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Why CEOs must become customer-experience evangelists

o Mark Hurd
16.10.2013 kl 00:38 | Computerworld Hong Kong

Conventional wisdom has lately been taking a terrible beating from modern technology as today's natively social and mobile generation relegates big chunks of traditional business strategy to the junk-heap of irrelevance.

 

Conventional wisdom has lately been taking a terrible beating from modern technology as today's natively social and mobile generation relegates big chunks of traditional business strategy to the junk-heap of irrelevance.

For example, classic business school thinking always told us that when your customer-satisfaction numbers hit 95 percent or even 98 percent, it's a waste of money to try to push beyond that because some customers are just grumpy and implacable by nature and you can't do a thing about that. So move on, we were told.

And that was okay back in the old days when the seller was in control of everything, from what the customer could buy and how the product would be fulfilled to the options that would or would not be available. But today, that model's got about as much vitality as the local video store.

In today's global marketplace, buyers are empowered by modern technology and are fully in control of the buyer-seller relationship. It's the consumers who control the leverage, not the sellers -- and with that new dynamic in place, much of the conventional business wisdom that has served CEOs nicely for the past several decades needs a complete overhaul.

A voice for the minority

Unhappy customers -- even if it's only two percent of your total customer universe -- now have the voice and the authority to exact a painful price on companies they believe have missed the mark on product selection or availability or fulfillment channels or after-purchase service and support.

Social media and mobile computing advances have given those consumers powerful platforms through which to influence the purchasing decisions of dozens or hundreds or even thousands of other potential buyers.

For CEOs, the good news is that you and most other high-level business leaders are fully aware of this dual challenge and opportunity: fully 97 percent of executives surveyed say that delivering great customer experiences is essential to their success.

But the bad news for a lot of CEOs is that only 63 percent of companies have appropriate customer experience systems and processes in place. So about one-third of businesses today are giving nothing but lip service to delivering superb experiences to customers -- how can those companies expect to compete? Or even survive?

Disconnected social media strategy

Clearly, social media has become an indispensable platform in helping customers engage with businesses and in fostering enduring and mutually beneficial relationships. However, we're once again finding that there's a jarring discrepancy between what companies say they should be doing with regard to social media, and what in fact they are doing: while 81 percent of executives surveyed say they realize that active social-media processes and culture are essential to their success, only 65 percent offer social channels for sales and service!

So what's causing this disconnect? The respondents spread the blame equally across three culprits: inflexible technology that can't handle modern social tools, siloed organizations that can't adapt to rapid external disruptions, and insufficient funding.

As I look at those three obstacles -- core technology, organizational structures, and budget priorities -- it's clear that they can't be overcome by a feisty social team, or a hard-charging sales leader, or even by a forceful finance chief. No, those barriers to becoming a truly social business that can deliver superb customer experiences can only be knocked down by the CEO.

The customer-experience evangelist

And that's why in my meetings with customers across the country and around the world, I tell CEOs that they need to become customer-experience evangelists. It's not enough for CEOs to bless some plans for which others will be champions, or to ask the CFO to see if he can reallocate some funding to kickstart a customer experience campaign.

Instead, CEOs need to make customer experience a top priority across the company, and make customer experience a central goal of transformational efforts that attack those three obstacles that today only look like inconveniences, but that tomorrow will manifest themselves as dangerous and devastating threats.

Let me focus for a moment on one of those impediments that I think is the most serious: inflexible and outdated technology. At many of the companies I visit, CEOs tell me their organization is not nimble enough and they can't get the right information to the right people at the right time. They tell me that their customer satisfaction numbers are slipping, and that they're spending almost all of their IT budget on old stuff in the basement that isn't delivering any real value or helping address these new and urgent challenges.

And after listening to those symptoms, I'll ask, "How old are your core business applications?" Quite often, the answer is 15 years old or even 20. That means that the company's mission-critical business processes, that are managed by the underlying business applications, are based on software that today should be regarded as prehistoric because it was written before the Web became popular; before consumer search engines; before smartphones; and certainly before social media and social engagement and social business.

The result is a massive technological mismatch that manifests itself in out-of-synch information flows and missed opportunities, incomplete visibility and misaligned organizations and a frustrated and under-equipped workforce -- one that might be fully willing to win in the marketplace, but simply doesn't have the tools to do so.

Those 15-year-old or 20-year-old apps were never intended to function in today's modern world -- it's the equivalent of taking a tricycle to a Formula One race.

That's why CEOs have to make it their mission to completely re-architect how they think about the core applications that run their core business processes, from purchasing all the way out to customer experience. Because the demographics of business have been turned upside down: instead of business technology defining the rules of engagement, today's marketplace is dictated by consumers wielding powerful new technologies and wildly new buying habits that are being absorbed by all age groups. Plus, it's happening across the globe.

And, it won't be enough for CEOs just to play catch-up, because the pace of change and innovation isn't slowing down -- in fact, it's accelerating. What changes in mobile experiences and online payments and web commerce will emerge over the next two or three years? How can CEOs help future-proof their companies from being blindsided by those?

It's a complex set of problems, to be sure, but I would recommend that the best approach for CEOs is to begin by focusing on the customer and what they want and how they buy, and how those are likely to evolve in the coming few years. CEOs need to build organizations and cultures and processes that let their companies move as fast as their customers and, in turn, can engage with those customers via whatever channels or combination of channels those customers choose.

And that's why the CEO needs to become a hair-on-fire customer experience evangelist. The journey won't be easy, but it will surely be worth it.

Mark Hurd is the President of Oracle.

Keywords: Business Issues  
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