Organizational agility — to profitably seize evolving opportunities and allay emerging threats — depends upon managers aligning daily decisions with core customers’ expectations and your corporate strategy. Surprisingly, the major glitch for agility and alignment is lack of clear understanding about how major priorities and objectives fit together, according to extensive research conducted by Donald Sull from MIT Sloan School of Management.
Typically, half of the C-suite struggles with connecting the dots accurately, with further dilution to less than a third of senior executives’ direct reports and just 16% of customer-facing supervisors and team leaders successfully identifying the relationships between corporate priorities and objectives.1
CEOs can increase their organization’s clear understanding of how major priorities and objectives fit together through 1) Prioritization Clarity, 2) Core Customers Clarity, 3) Customer Management Clarity, and 4) Customer Excellence Maturity Clarity.
1. Prioritization Clarity
Clarity is muddied when the CEO announces top strategic objectives, as the first one is usually financial, and the others are listed perhaps as equals or as paths to the financial objective. This tends to create confusion among employees about what trumps what in a pinch. The default assumption is that financials rule, perhaps at the expense of the other objectives, or perhaps with the end justifying any means.
Each manager interprets the relationship between priorities differently, often contributing to friction between units and to silos of data, systems and people. Cross-organizational alignment is the linchpin of strategy execution1.
As explained in the first of this six-part series, CEO’s Guide to Growth through Customer-Centered Management, financials are the cart, and customers are the horse.
Despite the emphasis on financials caused by the investment community’s scrutiny and operational survival, the source of money is customers’ daily evaluation of value: the customer experience. When customers leave, employees and investors still must be paid and may be forced to leave. This truth reveals customer experience as the primary managerial context for all corporate objectives.
CEOs who put the horse before the cart make customer experience the primary managerial context for every role in their company’s ecosystem. They keep the horse and cart connected and synchronized.
Clarity is created by reframing corporate objectives in this way: To meet our customers’ expectations for X, our financial stretch goal is Y. This provides customer experience context. It places the horse before the cart, conveying that the end is customer lifetime value growth, and the means is meeting or exceeding customer expectations.
This simplifies employees’ daily decisions in alignment with corporate strategy. Customer goals are a universal rallying point for employee engagement and for cross-organizational coordination and collaboration.
2. Core Customers Clarity
Clarity is enhanced by focusing attention on customers with greatest potential for generating your firm’s growth. Creating customer experience context that’s compelling in every nook and cranny of your enterprise is a four-part recipe:
- For each step in your customers’ end-to-end journey, among decision influencers in your customers’ business or household: who cares about what, and what are the positive and negative consequences for things going well or not?
- What is the overall objective of different customers in buying the type of solution you provide? (i.e. avoid risk, simplify, expand capability, etc.)
- What natural patterns in all of the above stand out to organically define groups of customers? (ignoring demographics and other traditional segmentation criteria)
- Which organically defined group has the greatest potential to drive your enterprise’s growth?
This recipe is the key to simplicity and enterprise-wide focus:
- Defining your core customers through natural patterns in their expectations rather than demographics (a) generates a more manageable number of customer personas and (b) focuses attention on expectations management.
- Meeting or exceeding expectations is the prerequisite for attracting and keeping customers and expanding their lifetime value.
- Characterizing customers by their end-to-end expectations provides meaningful guidance for every discipline in your firm.
- Understanding customers’ consequences compels employees to anticipate customers’ reactions and to align their decisions with what’s most efficient and effective for customers and your firm.
- Knowing customers’ overall objective empowers employees to find novel ways to generate value that customers will reward.
“Customer experience professionals often strive to fix everything for every single customer,” observed Diane Magers, formerly with Office of the Customer at AT&T. “At another company, the sales reps were using the same service model, services set and pricing structure for everyone,” Magers recalls. “They conducted expectations-based segmentation and identified customers who were (a) price-elastic quality buyers, (b) value-conscious for profit targets, and (c) service-oriented. They developed distinct approaches relevant to each segment’s expectations. Then they were able to identify from a baseline the impact to share-of-wallet and cost to serve, and how to drive value.”
3. Customer Management Clarity
Clarity is strengthened by unifying the various roles that manage customer experience across your company. In ClearAction’s five-year global study of business-to-business customer experience management practices, coordination among managers of various customer experience efforts was correlated with business growth.
Communication is typically non-existent or minimal across managers of CRM, service, voice-of-customer, loyalty, continual improvement, customer intelligence, customer success, and similar endeavors. Imagine the impact this has on customers, especially when programs are managed separately for each solution the customer buys. To address this, a council with a representative from each effort can meet at frequent intervals to share insights and program plans, and to coordinate and collaborate. These groups can also become unified through transparency on your intranet, operations reviews, or reporting dotted-line or directly to a single executive.
“Step back and look at where you’re investing time and money,” advises Magers, who is currently Interim CEO of the Customer Experience Professionals Association (CXPA) and contributes as a Senior Advisor with ClearAction Continuum. “A projects-in-flight assessment — looking at all projects across the enterprise — allows you to choose what to focus on for additive value. There’s lots of activity going on, with different outputs and outcomes, sometimes in conflict with one another or perhaps minimal incremental value, and some serving as a “Band-AidTM” for other mis-steps. One thing that gets lost in individual initiatives is low accountability for the larger picture of growth. Each manager generates piecemeal benefits by pulling various financial levers.”
“Conduct ecosystem mapping to see important things going on backstage,” recommends Magers. “This allows you to identify what each program, project and resource contributes. Systemic analysis of the ecosystem empowers re-assignment of resources for bigger returns and optimizes projects and programs toward better value. It tracks benefits realization and accountability by laying a baseline that clarifies results gained.”
“The power of a holistic view is the ability to focus on an overall objective such as improving productivity, reducing cost to serve, driving advocacy, resolving a chronic customer issue, while also operationalizing ownership of customer experience across disciplines which is key to driving the way the organization works to achieve its goals,” observes Magers.
4. Customer Excellence Maturity Clarity
Clarity is simplified when the whole company can see the path toward customer experience maturity. Show them how the customer management components flow and build upon one another to generate growth.
This model shows how corporate strategy and culture (a) are informed by voice-of-the-customer and (b) form the backbone and ecosystem for customer experience-driven growth.
Establish the basics simultaneously across the building blocks shown in this model, to earn customer trust, engagement, retention, loyalty and lifetime value. Once the basics have been mastered, adopt the next phase of maturity throughout the model simultaneously.
This model treats customer experience management as a living system. All living systems have dynamic, interdependent components that evolve together to greater maturity levels.
“A useful analysis among the executive team is to apply lenses of metrics and business value levers to your customer journey map,” suggests Magers. “The ability to see what people are measured by and how they’re driving the numbers can be an enlightening indicator of objectives that are in conflict with one another.”
A powerful way to start the ball rolling in aligning from the top for your company’s customer experience-driven growth is a C-suite workshop2 to (a) characterize how you want customers to feel in their dealings with your brand, (b) analyze what’s in support and what’s at-odds with that characterization in your vision, mission, values, capital and operating budget criteria, structure, policies and rewards, and (c) address the gaps through prioritization clarity, core customers clarity, customer management clarity, and customer excellence maturity clarity.
Corporate strategy is customer experience strategy, and vice versa. You’re in business to achieve great things for your customers. Tight alignment with them throughout your whole enterprise empowers your organizational agility. It’s the key to outperforming your industry in sustaining accelerated growth.
1Why Strategy Execution Unravels and What to Do About It, Harvard Business Review, Donald Sull et al, March 2015.
2Customer Experience ROI Trajectory, Carol Borghesi.
This article is second of a six-part series as an exclusive CustomerThink Advisors column: CEO’s Guide to Growth through Customer-Centered Management. This series explores ClearAction Continuum’s Customer Excellence DNATM methodology as introduced in the article What is Customer-Centricity DNA?