A problem with metrics and a solution

Seth Godin identifies a common problem of large organizations in The Myth of the CMO. “They don’t get to be the chief of the stuff that is really what marketing is all about today," he says. CMO is just one example of a situation where a functional owner doesn’t get to influence all the factors that matter to their success.

To some extent, this is an inevitable issue. There is an undeniable logic and efficiency in building an organization along functional dimensions. The entire customer experience (i.e. acquisition, product experience, customer service, etc.) only comes together at the CEO.

In our opinion, one way to address Seth’s concern is through customer-centric metrics. Most companies make the mistake of evaluate performance along functional activities. This perpetuates the silos that don’t allow Judy Verses, Verizon’s CMO (in Seth’s example) to influence the call center. Marketing becomes focused on driving revenue. Operations focuses on driving down costs. Product development is a success if new features appear on time. The externalities for these incentives are obvious: Marketing brings in customers who have low life-time value; Operations squeezes customer service costs at the cost of satisfaction; Product Development doesn’t bother to deliver the features that will help marketing bring in new customers.

One alternative is to define success metrics that cross the organizational structure and put customer experiences or processes at the forefront. Happy and high-value customers are at the center of your businesses success—but require multiple functions to work together. A commonly accepted metric with strong CEO support and real accountability can be a catalyst to get these groups working together.