Predicting future trends amid unprecedented change is like riding a high-speed express train and trying to read the station names as you whiz by. You know you’re headed somewhere, but the signposts along the way are a blur.
That’s how many business leaders are feeling these days. A May 2010 survey by the IBM Institute for Business Value (IBV) of more than 1,500 chief executive officers from 60 countries and 33 industries revealed a business environment that’s volatile, uncertain, and increasingly complex. Eight out of 10 CEOs expect their environments to grow significantly more complex but only 49 percent believe their organizations are equipped to deal with it successfully—the largest leadership challenge identified in eight years of research. Revenue from new sources is expected to double over the next five years and 76 percent of CEOs foresee the shift of economic power to rapidly developing markets. But how to respond? The study revealed three key strategies for this competitive economic environment: embody creative leadership, build operating dexterity, and reinvent customer relationships.
The desire to connect is understandable. As new products and services enter the market with lightning speed, and social networks and applications vie for customers’ attention, the customer seems more elusive than ever. The good news? Businesses can enhance customer intimacy in ways that simply didn’t exist until recently, capitalizing on the very factors contributing to the complexity. This is a perfect storm: Customers’ desire to engage is fulfilled by new communication channels and tools, and companies now have the technologies to make sense of it all in a continuous listen-learn-innovate-improve loop. This alignment finally makes it possible to reap the benefits of becoming a truly customer-centric company.
Getting closer to the customer, though, requires more than new CRM software or a Twitter account. The project can’t exist solely within a single domain or department. Customer centricity is an enterprise strategy addressing a company’s core values, so sponsorship atop and across the organization is essential. There are many approaches to defining and executing a customer strategy, but analytics now plays a differentiating role. Most companies have tons of customer data; what they lack is insight. “The problem,” as one respondent lamented, “is a misinformation explosion.”
Enter social networking and social media. Never before has a channel so rich with customer data—structured and unstructured—been available to mine, examine, and interpret with analytics. Maximizing these capabilities with a fresh approach to leadership—bold thinking and ongoing experimentation—companies can cultivate an environment where exciting insights can reshape customer experiences and improve products and services.
Consider customer co-creation. In a January 2010 IBM IBV study, 78 percent of consumers surveyed said they would collaborate with retailers to develop products and services. In the past, this co-creation effort was time-consuming and costly, and findings were rarely shared beyond the circle of project stakeholders. Today, via social networking and apps, companies can rapidly and inexpensively tap both the collective and individual wisdom of people who want to engage, be heard, and share their opinions. That’s not just customer advocacy—that’s customer evangelism, and it’s priceless, especially in today’s digital ecosystem where an influencer can virally reach a network of thousands in mere minutes.
What’s more, with new social CRM technologies, customer insights can be shared easily throughout the enterprise, enabling organizations to see how customer desires and behaviors influence the entire operational value chain. Imagine the possibilities: Every organization, encouraged to explore new ways of collaborating and executing, could reframe its mission to build the best customer experience possible.
In the face of such complexity, designing strategies through the lens of the customer is one way to stay laser-focused on what matters most. You’ll know where you’re going and how to get there—no matter how fast the train.
Carolyn Heller Baird (email@example.com) is the CRM global research leader for IBM’s Institute for Business Value (IBV), and a senior managing consultant with IBM Global Business Services, where she specializes in customer experience strategy and digital communications consulting. The IBM IBV 2010 CEO Study is available at http://sn.im/ibmibvceo10 and additional thought leadership from the IBV can be found at http://sn.im/ibmibv10.