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CEOs Are Spending More Quality Time With Their Customers WSJ

Sent this to one of the CEOs running a company I’m on Board of ..  LESSON:  You have to touch the customer!


CEOs Are Spending More Quality Time With Their Customers WSJ May 14, 2007; Page B1

When Intel made a bid to become the microprocessor supplier for Apple’s new Apple TV, Chief Executive Paul Otellini told his top engineers they needed to make some swift design changes.

Intel’s microprocessors, which the company had begun supplying for Apple computers in 2005, met performance specifications but their traditional packaging had to be thinner and smaller to fit Apple’s small set-top box that connects TV sets to a computer or the Web. He heard grumblings that this change wasn’t possible — at least not anytime soon — but Mr. Otellini pushed ahead. "Instead of saying no, we can’t, let’s say yes and figure out how," he recalls telling his senior team members. He won them over and soon had a new packaging design to show Apple, which chose Intel as its supplier.

It was a lesson in change and in how to approach customers, he says. "We’re adjusting and tailoring products for them and moving much more quickly," explains Mr. Otellini, who came up through the sales and marketing ranks. Top executives like Mr. Otellini find they are working more closely than ever with their customers, and listening and responding to their requests for product customization or service and training. They are becoming involved even in the nitty-gritty of contract negotiations. "Ten years ago, a sales executive would have given a pitch, but today big customers want the CEO’s commitment that if they buy from you, you’re forming a partnership with them and will deliver exactly what you promised," says Ed Peters, chief executive of OpenConnect, a Dallas company that makes software that uncovers business-process inefficiencies. "And if you don’t, your failure will be broadcast on the Internet and quash possible deals with other customers."

Mr. Peters says he spends at least 60% of his time on the road meeting with customers. Last week, he sat in on a sales presentation with a large global customer. His managers knew the client’s business processes inside and out. But his customer wanted to hear from him how they would save on costs. Next, he’ll meet with the client’s top executives to give them more information. Having the CEO make a "ceremonial visit" to only the biggest customers to tell them, "You’re important to us," isn’t cutting it anymore, says Kevin Coyne, a Harvard Business School professor. "They’re getting substantively involved in the biggest deals, showing up for key parts of a negotiation," he says. And they’re following up to make sure employees deliver what they’ve promised. At a time of product proliferation, they’re thinking about customers around the globe, he adds.

Nike CEO Mark Parker recently met in Shanghai with 50 Chinese artists, fashion and industrial designers, and photographers who gave him "insights I wouldn’t get reading an article about China," he says. "The message that came through was they want their own voice" and were concerned about being overwhelmed by Western products, he says.

He hopes Nike’s concept of personalization appeals to them. The company has Web sites that allow anyone to customize a pair of shoes with different colors, trims or team names.

"I enjoy connecting with people" who influence the taste and cultural trends, adds Mr. Parker, who was named CEO last year. He says it is critical for all business leaders to connect with customers. Clients today, he says, are "highly individualized, want products that excite them — and have more choices than ever."

For Mr. Parker and other CEOs, the must-see list is growing in number and variety. Nike has long used team sponsorships and star athlete endorsements to market its products and sought advice from athletes for its designs. But he also spends time with musicians, graffiti artists and other creative talent.

"I meet regularly with our biggest retail customers but I also go off the beaten path where I can stimulate the right side of my brain — and discover new tastes in music, fashion, cuisine," he says.

At Sun Microsystems, Scott McNealy maintains a list of 50 large customers. His relationships with some of them have spanned his whole tenure at the company he founded, although he is now chairman, not CEO. "I have 25-year relationships with a lot of these people," he says.

Since stepping down as CEO last year, he has created a new job for himself circling the globe to keep in touch with his customers. Just this past Saturday, he had plans to fly to Japan to meet with clients, and to do the same in India and Germany before returning to the U.S. He estimates he does about eight or 10 events each day when he’s traveling: scheduling lunch or dinner with scores of people, plus some one-on-one conversations with others. Company CEO Jonathan Schwartz gets reports daily from Mr. McNealy about what happens in those meetings. Even so, Mr. Schwartz also spends time with the customers. "But unlike Jonathan, I don’t have 15 direct reports who each want a piece of my mind, and I don’t have to come back jet-lagged and run a staff meeting," says Mr. McNealy.

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