OUR POINTS OF VIEW

Why Your Organization Needs a CXO More Than a CFO - by David Grasfield

Nobody questions the need and importance of a Chief Financial Officer (CFO) these days. But when they started to appear and proliferate in the economically tumultuous 1960’s and ‘70s, I am sure many viewed them as an over-specialized fad.

In the flurry of hype that swirls around the “Experience Economy” today, it is tempting to see the emerging role of Chief Experience Officer (CXO) in the same light. But it would be a mistake to miss the critical value that a good CXO – like a good CFO – brings to any leadership team. We just need to focus on how – and when – each adds enormous value to their organizations. In that regard, they’re surprisingly similar.

CFOs remain an essential part on most leadership teams today because they play a critical role in 1) defining optimal structure on the ‘front-end’ of any organization (whether that’s an entrepreneurial start-up seeking seed money in its earliest days or the latest transformation of a century-old banking giant recapitalizing due to regulatory and market change), and 2) measuring results on the ‘back-end’ to ensure follow-through, execution, results (whether that’s customer acquisition or capital efficiency). When they do that effectively, everyone in the ‘middle’ of the organization has the structure, direction, and metrics to align their diverse efforts for optimal outcomes, no matter what it is the organization exists to deliver.

And that is where the true value of a CXO shines. Beyond the hype of the Experience Economy, there is profound truth in the recent shift from discrete company-defined ‘products’ and ‘services’ to fluid and personalized customer-defined value. And the role that experience plays in creating and delivering that value to disparate current – and potential – customers continues to grow exponentially in this age of digital disruption, ubiquitous access and connectivity, social media, and artificial intelligence-driven machine learning.

But who truly represents the customer in today’s organizations? The good CXO – like the good CFO – is essential to understanding and defining the ‘front end’ of an organization’s value proposition. Who do you (or should you) seek to serve? What do they value? How can (and should) you deliver against that need? And how can you do it profitably – and defensibly – in a fast-changing competitive environment? This is the essence of strategy. And it is the essence of true customer-centricity … much talked-about (and ever-present in corporate Values statements), but surprisingly scarce in the marketplace.

Of course, if the work of the CXO – understanding Customer Need, redefining the Customer Journey, crafting optimal Customer Experiences, to enable Customer Value – is left to the other members of the leadership team (whose mandates sometimes run counter to the ‘creative destruction’ that good innovation often requires), then we run the risk of having optimally-capitalized companies meticulously managing performance metrics that might be fundamentally unaligned with customer needs and values. Efficiency without effectiveness is a recipe for accelerating an organization’s decline. And that is why your organization needs a CXO even more than a CFO.

Lest any organization worry that this means that they can’t begin tackling this critical aspect of their strategy until they can find the perfect person to fill a new CXO position on their leadership team, fear not. What matters most is that the need is recognized and the work begun, regardless of what hat the champion of the effort is currently wearing. Begin the critical conversation today. If we can help in getting started, please let us know.

David Grasfield is Founder and Principal of Grasfield Consulting. He can be reached at david.grasfield@gmail.com.

© 2019 David Grasfield