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When the CEO loses touch with customers, trouble follows

“Although many companies like to use scientific research methods like surveys and focus groups to try to understand consumer needs, the best CEOs don’t rely on clinical data alone. They know that if they become removed from the action, they may miss important changes and opportunities in the marketplace. Many of them make special efforts to observe and talk directly with the people who use their products and services.

…Many businesses run into trouble because the leaders lose touch with consumers.”

Ram Charan, ‘What The CEO Wants You To Know’ (2001)

Ram Charan is America’s renowned management consultant whose thoughts have featured many times in this column (and will continue to do so). From his privileged position at the shoulder of some the world’s leading CEOs, he has generated some unique insights. His readable and pithy books are worth picking up.

Here he is pointing out a problem that is more common than you might think: the tendency for business leaders to distance themselves from their core constituents – customers. Sounds stupid, and it is – but it keeps happening.

One of the reasons is that CEOs belong to a certain social class, and having settled into their regular routine of golf tournaments, cocktail circuits, foreign travel and high-profile events, they rapidly lose touch with their more rustic customers. They simply find it difficult to maintain authentic conversations with unschooled and ill-shod bumpkins. That attitude is all too visible in Kenya. It is also unforgivable. If you study the various examples of corporate decline in this country over the past decade or two, you will see that the crisis is very often caused by a growing distance between business leader and consumer.

In many cases, it is not that CEOs get no customer information at all. Rather, they rely on surveys and focus group results, and on the word of their customer-facing underlings. Statistical surveys do often yield much insight, but the great business leaders always construct their own narratives about customers. Nothing beats the rich insights gained by simply having face-to-face, informal conversations with customers. What customers love and hate about a company and its products is best gleaned from the customers themselves – directly, without intermediaries.

As for relying on your sales and marketing staff for customer knowledge – a fool’s errand, if ever there was one. All you will hear are the good things. The horror stories will stay hidden, until the crisis becomes apparent and customers are already gone.

Every leader I know in Kenya who has started talking to customers again has come back to make far-reaching changes in the company. So if you are out of touch, reconnect before you are out of work.

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