Knowledge Bank
Knowledge Bank

Internal Stakeholders vs Customers

19.09.20 05:56 AM By Michael

Has your organisation become customer-centric, yet you haven’t met anyone who has bought the products or services? Lets go through the difference between a customer and an internal stakeholder.

Hi, Im Mike from Surge. We partner with leaders to maximise your organisations potential. 

Since the 1980s there has been a fashionable trend to call any part of the value chain that receives a product or a service from you, your customer. 

Please.. Stop...

They are not your customer, they are part of the system that delivers value to THE CUSTOMER. 

The customer is at the end of your value chain or system.  That system partners together to deliver end value to someone who makes the choice to exchange a medium of exchange for the value you all provide. Without that customer, the entire value chain collapses. 

A quick way to understand if the person you are serving is a customer is to ask a couple of questions

Does the person buying your product or service have a choice?

No? This is an internal stakeholder. Normally another department within your organisation.

Does this person use your service or product to deliver value to others?

Yes? This is a Partner. Another company who you deliver something to, so that together you deliver value to a customer. 

The problem with treating partners or internal stakeholders as customers is that it encourages sub optimisation. An organisation should be creating a customer and serving them to the highest possible value. 

Ensuring internal stakeholders or partners are getting what they need without the context from the end customer, can increase efficiency, however, focussing on efficiency within the value stream loses site of how you all together deliver value, thus limiting productivity.

All decisions together should focus on the end customer needs and the best way to deliver value. 

Now, this doesn’t mean you shouldn’t understand your users needs, collaborate with partners and be continuously improving the system for the delivery of value to the customer. 

It just means that when an organisation says they are customer-centric, they should mean they are focussing on how the system delivers value to the specific customer and when departments in I.T create customer personas, they should be going direct to the customer and seeing how the technology enables their internal stakeholders to deliver value to the customer. 

I personally use user stories and features for this purpose. User stories should have a user in mind and features should have a customer in mind. 

To recap. Focussing on internal stakeholders, increases efficiency, focussing on customers, increases productivity. And you just learnt the difference between internal stakeholders and customers in three minutes.