I recently asked a CEO who was a close friend of Steve Jobs what he learned from Steve. He told me, “Steve always said you must see around the corner.” In trying to capture how top CEOs see around the corner and develop strategy, on September 9, 2015 I held a roundtable for business leaders in healthcare, retail, financial services, professional services and technology. Below are some of the insights shared from the following participants:
- Sandra L. Fenwick, CEO, Boston Children’s Hospital with 20,000 employees cited as the top clinical children’s hospital in America
- Sharon John, CEO, Build-A-Bear, who since John took over about 2 years ago has seen its stock price increase over 200%
- Jud Linville, CEO Citi Cards Citigroup, which is the world’s largest credit card issuer
- Andy Frawley, CEO, Epsilon, the world’s largest marketing company with 7,000 employees who leads the market in connecting with customers digitally
- Marc Lautenbach, CEO Pitney Bowes who has transformed the 90 year old company where stock has pretty much doubled during his 3 years as CEO
The meeting was kicked off by Linda Ban, IBM Global C-suite Study Director, who shared insights on how CEOs view game changers: “Technology is accelerating the blurring of industry boundaries – bringing seemingly unrelated industries together and sometimes redefining the way in which they are categorized. Often the greatest business disrupters that change the game come from outside traditionally competitive industries."
Robert Reiss: What is today’s business game changer?
Marc Lautenbach: It is that intersection of mobility and commerce coming together. The way we see it is that intelligent products are becoming much more important.
Jud Linville: The discussions we have now are around how to create the ultimate “buy” button. How do you create a frictionless experience for the customer and embed payment – think Uber here - so that they trust and don’t even need to think about the verification.
Sharon John: A game changer for us will be harnessing the power of the brand into new revenue streams. Based on our research and supported by our awareness and loyalty numbers we believe consumers would like to participate in the Build-A-Bear brand via categories that are not part of the current experience such as traditional toys, confection and apparel. It's time for us to shift from a "a specialty retailer" that just happens to have a great brand to "branded company" that just happens to have a great specialty retail arm. This shift can also be inclusive of a separate plush wholesale business and strategic international expansion. Ultimately we would end up with a more diversified portfolio, while growing the business and better meeting consumers needs.
Sandra L. Fenwick: It's all about experience. One message we’ve heard loud and clear from our families and providers is that it’s no longer enough to be the best in care—we must be the best in experience. Patients and families are in charge and their expectations around care, service and information are only growing. This can only make us better. We’re at our best when we’re focused on serving them well.
Andy Frawley: The real challenge is the notion of “recognition” – consistently recognizing each individual across all of their devices. Do we know who a customer is when they are not logged into your app or website? If I log in and check my account, you recognize who I am. But if I am browsing the web and clicking on ads, you may not. So we have focused on connecting with anonymous consumers and using our data assets to engage them across several devices, within a privacy-friendly framework. We think the notion of really understanding who people are is critical because you can’t have a good customer experience if you don’t know the customer.
Reiss: How is digital changing your business?
John: It may be counter-intuitive, but we have been careful not to over-digitize the experience of Build-A-Bear. We are such as experiential-based and tactile business. Yet, we do need to recognize the needs of the millennial mom and the tech-native child. We have had some interesting internal discussions about whether to create a Build-A-Bear online experience that replicates what happens in the store. In the end, we have decided to focus our digital strategy on enhancing our storytelling and brand engagement - ultimately, we are using technology to meet the needs of the consumer in a fresh and different way.
Frawley: What digital really gives us is the ability to bring the emotional elements of a brand into the customer experience everywhere. What we ask is: Do you have to have that integration of the experience? If there is a break in the chain then that is an opportunity for somebody else to come in. Everything is digital now and particularly social, so it has conditioned all of us as consumers to expect instant responses because everything is happening in real-time. This is key as the customer experience is now non-linear.
Linville: For Citi, the goal is to transport our core capabilities as rapidly as possible into digital channels and challenge ourselves to be more nimble than ever before. The credit card business is by its very nature a FinTech and “big data” business where, with machine learning, we bring buyers and suppliers together. In a very short amount of time, more than half of our new customer acquisitions shifted to digital channels, and 70% of our emails are now read on a mobile phone. How we design a responsive campaign and service customers now must consider mobile phones. This year alone, there will be an estimated $1.6 trillion of ecommerce spend. If we can close most of the incremental sales for many of our merchant clients using our cards by 1% or 2%, it blows away most of the marketing programs they have.
Fenwick: Digital impacts every aspect of our business, and of our institution. It affects how we interact with each other, how we engage with patients, and how we inform parents who want instantaneous information and are operating on a much more sophisticated level than any other time in history. Families are using resources on the web to become educated and to access service. Like Jud, 50% of the content that comes through to us is now coming digitally. That is why we're working to partner with and engage disrupters, and bring them into the fold instead having them all sit outside.
Lautenbach: The market dynamics are forcing companies to think about creating purposeful customer experiences. There are 85 different 1-800 numbers inside of Pitney Bowes in the United States. We cannot create a purposeful experience if we have an unfocused approach to interacting with our customers. That is what we are doing now – adapting our systems to focus on our customers in many ways.
Reiss: Talk about your corporate strategy over the next few years.
Linville: At the very core, it is about the relationship that people have with their money that is both highly rational and emotional. In an omnichannel digital world, how do people want to save, spend, borrow, invest, and protect their information? Equally important is our strength as a global bank with an unmatched footprint. Working with partners we have built a global rewards platform where customers can redeem their Citi points anywhere in the world, in a consistent, standardized fashion. It’s about enabling frictionless speed and simplicity for our customers. Finally, the last piece is new customer acquisition. The tools we have built in the U.S. are nascent in international markets and if we can transfer these capabilities to leapfrog local competitors it is a massive win.
Lautenbach: For us it is taking our core capabilities and reapplying them profitably in the digital world. If we can make that clearer then that is a great differentiator for us in our industry. For instance, in three years 85% of all of your statements will be digital.
John: Because we recently achieved our stated goal of returning to sustained profitability and are now shifting to delivering sustained profitable growth, we are in a unique situation and, therefore have to successfully shift our focus to the execution of our new growth strategy. Part of that strategy is to make sure that we don’t lose sight of what made Build-A-Bear successful in the first place. To that point, our shift to a growth strategy coincides with our preparation to celebrate our 20th anniversary in 2017. For the first time the kids who first came to Build-A-Bear in 1997 will now have kids of their own to bring to Build-A-Bear, too, making us a multi-generational brand which opens up new opportunities to expand the business. We want that original special customer experience to be passed on to their children.
Frawley: We will continue to be a powerful and relevant partner to CMOs at great brands, delivering personalized customer experiences at scale around the globe and building bigger businesses for our client’s. There is an enormous amount of marketing spend today that is not targeted and not addressable, but we are going to change that, so that in every multichannel moment you reach consumers at the right place and time.
Fenwick: We need to stay true to our mission and to our unique capability of taking care of children who have the most complex problems and conditions. By marrying science, discovery and innovation, we can make greater strides into personalized medicine and precision care, and live up to our responsibility to keep kids healthy.
To listen to more interviews with top CEOs, go to: www.ceoshow.com
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