Business Information Officer

Published in: IPA Bulletin, May/June 2003

A Position & Responsibility Whose Time Is Now

There are two strategic information streams that every company needs, yet tends to overlook and neglect --- until it's too late. Content from these two streams of information can contribute to practically every important decision a company makes, regardless of the organization's size, location, or market position. And without timely information from these two performance areas, any organization in our industry is doomed to eventual trouble.

As a relevant sidebar, there appears to be growing awareness in the upper quartiles of our industry that company size no longer insulates or protects an organization from neglecting these strategic customer and market issues.

To the point, it's the rare organization, regardless of size or performance, who has at least one person responsible for systematically reporting:

• What customers experience and think of the company's performance (plus customers' changing needs).
• Marketplace changes --- such as those involving competitors, target customer and prospect markets and technologies --- which can potentially have an impact on the company's future competitive position, and performance.

These strategic streams of information, relating to customer feedback and marketplace conditions, are central to each organization's future performance (regardless of organization size). Yet, it's the rare organization that tracks these and related issues for not only measuring changing competitive conditions, but also for recognizing and seizing opportunities.

Let's look at a few details.

Current Customer Feedback and Opportunities

Organizations tend to look at their monthly or quarterly top line, and then their bottom line. If those numbers look acceptable, or not too ugly, there's often a tendency to tone-down the analysis and work on "more urgent, production-oriented needs." In other words, there's a tendency not to pursue asking, "Why?"

Yet, there are always "trails of tell-tale symptoms" when an organization's performance story "turns dark."

Useful customer feedback occurs from literally a litany of sources: (a) unusual pricing pressures, (b) low estimating hit-ratios, (c) changing gross margins (or value-added percentages), (d) changes in services used, (e) erratic patterns of purchases, (f) frequency (and size) of credits issued, (g) accounts' lack of purchases and quoting activity, (h) lack of follow-up from a lack of timely sales reps' itineraries and call reports, (i) delayed payments of bills from solvent accounts (often representing unresolved disputes) --- there's almost always ongoing feedback to be tracked and analyzed.

And in our opinion, the average graphic arts supplier is not fully aware of elevated expectations and market pressures currently experienced by customers' buyers.

Qualified Customer Feedback

Recent customer surveys are indicating profound polarization in buyers of the perceived value of their suppliers. While sales reps tend not to overly-pursue customers who are at least sometimes sending work to the company, those same buyers are silently working to consolidate their suppliers, and can voice anger and contempt with a supplier contact person who is uninformed, has little to offer in terms of useful information, and doesn't know much about the buyer's business environment.

On behalf of a client, we recently were asked to review a prospectus from an anxious digital-graphic arts company who's seeking either a buyer or a merger and acquisition partner. Their financial stability is regarded as shaky, with troubling recent financial performance. But the one key of information that caused our client to "shove the opportunity back" was the all but obscure fact that there had been well over a 35 percent customer attrition rate in each of the last three years.

The question I chewed-on was, "How could senior management allow this condition to go on for three and a half years --- non-stop --- but for the fact that no one was watching and reporting on customer attrition, (implied) employee attrition, and the incredible number of customers who, apparently from the sales records, only bought once or twice."

A credible customer survey in any of those last three years would have doubtlessly uncovered disenchanted buyers, unresolved issues, and given a "compass" to urgent customer issues needing attention --- not only to senior management but also to the entire organization.

Other examples of related issues to systematically schedule and report include the frequency (or infrequency) of visits by senior management to major customers and the systematic implementation of periodic business reviews, with subsequent, documented follow-up.

Why is it that we can have a log and schedule for valuable equipment maintenance but don't have a record or anyone reporting customer contacts, customer performance, and written plans for account development?

Changes, Competitors and Customer Markets

As an overview, customer markets and individual target accounts are experiencing change at least as rapidly as graphic arts organizations. Doesn't it seem worthwhile to know one's top five or ten customers' priorities, goals, and performance objectives?

Doesn't it make profound sense that we should know what these critical accounts are planning to accomplish, how their customers' markets are changing, and how we might use our technologies and capabilities to support their success?

Historically, it appears the average graphic communication company was willing to allow demand growth to lead its development. But in today's market of buyers' consolidating suppliers, and changing directions with unnerving frequency, why is it that the last one to know that their services are no longer needed is the current supplier?

Most graphic communication organizations have at least two or three customer markets that represent a disproportionate part of their revenue base. To think about what it would mean to lose a significant part of that business requires a thought process that's almost too unsettling to engage. And to unnecessarily compound the risks incurred, we tend to measure company performance and stability in historical terms, such as last quarter's sales, or last quarter's pretax profits, instead of "what are these customers' plans for the coming six to nine months?"

INSERT IMAGE

An organization should have one person responsible for systematically reporting on what customers experience and think of the company 's performance as well as analyzing customers' changing needs. This person --- the Business Information Officer --- would also report on marketplace changes involving competitors, target customers and prospect markets, and technologies that can potentially have an impact on the company's future competitive position and performance.

Additionally, few companies send their senior managers out to find operations who exceed theirs in manufacturing cost performance. However, isn't this what they should be doing if staying ahead of the competitive curve is what those individuals should have as part of their responsibility that stretches into the future for creating a more secure and profitable company?

Summary

Someone in each organization should be pursuing answers to the following questions: Who has the best customer education programs? Who has the best sales team education programs? Whose estimators are using information to create profound performance between sales, suppliers, and manufacturing for where a company wants to go? Who has the best electronic pre-press, mailing, storage and fulfillment, and customer information systems?

Who has the best quarterly performance review system, for constantly improving company performance? Who conducts the best periodic business reviews? Who does the best job of managing suppliers for maximum overall performance? And who does the best job of communicating to their customers on an ongoing basis what they're capable of producing, and managing?

Answers to these and similar questions call for a change in corporate and industry mindset that focuses on managing information in a profound and meaningful way for creating and sustaining competitive performance --- and building value with customers.

Having the information is one thing. Knowing what to do with it is yet another. And knowing how to both keep useful information coming and distributed --- with accountable follow-up --- is a new and constant challenge.

Organizations who see the depth of this proposition I believe will not be able to ignore the ongoing opportunity it represents.

We've heard for several years from those who suggest a "Director of Technology." But if we're customer and business development focused, I believe we should first and foremost require a Business Information Officer, whose contributions never stop challenging the organization with opportunities to improve the value we create --- both for the customer as well as the company.

Position Description

Title: Business Information Officer

Reports to: President

Supervises: No one (or one administrative assistant)

Updated: Every six months, in coordination with semi-annual performance review.

General Responsibilities: Works diligently and systematically to provide senior management and department managers with competitive and customer information for enhancing company direction, improving performance, and revealing new opportunities. Develops industry contacts for measuring and reporting competitive conditions.

Specific Duties:

1. Systematically provides department heads with customer-specific feedback and performance indices for improving customer performance. Examples include testimonials, customer contact logs, estimating logs, supplier feedback, internally generated production and pre-production opportunities, and (potential) customer contributions to the company.

2. Works to provide business development and customer contact personnel with useful customer and customer-market information for improving customer performance and working relationships, and resulting new business.

3. Facilitates, records, and manages most external and internal company communications that relate to business performance and customer development. This includes periodic business reviews, and customer and prospect research.

4. Systematically reports on target customer market changes, and changing opportunities and trends in those markets.

5. Systematically reports on key competitors, opportunities to improve internal performance, and new applications for both current and new technologies.

6. Systematically reports key performance indices and opportunities to improve performance.

7. Constantly works to develop a network of useful information sources --- including personal, industry and customer-specific, technical, and institutional.