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Josh Schachter:

Everybody, and welcome to this episode of Unchurned. I’m Josh Shachter, founder and CEO of UpdateAI and host of Unchurned. Joining me today, we’re going upstream. We’re gonna talk about CCOs, the chief customer officer practice. We have Alexis Hennessy. Alexis is a partner at Heidrick and Struggles. Which is one of the most preeminent executive search and leadership advisory firms. She helped stand up the post sales and officers practice she has a wealth of experience dealing with CEOs, CCOs, all post sales executives. And we have Rod Cherkas, Rod is the CEO of Hello, Hello, CCO, and is a highly well respected consultant and advisor to CCO practices. Partly because he wrote the book on being a CCO called Chief Customer Officer playbook, which is a great read. Rod himself has experienced a company is like Intuit, RingCentral, Marketo Gainsight. The list goes on and on. Guys, thank you so much for being on this episode.

Alexis Hennessy:

Thanks, Robbie.

Rod Cherkas:

Thanks, Josh. Looking forward to it.

Josh Schachter:

So let’s jump right in. I wanna start. It’s q 2 right now of 2023. We’re recording this episode. And Alexis, I wanna start with you First of all, we’ve never actually had an executive search firm, you know, practitioner on our show. So maybe you can, you know, 1 or 2 sentences tell us a little bit about what you do as context for why we should trust your your opinion here. And then I wanna talk about trends. So first, can you introduce yourself for us? Sure.

Alexis Hennessy:

So, I think as you mentioned, Alexis, Tennessee, I’m a partner, Hydrogen Struggles. I joined the firm 10 years ago from a boutique, retained executive search firm. So I’ve been doing this, for quite some time. Hydrick as a firm has been around, I think, nearly 75 years. So wealth of experience in executive recruiting and leadership advisory, we get hired by mostly CEOs and board directors to help them fill roles that range from VP level to C level to serving on publicly traded boards. We work with clients, companies that range from really well funded funded venture backed, companies all the way through the fortune 50.

Josh Schachter:

So you’re hiring CCOs. You’re hiring CROs. You’re hiring SVPs of CS, those sorts of roles. What are some of the trends and we can narrow this down? But broad question, what are some of the trends you’re seeing coming into 2023 now in those roles?

Alexis Hennessy:

Yeah. So I think there’s a couple things. So one is the reporting structure. I think over the last few years, we’ve seen this move from a little known function that was maybe a VP level of customer success or maybe a VP of professional services who was then tasked with figuring out what customer success is. That’s really elevated to a C level role in so many organizations now that report directly to, directly to the CEO. Themselves. So I think just the importance, the awareness of customer success and the intention to the post sales function is really skyrocketed. I think COVID, the start of COVID really started to shine a spotlight in particular on the function because boards and CEOs figured out We gotta pay attention to the customers that we have, and we gotta make sure that we retain them.

Josh Schachter:

Rod, you you the it almost sounds like Alexis is talking about you. Right? Like, You were the the VP of Global Professional Services at Gainsight. And this is a few years ago right. Well, I guess it was during COVID. And and now you’re training CCO. So do you agree with this kind of view of, you know, where you’ve seen seen the role go over the past few years?

Rod Cherkas:

Yeah. I’ve I’ve been I’ve spent most of my career in post sale executive roles at a number of fast growing companies. I’ve been a CCO. I’ve been a VP and SVP at at all different, levels in an organization, sometimes responsible as Lexus said, for all of the post sale teams, like professional services and support and customer success and at other times, individual. And what’s changed in the last couple of years has been the importance of having a customer facing executive on the c staff that can help be the face of customers into the many short term and long term decisions that a company is making. There’s also a lot more operational responsibility expected from this leader. That has, teams of people. Often, they have P and L responsibilities increasingly responsible for, retention rates and expansion. They may be responsible for the p and l of a professional services and or an education team. And often, responsible for the customer experience and the operations of a support organization. Those are some of the consistent ones. And so with this, need to retain and grow customers with this responsibility for contributing to revenue growth and the profitability of company. This role has increasingly been a c level position that reports to a CEO, and it’s been, it’s been an important trend in the last couple of years

Josh Schachter:

Alexis, it’s this change now. Are our CEOs and boards struggling to kind of figure out how to bring a CCO into that higher echelon of the organization. Do they need a lot of guidance, or did they immediately kinda get it and and know the know the role that a chief customer officer can play at the highest level of the company.

Alexis Hennessy:

So in in addition to recruiting chief customer officers or direct reports too. I also personally spent a lot of time in our CEO and board practice, and I’ve also recruited my fair share of chief revenue officers. I will tell you I think CCOs are one of the hardest roles to recruit for. 1, because the function is still relatively nascent, so it’s difficult to find CCOs who have done the role at scale who have experience reporting into a CEO presenting to boards of directors I think it’s also really difficult and challenging to help the CEO and the executive team and the board understand what a really strong CCO can do for an organization? What should you expect of them? How do you assess them? So, yeah, I think there’s a ton of challenges around recruiting CCOs.

Josh Schachter:

Well, what advice do you give to a a new coming CCO? It’s it’s the first time that the organization has had a CCO at that level. Of the organization and with board influence. Is there anything that you guys are doing to to coach, to train, you know, tips, a certain framework that you recommend they use to really make sure that everybody’s aligned understands their value and their seat at the table.

Alexis Hennessy:

Yeah. So that that work, I think when, like, a best practice is you do that work at the start of search. So really understanding, you know, what the CCO hopes to get, or CEO, rather, hopes to get out of this hire, what do they really think the value of their CCO, will be what what sort of things will this person drive over the 1st year, 2 years, 3 years and making sure we have that alignment up front.

Josh Schachter:

Yeah. Yeah. Go ahead.

Rod Cherkas:

I was just gonna add. I that was one of the reasons that I wrote the book. I’ve worked with dozens of clients. I’ve worked with 100 of post sale executives, and there’s a common theme that their CEO doesn’t understand the value that their post sale teams can bring to the business. You do have to understand that a lot of times the CEO is focused on, you know, very small number of sort of metrics They care about revenue growth. They care about profitability. They care about having a sustainable, you know, product or solution pipeline to help grow it. And so They don’t necessarily spend a ton of time thinking about the value of their existing customers and the value that that drives for the company. So, you know, one of the reasons behind writing the chief customer officer playbook was thinking of the audience of CEOs and board members to help explain what they should expect from a leader, what are the skills that they should be looking for when they’re interviewing or when they have someone in place and they wanna help continue to develop them. And what are some of the metrics that they should be expecting, these leaders to be delivering for the organizations.

Josh Schachter:

Rod, what are what are some of the skills in your opinion and and what you were written about in the book that are most important for a top CCO candidate to have.

Rod Cherkas:

Yeah. Well, one of the biggest changes from individuals that are running functional teams to when you’re a CEO to, a chief customer officer is the fact that your team is no longer the your direct reports. You’re now part of the the east staff. And so you need to take a company, point of view. So one of the skills around that is around, cross functional collaboration and being able to get things done through others. Customer executives tend to not always have all the resources that they need in their organizations, yet they need to be able to drive company level outcomes like improve retention rate or customer experiences work, which often depend highly on working collaboratively with your sales organization or working collaboratively with your product team. So in my book, I outlined a number of skills and sort of strategies for being able to get things done at a company level. And I think a second, key, I mean, in the book, I talk about 8 strategies you know, as part of this cuss chief customer officer maturity model. The second one, that’s important is the ability to tell stories and communicate effectively to different levels in an organization. So you need to be able to level up and explain to your board and to your CEO and their staff. On both what you’re doing and also communicate a lot of the customer facing experiences. Like, how do your customers use your solution? What are some of the ways that they find value, how does your team contribute to delivery of that value in terms of saving customers, in terms of growing customers, in a way that people can understand that isn’t just taking a look at charts and taking a look at, you know, kind of bullets on a slide, but but really bringing it to life. And also being able to tell stories to your customers about how other customers are getting value.

Josh Schachter:

Right. You you brought up a a a term there that’s that’s a trigger word for me. I’ve been on this kick recently of storytelling. I just think it’s so important in in the CS realm, because you are that that connective tissue between the customer of the company. And so, Alexis, my question is then storytelling is a big part of the role. Are there ways that you’re looking for how a top candidate is you or the company that you represent is looking for the ways that a top candidate communicates, maybe tell stories or maybe communicates some other way that you know is gonna make sure that, like, that is going to ensure that they are going to have the gravitas and the ability to to communicate effectively, you know, in both directions.

Alexis Hennessy:

So I think after, you know, after you do a job like mine for a number of years, there is this pattern recognition, right, that starts to play in, but short of that, and the and this the chief customer officer role is top, right? You have to be operational like Rod talked about. You know, there’s P and L responsibility. You have to be technical. You have to be highly empathetic. And and I think the storytelling or sort of plays into the the commercial aspect of what the chief customer officer should also be bringing to the table. So I think as a as a person who assesses and tries to figure out if somebody is ready for a chief customer officer role and if so, Are they ready for this chief customer officer role? Those are all the aspects that I’m constantly looking at. Some of the things that I would say that comes through just in conversations with recruiters, whether it’s somebody like me or somebody talking to an internal recruiter from an organization is thinking about how you tell your own story. I personally like when I hear somebody walk me through a role or a a time at a company where they say I came into the organization. This was my mandate. Here were the 2 or 3 big levers I pulled and then here were the outcome and if you can leave your data into those answers, I I think it’s just a really powerful. That’s a powerful story in and of itself.

Josh Schachter:

I would imagine, that you have to weave your data into those stories, right, to be Yeah.

Alexis Hennessy:

Yeah.

Josh Schachter:

Rod, go ahead.

Rod Cherkas:

I was just gonna add, I think, the use of examples with real customers and or real names. Or if you were interviewing, it might you know, what was the exact, you know, what was the situation rather than explaining what you would do in a situation, you can bring it back in the the chief customer officer can often weave in stories of how their customers are finding value. So, for example, I was I’m working with a client who had their customer success managers go and and do site visits. And they were taking pictures and they were taking videos of their customers sort of using their their solution. It’s a a scanner solution for sort of inventory tracking and and check out. And so you could physically go in and watch, for example, people who are putting their inventory on a truck try to use their solution. But what happened was because it was a mobile device and the drivers were required to where driving gloves that the driving gloves weren’t able to manipulate the phone. So they had to physically cut the end of their gloves off so that their fingertips could hit that. It was like, you wouldn’t possibly know why aren’t they using their solution more? It’s because they physically couldn’t use it the way that their company was requiring them to wear driving gloves. So It’s part of the experience of understanding your customers, and then part of it is bringing it back. Hey. How are our customers experiencing And you can do others where you visit a store and see how they’re benefiting or or, you know, how customers are expanding the use when you start to see those. But you can bring it back and tell those stories to different audiences that gives people who don’t spend a lot of time, for example, with customers and appreciation for the value they get or the challenges they have.

Josh Schachter:

And by the way, Rod, bringing back stories. I’ve heard you tell that story before, right, about the truck driver gloves. But I love that. Right? Like, you don’t need that many stories in your repertoire. You you you’re always speaking to different audiences, but but, like, just get it down and it and it’s memorable. I I vividly remember the last time we talked about that story. And and I think it is such a 1 wonderfully demonstrative story. So, yeah, Alexis, you you said something a minute ago as you’re assessing whether somebody is ready to be a CCO. So that would be when you’re looking at candidates who are who are are climbing the ladder themselves, it’s not not really a lateral hire for them. What are some of those things that you’re looking for if you’re speaking to, let’s say, a VP, a a CS, or they might come from a separate function? That you’re saying, like, yeah, this person is ready to take that next level in their career. And I think to preface that, tell us a little bit about, like, the the the segmentation of the roles because you might be, like, heidrick struggles works with fortune 100 customers. Right? So it may be different than a CCO for a series a company, for example.

Alexis Hennessy:

Absolutely. I think there is, you know, even if someone’s been a wildly successful chief customer officer inside of a fortune 50. I I would maybe I probably would not think that they’re qualified to go and be a CCO series a. Right? So I’m constantly looking for ability to scale up and scale down. Right? But I think scale in and of itself, like, have you managed a team size of comparable size. I think that is a big one. Even more so than have you managed a renewals number of a certain size really the team size, the complexity of that team size, or the team, you know, what functions we’re reporting in. And then I think it depends on the company itself where it’s where it is in its life cycle, where it is in its maturity of its post sales organization. So Sometimes, you know, if you’re recruiting for a cyber security company, they’re really big on finding chief customer officers who have some relevant donating verteith. So we’ll understand the end user understand, you know, the the the technical nature of the product. If it’s a B2C company, they actually might want somebody who has overseeing marketing in addition to customer service, and support. So it it really depends on the company itself. And that’s what people have to keep in mind, and I think to show an enormous amount of self awareness to say, am I right for this role, or am I checking some of the boxes and can I own in the interview process the boxes that I don’t check and be thinking about how I would compensate for that? Right? I I think that is one of the most powerful things that somebody can do in an interview process who is going to be considered a step up candidate in some way.

Josh Schachter:

By background, I’m a product manager. And the reason I got into product management was coming out of my first startup, but I I was looking at, like, profiles just literally on LinkedIn of types of of folks that, you know, were in roles that I ultimately wanted to be in 10, 15 years down the line, which was like a general manager, of a of a tech company type of role. And I looked, and I saw that this is, at this time, 15 years ago, basically, this pathway of of, well, a lot of people come from product management or marketing management, but and then, you know, triangulated that with my skills and product management was where I decided to take my first step. Do you see any patterns Alexis with like, where people have originated and how they’ve navigated the tree of getting making their way to becoming a successful CCO candidate.

Alexis Hennessy:

Yeah. It’s I’m glad to say this, but I and I think as time has gone on, it’s become more diverse in terms of the backgrounds of finding a way to achieve customer serve. And, Rod, I know you you’ve seen this as well. We get used to be, you know, professional service executives who could get out of that, you know, PS mindset and sort of start thinking a bit more holistically about post sales were the best bet in terms of you becoming chief customer officers. Now I think there’s a whole generation of people who have grown up as a CSM who are starting to become viable for chief customer officer roles. So that’s That’s interesting, but I do think if there’s a blend of somebody who’s touched product or has been an engineer and is technical themselves as a foundation, they make really attractive chief customer officer candidates.

Josh Schachter:

Rod, any thoughts on your end?

Rod Cherkas:

Yeah. I interviewed a as as I was writing the book, several dozen chief customer officers, and asked them about their career paths. And There are 2 trends that I wanted to share in particular. 1 was there was hardly anybody that had the same functional experience from, like, frontline through a director to VP and then they become a CCO. There was a lot of moving between organizations where they may have been a salesperson or maybe they worked in services and then they went to success management or maybe they had an operational role. But there was exposure to different functional teams and the different sort of operating mechanisms that they had. The second was that then when I asked them about their keys to success, when I when I described in the book as career accelerators, so many of them talked about the real need to understand the metrics and the levers that really getting a sense for what were the drivers of the business, understanding the financials and the financial impact, building relationships with their CFOs or their finance business partners, even if it wasn’t an expertise for them coming in, but that that was a really critical skill. And so making sure that in your career development, you’re aware of that and picking it up so that when you get to this leadership role, you’ve got sort of visibility to how different functions operate. How they come together and how they all contribute to deliver the financial, outcomes that your CEO and your board care about.

Josh Schachter:

Because you are gonna have a seat of that boardroom table and you’re gonna be expected to have awareness about the cross functional interactions and what each what what each group needs. Last question for both of you separately is who is a CCO that you really look up to and admire and think that everybody listening here should, you know, adopt their characteristics. Who wants to start?

Rod Cherkas:

I’ll I’ll start. I would I would suggest Ashvin by Danathon, who was the chief customer officer when I was at Gainsight, and now he’s the chief customer officer at LinkedIn. He has a really good understanding of how business it, how the different parts of a business come together. So he brings that strategic thinking He’s also a great people manager and an internal leader, and he’s a champion for customers in all of the decisions that get made in his organization. Which I think are, you know, critical characteristics of a successful studio.

Josh Schachter:

Shout out to Ashwin.

Alexis Hennessy:

Good one.

Josh Schachter:

Alexis.

Alexis Hennessy:

Oh, it’s so hard to pick just one, but, there’s 2 quickly that come to mind, Christina Kosnowski, who was, at Salesforce for a period time became, head of all customer success services, support for Slack and then became CEO of logic monitor. And then there’s Yamini Rangan, who’s CEO of HubSpot. I picked those 2, one because I think it just shows there, there’s like enormous diversity within this function, which is really one fault. It’s not something you often find, especially within tech. And secondly, I think this is they’re both great examples of how chief customer officers are now becoming CEO candidates, board candidates, for many of the searches that we work on. There’s just, I, I think, enormous headway for the CCO candidates and, and the roles that they could hold.

Josh Schachter:

We’ll leave it at that. Alexis, Hennessy, Rod Turkish. Thank you guys very much.

Alexis Hennessy:

Thank you.

Rod Cherkas:

Thank you, Josh.