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Functional Dysfunction

Mark Crocker - October 23, 2023 - 0 comments

Many organizations have invested huge amounts in customer relationship management (CRM) applications and these investments have generated a wide range of outcomes from successfully increased revenues and customer retention, all the way down to dismal write-offs of the total investment.

Ensuring that CRM benefits are realized requires a company to improve the way in which it interacts with its customers across channels and product groups. Most companies still lack a systematic way to consistently manage customer interactions to deliver true value. Silos exist and any specific accountability for the total customer experience is often hard to find. Systems and processes are often misaligned and customer data flows incoherently throughout the organization.

For too many companies the effort required to coordinate across functional boundaries and business unit silos just doesn’t exist even though research shows that improving a company’s customer relationships through relatively modest changes in processes, technology and organization design can increase revenues by 10 to 20 percent while reducing customer churn by 5 to 10 percent.

Too often sales leads and service requests are isolated because of functional silos and functional systems that are not linked. Even when employees hand off customers from one unit to another it is often difficult to succeed as there is no process to ensure that someone does something with that opportunity or assumes the accountability for a successful and profitable outcome.

From a service perspective most companies can easily solve simple account issues but fail to deal with situations satisfactorily when problems cross boundaries of business units or product groups. Employees may understand these boundaries, but customers could not care less and too often the customer becomes the coordinator for resolution of the issues. These ‘moments of truth’ lie at the heart of customer attrition, particularly where no satisfactory resolution from the customer’s perspective is achieved.

Adopting a broader CRM approach as a philosophy not as a computer application is the solution, requiring better coordination and follow-through on customer interactions across every part of the organization. The organization as a whole being accountable for the customer relationship is key, as is the multitude of employees involved within that customer relationship being engaged and aligned with the idea of serving that customer as well as possible.

By making cooperation systematic, companies can deliver a better customer experience. The core processes need to cut across organizational lines. Alignment across the leadership groups and all functions is critical. There needs to be a single view of the customer and variability within customer interactions needs to be reduced or even eliminated. In essence, the organization needs to be laid on its side so that functional silos are removed. In their place we should see the customer journey as the core thread of our purpose.

Functional silos usually serve the needs of the individuals within that silo and the fiefdom has its own culture, own hierarchy and own agenda. The customer is often an afterthought to the needs of the silo.

As we all know, functions are fundamental to most organizations. The organization chart is often described in functional terms. Functions have unique skills sets and qualifications, and functions provide an identity for those who serve in them. Functions often compete with each other – for status, for talent, even for funding. Turf wars can exist between functions, blame is often easy to be apportioned to functions and corporate intelligence is often fiercely guarded within functions as a source of power and influence.

The reality of course is that allowing functions to exist within silos truly destroys value. It’s a known fact and yet too many organizations accept the cost or try and fix it by issuing edicts that the function leaders need to ‘work together’ and ‘collaborate’. Truth is, we need to consider the customer journey and organize ourselves around those moments of truth throughout the customer journey.
Establishing a customer journey approach that crosses boundaries is not easy but as we mention frequently, just because it is hard doesn’t mean that it shouldn’t be done.

Next time you are looking at your organization chart, think about how it is working for your customer journey.

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