Ask any angel investor or venture capitalist, and they’ll tell you that the most successful entrepreneurs are those who stay connected with their customers’ needs. That isn’t easy to do, especially as businesses grow and shareholders need answering to. But among all the many things business leaders must do, the most successful ones find ways to keep their customers front and center. Here’s a look at three CEOs whose track records fit that description.
As companies grow up, the need to engage directly with customers recedes in the distance, like an object passed earlier in the journey. The farther you go down the road, the smaller it gets in your rear-view mirror. You can still see it even as other priorities take over, and CEOs find someone else to do the listening and the connecting for their organizations.
I once surveyed 23 startup CEOs to find out how much time they spent personally interacting with customers. The average was around 45% of each week–over two full days out of every five! Of course, when your company is small and striving to prove itself, why shouldn’t the person in charge be totally focused on what customers say, feel, want, and need?
But the harder and more time-consuming it becomes for a CEO to do that, the more likely they are to dismiss it as unimportant. When that priority fades at the leadership level, it’s responsive, and customer-oriented culture suffers. And without constant feedback from your customer base, you lose a powerful source of innovation and agility.
That being the case, it’s no wonder that so many large companies are seen as stodgy and slow to change. Ironically, one of the surest ways for established organizations to jumpstart innovation is for their CEOs to rediscover their entrepreneurial roots, like these three did.
CEOs are the clearest emblems of “what counts” in a company. A CEO’s personal leadership practices set the tone for the actions of the senior team, and for countless other managers and employees. When the CEO loses touch with customers, the whole organization does, too. Many observers believe that’s what happened at Starbucks before Howard Schultz returned to the helm of the company in 2008. One thing Schultz seems to have understood was that Jim Donald had lost touch with one of Starbucks’s core values: its personalized customer interaction.
Schultz has since made small changes to bring it back, like buying espresso machines with a lower profile so baristas can look customers in the eye while they’re making drinks. Aware of the symbolic importance of his leadership–and at considerable expense to the company–Schultz invited 10,000 store managers to New Orleans for a conference. As Schultz later told Harvard Business Review, “The conference was about galvanizing the entire leadership of the company. . . . We had to understand that everyone must be personally accountable and responsible for the outcome of every single customer interaction.”
Ten years ago at Procter & Gamble, CEO A.G. Lafley led a similar charge for greater customer connectivity. Here was a company with hundreds of products and millions of consumers spread out all over the world. Despite this size and complexity, one of the things that distinguished P&G from most other large corporations was the way it thought about its customers.
Under Lafley, P&G tried hard to dig deep into their lives and experiences. It created a number of consumer immersion programs that brought customers into personal contact with employees. P&G used the program to draw up carefully segmented customer groups, establish live and electronic two-way conversations with customers, and ultimately bring innovative new products to the market. Lafley understood his customers were real people. More than that, he also knew his leadership was needed to change P&G’s corporate culture.
Ron Shaich, the founder, chairman, and CEO of Panera Bread, has long dominated the restaurant chain’s culture. Panera serves over 8 million customers each week and employs over 80,000 associates. Despite its size and scope, Shaich describes his role as “discoverer-in-chief.” He says he wants to know what customers really care about, what really matters to them.
“I listen to people at dinner parties, on the street, in our stores,” he told me when we spoke recently. “I am looking for patterns of feelings and desires and aspirations. I want to discover how to bring them the kind of food they dream about.” Panera is now embarking on an ambitious (and expensive) “food as it should be” initiative that will eliminate a range of artificial preservatives, flavors, and colorings as well as different kinds of sweeteners and antibiotic-treated meats.
Like Schultz and Lafley, Shaich is prepared to sacrifice short-term profits for long-term growth–as long as it’s inspired by what customers want.
Would it be unreasonable to expect all CEOs to be as personally engaged with customers as Shaich or Schultz or Lafley? Perhaps, but it’s ultimately what they’re hired to do. If a company is no longer attuned to what its customers want, it can’t do business. And once-a-year “market tours” or “top-to-top” meetings usually don’t cut it. Fearful that the CEO will jump to a conclusion based on a single customer interaction, many midlevel managers actually shield the CEO from personal customer contact.
This is counterproductive. If successful entrepreneurial leaders can devote half their time to customers, CEOs of large companies should be able to find five or six hours a week engaging with the real people who buy and use their products or services. Remember, your customers don’t need you. But you need them.
Bob Stringer is a strategic consultant at C Space and an expert in customer-inspired leadership. He is a former partner of Oliver Wyman, Inc. and the former president and founder of Sherbrooke Associates.