Executing to Plan: How to Close the Gap

When it comes to customer strategy, companies need to do more and say less

by Don Peppers & Martha Rogers, Ph.D.

Cognitive dissonance -- a term often used by psychologists to identify the difference between what people say they're going to do and what they actually do -- can be applied to business, too. We've seen a lot of companies that don't do what they say they're going to do. Call it corporate dissonance. More specifically, there's a gap between planning and execution when it comes to keeping companies on the path toward maximizing customer value.

Failure to execute to plan has been a thorn in the side of executives for decades. For many organizations, the complexity of today's hypercompetitive, multichannel business environment has widened the gap between execution and plan. A study of 197 companies published in the July/August issue of Harvard Business Review reports that those businesses lost an average of 37 percent of their overall performance because of breakdowns in the planning and execution process. The HBR study identifies several cracks in the process. One is closely related to maximizing customer value, and that is: Companies rarely track their performances versus their original plans. This ties in to our insistence in our new book, Return on Customer, that companies must balance their short- and long-term goals. Short-term decisions, even marketing-related decisions such as contact center complaint resolution, can have a long-term effect on customer value.

From our point of view, the execution-to-plan gap is caused by poor adoption and poor change management processes. Lack of attention to either one can derail a customer strategy, and they're completely intertwined.

When executing a truly enterprisewide customer strategy, you have to bring together people playing different roles in a variety of functions across your entire organization. Sales reps, financial staff, marketing managers, contact center personnel, service technicians -- everyone in the company must center himself or herself on the customer and take the customer's point of view.

Managing to change
Sometimes a new customer strategy that maximizes customer value also requires employees to adopt a new technology. In addition, vendors, partners and customers themselves may need to use the technology. Customer self-service, for example, offers compelling benefits to customers, not just to you. To encourage adoption, executives must balance the company's needs for using the technology with the customer's benefit from accessing it. If customers are demanding more self-service technologies, but your goals for maximizing customer value involve a more personalized approach, your company needs to find a middle ground that serves both the customer and your long-term goals.

Adoption is a process, not a destination. It involves everyone in the company. If your company wants to maximize customer value, that mission is not just for marketing or sales. Eventually, it will touch everybody who touches your company. It's therefore vital that your customer-focused technologies -- and the processes they support -- accommodate all of the members of your team. Once again, to cite the self-service example, are sales reps on board with how they will treat customers if customers have more self-service access? Does marketing know how its role will change?

This transformation also takes a commitment from senior managers. Everyone in the C-suite must play an active role in instilling a customer-centric culture, as well as implementing the technology necessary to support it. If a company's goal is to provide a more detailed and singular view of its customer base, and new database software will support that strategy, for example, all information needs to come from that database. C-level executives must be committed to the process of creating that single customer view. They must insist that the relevant technology is implemented. Without that awareness, adoption of customer-centric processes will flounder.

One show of support from the C-suite is to align the organization's measurements of success and its incentives with the goals of its customer initiative. Adoption and change management stand no chance without metrics and compensation. Compensation buys compliance, which fuels an organization's behavior to change. It is a simple equation: No compensation equals no compliance, which equals no behavior change.

Companies should measure and compensate on long-term goals, as well as on the short-term results of their plans. In sales, for example, instead of gauging success entirely on current sales and profits, reward reps for meeting monthly sales and pipeline targets and compensate them for the time invested in gathering key customer data and creating relationships that will pay long-term dividends for the company.

No matter how much you invest in making the changes necessary to adopt a new customer initiative that maximizes customer value and closes the execution-to-plan gap, you won't effectively execute on it unless you build a culture of trust -- one that continuously encourages everyone in your company to see your business from the customer's perspective. People within your firm must not only understand what it means to be customer oriented; they must also want it to happen. Managers must clearly communicate the benefits of doing so. With that attitude, you can implement the processes, technologies and organizational structure that will help your customer strategy succeed.

When it comes to maximizing customer value, focus on adoption and change management. Only then will your company be able to do what it says it's going to do, and only then will you execute according to plan.

Bio: Don Peppers and Martha Rogers, Ph.D., are co-founders of Peppers & Rogers Group, a management consulting firm recognized as the leading authority on customer-based business strategy. Together, they've co-authored five best-selling books on the subject. Their firm helps its clients worldwide create and execute customer-based initiatives that make a bottom-line impact. Visit Peppers & Rogers Group online at www.1to1.com.