Making Change Happen: The Executive Commitment

One of the dozens of financial, organizational, and personnel
reports delivered to Virgin Mobile U.S. CEO Dan Schulman every
week is a "customer incident report." It shows every customer
complaint tracked by the company's contact center and sales
force. Virgin Mobile's senior mangers all start their day by
reviewing a data highlight report prepared by CIO Michael
Parks' department

Schulman is part of what Parks calls a "customer-obsessed culture"
that has made Virgin Mobile the fastest growing wireless company
in America. He is also an excellent example of a CEO who is truly
committed to customers

History has shown that a CEO's direct involvement in any
customer-oriented initiative greatly increases its chances
of success, we write in our book. In 2004 IBM conducted in-
depth interviews with hundreds of business executives around
the world and concluded that "top-down, ongoing support of
senior executives and clear links to overall corporate goals"
was one of the most critical factors that differentiated
successful initiatives

But, according to the study, nearly three out of four
companies implementing such initiatives place ownership for
it with sales, marketing, IT, or some other department, while
only a quarter of firms assign it to a corporate-level team.
IBM's survey showed that when such a program is owned at the
corporate level it has a 25 percent to 50 percent greater
chance of success. Ironically, the study showed that senior
management actually impeded success in more than a third of
the firms surveyed, because the customer-oriented initiative
at their own firm was viewed as "useful," but not "critical

-- Look to the top --
C-level executives must play an active role in any customer
strategy initiative. They must be personally committed and
make sure their direct reports are focused on a program's
success, whether it's a new database management initiative
or new complaint resolution processes in the contact center

Take software firm SAS, for example. Dr. Jim Goodnight, the
firm's CEO, says customer focus has led it to be the world's
largest privately held software company. "As CEO, I am often
the face of SAS for senior-level customers and prospects,"
Goodnight says. "I meet frequently with customers around the
globe to better understand their changing needs, to listen to
their thoughts and feedback, and to communicate to them our
commitment as a company -- and my personal commitment as both
CEO and founder of SAS -- to remain squarely on their side

That executive commitment is rewarded with strong customer
loyalty. "By always keeping the customer at the center of
our universe, we have seen remarkable customer loyalty,"
Goodnight says. "Our customer retention from year-to-year
is consistently in the high 90 percent range." He adds that
it's not just the CEO's job, but the entire company's job to
keep the customer a priority. "Executives must set the tone
for their organizations, but customer-focused initiatives
cannot be merely top-down exercises," he says. "Executive
sponsorship is critical, but so too is a top-to-bottom
commitment to providing extraordinary customer service

Shen Li, VP of worldwide customer operations for Hewlett-
Packard and "ROC Monthly" board member, also notes that
constant reinforcement from the top is a necessity.
"Extending a customer-based program beyond just customer-
facing employees to make it part of the culture is how you
get things accomplished," he says. This requires executive
communication down through the ranks

-- Steering customer focus --
In some organizations a strong steering committee helps keep
momentum. A good example is at UPS. The company is at the
beginning of a five-year customer initiative to improve
salesforce automation, decrease sales cycles, increase
business from key accounts, and seamlessly integrate new
customer acquisition. Sheila Dunn, senior director for CRM
at UPS, is responsible for convening a monthly steering
committee that includes the senior VP of sales, the CIO,
CFO, and other senior executives. Attendance is mandatory;
sending lieutenants is unacceptable. The agenda is set out
ahead of time and consists of updating the progress of each
customer initiative and planning next steps

"The steering committee enables us to keep momentum behind
the plan," says Dunn. "Without some kind of infrastructure
to ensure executive commitment, you can't reach your goals.
I've been at UPS for 23 years. If you don't have executive
commitment for a program, it can't be successful

BMW Canada also has a customer strategy steering committee
that includes the CEO and CFO. According to CRM director
Kelly Lam, it meets frequently and the agenda leaves time
for brainstorming new ideas. "We all learn a lot from other
businesses and by no stretch do we think we've invented the
perfect customer experience. So we discuss a lot of different
things

HP's Li says a steering committee is only as good as its
sponsor. "Steering committees are valuable, but they can
be difficult without strong support," he says. "At the end
of the day, there's not just one business unit that runs any
customer-based program. They're working across all functions,
so strong sponsorship is important

Regardless of how senior executives choose to manage customer
strategy initiatives, remember that any meeting or steering
committee should have its roots in accountable, fact-based
reporting. "I think accountability is the key to any kind of
executive sponsorship," says Mike Emerson, general manager,
Siebel Marketing. "Companies we work with have a global
accountability system for any customer initiative. As
marketing departments get more funding for customer
relationship programs, it helps C-level executives track
their effectiveness when they see KPIs like ROI, churn rates,
and new customer revenue. It's easier for the CMO to step up
to the plate and tell the executive team that this program is
going to deliver accountable value and not just excitement

HP's Li agrees, adding that day-to-day measurement and
tracking long-term goals should be embedded into everything.
"Things need to be tangible," he says. "You want to quantify
your progress over time

By Don Peppers and Martha Rogers, Ph.D