Why CEOs Should Not Be Our Primary Source of Customer Input

I work with a lot of CEOs, usually as an advocate for better product and development organizations. Many CEOs tell me that they (personally) are the best-informed people within their companies about what customers need, and they (personally) are best positioned to drive decisions on product priorities. I think this is fundamentally wrong for companies with more than a half-dozen customers or a dozen employees – and is a primary contributor to product strategy gridlock. So here’s a humble* open letter to CEOs about delegating the intensive, expertise-based, ongoing work of deeply understanding and interpreting what their overall customer base really needs.

First, some context. Bare metal startups don’t have a product management team, just as they don’t have a sales/marketing organization or support group or a business analytics squad. A not-yet-generating-repeatable-revenue company of 6 people might have one architect/CTO, one designer, three other developers, and a CEO. So we know that the CEO is time-slicing to cover investor pitches and office space and recruiting and benefits and legal and setting product direction and stocking the kitchen with snacks. That also includes closing the first two or three deals, before bringing on commissioned salespeople.

But growth means hiring for critical expertise and delegating strategically. Ramping up sales means hiring a Sales VP, jointly setting quotas, and letting the sales team do its work. (With occasional inspections and interventions.) A CMO/VP Marketing with strong messaging and promotional chops can spend full time getting the world interested in us. CFOs keep the paychecks from bouncing and the auditors from rioting. CHROs finds great talent and creates useful review processes. Legal keeps us out of jail. Experienced CEOs delegate large blocks of responsibility to functional leaders so they can do their CEO-specific work: fundraising and investor management; assembling a strong executive team; setting long-term vision; growing a healthy corporate culture; leaning in as PR spokesperson and deal-closer-in-chief.

Somehow, interpreting customer needs can feel different. We may think of it as obvious, straightforward, intuitive, a natural result of assorted conversations with prospects or buyers or industry analysts. But that’s an illusion. Methodically validating which things will drive significant revenue growth and increased user satisfaction is time-consuming, subtle, continuous, expertise-based, and requires us to keep an eye on our inherent biases.

Here are some rationales that we may be holding onto, but don’t hold up to scrutiny:

[1] “As CEO, I talk with lots of representative customers and prospects.”

This may have been true in the company’s very earliest days, when we had a handful of active users and no sales or support group. But as our companies grow and we get ever busier, non-executives are tasked with the vast majority of pre-sales and post-sales customer contact. Most CEO escalations are to help close a really big deal with unique demands that sales and product/engineering won’t satisfy, or large existing customers frustrated enough to demand a chat with the boss. We get few chats with happy users, newly onboarded mid-sized customers, power users with thoughtful suggestions, or late adopters wanting just the basics.

In other words, CEO interactions – and therefore CEO impressions – naturally skew toward the biggest and unhappiest customers. Sales/marketing/support/product/engineering teams successfully deal with 95% of prospects and customers: we hear from the whales and the outliers. Most revenue happens without direct CEO involvement.

[A lightweight experiment: look at your last month’s calendar and count how many customer calls you took. Of those, which were whales and outliers? And how many of those calls did you initiate as learning opportunities, rather than receiving as escalations?]

[2] “My customer discussions are good ways to dig into detailed customer needs.”

When we’re acting as deal-closers-in-chief and taking executive calls with prospects, our job is to be persuasive and charming and reassuring. To pitch what we have available. TO CLOSE. TO GET TO YES. Sales calls are not good research opportunities. When we are selling, we are marshaling arguments to address the customer’s known objections and minimizing their concerns.

CEO-level interventions are not ideal for wide-ranging, open-ended conversations — where we explore unmet needs, competitive offerings, deep dives into technical alternatives, quantifiable value or trade-offs among roadmap items. Our product and design folks have a very different approach to learning from customers/users/prospects: mostly listening; unpacking symptoms to find underlying problems; offering various hypothetical solutions; probing about value metrics and purchase approval processes; and echoing for clarity. Learning meetings don’t sound at all like sales meetings: their objective is to extract insights rather than commitments. That takes practice, preparation, outreach to get representative participants, and inviting lots of users to critique unpolished ideas. As CEOs, we don’t have the time or tools or expertise to consistently mix this in with our executive responsibilities.

[Experiment: how many of your last month’s customer calls had 10+ minutes of focused listening, where the customer did the talking and you probed for something unexpected? Without pitching, closing, or leading the witness?]

In the same vein, I always hear that “Our sales teams are talking with prospects all day long, so they know what customers want.” But we hire and train and promote salespeople for closing deals – not for uncovering new problems. Good salespeople get prospects to list their objections, and knock down each objection to close that deal. Rather than digging deep into complex underlying issues, they want to play down or reposition or explain away those issues. Sales teams are rewarded for getting prospects to changing RFPs or buying criteria to fit our product, not for agreeing that assorted improvements would make our future product more valuable. So having Sales set product direction encourages short-term thinking and simplified answers.

[Experiment: how many sales call have you joined where the prospect did 75% of the talking and we probed for good low-cost alternatives to our product? How would you evaluate such a salesperson?]

[3] “As a former user/subject expert, I know what customers want.”

Many CEOs came from the customer side: construction execs heading up project management vendors; high-powered investors leading robo-advisor startups; musicians running streaming services. We tend to universalize our individual experiences (“most users are just like me and need what I needed”) or wave away market complexities. A smart healthcare software exec taught me that “when you’ve seen one hospital, you’ve seen one hospital” because every hospital has its unique stack of archaic homegrown applications and unnecessarily customized commercial software and unharmonized databases.
Also, markets and competitors and regulations keep shifting after we leave our client-side operating roles. So we jeopardize our companies when we put our personal experience ahead of well-designed validation.

[4] “I don’t have someone I trust to delegate customer insights or innovation.”

Ah, there’s the rub. We may be missing a product and design team normally tasked with validation/input. Or we may not see them doing this well. Or they are bringing us answers that don’t feel right. Or we’ve pieced out the problem to various other groups which lack discovery skills and tools. So this falls back on us, since as CEOs we own whatever’s not covered elsewhere. (One CEO told me that “if our product team were doing a better job gathering breakthrough market insights, I would let them do it.”)

But our other CEO responsibilities mean that we really can’t do this well ourselves. We’ll be driving decisions based on a handful of whales and outliers who’ve told us what they think they might want. And we’ll risking our company’s ongoing success.

Instead, we probably need to have a frank conversation with the VP of Product (and/or Head of Design) about turning this around:

What could they do/show to demonstrate a well-functioning validation process and (re)gain our trust?
Can we make learning and customer insight a top priority for the product and design teams? What product work will we de-prioritize to focus here?
What internal roadblocks need to be removed? Are product managers allowed to contact directly to customers without going through Sales or Support?
Investments in interview skills coaching, data analytics, activity tracking? What tools or talents does the team need, and how will we train or hire for those?
How do we show progress, inspect artifacts, share insights, demonstrate that we’re turning real learning into winning products? Which executive forums are designed to share learning instead of schedules and revenue?

Our executive goal is to make our product and design teams successful at building what matters, rather than parcel out their strategic work to other groups.

If we don’t have product and design teams yet, that’s a big hole to start filling right now. The sooner we have dedicated folks extracting representative insights from a large slice of our audience, the sooner we can move on to whichever company crisis arrives next.

TAKEAWAY

Consistent, well-designed, representative customer input and product validation is life-and-death for companies. It’s as important as sales, marketing, finance, operations or support. Trusting and rewarding a product+design team for this essential work is better than having CEOs doing it themselves.

* I’ve been a CEO, and it’s no cakewalk. CEOs have my deep respect for doing the toughest job in their company. And it’s natural to take personal control over the biggest drivers of company success. So I hope these are practical reasons for delegating product/market validation/customer discovery to focused and highly skilled product+design teams. And then to inspect for solid market learning.

Photo credits: lightbulb by Rohan Makhecha on Unsplash; trust by Bernard Hermant on Unsplash.