When the New Currency of Business is Relationships, Boards Must Understand All Stakeholders to Remain Relevant
Who are you most likely to hire if you’re at a crossroad of indecision? Someone you know.
Who do you trust when you need sound business advice? The advisor your colleagues referred you to.
Who do you buy from when you’re teetering between brands, credit card in hand? The brand you know best.
When something goes wrong at a partnering organization, who do you want to speak with? Someone you believe has your best interests in mind.
When something goes right at a partnering organization, who do you want to speak with? Someone you believe in.
We think business is done in dollar bills. In VC, in cryptocurrency, or checks with ink-black figures scrawled across — but no. Business today revolves around relationships, an intangible that can’t be replicated through technology. Despite modern advances like artificial intelligence, we’re still human at our core. And, despite it being 2019, we still prefer working with other humans. People inherently value relationships — the conversations they deliver, the trust that unfolds, the give and take.
This is why relationship-driven roles, such as the Chief Customer Officer, Chief Human Resources Officer, and the Chief Marketing Officer, must be represented at the board table. These individuals know so much about an organization’s’ most important relationships and on such an intimate level. They’re uniquely capable of strategically guiding organizations on issues ranging from customer buy-in and brand to product development and employee retention. These roles are hyper-focused on the customer as the center of all things, and is absolutely obsessed with driving value at the customer level — whether that customer is a job candidate, a mid-level manager, a customer or investor.
It’s not “just business.” It’s personal.
In today’s world, many organizations strive to manage everything. After all, we often have the tools, intelligence, and automation to do so. Aspects of business such as reputation management, customer buy-in, brand awareness — we’ve placed value on these elements as key levers in business success.
But there are some elements of business that can’t be 100% turned over to AI or to a CRM system to manage. These relationships vary by organization, industry and even phase of business. For example, at a startup, CCOs may be heavily focused on driving relationships with early enterprise clients. Figuring out what makes them tick, what motivates them, what aspects of the startup are sticky. Good CCOs will want to know the good, the bad, the ugly and the curious — and once they figure it out, they’ll seek to replicate the good across every future client.
At an enterprise, a CCO might shift gears to focus on the entire customer lifecycle. To close gaps in engagement and sales renewals; to discover why potential clients walked away (and what made others sign on the dotted line). They’ll look to understand every customer touch point — every email, phone call, click, you name it — from the customer side to the operational inner workings of the organization.
As for CHROs: in an era when employees hold more power than ever and readily go from company to company, CHROs have gained recognition for taking the lead on critical issues like compensation, culture, and workplace policy. Boards are increasingly seeing that it’s not just a product that makes a great company; it begins and ends with people.
In parallel, buying customers expect more from brands today than they ever have, and this is where the CMO takes the lead. Buying customers don’t just want a quality product or service, they want a real relationship — a conversation, a give and take, trust. Managing a brand the right way extends far beyond creative works; it’s about influencing buyer behavior, reputation management, customer engagement, and differentiation in a tough market.
Without a doubt, these relationship-driven executives are in swim lanes of their own, difficult to replicate organization to organization. They’re deeply intertwined in operations. Their reach extends far beyond a sale. And, each must act with the spirit of the brand.
These roles offer unique perspectives to any challenge as they don’t just deal with the data side of an equation, they deal with the people side as well. The heart, the emotion, the frustration, the excitement, and the potential. These elements are so crucial to success, and these are the leaders who are charged with making them repeatable. With every customer, in and outside of the organization. Spot on, every time.
Relationships = results
Strong relationships have the power to recruit bright minds, close big deals, and build cult-like followings.
- Relationships build community. A Harvard Business Review article examined customer relationships at top brands, “Think about the relationships that Amazon, Patagonia, and Airbnb have with their customers. Amazon is about connecting people with the information and vendors they need, while Patagonia fosters a community of like-minded explorers and environmental stewards. Airbnb blurs the line between provider and consumer, to encourage deeper personal connections — even, occasionally, at cost to the company. Each model is clearly stated and universally understood, internally and in the market,” but it notes that success such as this requires a kick-off from leadership: “This starts with organizational leaders asking the question, ‘What relationships are critical to the success of my business?’”
- Relationships can differentiate a brand. Relationships spark loyalty, repeat engagement and referrals. As consulting firm McKinsey put it, “The wave of commoditization and shorter product cycles has made it harder for product-oriented businesses to stand out from the pack. In this environment, consistently delighting customers becomes a difficult-to-replicate competitive edge that gives resiliency to a company’s brand equity.”
- Relationships enable innovation. Relationships are about give and take. The brightest organizations use what their customers “give” — the feedback, the user data, the product feedback and more — and create something stronger. The act of listening to customer feedback can help secure an organization’s place in the future. As Gartner describes, “Customer-centric organizations understand the unique problems and expectations of their customers as well as the context of those needs. They then consistently deliver products and services that meet those expectations.”
Does your board understand the customer?
For the modern board, these people-centered roles can offer invaluable perspectives on how to spark, nurture, and sustain strategic long-term relationships. Experienced executives such as CMOs, CHROs, and CCOs can speak to nuances on relationships within the technology industry, how to drive value with customers and craft the right partnerships for a stronger business.
In an era where everyone is watching, everyone is “talking” and sharing information, and where everything is digital, a focus on the customer is a strategy that will never go stale. As we move to become a more tech-enabled and tech-dependent society, a return to relationships — the ones that really matter — may be more important than ever.