Citation
(2014), "Executive summary of “The impact of organizational context on the failure of key and strategic account management programmes”", Journal of Business & Industrial Marketing, Vol. 29 No. 5. https://doi.org/10.1108/JBIM-04-2014-0079
Publisher
:Emerald Group Publishing Limited
Executive summary of “The impact of organizational context on the failure of key and strategic account management programmes”
Article Type: Executive summary and implications for managers and executives From: Journal of Business & Industrial Marketing, Volume 29, Issue 5
This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.
When a provider of outsourced human resource services to a small customer base of large corporations lost one of its most important clients, board members decided to launch an account management program in direct response to the defection. An experienced program manager was brought in to oversee the key and strategic account management (K/SAM) program.
Customer satisfaction improved and some, who had previously indicated they were seeking other providers, evaluated new offers initiated by the K/SAM program that expanded their contracts. Some mistakes were made – for example, senior managers failed to inform the operations people delivering services within customer organizations about the new program. A further mistake was to give a newly hired VP of Sales control of the account management program. Her background was in sales, not account management, and her brief was to increase sales.
The CFO, COO, Head of R&D and other senior managers, preoccupied with internal issues, let their relationships with customers go dormant, and without the K/SAM program prompting them, failed to initiate contacts at the customer sites. The relationships were not broken, just not pursued or leveraged.
Monthly account reports were allowed to drop away and the company continued to fail to renew contracts with existing clients, some of whom expressed frustration that the account management program, which they had bought into, was shelved. While the short-term sales increased, so did the level of customer dissatisfaction and turnover. Within six months, three of the five key account managers left the company, and the others left within the year. Anecdotal evidence suggests that a substantial number of K/SAM programs failed. In “The impact of organizational context on the failure of key and strategic account management programmes”, Dr Kevin Wilson and Dr Diana Woodburn explore some of the contextual reasons why.
In the failure described briefly above, while the K/SAM program did not last long enough to be sure that it would achieve sustainable success, the signs were good – in contrast to the situation after the focus was shifted back to short-term sales. However, even the original program contained two “failure factors”: the lack of separation between sales and K/SAM; and the lack of alignment with operations, which would have been important in the delivery of new offers.
When companies embark on K/SAM, they frequently inform only the sales force, and fail to involve the rest of the company and operational deliverers in particular. Even if they do communicate more widely than the sales department, the message is still often “just for your information” and fails to clarify and gain acceptance for the deliverers’ role. This silence may itself be an indication of lack of commitment to the K/SAM strategy, and the consequences can be devastating for K/SAM. Shortage of resources is often cited by companies as a reason for the problems they have with implementing K/SAM. This research suggests that a lack of resources, even if it were real, is likely to be a symptom of a lack of commitment and an inability to change. K/SAM is often seen as an additional activity rather than an alternative, integral approach that entails substantial redistribution of resources, which managers are unwilling to tackle.
Without clear, persistent, high-profile support for the K/SAM strategy and program, the organization lays itself open to political challenges from competing interest groups vying for resources, resisting change and acting in ways that serve personal self-interest rather than serving company or customer need.
Implementation is not only about putting the right strategies, systems and processes in place but also about recognizing and addressing moderating and intervening factors that often lie unspoken at the root of K/SAM failure. These may originate in the organization’s underlying culture, so are not documented and readily identified. Nevertheless, they have the power to frustrate K/SAM development.
Installing a K/SAM program is a long-term process that requires consistency of management entanglement. Support can be transient, and often is. Entanglement through executive sponsorship, customer engagement, visibility in addressing barriers to the program, all demonstrate management commitment that goes beyond lip service.
It is clear to participants in K/SAM that it works through long-term value creation, and the pressure that companies apply aimed at short-term region of interest can be very destructive. The principal value gained will still be economic, but it takes time to realize the benefits of K/SAM. The additional value gained from organizational learning, the development of competencies and the transfer of what has been learned to other relationships should not be overlooked.
True customer orientation demands organizational alignment around customers in matrix structures that focus the whole firm on value co-creation with the customer, and the removal of silo mentalities that focus on product, technology, process and geographies. The political environment requires managing, so that entrenched interests are not allowed to impede the realization of K/SAM potential.
For the full article enter 10.1108/JBIM-03-2013-0061 into your search engine.
(A précis of the article “The impact of organizational context on the failure of key and strategic account management programmes”. Supplied by Marketing Consultants for Emerald.)