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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

The CCO Dashboard [Part one of a two-part series*]

Tuesday, November 26, 2013

There are seven measurements that should be on every CCO's dashboard. I cover four in this blog post and the remaining three in next week's blog post.

First, an important word about metrics. Because these metrics represent "proxy" measures for revenue and profitability, securing buy-in from the corporate level that these metrics are indeed tied to revenue and/or profitability, albeit indirectly, is critical to their credibility and the CCO's authority. Without this consensus the dashboard cannot demonstrate value for the CCO. The metrics are presented in order of data readiness and access; the easiest measures are listed first.

Key account relationship health

On a weekly basis, account relationship managers should post the status of key accounts; those in green have no issues, those in yellow have some emerging issues not of a critical nature, and red accounts are those in greatest jeopardy. The CCO must take personal responsibility for resolving the issues for accounts with red indicators.

Metrics: The number of accounts in green or successfully migrated to green, or elapsed time between identification and improved account status are potential metrics for the dashboard.

Overall and key customer engagement

It has been shown that more engaged customers spend more money. The degree of customer engagement can be measured based on rates of participation in customer programs such as executive forums, product development, and participation in corporate strategy initiatives. One large technology company has over 70 customer engagement programs and they have been able to document the positive relationship between customer engagement and spending.

Metrics: There are several metrics to be considered: The number of customer engagement programs and their growth, the level of involvement of customers in customer engagement initiatives, and especially the spending patterns of customers at different levels of engagement.

Loyalty measures

Academic research has proven that the higher the level of customer loyalty the greater the spend level.

Metrics: A number of commercially available survey instruments can be used to measure customer loyalty. As well, combining a customer's spending over time and customer loyalty makes a good proxy measure.

Progress toward resolution of critical customer issues

Identifying and focusing resources on resolving critical customer issues is an important role for the CCO. One large technology company annually identifies its chief customer concerns that represent a combination of technical, operational, and process issues.

Metrics: The time it takes the CCO to identify the components and drivers of the issue, the timing for a resolution plan, and time to resolution are appropriate measures for the dashboard.

This covers the four of the seven areas recommended for the CCO dashboard. The remaining three measurements and their potential metrics will be discussed in next week's blog post.

*This series has been excerpted from The Bingham Advisory: Eight Imperatives for the Chief Customer Officer, available for free download from the CCO Council website here.

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Categories: Chief Customer Officer | Customer Insight