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Key Characteristics of the Successful CCO

Tuesday, March 25, 2014

Where does your company stand on customers? Does the voice of the customer make its way up the executive level and influence strategic direction? Have you determined that you need a C-Level position dedicated to creating a customer experience and driving customer strategy throughout the organization? If you don't know or have had concerns regarding these important questions, then it might be time to consider adding a chief customer officer (CCO) to your C-Suite.

One cannot just post a job listing and hope for the best. In this case, the lack of a standard definition of the roles and responsibilities of the CCO creates hiring challenges for CEOs and Boards of Directors. Additionally key characteristics of successful CCOs are still emerging. In order to create the right career path, it is critical for the CCO to understand what is needed to be successful. CEOs and Boards of Directors should use these characteristics as part of hiring criteria.

The CCO is the company's change agent and as such spends most of his or her efforts "selling" customer centricity. The ability to influence both internal and external stakeholders is the single most important characteristic of the CCO. The CCO spends her or his time convincing others that changes being proposed will positively affect the success of the company. Until the CCO has a track record of achievements, the ability to influence others will determine the ability to increase revenue and profitability.

Skills
Above all else, the CCO must have leadership skills, including the ability to influence others. Confronted with limited resources and some skepticism it is critical that the CCO be action oriented, have analytic skills to evaluate data, make conclusions, and turn them into programs. Negotiating agreement on initiatives requires good listening skills; solutions must be collaboratively developed in order to ensure buy-in across the organization. The CCOs' advocacy for the consumer must be unwavering. Putting the customer front and center while balancing fiscal responsibility will keep the CCO focused on his/her mission.

Experience
When asked what experience a CCO should possess, one of the most successful CCOs stated that her broad understanding of business, especially operations, is her greatest asset. It gives her credibility and the ability to identify opportunities for customer improvements. Often organizations promote the "head of customer service" into the CCO role and while that individual may know customer service it is only a small part of creating a customer centric organization.

Personality and Fit
A critical criterion for CCOs is personality and how it fits within the culture or the desired culture of the organization. At the executive level of the corporation, CCOs must be able to leave their egos at the door. Collaboration with colleagues and department heads and the ability to influence them will be critical to success. Strong-arming or using Positional or Borrowed Authority will marginalize even the best formed programs. This collaborative approach must be balanced with the ability to project a strong presence and authority. The reality is that until the CCO is able to "demonstrate value" there are skeptics who will constantly challenge the role of CCO. A CCO must be "thick skinned," able to de-personalize the skepticism, and defend a position that may not be popular or have negative short term financial implications. For example, if a product release is known to have significant flaws, the CCO must be willing to delay the release even though it may result in a negative cash flow.

C-Suite executives and board members must carefully consider the characteristics of the successful CCO. The key is not to just put a warm body in the position with a goal of driving customer strategy. Careful consideration of personality and skill sets with reasonable expectations and timelines will put a new CCO in a position for success. Without incorporating the characteristics discussed above the potential for hiring the right person diminishes.

*This article is 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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Critical Success Factors for Chief Customer Officers

Monday, March 17, 2014

CCO tenure often falls casualty to the "Results right now!" syndrome that ignores a critical fact: like great wine, strong relationships take time to develop and grow more profitable with age. Many of these relationships cannot take root without a strategic plan to transmit the voice of the customer into the c-suite, thereby positioning the company to succeed and the CCO to thrive. Based on my ten years of work with more than 150 CCOs, here are seven critical success factors that will ensure CCOs meet or exceed strategic plans for their careers and for their customers.

Authoritative title and reporting structure: Title and reporting structure of the CCO are powerful signals of the company's commitment to customer centricity. The successful customer executive will have the title of CCO and report to the CEO or to an individual no more than one level below the CEO (e.g., chief marketing officer, chief operating officer, etc.).

Unwavering executive support: Continuous, vocal, and visible support from the CEO, the board, and the c-suite is critical to growth and stability for the CCO. The leadership team cannot abdicate involvement in customer centricity just because the company hired a CCO.

Earned Authority: Above and beyond positional authority derived from the job title and borrowed authority derived from the explicit, visible support of the CEO, CCOs must earn authority and credibility of their own. They do so by leading peers, executives, and employees to recognize how customer insight and customer centricity can be valuable aids in achieving their business goals.

Alignment with the CEO: By aligning priorities with the CEO and the rest of the c-suite, CCOs secure visibility at the highest level of the company and maintain involvement in key strategic corporate decisions.

Metrics that tie customer centricity to revenue growth and profitability: It is critical for CCOs to correlate customer centric programs to revenue growth and profitability, as challenging as that may be. There is growing evidence that customer loyalty and degree of customer engagement are tied to revenue. CCOs must lead their companies to determine and validate the evidence for themselves.

Support from internal and external allies: Without the support of peers, community leaders, industry analysts, and the customer, CCO initiatives will have limited results and impact. Critical to the future of the CCO is developing these alliances and being explicit about defining and communicating successes.

Compensation commensurate with customer centricity: All executives and senior leaders should have customer measures (e.g. satisfaction, loyalty) as part of their Management by Objectives (MBO). As part of this process, CCOs need to lead managers to recognize the impact their department has on customers and customer centricity.

These critical success factors are guideposts on your path to realizing your career goals as a CCO. Create a plan around those goals and use these success factors as self-evaluation criteria to maintain focus and improve your chances for success.

*This article is excerpted from The Bingham Advisory: Eight Imperatives for Chief Customer Officers, available for free download from the CCO Council website here.

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Six Key Challenges for the Chief Customer Officer

Tuesday, March 11, 2014

The CCO Council identified six of the greatest challenges CCOs face and recommends the following approaches to overcoming them. 

1. Customer centricity is not widely viewed as a strategic imperative and the CCO's contribution to this imperative is poorly defined. As a result, CCOs spend more time explaining and defending their value than they spend with customers.

Recommendation: The CEO and Board must recognize the growing body of proof that customer-centricity is the new basis for competitive advantage with demonstrable business results, and then make the CCO a part of this strategic imperative.

2. The most successful CCOs recognize and leverage three sources of CCO Authority, starting with either Positional Authority or Borrowed Authority and quickly earning authority of their own. Without such authority, cultural resistance to change, conflicting priorities, and a host of other obstacles prevent CCO success.

Recommendation: The CEO must provide to the CCO significant Borrowed Authority. The CCO must "earn" authority rapidly by providing value, demonstrating results at all levels, and effectively communicating the business impact of those results.

3. Not surprisingly, there is often limited understanding of the type of resources required to successfully convert an organization to customer centricity. The CCO of one enterprise company chose to report into Marketing as a strategy to gain greater access to staffing and expertise.

Recommendation: CEOs and Boards of Directors must have realistic expectations of the resources required for a CCO to be successful and make a commitment to supply those resources. 

4. Gathering customer data is easy, but converting it into action is much harder especially as the complexity of customer purchases and interactions increases. Many CCOs struggle to move beyond the voice of the customer and triage to create and implement customer strategy.

Recommendation: Implementing customer triage and issue resolution processes are critical first steps for CCOs. But then the CCO needs to make powerful allies and initiate cross-functional initiatives to create workable customer strategy that cuts across business units to improve the overall customer experience.

5. Implementing change is challenging for most organizations and resistance to change is human nature. Traditional methods for cultural change including bonuses and penalties help mitigate the resistance. Actively engaging employees in the process of change will move the culture from compliance to engagement.

Recommendation: The CCO must accurately evaluate the company's appetite for change and adjust expectations and program design accordingly. 

6. Many organizations are adept at measuring transactions but customer emotion and behavior are harder to measure and correlate to results. This difficulty is perhaps the single greatest reason for the CCO's role being the most fragile in the c-suite.

Recommendation: The CEO, Board, and CCO must agree upon metrics and measures that balance revenue, profit, and customer loyalty. The CCO must effectively communicate and market the value of customer-centric change to the organization to gain further support and adoption. 

Whether you are an experienced or new CCO, addressing these challenges head-on can help you drive more profitable customer behavior, create customer-centric cultures, and increase the value you deliver to your customers.

*This article is 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 Centricity

Four Ways to Increase Earned Authority

Tuesday, March 04, 2014

Positional Authority doesn't change. Borrowed Authority may have a limited lifespan. The remaining Authority - Earned Authority - is gained through a sustained history of delivering positive, visible results for customers that also benefit the business; and by proving to other executives the business value of acting in the customer's best interest. Here are four ways to earn Authority.

Own Customer Insight and Inject it into Strategic Discussions

The CCO's value is in interpreting data and devising strategy but not necessarily in owning customer data, as this can be a time-consuming distraction. CCOs must be the definitive Authority on customer needs, wants, and desires and accurately represent customers in strategic decisions; always in balance, of course, with business needs.

Build Relationships With Peers, Employees, Management, Customers, And Outside Influencers

By definition, Earned Authority results from the recognition of the value of the CCO's efforts. Most CCOs do not own all customer-facing resources and must lead by influencing relationships. These relationships help drive customer centricity throughout the organization and change the business landscape. 

Engage Employees

The CCO cannot afford to be the only customer champion. All employees must be actively engaged as part of a pervasive, customer-centric culture so as to ensure that customer needs are consistently and profitably met. Engagement can mean something as simple as employees understanding individual impact on customers or employees actively seeking to understand and deliver more for customers. How can the CCO best engage employees in the service of customers?

Demonstrate Results

CCOs need to demonstrate and publicize their results in order to earn greater Authority. Of particular importance is the correlation with revenue and profits. Oracle's CCO found that Oracle's most engaged customers generate 3x greater revenue than similar customers who are not as engaged in customer programs. Another CCO found that extremely loyal customers were five times more likely to repurchase, and that by moving 1% of their customers into this top loyalty box, the company generated an additional $33.3M in annual incremental revenue. A low-cost airline found that a one point increase in NPS score generates between $5M and $8M. These data are extremely powerful. They draw a clear line from CCO initiatives to increased revenue and demonstrate inarguable results.

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.

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

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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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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