"As the success of an array of forward looking marketing organizations suggests, the defining element of competitive differentiation is now strategic and systematic learning," contend Julie Baker, Ken Demma and Niall Budds from the marketing consulting firm Quaero.

The piece argues that strategic learning "is beginning to attain much greater prominence as the advantages associated with brand and product become less enduring. If Marketing is to strengthen its credibility and even elevate its strategic value within the enterprise, then it must play a central role in the enablement and acceleration of organizational learning."

The authors go on to support the concept of a "Learning Agenda" as part of a forward-looking marketing strategy and investment portfolio. "When we invest intelligently, we develop an agenda of marketing objectives and priorities that reflect the wider business objectives of our companies. The open (and ugly) secret associated with today’s marketing plans and planning processes is that they have become increasingly focused on operations and tactics, media and messaging. Too often, marketing organizations fail to actively and systematically invest in learning. Because they see their role as one of mere implementation, they have stopped making the discoveries, eliciting the insights and defining the knowledge that can truly influence the strategic direction of the enterprise."

I encourage you to read the whole piece. It offers a far-reaching perspective and provides a framework for marketing-driven innovation. With profiles of Harrah's, Capital One and others, the piece goes on to advocate that marketing leaders invest in "breakthrough learning" and "incremental learning" as part of a "learning portfolio."

"The work of Harvard Business School professors Gerald Zaltman and Rohit Deshpandé suggests that corporate managers who typically commission market research generally don’t seek or welcome 'surprises' and often suppress them when they arise," the authors observe. "This suggests that marketing leaders should invest in and actively seek out market discoveries as part of the learning portfolio. Breakthrough innovations and advancements depend on such learning. And yet, we also know that high performance lies in the “patient accumulation of successes” that come with continuous improvement. Those types of gains also must be funded. A well diversified learning portfolio should include a smart mix of 'aggressive' and 'conservative' investments."

As the piece concludes, "The Learning Agenda is not a lightweight, touchy feely endeavor. It represents the marketing organization’s hidden and unrealized source of strategic value. As Marketing ascends the learning curve, it promises to become a strategic leader and catalyst in the next era of competitive success."

Instead of talking about mere customer relationships, our perspective has become more multi-dimensional. Now, we are talking about the customer experience. Tom Johnson, a managing director with business-consulting firm BearingPoint, actually sees Customer Relationship Management (CRM) maturing into Customer Experience Management (CEM).. He thinks CRM began to decline when its emphasis shifted to cost-cutting. "But CRM is really about driving growth, not cutting costs," he says.

As a recent article in CIO Today suggests, CEM is about providing a consistent customer experience across all channels -- from marketing to sales to customer support. "If your brand's message is cheap and fast, then you need to be cheap and fast all the time, in every interaction with every customer," says Woody (Woodruff) Driggs, managing partner of Operational CRM at Accenture. "If you are high-end, you need to always be high-end."

The challenge within companies is, in many ways, a failure to communicate. "CEM starts by getting everyone who is important to the customer experience in a room," said Driggs. "We are constantly amazed to discover how often this is the first time that the key people from marketing, advertising, sales and service have talked to one another about what the customer experience should be."

What it shouldn't be is the thing Dell Computer is now trying to address. It began when Jeff Jarvis started making waves with his blog, Buzz Machine. In an "open letter" posted on the site, he berated Michael Dell for making shoddy product after his own $1,600 Dell machine crashed and burned (an experience I have had myself with a brand-new Dell). Apparently, the blog now gets 10,000 daily visits (with comments like, "Buy an Apple, Dude.").

Dell's response? The company got Jarvis his money back right away -- and has started actively tracking down angry customers (particularly the vocal ones). John Hamlin, Dell's SVP for U.S. consumer business, says Dell is adding more call centers and trained phone reps. "The customer experience is one of the most important issues for us," he adds.

There's that word again: experience.

If you are particularly interested in where this idea of customer experience management is headed, I suggest you consider attending the upcoming thinkAbout conference in Keystone, Colorado, which takes place September 14 and 15. It is hosted by Joe Pine and Jim Gilmore, co-authors of The Experience Economy.

"Our experience is not for the meek," they explain. "Each year, it attracts a potent mix of imaginative minds, business trailblazers, and experience mavens. These are people who truly desire to advance the boundaries of new offerings and envision new ways to think about the business of business."

One clear powerhouse of customer insight is UK-based Tesco. In a recent piece in the Economist, the high-growth retailer is recognized for its ability to adapt to and even influence British culture. "If an anthropologist wanted to know what Britain was like, he would do well to take his notebook to Tesco," the publication writes. "That's partly because it sells a third of Britain's groceries. But it is also because Tesco's customers are made up of the wealthy, middling and poor in just the same proportions as shoppers in the country as a whole. Tesco has become big by being like Britain."

Tesco has proved a master at leveraging customer intelligence. It recently collaborated with the University College London's geography department to figure out how to make the most of its statistical information. However, it gathers most of its data from its successful Clubcard. With 12 million cards in use in Britain, Tesco can closely watch what its shoppers are purchasing. It then explores linkages between the products people presently buy and the ones they might be persuaded to buy next. “We believe we have one of the largest databases anywhere in the world,” says Martin Hayward of dunnhumby, which handles data management for the company.

As the Economist explains, "This knowledge allows Tesco to do two things. First, it can lavish attention on customers by giving them discounts on things that they buy routinely. Each cardholder gets a letter at the end of each quarter containing vouchers worth 1% of what they have spent. But they also get coupons that entitle them to discounts on products that Tesco's database, working much like the software that powers Amazon.com, suggests they might like. Last quarter, the store sent out 6m versions of this letter, each offering slightly different discounts....

Second, Tesco can adjust its shelves to suit the profile of the local area, or even the time of day. Tesco in Brixton, an area of south London settled by immigrants from the Caribbean, sells plantains, a kind of savoury banana that can also be found for sale on market stalls outside. Tesco stores in central London do not, but are instead designed around selling sandwiches to office workers at lunchtime and then ready-meals to them in the evening. The aim is to combine the local knowledge of the village shop with a multinational's economies of scale in buying and logistics."

Those are impressive capabilities. They position the company for increasing growth in the years ahead, particularly as its competitors continue to deny the extraordinary power that this intelligence delivers.

None other than Accenture -- a longtime advocate of Customer Relationship Management technology -- has pronounced CRM a virtual failure in the telecom industry. Citing its own survey of 1000 UK consumers, it notes that CRM technology has not improved customer service.

Despite heavy investments in CRM on the service provider side, over half of respondents claim to have switched service providers because of poor service. "These findings are troubling for any industry with heavy customer interaction, given that poor service was the predominant reason for half of the respondents changing service providers in one industry or another last year," says John Freeland, global managing partner at Accenture's CRM practice. "Winning companies strike the right balance between using technology to help reduce costs, and streamlining the customer experience with well-considered processes that contribute to more personalized services."

One key annoyance was "technologies that delay or stop service" among 20% of respondents. However, long hold times was the key annoyance for 82%. Average UK consumers spend as much as six minutes on hold and speak to an average of 2.7 customer reps as they try to solve problems.

"I am not surprised by this report. It's a classic example of rolling out technology and expecting it to solve all your problems," says Chris Boorman, vice president of marketing for Europe at Salesforce.com. "Organizations need to focus on meeting business requirements first and foremost. They should not adapt to technology. Technology should adapt to companies, and it's crucial to customize for each industry. You cannot have an off-the-shelf product that suits every vertical sector."

One of thet greatest barriers to success in terms of leveraging customer intelligence is structural. Too often, companies organize to simply sell more products instead of enhancing customer growth and profitability. But there are reasons to believe change is on the horizon.

Corporate bellwether General Electric has just taken a step in the "customer- focused" direction by reorganizing around industries to reach its next level of growth. GE Chairman and Chief Executive Jeffrey Immelt stated: "This change allows us to leverage our exceptionally deep leadership team to accelerate growth and improve productivity."

As part of the move, GE will consolidate 11 divisions into six businesses: infrastructure, industrial, commercial financial services, NBC Universal, health care and consumer finance. While the decision is certained to reduce operational costs and rendundancies, it also lays the groundwork for new approaches to customer management.

As opposed to managing the client based on product, the restructuring potentiallly makes it easier for GE to mine and manage customer information in ways that help it expand its existing customer relationships. The focus is no longer the product, but rather, the customer's industry. Considering GE's influence on business in general, it will be interesting to see which companies follow suit and begin taking steps in this direction -- organizing around their customers as opposed to the products and business lines.

While I certainly don't think the current customer data frauds and follies are any excuse to stop collecting it, I think there is a real danger that this could be the result if companies don't start managing it more responsibly.

According to a recent piece in Fortune Magazine, it will take more than IT security spending alone to address the problem. "Secure information typically walks out the door in one of three ways: hackers grab it, employees steal it, or companies lose it—through incompetence, poor gatekeeping, bad procedures, or some combination of the three. High tech allows the data to be captured, but tech isn't always the way it escapes."

One data debacle that the magazine looks into takes place at Bank of America. Last December, bank employees "packed up and sent to its backup data center tapes containing information on government workers enrolled in a charge-card account. Or at least, that's where they were supposed to go. The tapes—none of which were encrypted—shipped via commercial air. But just after New Year's, bank officials realized that the tapes had never arrived. They scrambled to see what might be lost. It wasn't pretty: more than a million names, addresses, account numbers, and Social Security numbers."

In early January, the bank called the Secret Service, which has jurisdiction over such problems. "Account holders had no idea that their information might be on the loose. Bank of America says the Secret Service asked it to keep quiet while it investigated. The bank kept monitoring the accounts, looking for any funny business, but found none—and still hasn't, it says. In mid-February the bank finally went public, promising that it had changed its ways (backup tapes no longer go by commercial air, for instance) and offering free credit reports and fraud monitoring to affected consumers."

While Bank of America apparently got lucky this time, security experts are now shaking their heads in disbelief. "The Bank of America incident was absolute stupidity," says Jim Stickley, the CTO of TraceSecurity, a threat-management company based in Baton Rouge, LA.

The real threat here is the backlash that inane behavior such as this could very well bring to life. We won't be any better off if customer data is no longer legally collectable, but that's the outcome if "absolute stupidity" remains an industry standard.

It's long been observed that wars can drive the "state of the art" far further and far faster than any other phenomenon. Wars focus national resources -- demanding investments in new thinking, new approaches, new technologies. So it goes with the War on Terror.

Just as the "Dotcom Boom" -- another temporal phenomenon that drove massive investment in new technology -- began to bomb, we were all witnesses to the horrifying spectacle of 9/11. The implications of that event continue to play out in the expansion of and the investment in something William Safire disparagingly calls the "Surveillance Society" in the New York Times.

In his recent review of two new books, Safire offers a one-sided perspective on "the world of surveillance and dossier assembly." Citing negative stories such as the recent revelation of ChoicePoint's hacked consumer data, Safire goes one step further to speak of the "sinister synergism" (remember, he writes the On Language column, too) between government and commercial data gatherers. Apparently, Robert O'Harrow Jr.'s ''No Place to Hide'' and Patrick Radden Keefe's ''Chatter: Dispatches from the Secret World of Global Eavesdropping'' provide more than enough evidence, in Safire's view, to encourage us all to scream for reform and demand that we all be taken off the grid in the name of personal privacy.

It's funny. The Unibomber, who used to write pointed missives to the Times from his undisclosed cabin hideout, and Mohammed Atta, who plotted and led the 9/11 strike, would most certainly welcome Safire's unbalanced point-of-view.

On the other hand, Safire's single-mindedness is probably important as a counter-weight to all those who might abuse all the intel that emerges through our new electronic mesh of consumer and citizen information. Mr. Keefe discusses the concept of a "liberty-security matrix" in his book. We're all going to have to get serious about where we stand on (or off) such a grid.

I'd merely argue that security need not necessarily come at liberty's expense. After all, how free do I (or you) feel knowing that time is on the side of terrorists plotting to take down America's cities (and towns) with weaponized viruses and suitcase nukes?

On the consumer side, I also have to consider my options. Do I not benefit from having my product and service providers know that I am not a bad credit risk? Do I not benefit from the personalized service (and recommendations) enabled by the release of some personal data? Surely, the companies I choose to do business with would not offer the offerings they do at the prices they offer them if everyone remained in the dark on what I will call the "risk-opportunity matrix." We make trade-offs -- of information for value -- all the time. (Reason Magazine's Declan McCullagh illustrates them quite nicely in his piece on "Database Nation.")

Mr. Safire has always diminished those trade-offs in his alarmist columns on consumer privacy. And yet, I'm glad he writes (and has written) them. I just think it is the role of others to discuss the other factors he downplays.

One sober voice is that of Fred Ikle, author of "Every War Must End." In the Wall Street Journal, he writes, "The worldwide proliferation of WMD capabilities can be slowed down, but it cannot be stopped. It is high time that our body politic took this unpleasant fact on board. The globalization of science and technology will gradually, but ineluctably, spread the wherewithal for building mass destruction weapons. We are thus fated to confront a threat of a kind we have never faced before."

Think 9/11 multiplied by 11 -- or 11,000. That's the dark future we face if we take ourselves and our enemies off the grid. In a world that increasingly empowers small bands of barbarians, smart surveillance and active intelligence gathering may be our best defense. It makes no sense at all to unilaterally disarm.

Not many book reviewers will fess up to not having read the books they are reviewing. This reviewer will now make an exception. While they won't admit it, lots of reviewers read a few chapters, skim the rest and then, rush to meet their deadlines. Either that, or the reviewers that make me believe this to be the case are just complete morons. So, no, I didn't read the book I am about to comment on. Just being honest -- and I think the subject of my review actually justifies my actions (and daring honesty).

The book is the best-selling Blink: The Power of Thinking Without Thinking. The author is Malcom Gladwell, who last hit the charts with The Tipping Point. While he is an impressive and insightful writer, my first impression of this book is one of irritation.

As Gladwell explains on his web site, "It's a book about rapid cognition, about the kind of thinking that happens in a blink of an eye. When you meet someone for the first time, or walk into a house you are thinking of buying, or read the first few sentences of a book, your mind takes about two seconds to jump to a series of conclusions. Well, 'Blink' is a book about those two seconds, because I think those instant conclusions that we reach are really powerful and really important and, occasionally, really good."

There you go. That's all you needed to know, too. So what do you think of the book? You're an expert (just like the rest of us). All you really had to do was read a few sentences. Now you can hold forth for hours about the subject (and the book) at the next cocktail party you attend.

Actually, I did read a few reviews of the book. David Brooks of the New York Times, who seems to lack the fortitude to say anything really hard-hitting about anyone or anything, calls the book "boffo." He then goes on to, essentially, pan it and question the depth of its scholarship (in the gentlest of terms). Interestingly, Brooks makes a comparison that also came to my mind -- in a blink, you could say -- when I heard the book's premise. He compared it to Michael Lewis's Moneyball -- a book I did read.

If you are familiar with Moneyball, you will recall that its hypothesis -- tested by the Oakland A's, which manage to make the playoffs four years in a row despite being one of the poorest teams in baseball -- is that left-brain, fact-driven, analytical intelligence can be applied to trump intuitive, right-brain, conventional wisdom.

Well, this book seems (remember, I haven't actually read it) to go in the opposite direction. On his web site Gladwell explains, Blink "is concerned with the smallest components of our everyday lives -- with the content and origin of those instantaneous impressions and conclusions that bubble up whenever we meet a new person, or confront a complex situation, or have to make a decision under conditions of stress. I think its time we paid more attention to those fleeting moments. I think that if we did, it would change the way wars are fought, the kind of products we see on the shelves, the kinds of movies that get made, the way police officers are trained, the way couples are counseled, the way job interviews are conducted and on and on -- and if you combine all those little changes together you end up with a different and happier world."

That's really sweet. My problem is that I imagine this book is being lapped up by executives merely because the economy is reviving. It is in fast-growth economies that ambitious people begin to think they are the force that moves the ocean (even when they are merely riding the waves). At times like this, top execs trust their gut instincts and tend to ignore the evidence. Diligence and analysis are tossed aside. That's how folks acted all the time during the dotcom boom -- back when Gladwell's last book (about getting something for nothing) was climbing to the top of the charts.

You gotta give it to the guys who know how to catch the Zeitgeist. Lewis's best-seller, Moneyball (which teaches us we can do more with less if we think more), was a downturn economy book for a time when everyone had been laid low. Gladwell's Blink (which teaches us we can get more if we think less) is a book for a rebounding, post-election economy when any exec who's had a good quarter can dream he has the Midas Touch.

Perhaps some day someone will provide a synthesis that shows the power of combining analytical and intuitive intelligence with intelligent action. I think that would truly be a great book. But I haven't really thought about it all that much.

There's a fascinating story about professional matchmaking in the New York Times Magazine this week. What I found particularly interesting was the way that the matchmakers discussed in the piece profile their clients and make a match. It's a lot like the way that top sales people and customer intelligence specialists operate.

As the piece shows, there are numerous problems that prevent people from finding an appropriate mate. One is that they are not exposed to enough potential spouses. (Their sample sizes are not large enough -- or their samples are not appropriate.) Perhaps they work too many hours or they are too shy to go to parties. They don't get out enough. Professional matchmakers keep a special database of possible mates that's based on particular characteristics and profile elements. They have these people fill out a brief questionnaire and they rigorously interview them. The best matchmakers are very selective about who goes into the database.

Another problem that marriage hopefuls face is that they are not always a good judge of character. They choose to date people that may seem attractive at some level but turn out not to be good marriage material. Professional matchmakers, however, have experience -- way more than the typical matchmaking client does. They've seen the patterns. They've seen the results associated with putting certain types of people together. In some respects, they know you better than you know yourself.

The final problem is that people cannot advise themselves. They just can't be objective -- or diligent -- enough. It takes a matchmaker to play the role of coach and drive some sense into some people. Many have unrealistic expectations of their potential mates. It's the matchmaker's job to be tough -- and drive clarity. One matchmaker mentioned in the piece even scolds her male clients who cannot make up their minds. She'll say, ''Are you like a little boy in a candy store who can't decide? Because I'm not here to provide candy. Do you want to get married or not?''' Indeed, they pay tens of thousands of dollars for this type of treatment.

While some people may see hope in the Internet as a vehicle for matchmaking (and I encourage you to check out Corante's own Online Dating blog produced by David Evans), it turns out that many Net daters tend to lie on their questionnaires. Match.com and eHarmony.com may not be able to effectively link you up if everyone is lying in cyberspace just to get laid. Unfortunately, this happens a lot. When the decision is as high stakes as the person you are going to marry, it may be worth the investment of $20K (plus a marriage bonus) to have some personal guidance and attention.

What struck me about this piece, however, was how much professional matchmaking runs in parallel to world-class selling. Sales people that are considered "eagles" tend to be as trustworthy (and well compensated) as professional matchmakers. Their enlightened self-interest lies not in persuading someone to buy, but rather, in making successful matches. They know their clients well and they also know what needs to happen to make them successful (and happy). Customer intelligence helps companies (and their people) make the right matches.

But here's where the romantic types will resist. It's not about magic. It's not about love at first sight. Professional matchmakers think in rational and objective terms. "They have a finely honed ability to instantly classify people anthropologically, according to socioeconomic type, and pair them off accordingly," states the article. "Behind this kind of matchmaking lies a deep distrust of romance, as we usually imagine the word. Matchmakers believe that people should stop their agonized search for soul mates. After all, a soul mate can be glimpsed in many inappropriate objects: the soul may be located in someone who is too young or too old or too poor or the wrong religion or a convicted felon who is married to your sister. Half of literature concerns the perils of falling for a soul mate: the Victorian heroine runs off with the gardener; Romeo decides he can't live without the daughter of a family with whom his is feuding. And these tales always end badly, with disgrace and death, so that the normal order of society can be soberly restored."

As with sales and marketing, the profession of matchmaking is becoming increasingly scientific and left-brain. And though intuition and experience are still important, the matchmaker's primary weapon is not cupid's arrow, but rather insight and analysis. Some might consider the new matchmaking a bloodlessly rational process. That may not fit the romantic fantasies of courting that we've always had. (In fact, the matchmakers never get invited to their clients' weddings.) The question is: "Do you want to get married or not?"

Any company that is seriously considering a heavy investment in a customer intelligence -- or customer relationship management -- initiative, needs to think deep about the challenge of change. This is where many of our "new economy" disappointments and unmet expectations can be traced.

Too often, companies have invested heavily in information technology but have remained relatively ignorant of the potential implications within (and beyond)their organizations. They've failed to build momentum and generate "buy in" from others. They've ignored their existing assets (be they people, processes or relationships). Following the advice of folks like Michael Hammer, they've shoved it down peoples' throats in the name of "creative destruction."

Well, now, an insightful response to the Hammer approach has been issued by a consultant and Columbia University professor named Eric Abrahamson. His book, Change Without Pain, argues that successful and enduring change is most likely to be effected through "creative recombination." Indeed, he offers "dynamic stability" as an alternative to messy and disruptive chaos.

"Rather than obliterating and then reinventing anew, creative recombination seeks sustainable, repeatable transformation by reconfiguring the people, structures, culture, processes, and networks the company already has," he contends. He argues for a "smoother, more cost-efficient, less painful organizational change" and offers guidance in how to achieve it.

Companies should take "a surgical view" of their investments in Customer Relationship Management (CRM) based on carefully defined risks and rewards, according to AMR Research analyst Laura Preslan.

Recognizing there are hundreds of technology investments that can be made in CRM, the analyst firm provides a risk-reward framework to help companies prioritize based on business value.

Technology investments are divided into four groups: Foundation, Advantage, Tactics, and Compliance.

Foundation (high reward, low risk). According to AMR, these are "core applications that every company should use for great benefits at low risk. These investments typically do not cost buyers a great deal of money to initiate nor do they have high penalties for failure. In CRM, Web self-service is the best investment across all customer management areas based on the risk-reward equation....AMR Research surveys show that only 47% of companies have invested in Web self-service to date. However, the majority of those companies have launched basic Websites rather than implementing integrated knowledge management, natural language processing search abilities, and strategies to deflect calls into Web self service. This has reduced the reward of the investment."

Advantage (high reward, high risk). These are applications that "can deliver a competitive advantage and great market distinction. They carry great risk for failure, however, and must be carefully considered and executed." As AMR sees it, "price management falls into this category. Price management is the end-to-end process of optimization, execution, and enforcement of prices...Even though every company can benefit from improvements in price management, only those companies with a high risk tolerance should invest in price optimization and price enforcement today. Companies that are ready to tackle the business process issues that lie at the heart of price management problems reap significant top-line and bottom-line improvements."

Tactics (low reward, low risk). These are applications that "can be executed fairly easily and inexpensively. They are not essential to a business, but represent the type of functionality to deliver operational blocking and tackling....In CRM, a customer knowledgebase is a good example of such a technology. A customer knowledgebase is a database that stores information about customers and the products that they have purchased. It is typically a stand-alone database for one product line or division and is not integrated with other customer data sources. A customer knowledgebase is often confused with Customer Data Management (CDM). CDM is an enterprise-wide strategy for storing, cleansing, updating, and using customer and prospect data. It is much more difficult to achieve and more expensive to implement (high risk, high reward) than a customer knowledgebase, but without it, companies lack a unified view of customers."

Compliance (low reward, high risk). These are applications that "must be executed because of government, customer, or supplier demands. Their nature, cost, and complexity make them high risk...Traditional Sales Force Automation (SFA) implementations are high risk, low reward. With an average implementation price tag of more than $5M for a $1B company, most of the 56% of companies that have implemented traditional SFA have not seen a Return on Investment (ROI) in their implementations because of lack of user adoption, cumbersome interfaces, and lack of integration with other systems. These projects can still be saved, but new investments should focus on ease of use rather than fully-featured functionality. ...Companies that invest in products like those from salesforce.com are finding that less is more with SFA (note that hosted SFA is shown as low risk, moderate reward). Processes for tracking and understanding pipeline activity are important, but ease of use and flexibility of customization outweigh the intended benefits of complicated functionality."

As AMR concludes, companies "should look at each category of CRM technology to identify surgical opportunities that are low to moderate risk, high reward investments... While many companies have already invested in the application categories described above, the investments are not delivering maximum value. Explore opportunities to increase the reward for application categories for which you have already absorbed the risk."

Kamran Kashani, a professor of Marketing and Global Strategy at Switzerland's IMD business School, offers a few key imperatives to guide companies as they develop their customer initiatives. Among them:

Grasp the Moment: A break with the past is never easy, but it's a lot easier when standing on a burning platform. In many customer-focused turnarounds, the management began the journey facing an impending crisis, one that forced the organization to search for novel ways of serving its customers. IBM's combined $13 billion loss in 1992-93, the largest in its long history, was a compelling signal that a clean break from its insular ways was overdue. The new management exploited this organization-wide realization to push through a new vision that tied the success of the company to ways of making customers successful in their businesses. But managers need not wait until the entire house is on fire before raising the alarm. Anticipating a future crisis, they are well advised to grasp the opportunity that comes with increments of bad news to raise the sense of urgency and to prod and prepare their organization for the unavoidable change.

Organize Around Segments: The right structure can be an immense help in implementing a customer-intimate strategy. At IBM, to facilitate the acquisition of sector knowledge needed for its newly adopted solutions strategy, the management re-drew the organization chart thereby creating 12 divisions, each looking after an end-user cluster (banking; government; insurance; distribution; etc.).The new structure replaced a product-based organization that was no longer relevant or even comprehensible to its customers. The power of organizing around customer segments lies in assembling under one roof the often internally scattered customer expertise, and in crafting strategies that exploit deep insights into each segment's business.

Choose Your Customers: Getting intimate with customers is a selective process: not all potential accounts deserve or qualify for it. Put differently, the high cost to align and serve the chosen accounts must be more than compensated by the additional profit streams directly attributed to such undertaking. That criterion alone suggests that the current volumes of business are probably less important in targeting customers than their future profitability. Other factors to consider include a fit between the company's strategic ambitions and those of the customer, a readiness to invest in joint programs for shared benefits, and more than a minimum level of mutual trust between the two management teams.

Follow Through: If a single variable could explain the difference between success and failure in customer intimacy, that variable would be the qualities of top management's leadership in follow through. It's the top management that defines the logic and sets the agenda for a customer-focused strategy. It's also those at the helm who have to shape and steer the organization in the unchartered waters as gaps between ambitions and reality become evermore apparent. In deciding to refocus the strategic agenda, they have embarked on a major change program that would continue to require their active involvement with the entire process over a good stretch of time.