Businesses are meant to be directed by the most senior management – that’s why, the UK for example, they’re called directors. These are the folk whose job is to decide mission, policies and direction of an organisation. They may be appointed by the shareholders but, unless the organisation has just a small number of shareholders, and shareholders who are in close contact with each other, the directors set the direction; if shareholders don’t like it, they find directors whose direction they like.
To be effective, they (the directors) need to know what the organisation’s customers want; they need to know what customers think about the organisation. Some of this information will often be supplied by sales and marketing departments, or by feedback processed through the quality management system but, if all the information is upward through the organisation it will have gone through layers of filtering. It is sometimes said that middle management need to be bi-lingual – speaking both the language of the workforce and the language of the board room. Middle management translates and, in doing so, will filter out any information not deemed necessary or appropriate. And this isn’t a feature only of large organisations with multi-tiered management – it exists in any organisation where there are delegated responsibilities. Thus, directors who rely solely on what they’re fed by those who report to them will rarely see the true picture.
It’s human nature to say what you think your boss wants to hear; it’s human nature to want to be the bearer of good news; it’s human nature, too, to be brief with failings (brief to the extend of omission if possible). Being selective need not be malicious nor devious, just human nature. Even where the boss doesn’t mind failure, it’s rarely something to write up at length if he/she doesn’t need to hear about it. Even setting that aside, middle management rarely have the full picture; sometimes, the CEO doesn’t have everything.
Effective decision making, effective direction, needs data – needs the full picture. So directors need to seek out information for themselves. They need to speak (and listen) to customers – not because sales and marketing get it wrong but because only the directors have the full overview and can recognise significance (and, if they can’t, they shouldn’t be directing). Knowing what the customer wants, and thinks, means they are able to determine what the organisation should be delivering (whether services or products). They can decide priorities – enter a new market or pull out of a current one – decide which customers to serve and direct efforts where they will yield best value.
An insufficiently sound understanding of the customer will result in policies and direction that can never fully satisfy needs. No matter how competent middle management, no matter how good the management system, no matter how skilled the workforce – their efforts will not be directed towards what is actually needed.