Is It Time to Dump the Idea of "Internal Customers"?

My medical aid company looks like it’s a dream company to work for. There is free cappuccino everywhere, and the canteen serves a variety of gourmet food for all staff at a really good price. There is a gym, a laundry, a staff convenience store, a number of clubs that one can join, and even a concierge that will do certain things for you. Every day there is a party of some sort, and my delegates and I were once kicked out of the training room to a small squashed meeting room because they needed the bigger room for a baby shower.

Yes, employees definitely loved working there, but as a customer I really resented it.

For a long time I have promoted the principle of looking after internal customers. And I agree that some barbaric management practices need to be banned. The principle goes something like this: There are two kinds of people that work in companies – those who service the customer directly, and those who service those who service the customer. And if the latter group doesn’t look after the front-line staff, then the front-line staff can’t look after the real customers.

But as a result of that one experience I had in our client’s company, (the medical aid,) I wondered whether we’ve been running around in circles chasing our own corporate tails in yet another form of corporate madness. There was certainly a lot of activity improving things within the company, but none of it was getting through to the customers. It’s good that the security guards were polite, and that there is a doctor which one can visit when you are feeling ill. It’s also good that there were dozens of projects that improved communication and teamwork, that trained people in all the processes and skills needed to work properly, and that challenged all activities that made staff unhappy. Cost-cutting activities make the directors and shareholders happy.

But there wasn’t even one project aimed at improving customer experiences and loyalty – and you could see it in the reception area where dozens of unhappy customers waited to get what they needed.

Does focusing on providing great service to internal customers take us away from our focus on the people who actually pay us for what we do? Are we so busy adding value for our internal customers that we forget to add value for the external real customers?

I have come to the conclusion that many organisations waste too much energy on what -if you think about it – isn’t there. Internal customers simply don’t exist. They are a figment of our imagination. There are only real customers, with real money, in their real hands, which they may give you if you really do what they want. Paying too much attention to internal customers can create obstacles to and a lack of focus on caring for real customers.

There is, perhaps, a time when the idea of “internal customers” is necessary: we need to create awareness within the company that everyone ultimately impacts on the final products and/or service which the real customers pay for. It is also a good way to allow companies and people to break the functional silos which prevent the smooth flow of work. Taken to another level, we also identify who adds value, (for customers), and who does not, and we become ruthless about ensuring that many support functions became more effective, and do what they are supposed to do – support.

But, as with many other management fads, we then create a whole set of procedures, systems, structures, and, of course, reams of paperwork, to ensure that it all comes together. (In this same organisation, if your computer breaks, you are better off phoning Dial-a-Nerd than dealing with the IT guys.) Thus, what may have been a good idea gets bogged down by hurdles and bureaucracy.

For the sales and servicing people, the idea that they are the internal customer also becomes a very legitimate way to blame people back down the line when things go wrong. After all, the rest of the company should accept collective responsibility for the inevitable mistakes, problems, defects and delays. If everyone understood and repeated slogans like “The customer is king,” and “The customer is always right,” then the resulting synergy would, in theory, lead to better performance. In theory.

So what’s the answer? It starts off from the basic objective of business: that it exists to create value – and value is defined only by paying customers. Thus, it begins with a regular “report card” from our real customers, giving detailed information about our performance on specific and quantifiable factors such as product quality, responsiveness, meeting delivery schedules, staff competence, and so on. Their responses will then help us to determine what should be our best practices, to spot and resolve problems when they arise, and to determine what should be our priorities.

There are four questions every manager, and every employee for that matter, needs to ask constantly:

  • What should we do less of, reduce, or simplify – because doing this adds little value for our customers?
  • What should we stop doing altogether? (Look especially at the dumb things that irritate customers.)
  • What should we do more of, or increase, because our customers love it? (What would make us the best in the world?)
  • What should we create from scratch that will surprise our customers, and shock our competitors?

If you then combine this with a company structure where teams of people from various functions take full responsibility for your customer’s total experience, then you will have a real winner on your hands.

And then maybe – just maybe – I will be happy to sponsor your cappuccino and the other little luxuries that make your job worthwhile.


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