History Repeats Itself

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The great American statesman Patrick Henry said a mouthful when he pronounced, "I know no way of judging the future but by the past." Of course, most of us would guffaw at Pat if he were alive and said those words today. "How dated." "I mean, really, hasn't high-tech changed everything, including the rules of business?"

Not hardly. In fact, had the cadre of dot-bomb business creators ever bothered to look back, they would have seen the cliff ahead--the one they would soon march off like turkeys in a row. As they discovered, much to their chagrin, the laws of gravity still apply, as do the fundamental rules of business. And CRM folks, providers and implementers alike, are discovering the very same.

Hey, I'm far from the only one who played "Chicken Little" over the last several years, screaming "the high-tech sky is falling, the high-tech sky is falling." But for all the brickbats I took, sensitive me is sorely tempted to say a snotty "I told you so." And if victims here were limited to dot-bomb creators and other purveyors of new technologies, I might so indulge myself. But relatively innocent companies that bought into wild, ungrounded presumptions about the digital marketplace and digital workplace--including those leaping into CRM software without CRM--also got hurt. Often badly.

Hell, yes, these companies went in with their eyes open. But the high-tech sellers sure applied a heap of pressure--even ridicule--on those not ready to march to their "dot com rules" and "gotta buy CRM software" songs. So these user companies--or should we say "used companies"--leapt before they looked forward or back. And they've paid for it enough already, without our pouring salt in their wounds. So let's set the negative stuff aside and look for the lessons we could have and should have learned from experiences past--experiences that just might relate to today's CRM implementers.

The CRM industry types like to portray CRM or eCRM or whatever we're calling it this month as a total departure from the past. Something so alien to business that we've never experienced the likes of it before. Makes me want to puke when I hear that stuff. Why? Because CRM really is déjà vu all over again, the third of three interwoven waves of change in our business environment we've experienced over the past 20 years--all three driven by a series of economic changes that put customers in charge of buyer-seller relationships.

Wave 1 was TQM (total quality management). TQM, which hit the main stage in the early '80s, focuses on improving the quality of goods and services. It also shortens both product development and production cycle times. Doesn't sound much like CRM? Well, reflect on the following "TQM snapshot":

TQM Trigger: Customers began demanding better quality goods and services and more responsiveness to changing customer preferences.

Response: Most companies started by asking workers to "be more careful." When that didn't do it, they started fiddling with work processes and supporting technology. When that produced little or nothing, smarter and more determined companies recognized that "quality" had to flow from changes in corporate values--and that corporate leadership had to lead the charge. Effective change management turned out to be the key to TQM success.

Outcome: Companies that made quality part of corporate culture largely succeeded in making major upgrades to quality of products/services. Those that didn't consider quality a corporate value failed to achieve it--and many went over the cliff and got dead or severely wounded.

Wave 2 was ABM (activity based management). ABM, which started rearing its head in the late '80s and early '90s, focuses on reducing costs to produce and deliver goods and services--with strong emphasis on identifying cost drivers and sharing information and coordinating activities within and without the company. While TQM's primary impact is on line people making (and designing) goods and delivering services, ABM works on managerial and administrative decision-making that supports production and service-including setting relationships up and down the supply chain. Doesn't sound much more like CRM? Well, reflect on the "ABM snapshot:"

ABM Trigger: Customers began demanding better prices that incorporated less "producer waste."

Response: Most companies started by cutting workers. When that didn't do enough--or backfired because they cut into bone--once again they started fiddling with work processes and supporting technology. When that bogged down and didn't produce the desired outcomes, smarter and more determined companies recognized that ABM decision-making required a huge mindset change--and that corporate leadership had to lead the charge. Effective change management turned out to be the key to ABM success, as well. How peculiar.

Outcome: Companies that made the mindset change and adopted ABM principles succeeded in reducing costs. Those that didn't found they couldn't cut costs without sacrificing quality--and they, too, went over the cliff.

Wave 3 is CRM, which grew out of increased attention to the effectiveness of customer-facing functions arising in the mid- to late '90s and focuses on the subjective side of customer relationship building, whereas TQM and ABM work the objective side. CRM involves most directly the folks TQM and ABM left out--sales, marketing and customer. Totally different than Waves 1 and 2? Bet you already know I'm going to ask you to compare the "CRM fact sheet" to the first two:

CRM Trigger: Customers began demanding more informed, even personal relationships that gave them more of the treatment they wanted--and less of the other stuff.

Response: Most companies started by pushing "customer intimacy"--which meant shoving both hands into customers' pockets. When customers saw right through that, guess what the companies did? They started fiddling with work processes and supporting CRM technology. And in large part, that's where we are today. A few smarter and more determined companies now recognize that implementing CRM is a gut-wrenching change in corporate values and management mindset--and that corporate leadership has to lead the charge. Effective change management, as it turns out, is also the key to CRM success. Duh!

Outcome: While it's still early in the game, we've already seen some companies "flame out" because they treated customers badly. But the parade to the corporate cliff has just begun. Because customer power is now growing exponentially, CRM promises to have the messiest outcome of the three.

How should we judge the future, according to the past? Here's a suggestion. The CRM market--sellers and buyers alike--should grasp their collective heads tightly and twist hard until 180-degree rotation is achieved. Then everyone should stare back at the bottom of the cliff, now littered with corporate dead, dying and wounded, all there because they tried to trivialize major change and find shortcuts around it--and all there ultimately because executive leaders did not lead the charge. Then all should bow heads and chant, "Management leads the charge, management leads the charge, management leads..." We should do that until it becomes "the CRM mantra." Until we all understand that CRM is a high-bar exercise in change management. Until we stop fiddling with process and software first--which is an exercise in fiddling our futures away.

And here's another suggestion. When some software smoothie or capricious consultant tells you all the rules have changed and there's nothing to learn from the past, show them the cliff--and push hard.

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