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I’m in discussions with a national organization about speaking at their upcoming CRM conference later this year and began to do some updated research on the state of customer relationship management application software and services.  According to IDC, the global spend on CRM in 2005 surpassed $35 billion dollars; all in an effort to develop a stronger, more strategic business relationship with key economic buyers and influencers.  The outcome: often extraordinary returns in revenue growth, enhanced customer experience, and reduced cost of customer acquisition and retention.

Unfortunately, many leave a great deal of upside potential return from this investment behind by not fully integrating other customer touch points such as multiple channels or product lines.  Specifically by not asking “how can we more effectively coordinate customer service calls with website inquiries and direct sales campaigns”, the current full value of that customer relationship and certainly the prospective lifetime value of those customers are not accurately measured.

In working with another client, we’re collaborating on the most efficient and effective process for rolling out a lead generation campaign and it made me question – how systematic is the manner in which leads and service requests are passed from one channel or product group to another.  Because, leaving it to human interaction defies the fundamental asset of the technology which is to automate the mundane and the resource intensive.

If you’ve heard a keynote speech on Relationship Economics®, I often talk about geographic, functional and project-based silos and their inherent inability to create a relationship-centric culture.  It’s been our experience that even organizations with solid CRM programs in their most valuable channels, often fail to make critical connections due to the coordination and investment of time, effort and resources – real organizational relationships – necessary to overcome business unit boundaries.  When companies do bridge the gap, targeted investments in business processes, supporting infrastructure and minor changes in processes, technology and organization can increase up-sell or cross-sell revenues by 10 to 15 percent while reducing customer churn by 5-10 percent.

The main obstacle to getting a return on integration in many organizations deploying CRM systems often seems to be a failure to recognize the quantifiable and strategic potential in their intracompany relationships and act on it.

Tags: Keynote Speaker, Reputation Capital, Professional Net Worth, Co-Opetition, collaborate, Leadership Development, relationship currency, business relationships, social networking, Sales Growth

Why would I collaborate with a competitor?

A:   You wouldn’t, at least not with just any competitor.  But, there is strategic value in Co-Opetition!  Take a lesson from Alan Mulally, Ford CEO, and his meeting with Fujio Cho, the Chairman of Toyota!

Ford Chief Executive, Alan Mulally, recently made a 24-hour trip to meet with Toyota Chairman Fujio Cho.  To many, that just doesn’t make sense!  Why would he do this, especially since only a few years ago, Bill Ford Jr., then Ford’s CEO, proclaimed “my goal is to fight Toyota and everybody else and come out on top,” in an interview with Time magazine.  “I’m not ceding anything to Toyota.  They’re an excellent company and they’re a terrific competitor, but I look forward to taking them on”, he added.

Perhaps it’s the comment of “Toyota as an excellent company and a terrific competitor” that motivated Mulally to ask for the visit.  Ford is struggling to bounce back from one of the worst crises in its history – a third quarter loss of $5.8 billion in North America alone.  Toyota, on the other hand, is poised to become the world’s biggest auto company in 2007.

Co-Opetition simply defined is the strategic collaboration between perceived direct competitors that leads to an accelerated development of a mutually-beneficial solution – and, the practice is a strategic asset to both sides.   Seasoned executives have long understood, appreciated and discreetly engaged externally-perceived fierce competitors for collaboration towards the achievement of one of three goals:

1. Defeating a common enemy, such as pending legislation or a new entrant in the market
2. Greater market potential, by the whole being greater than the sum of its parts
3. Saving a market niche from extinction with innovation

According to December 26, 2006 article in The New York Times, senior officials at both Ford and Toyota confirmed that talks between the two teams had focused on the development of environmentally friendly technology, such as hybrid-electric and hydrogen fuel systems, as well as ways that Toyota could help Ford improve its manufacturing efficiency!  This is consistent with visits last summer between General Motors, French Renault, and Japanese Nissan, where the topics were joint purchasing and car production ideas.  But Ford and Toyota’s relationship goes deeper than that – actually back to the 1950s when Ford helped Toyota regroup after World War II.  It has been widely reported that Toyota also came to Ford in the 1980s when it was looking to jump-start its production capabilities in the U.S.

The key players who engage in these cooperative endeavors also tend to have a predetermined tie to the opportunity at hand.  Mr. Cho, Toyota’s current chairman, for example, worked under Taichi Ohno, the famed Toyota Kaizen production system designer, emphasizing waste reduction, workforce collaboration and continuous process improvement on the factory floor.  Cho also ran Toyota’s plant in Georgetown, Kentucky before becoming chief executive and, subsequently, chairman.  James P. Womack, co-author of The Machine That Changed the World, makes a powerful argument for Toyota having nothing to gain by letting Ford fail.  That could explain Toyota’s licensing of its dominant hybrid technology to Ford to integrate into the Ford Escape SUV.  Ford also buys hybrid parts from Aisin Seiki, a supplier owned partially by Toyota.  Mulally, likewise, is a student of Kaizen and used a form of it at Boeing, where he ran the commercial airplane division.

Are there competitors in your market who could become strategic alliance partners on key initiatives?  Could you collaborate against a common enemy or share unique R&D initiatives to innovate in your market?  Can your partnership give both companies a broader product portfolio, access to new or emerging markets, or a reduced cost of customer acquisition?  A discreet outreach to a strategic leader on the other team could prove not only interesting, but incredibly viable to your long-term success as well.

The Nour Group, Inc.
January 2007 – Relationship Economics® Newsletter

Dear Clients, Colleagues and Friends:

What a beginning to the new year here in Atlanta – Bob Nardelli ousted as CEO of Home Depot.  Garry Betty, CEO of EarthLink, died of cancer complications.  Jim Mora fired as the Atlanta Falcons’ Head Coach.  As I look for lessons from each, here is one perspective:

• Nardelli was an example of a bad executive hire.  His performance simply didn’t match his compensation package – something many believe he thought of as a scorecard.  Shutting down shareholders at last year’s meeting was a clear illustration of an arrogant, overpaid CEO.  Arthur Blank was asked at a function I attended late last year, what he thought of Nardelli’s centralizing functions and tight ship tactics vs. giving store managers more say in serving their local markets and training their employees.  He didn’t have a kind response.  Although you can’t argue with profits and revenue soaring under Nardelli’s six-year tenure, many saw customer service as a sore spot. Some Home Depot stores look tired and disorganized, and finding an employee to help locate items can be a chore at times.  The Board finally had enough and found a way to part ways – unfortunately at the cost of $210M severance package to the shareholders.
• Betty is an example of an aspiring flame going out before its time.  He was a local hero, graduating from Georgia Tech, gaining solid experiences at IBM and turning a modem into a commodity at Hayes Microcomputer Products, before becoming President & CEO of Digital Communications Associations (DCA) – the youngest CEO of an NYSE listed company.  He served as president and CEO of EarthLink from 1996 to 2007, transforming EarthLink from a small regional ISP with fewer than 100,000 members to a national brand with more than five million subscribers.   In the process, he led most of EarthLink’s major milestone achievements, from an IPO to a strategic alliance with Sprint, to eventually merging the company with long-term competitor MindSpring. During the past several years, he earned several well-deserved honors, including the Georgia Technology Hall of Fame, Ernst and Young Entrepreneur of the Year, and one of the Most Influential Atlantans by the Atlanta Business Chronicle.  His leadership will certainly be missed.
• Mora is an example of the need for Introspective Leadership.  Although he went 12- 4 in his first year, over the next two seasons he lost games, respect by some of his players and confidence by the fans and the owner.  Unfortunately, he was known as much for what he didn’t get done on the field as for the comments and incidences off the field.  I’m writing a book on the need for all of us forty-somethings to look deep within and ask ourselves if we are really ready to lead if we’ve never been tested.  Whether it’s learning how to win big games on the football field or in the day-to-day governance of our respective businesses, I’m not convinced Mora was ready for prime time; I’m not convinced the bench in corporate America is as deep as we hope and need it to be either!
  

A sample New Year’s resolution, an assessment of the value of holiday cards, an overview of VTPs – Very Talent People, and a timely article entitled “Just Because You Call It Strategic, Doesn’t Make It So” are among some of what we’ve gathered both within and external to our firm.  We hope you’ll enjoy this month’s Relationship Economics® newsletter and will forward it to colleagues you deem of value.

Happy New Year!
David

David Nour, Managing Partner
The Nour Group, Inc. – Atlanta
404-419-2115 x9101

Below are some interesting 2007 market trends and predictions in senior executive and board-level talent acquisition and retention from Joel Koblentz at Morgan Howard.  Thought it may be of interest to a broader audience.
Thanks,
David
From: Joel Koblentz [mailto:joel.koblentz@morganhoward.com]
Sent: Friday, January 12, 2007 3:48 PM
Subject: Executive Trends from Joel Koblentz

As is our tradition, below are a few trends, predictions and thoughts for 2007:

• The accelerated velocity of executive “musical chairs” in 2007 and beyond will continue unabated and will be driven by investor expectations of improved performance, placing heightened pressure on boards and their management, i.e., urgency and results. In the past two years, it is noteworthy that 25% of U.S. based public company CEOs have changed principally due to performance shortfalls, the options situation, and the attraction of opportunities for wealth in private equity situations without the spotlight of leading a public entity. Along these lines, our clients are seeking leadership that delivers quality results quickly while positioning their companies for enhanced future valuation. We have advised our clients’ boards to expect that turnover of their most talented executives will accelerate and that attracting the appropriate leadership at the “C” level will require extraordinary diligence. In fact, the latest information suggests that “C” level turnover hit record levels in 2006 – 110% over 2005.
• As a result of these conditions, we continue to conduct numerous searches for Operating, Financial, and Sales and Marketing executives. Demand remains strong. This trend is consistent with the push for performance. The “cost” of attracting and retaining a highly qualified talent base continues to “move north” as executives with substantive track records enjoy numerous career options. For the first time, we can say that many companies, given this revitalized war for talent, are becoming serious about succession planning at all senior levels and are seeking a “true” return on their investment in talent.  Interestingly, executive demand by our clients for leadership in their human resources, information technology and technology related functions has, at the moment, somewhat cooled. We are advising our clients that if they have a requirement in these functional areas, given market conditions, it may be advantageous to move forward to recruit highly qualified professionals under the current “reasonable conditions,” which, based on our discussions with numerous companies, are likely to change by the end of the first quarter.
• The demand for “C” level leadership in Asia for American and European companies will continue to spiral upward. Our offices in Singapore and China report that the demand for culturally sensitive, savvy executives with track records exceeds the quality of the talent pool.  We recommend to our clients to think carefully about the qualities needed in advance of recruiting in Asia, albeit with an appreciation of culture which varies from market to market. Plan ahead for such a search, involve the company’s senior team, and be diligent to assure success in the recruitment of senior executives in India, China, Singapore and Malaysia.
• We predict, based on our discussions with Chairpersons and Lead Directors, that corporate boards will experience in 2007 the biggest turnover of members since the onset of Sarbanes-Oxley. This is driven by term expirations where board members have selected not to stand for re-election (time requirements and liability matters are the two causes most mentioned); where ineffective board members are not being re-nominated, and where the needs for specific expertise and diversity must be met at the cost of less effective members, the latter two points reflecting the shrinking size of corporate boards. Boards continue to face complicated matters where diligence and due care requires extraordinary commitment. Many who are qualified to serve as independent board members tell us that they cannot justify the time commitment, even with increased board compensation. Fear of the “unknown” continues to dominate board member concerns.  Our advice to clients is to consider the merits, experience and competencies of a broad base of independent board candidates. Consider only those candidates who sit on no more than two boards, thus minimizing conflicts of interest and time. To the extent possible, plan ahead, as attracting qualified board members in today’s environment requires a significant board member commitment. Morgan Howard’s approach to successfully attract qualified board candidates is to “partner” with each board’s nominating committee, and involves mapping governance competencies, which oftentimes reduces the inevitable “wrinkles” of such recruitments.

I want you to compare and contrast the two emails below, from “John” and “Michael”.

The first email is an example of several I get each week from those you’d think would know better (this guy actually did attend the World Economic Forum in Davos!!), yet somehow are surprised when the rug gets pulled out from under them!  They look around and start scrambling for what to do next – sometimes the panic is a financial concern, but often it’s simply a question of where they can contribute next.

—–Original Message—–
Sent: Tuesday, January 2, 2007 10:53 AM
To: David Nour
Subject: Checking in and looking for a new gig…

David,
How goes it?  I’ve been consulting at XYZ Company for the last six months and got caught flat footed yesterday.  I found out that they aren’t keeping me on after this month (financial woes here).  So I’m scrounging around to figure out what I can do with myself in February.  If you know of anyone that could use my expertise (full-time or consulting), I’d love to hear about it.  If you want to take a look, my resume is attached.

Thanks a bunch David!
John

Two fundamental problems here:   

1. This guy is a classic “taker,” as the only time I hear from him is when HE wants something!  In this case, I went back and looked up the last email from him – it was in 2004!!  He has NEVER called to ask “how are you, how is your family, or your business, or let’s meet for a cup of coffee so I can find a way to become an asset to your efforts!”  As such, I have little incentive or inclination to help – other than recommend my new audio CD of the Top Relationship-Centric Mistakes Most Senior Executives Make!
2. He’s scrambling to dig a well when he needs it, when in reality we all need to be digging our wells far in advance of needing the next job, a piece of business, or help in getting that project done.

The second email, in contrast, is from someone who has proven himself to be a relationship “investor.”  Although I may not have agreed with some of his career choices over the years, I like him as a person and have gone out of my way several times to help him.

—–Original Message—–
From: Michael
Date: Thu, 17 Aug 2006 07:20:48
To: David Nour
Subject: RE: Virtual Introduction

David,
I trust your trip to China went well and that you had safe travels.  I am writing to see if I could make an introduction for a friend and neighbor of mine, Paul Matsen.  For years Paul was the Chief Marketing Officer at Delta Airlines and I thought the two of you would appreciate getting to know each other.  Let me know how you’d like to proceed.  I look forward to catching up with you.

Best regards,
Michael

Compared to the first email from John, Michael often thinks of others when reaching out and aims to add value in each interaction.  Once he has made that Relationship Currency® deposit, it’s a lot easier for him to ask for a withdrawal – which by the way, he has become very adept at by following up and leveraging those investments for a return as well.  Soon after the above email exchange, I introduced him to half a dozen potential sources of value to his efforts!   

The diversity, quality and the investment efforts you make in identifying, building and nurturing your portfolio of relationships is your most valuable asset!  I’m amazed of how often people forget this!

Great stories of how savvy entrepreneurs, professional service providers, and business development professionals are leveraging the Relationship Economics methodology to transform their most valuable relationships into execution, performance, and results.  Would love to hear some of yours, David

These two from Wendy Kinney of PowerCore:

John Morris, a financial planner, was going through his standard presentation with a prospect when the prospect interrupted John and said: “My CPA said to use you – so if that’s what Chris wants let’s skip all of this and just get started.”

Mike Smith is a copier salesman. Allen Truett is a computer techie. In conversation with the office manager at a dentist client Allen learned they were looking for a new copier. Allen emailed Mike; Mike called the Dentist’s office, where the office manager’s first words were: “Allen says you’re the one he wants me to use.”