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I believe " Successful CRM/CXM " is about competing in the relationship dimension. Not as an alternative to having a competitive product or reasonable price- but as a differentiator. If your competitors are doing the same thing you are (as they generally are), product and price won't give you a long-term, sustainable competitive advantage. But if you can get an edge based on how customers feel about your company, it's a much stickier--sustainable--relationship over the long haul.
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Dinesh Chandrasekar DC*

Sunday, February 13, 2011

CRM Program Governance and Executive Sponsorship – Part 1


In this article I want to highlight two critical areas for successful customer relations management (CRM) programmes. The first is the subject of programme governance and the second is the role and function of executive sponsorship. Programme governance is critical to programme success. Businesses with strong governance succeed. Any good organization undertaking a long-term business transformation knows that strong governance is required for successful change. The research and experience proves that return on investment is limited, or even nonexistent, where no governance structure is in place, or where dependencies are not managed effectively. It is far easier to build business cases and to spend on additional organization and systems than it is to ensure the market and internal dependencies are sufficiently controlled to deliver the required revenue returns.

A critical component of programme governance is strong executive sponsorship. Personal sponsorship is required from the highest levels; this must be as an involved champion of change. In IBM's global CRM programme this was the chief executive personally, Lou Gerstner. The sponsor needs to do more than 'wear the T shirt', becoming personally involved and providing direction to the executive board. 'Walking the talk' and leading by example is key to pre-empting and removing barriers to change. In one global financial services company, where the CRM programme director was also the managing director of a subsidiary bank, the executive measurement and pay system was changed by the chief executive officer (CEO) to pay each executive 75 per cent on team transformation results, leaving 25 per cent payment for his or her personal ownership of subsidiary revenue and profit success. Of course the CEO was not expecting any executive to neglect his or her personal business targets, but at the same time he was emphasizing the importance of change across the enterprise, and his expectation of achieving this through enterprise and executive teaming.

This brings into focus a highly relevant but less well-known area, critical to executive sponsors of CRM programmes, that of 'symbolic action', where the ability to play an acting role becomes critical in managing the various audiences involved. The role of an executive sponsor can be summed up in the following short analogy. Imagine the scenario: you are a movie producer and one day you get a call from a studio, 'We've got a great idea for a movie and we want you to produce it for us, oh and there's a small acting part in it for you as well. Here's the brief, now go and make it happen.' It is a low-budget production so you need to do a bit of scriptwriting and directing as well. Throughout this chapter we will be comparing the parallels between the role of executive sponsor and the multiple roles associated with the making of a movie: producer, scriptwriter, casting director and actor, focusing primarily on the actor role.

There are two main differences between the world of movie production and that of change leadership in organizations. First, movie production is a totally project-based operation, whereas change in organizations entails a project operation being overlaid on existing organizational structures. This creates a significant set of discrete challenges that are not faced in movie production. In fact the governance and change project aims to provide the continuity through various organization stages, selecting the most appropriate structure at any one time, and planning the level of change that can be absorbed and the emphasis that needs to be made (for example innovation or roll-out).

Second, in the movie business there is a final result: the creation of the film, at which point the team disbands. Contrast this with an organizational change, where there are major effects on all aspects of an organization, which need to be sustained for further periods in the organization's evolution. Some might suggest this is the largest obstacle and success factor of programmes within an organization.

In this article, the term 'executive sponsor' refers to a senior person within an organization who is given the 'responsibility' for the implementation of a change programme. The term should not be confused with terms such as 'programme sponsorship', which refer to funding arrangements for commercial sponsorship of events. The word 'responsibility' is important because the specific role and responsibilities, or authority, for an executive sponsor are rarely defined or clear and are generally left to the individual who has such an honour bestowed - which is an issue in itself. In CRM programmes there are many issues faced by the programme sponsor, depending on the specifics of the situation. Ideally the programme sponsor of any CRM programme is the CEO or managing director, who has the remit and power to address the complex 're-engineering' that is required for any successful CRM programme. Many issues are faced in implementing successful CRM, including changing the mindsets of those involved, making the sometimes difficult transition to a more integrated and customer-focused approach to an organization's operations. Another is addressing the 'functional silos' that exist within organizations and have a strong influence on group behaviour, particularly at senior levels. One of the biggest challenges for CRM implementations is making the organizational structure match the organization's new alignment. Any CRM implementation will affect all functions - sales, marketing, customer support - and all business processes - customer attraction, the sales process and so on. This can be a political minefield for senior executives in organizations, including the sponsor.

Too often the sponsor has never made such an extensive and enterprise-wide transformation journey, yet is expected to lead by example, cascading clear objectives and roles to the executive and management team. In the early stages it can be very valuable to develop links with external mentors who have been in such a role and can relate the critical success factors to the new sponsor. The most active sponsors will research the role and learn quickly, while others will simply pass the problem down to the executive team without clear direction.

Symbolic action

Symbolic Action is different from more substantive action because symbolic action has no explicit, direct intention for the audience, but is more suggestive and symbolic. It is not driven by pure logic but rather has its value in the meaning that people attach to it. Examples are the use of a metaphor, the type of language used, and actions that surprise or are not expected.

Any new programme faces a range of resistance and barriers. The typical response of leaders is to present very logical and rational arguments for the programme. This helps in many respects but invariably does not either win over all people or does not provide a totally compelling case for people.

In order to gain commitment and win the hearts and minds of all stakeholders, attention must also be given to more emotive levers. Hence leaders and particularly sponsors of new programmes should give consideration to symbolic action as well as the more substantive actions. Here we discuss what these actions might be, then go on to discuss some of the implications of these ideas for management. But first, programme governance.

Programme Governance

Effective programme governance comprises a number of key roles and activities. These are outlined below.

Programme manager

The programme manager needs to be of a sufficient level and capability that the stakeholders view him or her as an equal and have confidence in his or her ability to succeed. The sponsor needs to personally appoint the programme manager, and champion change through identifying and resolving issues very rapidly - even in advance!

Programme board and team

The best skills are always in demand to run business operations. However these same people are required to manage change. It may be a tough decision but it is essential for success that key people are selected to join the programme team. These people represent the stakeholders at a working level. They may be allocated to the team for short periods, to achieve specific objectives, and then released back to roles, which will take advantage of their new skills and knowledge.

Architecture board

The leader of the architecture board is normally a member of the full programme board. The role of the architecture board is to achieve a level of consistency and synergy across the enterprise systems and data structures. This is essential for achieving enterprise cost reduction and operational resilience.

Project budgets are more usually allocated to the business today, which can create a tendency towards isolated quick wins at the expense of increased ROI from shared infrastructure and leveraged successes.

We will see some more of the essence of the subject in the next article.

Loving P&C

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