Most Organizations Are Not Designed for Growth

Image: Forethought

You would think that when it comes to gaining market share, structurally at least, it is a reasonably straightforward exercise to organise. And yet, the growth journey is littered with the carnage of executives, mainly from marketing, whose greatest folly was to spend too little time framing the growth challenge into a gain & retain work plan, and too much time hoping that the creative agency’s Big Idea would be their growth salvation.

Ideally, a concerted effort for both gain and retain is required if the business is to realize its growth potential.  For a coordinated gain & retain strategy to be effective, the sponsoring executive needs to be sufficiently senior to enable navigation amongst the silos within the business. In most businesses, one needs to travel all the way to the office of the CEO before you arrive at the desk of the single executive who holds the reins to both sides of the growth equation.

“One needs to travel all the way to the office of the CEO before you arrive at the desk of the single executive who holds the reins to both sides of the growth equation”

The contemporary approach to address this dilemma is to appoint a Chief Customer Officer (CCO) who has oversight of both operations and marketing. Trouble is, finding suitable candidates is challenging. Rarely can you identify a candidate who in their career, has taken an operational pathway and additionally, has marketing and brand management experience. On that front, almost always, the appointment of the CCO is a compromise and requires on-the-job learning which is less than ideal. Incidentally, having witnessed several such appointments, my leaning would be to appoint someone with primarily operational experience. Perhaps the existing Chief Operating Officer. Generalising but, with the operational orientation usually comes levels of numeracy which may result in a higher likelihood of embracing an evidence-based approach to matters involving churn modelling and holding advertising and media partners to account.

Single Accountability for Driving Growth

Even for just the “retain” side of the equation, the customer journey straddles most of the organisation and other than the CEO, no single individual has accountability for the typical end-to-end customer journey. And yet, if you ask a Chief Marketing Officer about the breadth of their responsibilities, past work in the area tells us that about one-third of CMO’s will say that they are responsible for managing the customer experience. Presumably, in answering this question, the CMO’s have not considered the sheer organizational breadth of the customer journey. Closer to the operational reality is that when it comes to growth, the common organizational structure is more likely to resemble territorial factions than a single point of responsibility for gain and retain.

“When it comes to growth, the common organizational structure is more likely to resemble territorial factions”

The alternative to appointing a Chief Customer Officer is to expect the CEO to take a more hands-on approach to growth. Philosophically, of course, the CEO agrees that growth is a pivotal requirement for the business, but how are they to be convinced that this growth initiative needs to be added to their already burdensome direct oversight? Perhaps it’s the failed past attempts to shift the prosperity of the business that speaks loudest to this question. Part of the solution is to provide the CEO with oversight through efficient first-line reporting rather than inefficient means such as task force membership. Therefore, we arrive back at the Chief Customer Officer solution as the CEO’s first report responsible for the growth agenda.

At an initiatives level, the division of responsibility is clearer. Traditionally, the externally-facing task of attracting new customers is the mainstay of marketing and the primary means for bringing about the gain outcome is the communications strategy. Few amongst the factions would challenge the proposition that marketing is best placed to exercise stewardship over the creation and execution of the communications strategy.

Gain and Retain are Two Sides of the Single Growth Coin

Retaining existing customers is often the responsibility of operations. In services businesses, where there is more likely to be a continuing interaction with the customer, it is the operations folks who carry the responsibility for cultivating the relationship and therefore have a territorial claim over the ongoing servicing of existing customers. It is the numerous touchpoints along this customer journey that drives the customer’s experience and assessment of the business, and no amount of marketing communications is likely to change this.

At its most raw level, there are just two growth-related customer outcomes that businesses seek: First, provide an ongoing exchange such that the customer is retained, and second, deepen the relationship through cross-selling existing services or products to existing customers.

Image: Forethought

When it comes to cross-selling, there is a need for inter-factional activity. Operations services existing relationships, marketing has the wherewithal to communicate, and together they have the remit of introducing additional products and services to existing customers. A collaborative model between marketing and operations will achieve optimum cross-selling activity which takes us back to the contemporary solution, the appointment of a Chief Customer Officer.

Photo by Felix Mittermeier from Pexels