The Future of Customer Centricity: Insights from Top CEOs

The heart of the word customer is “custom.” Great companies understand this. They know  building a value proposition around what customers really want – and will want in the future – is the foundation for a leading business. To gain insights about how top CEOs connect with customers, on December 7, 2011, I facilitated a 1-hour discussion with leaders from the most customer centric companies in industries like: health care, financial services, technology and food & beverage. Some insights include that in the restaurant business tasting menus are the future, the only sustainable competitive strategy for banking now and in the future is customer experience, and that healthcare will shift to the home.

The participants were:  George Halvorson, CEO & Chairman of Kaiser Permanente, leading healthcare provider with 180,000 employees $45 billion revenue, 36 hospitals and more than 8.9 million members; Bharat Masrani, CEO & President of TD Bank a perennial award winner in service; Chris Artinian, CEO of Morton’s Restaurants with 77 global steakhouses and a service model with perhaps unparalleled adulation from customers; and Raj Mirchandani, IBM’s Global Leader in digital and contact center service. Here are their verbatim insights.  

How do you create customized experiences?

Chris Artinian, Morton’s: “It goes beyond what’s on the menu. You see someone pulling out a laptop, you know what? Let’s anticipate their needs and move them into a room where they can plug it into a bigger screen which we have available to them. And it’s teaching the folks to recognize those types of opportunities to make the guest feel like you’re looking out for them.”

What do you do personally to engage your organization?     

George Halvorson, Kaiser Permanente: “I send an email every Friday to every single one of our employees. And they’re typically around 1000 words or maybe a little less. Every single letter celebrates something that we’ve done. One of our successes has been to literally cut the number of deaths from sepsis in half. I wrote about that success, but I didn’t write about it from the perspective of a statistic, I wrote about it from the perspective of how horrible it is for patients to have sepsis and what an ugly thing it is for a patient and their family to go through that experience. And then I told our staff how important it is that we’ve done the things that we’ve done to cut sepsis deaths in half. That makes it a personal thing for each staff member.”

Talk about your customer model.

Bharat Masrani, TD Bank: “We came to the realization many, many years ago that the only way to sustain a competitive advantage is through legendary customer experiences. There is no other way in my business … you cannot come up with to m any innovative products to sustain you over many years because most likely it will be replicated within a nanosecond. You cannot compete on price. If that’s your business model then it is not going to be sustainable and somebody’s going to match you. In the United States, we speak to more than 800 customers every night to deliver on our promise of America’s Most Convenient Bank. Everyone at TD is empowered to think like the customer.”

Chris Artinian, Morton’s:  “It’s about hiring for the passion and making sure that they’re fully engaged in understanding how to take care of guests’ needs by understanding how to care of each other’s needs within the four walls of our building and our company first.”

How is technology changing your business?

Bharat Masrani, TD Bank: “We are going through a major technological change. We are going through a major demographic change. And while banking -will not change in any dramatic fashion it will change as to how we deliver those products, how we sell those products, how we provide advice, what channels we use and how are reacting to those changes.”

Chris Artinian, Morton’s: “We have it in all of our restaurants but we also use satellite technology to make it easier for folks to have meetings on a broad scale without traveling people to 30 or 40 different cities to one place. From one location you can still broadcast the meeting, still have dinner at Morton’s in a private dining room and not have to travel those folks and take the time away from the office, and without the expense of a hotel.”

Talk about future customer needs.

Chris Artinian, Morton’s: “People are headed towards smaller plates, more tasting menus which we’ve answered the bell there with what we’re doing in our bar with smaller plates. So it’s really opening your hearts to the guests and making sure you stay engaged and then communicate with them. And then also understand where trends are going so you can – so you can continue to evolve.”

George Halvorson, Kaiser Permanente: “It’s also important to send the message that we are continuously improving and trying to invent the future because our people want to be part of the future. We have multiple approaches focused on the future. We have a program called the Garfield Center with a facility that’s set up to look like a Hollywood film studio and we model clinical operations and hospital operations at that site. We do ergonomic redesign there. But we also try to design what future care will look like and we try to design what the hospital of the future will look like. The Garfield Center also has rooms that function like the rooms people live in. We’ve concluded that the home is ultimately going to be the hub of most care for most people not too far into the future.”

Raj Mirchandani, IBM: “There still is some magic about reinventing the future from a product and from a company perspective that goes beyond asking the customers what they think their needs and wants are. Sometimes it’s about taking a great leap forward and really rethinking the entire industry or the entire experience in a way that only those that are of experts in the industry can do. So fundamentally it’s about learning from others quickly and deploying what’s relevant to your industry.”

How do you differentiate your organization?

George Halvorson, Kaiser Permanente: “We focus on each individual patient. We want to make sure that each care experience is the care experience that the patients want, expect and need, feel good about. We just won the J.D. Power and Associates award for best service of any health plan. And – Medicare just rated 459 health plans and gave nine of the plans five stars. And five of those plans were us and our other three plans got 4.5 stars because we’re focusing on high service levels.”

Bharat Masrani, TD Bank: “What it comes down to in our industry is to make sure that you have that emotional connection with your customer. Our name actually is TD Bank, America’s Most Convenient Bank. And it’s our brand and it’s more than a tagline. Are we convenient for you if it is raining? Are we convenient for you if you have kids? Are we convenient for you if you have pets? Are we convenient for you if you want a mortgage from a bank? So we take that definition to a new level. What we have done is essentially become an un-bank. So we are retailers that happen to be in banking.”

George Halvorson, Kaiser Permanente: ”I’d like to reinforce the importance of diversity. The customer base, the patient base is increasingly diverse and it’s important that the workforce reflect and even anticipate the diversity of the membership base. And if you do diversity right you can actually create a synergy and an energy from being diverse. We just won a Diversity magazine award for the best place to work in the country for diversity. We just won an IT award for best place to work for minority IT employees. One reason we won the awards is because when you look at our senior executives, very diverse. Two of our presidents run the two largest regions, one is Chinese-American, one’s African-American. Our third largest region is run by a woman.

The reason that’s important, and having very diverse senior leadership and adds value is that when people are looking at where they want to work and looking at what the rewards are for working well, what they see with us is there’s no glass ceiling. We are absolutely a meritocracy.”          

What’s the CEO’s role?

George Halvorson, Kaiser Permanente: ”The CEO’s role is to keep the organization aligned with the right future and have the people inside the organization internally aligned, supportive, understanding, working toward the future that we’re trying to create. If the people at the front lines at all the hospitals and all the clinics and all the labs and imaging centers have a sense of where we’re going, they can make day-to-day decisions that are aligned with that direction.”

Bharat Masrani, TD Bank: “You have to be clear as to what the organization’s values are and where we are headed, while clearly defining success. So there’s absolutely no ambiguity as to what the destination is. In my bank, for example, diversity is a very important initiative. Why wouldn’t I want the best diverse team? We are in a war for talent and banking is a people business. “

Chris Artinian, Morton’s: “I think speaking to clarity, it’s about simplicity. We talked a little about keeping things simple. Over the last couple of years we’ve become a flatter organization, to streamline communication, to make sure folks stay aligned and focus on the right message.”

How much of your time is spent on today’s issues vs. the future?

Bharat Masrani, TD Bank: “Given the banking environment, I’m spending probably 50% of my time on today’s issues versus, the future. The CEO’s role is not only to steer the ship but make it very clear on where we’re headed. You have to remain connected to employees and customers. Talk the talk and walk the walk.”

Chris Artinian, Morton’s: “I’d love to spend more time on the future but it’s been so unpredictable. My time is spent about 20% of the time in the future (and the rest on the present).”

George Halvorson, Kaiser Permanente: “Right now, I’m probably no more than about 30% day-to-day in operations. And then the rest of my time is spent on the future.”

Healthcare impacts everyone. What are the greatest challenges in healthcare today?

George Halvorson, Kaiser Permanente: “Healthcare costs are out of control. We have the highest costs in the world in the country by a factor of two. And part of the problem with that is the way we buy care. The business model of care is badly flawed. We buy care from a fee schedule and the fee schedule was built basically by underwriters and it’s very limited. And if caregivers try to provide care off the fee schedule it’s denied as a claim and Medicare actually sometimes makes it a crime to do care not on the fee schedule. They call it billing fraud. If we redesign care appropriately, we should be able to cut the cost of care and improve all care outcomes. But we need an industrial revolution and that has to start with changing the payment model.”

 What does the future look like?

Raj Mirchandani, IBM: “Seniors and boomers like talking to somebody eyeball to eyeball. That’s part of the customer relationship. Gen X, Gen Y actually prefer to go out, look at ratings and reviews, get input from friends and communities and do a lot of research before they make an informed sort of decision. And as the under-40 set becomes the over-40 set they’re bringing with them this expectation of social e-engagement we are on this interesting ride where industries are innovating at such a pace and other industries are adopting and consumers like it. We’ve got the under-40 dynamic where the next generation which grew up being connected all the time. And that’s driving expectations and also changing industries.”

Chris Artinian, Morton’s: “The core of our business will always be about hospitality execution, the perfect experience. And one of the things that we will see continue to evolve is the bar, lounge, more casual dining experience, whether it be rolling out items like Spa-Tinis.”    

Bharat Masrani, TD Bank: “We don’t think that there’s any other space in our industry that you can occupy and have a competitive advantage other than to provide a wow, legendary experience. So we do not think that will change from a fundamental perspective. But when you peel the onion and if you look at our current customer base and split it into two, you’ll see some of those customers are more transaction-oriented and the other customers are seeking advice from a financial institution. Banks need to evolve their products as people’s needs evolve but you need to do with WOW! service. ”

George Halvorson, Kaiser Permanente: “We’re looking at a total care experience. The total care experience is about being connected with each patient in a very patient-focused way and a patient-centered way. The new tool kit for connectivity is phenomenal. What’s available with the iPad equivalent set of tools goes beyond anything that we ever dreamed of just a few years ago. And we need to take full advantage of that whole array of connectivity to reengineer care and improve the delivery of care.”