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The Conference Board Review® Article
The Customer Comes Eighth
Ahead of the customer stand at least seven other people you'd better satisfy-or else.
By Art Kleiner
Art Kleiner is research director of Dialogos, a Cambridge, Mass.-based consulting firm, and a faculty member in New York University's Interactive Telecommunications Program. He co-wrote "Should a Company Have a Noble Purpose?" in the January 2001 issue and is the author of the forthcoming book Who Really Matters: The Core Group Theory of Power, Privilege, and Business Success (Doubleday/Currency), from which this article is adapted. He can be reached via www.well.com/user/art/.
Back in the early 1980s, when writing mission statements was an infant management fad, a division of Exxon Oil Co. held an employee conference to announce its new "core values." Enshrined as number one on the list was this simple sentence: "The customer comes first."
That night, the division executives met for dinner, and after a few drinks, a brash, young rising star named Monty proposed a toast. "I just want you to know," he said, "that the customer does not come first." Monty named the president of the division. "He comes first." He named the European president. "He comes second." And the North American president. "He comes third." The Far Eastern president "comes fourth." And so on for the fifth, sixth, and seventh senior executives of the division, all of whom were in the room. "The customer," concluded Monty, "comes eighth."
Said the Exxon retiree who told me this story: "There was an agonized silence for about 10 seconds. I thought Monty would get fired on the spot. Then one of the top people smiled, and the place fell apart in hysterical laughter. It was the first truth spoken all day."
"The customer comes first" is one of the three great lies of the modern corporation. The other two: "We make our decisions on behalf of our shareholders" and, "Employees are our most important asset." In the wake of corporate scandals and the "jobless" semi-recession, none of those lines are persuasive.
At the same time, many harried executives would have a hard time believing that they come first either. Indeed, you could argue that they are more earnest, diffident, and timid about asserting themselves and offending their external stakeholders than ever before. That, at least, is the argument made by U.K. financial journalist Benjamin Hunt in his new book The Timid Corporation: Why Business Is Terrified of Taking Risk. And Hunt is on to something: Most companies are shrinking back from bold moves, either in R&D or marketing, preferring to focus on the kinds of incremental, sure bets that lead to a business model of equilibrium. It's almost as if nobody comes first.
But there is always some group of people on whose behalf the company operates. There are people who really matter, who set the organization's direction, and drive its behavior. They are not necessarily the people at the top of the organization chart, and they generally include only a handful of members of the board of directors. Conventional wisdom, to be sure, says that the board and the half-dozen top executives are the people who run the company. But the reality of organizational life isn't that simple. Every organization has a hierarchy grounded not in formal power but in informal legitimacy. It overlaps with the authorized hierarchy, comprising the people who are truly responsible for the success or failure of the organization itself-whether they know it or not. I call them the core group.
You probably know who the members are in your own organization. They're the people who come to mind when an initiative begins to circulate. They're the ones who possess the ability, formally or informally, to green-light or kill a project-and whose interests and concerns therefore must be taken into account early in any process. Some have gained power and influence within the organization through their title and position; others have it through their political smarts, skill in predicting a project's eventual fate, knack in getting the CEO's ear, position as a key bottleneck, or simply through their integrity and willingness to risk their careers to take the right kind of stand.
Comments? Write a letter to the editor.
Return to the September/October 2003 The Conference Board Review® issue.
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