2020

PROGRESS REPORT

CULTURE AND CUSTOMERS

New Kids on the Block

Organizations adding two new roles to the traditional C-suite

Undoubtedly, you’ve heard of a chief executive officer, chief financial officer and chief operations officer. But what about a chief culture officer or a chief customer officer?

As culture and customers are increasingly emphasized in today’s workplace, a growing number of organizations, such as Zappos and Thomson Reuters, are adding these positions to their C-suites.

But what do they do exactly? Can they make a difference? Or are these positions just a reaction to trendy buzzwords being tossed around these days?

Chief culture officer

As the name suggests, the job of the chief culture officer is to manage an organization’s culture. As an organization grows and evolves—through a merger or acquisition, or a period of growth, for example—so does its culture. And like any other function in an organization, someone must be responsible for it.

The chief culture officer develops and cultivates the organization’s culture to ensure it stays aligned with its business strategy, and to ensure the organization doesn’t lose sight of its business strategy during times of change. According to culture expert Debbie Robins, that’s no small task.

"The building, managing and merging of cultures has become a full-time job in the new economy. These demands now exceed the capacities of most HR divisions and call for a new kind of specialist," she said.1

This means that an organization that is serious about improving or maintaining its culture should have someone focusing on it full time.

"If a company is really focused on building culture as part of [what] they are, they really need someone who thinks about it every single day," culture consultant Mallory Maske said. "What oftentimes happens in a standard HR structure is the HR group wants to do all the cultural things, but the day-to-day [demands] get in the way a lot."2

Some chief culture officers report to the CEO, but as Maske suggested, many work in the HR department to ensure all HR functions, such as staffing and teambuilding, align with the organization’s culture.

Take Google, for example-—one of the most well-known organizations to add a chief culture officer. Stacy Sullivan, head of HR at Google, was given the title of chief culture officer in 2006, and it’s her job to protect Google’s innovative culture.

"Google’s secret sauce is the people we hire. Hiring the right people for our culture is more important than hiring people who are highly specialized or skilled," said Sullivan. "We really want to make sure people coming in are genuine, have humility, won’t be overly concerned about their title or what they’re going to be doing right when they get here."3

Hiring the right people to cultivate the right culture is crucial to an organization’s success. Charles A. O’Reilly III, a professor of management at the Stanford Graduate School of Business, said that an organization’s culture is tied to its business outcomes, such as its reputation, performance and employee satisfaction.

"When managers think about culture in organizations, they should be sensitive to the fact that what they’re really trying to do is create norms and expectations among employees around this notion of adaptability and to make sure those norms are widely shared," O’Reilly said.4

"The key to long-term success is to have a culture that’s aligned with your strategy but also have embedded in it norms that promote adaptability," O’Reilly added.

When an organization’s culture runs awry, it can mean devastating things for the business—and its customers. One such example is Kobe Steel, Japan’s third-largest steel maker. The organization’s top management chose to ignore the fact that its quality data was being falsified for at least a decade. When the scandal finally came to light in 2017, hundreds of Kobe Steel’s customers realized they had unknowingly been using defective materials in their products.

A former employee of Kobe Steel said, "The corporate culture was to look the other way even while you saw what was going on … [Management was] supposed to be instilling a culture that paid attention when improprieties were discovered. In the end, they didn’t create such a corporate culture."5

Chief customer officer

Like the chief culture officer, the role of the chief customer officer is what you would imagine—this person advocates for the organization’s customers. The chief customer officer is responsible for knowing everything there is to know about the organization’s customers and their needs and wants, and to disseminate that information throughout the organization.

According to research performed by Russell Reynolds Associates, an executive search firm based in New York, only 39% of organizations have at least one senior-level executive devoted to the customer experience.6 But that’s not acceptable in today’s world. More consumers judge an organization’s worth not only on the quality of its products and services, but also on how it treats it customers. That means if two organizations offer comparable products, consumers are going to opt for the organization that offers a better customer experience.

A customer survey issued by research firm McKinsey Global Institute revealed that it’s not enough to measure a customer’s satisfaction with his or her individual interactions with an organization—organizations must think big-picture.

"Our most recent customer-experience survey of some 27,000 American consumers across 14 different industries found that effective customer journeys are more important: Measuring satisfaction on customer journeys is 30% more predictive of overall customer satisfaction than measuring happiness for each individual interaction.

"In addition, maximizing satisfaction with customer journeys has the potential not only to increase customer satisfaction by 20% but also to lift revenue by up to 15% while lowering the cost of serving customers by as much as 20%."7

Hiring a chief customer officer allows an organization to provide exceptional customer service because there is an employee dedicated to ensuring customer needs are always being met.

Better together

Working together, the chief culture officer and the chief customer officer can create an organizational culture that’s focused on customers and employees. According to author Blake Morgan, culture is at the center of the customer experience.

"A culture that encourages, celebrates, and supports employees naturally leads to being centered on customers and offering great customer experiences … Most businesses open their doors with founders who are wide-eyed and bushy tailed about what they have to offer the world. The company grows, the workload increases, and years pass until the enthusiastic founder who feels ownership over the customer experience is replaced by employees who can’t wait until their next break or vacation."8

By building a strong corporate culture, organizations are setting themselves up for future successes, Morgan said.

"[Culture] plays such a vital role in the reputation, growth, and success of a company that entire C-level positions are dedicated to shaping it, he adds. With their chief responsibilities to build culture and customer loyalty, chief culture officers and chief customer officers can fight apathy by building a sustainable culture where everyone feels valued. Culture translates to customer experience, which translates to growth and increased revenue."9

—compiled by Lindsay Dal Porto, assistant editor

References

  1. Kathy Gurchiek, "Chief Culture Officers Fill a Growing Need," Society for Human Resource Management, July 13, 2015, https://tinyurl.com/yb3awu5s.
  2. Kathy Gurchiek, "Culture Officers Protect, Maintain Essence of Company," Society for Human Resource Management, Dec. 6, 2013, https://tinyurl.com/yacwsnvf.
  3. Annelle Tayao-Juego, "Google’s Secret Sauce? Its People," Inquirer, Oct. 31, 2016, https://tinyurl.com/yauxwonw.
  4. Gurchiek, "Chief Culture Officers Fill a Growing Need," see reference 1.
  5. Taro Fuse, "Scandal-Hit Kobe Steel Has a ‘Look the Other Way’ Culture, They Say in Hometown," Nov. 4, 2017, https://tinyurl.com/ybhz6s5z.
  6. Chris Davis, Alex Kazaks and Alfonso Pulido, "Why Your Company Needs a Chief Customer Officer," Forbes, Oct. 12, 2016, https://tinyurl.com/y9kug88s.
  7. Alfonso Pulido, Dorian Stone and John Strevel, "The Three Cs of Customer Satisfaction: Consistency, Consistency, Consistency," McKinsey & Company, March 2014, https://tinyurl.com/y9co8m57.
  8. Blake Morgan, "Chief Culture Officer and Chief Customer Officer: A Winning Combination," Forbes, Jan. 16, 2018, https://tinyurl.com/yax7lw4d.
  9. Ibid.

AUTOMOTIVE

Netherlands Most Ready for Autonomous Vehicles

The Netherlands, Singapore and the United States are the countries most prepared for the future of autonomous transportation, according to new research by KMPG.

According to the study, titled "The 2018 Autonomous Vehicles Readiness Index," the Netherlands ranks No. 1 because of its population’s widespread acceptance of electric cars, a high density of charging stations, a robust telecommunications network—vital for directing autonomous vehicles (AV)—and large-scale AV road tests planned.

For the report, researchers evaluated 20 countries and the availability of electric vehicle charging stations, AV technology R&D, the population's acceptance of the technology and the country’s regulatory environments.

"The mobility freedom provided by AVs will have a transformational impact on society," said Richard Threlfall, global head of infrastructure at KMPG International. "With the tremendous opportunity, though, comes significant challenges that have to be addressed for countries to be able to realize the benefits of AVs."

To access the 60-page report, visit https://tinyurl.com/autonomous-veh-study.


Getting to Know …

Mark L. Neal

Current position: Vice president of quality for the urology and critical care business unit in Becton Dickinson’s Interventional Segment.

Education: Bachelor of science degree in nuclear engineering from Texas A&M University in College Station.

What was your introduction to quality? After I left the U.S. Army in 1983, I worked at Texas Instruments Defense Group as a software quality engineer working on classified programs. After eight years, I realized that the quality profession allows you to work on all aspects of the product life cycle. It was then I decided to be a quality lifer.

Do you have a mentor who has made a difference in your career? Cassie Stern, then director of quality at Abbott Diagnostics Division. Stern helped me transition from a military leadership style to one more aligned with high-tech environments. Jeff Fecho, then global vice president of quality at St. Jude Medical, taught me to have patience for change and to "plant seeds" so when the organization was ready for the change, those ideas were better accepted.

What’s the best career advice you’ve received? After starting a new job, reorganize the team to make the structure yours, thereby making a visible change that things will be different and unfreezing team members from their prior entrenchments.

Any previous jobs you consider noteworthy? During college, I spent a summer as a sewer inspector in Houston and learned that no job is beneath me and all jobs fulfill a need to contribute to society. Never disparage someone’s job.

Are you active in ASQ? I served as the Software Division’s region councilor for southeast United States and Puerto Rico for five years. I also served as the division’s chair in 2009, 2011, 2012 and 2013, and vice chair for the 2014 ASQ International Conference on Software Quality.

Have you had anything published? I’ve had several articles published in Texas Instruments Technical Journal and Institute of Electrical and Electronics Engineers (IEEE) Software Magazine. I’ve also presented many technical papers on quality and engineering topics at the North Texas Quality Expo, Project Management Institute International Conference, Management Roundtable, Software Process Improvement Workshop, Dallas Chapter IEEE Reliability Society and the International Conference on Software Quality.

Any recent honors or awards? Elected to ASQ’s 2017 class of fellows. I’m also included in Who’s Who in the World, Who’s Who in the South and Southwest, and Worldwide Executives Who’s Who.

Personal: Married to Cheryl Neal.

What books are you currently reading? My favorite author is Larry Niven—and especially the Ringworld series of science fiction novels.

Quality quote: Product quality is in the eyes of the customer. It is a result of quality-related principles applied in all design, manufacturing, distribution and servicing activities.


ASQ

2018 Class of Fellows Named

The ASQ Board of Directors has named three fellows who join nearly 650 active fellows. Members of the 2018 class of ASQ fellows are:

  • José Carlos Flores-Molina, Instituto Para La Calidad—PUCP, Lima, Peru.
  • Alka Jarvis, Cisco Systems, San Jose, CA.
  • Abhijit Sengupta, Washington, D.C.

The new fellows will be honored at a ceremony prior to ASQ’s World Conference on Quality and Improvement being held April 30 to May 2 in Seattle.


APQC

New APQC Officers Chosen

Lisa Higgins has been named CEO and president of American Productivity and Quality Center (APQC), and Carla O’Dell is now the organization’s chairman of the board. Higgins was named APQC president in 2012 and COO in 2000. O’Dell served as APQC CEO from 2012 to 2017, president from 1994 to 2012, and in other leadership roles since 1978. For more on the appointments, https://tinyurl.com/apqc-appoint.


BALDRIGE

Baldrige Officers Announced

The board of directors of the foundation for the Malcolm Baldrige National Quality Award announced its officers for 2018. They are:

  • Chair: P. George Benson, retired president of College of Charleston in South Carolina.
  • Vice chair: Kathryn Eggleston, president of Richland College in Dallas.
  • Secretary: Paul W. Worstell, retired president of PRO-TEC Coating.
  • Treasurer: Frank Fusco, retired executive director, South Carolina State Government.
  • Immediate past chair: Debbie J. Collard, retired director of program management, integration and development, Boeing.

For information on the officers’ backgrounds, visit https://tinyurl.com/baldrige-officers.


New @ ASQ

Two ASQ journals—Quality Management Journal (QMJ) and the Journal of Quality Technology (JQT)— are now free to ASQ full, senior and fellow members. QMJ’s most recent edition focuses on research in healthcare quality management. Access that journal by visiting http://asq.org/pub/qmj/index.html. JQT’s most recent edition celebrates its 50th anniversary. Later this year, the journal is planning special issues focused on reliability and maintenance modeling with big data, quality engineering in advanced manufacturing and statistical process control for big data streams. Visit JQT at http://asq.org/pub/jqt/index.html.


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