhaps they are. More to the point, the store has to understand that these people exist, and to advise the sales staff how best to work with them.

Other interested parties

The most recent edition of the ISO quality management system standards generalized the concept of customer by introducing that of interested party. ISO 9000:2015 defines an interested party as a:

stakeholder; [a] person or organization that can affect, be affected by, or perceive itself to be affected by a decision or activity [3.2.3] 

As we saw a few years ago while discussing the case of universities (see this post and this one), the concept of "interested party" is in many ways simpler than the concept of "customer." And it shouldn't be hard for most organizations to list the interested parties that care about the outcome of their operations. For example, your state may require you to apply for a business license in order to operate. Strictly speaking the state government isn't a customer, but everyone understands the need to obtain all the appropriate licenses before you open your doors. So naturally the state's "needs and expectations" have to be taken into account.  

Unusual interested parties

Sometimes you might have "interested parties" that aren't so obvious. 

Let's consider an unpleasant example—and one that I hope will never happen to you in real life! Suppose a representative of the Corleone Family comes into your shop one day, looks around, and says, "This is a nice place you got here. It'd be a shame if something happened to it." Then he offers to "sell you insurance" to protect your shop. Does this thug count as an "interested party"?

According to ISO, he might. It depends on how credible a threat he poses. If you are confident that the police can protect you, naturally you'll prefer to ignore him. But ISO 9000:2015 clarifies the concept of interested party by explaining:

The relevant interested parties are those that provide significant risk to organizational sustainability if their needs and expectations are not met. [2.2.4, para. 2]

So if the Corleone Family truly poses a "significant risk," then it is fair to classify them as "relevant interested parties." And ISO 9000:2015's advice on customer focus suggests that one way to address such focus is to:

determine and take action on relevant interested parties’ needs and appropriate expectations that can affect customer satisfaction. [2.3.1.4]

Only you—or your organization—can determine whether "protection insurance" counts as an "appropriate expectation" from local criminals; but if you choose to pay it, ISO 9000 will back you up.

All our work is for the sake of something, which means that it is all—implicitly, at least—in the service of somebody. As long as we can remember that, we're well on our way towards sustainable Quality. 

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* There is room to discuss whether it is always right to exceed customer expectations. (See this post, for example.) But the standard says only "strive," so we can afford not to emphasize this point when it does not apply.