CRM failure remains a significant problem in many organizations. For that reason, it's important to explore why so many of these projects do not achieve their potential.
- Related: CRM failure rates: 2001-2009
For this reason, I asked Jill Dyché, a Partner with IT services and management consulting firm, Baseline Consulting to write a guest post for this blog. Jill is the author of three books on the business value of technology, including her latest, Customer Data Integration: Reaching a Single Version of the Truth. You can reach Jill on Twitter (@jilldyche) or email (email@example.com).
Most folks involved in CRM don't quickly recognize the warning signs of failure, causing bad projects that die a slow, agonizing death. These folks need Arnold Schwarzeneggers' Commando to stop the madness and put their project out of its misery.
Arnold's role of "exit champion," in which he kills for the greater good, reminds us that not all CRM projects are fit to survive. However, most corporate cultures discourage naysayers, so even well-informed people who sense a CRM effort going sideways avoid making waves and don't call out obvious warning signs.
This cultural condition creates groupthink and denial, a type of organizational neglect that researcher Isabelle Royer calls "the seductive appeal of collective belief." We've all seen or heard this kind of logic:
Our project must be going fine, since no one is complaining, even though we're already over-budget and the development team is still being trained on the software. After all, CRM is a hot topic with analysts and our executives are all on board. Someone must know what they're doing. Right?
Although the warning signs of CRM-gone-wrong may appear vague, they are actually quite consistent across companies, vendor solutions, and development plans. Here are four to watch for:
- Choosing a bad executive sponsor. Few organizations take time to qualify their CRM sponsor properly. Great sponsors are skilled at articulating business requirements for customer information, funding the acquisition of software products, and managing up effectively. Bad sponsors fail to communicate sufficiently and may be unwilling to intercede when project participants disagree on critical matters. If things go wrong, a poor sponsor may relinquish responsibility for solving the problem or, even worse, disavow the entire project and walk away.
- Suspending status reports. CRM projects usually start with a bang. When executives push a new focus on the customer, the organization allocates budget, plans the project, purchases software, convenes the development team, and circulates regular status reports to stakeholder. Until one day those reports stop. Be wary anytime progress is suddenly no longer forthcoming. When the project team clams up, it's not good news.
- Revisiting past decisions. Something is wrong when stakeholders second-guess decisions they've already approved. You'll see this expressed as accusatory questions such as, "Why did the selection team choose that lousy software." That kind of language means confidence has eroded, regarding basic aspects of the project. Historian Barbara Tuchman calls this tendency to reexamine old decisions "disaffection of constituents." It's a warning sign you shouldn't ignore.
- Focusing on the wrong issues. Some teams spend more time studying competitors' Facebook page, or debating merits of on-line communities, and less time integrating customer data and ensuring the project meets business requirements. Failure is coming when folks succumb to bright shiny object syndrome, focusing on so-called "social CRM" rather than improving customer-facing processes or enhancing customer data quality.
CRM projects that display these warning signs are in real danger.
Should you become the exit champion who calls out warning signs of a CRM effort in jeopardy? It's a tough question because in many organizations, the risks of speaking unpopular truths can outweigh the rewards.
Schwarzenegger's hero in The Running Man insisted, "I'm not into politics. I'm into survival." That's not a bad lesson for those of us trying to run successful CRM projects.
[Thanks to Jill Dyché for writing this guest post. Image via iStockphoto.]