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Currently viewing the tag: "Customer Experience"

OrgD2Research by PwC indicates that leading companies are in a near perpetual state of Reorganization.  This upsurge in Organizational Design initiatives is owing to the accelerating pace of strategic change caused by disruption of industries, changing competitor landscape, customer behaviors, and distribution channels.

Companies opt to commence efforts to restructure their organization in the hopes of enhancing efficiency, perpetuating growth, and surviving in future.  Some shift their Business Models, few alter their focus from products to customer-centric; whereas others adopt new behaviors, systems, or IT architecture.  However, merely a quarter of the Organizational Design initiatives succeed in achieving their anticipated objectives.

The reason for this high failure rate is simple.  Reorganization is not about changing a company’s organogram.  It’s a methodical processes that necessitates transforming / streamlining the decision-making process, mindsets, talent pipeline, reward structures, reporting lines, and the way responsibilities are assigned.

There is no cookie-cutter approach to Reorganization that can work across all organizations.  However, research and management best practices reveal 10 principles that are critical for developing an effective Organizational Design, applicable to any enterprise:

  1. Don’t get caught in past Reorganization initiatives
  2. Consider Organizational Design elements
  3. Transform Organization Chart in the end
  4. Don’t overlook top talent
  5. Converge attention towards controllable factors
  6. Encourage responsibility
  7. Use best practices with care
  8. Harmonize organizational hierarchy with Strategic Objectives
  9. Give due emphasis to intangible elements of organization
  10. Make efficient use of company culture and practices

Let’s dive deeper into these guiding principles.

1. Don’t Get Caught in Past Reorganization Initiatives

Leaders at most organizations tend to keep discussing and focusing on the old reorganization initiatives.  This takes away much of their time and energy which should rather be spent on making the current Organizational Design a success.

Organization Design should be created on the basis of an enterprise’s sense of purpose, strategy, core competencies, products, competitive advantage, and experience offered to customers and employees.  Senior leaders need to be able to see the broader perspective, set clear organizational objectives, and steer the workforce to achieve their personal as well as organizational objectives.

2. Consider Organizational Design Elements

Reorganization is a complex undertaking, but a structured approach to Organizational Design assists in identifying and prioritizing key priorities.  Organizational Design has 8 fundamental elements that are important for all organizations, Business Models, sectors, or regions.  These elements can be categorized into 4 pairs.  Each of these 4 pairs constitute a formal (tangible) and an informal (intangible) element:

  • Decisions team up with Norms (the way people act).
  • Motivators (the way people are influenced to work) pair with Commitments (what affects people’s thoughts about work).
  • Information (the way data is processed) pairs with Mindsets (how people process knowledge and meaning).
  • Structure (reporting lines) pairs off with Networks (how people collaborate).

Leaders should select fewer, prioritized Organizational Design elements to work on that have the most impact on their organizations.

3. Transform Organization Chart in the End

Most leaders consider Organization Structure to be the most critical element to Business Transformation.  In reality, there are other key organizational elements that need to be tackled first to improve effectiveness.  Revisiting the organogram does not have much effect on the way business is done—or to improve it.  Structure depicts reporting lines and changing it can reduce costs temporary.  Changing structure alone—without transforming other organizational elements—allows the redundant reporting lines to reappear and put the organization back to its earlier state of affairs.  Instead of changing the organogram, core organizational issues should be prioritized and confronted first.  Structure will adjust accordingly once the issues resolve.

4. Don’t Overlook Top Talent

Top talent often go unnoticed when it comes to Reorganization.  The skills and traits of the senior leadership has a profound impact on Organizational Design.  Mapping of technical capabilities and leadership abilities of top leadership is an important step to Reorganization.

Interested in learning more about the guiding principles critical for Organizational Design?”  “You can download an editable PowerPoint on 10 Principles of Organizational Design here on the Flevy documents marketplace.

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Deal 2Mergers and Acquisitions enable numerous opportunities for growth.  Organizations pursue these initiatives for a number of reasons—e.g. to expand further, attract more clients, or to broaden their product / service offerings.  Scores of M&A transactions materialize across the globe each year, but not all of them achieve the synergies such deals promise.  As a matter of fact, the success ratio is just around 27%.

The M&A Growth Framework is a structured approach to enhance the odds of a successful M&A transaction.  This approach is instrumental in helping organizations capitalize on growth opportunities locked in M&A deals.  The framework comprises 10 phases scattered across 3 timeframes:

  1. Pre-deal Preparation
  2. First 100 Days
  3. Post-deal Closure

The 10 phases of the M&A Growth Framework organized under the 3 timeframes include:

The M&A Growth Framework facilitates in finding growth opportunities, aligning them with Go-to-Market Strategy, reinforcing Customer Experience, and enabling Organizational Readiness for integration after the M&A.

Let’s dive deeper into the first 3 phases of the M&A Growth Framework for now.

Growth Opportunities

The first step in achieving growth from a Merger or Acquisition deal is to identify and analyze the opportunities essential for growth.

Identification of growth opportunities necessitates:

  • Gauging the ability of the new company to enter target markets.
  • Conducting one-to-one interviews and Focus Group Discussions with key people from the management and customers to develop points of reference for existing key competencies.
  • Identifying and translating growth opportunities into initiatives.
  • Quantifying growth with timeline requirements.
  • Prioritizing opportunities based on their magnitude, viability, and potential for effective execution.
  • Utilizing clean teams to ensure confidentiality of data.

Go-to-Market Strategy

Identification and prioritization of growth opportunities necessitates delineating the Go-to-Market Strategy of the combined entity.  This phase assists in achieving the newly-formed company’s stated growth targets, business continuity objectives, and proficient utilization of unified team and resources.

Key steps involved in this phase include:

  • Combining the acquired entity’s product/service portfolio with the buyer’s offerings.
  • Ascertaining and prioritizing strategic inputs.
  • Translating the information and inputs available into prioritized action items.
  • Segmenting the customers and their needs.
  • Creating Go-to-Market plans.
  • Connecting the sales channels with the unified company’s product mix.
  • Ensuring resource readiness, sales targets, coverage, and channel mix.
  • Finalizing marketing plans: communication, branding, targeting, product mix.

Customer Experience Strategy

As part of integrating the 2 unified companies, it is critical for the senior leadership to develop and deploy a Customer Experience (CE) Strategy.  A consistent Customer Experience derives more value from existing customers, aids in the continuation of operations, and boosts customer spending.

Key steps in this phase entail:

  • Appraising the existing customer experience, interactions, and customer pain points.
  • Developing a customer-focused organization by creating seamless CE “personas” and customer journey maps.
  • Identifying and ranking CE improvement initiatives.
  • Implementing CE enhancement initiatives, monitoring outcomes, and correcting the course.
  • Integrating the customers and Customer Experiences of the acquirer and the target companies.

Interested in learning more about the other phases of the M&A Growth Framework ?  You can download an editable PowerPoint on M&A Growth Framework here on the Flevy documents marketplace.

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– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

CX2Most organizations aren’t ready to deliver great Customer Experiences across all channels.  Many of them have invested heavily in conventional methods of doing business, backed by in person or over-the-phone customer experience.  This has led to creation of siloed operational structures within companies, where each silo operates individually.

With the advent of digital channels, these organizations set out to use and proffer their services via digital channels.  They did this by creating discrete digital-product groups in their existing operational infrastructure.  However, their siloed infrastructure falls short of meeting customers’ requirements in terms of seamless communication and interaction across all channels.  The reason being:

  • Customers’ utilization of multiple channels and touchpoints across Customer Journeys.
  • Requirements of personalized services / products by the customers.
  • Anticipation of impeccable coordination and communication by the customers no matter how they interact with the business.

This necessitates the businesses to not only provide great Customer Experiences at each channel, but also make the transitions across these channels simple to improve the overall Customer Experience (CX). However, improving the overall Customer Experience isn’t that simple a feat, especially with silo-based operational infrastructures.  Providing consistent amazing Customer Experience warrants:

  • Creation of a robust operational ecosystem through Transformation of internal operations, to respond quickly to customers’ expectations.
  • Meticulous design and delivery of Customer Experiences.

Most organizations understand the significance of Transforming their Customer Experience—however, they lack the direction and support required to realize this goal. Organizational leadership can make use of the Customer Experience Pyramid to guide their CX Transformation.

The Customer Experience Pyramid is an empirical research based framework, which is quite effective in not only improving individual touchpoints but streamlining the entire Customer Journeys.  The CX Pyramid entails 2 core dimensions:

  • Focus Areas – the organizational spheres that must change to enable provision of amazing digital Customer Experiences.
  • Strategic Building Blocks – the strategies that define how this change can take place and made part of the organizational processes to deliver exceptional Customer Experiences.

The 4 Focus Areas crucial in a business to change in order to deliver top-quality Digital Customer Experiences at scale are:

  1. Vision and Strategy
  2. Talent Management
  3. Operations
  4. Technology

Let’s discuss the first 2 individual Focus Areas of the CX Pyramid in detail for now.

Vision and Strategy

Redirecting focus on making Customer Experience a part of the Organizational DNA necessitates creating a Vision statement and Strategy to depict, clarify, and plan out the purpose and objectives of serving the customers.  The senior leadership needs to come up with a short and crisp Vision statement.  The Vision sets out the foundation that reflects the leadership’s focus, importance the organization gives to Customer Experience, and the high-level objectives associated with the provision of quality Customer Experiences.

Next, the leadership should work on developing strategies to build fundamental competencies within the 4 CX Building Blocks—i.e., CX operations, metrics, CX-centric culture, systems and governance protocols.

Talent Management

Once the Vision statement has been agreed upon, it’s time to work towards carrying out the required actions to produce customer-centric outcomes.  The first step in that direction involves linking all employees who work in discrete silos (in conventional structures).  To align all employees, there is a need to create a Transformation team and define new roles / CX groups.  The Transformation team should train and direct teams responsible for the different stages of the Customer Journey, instill new ideas, and foster desired behaviors in them.

Senior Leadership need to also assign a CX Team to run the CX program.  The CX Team has to lay out processes and yardsticks to foster cross-functional collaboration and coach functional units to adopt customer-centric design practices in their operations.

Interested in learning more about the other focus areas of the CX Pyramid Framework?  You can download an editable PowerPoint presentation on Customer Experience Pyramid here on the Flevy documents marketplace.

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PD3Product Managers are responsible for defining the features or functions of a Product and for overseeing the development of the Product.  The role of Product Managers spans many activities from developing Product Strategy to tactical plan and can vary based on the organizational structure of the organization.

Typically, Product Leaders are involved with the entire Product Lifecycle.  However, the Product Management’s primary focus is on driving New Product Development.  To successfully execute these roles, it’s important for Product Management to collect and synthesize proper, relevant data to make informed Product decisions.

Product Managers need to evaluate 10 categories of Key Performance Indicators (KPIs) to determine the most appropriate KPIs relevant to their work:

  1. Product Stickiness
  2. Product Usage
  3. Feature Adoption
  4. Feature Retention
  5. Net Promoter Score (NPS)
  6. Leading Indicators
  7. Top Feature Requests
  8. Product Delivery Predictability
  9. Product Bugs
  10. Product Speed and Reliability

Let’s discuss these Product Management KPIs in a bit detail.

Product Stickiness

KPIs around Product Stickiness determine whether users are re-engaging with our product.  If a product is successful, it exhibit “stickiness.”  That means users don’t just sign up and forget about it.  They continuously live inside the product, such that it becomes part of their daily routine.  A good product should not long attract new users, but to also continuously re-engage with its users.

Product Stickiness is often measured by taking the ratio of our Daily Active Users (DAU) to Monthly Active Users (MAU): i.e., DAU/MAU.  This metric calculates the percentage of our monthly users who engage with our product on a daily basis.

Product Usage

It is inevitable that not all features of a product will be utilized the same.  Some features are more heavily used, whereas others are not.  The only way to know what product features are important to users is by measuring how our product is being used.  Measuring user engagement across the product allows us to answer what features should we enhance, which ones to eliminate, and which features to promote to increase users awareness of the product functionality.

Product usage is measured by using 3 key metrics—Breadth: refers to the number of active users for a given client within the last 90 days.  Depth: Captures whether users are using key features that make the product sticky.  Frequency: e.g., number of logins across all devices within the last 90 days.

Feature Adoption

These KPIs seek to understand and set feature adoption goals.  Key question to clarify these KPIs is whether users are adopting the newly released features.  Feature adoption data of recent feature launches is critical to determine appropriate feature adoption goals.  It is important to look at feature adoption at both the user level and account level.  For instance, different customer groups with an account may exhibit different levels of adoption for different feature sets.

The key metric to measure feature adoption is the percentage of users using the feature.  This should be evaluated across multiple features on a timescale (typically for at least 30 days following the feature release).

Feature Retention

Feature retention KPIs reveal true adoption of features vs. the initial promotion-driven adoption.  Feature Adoption seeks to measure initial use of a feature, whereas Feature Retention seeks to measure the long-term, persistent usage of a feature.  Measuring feature retention helps us identify at-risk users who have started to disengage from the product after the initial promotion is over.  We can then take action to re-engage these users.

Feature retention can be measured across different customer segments, e.g., by pricing (Free vs. Paid), by organization size (Startups vs. Enterprises), by position (Analyst vs. Manager).

Interested in learning more about the other KPIs critical to manage and develop a Product Portfolio?  You can download an editable PowerPoint presentation on Product Management KPIs here on the Flevy documents marketplace.

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You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro LibraryFlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

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– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”

– Michael Duff, Managing Director at Change Strategy (UK)

Enterprises invest in Analytics to improve Decision Making and outcomes across the business. This is from Product Strategy and Innovation to pic 1 Analytics-driven OrganizationSupply Chain Management, Customer Experience, and Risk Management. Yet, many executives are not yet seeing the results of their Analytics initiatives and investments.

Every organization putting on investment in Analytics has experienced several stumbling blocks. This differentiates the leaders from the laggards. Analytics-driven Organizations have clearly established processes, practices, and organizational conditions to achieve Operational Excellence. Their commitment to Analytics is creating a major payoff from their investments and a competitive edge.

What It Takes to Be Analytics-driven

The Harvard Business Review Analytic Services conducted a survey of 744 business executives around the world and across a variety of industries. Their focus was on the performance gap between companies that have struggled to get a return on their Analytics investment and those that have effectively leveraged their investment.

The survey showed that Analytics-driven Organizations get sufficient return on investment in Analytics. In fact, they have been highly successful in gaining a return on Analytics investment. This is gainfully achieved as organizations use Analytics consistently in strategic decision making. Executives of Analytics-driven Organizations rely on Analytics insights when it contradicted their gut feel.

Essentially, Analytics-driven Organizations have reduced costs and risks, increased Productivity, Revenue, and Innovation, and have successfully executed their Strategy. Yet, in evolving the organization’s Analytics approach, there can be 4 core obstacles that can affect their drive to getting a greater return on investment in Analytics.

The Core Obstacles to Finding Return on Analytics Investment

There are 4 core obstacles to being an Analytics-driven Organization.

Let’s briefly take a look at the first 2 obstacles:

  1. Communication and Decision-making Integration. The lack of Communication and Decision-making Integration limits the integration of Analytics into workflows and decision processes do not reach decision-makers. As a result of these core obstacles, the use of Analytics is limited in specific areas.
  1.  Skills to Interpret and Apply Analytics. A second core obstacle is the inadequate skills of business staff to interpret and use Analytics. In fact, the survey showed that only one-quarter of frontline employees use Analytics with only 7% using Analytics regularly.

The other two core obstacles are siloed and fragmented Analytics and time delay. These are two equally important core obstacles that can hinder the use of Analytics to maximize return on investment. Further, the 4 core obstacles are barriers to analytic success.

Are You Ready to Be an Analytics Leader?

Leaders use Analytics consistently in decision making. In fact, based on the survey, 83% of executives use it in business planning and forecasting. On the other hand, laggards only use it 67% of the time. Even in various aspects of the organization such as Marketing, Operations, Strategy Development, Sales, Supply Chain, Pricing and Revenue Management, and Information Technology, laggards use Analytics only half the time compared to Analytics Leaders.

Analytics Leaders always ensure that they establish the processes and organizational conditions to allow them to successfully deploy Analytics. In fact, to increase return on Analytics, organizations must undertake the use of four interrelated initiatives that will drive greater return on investment Analytics. These are four initiatives essential to building an Analytics-driven Organization.

One is building an organizational culture around Analytics. To achieve this the organization must have clear, strategic, and operational objectives that are set for Analytics. Second is deploying Analytics throughout all core functions of the business.

Starting with an Analytics-driven Culture can greatly facilitate cross-functional deployment of Analytics.

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Customer Experience 1With startups ready to disrupt traditional players, established firms need to form an even stronger bond with their customers instead of waiting for customers to reach out to them.

The traditional Customer Experience model—referred to as the “acquire what we make” model—is characterized by occasional interaction between the companies and the customers, once a customer ascertains her/his needs and looks for products or services to fulfill them.  In this model, companies do all they can to offer quality products or services at a competitive price, while their marketing and operations are based only on brief engagement with the customers.  Because of the occasional connection with the customer in this approach, the vendor has little knowledge of the difficulties a customer faces to procure a product or service.

With each passing day the tactics that organizations use to connect with their customers are undergoing rapid transformation.  Technology and customized digital interactions provide companies the means to build deeper relationships with customers.  Organizations pursuing Customer-centric Design, today, are addressing customers’ needs the moment they occur—or even before that by virtue of “Connected Customer Strategies.”

Connected Customer Strategies call for the companies to maintain customer relationships round the clock (24×7).  These strategies demand from the organizations to develop an assortment of new capabilities (e.g., invest in Big data and Analytics), connect with the customers on a regular basis, track their activities, and offer customized experiences and offerings.  These strategies are not about using modern technology, rather the methods companies should adopt by using technology in creating delightful experiences and long-standing associations with the customers.

There are 4 distinct Connected Customer Strategies that are instrumental in developing exceptional Customer Journeys:

  1. Fast Response
  2. Personalized Recommendations
  3. Proactive Recommendations
  4. Automatic Execution

Let’s discuss the first 2 strategies in detail now.

Fast Response

Organizational Leadership needs to carefully consider adopting the most suitable connected customer strategy.  The Fast Response strategy, as the name suggests, is about prompt and flawless delivery of required services and products to the customers.  To adopt Fast Response strategy, organizations need to ascertain the customer requirements carefully and simplify their purchasing process.

The core capabilities needed to implement this strategy include prompt delivery, minimal friction, flexibility, and precise execution.  This strategy is appropriate for knowledgeable yet authoritative customers who dislike disclosing their personal information.  Using this strategy, a prompt response to a customer needing replacement of a product should be a simple yet accurate, couple-of-click online ordering process and the order should be delivered a few hours later.  The aim of the Fast Response strategy is to reduce the amount of time and energy the customers spend on procurement as much as possible.

Personalized Recommendations

Organizations using Personalized Recommendations strategy help customers identify their needs by presenting various options to them.  The strategy involves active involvement of firms in assisting their customers by offering a menu of customized offerings—as soon as the customers have finalized their requirement but before their decision on how to fulfill it.

This strategy is suitable for customers who are willing to share their data with the company and value advice but still hold the final say.  With the Personalized Recommendations strategy at work, the journey for a customer needing a product replacement could simply involve the customer’s visiting a company’s website, automatic suggestions to customer about the correct product based on her/his prior shopping history, the customer ordering the suggested product, and receiving the delivery a few hours later.

Interested in learning more about the other Connected Customer Strategies?  You can download an editable PowerPoint on Customer Experience: Connected Customer Strategies here on the Flevy documents marketplace.

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customer buyingBusinesses are getting increasingly complex and so are customers’ expectations.  Digital organizations are digitizing their critical Customer Journeys at scale to outperform competition.  These organizations are using Digitization to create streamlined journeys, which result in more agile IT units, quick delivery of new products, and improved Customer Experiences and Engagement.

But before embarking on digitization and streamlining Customer Journeys, organizations need to transform their products, processes, legacy systems and technology, and culture to become truly digital businesses.

Streamlining multiple Customer Journeys concurrently requires integration of existing systems, building new capabilities, and deploying existing competences in a different way.  Specifically, it entails embracing the following 5-phase Omni-channel Customer Journey Design approach that is critical for improving Customer Experiences and accomplishing higher Customer Engagement:

  1. Develop Enterprise Customer Experience Story
  2. Prioritize Technology Transformation Projects
  3. Develop a Flexible Ecosystem of Technologies and Platforms
  4. Adapt Principles of Strong, Agile, and Lean
  5. Be Adaptive in Performance Management

Now, let’s talk about the first 3 phases of the Omni-channel Customer Journey Design approach.

Phase 1 – Develop Enterprise Customer Experience Story

Creating a Customer Experience Story calls for setting up a Customer Experience team.  The Customer Experience team begins by identifying the critical factors and main concerns in their customer relationships.  Around these themes, they, then, carefully outline the experiences customers may come across during each and every interaction they have with the company in the form of a story.  The Enterprise Customer Experience Story is unique to every company and provides a summary of the strategy, brand, and positioning in workable terms.

Next, the team identifies the journeys that are able to effectively deliver the factors and features critical for the customers utilizing digitization.  Each journey should be critically analyzed to assess its significance, cost advantages associated with scaling it, the governance and technical impediments, and the availability of adequate financial and leadership resources to manage it.  Thorough analysis of Customer Journeys yields a plan of action that aids in creating prioritized journeys.

Phase 2 – Prioritize Technology Transformation Projects

IT Transformation is typically the most challenging and resource hungry among other change initiatives.  For instance, designing a mobile app is simple, however, it’s the linkage of the app to all the channels customers use and its integration with the back-end systems that is complicated.

To undertake Digitization, companies should avoid digitizing each journey separately—as it fosters internal silos—and investing heavily in Internet or mobile-channel IT.  A better approach for the organizations is to rather prioritize the IT initiatives to enable smooth transformation of IT architecture with the addition of more customer journeys.  Standard IT components are reusable across different journeys.

Phase 3 – Develop a Flexible Ecosystem of Technologies and Platforms

An important consideration for digitizing core journeys and scaling digitization is to link your IT systems with the technologies and platforms working outside the firm.  These external systems provide the organization several advantages, including quick access to new customers, data pools, and capabilities.

Next-generation integration architecture should be designed in such a way that it should support open standards, dynamic interaction models, and curtail security threats.  Progress in cloud computing and technology infrastructure has made quick and easy access, management, and operations of infrastructure resources possible—including networks, servers, databases, programs, and services.  The skills needed to manage these technology ecosystems include DevOps experts to supervise integration of development and operations, enterprise architects, cloud engineers to manage software and cloud-computing, data scientists, and automation engineers.

Interested in learning more about the other key phases of the Customer Journey Design approach?  You can download an editable PowerPoint on Omni-channel Customer Journey here on the Flevy documents marketplace.

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customer buyingDigital-savvy startups are disrupting markets and threatening conventional businesses.  They are doing this by utilizing technology to offer new products and services and providing tailored yet uncomplicated experiences for their customers.

Likewise, large traditionally-run firms will have to keep evolving their Customer Experience approaches to secure additional avenues of revenue and to stay competitive.  To accomplish this, they will need to develop capabilities to effectively utilize insights on customer preferences and design offerings as per the customers’ preferences.

Many organizations, today, are undertaking Digital Transformation programs to improve their Customer Experiences.  However, a majority of these Digital Transformation initiatives fall short of securing their maximum value potential due to focusing only on improving specific touchpoints instead of confronting the entire customer journeys—spanning across several departments and channels.

To make their Customer Experience sustainable and to become Customer-centric Organizations need to clearly transform their ways of doing business, operations, and employee behaviors.  It is critical to improve these fundamental support processes before embarking on initiating any Customer Experience optimization initiatives.

Customer Experience optimization facilitates in gaining more satisfied/paying customers, additional value, and better retention rates.  Research reveals that the companies that have higher Customer Satisfaction levels can achieve four times growth in value compare to those that rank lower in Customer Satisfaction.

Customer Experience (CX) Approach to Value Creation

The following pragmatic 5-phase approach to Customer Experience Management and Value Creation is of great benefit to organizations aspiring to enrich their Customer Experience, achieve clear-cut differentiation, and capture the most potential value:

  1. Understand What Customers Value
  2. Simplify and Streamline Offerings
  3. Link Customer Value to Operational Drivers
  4. Focus on Most Important Customer Journeys
  5. Adopt Continuous Improvement (CI) Thinking

Let’s now delve deeper into the first 3 phases of the approach.

Understand What Customers Value

Ascertaining the key drivers of Customer Satisfaction is the foremost step in improving Customer Experience.  A flawed approach—that many companies still employ—at the onset of a Customer Experience optimization initiative is to reduce costs associated with internal processes and exploring customer pain points.  This doesn’t assist in maximizing Value Creation.

Customer-centric organizations, on the other hand, devote their time in developing a clear understanding of what really matters to their customers.  This helps in deciding where to focus, rationalizing their processes, and creating new experiences for the customers to generate additional value.

Great Customer Experience necessitates much more than just satisfactory interactions.  Customer Satisfaction should be mapped along the entire customer journey—spanning multiple functions and channels—as customers use various channels to communicate with companies before making a transaction.

Simplify and Streamline Offerings

Alongside rationalizing the processes, it is equally important to carry out a detailed analysis of the brands, offerings, and price structures is essential to tap value from Customer Experience.  After all, even the most pleasing Customer Experience cannot offset an unpredictable or exorbitantly expensive product.

Once these fundamentals are in order, organizations should investigate which interactions and Customer Journeys carry the most significance in a Customer Experience; evaluate how the organization is rated in each journey; identify and focus on the operations that need to be overhauled to improve the overall Customer Experience.

Link Customer Value to Operational Drivers

Technology and customer input provides the stimulus to streamline offerings and Customer Experience.  However, the real value comes from linking the Customer Experience to core operational processes.  Seeing journeys from the customer perspective aids in focusing on what they need and linking internal processes, structures, and KPIs to customer facilitation.

This necessitates deeper insights on elements that are of most value to the customer across a journey, pinpointing drivers of business costs and revenues, and—most importantly—inculcating the right mindsets across the organization.  This detailed evaluation of customer journeys facilitates in determining operational improvements that bear the most positive effect on Customer Experience.

Interested in learning more about the other phases of the approach to managing Customer Experience?  You can download an editable PowerPoint on the Customer Experience (CX) Approach to Create Value here on the Flevy documents marketplace.

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customer culture innovationA large majority of organizations rarely focus on gathering and utilizing customer-centric knowledge. So much so that they even introduce a product without having vital insights on the customer and their unmet needs, and they are often clueless about them. Consequently, many product development initiatives fall flat as managers struggle to filter and evaluate ideas.

Most organizations, today, are developing initiatives around Customer Experience Strategy and Customer Journey Mapping. Customer-centric Organizations are deeply focused towards value creation for their customers. They understand the unique customer insights needed to make customer-centric decisions, are able to gather those customer insights, and are aware of the way to utilize the insights in creating value for their customers. By using customer insights, Customer-centric Organizations drive their product innovation success rate significantly higher than the industry average.

In order to develop this capability, organizations need to first utilize a customer-centric research process to gather the customer insights required to drive value creation. This is accomplished when:

  • They know the desired unique customer insights needed to make customer-centric decision.
  • They are able to gather the required customer insights.
  • They realize the proper time and way to utilize the insights in making value creation focused business decisions.

Building a Customer-centric Culture of Innovation warrants a methodical approach. A potent approach to building such a culture of innovation encompasses 3 key phases:

  1. Qualitative Insights: Apply Customer-Centric Fundamentals - The first phase commences by organizing an intensive day-long workshop for each cross-functional product team. The teams engage in a unique customer journey where they employ a “jobs-to-be-done” lens to analyze their market, and identify valuable, qualitative customer insights needed to drive customer-centric decision making.
  2. Quantitative Insights: Quantify Opportunities that Exist - This phase entails conducting quantitative research to rank the most critical customer insights needed to develop customer-centric data model. The insights available through this data set help the company in making customer-centric business decisions for years to come.
  3. Implementation: Leverage New Customer Insights for Growth - In this phase, managers and employees across the organization are trained on utilizing the insights to devise market and product strategies, and to encourage customer-centric growth.
Customer-centric culture of Innovation
Let’s take a deeper dive into the first phase of this process.

Qualitative Insights: Apply Customer-Centric Fundamentals

The first phase commences by organizing an intensive workshop for each cross-functional product team. It is typically a day-long session where the teams engage in a unique customer journey. They employ a “jobs-to-be-done” lens to analyze their market and identify valuable, qualitative customer insights needed to drive customer-centric decision making. The qualitative customer insights developed during the first phase serve as an indispensable, long-term guide in the journey to a customer-centric mindset.

During phase I, each product team is trained on customer-centric philosophy in a workshop settings. The workshop participants participate in qualitative research discussions designed to obtain critical customer information and fresh insights. Upon completion of the initial phase, the product team is able to develop a shared innovation vocabulary and gather customer insights to make customer-centric marketing and product development decisions.

Interested in learning about the third phase of the approach to Customer-centric Culture of Innovation? You can download an editable PowerPoint on Customer-centric Culture of Innovation here on the Flevy documents marketplace.

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Despite the emergence of new devices and software products designed to unite employees in more ways than ever before, the threat of Organizational Silos Primer pic1organizational silos is still very real. While silos deter customer experiences and producing correctly functioning products – the root of the problem is that many managers fail to spot those silos as they formulate in front of their very eyes.

What are Silos? Organization silos describe the isolation that occurs when employees or entire departments within an organization do not want to or do not have adequate means to share information or knowledge with each other. Siloed teams often end up working in isolation from the rest of the company. This leads to a plethora of internal and external problems for employees, executives, partners, and customers.

In Organizational Design, it is critical to also consider the risks of unintended silos within the organization.  Having organizational silos can lead to duplicate work, inefficiency, bugs and generalized employee disenfranchisement at a granular level. Work is being done without regard to how the work impacts other departments. Departments start having tunnel vision, solely focused on their own functional area. In the end, there is a breakdown in communication and transparency leading to organizational dysfunction on multiple levels. This can greatly affect the company’s ability to deliver excellent Customer Experience.

Breaking Down Organizational Silos: The 5 Key Symptoms

Understanding the 5 Key Symptoms of Organizational Silos will guide companies in breaking down silos and limiting their effect on performance, goals, and targets.

  1. Broken Customer Experiences. This is the most obvious sign of a siloed team. Eventually, this symptom will ultimately make the company undesirable.
  1. Internal Unfamiliarity. There is internal unfamiliarity when employees or colleagues are not on a first name basis. Employees are not familiar with the majority of the people outside the team and what they do.
  1. The Us vs. Them Mentalities. When your department sees other departments as competitors and obstacles to success, then there exists the us vs. them mentality. In the us vs. them mentality, protectionist thinking exists. When this happens, information is not shared for fear that another team’s gain will be their loss.  This leads to the creation of cliques with its own distinct culture that is not aligned with the company’s overall mission and culture.
  1. Disenfranchised Employees. Having employees who feel that they are not part of the team is a symptom of organizational silos. Disenfranchised employees are unhappy, unproductive, and pose the risk of sharing negativity with coworkers.
  1. Task Duplication. Have you seen people of different teams working on similar assignments and projects? That is a symptom that there are organizational silos within your company. When there is task duplication, this can lead to inefficiencies and loss of productivity.

Companies can immediately break down barriers to communication and collaboration once the key symptoms are detected. Silos in business have two sides to the coin. The good side is variety, ownership, accountability, specialization, and efficiency. However, on the other side, the bad side means short-sightedness, inaccessibility, and inefficiency. This can harm your organization.

Organizations must be able to deal with silos inside a business. This can be done by expanding our perspectives and motivation in the work we do.

Interested in gaining more understanding of Organizational Silos, the different types, and proper ways of addressing them? You can learn more and download an editable PowerPoint of Organizational Silos here on the Flevy documents marketplace.

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