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The CEO and the market-place


The CEO and the war for customers

By Roopen Roy Apr 14 2015

Tags: Op-ed
I have always wondered why so many CEOs start with a promise to change the world but eventually end up being a CFO or a COO. After many years of watching, I have come to the conclusion that it is not about leadership style or circumstances. It is about courage and choice.

Every company has to manage multiple moving parts: customers, people, community, regulators and shareholders. The CEO has to prioritise and balance how much time he or she should spend on managing the key components of the business.

In so managing, there is a subtle power dynamic at play. For instance, when the CEO is selecting a vendor or recruiting a key manager, he is “buying” and exercising “power.” He can either select or reject. It is a natural zone of comfort for any human being to be a “top dog,” i.e in a position of power.

Tribal societies and monarchies have always displayed the trappings of power. Feathers and plumes, sceptres and crowns and coats of arms are displays of position and power. In the Soviet era, there was a joke that when Leonid Brezhnev dropped his jacket on the floor with his numerous medals, the jangling caused a minor earthquake in Kremlin. To him, his decorative medals were spectacles of power.

On the other hand, when a CEO is selling to a customer in a competitive situation, the shoe is on the other foot. The person on the other side of the table has all the power. He can select you or reject you. The fear of rejection can be over-powering. If the CEO falls prey to such anxiety, then he will almost shy away from selling and have his ego intact.

In many companies in India, we still have an undercurrent of feudal culture. These companies are typically run autocratically and in a shroud of secrecy. There are kitchen cabinets and posses of yes men. No one tells the king the truth about his sartorial status. In these circumstances, the CEO increasingly loses the “customer touch.” He focuses on internal matters, and lets “sales guys” do the “customer stuff.”

I am tempted here to narrate a story. In 2002, the company I then worked for was building a new software factory in Kolkata. We needed a new lighting system. Two vendors had been shortlisted: Wipro Lighting and GE. One evening, I received a call from Azim Premji directly. He said that he was looking forward to serving our company and assured us of the best services.

I was impressed. The owner of one of the largest IT companies was making a call directly to pitch for his team to sell lighting systems! As it turned out, GE won the order. I received a follow-up call from him. He did not question the wisdom of our decision. He sent his general manager in charge of lighting to sit with our team to understand why Wipro had lost the order. We had an open and transparent discussion.

A few months later, our company sold its global consulting business to IBM and the software factory was taken over by them. While giving a tour of the facilities, I narrated this anecdote to Abraham Thomas, the head of IBM India at the time. He said, “This is a very powerful story, I must narrate this to my management team.” From my former colleagues who went over to IBM, I have heard that Abe Thomas used to tell his team this anecdote and exhort them to lead from the front without any ego.

There is a post-script to this. When we built the next software facility, Wipro Lighting had improved vastly and won the order. Those who know Azim Premji are aware that he is a man of unmatched humility and in a sales situation, he will, in a heartbeat, come and bat for his team.

All successful global companies are customer-centric. The CEO of Procter & Gamble, AG Laffley, when he returned to the company, reinstituted consumer home visits and store visits for himself and his senior executives after discovering that Procter's product managers spent on average only three per cent of their time in contact with end consumers. Everyone cannot be Premji or Laffley. But there is no excuse for not being customer-centric.

Relationships with buyers and decision-makers of the customer’s organisation are still critical. Analytics will provide you with insights and trends. CRM (customer relationship management) systems will provide you with information to manage your customers better and to make your sales force more productive. But in the end, the customer has to trust you. He must know you. Large deals never happen without human interactions and a hand-shake. When selling in a competitive situation, companies with CEOs who delegate and “outsource” customer relations are at a severe disadvantage. The CEO must lead from the front and be the face of his organisation.

As Georges Clemenceau, the former prime minister of France, famously said, “La guerre! C’est une chose trop grave pour la confier à des militaires.” The war! It is too grave a matter to be left to the military folks. When there is a war for the customer, the CEO must be in the thick of the battle.

(The writer is managing director of DeloitteConsulting, India)
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