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Introducing The CRO - Chief Relationship Officer
by Tom Richardson and Gus Vidaurreta

 
   
 
   

On the snowy 12-hour drive along Route 90 from Boston to Cleveland, the truck driver delivering this first load of shiny widgets to your new client in the heartland hears a sad, chart-topping song about love gone-bad exactly 47 times. Forty-seven duplicate versions on 22 radio stations from 14 different cities.

And every time he hears the song for those 12 long hours, the driver psychically relives his own miserable romantic breakup that happened, coincidentally, just before this trip. And now here he is, bleary-eyed, sad, and exhausted, in Cleveland, talking as your company's representative to the guy who plans to pay you $100,000 for these widgets.

So, sing along to the sad song. Right?

Well, if you have a Chief Relationship Officer, a CRO, the truck driver, besides being trained to drive, would be trained how to handle any business relationship no matter how exhausted he was or how many times he had just heard the soft catchy twangs of heartbreak at sunrise. And with a CRO in charge, by now the customer would have received a healthy dose of communication, as well as great widgets, to overcome anything a heartbroken truck driver could say by mistake.

Understanding how everything affects everything else, and how webs are created, is the job of the CRO. The truth is that the value of relationships in American business is under appreciated.

Relationships are assets.

The truck driver who delivers the widgets has relationships that represent your widget company. So does the salesman who sold the widgets, the engineer who designed them, the CEO who manages all of it, and the banker who funded the idea on the advice of a board of 10 people with their own histories and preconceived idea of the entire widget industry.

Though each person has his or her job with a specific focus, none can ignore the power of all of their relationships on behalf of the company. And the company should do all it can to grow relationships. It is time for a change. It is time to appoint a Chief Relationship Officer.

The CRO is insurance, the ace in the hole, the competitive differentiator, the underdog equalizer, and simply one of the major factors in an organization's success. The CRO owns the relationship environment, and is the co-owner of all the relationships of the organization. She is the banker and guardian of all of a company's relationship assets - even the ones most people in the company don't know exist.

The CRO wears four professional hats:

  1. He owns the relationship environment;
  2. He co-owns the key business relationships;
  3. He is the architect of the organization's Relationship Asset Management strategy;
  4. He is the corporation's top asset management teacher - training every individual in the organization to establish, assess, maintain and improve every relationship on their individual and organization relationship webs.

It's the CRO's job to mine the intrinsic value in relationships for, between and among individuals, divisions of an enterprise and the associated stakeholders outside the corporate structure. His task is to facilitate win-win resolutions to shared concerns.

The CRO position makes financial sense. The position (and all of the needed ancillary supports) will pay for itself by formally treating relationships as assets.

Ultimately the CRO must become part of the consciousness of every employee in the organization. The explanation must come from the top down and from every level of management.

Every person in this organization has relationships that are like "money in the bank" and actually reflect future income to the business. The job of the CRO is to help the company, and every individual, manage these assets as profitably as possible.

Wilton Connor understands this perfectly. He is the chief executive of Wilton Connor Packaging which offers employees on-site laundry as well as an on-call handyman who will appear at employees' houses to fix minor problems so employees don't call into work with household excuses.

He treats his employees well, and they reciprocate with their effort and loyalty to the company. The relationship works. "We have virtually no turnover, we have no quality problems, we have very few supervisors," Connor told Forbes Magazine in November 1996. "Those are the hard-nosed business reasons for doing these things."

Following such a strategy for all relationships will be the role of the CRO. Gently guiding relationships is a task the CRO will embrace as he looks to ensure all the assets of the company are maximized. For instance, the CRO can be a relationship bridge for the client between a top salesman who leaves the company and the person who replaces the salesman. The CRO maintains the relationship so that the departing salesman cannot take the revenue with them and also so the incoming sales person can move in comfortably.

The CRO is a part of all the company's most important relationships, and knows generally about every relationship. A CRO has many duties including hyping positive stories to the media, and helping employees find good things to say about the company as a general way of talking. A CRO formally recognizes the importance of all relationships.

Organizations - corporations, non-profits, and government agencies - have always dealt with their many internal and external relationships. But they've done it haphazardly, without a plan, often unconsciously, and almost always badly. And they've suffered incalculable losses as a result - lost business, lost employees, disgruntled suppliers and distributors, bad press, government problems and on and on and on.

The company that establishes the position of Chief Relationship Officer takes the first giant step toward ending those losses and turning them into profits or assets. The move acknowledges that individual and collective stakeholder relationships in a company are important enough to warrant full-time attention and systematic, conscious management.


     
   
     
   

The Authors

 

Tom Richardson and Augusto (Gus) Vidaurreta were founders of The Systems Consulting Group, Inc. (SCG) and led the information consulting firm from a start up to over $30 million in revenues in just 7 years, twice making INC. Magazine’s list of the fastest growing companies in America. By 1995 SCG had grown organically to 200 consultants in offices in Miami, Chicago and San Juan. Largely due to the approach that Tom, Gus and his partners used in building and maintaining relationships SCG was able to attract and retain the best employees in the industry as well as blue chip clients, such as M&M Mars, Quaker Oats, Bell Atlantic, Ryder System, and Burger King. In 1995, Cambridge Technology Partners acquired SCG.

Currently Tom and Gus are involved in a variety of enterprises: part owners of P&O Packaging (a plastics company), Firehouse Four (one of Miami’s leading restaurants), The Radisson Riverwalk Hotel (a large hotel in Jacksonville), Horizon Bank (a new community bank they helped found and where they serve on the board of directors) and Infinet (a new media design company). In August 1999, Tom and Gus co-founded Entente Investment Inc. whose mission was to invest in entities in the information systems consulting space. In 2001, Entente merged with three of its investments to form Adjoined Consulting Inc., a system integration and general consulting provider.

Recently Gus and Tom Richardson completed writing a book on the subject of creating a competitive advantage by dealing with relationships as key business assets, a true new model for business success. "Business is a Contact Sport" outlines the principles of Relationship Asset Management for the benefit of the business community.

Business Is A Contact Sport:
Using the 12 Principles of Relationship Asset Management to Build Buy-in, Blast Away Barriers and Boost Your Business
by Tom Richardson, Tom Gorman and Augusto Vidaurreta Macmillan Publishing USA
August 2001
     
   
     
   
Many more articles in Partnering & Alliances in The CEO Refresher Archives
     
   
     
   
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Copyright 2002 by Tom Richardson and Augusto Vidaurreta. All rights reserved.

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