How many companies improved profits from studying Ernest Shackleford, a screw-up whose main achievement is that he avoided turning himself and his men into frozen penguin hors d'oeuvres? There's a man worthy of emulation.
What business turnarounds are credited to Baltimore Ravens head coach Brian Billick's book Competitive Leadership: Twelve Principles For Success? Brian banged that quickie out immediately after his team won the Super Bowl, then must have misplaced his copy as his Ravens subsequently posted losing season after losing season. Principle #1 must have been "Have Marvin Lewis coordinate your defense." Isn't that helpful?
Are you sweating the small stuff, finding your cheese, cashing purpose-driven profits? Emulating Lee Iacocca's example of having the government bail out your stupid business decisions? Becoming a Donald Trump-style artist of the deal? Following the management principles of Jesus, John Cleese or Sun T'zu? Friends, are you copying or contributing to Howard Schultz's business success one cup at a time?
These are smart, successful guys. So why are such books as useless as cold dishwater? Because they're based on the notion that if a principle holds true in one discipline or business in one case, its practice is equally valuable for your particular business.
It isn't. What you get are either strained, forced "analogies" using highly selective examples, or exercises in the bleedin’ obvious -- "Running a business is like coaching a football team because blah blah motivation blah blah goal blah blah competition blah blah personnel blah blah strategy blah blah WIN!" (forehead smack) "So that's it!"
These tomes never impart knowledge you didn't already have -- Simply knowing the principles of football bestows success? Really? All right, then, why do the Detroit Lions stink, Barnes & Noble in Detroit doesn't stock Billick's book? If Joe Torre's Ground Rules For Winners are worth $27.95 in hardcover why have the Yankees ended the season with a loss the past seven years? And why don't the Royals pick up a copy?
No, the best method of finding a useful perspective on CRM in another discipline is to have it hit you across the head like a jilted East German shot-putter with a frying pan. Witness the dent on First Coffee's skull, friends:
This weekend I was reading Hernando de Soto's brilliant 2000 book The Mystery of Capital: Why Capitalism Triumphs In The West And Fails Everywhere Else. Basically, Peruvian economist de Soto finds, it's because the West has a system to guarantee titled property rights, which allows ordinary citizens to translate property value into fungible assets. You'd be shocked, as de Soto and First Coffee were, both by how much capital is dead due to lack of valid titles -- de Soto conservatively estimates that the poor in the Third World and ex-communist nations possess over $9.3 trillion in assets -- and how few nations design property laws allowing them to use that capital to generate value. Property reform is the one indispensable reform to bring the poor into global prosperity.
De Soto's saying that while most countries can survey and map land holdings they fail to enact the sort of property titling laws that allow average citizens to register and integrate their property in a way that, basically, lets them mortgage their house to start a business, when he writes this passage:
The propensity in some countries to squeeze the issues related to property into the departments of mapping and information technology has obscured the real nature of property. Property is not really part of the physical world: its natural habitat is legal and economic. Property is about invisible things, while maps are resemblances of physical things on the ground. Maps capture the physical information of assets but miss the big picture.
Well. Of course I immediately connected that with CRM, and how the propensity of some companies to squeeze the issues related to customer relationship management into the department of information technology has obscured the real nature of customer loyalty. Customer loyalty is not really part of the IT world: its natural habitat is the entire organization. Loyalty is about invisible things, while CRM tech tools are resemblances of customer activity on the ground. Technological tools capture the physical information of customer behavior but miss the big picture.
Okay, as I've shown I'm leery of these sort of bilateral comparisons providing much of a stable foundation for constructing and edifice of "insight," so I simply put a mark by the passage in the book and kept reading. On the very next page I saw this on the failure of well-intentioned government projects to grant titles to current landowners:
Technically driven titling projects tend to degenerate into identification systems for physical stock, outdated Domesday Books or historical relics… Their project budgets are approved by politicians who expect that these new methods will incorporate the poor. Once they realize they do not, the mapping projects get scaled down or terminated.
And I realized, of course, that technically-driven CRM projects tend to degenerate into contact systems for customer interactions, outdated Domesday Books or historical relics, and their project budgets are approved by CEOs who expect that these new methods will incorporate customer loyalty. Once they realize they do not, the CRM projects get scaled down or terminated.
Now this is getting freaky. We're way beyond the shallow "CRM can best be understood in terms of a singles pickup bar on Saturday night" platitudes you can walk through without getting your ankles wet. I kept reading:
These [mapping and surveying] technologies work so well in advanced nations, without the need for much legal and political tinkering, because the tinkering was done more than a hundred years ago. The all-encompassing social contract on property is already firmly in place. When the database systems, geographical information systems, remote sensing, global positioning system, and all the wonderful information technology tools became available during the last thirty years, they could fit neatly into a well-integrated information and legal infrastructure. Thus, the written and geographical representational devices, and facilities for better storage, retrieval and manipulation of information, could be put to good use.
I don't know if Hernando de Soto has ever heard of Customer Relationship Management, but if he hasn't, he'd certainly understand that CRM technologies work so well in customer-focused firms without the need for much organizational and procedural reorientation, because the companywide customer-focusing reorientation was done before they bought the CRM technology. The all-encompassing company focus on customer loyalty is already firmly in place.
So when the CRM systems, customer contact systems, business intelligence, data mining system, and all the wonderful information technology tools became available during the last thirty years, they could fit neatly into a customer-focused company's infrastructure. Thus, the CRM and contact center devices, and warehouses for better storage, retrieval and manipulation of customer information, could be put to good use.
As de Soto, you and I know, CRM technology works well in an organization already customer-facing. It does not work so well when you’re relying on the technology to magically make your organization customer-facing, just as mapping and titling technology does not magically provide people with usable capital unless the rest of the country's laws are in line for that to happen.
The depth and quality of correlation between acquiring property and acquiring customer loyalty is almost eerily striking. Tell me if this line comes from a book explaining the correlation between property law and capital or a book on CRM: "Existing institutions are inclined to favor and protect the status quo. It is a political task to persuade technocracy to make itself over and support change."
Or here, de Soto has provided a template for a Do-It-Yourself CRM or Do-It-Yourself Property Law book, simply fill in the blanks as appropriate:
[Insert title of top authority] intervention is also necessary because _____ organizations… are generally not designed to undertake swift, broad _____ programs. They are usually organized as specialized departments, a structure that makes sense in _____, where only gradual change is necessary because the [name of system] is already functioning for all.
I went through the rest of the book and underlined blocks and blocks of text showing that the same principles de Soto found to be true in multiple countries for turning dead assets into valuable capital are also true in multiple companies for turning dead customer information into valuable customer loyalty. If there were one book I would recommend CRM theorists read, this one would be it.
Because that's what Jesus, Brian Billick and Ernest Shackleford would do, right?