When Should You Appoint a Chief Customer Officer?

Francois Gossieaux over at the Emergence Marketing blog wrote an interesting post on Do You Really Need a CCO?‘. He notes that many analysts and management pundits have been assertively promoting the CCO role for some time. The general thinking seems to be that appointing a CCO is the right way to drive the adoption of customer-centricity in organisations.

This is dangerously flawed thinking. The explosion of CXO positions in companies is as much a sign of their inability to get the business basics right, as it is of their focus on whatever X stands for. The CCO position is just the latest version of this malaise.

There is a well established series of steps used by organisation developers in the drive towards becoming a customer-centric organisation. It starts with:

1. Leveraging the informal social network of colleagues with the same customer-centric approach to business. We all have extensive social networks, including at work. These networks are a common way of getting things done in hierarchical organisations. They are also a powerful way of self-organising around customer-centricity. Customer-centricity often starts to develop through a like-minded group of individuals who have seen its business benefits and who spread the good word amongst their friends and peers.
2. Establishing cross-functional teams to work formally on customer-centric activities. Eventually, self-organised social networks get formalised into cross-functional teams to work on developing customer-centricity. They explicitly have management’s support and are able to call on resources and expertise that self-organised networks can’t. This is also the stage where consultants are often hired to understand customer-centricity’s potential.
3. Appointing someone in a coordinator role to promote the collaboration required to become customer-centric. Once the case for customer-centricity has been established, a coordinator should be appointed to take charge of its further development. Although many individuals and some functions already act in a customer-centric way, proper customer-centricity requires a much broader collaboration that has a common view of the customer, how they should be managed and so on. Customer-centricity provides benefits to the whole organisation, but each individual or function has a day job to do against which they are measured. Just adding collaboration to their already overburdened day job is not likely to get it done.
4. Developing a matrix type reporting structure of overlapping responsibilities. Once the coordinator has started to build the collaboration required for customer-centricity, it should be embedded into the whole organisation in terms of performance measures and where appropriate, matrix reporting structures. This is the earliest stage at which a CCO makes any sense, albeit here still subservient to the day business. Although matrix organisations are difficult to manage, they are a useful stepping stone towards a customer-centric organisation.
5. Having a proper customer-centric organisation structure based on meaningful customer segments. As the organisation starts to reorient itself around discrete customer segments, it evolves into a proper customer-centric organisation. This not only requires different reporting lines on the organisation chart, but also all the other customer-centric capabilities to have been built out in unison.

Organisations need to build-out their people, process, technology, data and other complementary resources that make-up their customer-centric capabilities as they go through each of the above steps too. The alternative is more of what we see today, with CMOs responsible for the customer experience, but not responsible for sales, for customer service, for delivery partners, or for the other critical touchpoints in the customer experience either. Responsibility without authority is a recipe for managerial failure.

A CCO obviously only makes sense at steps 4 and 5, when the organisation has already started to restructure itself and has built-out its customer-centric capabilities too (form follows function in organisation development). But how many companies are structured in this way and have built-out their customer-centric capabilities too? Hmm!

Far better for companies to focus on developing real customer-centricity step by step and to build out the capabilities required to create value at each step, than on the temporary illusion of customer-centricity implied by having a puny, underdeveloped CCO.

What do you think? Should organisations appoint a CCO to drive customer-centricity? Or should they only appoint one when they are almost there?

Post a comment or email me at graham(dot)hill(at)web(dot)de to get the conversation going.

Graham Hill
Customer-centric Innovator
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Further Reading:

Francois Gossieaux, Do You Really Need a CCO?
Do You Really Need a CCO?