Every time I encounter low standards of customer service—in shops, healthcare facilities, or public institutions—I can’t help but wonder: what kind of HR structure is at play here?

Often, organizations proudly showcase their achievements in service automation, including HR and CRM systems, yet fail to meet basic customer service standards. Is there a correlation between automation and service quality? It seems automation alone doesn’t guarantee excellence. In fact, even organizations heavily investing in CRM often show disconnects with HR strategies, assuming they have any in place at all.

While customer feedback can influence product improvements, HR must also heed those insights. Aligning customer needs with HR practices resonates strongly with Dave Ulrich’s Outside-in model of HR value creation. This model challenges traditional HR approaches by advocating adaptation to external influences—such as customers, investors, and communities—rather than just internal efficiency. It promotes HR practices that deliver value beyond the organization itself, rather than focusing narrowly on staffing, training, rewards, or analytics.

One curious tale brings this idea to life: the Pontiac Ice Cream story. A customer reported to General Motors that his car wouldn’t start after buying vanilla ice cream—but started fine with other flavors. At first, the complaint seemed absurd. But the engineers took the issue seriously, initiating a thorough investigation. They discovered that vanilla ice cream was stored in a section allowing quicker purchases, which meant the car remained idle for a shorter time. This led to vapor lock—a heat-related fuel system issue triggered by shortened cooling periods. The finding was groundbreaking, prompted solely by a customer’s unusual complaint.

When I asked Copilot about how this story aligns with Ulrich’s model, it pointed out several  key implications for HR, but I’d like to point out the following:

Customer-driven problem-solving

Data-driven insights and analysis

Agility and adaptability in responding to external feedback

From a strategic standpoint, embracing customer-centric problem solving means incorporating external influences—economic shifts, social preferences, career motivations—into HR strategy development. Internally, this approach should shape competency building and learning frameworks.

It’s also worth exploring a systematic link between CRM and HR, allowing individual customer feedback to be filtered and analyzed for HR relevance. Ideally, this would enable HR and other departments to proactively address emerging issues. Embedding such analysis into management culture would be transformative.

The Pontiac case also underscores the value of analytics. Engineers collected data on purchase timing, weather conditions, and fuel behavior before drawing conclusions. Similarly, organizations should cultivate a data-informed culture to assess consumer behavior, employee engagement, and market dynamics.

However, what stands out most is the unwavering professional integrity of the Pontiac engineers. Faced with an unusual complaint, they refused to dismiss it, ultimately uncovering a real mechanical issue. That integrity should be a cornerstone of any organization.

Lastly, the story speaks volumes about employee engagement. Investigating customer feedback invites employees—at all levels—to contribute meaningfully to organizational success. It fosters ownership, pride, and a sense of purpose. HR should nurture this connection with customer insights, integrating it into workplace culture and strategy.

There is actually more to HR!

Author: Lilit Hakobyan, Chartered MCIPD, Founder of Proservicel HR Consultancy