Logo
BodyBGTop
Selling CRM to Your CEO
Reluctant senior executives may need some convincing before they'll take the leap to CRM.
For the rest of the September 2000 issue of CRM magazine please click here
Page 1



We've learned lots since we started piecing together customer relationship strategies, reformulated workflow and enabling technologies into something called CRM. Perhaps more than we can bear to know.

For instance, we've learned that CRM is an organic process that organizations evolve through in order to become customer-centric--not a bolt-on technology. We've learned that "e" is merely a channel while "CRM" is a strategy--not the other way around. We've learned that CRM unfolds sequentially--first with new strategies, next with redesigned functions and re-engineered work processes and last with supporting technology. We've also learned that attempting to reverse this sequence is futile and dangerous. And we've relearned Freud's famous definition of insanity--doing the same thing over and over again but expecting a different outcome--by trying to change the way we interact with customers without changing our internally focused organizational values and structures.

But most of all, we've learned that implementing CRM is hard--very hard--and that (confusing CRM with software aside) attitudes and behaviors of CEOs and their senior management cohorts are the primary culprits in making CRM so difficult.

Why so? Two reasons. First, and more obviously, CRM is barely making most CEO radar screens. Now and again some CEO somewhere issues an order to implement CRM by buying such-and-such brand of CRM software. But most CEOs needed more smarts than that to become CEOs. Bottom line: Those of us involved in CRM haven't yet made it a high enough priority to CEOs. Not high enough, at least, to warrant their charging out of that corner office offering to become lead dog on their company's CRM team. Not even high enough to assign lead dog role to a trusted senior executive--and openly and decisively empowering said executive to see CRM through, no matter how many departmental silos tumble in its wake.

It's no surprise that we've failed in this regard, though. CRM isn't a simple solution to a highly visible, definable problem--which makes getting hard-to-get CEO attention doubly hard. As a frame of reference for you, Synthesis Consulting principal Ralph Jacobson, author of the red-hot new book Leading for a Change and an expert in dealing with CEOs, suggests that any idea presented should fit on one side of one page. Ever see a CRM project rationale that short?

Short-Term Thinking
Exacerbating matters is the fundamental fact that CRM's benefits are long-term, not short-term--an attention-killer because most CEOs think short-term, not long-term. And the flimsy, short-term ROI scenarios constructed by "down and dirty" CRMers won't fool a CEO for two seconds--except perhaps for the mercifully small (and shrinking) "buy this brand of software now" contingent.

But second, and more subtly, CRM involves people: customers and employees both. According to Brendler Associates principal Bill Brendler, who is among the leadership consultants with career-long experience helping CEOs lead CRM-type movements, "Darn few CEOs deal with people as willingly or effectively as they deal with concepts--or with numbers." Let's add to that the perspective of Jens Loren Poulsen, partner in Copenhagen, Denmark-based Cultivator, one of Europe's leading change management consultancies, who says, "You win with and through people. Period." The sum of their perspectives spells trouble for CRM, which requires CEOs to lead the troops through often painful organizational change.

Worse yet for CRM, Brendler also notes that even fewer CEOs than the small number with good people skills ever meet customers, climb into their shoes and see through customer eyes. Too scary perhaps? But think about it. How many CEOs are ripe for applauding the empowerment of customers they don't know and don't care to know? Not to mention ready to applaud the people messes CRM will create all over their company--as heads shake, rattle and roll to the beat of "we've got to reorganize around customers." Hear that one hand clapping?

stealth CRM?
So what do we do with this insight? Certainly not what many CRM implementers and most software vendors are doing: pretending CRM is easy enough not to require CEO involvement. "Hey, when the going gets tough, we can hide inside these software boxes." Great, until someone throws the boxes away. Nor what some CRM consultants are doing: "dime-store CRM" too tactical to require CEO involvement. "Hey, we can automate some work processes and create internal efficiencies without ruffling many feathers." Great, until the client gets clobbered by competitors doing CRM right. Nor what some e-ified companies are doing--plunging headfirst into e-commerce as a substitute for CRM, an easy sell because it's already on CEO radar screens. "Who cares if we're substituting a channel for a strategy? E.com is hot, so let's dive right in." But like the Chinese proverb says, "Never test the depth of the water with both feet."

Avoidance. That's what we've been doing with what we've learned. And as the American proverb goes, "You can run, but you can't hide."

So how should we use what we've learned? Well, we could start off by applying a little common sense. If CRM isn't making CEO radar screens because it's not a simple solution to a visible problem, which it's not, then we have to redefine the problem and solution in CEO terms. And "in CEO terms" means keep it simple and conceptual. If CEOs are instinctively disinclined to put customers in the center of the business circle, which CRM requires, we have to address their opposing inclination. In most cases, that's powerful control orientation.

If CRM requires organizational changes most CEOs are unwilling to make or even support, which it typically does, we have to identify the reasons CEOs are unwilling or unable to make these changes. Shying away from "people" issues aside, most CEOs are risk-averse, and they prefer working incrementally rather than taking quantum leaps.

If CEOs are reluctant to turn loose a team of function leaders to develop a CRM strategy, without which CRM won't happen, we have to get inside their reluctance. Fact is, most CEOs aren't naturally collaborative and shy away from anything that smacks of "community."

And we could go on and on. But all we'll do is further reinforce what should by now be clear: changing CEO attitudes and behavior to accommodate CRM is no task for amateurs. The size of the propeller on your beanie means squat here. Ditto for expertise at re-engineering work processes. The same even for understanding what customers want and how to delight them. "Selling" CEOs on doing CRM--and doing it right--requires expertise in changing senior executive minds and directions, which takes someone operating at or near CEO-level--someone a CEO trusts and respects.

We Need a Hero
Where do you find such an animal? Sometimes internally, a door or two down from the corner office. But when you're dealing with your future CEO or another company's, you typically face the very same issues and obstacles you face presenting CRM to your present-day CEO. So you may need a CRMer and a senior exec, tied at the umbilical cord. Or you may need to look for the "animal" you need outside your organization--a hired gun in leadership training and organizational development accustomed to flopping around executive offices.

To a dedicated CRMer, this may seem like a foreign concept--bringing in one of these "OD" guys to help sell the CEO on adopting CRM, with all its trappings and implications. But there's some history here. In fact, the issues surrounding executive support for CRM are absolutely analogous to the issues faced by the Total Quality Management and Activity-Based Management movements 20 and 10 years ago, respectively--and without outside specialists leading companies and their CEOs through this much change, TQM and ABM would have downsized from tidal waves to tidal pools.

But regardless of who's doing the selling, understanding the CRM phenomenon and how it intersects with CEOdom is an imperative, because CRM is following right in TQM's and ABM's footsteps.

What? You mean CRM isn't unique and unparalleled in the annals of history? Not hardly.

Back in the late 1970s and early 1980s, the statistical Process Control movement took off. To oversimplify it, SPC was (and is) a way to increase production speed and efficiency while reducing errors on the production line. You know, GM gets to make twice as many cars per production-hour, and they fall apart half as often. Great concept. So great that it didn't just apply to the production line. In fact, SPC had few boundaries in the back office (the part of the business world that's traditionally worked with its back turned to customers). So it spread like mold on the sandwiches my son loses in his school locker. And before long, voila! We had the TQM movement, which transformed business more fundamentally than the Internet will for years to come. And which (and here's the most important part) required CEOs to take an active role in re-engineering their companies around TQM principles. A true case of "you snooze, you lose."

Of course, as Brendler attests, lots of CEOs hid in their corner offices. And their companies didn't make it to TQM. And many of these companies didn't make it at all, creating an object lesson for future CEOs.

Then, some 10 years later, along came this great little concept called Activity-Based Costing. ABC tells us which internal activities create how much indirect cost in our operations. Like, instead of using "peanut butter" accounting that spreads all overhead costs evenly, we can tie specific costs to specific activities--and thereby drive out excess cost. Great concept again. So great that it didn't just apply to internal overhead, but we apply it to distribution and supply channels, even customers. In fact, ABC, too, had few natural boundaries. So it mushroomed into full-bore ABM. Never heard of ABM? Well, all ABM did was create the need for little stuff like Enterprise Resource Planning systems that integrate all back-office information, or at least try to, and Supply Chain Management, which is among the hottest issues in business today. Hey, just look at all the e-commerce activity. How much of what's working is SCM stuff? Most of it.

And what did ABM mean to CEOs? Deja vu all over again. It required CEOs to take an active role in re-engineering their companies around ABM principles. Another true case of "you snooze, you lose." And again, some snoozed and lost, creating another object lesson.

Enter SFA

So, 10 years or so after ABC, along bops still another little gem called Sales Force Automation, which finally crept out of the shadows where it had been lurking. SFA, which started as a shaky partnership between sales, marketing and technology, enabled us to build better relationships with customers--even remember who they were. And now salespeople could start focusing their time where they were most likely to get a return and maintain consistency and continuity in customer relationships and communicate more relevant stuff more often. SFA even helped us clean up some of the inefficiencies endemic to sales, which we'd lapsed into believing were chronic and incurable. And guess what. SFA had no boundaries, either. Before long it covered the entire front office and morphed into an all-encompassing business strategy called Customer Relationship Management. So now we could finally start responding to customers the way customers were demanding we respond, and we could present one face to customers and know what they were worth to us and on and on. Theoretically, at least. Theoretically because CRM is right now at the very point the then-nascent TQM and ABM movements were when CEOs were required to come out of the corner office and lead the re-engineering of their companies around new sets of principles.

What a great time to stand at the window and watch history in the making. Heck, what a great time to be a bystander--far away from the flailing fists and feet of CEOs resisting to the death messing with complex stuff that doesn't solve a simple problem but does mess with people and substitutes long-term ROI for short-term profits and doggone near every other thing CEOs hate.

But it may not be as bad as it sounds so far. First, because many CEOs have witnessed their counterparts "snoozing and losing." And, as Brendler puts it, "CEOs are the most competitive breed on the planet." They hate to lose. They hate seeing any competitor get the drop on them. And a competitor armed with CRM can shoot you dead long before you complete a year or two or three of planning, changing, learning, training, propeller spinning and the like in order to develop a weapon for defending yourself. But things also may not be as bad as they seem because non-CEOs have had their object lesson in how to sell CEOs on--as Jacobson puts it-- "leading for a change."

Lessons Learned
Among the important lessons we've learned about selling such a big deal as CRM to CEOs is what Jacobson describes as "A paradox, in which leaders want to maintain control and stability but can't grow or compete that way." That's an internal struggle in CEOs that we can exploit--you read me right, exploit. Hey, as Jacobson, Brendler and Poulson all point out, you're not going to win over CEOs with warm fuzzy stuff. They're not about to jump off their throne to join hands in a circle with customers singing "Kumbaya." This paradox, their hot seat, is your opportunity. Turn up the heat enough, and they're gonna jump off.

Another thing we've learned, according to Brendler, is how extremely sensitive CEOs are to anything that affects the company P&L, which often drives their personal compensation. We know what happened to many companies (and their CEOs) that "snoozed and loozed." They lost their market position, then their independence and then the CEO lost his or her job. Can't hit the ol' wallet any harder than that.

Hey, their fear is your opportunity. Except for wet-behind-the-ears dot com CEOs, who you're probably not going to get through to anyway, today's CEOs lived through TQM and ABM. And the mere mention of what happened to companies that sat out the quality movement in particular will send shivers up many CEO spines. And you want to send as many shivers as possible up the backbones of not only the CEO but the entire senior executive cohort--because ofttimes you'll find the negative vision of what will happen sans CRM a more powerful change agent than the positive one of CRM benefits. And as Poulson puts it, "If this group (CEO and senior managers) does not ignite on their own vision--don't expect anyone else to do so."

Shivers aside, using the TQM analogy may help your case another way. TQM speaks pages in one acronym. And CRM is "TQM in the front office," right? Actually, it's more than that, but why muddy up a clear case? The "TQM in the front office" analogy helps get your case down to Jacobson's "one page"--one compelling page.

While your exact approach will differ with the particular personality of your CEO, these are the basics. Position CRM, and properly so, as the next wave of change following TQM and ABM. Go for the soft spots--distaste for being beaten, abhorrence of losing out financially. Get in. Get out. Skip the platitudes. Remind them of the fate of their predecessors who tried to duck under the wave. As Jacobson suggests, paint standing pat as a greater risk than going ahead with CRM. Oh, and make sure you pour in a liberal measure of e.something. And if all else fails, Brendler suggests sending the reluctant CEO out to see a few key customers. Given how ornery customers are today, that's probably pretty sound advice.

And what if all that fails? Brendler suggests, "Go look for a new job."

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