Logo
BodyBGTop
CRM Works--Only If You Create the Right Environment
Why do so many CRM implementations fail? Too many companies try to change technology without changing culture. What they need is a collective mindset.
Posted Mar 19, 2001
Page 1



The complexity of modern business and the need for quick responses to changing conditions don't allow employees to go through channels anymore. But many companies have a hard time combining information, action and interpretation across old structural boundaries. Often, the result is decisions so untimely as to be irrelevant, no matter how technically correct they are.

When CRM works, it helps to solve this problem by meshing everyone together and focusing the entire organization on the customer. Often, people are forced to cross old organizational boundaries and to deal with others they barely knew before, collaborating to make decisions that affect the customer.

But here's the rub: If this process of integrating employees around the customer is not done well by the leaders of the organization, the results can be explosive. Ideally, of course, your company is already integrated around the customer and you are seeing the advantages of working in cross-functional teams. If not, CRM will force those issues in ways that previous waves of business change, like Total Quality Management (TQM) and reengineering, never did. TQM and reengineering won't shut your business down--losing your customers will.

The new customer challenges demand dramatic changes in how you are organized. To ensure CRM is successful, integration is the watchword. And for some, this will require a large leap of faith.

Barring the CEO, managers often don't have a cross-functional perspective on what is needed to change to a customer centric organization. The fact is, many managers are comfortable in their traditional, functional silos. Most were trained as functional specialists. What's more, many management systems further encourage and reinforce this functional specialization.

This traditional, functional view optimizes individual functions at the expense of customers and the whole business. This narrow scope, to which so many want to cling, leads decision-makers to attack symptoms in one function but miss the causes rooted in another. This happens all the time in the silos--sales, marketing and customer service. Making CRM work often depends on your openness to change and your determination to reorganize teams around your customers. Today's losers are internally focused, functionally managed and management-centered.

A New Approach
The future requires a new mindset. It will take nontraditional thinking for you to look at the way in which your company does business with your customer. Traditionally, customers have had to do all the work to get their problems solved. In many companies, the business units designed to serve the same customers rarely interact, and when they do, they seem at odds about how to handle problems or complaints.

To remedy this lack of agreement, you need to look for ways to improve cross-functional communication. Some assign customer accounts to teams of employees from various areas where contact with customers is paramount--for example, sales, marketing, product design, customer service and accounts receivable. A single company contact might have responsibility for all inquiries regarding credit, purchasing and order fulfillment.

Eliminating the layers of bureaucracy between customers and those employees best equipped to solve their problems is the first step in building cross-functional cooperation. As successful companies have discovered, the best way to streamline customer service is to provide a cross-functional team structure and training so that these teams understand the entire customer cycle--from the first contact with the company to the follow-up that accompanies a sale or an order.

Federal Express is another example of cross-functional cooperation. To achieve a more accurate focus on customer needs, FedEx integrated two groups of employees that usually never talked to each other, creating teams made up of information technology (IT) experts and sales representatives. In addition, senior management participated with the employees in this process.

This inventive approach improved the speed and accuracy of customer information by 30 percent. By bringing their different skills and opinions together, the teams were able to better define the needs of the customer and deliver the right services and products.

USAA, a worldwide insurance and financial services company for the military community, forms cross-functional teams who go to where the customer dissatisfaction problem surfaces. They focus on both fixing the problem and retaining the customer. The key is the teams are empowered to get it done, whatever it takes.

Connected Means Committed
One of the major challenges in implementing CRM is resistance to change. Change does not occur in isolation. Only committed people implement CRM successfully. For a collection of people cutting across organizational boundaries to create the coordinated set of actions necessary to implement CRM, they must feel connected to each other. Building relationships across functions increases trust, and when trust is increased relationships are increased. This is a mutually reinforcing pattern. If the people that impact the customer improve their relationships by working effectively across functions, they learn how to do that with the customer too.

When it comes to understanding what goes on in the entire company, most people would say they know their jobs and the work in their groups. In my experience, most people don't understand the larger system in which they work. When customer problems arise, this unawareness can cause major challenges for the customer. The customer is often passed around like a bouncing ball because no one understands the whole picture and the extent of the problem, which often includes a number of different functions or silos. Issues are often solved in favor of one organizational silo, not for the good of the customer.

A company I know conducted classes for customers on its manufacturing process; its managers believed that having more knowledgeable customers would improve relationships. The thinking was that if the customers knew how the manufacturing process worked, they were able to interface more effectively with their counterparts in the manufacturing organization.

Unfortunately, people who worked within the company were not given the same opportunity to learn about how the whole manufacturing system worked. Some people had worked for 20 years in the same department; they were experts in their part of the system, but had little knowledge of what happened once work left their unit. They understood in only the most rudimentary way the impact their actions had on the rest of the system and especially the customer. They also did not know the impact their work was having on the rest of the organization. Because the organization failed to make the whole system more visible across silos, creating cross-functional cooperation, the entire relationship effort failed miserably.

When the whole system is visible and people can work across functions, a number of things occur. First, people experience themselves as a part of a larger whole. They are no longer just a job or a role, but connected to the whole system-for the customer. Second, they see where they fit in the system and how they impact the customer. They understand how the work that preceded theirs enables them to do their job effectively, and how their job affects the work of those who are next in line. They actually see the processes that impact the customer. Third, when people see where they fit, they are able to make connections with other people in different parts of the system. These links smooth the flow of the work and have a major impact on improving customer relationships.

Setting the stage for Action
Changes facing companies today require collective effort. I've never seen a change work that was mandated. People must be willing to make it happen. The desire to become a willing participant must come from within that person. To get CRM to work, the people who are implementing it must be willing to make it work.

So here is the dilemma. Companies by their very nature need predictable outcomes. On the other hand, we know that it takes people who are willing, to make these companies work. Without people who care about whether CRM works, the company implementing CRM will never meet the goal of predictable outcomes regarding their customers. Caring about customers is a function of consent, not control. So, is it possible to create action that is based on consent in an organization that is designed to control people and outcomes? The answer is yes.

A barn raising is a perfect example of how a common task and collective effort causes predictable outcomes. In a barn raising, members of the community come together to help a neighbor build a barn. The community voluntarily assists their neighbor because they know that this task cannot be accomplished alone. As people work together to build the barn, the experience in turn strengthens their bonds to each other. When people commit to a course of action, they are willing to hold themselves and others accountable. They are often willing to put forth extraordinary amounts of time and effort. Committed people make things happen.

If you get nothing else in this article, make sure you get this: Logic and facts are nice, but that's not what's needed. Don't get me wrong; statements of facts--market share is declining or our customer service is terrible--can and do influence people. But that's not enough.

I have seen leaders speak eloquently on the case for CRM, with flashy slides, only to meet with yawns. Their belief that logic would win the day caused them to ignore the other more important element--the people's hearts. CRM means customer relationship management, and establishing a great customer relationship comes from the heart. Their people commit to action primarily because of their relationship with the customer and their own personal values. They commit to change when it is consistent with their own personal values.

This is why we have had so much trouble implementing CRM. The mistake leaders make when they seek to gain commitment is just focusing on the logic. They mistakenly believe that once people know the facts they will commit to making the necessary changes.

To give you an example, I work with a company that is implementing CRM and experiencing a great deal of difficulty. Customers are very dissatisfied. The top executives presented data to attest to these facts ad nauseam with little result. What they have failed to realize is that at the value level, people wanted to be a part of an organization that worked--one in which the current system, rules, inefficiencies and waste did not make sense. The logical arguments about customers and market share never addressed these issues. It was not until the change effort began to address these issues--did the people come alive and engage in the effort. Coincidently and not surprising, there was a direct tie-in between these emotional issues and the logical issues of declining market share, cost and customer satisfaction, but it took the emotional issues to make the logical ones come to life.

Ultimately every organization must address what it's going to do differently so it can respond more effectively to its customers. This understanding cannot be spoon-fed. It occurs when people are actively engaged. I have seen repeatedly that as people come to understand the issues that are affecting them, they become excited about the possibilities for doing things differently. Creating this environment equalizes power. That's what makes CRM work.

If you want to implement CRM successfully, you have to create this environment. There are no "ifs," "ands," or "buts."

Page 1
To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
Search
Popular Articles
 

BodyBGRight
Home | Get CRM Magazine | CRM eWeekly | CRM Topic Centers | CRM Industry Solutions | CRM News | Viewpoints | Web Events | Events Calendar
DestinationCRM.com RSS Feeds RSS Feeds | About destinationCRM | Advertise | Getting Covered | Report Problems | Contact Us