How to gauge if your company is ready for a chief customer officer
While the role of chief customer officer (or equivalent) has proliferated in recent years, evidence suggests that there is still some way to go before they become commonplace in the boardrooms of today’s businesses.
Analysis by consultancy PeopleTECH found that only 1% of FTSE companies have a CCO on board, while high-growth firms on the FTSE AIM 100 fared even worse, with none having a CCO or equivalent.
However, research suggests that across the pond, the role of CCO has gained greater traction. A study by the CCO Council suggests that by 2014 10% of Fortune 500 companies had already adopted the role, with that number leaping to 22% amongst the Fortune 100.
With US companies including Philips Electronics, FedEx and Dunkin’ Brands all having appointed a CCO, what is it that American brands have seen in the potential of the role that British businesses are missing?
Jeanne Bliss, founder and president of CustomerBliss, cofounder of The Customer Experience Professionals Association, and author of Chief Customer Officer 2.0, believes that three things have happened over the last five or six years to drive up CCO adoption amongst US brands.
“The first is that the economic downturn in the US really made leaders realise that organically growing customers is the best path to driving long-term profitability,” she explains. “Yes, you can continue to acquire more customers, but as markets become more saturated and verticals become more saturated, the way to grow is through uniting the customer experience and there really is no-one inside of the organisation doing that in a comprehensive way.”
She continues: “The second thing is the role of social media. What your customer says is the experience and value you deliver is something you can’t overcome with great branding. You’re either delivering reliability and value to your customers or you’re not, and they have the megaphone in their hand.
“And then finally the third thing is that over time companies have become more astute to the fact that customer growth is defined by profitability of organic growth and business growth, but unintentionally silos have been working separately so that from the customer’s point of view there is a disorganised experience, a complex experience, and one that is sometimes at cross-purposes. It leaves the customer as the only one looking across everything the business has delivered.
“So for those three reasons, it has become more and more purposeful for organisations, and in particular very large organisations, to create a role that unites the organisation and starts to embed competencies in a more united way to deliver a deliberate and value-added experience.”
- Overseeing the overall customer experience.
- Maintaining authority and responsibility for customer measures.
- Defining the customer strategy.
- Managing the customer experience design.
- Working with silos to demonstrate how their function is one part of the overall customer experience.
Bliss adds that the key task of the CCO is to create a new perspective around what the purpose of the business is. As part of this new “starting point”, the CCO will need to work with the leadership team to unite silos and drive accountability from the customer’s experience standpoint as opposed to the priorities of the internal silos.
She notes: “The CCO and the leadership team should act as a kind of board of directors, helping to guide competencies within the organisation and understanding the issues that customers can face during their journey, and then together making decisions about priorities and resources. This therefore places the CCO as the unifier of a leadership team and of the organisation.”
To demonstrate the new perspective that a CCO should herald, Bliss points to the onboarding process, something that is typically remit job of the sales organisation. “The sales organisation says they’re in charge of onboarding, they give the customer a load of stuff and then their done,” she explains. “But if you’re thinking about it as a complete experience, it isn’t just the job of the sales organisation. It’s about education and information and training and the support department afterwards.”
The CCO and the leadership team should guide competencies within the organisation and understand the issues that customers can face during their journey, and then together make decisions about priorities and resources.
She continues: “So if you want to create an onboarding experience, you start with the customer value first, and that will dictate the organisational changes that might be required – what the teams will look like and how they should be rewarded and compensated. How teams work together has to be informed by a very clear outcome of value that you want to deliver to the customer.”
Clearly the role of CCO is an influential and important one for those businesses that appoint one. So it comes as some surprise to learn that even in the US, where the role has gained greatest traction, the role of CCO remains a fragile one – the CCO Council suggests that the average tenure of a chief customer officer is a mere 26 months.
So what’s the problem? Three issues appear to be particularly evident – a lack of preparation, a lack of commitment and a lack of patience.
Curtis Bingham, the founder and executive director of the CCO Council, believes that some companies mistakenly believe that the appointment of a CCO alone will be sufficient to create customer experience transformation within their organisations, and rush into creating the position before the company is ready. And if organisations rush too quickly into creating the position of CCO before removing key barriers, it can be an uphill struggle from the start.
As Bliss emphasises: “There is an enormous amount of work that has to happen before a CCO is appointed.”
She explains: “There has to be real clarity amongst the leadership team of the work ahead and what the challenges are going to be and how it is going to impact the normal state of running the business. This is about a shift in mindset about how leaders will lead differently, and how they will drive accountability differently and about what they will consider success inside the organisation to be. And there has to be real understanding and agreement to do that work and be a part of it.”
Furthermore, there also needs to be preparation around the workflow of the CCO, how this will be supported by the organisation, and what pre-appointment work needs to be done in anticipation.
Bliss continues: “There has to be an understanding that this role is not about grabbing power but about uniting the organisation. And there must also be real planning and clarity around how the CCO will interact with the leadership team and their teams to start driving a new cadence as well as how the company will drive improvement and organise projects and figure out capacity. And until all those things are done, you’re putting the CCO in a position of not being able to be successful.”
In her book, the Chief Customer Officer 2.0, Jeanne Bliss recommends that CEOs make a concerted effort to validate the need for the CCO position, ensuring the chief customer officer is doing specific and tangible work within the first month of appointment. As part of this, it is important that the role doesn’t just become a token effort.
“A lot of times, companies will appoint a CCO and then say ‘OK, that’s their job and we’ll listen to them pitch in the monthly meeting’ and that’s what I call ‘situational’ commitment,” she notes.
Bliss also warns that the work of the CCO can be undermined if the company feels that it isn’t a valid role, so executives must commit to supporting the role visibly and vocally to ensure that the chief customer officer has the authority and credibility necessary for success.
Getting respect from the organisation can sometimes be helped by appointing from within the company, notes Bliss.
“Frequently we see an appointment from inside the organisation, from a leader who is already known and respected and has run an operation.”
Bingham emphasises that organisations must understand that developing and improving customer strategy is a profitable but longer-term investment. He estimates it can take a period of two years or more for the CCO’s activities to flow through the company and make a significant impact on top- and bottom-line results.
Therefore, Bingham warns that CEOs must be patient, and be prepared to commit the time and resources to support the CCO for a minimum of two years, while CCOs themselves should work to manage the expectations of the CEO and board to allow for this two-year probationary period.
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Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.