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Of What Lasting Value Is A Beautifully-Designed Building If It Is Poorly Constructed?

Michael Lowenstein, PhD, CMC | Mar 20, 2017 65 views 2 Comments

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The title is a lengthy, but appropriate, way of saying that the best, most innovative CX programs and processes will fall short of objectives without making certain that the basics – what we can call the architecture, engineering, foundation, framing, electrical wiring and plumbing of customer experience – are in place.

Virtually everything a company does, but especially its strategy, structure, managerial and leadership style, and experience delivery capabilities, plus buy-in and loyalty of employees at all levels, will impact customers. Further, CX programs, indeed all customer-related initiatives processes, need to embrace and include both internal customers (staff) and external customers (end customers, former customers, potential customers, suppliers, the financial community, etc.) at planning and implementation stages.

Creating superior CX requires both a corporate and individual mindset on behalf of all stakeholders involved with value delivery. The mindset must be both proactive and commitment-based. It is people and processes that make CX effective, or ineffective, not merely the application of technology, service, or any other individual component of experience.



Marketing theorist Theodore Levitt has said: “The purpose of business is to get and keep customers”. That’s an easy to understand way of postulating that, next to having a stakeholder-centric culture and infrastructure, everything else a company does is secondary. Leading-edge customer research organizations have determined that the most successful companies have a focused and well-integrated approach to customers. They have also found that companies consider having such a single, integrated approach a key priority; however, very few companies have been able to fully achieve this.

There is a framework that companies can use to optimize any and all CX efforts, and it’s not the Service-Profit Chain. In the late 1970’s, when management experts Tom Peters and Robert Waterman were still employed by McKinsey & Company, they developed a management model they defined as the Seven S Framework. First presented in a book about the successes achieved by Japanese businesses, The Art of Japanese Management, in 1981, and later repeated in their groundbreaking book, In Search of Excellence, the following year, the Seven S Framework consists of seven groups of characteristics, or factors, which when appropriately developed, aligned, and executed would result in superior performance.

A company’s creativity and resiliency, strength of culture, and effectiveness of proaction can be assessed through the manner in which these characteristics are focused on optimizing customer loyalty and value. The Seven S Framework is a robust, extraordinarily dynamic, and yet simple and orderly way of understanding how far a company has progressed along this path and how much distance is still to be traveled.

The Seven S’s in the Framework are:

– Strategy – the plan of action, the manner in which scarce resources (time, money,
staff, facilities, and technology) are allocated on a corporate, business, and functional level

– Structure – the manner in which the company’s architecture, its organization chart,
is defined. This also includes methods of operation governing jobs and authority,
span of control, and operating parameters for staff.

– Systems – company processes and reporting mechanisms, particularly information
flow (inside and outside of the company)

– Style – the culture, DNA, or ‘feel’ of the organization, what those inside and outside the
organization experience of it on a day-to day basis. This includes how management relates to subordinates, staff and customers, and how well key staff members lead.

– Staff – the identification, or categorization, of job ‘demographics’ (titles, descriptions, and levels of training), and their ability to contribute to company goals and objectives

– Skills – the special capabilities of the organization (innovative, high-tech, proactive, etc.) and/or key staff

– Shared Values/Superordinate Goals – the company’s set of guiding meanings, directions, and concepts – as understood by the organization, its customers and suppliers. It can also be the basis for the corporate mission or vision.

There is a direct alignment, or interdependency, among the Seven S’s. So, for a company like Ritz-Carlton, for instance, to prioritize customer loyalty and CX, they have a strategic objective of value optimization for each guest, and a management goal of providing an empowered environment for staff (central to employee ambassadorship), and a business goal that emphasizes personalized customer service. Their systems have been carefully designed to yield a culture that supports this. Participatory management is the style supported by company leaders. Staff are selected and trained to be creative and proactive, and service is a shared value within the company. Skills are evident in Ritz-Carlton’s capacity to create high customer value. Structure, with respect to providing value for customers and staff, emphasizes cross-functionalism and teamwork.

A lot of what goes on at successful, stakeholder-focused companies like Ritz-Carlton, doesn’t appear, at first look, to be customer experience-related. If CX were thought of only in terms of technological, marketing, or service aspects, that would be true. However, as stated, we see CX as holistic, embracing every process.

New approaches to customers and frequency marketing programs will only be part of what creates true customer loyalty and advocacy for leading-edge companies. These companies are committed to customers. Their cultures are totally customer-focused. Customer information is both extensive and continually updated, and systems are designed for their staffs to readily share and apply knowledge. Their leaders live the organization’s mission. In the United States, such companies as State Farm Insurance, Federal Express, Amazon, USAA, Wegman’s Markets, Southwest Airlines, Publix, Chick-fil-a, Servicemaster, Trader Joe’s and Ritz-Carlton Hotels, to cite just a few, exemplify this commitment. Everything they do is completely stakeholder-centric, reflective, almost 40 years later, of the adaptability, flexibility, and almost universal application Peters and Waterman had in mind with the Seven-S Framework.

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2 Responses to Of What Lasting Value Is A Beautifully-Designed Building If It Is Poorly Constructed?

  1. Cary McGuckin March 21, 2017 at 9:23 am (1 comment) #

    Great article Michael. CX is not lipstick or window dressing, but the foundation your strategy must be anchored to.

    Would love to see a follow up that examines in more depth the other mentioned companies, as you have done with Ritz-Carlton.

  2. Michael Lowenstein March 21, 2017 at 1:21 pm (1273 comments) #

    Cary –

    Thanks for the kind words. In most industries, there are examples of really stakeholder-centric organizations with the culture and processes to deliver superior experiences. I’ve profiled several of the companies mentioned in my post, including Wegman’s: http://customerthink.com/like-just-about-all-of-their-customers-i-love-wegmans/

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