Englishmen are still sufficiently rare in Silicon Valley for Stephen Kelly to turn heads when he speaks.

"There's an expectation that the chief executive of an American company will be an American citizen, and my accent immediately gives me away," he says. But the reaction is always welcoming: "I've never had anything but a positive reception, which is very encouraging."

Being a chief executive in the US is a very different to doing the same job in the UK, Mr Kelly believes. "People tend to be much more gung-ho and effusive in the US, while English CEOs behave with more reserve. And even though they may be passionate about their companies, they usually speak about them with greater modesty in public."

The culture is also much more open than in the UK, where heads of companies are usually fiercely guarded by secretaries. "In the US, you are not screened so heavily: you get calls from everyone - ranging from advertising sales people to junior executives from clients." But in the UK, senior executives can be too protected from the real world, and even from their customers.

While most chiefs only have to worry about their own customers, Mr Kelly has to think a step beyond, to his customers' customers - his business is customer relationship management software.

Chordiant was set up in May 1997, in Silicon Valley, and now numbers more than 400 employees, with sales of $76m last year, though the company recorded a loss. Chordiant floated in 2000, and is now valued at about $360m. Its customers include several British household names, such as British Telecommunications and Lloyds TSB, as well as US companies that include UPS and First USA Bank.

Mr Kelly helped to start Chordiant's UK operations in 1997, before taking on responsibility for Chordiant's field operations in early 2000, which meant a move to the US. He enjoys living in California, though his family remains behind in England until they join him later this year. He became Chordiant's chief executive at the start of this year.

As companies struggle to find new sources of revenue and to cut costs in the midst of the economic slowdown, Mr Kelly believes CRM software will assume greater importance for all organisations.

"You can save up to 30 to 40 per cent of the costs of managing your customers with CRM software, and that's something that speaks directly to CEOs in this climate. Add to that the fact that keeping a customer is always cheaper than finding a new one," he says.

At its simplest, CRM means having a whole view of the customer, rather than the partial view most companies have. Consider, for example, a bank customer with a current account, mortgage and credit card: each of these may be dealt with by a different part of the bank, and the information about each may be kept on a different computer system. In order to deal effectively with that customer, however, customer service employees should have access to all of these areas. The integration of back-end systems takes time and is technologically complex, so CRM software can be hard to implement.

For some organisations, the phrase "customer relationship management" is loaded with negative overtones. CRM projects have a reputation for being lengthy, costly and prone to failure. Companies weary from business process engineering projects, enterprise resource planning implementations, supply chain management software, just do not want to hear another three-letter acronym.

Many CRM projects do fail, Mr Kelly acknowledges. Managers should not lose faith as a result, however. Instead, they should examine the reasons why the project has failed.

Is it to do with the technology, or with the process of implementation? Has CRM really been tried, or found hard and left untried? Did the company whole-heartedly commit itself to make the project work, or did internal opposition, politicking or reluctance to change put a spanner in the work? Have business processes been changed in step with the new technology, or have the two been left out of synch?

Unless processes are aligned with technology, there can be no hope of success, Mr Kelly maintains. And for business processes to be aligned properly with a CRM system, a company must be fully committed to a sometimes painful regime of change. In many cases, companies simply find that their courage fails them, and the difficult project is shelved.

Take a closer look at the role of the chief executive. "If the head of the company decides to throw his backing behind a CRM project, that's the best guarantee of success," says Mr Kelly. Even if at points it looks as though the project is doomed because it is 'too difficult', hard driving from the top management will see it through.

The differences between the UK and the US can be thrown sharply into relief during such projects. "It's a stereotype, but often true, that lots of UK companies have a culture of blame and fear. The US, on the other hand, has a culture of learning," observes Mr Kelly.

That extends to learning from failures - and rewarding successes. Companies in the UK would do well to adopt a similar attitude, he believes, instead of a negative culture that makes people afraid to take risks or try anything new, and too ready to block change.

Contrasts

UK companies are also too ready to undermine and ridicule "the obsession with the customer that characterises American businesses", he says. "You find people stand by the coffee machine making snide remarks [about your own company and your customers], which you don't find in the US."

Only by reforming their attitudes to the customer will UK companies be able to compete with their US counterparts. This approach must come from the very top and be passed down to all levels of the organisation.

In leading his own company, Mr Kelly says, "I don't pretend to be a genius. I never claim to be anything special, but I do simple things very well. Most of the things I say, my way of working, I have plagiarised from other companies that have been successful."

He tells his own employees: "Never be afraid." People should be happy to seek advice, coaching and supervision internally, without feeling they will lose face. They should accept that failures can happen but instead of finding someone to blame, try to learn the lessons. They should not be anxious about questioning existing processes but should be open to change. And above all, he concludes, remember that the one thing crucial to success in business is the quality of relationship with the customer.