s»tom-ers 2

The New Net CEOBv Chuck Martin

Tfiere are only two kinds ofpeopie in the Net environ-ment: those who get it andthose who don't. That's it. Nogray area.

The good news is thatonce an executive gets it. heor she doesn't go back. It is

essential that managers andemployees believe theirexecutive team gets it.

Getting it means under-standing that the consumeroccupies the center of theNet Future universe: Whenthe consumer speaks, thecompany listens. Leadersmust focus on reorganizing

It takes executive vision tocreate the customer-centeredorganization. The new economydemands bosses who get it.

around their customers.Soon, focus only on the cur-rent customer will be theequivalent of the eariy focuson the Web (a great site, nota total e-strategy)—inade-quate, a mere nod at trans-forming the enterprise. Vision-aries in the next revolutionwill target how efficiently andcompetitively Iheir corpora-tions can mobilize to servecustomers' real-time needs.Rrst, they must know thoseneeds.

To attain superior cus-tomer focus, executives mustrecognize how networkedcommunication affects peo-

_ple and business, redefiningthe way we function at work,at home, and in the market-place. To survive the transfor-mation, business leaders

need to evaluate sevenmajor cybertrends—the

trends that define theultimate in end-to-end electronic busi-

t ness:1-Thecyberecono-my goes MainStreet. New waysof buying andselling have cre-ated a newbreed of onlineconsumer whoexpects faster

delivery, easiertransactions, and

real-time factualinformation. Shopping

from home or w o r k -without leaving a chair—

and experiencing next-daydelivery offers a compellingvalue proposition: It freestime for family, friends, orother pursuits.2-The wired workforce takes

over. Corporate intranets thatinform employees and createvirtual work communities alterthe dynamics of the work-place for both individuals andorganizations. Work can bedone anywhere at any time,forcing companies to reorga-nize around their empoweredworkers (think talented em-ployee as asset). The flow ofinformation changes fromcompany fo employee to cus-tomer to wired customer towired worker to corporate entity.making the employee thenew asset of the enterprise.

Nabisco Food Serviceshas wired its sales force todeliver customer feedback—instantaneously and electron-ically—to corporate man-agers when a new productcampaign is launched. Theconnected leam offers suchdirect and immediateresponse that Nabisco canmodify programs to suit themarket in real time.3-The customer becomes data.Technologies for analyzingand predicting customerbehavior in real time willrequire companies to orga-nize differently, This new Net-version of customer centricityinvolves real-time customerinteraction and better man-agement and use of cus-tomer information.

When a customer makesa search on Thomas CookTravel for a vacation pack-age, he can supply his tele-phone number and instantlyreceive a call from a cus-tomer service representative.The Thomas Cook rep hasinstant access to the sameinformation the potential buy-er is evaluating. Telemarket-

SPECIAL ADVERTISING SECTION

New Economy, New RulesTo survive in an environment of fast, inexpensivecommunication and ubiquitous network access, executivesmust address five key areas of adjustment:

• Capture the hearts and minds of wiredconsumers.Wilh irtstant access to nearly every company and its prod-ucts, consumers will move firmly into the driver's seat inthe Net economy. Miss this trend and the market itselfmay penalize you since another company's products andservices are only a mouse dick away.

• Reorganize distribution mectianisms.The explosion of electronic marketplaces will revolutionizehow companies and suppliers deal with each other. Recog-nize that every industry—including automotive, steel, and railtransport—will align into e-marketplaces.

• Redefine price in the purchase decision.Wore companies will tier customers to reward their best buyerswith better pricing or special incentives. Again, beware thepotential mouse click that intensifies competitive pressures.

• Change corporate cuiture and authority.Networked workers with unlimited access to information maycompare working conditions at other organizations to theirown. Empower employees to help retain talented staffers thatare in short supply, high demand, and expensive to replace.

• Acknowiedge integration of personaland work lives.Anyone can communicate anywhere at any time, erasinglines between work and home. Offer a bit of flexibility lorpersonal business at the office to those staffers who workweekends or on call.

ing becomes inbound ratherthan outbound, with the cus-tomer tdentifying himself asimmediate buyer or prospect.4-The open-book corporationemei es. Enter the era of self-service. Customers can go toDell's Web site to buy a PC,or to Amazon.com for a book,or to Office Depot for sup-plies—even apply to a univer-sity online. The customer isnow considered part of theenterprise.5- Products become commodi-ties. The networked environ-ment allows companies toaggregate supply or demand,creating the opportunity forflexible, real-time pricing. Neteconomics requires reexam-ining a company's valueproposition and pricing tocope with a market environ-ment that changes moment

by moment,6 - Experience communities arise.The collective, networkedexperience and instant, globalcommunications will play agreater role in individual andcorporate decisions. The cus-tomer-focused executive willlook to electronic communi-ties for instant feedback,information, even guidance.Communities can includethose for employees, distribu-tors, business partners, orcustomers.7-Learning moves to real time,all (he time. Companies can'tfind enough talent, leadingthem to create a new genera-tion of empowered and inde-pendent learners. With morethan 500.000 IT jobs availablein the U.S, and Europe alone,companies will likely fill someof them by retraining current

staff. Such efforts will movebeyond time-consuming, stan-dard classroom-style leamingto online instruction—ultimate-ly becoming an ongoing, self-motivated process- Executivesmust drive this change fromthe top.

In a world realizing thesecybertrends, what will thecustomer of the future looklike? The customer of thefuture will be not only the finalconsumer of a company'sgoods, but anyone with aninterest in the success of acompany. These stakehold-ers (their fortunes tied to thecompany) include employees,distributors, suppliers, busi-ness partners, shareholders,and even consumers. Stake-holders want better productswith appropriate price/valuepropositions, delivered in themost efficient manner. Theyultimately want to increasethe value of the providingcompany-

The corporate leader ofthe future must address thisextended enterprise, focusingon every piece in the valuechain, which extends well

cus-tom-ers 2

beyond a current customerset. Unlike e-business initia-tives in the earlier days of thecommercial Internet whencompanies established sepa-rate departments or divisions,often in search of new rev-enue streams, current strate-gies meld e-business intoexisting business, most oftenwith existing management.Gone is the separate exten-sion that interlocked series ofrelationships among cus-tomers, employees, distribu-tors, suppliers, and businesspartners.

How can you connect withthese customers of thefuture? Some companiesforge new relationships withtheir customers and redefinethemselves for the onlineworld. Electronically distribut-ing company brochures andannual reports alone doesn'tsuffice. The Web providesunprecedented opportunitiesfor companies to interactwith traditional customers andto create ongoing dialoguewith new customers. Similar-ly, corporate intranets offerunprecedented opportunities

Mike Brochu, CEOPRIMUS

"In the old economy, organizations were extremelyprocess-centric, and the customer was seen as justanother step in that process. To meet the needs of

new economy, however, businessesmust transform themselves andbecome customer-centric. To achievethis, they first need to offer multipleentry points that provide full access tothe entire organization.

Doing this requires underlyingtechnology that acknowledges thecustomer as an active and informedparticipant in the process. Primusdelivers a complete suite of software

that enables businesses to make rapidly the transitionfrom process-centric to customer-centric, a transitionnecessary for survival,"

SPECIAL ADVERTISING SECTION S11

Executive Prep for the Net FutureGet wired, stay wired, communicate. Here's how:

• Listen to the 24-year-olds.• Leam to use a computer.

Really well.• Surf the Net.• Prepare tor the opposite of what you expect.

Just in case.• Practice saying, 'Let me send you some

information that might help you."• Use e-mail as a primary communications medium• Respond to all communications within 24 hours.• Learn how to filter e-mails automatically.• Clean up and integrate your corporate datahases

to do datamining.• fVlemorize this phrase:

"I've got to go now.I'm having dinner withmy kids." Use it often.

to interact with employees.Information exchanged viaintranet can remain for inter-nal use only, a powerful toolfor treating employees likecustomers.

For optimal interface withthe supplier-distributor-part-ner customer consider thatcustomer a part of the enter-prise. Many companies relyon suppliers, distributors, andpartners to create and trackrecords, even fill out theirown forms. Some organiza-tions are leveraging brick-and-mortar operations (notlong ago considered only lia-bilities) to attract e-partnersor handle inventory and deliv-

focused? In addition toaccounting for cybertrendsand recognizing the breadthof future customers, execu-tives should accomplish threecore tasks:1 - Understand the end-to-endnature of e-business. The sev-en cybertrends are not inde-pendent of one another. Look-ing at each trend in terms ofhow it interacts with the othersreinforces the idea that an e-business Is dramatically morethan the sum of its parts.

2 - Align the organization to lieit together end to end. Becausee-business is so intercon-nected, implementing manyof the changes it requires

© 1999 by Charles L Martin, Jr.Reprinted with permission.

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Sam Reese, CEOMILLER HEIMAN, INC.

"Be accountable for the complete solution you bring to

your customer. Your solution must help your customers

achieve their desired results, even if the solution pack-

age includes products or services that are outside your

scope of product offerings. Results drive business.

You can't iust repackage your prod-

ucts or services to look tike you are

customizing them. You may not change

your products, but you should deliver

unique solutions based on what the

customer requires every single time.

To be customer-centric, you must

incorporate customer perspective in

everything, not just products and

services, but everything Internal. Anything that touches

the customer shouid be considered your product. I'm

amazed when I see companies that consider themseives

to be very customer-centric but they have a credit form

that is totally intrusive or a biiling or collection process

that is very inconvenient. Everything that touches the

customer shouid have a customer-centric feel."

ery for e-orders. CVS. a chainof drugstores, purchased theonline pharmaceutical mer-chant Soma to offer cus-tomers access to productsand prescriptions both via theNet and in stores. When acustomer orders online fromCircuit City, the customer isdirected to the nearest storeto pick up goods.

Thanks to total, end-to-end connectivity to organiza-tions, all customers—fromfirst-time buyers to long-timeclients—can indicate desiresregarding products and ser-vices, future needs andwants, and likes and dislikes,in real time. In the Net Future.consumption can drive con-cept. Leaders who tap intoconnected consumers forreal-time feedback can useresponses to help conceive,create, test, and enhancenew products and services.

So how does an executivebecome more customer

may seem overwhelming.Learning from mistakesbased on rapid feedbackbecomes the right model inthis environment. Creating acustomer-focused enterpriseis a iourney.3 - Build around the customer.Connectivity allows customersto drive companies. Truevisionaries will focus on serv-ing the entire customer s e t -customers, employees, busi-ness partners, suppliers, dis-tributors, shareholders. Howwell organizations serve andconnect with these stakehold-ers will determine how wellthey succeed at business. •

Chuck Martin is chairman andCEO of The Net Future Institute, aU.S.-based think tank exploringthe future of electronic businessand the Internet. He is the authorof Net Future (f\/JcGraw-Hill,1999) and The Digital Estate(McGraw-Hill, 1996) and a for-mer vice president of IBM.

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