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Consumers Wield the Big Stick Over Companies

Newsies Movie PosterRemember the Disney movie “Newsies” where the paper boys from all over New York and Brooklyn team up and strike against the big-shot newspapermen (Hearst & Pulitzer) to protest the 10 cent rate increase?

Well, consumers are poised to do the same thing to major companies according to a McKinsey survey of 391 CEOs conducted earlier this year. The survey asked, “Which of the following stakeholder groups have/will have greater impact on the way companies manage societal expectations?” Fascinatingly, employees currently have the greatest impact, but CEOs predict they will be overruled by consumers in the next 5 years.

Are you prepared for this dramatic change? Are you listening to your customers sufficiently well to learn where they want you to go? You might just need a Chief Customer Officer to help guide the way.

95% of the CEOs in the survey said that society has greater expectations for companies in their public responsibilities and more than 1/2 said these expectations will increase during the next five years. The chart below shows some interesting insights.

stakeholder-impact-on-business.jpg

Consumers are expected to rise dramatically in influence during the next five years, dwarfing Employees as the reigning “big stick wielder”. Surprisingly, CEOs believe that Governments and Boards will give up clout. Presently, the investment community has no metrics with which to measure a company’s social responsibility and so holds little sway, but as metrics improve, the investment community’s influence is expected to grow. I found it interesting that Organized labor’s influence was low and wasn’t expected to change.

So what does this tell us? It tells us that customers’ opinions are becoming increasingly important in the overall strategy of our businesses. The question is, are you listening? Do you know what social concerns are driving your customers? Are you prepared to adjust your strategy to adapt to the decision-making criteria of your most profitable customers?

As a CEO, you have your hands full in managing investor and shareholder demands. You’ve delegated the financial urgencies to your CFO, your operational urgencies to your COO, revenue generation imperatives to your CMO and VP Sales. But who is responsible for the customer imperative? Whose job is it to ensure that this trend we’re discussing isn’t missed with potentially disastrous side effects? Depending on your organization and goals, you might need a Chief Customer Officer (CCO) to bring balance to the decision-making process and advocate for the customer–to ensure your organization remains relevant and profitable in the face of changing customer demands. For more information on the CCO, visit predictiveconsulting.com for more information about the four types of CCO and how they can help prepare your business to profit from changing customer needs, wants, and desires.