Monthly Archives: October 2010

The Battle is Joined: Customer Interests vs. Functional Silos

Ranjay Gulati’s recent book, “(Re)Organizing for Resilience,” explores the obstacles faced by companies migrating from inside-out (company first) to outside-in (customers first). And he hits the nail on the head when he identifies functional silos as the key organizational impediment stalling companies making this journey. We’ve seen it happen over and over again, although we’ve become much smarter about forewarning CEOs of the organizational disruption they’re about to face.

CRM practitioners will blow off the issue and tell companies to rely on their software. Process people will claim that redesigning process will get clients from I-O to O-I. Customer experience denizens will claim that hiring, training and motivating customer-facing employees will get you there. Marketers will claim going touchy-feely will do it. Social media believers believe they have the true and only answer. And they’re all wrong.

You can’t get there from here without shrinking silo walls and installing senior managers above the silo walls responsible for coordinating the contribution of all functions towards optimizing the customer experience. And now that customers are forcing more and more companies to put them first, it’s an opportune time to ask, “How would this go over in your company?”

Is Social Media Headed for a Correction?

We rarely see people as enthused as they are over social media. Among those recent rare times are: just before the technology bubble burst; at the height of the housing bubble; just before the market crashed; and when Sarah Palin was nominated for VP. Hey, exuberance can be headiest just before the fall.

Now don’t accuse me of being anti-social media. I’m very active on Linkedin. I do have Facebook and Twitter accounts, but neither has any potential to aid our business. In fact, the time I’d spend playing up there can be much more gainfully used creating more value for our clients.

Does anyone else subscribe to the “whatever goes up must come down” perspective on social media? And why?

Which contributes more to improving customer experience: Process that changes company behavior? Or promotion that changes customer behavior?

Most in the business community agree that adding and retaining customers is becoming harder by the year. And economic conditions will continue growing the gap between potential supply and trailing customer demand – even after the recession eases. That’s forcing more and more companies to change from company-first (inside-out) models to customer-first (outside-in).

The question is…how? Do they invest first in becoming super-communicators with customers with strong brands – or do they start by changing: what work is done; by who (organizational redesign); how; and with which enabling technologies – otherwise known as Outside-In process?

A marketer’s first reaction will likely be through customer communication. A process person will almost all come down on the side of customer-driven process. But what about those in customer experience?

I believe an increasing number of CEM folks are starting to agree with the process perspective. Not even well-trained and highly motivated customer contact staff can overcome bad process (and policies). And the most influential aspect of customer experience is employee contact.

Several years ago, my research partner David Mangen Ph.D and I (no Ph.D) conducted a study of both B2B and B2C buying triggers across a range of industries. Like many an objective research project not seeking to validate beliefs does, this one surprised us with several unexpected findings. Principal among these was customers ranking “dealing with knowledgeable and empowered employees” their second most influential buying trigger for both B2B and B2C. That’s a process outcome, not a product of branding or any other form of customer communication.

Your thoughts?