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Five Ways to Increase Borrowed Authority

Tuesday, February 25, 2014

Borrowed Authority is that which is borrowed from others with greater influence. It is best gained through the strong, vocal, and very visible support of the CEO. The more prominently the CEO advocates for the CCO and reinforces customer-centric imperatives, the ber the halo-effect and the greater the influence the CCO has over the organization. Borrowed Authority is imperative in the early days of the CCO’s tenure as any culture naturally resists change. The voice and Authority of the CEO is often necessary to overcome organizational inertia and enable a more complete customer-centric transformation. Leveraged correctly, this halo effect can be used to gain significant early momentum.

Here follow five strategies to increase your Borrowed Authority.

Align Priorities Alignment with CEO and board priorities is one key to Borrowed Authority. This gets and keeps your seat at the CEO’s table. The successful CCO shows a clear “line of sight” between customer activities and CEO priorities, demonstrating how customer centricity will enable success in meeting CEO objectives. Initiatives so aligned are more easily supported and promoted by the CEO.

Obtain clear direction (particularly at the outset) as to the objectives and measures the board and CEO are applying to the CCO role. In so doing, CCOs not only design their own agenda to best impact the company’s evaluation of their performance, but also inform the board, CEO, and peers of the shared purpose and need for collaboration.

Engage Executives Successful CCOs recognize that they cannot be the only ones championing the customer cause and refuse to allow the CEO or other executives to abdicate responsibility for understanding, serving, and actively engaging customers in growing the business. The most important way to engage executives is to make the voice of the customer roar through the C-suite. Every strategic decision should include the discussion, “What is the impact on the customer?” If the impact is positive, the strategic initiative should be promoted heavily. If it is negative, ways to mitigate the negative impact should be examined.

Speak the Language of Business An important way to borrow Authority is to speak the language of business. The CEO deals in revenue opportunity, ROI, hard cost, opportunity cost—but often finds loyalty or satisfaction scores as a strategic measure to be unfamiliar. At a minimum, the CCO should show how customer centricity can facilitate or accelerate executive goals. Better yet, the CCO should correlate customer value and the dollar cost of changes in loyalty scores with hard data such as revenue opportunities, cost savings, market penetration, share of wallet, and risk measures that the CEO, CFO and other fellow executives use to measure success.

The most successful CCOs are effective in championing hard metrics over the intangible, creating the business case for customer loyalty in terms of revenue opportunities and hard costs that are easily compared with competing priorities.

Create and Leverage Opportunities for CEO Support It is in the CEO’s best interest for the CCO to be successful. Yet, many CEOs and other executives are unaware of the best ways to demonstrate support for CCO activities. CCOs must create opportunities for CEOs and other executives to show support and leverage these activities fully. To solicit and leverage CEO support:

Use the CEO to Blow Up Obstacles When diplomacy fails in the face of “not invented here” or other irrational resistance to customer success, it may simply be necessary to leverage the CEO to blow up such obstacles. One CCO said that it took three years to consolidate employees with the same function from disparate departments. A CEO mandate would have resolved these roadblocks within weeks, saving customers three years of frustration. CEOs occasionally need to clarify or reset executive priorities around customer centricity, either directly through a mandate and personal charge or indirectly through MBOs and bonus plans.

Executives without strong Borrowed Authority report spending nearly 50% of their time justifying their existence and soliciting support, instead of serving customers. Increasing Authority to solve customer issues, drive customer centricity, and thereby create sustainable business growth needs to be a core strategy of every CCO who doesn’t wish to relegate the tenure of his/her role to chance. The Bingham CCO Authority Model is a powerful tool for guiding your strategy to gain and increase power and influence within your organization.

*This article is the second in a three-part series excerpted from The Bingham Advisory: Powerful Influence on Customer Centricity, available for free download here.

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Categories: Chief Customer Officer

The Bingham CCO Authority Model

Tuesday, February 18, 2014

Authority is the currency of the C-Suite. Greater Authority means greater ability to influence the organization to take a desired action. But even as direct reports to the CEO, customer loyalty executives may be challenged to obtain the Authority needed to get the job done. Because they typically do not own all customer-facing resources they must lead by influence to effectively resolve customer issues or enhance the end-to-end customer experience and ultimately increase revenue and profits. There are three types of Authority for the CCO or other customer executive: Positional, Earned, and Borrowed Authority.

Every CCO or loyalty executive has some Authority derived from the position and title they hold within the organizational hierarchy. Using Positional Authority the CCO can point to his or her direct reports and say, “make it so” in order to address specific customer issues. In order to grant sufficient Positional Authority, the CCO is ideally positioned as a direct report to the CEO or perhaps one level below with a strong dotted line to the CEO. Title is crucial in granting Authority, inviting respect, and opening doors to influence other executives and departments to solve cross-boundary customer challenges (see The Bingham Advisory: 8 Strategic Imperatives for the CCO available at the CCO Council website). After the initial bump in influence following the appointment to the role, Positional Authority tends to be static and may even wane over time unless increased through a promotion. 

Borrowed Authority is that which is borrowed from others with greater influence. It is best gained through the strong, vocal, and very visible support of the CEO. The appointment of a loyalty executive tells the organization, including peers within the C-Suite: “Customer centricity is our strategic imperative.” The more prominently the CEO advocates for the CCO and reinforces customer-centric imperatives, the stronger the halo-effect and the greater the influence the CCO has over the organization. As the CEO of Nationwide said when he introduced newly appointed Chief Customer Advocate, Jasmine Green, to his organization, “This is Jasmine. She speaks for me.” Executives without strong Borrowed Authority report spending nearly 50% of their time justifying their existence and soliciting support instead of serving customers.

Borrowed Authority is imperative in the early days of the CCO’s tenure as any culture naturally resists change. The voice and Authority of the CEO is often necessary to overcome organizational inertia and enable a more complete customer-centric transformation. Leveraged correctly, this halo effect can be used to gain significant early momentum. Borrowed Authority may be strong in the early days but tends to wane as the attention of the CEO turns to other initiatives. If the drop is precipitous, the CCO can be rendered ineffective. Thus, while leveraging both Positional and Borrowed Authority, it is critical for CCOs to develop Earned Authority.

Earned Authority is the most powerful and sustainable Authority that can be wielded within the C-Suite and the organization, but it is the hardest won and typically in the shortest supply in the earliest days of CCO tenure. This is the type of Authority that comes with results. It is earned as the CCO leads peers, executives, and employees to recognize how customer insight and customer centricity can be valuable aids in achieving their own business, department, and personal goals. It is earned as CCO-led initiatives are seen to be successful both internally and externally. Because Earned Authority can grow over time, it eclipses all other forms of Authority. It is the strongest and most powerful form of Authority, and wielded correctly, can also enhance Positional and Borrowed Authority in a virtuous upwards cycle. The most successful executives with the longest tenure quickly earn this type of Authority.

Increasing Authority to solve customer issues, drive customer centricity, and thereby create sustainable business growth needs to be a core strategy of every CCO who doesn’t wish to relegate the tenure of his/her role to chance. Using the Bingham CCO Authority Model, you can gain, increase, and leverage your power and influence over your organization on three fronts at once.  

*This post is the first in a three-part series excerpted from The Bingham Advisory: Powerful Influence on Customer Centricity, available for free download here.

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Categories: Chief Customer Officer | Customer Centricity

Innovation Must Begin with Customers

Monday, February 10, 2014

The new reality is that innovation must start with customers. To effectively leverage innovation to fuel customer-centric growth, companies need to do three things:

Develop and regularly refresh an extraordinarily deep understanding of customers’ needs, wants, desires, and attitudes regarding their products, services, and the company itself

It isn’t too hard to find out what customers need, want, and are willing to pay for these days: customers are demanding to be heard, across an unprecedented proliferation of channels and platforms. Unfortunately, not nearly enough companies make sufficient effort to systematically capture and utilize available customer insight, choosing instead to operate “from the gut”, or rely upon outdated third-party research.

To effectively listen, you must speak with and learn from customers, vendors, partners, and others, wherever they can be found. You need to scour the social web, public forums, and user communities to woo influential users, bloggers, exemplars and advocates who can meaningfully contribute to your growing body of knowledge. Of course you need to solicit information about product issues, too, but there is far more than that to be gained. You must delve deeper into customer attributes, perceptions, dissatisfiers, and how they reflect upon your business processes. That data will enable you to quantify, justify, and defend the value you provide. It will also help you fortify customer purchase and retention drivers, as well as to discover new, profitable opportunities.

Assign executive champions for innovation initiatives

Great leaders are those who can recognize significant innovation and successfully evaluate it, vet it with customers, and commercialize it. Executive leadership alone has the ability to understand potential, forswear risk, fund great ideas, and remove obstacles. Companies must create executive-level support for well-qualified initiatives so they see the light of day and have a chance to contribute to the company’s bottom line. As well, these contributions must be formally measured and rewarded to ensure that the desired results are achieved. 

The CCO Roadmap identifies innovation as one of the key responsibilities of the chief customer officer (CCO). The CCO is in a unique position from which to identify, evaluate, and refine customer-centric innovations to ensure the greatest success. World-class CCOs have at their fingertips data identifying the most valuable and profitable customers whose needs are most important to consider. In addition, these CCOs have the strongest B2B customer connections and the greatest B2C credibility to garner participation in customer listening activities that discover, test, and refine innovative ideas. Leveraging their in-depth customer understanding, CCOs can effectively ground the most promising innovation efforts in reality.

Create a unified process for identifying and qualifying new opportunities for products, services, markets, or segments

With the seemingly unending supply of new business opportunities, how do you go about evaluating them all to determine which ones are viable? For Proctor & Gamble, the process was relatively straightforward: it identified the five biggest customer issues for each its divisions and then spent time with key customers to identify the desired experience around each issue. It then began to source solutions from innovation marketplaces, evaluating each according to potential profit contribution, strategic fit, and overall improvement to the desired customer experience. While your process may be different, the most important thing is to ensure that there is a unified process that everyone in your organization understands and can follow.

It is clear that sustained, profitable innovation must come from customers. Those companies that strive to intimately understand their customers’ needs, wants, and desires and profitably satisfy them better than their competitors are those who will win in the customers’ eyes and in the marketplace. Let your customers guide your next strategic move so you can grow profits as you attract more of the best customers and keep them longer. 

This blog post is excerpted from Curtis's full-length article, Innovation Starts With Customers. Visit our Exclusive Resources page for other articles by Curtis.

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Categories: Chief Customer Officer | Customer Centricity | Customer Engagement | Customer Insight | Innovation

Customer Engagement Models: Riot Games

Tuesday, February 04, 2014

Many companies today have developed paths to greater engagement and greater profitability through recruiting the involvement of their customers. To restate the definition of engagement: it is the extent of a customer's willingness to invest his/her discretionary time for a mutual benefit, and particularly for the benefit of a business.

Established in Southern California in 2006, Riot Games is a US-based publisher best known for its multiplayer online battle arena title, League of Legends. As a testament to the level of engagement Riot Games has achieved with its player base, today the average percentage of new players that come through word of mouth is between 85 and 90%. A significant contributor to this engagement is structural: Riot created a game that's simply more fun to play with friends. Players recruit their friends to play with them because they enjoy a better gaming experience.

One of Riot's most outstanding examples of player engagement can be found within the process by which it enables its player community to recognize and manage negative in-game behavior, called the Tribunal. The game is played in sessions that last anywhere from 20 to 50 minutes at a time. At the end of each session, if a player behaved exhibited any unsportsmanlike behavior such as berating teammates or name calling, the other players can report him. When enough reports are filed against an individual - a number based upon the ratio of reports filed to total games played - a case file comprised of chat logs (in game instant-messaging), statistics, game data, activity, etc. is generated.

This case is displayed at random to members of the tribunal; other players in the community who have voluntarily chosen to participate in regulating and weighing in on community behavior. Through the constructive feedback of peers, Riot attempts to optimize teamwork, cooperation and positive player experiences. The best outcome is for a player to never show up at the tribunal again. Therefore, all systems are designed to adjust, not punish, behavior by allowing players equal ability to reward their peers for positive behavior by 'honoring' them after a game. When players do actually get punished, they are sent all the details in their case files: what they did, how others felt about it, why it had a negative impact on player experience, and why it was bad.

In Riot's example, it is peers - fellow players - who are applying and enforcing standards of appropriate gaming behavior; they are devoting their discretionary time to preserve the quality of experience for everyone. This strengthens the community, gives it greater credibility and authority, and at the same time frees company resources to be spent on more valuable opportunities. It also fosters greater engagement by players and a stronger commitment to the game's ecosystem.

*This post is excerpted from The Bingham Advisory: The Customer Engagement Trajectory, available for free download from the CCO Council website here.

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Categories: Customer Engagement | Customer Insight | Customer Loyalty | Customer Retention