Where are you focused as a CX leader?
Customer experience (CX) is a broad discipline that requires integrating a range of skills and collaborating within and outside your organization to achieve results. In most organizations the people, processes, and technology that enable a better CX are spread across multiple places in the organization, whether functions, strategic business units, or geographies, even when they have built up a centralized CX team. Driving greater organizational effectiveness to address your “bold bets” and your “brilliant basics” for your CX requires fusing diverse perspectives across human-centered design, enterprise agility, data science, quality management, change management, and organizational design (and this list is not exhaustive). CX is a team sport that requires executive sponsorship and collaboration among your leaders, managers, and frontline employees to drive results.
For these reasons, if you ask CX leaders what the problem statements they are focused on addressing are, you’ll get a broad set of answers. CX leaders need to prioritize which problem statements they focus on, in what order, and how they can best engage and evolve their organization’s maturity to address them.
That said, I’ve found that these problem statements typically fall into one of four complementary categories. Taken together, they help you drive more value through a combination of better, faster, and cheaper. The right balance for you will depend on your own company’s strategy and capability maturity, and the unique trade-offs you make across value and ease of execution.
Read on for an initial summary of the four areas. I’ll then follow up with a blog series dedicated to each of them over the coming weeks. I’ll also be ramping up a set of videos and podcasts that dive deeper into these topics, showcasing a set of guests that I hope you’ll find valuable.
The problem statements are all written with the same format: As a CX leader, I need to do X. Think of the text in blue in the exhibit as level one problem statements. Then the text below the level one problem statements are level two problem statements that drill down on ways you can solve the level one problem statements.
As a CX leader, I need to Reimagine Insights
Insights are the spark for great customer experiences. You must make investments in this area to enable your efforts on the other level one problem statements. The same is true for driving change and evolving the culture, which makes or breaks your program success and amplifies the ROI you achieve.
This is why I started on this blog series first among the four. You can find the blogs I’ve written so far for Reimagining Insights here. There are more to come for this series, even as I start to flesh out the other three series, too.
I’ve been collaborating on the Reimagining insights series with Lou Carbone, a dear friend and mentor. You may have also seen my review of his book, Clued In, or the video interview I did with Lou (found here together with video interviews of other strategic partners for JourneySpark Consulting).
As Lou and I discuss in the video, companies are making the transition from an Industrial Age approach to experience management to one that is better aligned to the needs of the Experience Economy. They are transitioning from a make-and-sell approach to a more customer-driven model. They are overcoming siloed approaches to creativity and analytics, building a more integrated, data-driven approach to evoking emotions along the customer journey. They are broadening their emphasis from rational thinking and what people are doing along the customer journey, paying deeper attention to unconscious thought and what people are feeling along the customer journey. They are addressing the long lags to generating insights that inhibit their ability to drive continuous improvement in their CX, feeding the teams working on their bold bets and brilliant basics with more regular and actionable insights. And as we will reinforce further in the fourth level one collection of problem statements for change management and culture, they are building a movement among their leaders, managers, and frontline employees that helps them get from data to knowledge to wisdom and become a more adaptive enterprise (see also my book review for Adaptive Enterprise by Stephan Haeckel here, whom Lou collaborated with on some of their earlier, pioneering work that shaped the experience management space).
As a CX leader, I need to Amplify Innovation
Elevating the profile of CX at your company requires shifting beyond just “draining the pain” and helping enhance your company’s innovation effectiveness.
Are you focused on ways to amplify the existing peaks or create new peaks on your customer’s journey? Have you been able to shift from a reactive to a proactive approach that improves the overall system design and helps reframe value for your customers?
Are you stuck in a red ocean where you are chasing volume and buying loyalty? How can you change the game and reimagine your loyalty programs and the ways that you drive relationships with customers and build community around your brand?
Are you focused on shifting from B2B4C models to B2C models? What are the right investments to make across content, community, and commerce to drive profitable growth for your direct-to-consumer business?
For B2B companies, how are you evolving your approach to sales, marketing and service given the shift to hybrid and always-on approaches to deliver expertise and engage your customers?
Any one of these areas requires significant attention to drive results. What choices are you making and are you getting the results you need?
As a CX leader, I need to Accelerate Value
A lot of CX leaders are tasked with building a business case for investment in the capabilities required to deliver a better CX and drive their desired business outcomes. While building a more rigorous business case can be valuable, this frames the challenge too narrowly, and risks bogging down your organization in paralysis by analysis. What CX leaders really need to do is build a self-sustaining movement in their company that provides a flywheel for growth. The business case can help, but what really matters is ongoing iteration to amplify and extend the impact on value realization. If you focus on building a flywheel and putting in place the right insights and measurements that enable you to both drive and track value realization, you will generate orders of magnitude more value. Your business case then becomes a living model for your business, rather than a once-and-done exercise.
In practice, I find there are three pathways to accelerate value. All lead to self-funding flywheels where the value created early on enables an expanded level of investment over time that makes the flywheel spin even faster.
The first is focused on raising the ROI for your marketing and promotions spend, targeting the right personas with propensity to engage with your brand and optimizing the content and experiences you design for them. I recently wrote about this in one of my AI & CX blogs (found here), recommending you pay attention to your “Moveable Middle.” This is a powerful framework developed by MMA Global, the association where I’m acting as a CX subject matter expert. MMA Global has conducted experiments with members that demonstrate that the ROAS for paid media campaigns focused on customers with some propensity to engage but that aren’t already promoters is orders of magnitude higher than the control for media campaigns. The powerful concepts for Moveable Middle can be extended to your owned and earned media, which are arguably more important for your end-to-end CX, and broaden the focus from acquisition marketing to retention and customer lifetime value.
The second pathway to value is to create a growth flywheel focused on levers such as retention, pricing realization, driving usage and category engagement, or new business models. This builds on the problem statements for Innovation, while leveraging the more powerful insights you are generating to guide and sustain your progress.
The third pathway is focused on achieving near-term cost savings in areas such as research and testing, vendor rationalization, and customer service costs that can pay for all your capability investments to spin the two flywheels above, while also dropping significant benefits to the bottom line. Any one of these could pay for your incremental investments in headcount, license fees and professional services, speeding your break-even and significantly expanding your ongoing investment capacity so that the benefits from top-line growth all flow to the bottom line.
Typically, cost savings are used as a catalyst to enhance and accelerate your ability to pursue the other two pathways to value. The economic value of the first two is orders of magnitude higher but take more time – though you can drive some quick hits for the first two as well even as you scale up what is working best. Building momentum and capturing savings from the third helps build and sustain executive support to fund the broader program and generates savings that can be ploughed back into capability investment to further accelerate your flywheel for growth.
As a CX leader, I need to Drive Change and Evolve the Culture
Many of you have heard or referred to the famous quote yourself that “culture eats strategy for breakfast.” Bonus points if you knew this was said by Peter Drucker, the famous strategy guru. Drucker didn’t mean that strategy is unimportant, but rather that paying close attention to culture is key to ensuring the success of your strategic initiatives. Said another way, it’s not enough to pay attention to change management to de-risk your investments in business transformation. Your approach to change management needs to be culture-led.
Culture-led change has been a focus for me over my own professional career. I was fortunate to have the opportunity to collaborate with many amazing colleagues at the Katzenbach Center while at Booz & Company and later PwC. Jon Katzenbach (Katz), who I would argue is to culture what Peter Drucker is to strategy, became a partner for the third time in his career the same year that I did at Booz & Company in 2008, when he sold Katzenbach Partners to Booz & Company and joined the firm (the first time he made partner was at McKinsey). The Katzenbach Center later became one of the two sub-brands at PwC in addition to Strategy&, which was what Booz & Company was renamed after it was acquired by PwC. You can find several of my favorite articles that I’ve collaborated on over the years that touch on the intersection of culture, change management, customer experience, and enterprise agility here. I also recommend checking out my review for Leading Outside the Lines, which is one of many influential books by Katz.
Here are a few questions to get you started as you think about the right problem statements to focus on for applying culture-led change to accelerate value for your investments in CX.
Is there a shared understanding for your CX vision? How strong is the motivation and commitment to change for the problem statements that you’ve prioritized? Is your CX vision written in a way that pays attention to the emotional connection you are seeking to create with your customers, and that will tap into the pride of your employees for delivering that experience to customers? How are you enrolling and empowering your leaders, managers, and frontline employees as you work on your prioritized problem statements to realize this vision? People embrace what they help create.
Have you identified the specific customer-driven behaviors to focus on in your organization? What are the activation tactics that will work best to spread these behaviors? How are you measuring the impact of behavior adoption on the business outcomes that are key to your CX strategy?
How would greater enterprise agility help you achieve value from your CX investments? How does this relate to the customer-driven behaviors you are seeking to adopt as part of a more customer-driven culture? This will help you to build a movement that shifts the focus from “turning on technology” and “building stuff” to driving behavior changes across your leaders, managers, and frontline employees that have direct and indirect effects on your customer experience.
What are the skills you’d like more employees to have to drive greater organizational effectiveness? How can you nurture greater range in these skills, even as you foster more effective collaboration across people with diverse skills? What are the best approaches to scale upskilling efforts and reinforce cultural behaviors? As I’ve written about in my Reimagining Insights series with Lou Carbone, you can proactively develop the “clue consciousness” of your organization as part of building a cultural movement, which amplifies the value of your CX investments.
Finally, how can you create a more flexible and scalable operating model to realize more value, more quickly from your CX investments? Your operating model needs to address more than just organization design, including areas such as governance, decision-making, incentives, and performance management. I recommended reading Leading Outside the Lines because it broadens the aperture from your formal organizational levers, showcasing the power of informal approaches such as relationship networks, leadership commitments, and other ways to showcase and drive adoption of your cultural behaviors.
These four level one problem statements are meant to be mutually reinforcing. You do need to make choices, however, given limited resources and the need to generate results to sustain motivation and commitment to change in your organization.
What choices are right for you? How can you build an aligned strategy, operating model, and culture that drive the best results? I’m looking forward to the conversations in the coming weeks as I share the blogs, videos, and podcasts for each of these problem statements with you. Please don’t hesitate to reach out and share your own sparks of inspiration!