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The CEO and CRM: Only Leaders Need Apply
CRM initiatives need leadership, and that leadership should come from the top.
For the rest of the October 1999 issue of CRM magazine please click here
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Occasionally, studies are published that capture the percentage of time that the CEO of an organization is involved in a CRM initiative; typically, it is less than 25 percent of the time. Often, there will be a comment regarding the fact that this percentage is growing. At the same time, the industry publishes initiative failure rates that approach 50 percent! Something is missing from this picture, and perhaps it is the CEO.

In reality, the involvement of the CEO should be 100 percent. You ask, Why? Well, here is the argument for those who want to be successful.

Customer relationship management is not a bottom-up strategy. Although there are innumerable definitions of CRM and newly evolving definitions around some version of e- (add your favorite acronym), a customer-based focus is first and foremost a strategic business decision. Technology- and process-related initiatives are implemented to support the CRM strategic decision. Therefore, if the CRM strategy is real, the CEO must be at the forefront of the initiative.

Growth and Shareholder Value Issues
Most CEOs have discovered through the late `80s and early `90s that a corporation cannot cost- reduce itself to shareholder wealth beyond a momentary blip. Revenue growth is the new mantra of the economy, and CEOs have to figure out how to generate it. Obviously, sales (channel) and marketing issues have to be key to any growth strategy. The CEO must be vitally concerned about the capabilities of these two functions regardless of the orientation toward the customer. However, many organizations are realizing that customer retention is essential to success, particularly when one retains profitable customers. This is one of the challenges.

Cross-Functional Processes:
the Alignment Issue
Customer relationship management deals with issues relating to sharing customer-related data and providing a seamless contact and fulfillment experience for the customer. Because these processes by definition are cross-functional in nature, the questions of who owns them and what are the metrics of success arise. Many organizations have done a good job of designing and implementing their systems only to have them self-destruct because functional goals and objectives were not in alignment. When this happens, the system heightens the conflict and usually the system is blamed for what is in fact an organizational issue. Since the issues cross functional lines, this is the domain of the CEO/COO. These are often difficult issues to deal with; therefore, to pursue corrective action, the CEO must be committed to the strategy.

Time Horizons
It is generally accepted that CEOs are expected to address issues that are associated with longer time horizons. If a CRM system is to be implemented, is it designed to meet today's needs or those of the future? Many systems fail because of lack of anticipation. While this can be due to monolithic customization time frames, more often it is a lack of synchronization with a vision for the future-or lack thereof. Who supplies the vision?

Forensic evidence and accountability
Most organizations are run on the basis of forensic evidence: last month's numbers that are at best two weeks old. CRM systems can help companies look forward, but they don't do so automatically. Such capabilities require changes in culture and accountability. A CEO needs to be aware of these capabilities and create an environment where such insight is not met with a brickbat.

Growth and predictability of earnings are highly prized by shareholders and the market. While CRM does not offer silver bullets, it can be at the center of a solution. But only for leaders who recognize it.

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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/.
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