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CRM Initiatives: The senior executive’s role
Although many organizational challenges that impede CRM require solutions from the front lines, senior executives too have important responsibilities. For instance, only the CEO and the business-unit heads (or their chief lieutenants) have the authority to establish a sending-and-receiving infrastructure that cuts across organizations. Moreover, like marathoners running a difficult course, CRM teams require cheerleading for motivation, fuel to keep going, and clear directions to stay on course. Senior executives are uniquely positioned to provide this assistance.

Top executives ought to treat important CRM milestones just as seriously as they do quarterly business-unit profit targets.
One key to success is articulating a specific business rationale-improving customer satisfaction to boost retention and keep competitors from stealing market share, for example, or improving cross-selling rates to achieve annual revenue targets. Clear messages like these help keep the effort focused and are far preferable to vague platitudes about the importance of customer satisfaction. Senior executives should also demand regular status updates, which keep the heat turned up and let them cut through the political tussles that invariably arise during large cross-organizational initiatives like CRM. And clearly, the senior team has a critical role to play in enforcing accountability. Executives need to treat important CRM milestones and performance goals just as seriously as they do quarterly business-unit profit targets.

The senior executives of one North American insurance company played all of these roles. At the beginning of the fiscal year, its management team articulated a simple goal: utilizing technology to achieve aggressive growth and to improve customer retention substantially. In management meetings across the company, executives relentlessly emphasized the importance-and monitored the status-of projects linked to growth and customer retention, particularly the retooling of a major customer-information-management system. To break barriers and free up resources needed for mission-critical tasks, the management team went to great lengths, such as refocusing sales and marketing efforts on the goals of growth and customer retention and eliminating IT projects that didn’t promote them. In the end, the company benefited rapidly by implementing a CRM project it had abandoned on several previous occasions.

Organizing for CRM by Anupam Agarwal, David P. Harding, and Jeffrey R. Schumacher, The McKinsey Quarterly, 2004 Number 3, http://www.mckinseyquarterly.com

Cashing on Innovations
Innovation is critical in hi-tech industries and forms the basis for its survival. However, delays in getting the products to market, launching of similar products by competitive brands and fickle taste of consumers, put hurdles in translating innovations into bottomlines. In a recent study on handset wars, three approaches were recommended: Orchestration, Licensing and Integration.

According to the study, Ericsson, a major player in the handset market, has gained greatly by adopting the Orchestration approach. Ericsson by dint of its joint venture with Sony, utilizes the respective strengths of both the companies in terms of R&D, design and marketing to the optimum levels. By integrating and co-ordinating the service of other parties in areas of manufacture, logistics and processing, the company orchestrates the product that yields it maximum benefit.

Some other big names in the handset war - Motorola and Qualcomm follow the Licensor approach to their advantage. Qualcomm sold its production assets to Kyocera and now limits itself to developing technologies and chipsets that it licenses to companies making CDMA handsets of same standard. Similarly Motorola is licensing others the use of its technology. The approach has widened its reach in the world market and emboldened its plans to phase out its chip unit gradually.

The third is an Integrator approach followed by world’s top handset company Nokia. Apart from manufacturing its handsets, the company closely manages production logistics and supplier relationships. Samsung too, follows the same approach.

None of the three, however, is the ‘right way” that can work for all companies. An approach suited to the dynamics of the company needs to be selected to translate innovation to cash, balancing strategic concerns and financial returns. In identifying the right approach apart from the structure and dynamics of the company, type of innovation and degree of risk needs to be minutely analyzed. Growth in an industry is largely dependant on companies’ abilities to uncover and address new customer segments and needs while capabilities in areas of branding, consumer segmentation and design propel it to the right direction. Each company needs to re-evaluate its relative strengths to determine how much value it can derive from an innovation.

Speed and effective R&D are put at a high premium, for companies who hardly have time to recoup the investments made in innovations. Access to technologies, the design and the brand strength are the deciding factors.

The report warns against the dramatic rise in the market acceptance risk for an innovation in such hi-tech goodies as handsets. In this war, a company’s starting position is as important as its market share and physical assets. But the critical factor, as the report puts it, is the organization’s ability to execute a strategy, more so, if it is moving towards changing its focus or direction.

The choice, the report claims, is between being just innovative, or being an innovative enterprise. For, each approach offers different solutions to different situations. It is up to the companies, to pick the right one or create a balancing mix of all to get a competitive advantage in this cutting edge techno market.

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