Bad News for CEOs: You can’t compete your way to superior customer experience

||Bad News for CEOs: You can’t compete your way to superior customer experience
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Bad News for CEOs: You can’t compete your way to superior customer experience

For a Customer Experience (CX) initiative to succeed, it needs broad support across the organization, and it needs deep, gut-level support within the C-Suite. CX is not like a sales methodology, or a new technology. CX is not a tool; it is a creed, a creed that McKinsey asserts “…require organizations to make cultural changes and to rewire themselves operationally and financially.” (Designing and starting up a customer-experience transformation, 2016).

How are we possibly going to rewire ourselves without coordination within the C-Suite?

In this article, I’m going to reimagine what the C-Suite might look like when it is galvanized around a broader CX mission. And if you are a member of the C-Suite and have not yet come around to customer-centricity, I hope to give you a few new ideas to munch on.

What Does It Mean to Embrace CX?

For a CX initiative to work, it must be supported by the CEO — not on a superficial level, but on a deep level. Once the CEO makes this leap, employees will follow.

But even McKinsey does not go far enough when speaking of the changes necessary to catalyze a successful transformation. This much is apparent in the following statement. Read this:

“As improving customer experience becomes a bigger component of corporate strategy, more and more executives will face the decision to commit their organizations to a broad customer-experience transformation.” (Designing and starting up a customer-experience transformation, 2016).

In my mind there are two implications here, and we need to address them because they are the absolute ruin of so many CX transformations, and they describe exactly the mindset that can kill a CX initiative from the top-down.

Look at the word “component.” A “component” is something you would fit into a car, maybe a new battery, or a catalytic converter. It is something discrete, something that came from an assembly line, and something ultimately replicable and therefore replaceable. CX is none of these things in my view.

The second error, “executives will…commit their organizations,” suggests that the organization would transform, but not executives. In both of these cases, CX is compartmentalized, segmented, and sloughed off.

It needs be anything but. At the strategic level, CX entails the admission that your customers will be at the helm with you. Any CX initiative begins with the recognition that a customer is fundamentally what helps you achieve your goals around shareholder value. This priority is either deeply embedded at the strategic level of the company, or the initiative is dead. This is most aptly stated in the title of my friend Brian Dennis’ book If the Customer’s the Co-Pilot, You’re in the Wrong Seat (Dennis, 2016).

So the question I want to help you answer is simple: how do you infect the C-Suite with this new principle? How can we create a unified cultural and operational change at the highest level?

A Different Raison D’être: Amazon’s Way

Amazon’s share price has multiplied one-thousand times since its IPO in 1997. The stock has almost doubled in value each year for twenty years running.

One does not need to look very deep to see how customer centricity lies at the heart of every decision the company makes. First there was Kindle, which gave readers instant purchase gratification, the ability to carry libraries in their pockets, and at significantly lower prices.

Then there was Amazon Prime, which eliminated the friction of shipping costs and catalyzed adoption of eCommerce. How did the company come up with these incredible and courageous innovations? You know already: they prioritize customers at the highest level.

CEO Jeff Bezos explained: “We innovate by starting with the customer and working backwards,” “That becomes the touchstone for how we invent.”

Why Fighting with Ghosts Will Kill Your Shower Routine

As you know, the power to embrace what is novel is mitigated by attachment to the past. For leadership that has operated under a traditional model, and mindset, for decades, Bezos’ thought leadership might sound good; you might even say it out loud, but in the back of your mind, the old value system still reigns supreme.

So let’s call this creature out for what it is, drag it into the limelight, and really give it a chance to duke it out with the customer. Who is right?

Bezos has gone on the record with what I think is a beautiful characterization of these traditional modes of thought: “When they’re in the shower in the morning, they’re thinking about how they’re going to get ahead of one of their top competitors. Here in the shower, we’re thinking about how we are going to invent something on behalf of a customer.” This is a mindset shift that others can adopt to their advantage.

So now we know both contenders; you have on the one hand your competitors, or on the other, your customers. Are you fighting ghosts from the past, or collaborating in the present moment?

The answer could significantly enhance your showers in the near future.

organization adoption customer experience

Let Customer-Centricity Make Competitors Irrelevant

Before the Internet existed, we, as consumers had little choice over the products that we would invite into our daily lives. You would go to the grocery store and, after navigating your cart to the appropriate shelf, look at, maybe 5-10 different brands and variations at most. Winning a customer really was a competitive act back then because all you had to do was look slightly better among that short list.

But Bezos’ thinking, while visionary for its time in 1997, is now necessary. Ecommerce as a percentage of total retail in the United States has grown from under 4% in 2008 to 9% in 2017, (US Census Bureau, 2018). And even when customers are buying in stores, they often research online, or they are exposed to new products and services online. If you sell shampoo, then who knows if your competitor is Nivea, or possibly almond milk, because a blogger in Wisconsin recommends almond milk to her 4 million followers.

The point is: if your customers are looking for alternatives, they will instantly find an infinite number of candidates. The new objective, the only defensible position, is to make your customers so satisfied that they never look for alternatives.

Welcome the Customers’ Voice  to the Conference Table

OK, so let’s say you really believe to the core of your being that customer centricity, not competitiveness, is the key to shareholder value. Now what? How do we re-organize ourselves to empower this new priority at the highest level?

Start by hiring either a CCO, or call the title what you will, your new focus on customer centricity needs to be carried by a representative of the customer. Every executive needs to develop awareness of whom they serve, but the CCO requires unique capabilities and characteristics:

  • Capacity to interpret streams of data
  • Characteristics of empathy and compassion
  • Understands and can communicate strategic position
  • Ability to build teams focused on sharing insights to influence customer and internal stakeholder behaviors at every level in the organization
  • Ability to collaborate across functional borders
  • Innovative thinker who focuses on ‘creating’, not ‘fixing’

Once a CCO enters the strategic conversation, it is this officer’s role to build a coalition of partners around that table, a coalition capable of executing brilliantly on the CEO’s vision, recognizing that he/she cannot do anything alone; there must be partnership with all functions. I call this chain reaction “cascading collaboration,” and my next article in this series will discuss this concept more.

Takeaway

If there is one thing to take with you from this article, it is this: in order for a CX transformation to be effective, leadership must also change and on a fundamental level. You should not be engaged in trying to build a case for support. The C-Suite should be convincing you to execute brilliantly on their commitment to drive change toward customer centricity.  

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Sources

Ewan Duncan, Harald Fanderl, and Katy Maffei. “Designing and starting up a customer-experience transformation.” McKinsey & Company. March 2016. Accessed February 27, 2018.

US Census Bureau. “Quarterly Retail E-Commerce Sales 4th Quarter 2017.” U.S. Department of Commerce: Washington D.C. March 2017. Accessed January 29, 2018.

Dennis, Brian. “If the Customer’s the Copilot, You’re in the Wrong Seat: Innovative Yet Simple Strategies to Elevate Your Customer’s Experience.” Service Werkz, LLC: Sussex, WI. 2016.

By | 2018-03-25T09:22:45+00:00 March 22nd, 2018|Categories: Organizational Adoption of CX|Tags: , , , , |0 Comments

About the Author:

Mohamed Latib, Ph.D. is the founder and CEO of CX University. Mohamed has been involved in CX work for over 30 years. In his previous company that he co-founded he implemented customer feedback solutions for such brands as Kohl’s Department Stores, Fossil, TransUnion, The World Bank, Project Management Institute, Citi Bank and many others. He provided executive briefings going past key metric dashboards to identify strategic insights. Mohamed has also designed and delivered numerous CX workshops and training modules for Delaware North, Konica Minolta, Crowe Horwath, Singapore Post, Malaysia Telekom, and Reliant Energy among many others. He has led numerous culture transformation initiatives and has done senior executive development work for Air Products, Pennsylvania Power & Light, Siemens, Smithfield Meats, Dominion Textiles, Unisys, and others. The author of many articles and professional papers, Dr. Latib, holds an MS in Psychology, MBA and a Ph.D. in Business Administration (Organizational Behavior, Human Resources, and Strategy) from the Fox School of Business and Management, Temple University.

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