CEOs Aren't Talking to Customers (Jim Karrh On Marketing)

How do CEOs spend their time — and is their time well spent?

In the most recent issue of the Harvard Business Review, Michael E. Porter and Nitin Nohria report the results of a 12-year study involving 27 CEOs of large, global firms. The CEOs’ executive assistants recorded how their bosses spent time, in 15-minute increments, so the analysis is quite granular. The findings will probably resonate with you as an organizational leader, even if your teams aren’t spread around the world.

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These CEOs work a lot and they are “always on.” The leaders in the study worked nearly 10 hours per weekday, about four hours daily on the weekends and more than two hours per day on vacations. About half of that work was done at company headquarters; the remainder included time spent at other company locations, meeting external groups, commuting, traveling or at home.

Apart from the total, it’s the composition of that work time — as well as the time for family, health and renewal — that is the bigger deal. As the authors write, “The way CEOs allocate their time and their presence — where they choose to personally participate — is crucial, not only to their own effectiveness but also to the performance of their companies.”

Given the truth that CEOs are ultimately responsible for the growth of the enterprise, one detail stood out: “Most of our CEOs were dismayed to discover how little time they spent with their customers — just 3% on average.”

This is an all-too-common phenomenon that I see firsthand. The effects stifle innovation and growth:

► You can lose the language of the customer. Without much direct contact with customers, it’s easy to become mired in the corporate or industry lingo that you hear most of the time.

► You can focus too much on internal sales processes and not enough on consumers’ decision-making processes. If the CEO is only getting reports on the sales funnel and volume of activity — e.g., number of calls being made — then there is little opportunity to even consider whether those activities match what consumers need to hear and know along their path.

► You can pay too much attention to anecdotes. If a CEO has access to only a few snapshots with customers, then those interactions will have a disproportionate influence on her view of the market. That’s a natural “recency effect” from the latest meeting that can hang on your brain. But what if those customer interactions aren’t a fair representation of reality? In my experience, a customer will behave differently in a conversation involving the CEO than in more normal, everyday cases.

Whether you’re managing a large group, a smaller group or mostly just yourself, you likely feel stretched for time. These CEOs are much like the rest of us, trying to reduce the downward drag of activities that are more institutionally ingrained (long meetings) or reactive (responding to emails that someone else should handle).

How can we lift the priority given to real customer interaction? Here are two practical recommendations:

► Commit customer time to the calendar. As the authors wrote, “For retail CEOs, for example, store visits — especially unannounced ones — are an indispensable way to talk to regular customers, not just the company staff.” The CEO of a financial services firm aims to meet face-to-face with one customer every day.

► Connect, regularly and intentionally, to objective voices. Even if everyone’s motivations are pure, a CEO’s colleagues in sales, marketing or customer service will try to orchestrate the settings for conversations. Direct customer research can help. So can consultants, if it’s clear they are accountable to the CEO (and free to say what they think). So can more unscripted, spontaneous time with customers.

I would wager that all 27 of those CEOs want their companies to have a customer focus, from the top down. Let’s not have you be similarly “dismayed.”