This time we feature a nice short video from the CX Rockstar James Dodkins.
A quick google search on ‘Silo working’ reveals 37.1 Million finds and this is not a new topic. Hammer and Champy were not the first to raise the issue in 1993, but they were early advocates of sweeping away that silo thinking in ‘Reengineering the Corporation’ with their cry of ‘Don’t Automate, Obliterate!’
The Silo Mentality as defined by the Business Dictionary is a mindset present when certain departments or sectors do not wish to share information with others in the same company. This type of mentality will reduce efficiency in the overall operation, reduce morale, and may contribute to the demise of a productive company culture.
Do you want to embrace advanced Customer Centric thinking and become Outside-In?
Strategic positioning of customer experience is now widely recognized as a key to business success.
If you’re customer-first and do it in a smart way, then it can help the company.
Gartner 2021
Unfortunately, the majority of many well-intended CX initiatives become a victim of organization inertia and bureaucracy and sink to the level of metrics on dashboards buried in functional departments.
At best these failing efforts deliver small incremental performance improvements rather than providing the customer and business insights necessary to strategic success.
We have identified five major errors and causes of failure
1. Top teams have unreasonable expectations of CX success
2. Customers needs are not clearly defined from the Outside-In
3. CX Initiatives are not implemented with transformation in mind.
4. CX Initiatives focus on the wrong measures, rather than successful customer outcomes.
5. CX Initiatives go way down deep into functional complexity
👉Error #1: Top teams anticipate CX Success without understanding the enterprise was never designed to do this stuff.
Talking about customer experience and implementing the changes necessary to delivering CX success are two quite distinct things. Many organizations brief their senior people with the importance of the business transformations underway, why a focus on the customer is essential to survive and thrive, and why it is necessary that the dots are connected from every activity to the customer experience. Fair enough. However, Top teams then anticipate internal leadership towards customer centricity but at the same time do not enable the underlying functions to realign to achieve successful customer outcomes.
The organization structure, rewards systems and technology were never designed to deliver great customer experiences
The realization that the organization structure, rewards systems and technology were never designed to deliver great customer experiences, they were in fact originally designed with an industrial age mindset to achieve industrial age goals. To achieve strategic CX success, it is necessary to understand the limitations imposed by inside-out thinking (getting better at doing stuff faster) and help the organization migrate to Outside-In thinking and practices (alignment to delivering Successful Customer Outcomes)
👉Error #2: Customers needs are not clearly articulated and underpinned by smart Outside-In metrics
The challenge here is two-fold. Do we understand who our customers are, and what success looks like from their perspective?
It is frequently observed that 80% of profit comes from 20% of customers however organizations are especially fickle when it comes to understanding where they should focus limited resource to get the maximum sustained return from the appropriate customers.
Good discipline here is about identifying the categories of customer and prioritizing them in terms of needs and success. That can mean migrating away from undesirable customers. Intrinsic in this failure is arbitrarily segmenting customers by circumstance (where they are based, the length of relationship, immediate spend available etc.) rather than categorizing customers based on their needs.
Needs assessment is NOT about asking customers what they want.
Needs assessment is NOT about asking customers what they want. If you asked your kids what they want for dinner, don’t be too surprised if they say burgers, ice cream, chocolate and gummy bears, on one plate. That question is just plain stupid. So why go asking customers what they want?
Smart CX companies figure out their customer needs even when the customer doesn’t know them. Case in point would be the launch of the iPhone more than a decade ago.
Apple’s genius was in understanding the new customer and getting ahead of the game to design products and services that met, at the point of launch, something customers could never have articulated.
This is not, however, an excuse to stop listening to customers, that is more essential than ever before. Just stop asking them dumb questions which may cause you to do the wrong things (rather like Nokia did).
👉Error #3: For CX initiatives delivering success will require change and transformation
This is a very common problem and is rooted in the idea that CX initiatives are just another thing to integrate into the existing ways of working. This couldn’t be further from the truth. A fundamental of successful CX initiatives is identifying and implementing the ongoing change required across the enterprise to align everything to Successful Customer Outcomes.
align everything to Successful Customer Outcomes.
Once the customer needs are articulated work backward to recraft the appropriate structures that will guide the enterprise progressively towards success. That will, of course, require potentially significant changes to the shape and technology of how work gets done. It will reach into every nook and cranny of the business. Ultimately the organization may look quite different from the industrial age model and will become shaped to achieve the ongoing change brought about by the digital revolution.
👉Error #4: CX Initiatives focus on the wrong measures, rather than successful customer outcomes.
The Successful Customer Outcome is like the beacon on the hill; everyone should be aligned and progressively moving in that direction. If your metrics are not contributing to that alignment, you may be getting better at doing the wrong things (in the context of delivering an optimized CX).
There is a remarkable lack of science in this sphere of CX Initiatives.
Here’s a good question to ask anyone in the business “is everything you are doing aligned to delivering a successful customer outcome?” and if the answer comes back with anything other than “yes, 100%” you may be doing dumb stuff really well. The why of that is easy to understand – you get what you measure, and frequently companies excessively measure outputs (what is produced) rather than business outcomes (what is delivered).
If you task people to measure outputs and reward them for improving those outputs, there is often a repeated disconnect between the work performed and the end customer delivery. Getting a balance right here is essential.
There is a remarkable lack of science in this sphere of CX Initiatives. Reliance on simplistic measurement systems, with ‘one question rules them all’ approaches is not only misleading but may cause you to do precisely the wrong things.
👉Error #5. CX Initiatives go way down deep into functional complexity
CX Initiatives have lofty visions but all too often become bogged down in organization politics and the natural resistance to change. Often the local leadership pays lip service to the customer experience ‘it is not my job after all’ and this resulting crawl ultimately thwarts the CX initiative.
focus on winning the triple crown – simultaneously improving the Customer Experience, Reducing Costs and Growing Revenues
To deliver and ensure ongoing success, the guiding light of the Successful Customer Outcome and it is associated focus on winning the triple crown – simultaneously improving the Customer Experience, Reducing Costs and Growing Revenues – should be on every agenda in the business. Linking the triple crown across the departments and divisions dispels the practical objections as everyone becomes accountable for demonstrating their substantial triple crown contribution. This, in turn, ensures a significant contribution to delivering the ROI for the CX Initiative.
There are many bear traps and blind alleys to avoid on the journey to delivering CX success however an understanding of the most common errors will ensure a greater chance of success. After all the goal is to deliver strategic Successful Customer Outcomes that result in terrific and rewarding customer experiences.
Do you want to embrace advanced Customer Centric thinking and become Outside-In?
Complexity is an insidious thing. Humans seem unable to keep things simple and will add rules, reporting lines, and complications seemingly for the fun of it. And process people take it to a whole new level.
Why is that so? There is a simple answer, but many people don’t like it, or don’t want to admit it; if you pay people for doing dumb stuff they get really smart at it.
Are you rewarding people for doing dumb stuff?
Politicians are especially good at creating fiefdoms and empires, and the ones really clever at that rise above the rest, making the problem progressively worse by in-turn recruiting like minded people.
Now as much as humans have traditionally done this, there is a new kid on the block. And this new kid is defining a whole new way of being, one that is built and operated with the customer at the center of everything.
Don’t get me wrong, it isn’t that people haven’t talked about the customer before, just this time it is very different. The new game is all about customer experience management (CEM).
Here are a few of the meaningful stats that back this up.
According to Gartner, 89% of all businesses will compete on customer experience this year.
Another 89% believe customer experience will be their main differentiator by 2022.
The Temkin Group found that companies that earn $1 billion annually can expect to earn, on average, an additional $700 million within 3 years of investing in customer experience.
84% of companies who claim to be customer-centric are now focusing on the mobile customer experience.97% of global consumers cite customer service as important in their brand choice and loyalty.
CX also influences on-the-spot purchasing, too – as 49% of buyers have made impulse purchases after receiving a more personalized experience.
BPG Research 2021
And for those organizations effectively embracing the customer experience CEM is much more than journey mapping and the surface experience. For the leading companies, CEM is the opportunity to connect everything they do, from the customer interaction, right through to individual task, activity, and systems that support them.
Interestingly this eradicates unnecessary complexity and creates a virtuous circle. You figure out what a successful customer outcome looks like, you align everything you do to achieve it, the customer ‘gets it’ and comes back for more, and you evolve the customer experience to be even better next time.
It is a bit like a fitness regime as you get fitter, you get faster, you become better, and what was once difficult becomes easy.
👑 Those who Get It Win the Triple Crown
Not surprisingly great CEM drives down the cost of delivery, improves service and grows revenue. This triple crown of deliverables becomes the tangible measure of success for Customer Experience Management.
And as if this wasn’t motivation itself to do more CEM the work environment is simplified; we can increasingly reward each other for delivering results and outcomes (doing the right thing), rather than just measuring and rewarding what we do (doing things right).
That is what I mean when we say ‘let’s get more scientific about the customer experience’
Do you want to know more?
Do you want to embrace advanced Customer Centric thinking and become Outside-In?
Have you got a North Star metric? It’s one of the essential things for any company looking to innovate and drive growth. If you haven’t created one yet, it is time to seriously figure it out. And today, I will be explaining what a North Star metric is, why it’s essential, and how to come up with one.
The North Star metric is the most critical. It is that Metric that would consistently deliver Successful Customer Outcomes (SCO’s) and drive sustainable growth if you focus on above all else.
For Facebook is ‘daily active users,’ Airbnb is ‘nights booked,’ and for the BP Group, ours is ‘monthly organization upskilling.’
Why is having one important?
Because delivering SCO’s and driving change is a lot of work, and it’s easy to dilute effort and resources on things that don’t move the needle. Additionally, getting distracted with the latest and shiniest new ideas is a common problem. Having a North Star metric keeps everyone in your company focused on the most critical Measure for your company’s success. Chosen wisely, it will connect the dots from the front line to the top team
Creating Your North Star metric
You may already have created it in your Successful Customer Outcome Canvas®[1] (SCOC®). Even if you haven’t yet the steps are straightforward by examining your current key performance indicators and assessing what could be a lead Metric. Examine the metrics in the context of what creates the best outcome, for the business and the customer. It is especially effective when you aggregate the SCOC’s against all your customer categories and bringing out the most significant ones and deciding decide which is the most essential Metric.
Defining that North Star metric can have a considerable impact not only on your immediate customers but on how your company operates overall.
Your North Star metric will be different from other organizations, as is how it’s rolled out and communicated.
Connect the dots, Draw the Lines
Anyone involved in delivering Successful Customer Outcomes and driving growth for your company, from the ‘C’ suite to the marketing team to the operations team and all of your external agencies, should be clear on your North Star metric and their role in driving it forward. If you don’t have one and your success maybe isn’t where it needs to be, perhaps you should consider defining one for your organization.
Set up a time with key stakeholders,
Identify your customer categories,
Agree on the SMART needs,
Choose the most important one, then
Brainstorm what it should be across the entire organization.
It starts with understanding who are your best customers are and why. You will need to cut through all distractions and noise to identify the one metric that will have the most significant and most sustainable impact on your business performance.
It’s a significant process, and sometimes it can be challenging to see the forest for the trees.
It will take a concerted effort, but it is one of the most worthwhile things an organization can do to connect the strategy to execution. Realistically isn’t that desirable for every organization seeking to make winning systematic?
The Guiding Light
The North Star metric becomes the guiding light. It is tangible, objective, and touches everyone and everything. It is a simple concept and as a result everyone can understand it.
You can explore the North Star Alignment approach within the Certified Outside-In Masters® program. Review the short video introduction here: https://cemnext.com/oi2020
Part Two. In Part One we reviewed how poor metrics drive bad behaviours. Lets dig deeper with a typical scenario…
And if you think this experience is unusual grab a coffee and google ‘poor customer experiences’.
Leadership Delusion
The leadership team can talk until they are blue in the face about customer centricity but if they insist on metrics designed for running factories everyone suffers. Here’s another typical conversation:
In all three instances the customer did not achieve a Successful Outcome. In fact there is now more effort required by the customer, and also more cost and time to be incurred for the organisation if the customer does follow through. If the customer doesn’t bother that is more potential revenue lost.
So how does this organisation look to the browsing customer? Pretty awful to say the least.
We know why this is so. Organisations like this are focused on measuring Outputs, rather than measures of Successful Customer Outcomes. If it is so obvious why is it so many persist in this Failure-Demand cycle?
Because they are measuring the wrong things. And guess what? Yes, they will have automated those measurements and put them on fancy management dashboards so everyone can feel happy. Except the customer of course. But what does that matter?
In Part Three – a big reveal. A couple of techniques that will help shape Successful Customer Outcomes brought to you from companies like Amazon, Zara, Zappos and Emirates.
Now, please remember if you pay people to do dumb stuff they will get really smart at it.
Join our upcoming Coaching and Accreditation sessions online, LIVE & Interactive
Do you want to embrace advanced Customer Centric thinking and become Outside-In?
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My colleague and BP Group co-founder says this…
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You may be wondering why you should invest your precious time reading this book. With all the pressures of the current business climate, why will this investment be worthwhile?
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