Several years ago, The Wall Street Journal ran a story about a new matchmaker service for lonely executives. It wasn’t a dating service. It was a company that found friendly, understanding ears for top executives facing business issues they didn’t feel free to talk about with anyone else in their company.

That story reminded us of the day we walked into a client’s office just before our regular monthly meeting with the Executive Committee. Jim, the Chief Operating Officer, always seemed to be in control, but he now had the face of a man deeply troubled. He looked at us through his furrowed brow and said, "I almost canceled the meeting today. I was awake the better part of the night. We’re not ready to wrap up our planning cycle because I think we’re coming at our business the wrong way."

We were stunned. Before then, Jim had never displayed any misgivings about the company’s strategic intent. In fact, his signature was all over it. But clearly something had derailed him. Now we understood why Fran, his administrative assistant, had called us with a request to come 45 minutes before the meeting. Jim needed friendly, understanding ears.

"I’ve been working here for almost 15 years – since 1978. You know the old saying, ‘Work smarter, not harder?’ Well, it seems we’re working harder and harder to deliver more and more for less and less. You guys have been working with us the past few years. What do you think is going on?"

During Jim’s tenure, the company seemed to have a knack for doing just about everything right. It operated as close to the frontier of operational efficiency as any company around. It had become a paragon of total quality management within its industry. But everyone, including our consulting firm, had failed to see coming what was now keeping Jim awake at night.

We were oblivious to the long-term limitations of a strategy anchored upon operational effectiveness. We never considered that the very diffusion of best practices originated by our client, would also shorten the timeframe in which competitive advantage could be extracted from any given operational improvement. We ignored what might happen when the whole industry started “getting it right.” Jim was now asking, “What’s next?”

During those 45 minutes before the Executive Committee meeting, Jim didn’t give us much time to answer his original question. Instead, he kept raising additional questions that were more like self-prompts for thinking than queries in search of answers. We were his sounding board during this mostly patternless soul searching.

Fran’s summon, “Jim, the Executive Committee is waiting,” ended Jim’s anguished musings.

Jim opened the meeting, “Folks, I have a request. I’d like to go back to the drawing board before we agree to adopt the strategic plan. I think we have something important to discuss.”

Everyone looked confused. Jim was usually a predictable leader and rarely deviated far from a course he had laid down. The room was electrified. Something real important must be brewing for Jim to hold up the planning process.

Speaking slowly at first, choosing his words with care, Jim drew from our discussion before the Executive Committee meeting. At first he talked somewhat philosophically about the dangers of success. Then he asked some of the same questions he had raised with us before the meeting. The instinctual response by several executives was to defend the strategy that had served the organization so well. What ensued was the one of the most interesting, productive and uncomfortable meetings we ever had with a client.

Jim observed that even though quality and performance had improved, market conditions made it impossible to raise prices much beyond inflation. Quality and operational efficiencies were becoming "table stakes." As fast as a new service or feature was added to the value proposition, the competition matched it. The company’s response had always been to find new ways to accelerate the payoff from organizational effectiveness. Our consulting firm had been part of putting that strategy into play. By questioning this strategy, Jim was stepping on sacred ground, but facts were on his side. The focus on efficiency to achieve competitive advantage was paradoxically helping to create a more brutal competitive environment.

Taking advantage of the battles between competitors, customers were wresting more and more power away from producers. The consensus by the end of the meeting was that operational efficiency would continue to be important, but competitive differentiation would increasingly depend on enhancing customer relationships and on how effectively the overall customer asset was managed.

Jim had committed corporate heresy. In 1992, company operations everywhere revolved around ever increasing efficiency at ever lower cost in moving products and luring customers. Anticipating what would be clear to everyone by the end of the decade, Jim said the company needed a more "customer centered strategy." He used the term years before customer centric became a mantra uttered everyday in business. Since that day, the company’s tilt toward customer centricity has been gradual and measured. Eight years later and several years after Jim’s retirement, the balancing act between operational effectiveness and relationship effectiveness continues.

Jim praised us for the contribution we made at the meeting that day, but we couldn’t help feeling vulnerable. In the process of helping our client carve out a new path, had we also carved ourselves out of the picture? Consultants are supposed to see the gathering storm when clients are too enmeshed in the day-to-day details. Did Jim think we had let him down? We received our answer when Jim asked, “Are you ready to make this journey with us?”

Jim quickly embraced our premise that managing the customer asset was as much a “right-brained” subjective exercise as it was a “left-brained” analytical endeavor. Our colleague, David Wolfe, describes this combination as a “whole brain” approach to customer value management. Understanding the economics of the customer portfolio was critical, but so was an understanding of the deep drivers of customer behavior—the indirect forces that shape customers’ perception of value and their emotional connections with the brand. The latter was unfamiliar territory for Jim, but it wasn’t long before he began challenging how the company listened to customers, communicated with customers and conducted research on customers.

Some people thought Jim was a pain in the backside as he meddled in their turf. (Red carpets weren’t exactly being rolled out for us either.) But Jim’s reputation, credibility and authenticity carried him and us through some of the rough patches encountered early on.

As Jim dove into the subjective realms of feelings and emotions, he realized that building quality products at competitive prices alone does not produce lasting relationships with customers. Empathetic bridges between the company and customers needed to be built as well. While discussing this subject at dinner one evening, Jim remarked, “I’ve been listening to Kate with a more empathetic ear. It’s amazing what I’m learning about this woman after 35 years of marriage!”

The momentous meeting with Jim and the executive committee nearly a decade ago was the catalyst for Booth Morgan Consulting’s customer value management practice. Our roots in total quality management proved to be a natural foundation upon which to design and build a “whole brain” approach to managing customer value.

A growing number of business analysts have predicted that before this decade has run its course, annual reports to shareholders will include an independent appraisal of how well a company is managing customer value. One reason is that customer value has emerged as one of the most reliable single indicators of future corporate performance.

The balance between customer value and shareholder value is a delicate one. An over-emphasis of one to the neglect of the other can destroy long-term corporate value. Striking this balance requires viewing the customer as an investment asset, not unlike other assets in which a company invests. This may seem like a subtle and unremarkable adjustment, but the results can be dramatic. For companies with large numbers of customers, billions of dollars worth of corporate value can be at stake.

Thanks to Jim, we consistently help companies capture that value.