Entrepreneurial Leadership: When Knowing the Customer is Easier Said than Done.

1. Entrepreneurial Leadership: When Knowing the Customer is Easier Said than Done. Faith Ntabeni-Bhebe (PhD) faith@enhancementconsult.com Faith Ntabeni-Bhebe 2015

2. Outline • What KYC is about and its practice • Exploring challenges relating to it as documented in empirical studies and as experienced • Views on its elusiveness • Drawing lessons from Zimbabwe specific pillars of entrepreneurial leadership practice Faith Ntabeni-Bhebe 2015

3. Everyone’s Pre-occupation • Every business is pre-occupied with the need to know their customers in order to align their offering to customer expectations • Ultimate objective being to reap higher profitability • But is there a common understanding of what constitutes ‘knowing your customer’? Faith Ntabeni-Bhebe 2015

4. Everyone’s Pre-occupation • Use of multiple data sources to create deep understanding of consumers’ demographic profiles and their psychographics (Kavanaugh2014) • Emphasizing the need for insurers to progress from a transaction focus to an interaction focus (Breading 2013) • Knowing your customer is more than investing in a CRM system (Matis and Elies 2014) Faith Ntabeni-Bhebe 2015

5. Everyone’s Pre-occupation • Building long term relationships on the back of effective communication (Ernst and Young 2012) • EY’s Global Consumer Insurance Survey 2014 confirms that strengthening customer relationships and achieving customer centricity in core operations have become ubiquitous strategic imperatives for the insurance industry Faith Ntabeni-Bhebe 2015

6. Everyone’s Pre-occupation • Nigerian study, Nwankwo and Ajemunigbohun (2013) found that focusing on managing relationships with customers positively influences customer retention in the Nigeria’s Insurance Industry Faith Ntabeni-Bhebe 2015

7. KYC – Nagging Questions • Given that so much has been said and written about it, why does it seem so elusive? • Is it possible that we lack sincerity? • Is it even possible to be sincere or is it just a game of numbers - the bottom line? • Why do we seem to specialize in customer relationsinks? Faith Ntabeni-Bhebe 2015

8. Self Deception? Is it possible that: • Our vision does not match external reality? • That what we are seeing in the mirror is not what others are seeing? • Are customers seeing what we think they are seeing Faith Ntabeni-Bhebe 2015

9. Self Deception? • Are we deluding ourselves into thinking that we are as important to our customers as we presume ourselves to be • Do we think our fancy CRM system will do it all • Do we talk more than we do to the point of self deception? • Are we over fixated on the short term? Faith Ntabeni-Bhebe 2015

10. Self Deception? • Looking at a 359 degree view of the customer forgetting the last 1 degree • Falling into “touchpoint amnesia” – forgetting customer information which is supposed to be already in your systems Faith Ntabeni-Bhebe 2015

11. Beyond the Technological Intervention • While technology is an assist –– the real difference emerges beyond the technology – the last 1 degree view • We like talking about building relationships with customers but we don’t usually provide for it – nothing in our systems suggests a desire for a meaningful relationship Faith Ntabeni-Bhebe 2015

12. Beyond the Technological Intervention Winners will be those who: • Leverage human interaction • Build long term relationships • Use technology to better understand customers not in order to deliver batch specific service but rather to enhance individual specific service Faith Ntabeni-Bhebe 2015

13. Easier said than done – what then? • Why – because it is a moving target – it is elusive – people change, circumstances change • You don’t always see the same thing the same way • It calls for a specific type of leadership that is in tune with ‘moving targets’ where making an aim is near impossible Faith Ntabeni-Bhebe 2015

14. Easier said than done – what then? • It is accepted in business literature that where there is dynamism and lack of a clear pattern there is need for a new type of leadership that is different from that in stable conditions (Cangemi et al. 2011). • There are lessons to be learnt from the practice of leadership – both are social processes Faith Ntabeni-Bhebe 2015

15. Entrepreneurial Leadership • A study of leadership practices in Zimbabwe during one of its most turbulent operating environments found that business owners whose businesses survived had the following common pillars: • Grounding in one's spirituality • A deep knowledge of the 'self' (ukuzazi) • A dense network of social relationships • Making strategically relevant decisions and complementary actions (Ntabeni-Bhebe 2015) Faith Ntabeni-Bhebe 2015

16. Entrepreneurial Leadership • Knowing the customer is easier said than done because it actually calls upon us to adopt a new way of leading both ourselves and others • It calls upon leaders / managers being true to themselves and aligning their promises to who they are – you can fool some, some of the time but you can’t fool all, all of the time Faith Ntabeni-Bhebe 2015

17. Entrepreneurial Leadership • Relationships don’t exist in a vacuum – they feed from our who-ness and where-from-ness • They feed from our grounding and our deep knowledge of ourselves • Entrepreneurial leadership that can solve the ‘know your customer’ challenge is found in that chain reaction Faith Ntabeni-Bhebe 2015

18. Context of Relationships Faith Ntabeni-Bhebe 2015

19. Entrepreneurial Leadership • Business is conducted within social networks, it is a social process • People prefer to do business with people they know and trust • Relationships are what will make a difference – everything else tends to be the same – they are a business’ social capital Faith Ntabeni-Bhebe 2015

20. Entrepreneurial Leadership • Levitte (2004, p.45) defines social capital as “… networks and relationships, which are imbued with values, norms, and attitudes and that facilitate trust, reciprocity, and the collaborative production of tangible resources like services and money... ." • Because social capital is not distributed equally, it can create advantages for those who have it and in that way assist them in pursuing their objectives (Granovetter 1985). Faith Ntabeni-Bhebe 2015

21. Problem … • … Most of our social networks are artificial, the relationships are based on lies and posturing – making knowing the customer very elusive • We exist in two worlds ‘work world – kubasa’ and the real world – kuchivanu or esintwini • We have serious problems of cognitive dissonance Faith Ntabeni-Bhebe 2015

22. Focus on Relationship Four main pillars: • Invest the time • Be emotionally intelligent or at the bare minimum be literate • Build Trust • Practice Reciprocity Faith Ntabeni-Bhebe 2015

23. Relationships - Time • Time is a scarce commodity • The challenge of depending on the the hired hand – but then how else? • Continuity problems • Whose client is it? Faith Ntabeni-Bhebe 2015

24. Relationships - EI • EI incorporates intrapersonal and interpersonal intelligence (Raina and Sharma, 2013). • Zampetakis et al. (2009) found a positive relationship between EI and entrepreneurial intentions • Raina and Sharma (2013) conclude that entrepreneurs' leadership skills could be improved by being emotionally intelligent Faith Ntabeni-Bhebe 2015

25. Relationships - Trust • About the client knowing without doubt that you are competent, consistent, transparent and exercise individual consideration • It takes time and hard work to build trust but it does not take much time to destroy it • Umuntu olo buntu (a human with human-ness / umuntu ebantwini (a human being among other human beings • You earn it – it is bestowed by others Faith Ntabeni-Bhebe 2015

26. Relationships - Continuity • Continuity is perhaps the biggest challenge • How do you institutionalise knowledge of the customer? • How do you institutionalise the relationship? • How do you move it from being a preserve of the coal face people – whose client is it? Faith Ntabeni-Bhebe 2015

27. Relationships - Reciprocity • The social construct of reciprocity • Doing unto customers as you would want things done to you • Always looking out for the customer’s own interests • Allowing the $$$ traffic to flow in both directions • Ikhotha eyikhothayo / chindiro chinoyenda kunobva chimwe Faith Ntabeni-Bhebe 2015

28. Conclusion I submit that: • Knowing the customer is about building relationships based on ubuntu ebantwini operationalised through mutual trust and reciprocity and grounded in remaining both authentic and ethical. • Knowledge of the customer based on attempts at fast fixes and superficial exchanges will not offer a business any meaningful advantage Faith Ntabeni-Bhebe 2015

29. Let us Engage Faith Ntabeni-Bhebe 2015

30. References • Breading M. (2013). Best practice in customer service for insurance, Interactive Intelligence Inc. • Cangemi J.P. et al. (2011). Successful leadership practices in turbulent times. Journal of Management Development,30(1), pp.30–43. • Ernst and Young (2012). The journey towards greater customer centricity. • Ernst and Young (2014). Consumer Insurance Survey. • Granovetter M. (1985). Economic action and social structure: the problem of embededness. American Journal of Sociology, pp.481-510. • Kavanaugh T. (2014). Knowing your customer - an imperative for growth. Top Issues - An Annual Report, Vol 6 • Levitte Y. (2004). Bonding social capital in entrepreneurial developing communities-survival networks or barriers?. Community Development, 35(1), pp.44-64. • Matis C. and Elies L. (2014). Customer Relationship Management in the Insurance Industry. Procedia Economics and Finance, vol 15. • Ntabeni-Bhebe F.P. (2015). Identifying entrepreneurial leadership practices of black business owners whose businesses survived the turbulent period of 2005 to 2009 in Zimbabwe. PhD thesis, NUST. • Nwankwo S.I . and Ajemunigbohun S.S. (2013). Customer Relationship Management and Customer Retention: Empirical Assessment from Nigeria’s Insurance Industry. Business and Economics Journal, 4:2. • Raina and Sharma, 2013 • Zampetakis L. A. (2009). On the relationship between emotional intelligence and entrepreneurial attitudes and intentions. International Journal of Entrepreneurial Behaviour & Research, 15(6), pp.595-618. Faith Ntabeni-Bhebe 2015