Opinion: CX Field Masks Failure of Many CEOs to Focus on Stakeholders

The failure of CEOs to lead a strategic and systematic approach to addressing the needs of all stakeholders is the single source of inefficiency and poor outcomes not only in employee but customer experience. Many of the books and theories about customer engagement and experience focus on the tactics when in fact the best results come when the CEO leads a strategic and systematic approach to making and keeping promises to all stakeholders.

By Bruce Bolger, Ron McKinley, and Lee S. Webster
opinion

Trillions Wasted on Marketing and Engagement
Failing Grades Despites Billions Spent

Customer and employee management looks like the quality management field in 1980s, ad hoc and reactive—filled with buzzwords and few solutions. The failure of US CEOs to strategically and systematically focus on quality opened the US economy to foreign competition from which it has never fully recovered. That said, the same principles of ISO 9001 quality management that helped the US battle back in the 1990s, and which many Japanese and South Korean leaders continue to follow, can be applied to people management as well.

In the 1980s, US industry faced one of the biggest competitive challenges in its history: the Japanese and South Korean countries whose businesses had embraced the practices of total quality management and continuous improvement (kaizen), not just in practice, but in spirit. Starting with the CEO, many of these country’s leading brands applied this strategic and systematic approach to aligning the interests of all stakeholders on the needs of external and internal customers to carve huge chunks of market share from US companies in automobiles, consumer electronics, appliances, industrial equipment, and more. In general, the Japanese approach focused not only on processes but people and culture to ensure that each organization’s eco-system of tactics supported the over-arching brand, values, and goals.

To fight back against the Japanese and South Koreans, US industry leaders embraced quality management principles in the 1990s. With the help of ISO 9000 quality management standards, US industry made an enormous comeback in quality through the application of a strategic and systematic approach as opposed to the reactive, ad hoc approach prevalent at the time. Numerous efficiency systems came out of this period of quality management innovation besides ISO standards, but, unlike in Japan, most focused more on process than on the human factor.

Trillions Wasted on Marketing and Engagement

Now the US faces another major challenge: a fundamental dissatisfaction with capitalism and skepticism about business in general, an almost universal sense that something isn’t working on multiple levels. Most surveys of employee and customer engagement have shown almost no change in the last decade or more, despite trillions spent on marketing to customers and on employer branding and recruitment; wages, benefits, and incentives for employees, not to mention surveys, communication, training and technology. Loyalty of any kind to businesses probably is at record lows, especially with the younger generations. This suggests trillions of dollars of wasted money. Most Americans would prefer to do business with, work for, or invest in organizations that focus on people and yet 95% of Americans in a JUST Capital survey feel that capitalism and most businesses aren’t working for people. You might ask yourself: Do you believe most organizations have a CEO-led strategic and systematic approach to addressing the needs of all stakeholders?

The next question is: what does this have to do with CX or EX? Everything. The well-known fact is that organizations spend billions on surveys and analytics about customer experience; yet, little is done with the information at most organizations because the CEO isn’t driving action. Many of the largest companies get failing grades on the most basic elements of customer experience. See: ESM: LivingLens Powers Video to Enrich Customer and Employee Feedback.

All the CX data confirms what any reader would agree upon on an intuitive level: the Golden Rule applies to marketing as much as it does to life. The majority of people want to be treated with respect and be understood for who they are. They seek honest, transparent information and want promises kept. They wish to be appreciated for their business, work or other contributions.

Failing Grades Despites Billions Spent on Marketing and CX

Most Americans would probably agree that many organizations get failing grades in one or more of these fundamental areas in a way that requires no analytics or artificial intelligence to address. The challenge is that many CEOs, board members, or senior executives never experience their company’s service in an authentic way. Nor do they often experience the tedium of calling customer service for their own or even personal business needs, because they are probably a premier customer and get immediate attention or because someone else on her or his staff gets to sit on hold for 45 minutes in their stead. The reality is that:

People often are not treated with respect and dignity. While it’s usually easy to get through to salespeople at most companies, wait times for customer service of a half-hour or more are common. While salespeople are usually at least somewhat informed, customer support people are often based offshore with only a modicum of understanding of American English or culture, and who must frequently call upon someone else to solve a problem because they don’t know the answer, adding to hold times. Is this treating customers with respect and dignity?

Many companies in fact do not consistently keep their promises. Many spend millions on advertising that deliberately uses fine print to confuse customers or make pricing and terms deliberately confusing, only to create unhappiness and disappointment later.

Few customers experience true appreciation. Despite the prevalence of points-based loyalty programs, few organizations have a strategic and systematic approach to personalizing their thanks except to the most valuable customers. How many of you have ever received a call or a personalized reward, recognition or special service out of the blue from a local grocery store, pharmacy, automobile dealer or other company with which you’ve done business with for years?

Organizations with a strategic and systematic approach to addressing all stakeholders don’t need to spend as much on consultants, mystery shoppers, analytics, and artificial intelligence: they build a focus on the needs of both external and internal customers into their brand, culture, objectives, and processes, the same way the Japanese and South Koreans did to conquer American markets.

The return on investment of this strategic and systematic approach is happier customers who tell others of their positive experiences. Such organizations benefit from a much lower incidence of product returns, complaints or lawsuits; more word-of- mouth referrals for customers or talent, and more supportive distribution partners, vendors and communities, meaning reduced reliance on bright shiny CX (or EX) objects attempting to cover up fundamental flaws in the brand and culture.

Without a CEO passionately committed to the customer or employee experience, all the talk about different strategies and tactics is just that: talk.

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Resources: The Brand Media Coalition, the only guide to the story-telling power of brands and where to source them for business, event, promotional gifting, and rewards and recognition. 2019 Enterprise Engagement Solution Provider Directory. The only directory of engagement solution providers covering all types of agencies and tactics as well as insights on how to select them.

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In Print:

Enterprise Engagement for CEOs:The Little Blue Book for People-Centric Capitalists
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Online:
10-minute short course: click here for a 10-minute introduction to Enterprise Engagement and ISO standards from the Coggno.com learning platform.

Services:
•  The International Center for Enterprise Engagement at TheICEE.org, offering: ISO 10018 certification for employers, solution providers, and Enterprise Engagement technology platforms; Human Resources and Human Capital audits for organizations seeking to benchmark their practices and related Advisory services for the hospitality field.
•  The Engagement Agency at EngagementAgency.net, offering: complete support services for employers, solution providers, and technology firms seeking to profit from formal engagement practices for themselves or their clients, including Brand and Capability audits for solution providers to make sure their products and services are up to date.
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•  Speakers Bureau—Select the right speaker on any aspect of engagement for your next event.
•  Mergers and Acquisitions. The Engagement Agency’s Mergers and Acquisition group is aware of multiple companies seeking to purchase firms in the engagement field. Contact Michael Mazer in confidence if your company is potentially for sale at 303-320-3777.

Enterprise Engagement Benchmark Tools: The Enterprise Engagement Alliance offers three tools to help organizations profit from Engagement. Click here to access the tools.
•  ROI of Engagement Calculator. Use this tool to determine the potential return-on-investment of an engagement strategy.
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•  Gauge Your Personal Level of Engagement. This survey, donated by Horsepower, enables individuals to gauge their own personal levels of engagement.

For more information, contact Bruce Bolger at Bolger@TheEEA.org, 914-591-7600, ext. 230.

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