Executives without strong Borrowed Authority report spending nearly 50% of their time justifying their existence and soliciting support, instead of serving customers. This article explains what Borrowed Authority is, and five strategies for achieving it.
There are three types of executive Authority: Positional, Borrowed, and Earned (the Bingham CCO Authority Model is fully discussed in The Bingham Advisory: Powerful Influence on Customer Centricity; see below). In this article, I focus on Borrowed Authority and some of the strategies CCOs can employ to increase it.
Borrowed Authority is that which is borrowed from others with greater influence. It is best gained through the strong, vocal, and very visible support of the CEO. The more prominently the CEO advocates for the CCO and reinforces customer-centric imperatives, the stronger the halo-effect and the greater the influence the CCO has over the organization. Borrowed Authority is imperative in the early days of the CCO's tenure as any culture naturally resists change. The voice and Authority of the CEO is often necessary to overcome organizational inertia and enable a more complete customer-centric transformation. Leveraged correctly, this halo effect can be used to gain significant early momentum.
Here follow five strategies to increase your Borrowed Authority.
Align Priorities
Alignment with CEO and board priorities is one key to Borrowed Authority. This gets and keeps your seat at the CEO's table. The successful CCO shows a clear "line of sight" between customer activities and CEO priorities, demonstrating how customer centricity will enable success in meeting CEO objectives. Initiatives so aligned are more easily supported and promoted by the CEO.
Obtain clear direction (particularly at the outset) as to the objectives and measures the board and CEO are applying to the CCO role. In so doing, CCOs not only design their own agenda to best impact the company's evaluation of their performance, but also inform the board, CEO, and peers of the shared purpose and need for collaboration.
To ensure alignment:
Select/adapt initiatives most closely aligned with CEO prioritiesProvide regular customer relationship health updates to the CEO and the boardCultivate a customer champion on the boardUse customer insight to shorten sales cycles Engage Executives
Successful CCOs recognize that they cannot be the only ones championing the customer cause and refuse to allow the CEO or other executives to abdicate responsibility for understanding, serving, and actively engaging customers in growing the business. The most important way to engage executives is to make the voice of the customer roar through the C-suite. Every strategic decision should include the discussion, "What is the impact on the customer?" If the impact is positive, the strategic initiative should be promoted heavily. If it is negative, ways to mitigate the negative impact should be examined.
To effectively engage executives:
Incorporate customer metrics into MBOsCreate executive customer advisory boards where company and customer executives meet regularlyCreate an executive sponsorship program where executives are tasked to visit key customers on a regular basisDesign and facilitate the executive escalation and customer response processEnable executives to model desired behavior for the organizationBring customers to the executive team Speak the Language of Business
An important way to borrow Authority is to speak the language of business. The CEO deals in revenue opportunity, ROI, hard cost, opportunity cost--but often finds loyalty or satisfaction scores as a strategic measure to be unfamiliar. At a minimum, the CCO should show how customer centricity can facilitate or accelerate executive goals. Better yet, the CCO should correlate customer value and the dollar cost of changes in loyalty scores with hard data such as revenue opportunities, cost savings, market penetration, share of wallet, and risk measures that the CEO, CFO and other fellow executives use to measure success.
There are a many ways of quantifying the ROI of customer centricity:
Quantify the cost of lost customersConsider Peppers' & Rogers' "Return on Customer" metric to estimate ROI of an investmentCompute the cost savings in decreasing the cost to serve customersCorrelate purchase behavior with loyalty, engagement, or other metricsMeasure the revenue and profit opportunity for shifting a percentage of customers from one loyalty level to anotherMeasure the impact on loyalty scores and profitability for primary customer touch pointsMeasure and optimize the win-back effort to focus on highest-value win-back customers and activities and to minimize those efforts and customers with lower expected return The most successful CCOs are effective in championing hard metrics over the intangible, creating the business case for customer loyalty in terms of revenue opportunities and hard costs that are easily compared with competing priorities.
Create and Leverage Opportunities for CEO Support
It is in the CEO's best interest for the CCO to be successful. Yet, many CEOs and other executives are unaware of the best ways to demonstrate support for CCO activities. CCOs must create opportunities for CEOs and other executives to show support and leverage these activities fully. To solicit and leverage CEO support:
Share customer success storiesGive executives something to brag about--and let them brag about youCreate CEO and board recognition awards where the CEO and board members can recognize customer-centric contributions and behaviors of outstanding employeesCreate a customer metric or tool the CEO can use to hold direct reports accountable to customersCreate customer awards to help recognize outstanding customers at annual meetings Use the CEO to Blow Up Obstacles
When diplomacy fails in the face of "not invented here" or other irrational resistance to customer success, it may simply be necessary to leverage the CEO to blow up such obstacles. One CCO said that it took three years to consolidate employees with the same function from disparate departments. A CEO mandate would have resolved these roadblocks within weeks, saving customers three years of frustration. CEOs occasionally need to clarify or reset executive priorities around customer centricity, either directly through a mandate and personal charge or indirectly through MBOs and bonus plans.
Conclusion
Executives without strong Borrowed Authority report spending nearly 50% of their time justifying their existence and soliciting support, instead of serving customers. Increasing Authority to solve customer issues, drive customer centricity, and thereby create sustainable business growth needs to be a core strategy of every CCO who doesn't wish to relegate the tenure of his/her role to chance.
The Bingham CCO Authority Model is a powerful tool for guiding your strategy to gain and increase power and influence within your organization.
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