The Chief Customer Officer needs to be a sleuth, uncovering and navigating agendas and factors that slow down and can threaten the work, especially if some leaders question its connection to business growth (when we really feel like we’re pushing that rock up the hill).
Whenever I work with companies now, early on we diagnose where the company power core resides and we measure its impact in driving the corporate agenda. This yields an immediate understanding of the complexity and scale of the job required to integrate customer experience and customer profitability. Writing about the Power Core was the hardest chapter in the first “CCO” book because I had to find a way to decode why we can hit a wall in this work. Why could I make traction in some companies but not budge the work an inch in others? The answer came with understanding and decoding the Power Core. Here’s the information below to diagnose yours.
Six Common Power Cores
There are six common power cores that emerge for most clients that we’ve worked with around the world. You’ll likely find one of them to be the dominant factor in decision-making and direction in your company. You may also see another in a supporting second place of strength.
For example, I really had to scratch my head on how to approach driving the customer agenda with some technology-based companies. The greatest challenge was that I just hadn’t gotten close enough to the power core to understand the best way to make early inroads. The customer experience process work—improving broken operational issues, improving service experiences, and so forth—is where efforts typically gain momentum and establish a track for success within many industries. But with these particular organizations, the product emerged as the power force that the world revolved around. It was about the software. I learned that lesson well. The customer work gained momentum when the efforts put a laser focus on using customer feedback to improve the product.
When Product Development or Product Engineering is Your Power Core … The product is the company to the marketplace. Product development groups get the most resources and the most play, and they have the most power. Just look at the organization chart. Metrics are about new products, size of products, getting products out, speed of product development, and competitive progress of products in relation to competitors.
When Sales Is Your Power Core… You are a growth acquisition driven company. The quest for the sale pulls the weight in the company. In these organizations, people are motivated to make the numbers. Performance is frequently measured in short-term sales goals and tar- gets. Sales targets are the strongest and most tracked corporate metrics. “Speed” sales are rewarded, even if they don’t necessarily result in long-term customer profitability. Frequently the organization hasn’t worked together to ensure that the after-sale experience delivers on the promise of the sale.
When Information Technology Is Your Power Core… The explosion of SaaS Companies and continued growth of IT based businesses have made the priorities of these groups the Power Core of their business, driving agendas, priorities and investment. In addition, because the bulk of spending related to IT projects far exceeds other financial requirements, IT has been given power in determining the priorities of the organization—and not just in computer resources. It also has a loud voice in representing, selecting, and enabling IT-dependent projects across the organization. Often these spending requests come through annual planning without a prioritization lens to determine which are critical for customer asset growth and customer experience improvement, as they come in silo-by-silo.
When Vertical Business Operations, Such As Insurance, Is Your Power Core … This power core is based on a particular competency related to an industry or function. The term vertical power core is used because deliverables to customers are akin to a vertical line of business highly focused on one particular area. We’ve all experienced the strong vertical disposition of the medical industry: some physicians are evolving, but many still define work by procedure rather than customer name (“I’ve got an appendectomy at eight, then tonsils at three”). This aligns with medical practitioner training: livers, hearts, the circulatory system, and so on. Bedside Manner 101 while not a part of the curriculum or considered a core competency, is slowly starting to show up on the medical school curriculum.
When Marketing Is Your Power Core… Marketing defines the tenor and tone of the relationship with customers. Brand at the advertising and messaging level is emphasized, but the implications for how to tie that to the experience can fall short. The opportunity is aligning the brand experience promised with the delivery of customer and employee experiences
Translating the “Brand Promise” into how the company will conduct itself with employees and customers to stay true to that promise, and operational alignment to execute on delivering the promise across the silos are often the gaps in the Marketing Power Core Company. As the role of marketing is evolving, new skill sets for uniting the organization in understanding and translating the brand promise operationally are required. We are seeing this shift as CMOs evaluate their roles.
When The Customer Is Your Power Core…Company decisions emanate from understanding what will drive greatest value to customers in the short and long terms. Leaders are united in efforts to deliver a reliable and differentiated customer experience to drive the greatest amount of profitable customers. While silos exist (not going away any time soon), they are united with clarity of purpose in improving customers’ lives. Planning, decision-making and teams assemble for experience creation and delivery, rather than silo based projects. Employees are enabled to deliver and honored as assets. For example; the Columbus Metropolitan Library not only has the customer at the core of their business, they organize to ensure that focus. Chief Customer Officer Alison Circle described that they have evolved their organizational structure to align everyone’s decision making lens around supporting and helping the lives of children begin on the right path and become life long readers and learners.
Other Emerging Power Cores are Finance, sometimes operations and human resources. The point is to identify your power core and use that understanding to frame the scale of the work to integrate customer leadership and customer profitability management. The six that I identified are simply the predominant ones. Regardless of what your power core is, it will have an impact on how you strategically address the work.
Take the time to understand your company power core. If you are just beginning your work, understand the key partners who must see value to be a steadfast partner with you. If you are leading the work and have hit some resistance, you may find the answer why in determining your Power Core. Identify your Power Core below to determine how and who to make sure you engage in this work.
Jeanne: I can’t help but think of the chicken and egg metaphor. Do companies morph into these concentrated competencies as they respond to forces on their business strategy? Or, do they wallow into them because – for whatever reasons – members of the executive team are subject to groupthink? In any case, your observations are keen as I have seen the same strengths and recognize that for every power core, tradeoffs are made.
Famously, Google and Apple made headlines recently for spending more on Legal than R&D. Legal wasn’t on your list, but many innovative tech companies shift organizational power to Legal as they mature, and recognize that high financial returns result from protecting existing innovation. Of course, that works up to a point. Kodak, Polaroid, Microsoft, RIM . . . hello?
The IT power core presents an interesting issue. In some companies, IT is inseparable from the company’s product. Netflix, Neilsen, Verizon, JD Power, etc. There are no distinct partitions between IT, ‘product’, sales, marketing, and even customer. IT provides the infrastructure, operations, and delivery for all of that. (In IT, we refer to that situation as Capability Maturity Model Level 4: Dynamic.) Elsewhere, IT often exists primarily to support other entities.
Can this model be applied in organizations where IT is totally embedded in the value that the company delivers?