Aligning A Firm to Unleash Strategic Customer Relationships
Organizational alignment means, among other things, that every department and employee are headed in roughly the same direction and concentrating their relational power. Peter Senge has a powerful analogy to describe this situation: he says the difference between focused and unfocused organizational power is the difference between a light bulb, which throws out scattered light, and a laser, where light is so concentrated that it can cut through steel. Organizational alignment offers that kind of focused power for both critical internal and customer relationships.
There is a near-universal example of diffuse versus concentrated power in strategic customer management. In almost every firm, customer relationship managers hand off tasks to other departments. What happens after that hand-off differentiates organizations that are truly aligned from those that are not. For example: if the strategic customer relationship manager doubts that the employee accepting the handoff understands the task’s urgency, she is forced either to follow that individual around or call periodically to make sure that the job gets done. These are not value-added tasks for the strategic relationship manager. Hovering to see that a small task is done for a critical customer is a sure sign of a poor relationship blocking true customer value and productivity.
Compare that weak alignment to the alignment in a firm such as Marriott International, where virtually all employees are ready to assist targeted strategic customers as a “volunteer army.” Here the relationship manager hands off the task to the account team and moves on to his next task, sure that the job will get done. Some might say “So what?” here. The ‘so what’ is that every minute account managers spend making up for an unaligned organization and poor internal relationships is a minute that could be used to uncover new opportunities for mutual value. The true costs of the unaligned firm are the lost opportunity costs keeping the firm from realizing its true bottom-line potential.
How does a firm align itself to unleash the power of relationships? We believe there are at least four elements:
1. A Common Vision and Set of Values
The first element of alignment is a common vision of where the company and the strategic customer group are headed. This vision keeps the end state in mind and helps employees determine their priorities to make good decisions in ambiguous times. It focuses people on the big picture so they can find common ground and develop deeper internal and customer relationships. Those values help guide employees in achieving the vision.
This vision is far more than a slogan, casually created by a few executives. It is more than a list of sales objectives. It is common for a cross-functional strategic customer leadership group to generate compelling visions, using objective market and customer data. The vision exists in words so it is important to let people in that group (and the other employees) to have a common understanding those words and what they mean. This requires more than talking, it requires a skillful dialog – first among executives and then among employees and departments – to gain the understanding and commitment that aligning organizational relationships requires.
Honeywell Industrial Automation & Control was awarded for its organizational alignment around strategic customer relationships several years ago. They believed their success came from their mission, which in 1999 was “to create value through a world-class, relationship-centric strategic approach that complements Honeywell’s technology leadership and differentiates its value from that of its competition.” It’s a deceptively simple statement, on which Honeywell built its very effective strategic customer relationship management program.
2. Systematic and Ongoing Communication of Vision and Values
The second component of alignment is systematic and ongoing communication – both from the customer and deep within the organization. A firm seeking to align itself and unleash the power of critical business relationships usually needs to develop systematic communication plans and processes to ensure that key messages travel to all departments and levels. This communication reinforces why the firm has chosen to achieve its vision. Successful leaders and their companies invest enormous time and resources ensuring the quality and effectiveness of the communications process, constantly repeating key messages to keep all employees focused on the vision, goals and relationships required to achieve them. Some CEO’s personally present firm visions to all their employees in small group settings because it is a particularly effective means to communicate a new direction.
3. Structural Changes
Traditionally, firms define organizational and relationship alignment as a structural issue, so they change reporting relationships and redesign processes to improve performance. Such restructuring and process redesign are certainly major parts of alignment. In many cases, alignment fails because the restructuring does not follow the agreed-upon vision and deep communication. A number of well-intentioned companies allocated budgets for setting up and staffing a strategic customer management function but did not allocate enough for planning, support, training or internal marketing. These firms believed that creating the department–the structure–would be enough. Strategic customer management is a very different way of working with customers and many of these new departments/programs fail through lack of internal support.
We’ve found that it’s fairly easy to determine an organization’s lack of alignment. Simply ask the strategic customer relationship managers how much time they are spending with their customers and how much time they are spending begging internal departments to do things for those customers. It’s not rare to find that these relationship managers are spending 75% of their time begging internally.
4. On-going Measurement
On-going measurement enables leadership to know to what degree it is aligned or on-track. The best form of measurement is a radar screen that lets the company know when it is off-course and how to get back on-course. Aligning an organization predictably requires mid-course corrections, but useful measurement systems help track progress and provide confidence that the destination is in sight.
The goal of strategic customer management is to work smarter, not harder. Without a vision, departments and their employees may continue to develop their own directions. Without systematic communication processes promoting the voice of the customer and organizational goals, vision development can easily turn into an academic exercise. Without work process redesign/reengineering, employees might not be moving toward achieving the vision in the most effective way. Without on-going measurement, leadership will not know how to keep moving toward the vision. True organizational alignment means that all four of these elements have been addressed.
At a time when suppliers are searching hard for any sustainable competitive advantage, aligning firms to deliver mutual value is a difficult and promising approach. Many firms will continue to align themselves to create internal efficiencies rather than focusing externally to meet key customer needs and expectations. For those suppliers willing and organizationally disciplined enough to develop visions/values, to communicate that picture constantly at all organizational levels, restructure themselves to offer aligned solutions, and create on-going measures to make certain they are on-course; there is a huge first-mover competitive advantage to be gained.
© S4 Consulting
