How Chief Customer Officers Are Driving Change
An increasing number of companies are appointing a single executive to lead customer experience efforts for a business unit or the entire company. Whether firms calls these executives chief customer officer (CCO) or give them some other label, these executives are driving change at organizations as diverse as CEMEX, Fidelity, General Motors, Maersk Line, and The Washington Post. And as diverse as the companies are that they work for, these leaders come from a wide range of backgrounds. To better understand the profile of a CCO, we recently gathered data on 165 executives in charge of enterprise wide customer experience. What did we find?
- Title: "chief customer officer." Similar to last year, "chief customer officer" remains the most popular title at 30% of firms, followed by "chief client officer" at 15% and "chief experience officer" at 10%. The remaining 45% go by a wide variety of titles, making it difficult to spot CCO-level executives by title alone.
- Tenure: two years or fewer. Most CCOs remain relatively new to their positions, which Forrester attributes to the emerging nature of enterprise-level customer experience management. About 50% of CCOs have spent two years or fewer in their position, and 28% have one year or less on the job.
- Background: division presidents or general manager. True to their tenure, current CCOs most often held very senior positions in their firms prior to assuming CCO responsibilities. Roughly a third of them have been division presidents or general managers, and almost as many have spent time in marketing and/or sales positions.
- Company size: very large or relatively small. 14% of the CCOs exist in very large companies with revenues of $20 billion or more, and another 21% are in large companies with revenues of $5 billion to less than $20 billion. We also found that 29% of the CCOs we looked at sit in relatively small companies with less than $250 million in revenues.
Just as CCOs vary considerably in background, title, and tenure, so do the kinds of authority their firms vest in them to drive change across the organization. CCOs typically oversee one of three types of organizational structures: advisory, matrixed, or operational—affecting the activities they do, the composition of the teams that report to them, and the budgets they control.
Advisory CCOs Play A Coaching Role
For companies that are early in their customer experience transformation, you’ll often find CCOs placed in an advisory role. This is because these firms are often reluctant to commit too many resources, or cede control of company processes to a CCO. Rather, advisory CCOs derive authority based on personal reputation and an executive mandate to influence change. They run small centralized teams that provide advice to other departments or lines of business.
Matrixed CCOs Create Accountability For Customer Experience Standards
Firms that are a bit farther along in building momentum for their customer experience efforts often implement a matrixed model. This gives the CCO authority through dotted-line relationships over specific activities such as enterprise wide customer metrics, project calendaring, or outbound communications. These CCOs leverage people and budgets from other parts of the organization, rather than having large teams and funding under their direct control.
Operational CCOs Exert Direct Control Over Major Company Operations
As companies mature in their customer experience transformation, many realize there are limits to evolving without reorganizing the operational structure to more closely align with customer needs. Other companies are deciding to change their business models from product-focused to services-focused models. These are the firms that often elect to put their CCO into an operational role so that they can oversee large parts of a restructured organization. They manage large teams and budgets and can implement change quickly relative to CCOs in other models.
No matter the authority model, the appointment of a CCO typically signifies a high level of executive buy-in to customer experience and a strategic mandate to change how a company functions. Ultimately, it will be the culture of an organization that will dictate the kind of authority its leaders should vest in its CCO and the structure that will best support its customer experience efforts. In making this decision, firms should pay attention to existing relationships, history, and centers of power and influence.
ABOUT THE AUTHOR(S)
Paul Hagen is a Principal Analyst at Forrester Research, serving customer experience professionals. His research focuses on defining a customer experience strategy (B2C and B2B), building organizational culture, and appointing a chief customer officer. Secondary areas of research include CRM, voice of the customer, and customer experience measurement.
Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 19 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 26 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit forrester.com.