Research Summary

Customer-Centricity as a Vehicle for Organic Growth

by Ranjay Gulati

Description

This body of work examines the mechanics of how firms grow profitably in commoditizing markets. Underlying the "customer-centricity" that many firms embrace today is a factor that will determine their success with this effort: enabling collaboration across their internal silos and, increasingly, with external partners. While internal integration has been an enduring theme in organizational research, in this context the nature of integration is driven not by production concerns but by external market and customer demands. The integration challenge is significant, as these drivers are not always predictable and consistent. To integrate internally, a firm must align its product-, technology-, function- or geography-based business units and operations to generate customer-focused offerings in a systemic and flexible way, without completely obliterating these silos, which are often crucial to innovation and/or house deep product and marketing expertise. Along with internal integration, firms are also seeking external partners who provide key inputs or complementary outputs that enable them to simultaneously "shrink their core" by doing less themselves and "expand their periphery" by offering a broader, integrated assortment of products and services. This poses new integration challenges as firms must find ways to improve customer-focused collaboration with external partners.  The belief is that this internal and external integration will allow the company to fully leverage the specialization and competencies of individual organizations-within and outside of the firm-to deliver greater value to customers and better bottom lines to themselves. Based on a study of nine prominent companies that are dismantling and transcending silos to become more customer-focused, I present the key enablers that shape their success, the pitfalls they face, and a model of how this journey typically unfolds.