companies buy innovation. Therefore, executive customers can play a valuable role in the M&A process as well. Oracle, for example, has acquired more than 60 companies to build out their offerings since 2005. Executive customers helped the company identify solution gaps and even suggested acquisition targets that weren’t on its radar. “Whether we develop it or acquire innovation, it must be relevant to the customer’s world,” says Jeb Dasteel. “Our executive customers make sure we invest properly.”
HCL Technologies has tapped executive customers to drive its efforts to create an innovative new business model. “Our executive customers have not only helped us create innovative products and services, but even more importantly, they have driven the transformation of our business model,” says Anubhav Saxena, global vice president of marketing and strategy of HCL’s ISD unit. “With so many directions and paths we could pursue, the clarity and direction our executive customers have provided is unmatched. Redefinition of our value proposition on Business Aligned IT, conceptualization and eventual co-development of HCL’s Gold Standard, and the reinforcement of our onshore/right-shore Global Delivery Model investments including brand enhancing recommendations are some examples.”
The End Result: SPPG
The first five benefits of engaging executive customers—market and leadership team alignment, strategic insight, marketing direction, increased sales, and relevant innovation—produce sustainable, predictable, profitable growth. By listening to these decision makers and investing resources in areas that are viable and important to them, you can avoid wasting time, energy, and money in areas where there is little or no business value, and capture the sixth and final benefit of The B2B Executive Playbook: SPPG.
The value of executive customers—one of the most underdeveloped resources in the B2B sector—is difficult to overstate. But since the most credible advice and recommendations come from peers, don’t take my word for it. Listen to Intesource’s CEO Tom Webster: “We opened the company kimono to our executive customers…the good, the bad, and the ugly. That was very hard, but the relationships and the trust that were established as a result are beyond description. Our executive customers not only assisted in the design of our next generation of solutions, marketing plans, sales training, customer support programs, and pricing models, they also helped design our future.”
The facts support Webster’s claim: within two years of launching their executive customer initiative, Intesource, which had been on the brink of closing its doors, was recording revenue growth and margins that were well above industry averages.
The B2B Executive Playbook
So, we’ve studied the B2B game and now know why and how well-developed relationships with executive customers drive SPPG. What’s next? We need a proven strategy and an approach for tapping into this powerful source of insight and growth—a playbook for B2B executives.
The B2B Executive Playbook has been developed with more than 20 years experience assisting B2B companies as they adopt, implement, and manage executive customer programs. We’ve seen it work time and again for the companies featured in these pages, including Oracle, HCL, Intesource, Springer Science+Business Media, Intel, Autodesk, Harris Broadcast, Crown Partners, and Wells Fargo, as well as many others. This playbook is composed of a four-step process for developing executive customer relationships in a way that ensures a company can capture all six benefits.
The four steps are not a typical process that must be executed in its entirety to produce some kind of output. Instead, they are a programmatic approach that has both an incremental and a cumulative effect on corporate performance. As B2B companies successfully implement the first step in the process, their revenue begins to grow and their profitability increases. With each new step, these metrics improve—profitable growth becomes sustainable and predictable (see Exhibit 3-3).
Exhibit 3-3: The Cumulative Effect of The B2B Executive Playbook
Step 1: Engage
When B2B leaders have a major decision to make, especially regarding risk-laden issues such as fundamental changes in business models, core capabilities, or product/service portfolios, they typically bring together internal players who can provide insight and perspective. But how often do these same leaders include their company’s executive customers in their deliberations? These are the customers who hold the fate of the company in their hands, and they drive the markets on which B2B companies depend. These are the customers who vote with their dollars about the viability and relevance of innovation, and the B2B companies with whom they will do business. When you think of executive customers in these terms, the only real surprise is that any B2B leader would leave them out of important decisions.
That is why the first step in The B2B Executive Playbook is to engage executive customers and connect them to the leadership team of your company. The most effective way to accomplish this is to create a market collective that is composed of the key decision makers in the most important companies in your customer base. Because this market collective is a vital source of alignment and information for the leadership team of any B2B company, this is the foundational element of The B2B Executive Playbook—it is the element that provides the engine and initial trajectory of SPPG.
Market Collective
A group of decision makers or executive customers drawn from a B2B company’s key accounts in terms of strategic importance and revenue contribution.
When done correctly, the creation of a market collective, and its systematic connection to the leadership team of your company, becomes the basis on which decisions are made regarding strategy, business model innovation, planning, marketing, innovation and development, acquisitions, and sales and service. This step in the Playbook addresses a multitude of common problems that plague decision making within B2B companies, including:
An overly intense focus on internal considerations or end users
Reactive versus proactive strategic thinking
Risk aversion and resistance to change
A poor grasp of the marketplace and other externalities, including globalization, niche competition, and technological change
Internal conflict and lack of support within the leadership team
The Engage step is the first step in the process of addressing and fixing these and many related issues. This step is discussed in detail in Chapter 4.
Step 2: Plan
Strategy guru Michael Porter describes strategy as simply “what your firm will and will not do.” That sounds straightforward, but B2B leadership teams that unanimously agree on what their companies should and shouldn’t do are not easy to find. Much more commonly, the strategic planning process in B2B companies is overly complex and too far removed from the marketplace. And in the end, it produces a plan in which the company’s leaders have little or no confidence. Too often, the strategic part of the process gets shortchanged for the planning part. Strategy meetings become sales planning and budgeting sessions, or they get hung up on short-term decision-making, none of which provide long-term direction, much less a plan for sustainable, predictable, profitable growth. It’s no wonder that leadership surveys conducted by McKinsey & Co. have consistently found that 70 percent of global executives are dissatisfied with their strategic planning process.
