Efficiency, Effectiveness & Customer Experiences
A short stint to Vienna, Austria, produced an exciting opportunity to engage with some of the world leaders advancing the legacy of Peter Drucker (1909 – 2005). As a leader in integrative management thinking, Drucker helped shape the modern corporation, as we know it today. In many ways, Drucker was ahead of his time. He saw management as a cross-functional and transdisciplinary activity, a concept many business schools and corporations are still trying to make a reality today.
One topic of interest centered on the difference between effectiveness and efficiency. Dr. Richard Straub, President of the Peter Drucker Society Europe, noted how a corporation’s inward focus on efficiency (measurable process optimization) can ultimately result in reduced shareholder value and revenue. Corporations have a tendency to throw the baby out with the bathwater and shed valuable resources as they focus only on efficiency. Straub also commented on the power of the brand, using recent efforts by IBM to demonstrate how a strong brand can carry a well-positioned international corporation through times of change without significant collateral damage.
In contrast, when we take Straub’s insights into the context of customer experience and service design, a corporation’s focus on effectiveness can lead to lasting market success, and positive contributions to brand building. How is that? When organizations shift their focus on empathy and have an outward focus on the customer – in the name of effectiveness (increasing the capacity to deliver an intended result) – the underlying tone of the collective effort changes. Effectiveness is about reaching goals and objectives, and doing the right thing at the right time. Emphasizing the importance of the focus on the needs of the customer, Straub cites Drucker’s assertion, “social responsibility of companies is innovation“.
Let us therefore introduce a third element to this conversation: the narrative of the customer-corporation relationship – in short the brand. Leading organizations have recognized the potential impact of this trilogy: innovation for effective, branded customer experiences. Doing what’s right for the customer creates long-term brand equity and customer value. In a crowded and competitive marketplace, branded customer experiences create (and maintain!) a point of differentiation that creates value.