We’ve talked before on this blog about the need to be a customer-focused CEO. But since CEOs are often the major decision-maker within an organization, it’s important to understand the decision-making styles of customer-focused CEOs. Because the C-Suite as a whole tends to make dozens (if not hundreds) of decisions in a given week, having an understanding on what specific decision-making styles make for leaders with a stronger customer focus is going to be helpful as you grow your own business.
#1 Decision-Making Style: They Decide With Clarity Of Purpose
This behavior is a hallmark of CEOs obsessed with building customer-driven growth. I’ve written entire sections of books about this throughout my career. Clarity of purpose refers to several concepts and can be identified in different ways by different people, but here’s what I mean:
- As a leader, you’re clear that your higher purpose is supporting the lives of your customers
- How you guide the company and direct people’s actions comes from that first bullet
- How work is prioritized and understood comes from this clarity about the singular purpose, which is improving the lives of customers
Think about it in these terms: if you asked 10 random people throughout your company why your company exists to help customers, , how many different answers might you get? If you get 1 essential answer, that’s true clarity of purpose that leaders embrace and guide the company from. Now consider a situation where you get 10 different responses. Try to imagine what your company and brand is likely delivering to customers. That’s why clarity of purpose matters. Especially in a world of social media, clarity for what you will and will not be to customers as a company must be united, and rigorously reinforced.
#2 Decision-Making Style: They Guide Company Behavior With Decisiveness
This is important in any leader, but especially in a customer-focused CEO.
Oftentimes, C-Suite is approached, with well intentions, to react and approve what I like to call “one-off” requests. These are presented by a specific silo to achieve an objective, or to swat away an urgent issue that has come up.
A great customer-driven leader will press for solutions that solve for the customer experience. They will ask for a solution that goes beyond the individual silo proposal to understand the implications to the customer.
Research from MIT and the London School of Business recently showed that only 1/3 of senior executives typically understand a CEO’s top three priorities for the organization.
Taken at face value, that means 2 of any 3 ideas presented to the C-Suite might not accurately reflect organizational priority. As a result, being decisive is crucial to stay focused on the end experience for the customer.
#3 Decision-Making Style: They Unite The Organization
The idea of ‘uniting the organization’ is not about consensus. It is about everyone singing from the same song book.
A CEO who wants to grow their business through customer-driven growth takes the time to unite the C-Suite on how they will — and will not — grow. They all discuss topics such as:
- What are the conditions for growth?
- What will they and will not they do to customers and employees to make a sale, beat the competition, or make the quarter?
Without C-Suite alignment, each leader translates actions based on silo metrics and goals. This may result in actions in the marketplace that actually work against customer experience and long-term growth.
With C-Suite alignment, the organization sees how leaders uniformly steer the decisions and the behavior of the organization.
But this does not happen accidentally. The best CEOs take the time to do this work.
#4 Decision-Making Style: They Focus The Organization On Delivering Value
This takes two forms.
First, a customer-focused CEO needs to understand the value of his/her product or service back to the consumer — and that’s less about the features of said product, and more about the value the product brings to the life of the customer.
Second, a customer-focused CEO needs to understand the value of his/her employees, often considered ‘internal customers.’ Without understanding, appreciating, and learning from the value of people who work for you, your decision-making will suffer.
MGM Resorts spent decades focused on ‘the whale’ customer — the person who flies to Vegas and spends tens of thousands of dollars in one weekend, if not one night. Only recently did MGM begin conceptualizing a ‘whale employee,’ or a high-performer who really helped with customers and growth. MGM now has strategies focused on their best employees, as opposed to only their best customers.
Many CEOs, even the best customer-focused ones, will make this mistake. You need to see the value in your employees as well, and lead with an eye towards that.
#5 Decision-Making Style: “Salmon” Leadership, Or Being Unafraid Of Swimming Against The Current
You all probably know the famous Henry Ford quote about customers:
Trying to be a customer-focused leader can be hard. (If it was easy, everyone would wake up tomorrow and do it.) Markets are unpredictable. Customer needs and wants don’t always make sense. It requires some big choices and some leaps of faith.
Customer leaders need the guts of a salmon. Think about it. The salmon goes head-first against the current. It pushes on to its destination, unscathed by resistant forces.
The salmon leader turns the company from facing itself to facing its customers. Salmon leaders use business meetings to guide and challenge people to understand how what they’re doing affects the customer. Salmon leaders constantly ask if the tactics being served up are connected across the organization. Salmon leaders are not afraid to trade short-term profits for long-term gains with customers. They know how to explain the commitment to the board and the company so that they can transfer this clarity to everyone else.
In order to lead in such a way, you can’t — cannot:
- Lead from a place of fear
- Worry about perceptions of incompetence
This is hard for many leaders, because numerous studies have shown that CEOs’ biggest fears tend to revolve around perceptions of incompetence.
When you make decisions from a place or fear or concerns about incompetence, you make safe decisions that you understand. That’s usually not best for an evolving customer.
The Broad Takeaway On Decision-Making Styles
Work at the C-Suite level is all about decision-making styles and priority management.
Those aspects of your leadership need to be rooted in clarity, lack of fear, decisiveness, an ability to gain consensus to a point, and no worries about being perceived as incompetence. If you can lead from a place where the customer’s benefit is your chief goal — and all decision-making and priority alignment flows from that — you will be successful as a customer-focused CEO.
Any key criteria you’ve seen from customer-focused CEOs that I missed above?
Though I’d broaden the role of servant leadership beyond customer-centricity, to stakeholder-centric culture formation and continuity, the CEO should be focusing on strategic allocation of resources, and the ever-chnging needs of the employees, the customers, and the organization itself. Leadership styles can vary, but they must be unambiguous and evident to all stakeholders. Actions should be clear and reflective of the situation – nature of the business, requirements for optimizing employee and customer experience, and the prioritized challenges facing the enterprise.
No one on the planet knows more about the mind of the customer-focused CEO than bestselling author Jeanne Bliss (Chief Customer Officer 2.0). This could be the foundation for a head hunting firm’s job description when locating and recruiting world-class CEO’s.
The best part of the post for me was the salmon metaphor. Having worked with many CEO’s in some of the most customer-focused organizations, I still believe, like Jeanne, that courage remains the most crucial feature for leadership greatness. That courage comes into play most when CEO’s are asked to stay the course during a culture change initiative crafted to help the organization become a customer-focused one. Too often CEO’s, with their perchance for focusing on the next quarter only, prefer drive-by culture change that is typically long on glitz, vision and high-sounding promises but short on the discipline and accountability necessary for sustainability.
Part of the reason that CEO’s have trouble with decision making when it comes to customers is, as Jeanne so clearly points out, ” CEOs’ biggest fears tend to revolve around perceptions of incompetence.” Since the definition of customer centricity is vague and easily misunderstood, I prefer the concept of “the customer comes first.” This is clear and hard to screw-up and that alone should relieve some of the CEO’s fears. Also, the organization will not have an issue understanding what they are supposed to do.
As for Michael’s idea of stakeholder-centricity the issue is that there can be only one top priority. Again, the customer is the source of all revenue and should be working with the company to co-create new products.
I guess I am fixated on making the customer first but they are ones with the money to buy our stuff.
Thanks to Michael, Chip and Sam for your comments.
I am committed to the power that people need to see modeled behavior. If the leader is making the customer-driven decisions and lets people know, it will give them permission to act accordingly.
The leadership team has to importantly act in unison – or else it all falls apart as people see multiple versions of success and what will promote them in the organization.
Chip, glad you brought in the timing. Yes you are so right – companies are quarterly inclined and this is a marathon not a sprint. Salmon leadership is so critical especially to the board and others pushing on short term financial goals. These need to be balanced with long term growth that comes in time.
Sam couldn’t agree with you more that co-creation is the new normal that has to occur in companies that are truly customer-focused. This has to be done with agility and involve many people across the organization.
J