CX – adaptive and customer obsessed – fueling digital transformation
In the first week of my son’s first grade class his teacher introduced the researched backed concept of a fixed vs growth mindset – the school as a whole was reinforcing the importance of being an adaptive, continuous learner.
A fixed mindset can limit organizations as they tackle change. Single target metrics can inhibit the readiness of an organization to adapt to change which can be disruptive to an industry or organization. A holistic focus on performance measures is an outcome of a complex set of interrelated business functions aligned under a series of strategic objectives.
One classic example of narrow focus on a single data metric leading a company off course is Wells Fargo, where employees opened 3.5 million deposit and credit card accounts without customers’ consent in an effort to implement its now-infamous “cross-selling” strategy. The bank the set aside a $3.25 billion accrual for future litigation expenses, paid over $1B in fines and resulted in substantial lost business.
Harvard Business Review analysis:
Were these devastating outcomes simply the natural consequences of having a bad strategy? Closer examination suggests that Wells Fargo never actually had a cross-selling strategy. It had a cross-selling metric. In its third quarter 2016 earnings report, the bank mentions an effort to “best align our cross-sell metric with our strategic focus of long-term retail banking relationships” [emphasis added]. In other words, Wells Fargo had—and still has—a strategy of building long-term customer relationships, and management intended to track the degree to which it was accomplishing that goal by measuring cross-selling. With brutal irony, a focus on the metric unraveled many of the bank’s valuable long-term relationships.
source: HBR September–October 2019
““In preparing for battle I have always found that plans are useless, but planning is indispensable.””
A holistic CX mindset, requires an ongoing obsession with delivering end-to-end customer value not limited to short-term issue orientation or gaming the metrics associated with a strategy. I’ve worked with a wide array of companies from fortune 500 to challenger brands and a surprising percentage become disconnected from their customer’s evolving needs or shifting ecosystems as they tackle the complexities of digital transformation initiatives.
According to research by Capgemini, 75% of organizations believe that they’re focused on providing great CX, however, only 30% of consumers would agree.
Internally-focused organizations tend to embrace self-directed product development strategies. Customer-centered product development and service design are crucial to balance the internal focus. Without a strong CX practice solutions can result in a forced market fit. This is the equivalent of a shoe salesperson only selling one shoe style. The dynamic starts with the “solution” when it should start with a clear problem statement influenced by market analysis and customer research. Define what problem we are solving first.
Do organizations suffer from a lack of empathy or are organizational biases obscuring the true customer needs and creating a gap between intent and impact?
Internal bias and organizational blind-spots can lead to a disconnect with customers. The reality is that It can be difficult to identify externalities that have potential impact on your business when focused on operational efficiency. When product or service development is an extension of internal systems the result can out of sync with customer needs and lead to failure. Organizational silos are another institutional barrier to cross-disciplinary team innovation. One way to avoid the pitfalls of focusing on short term goals and missing the larger arc of change and growth is to embrace a Growth mindset.
The CX practice is a flexible methodology designed to adapt to the limitations or constraints of the problem, technology, or customer limitations.
The CX toolkit is part of the strategic framework that will help us build better experiences. Data intelligence and machine learning must be paired with the full CX array of offerings to stay true to the company promise. CX is another seat at the table that can provide balance.
Balance efficiency and platforms with customer insights and behavioral patterns (on-stage and backstage).
CX can be as simple as a measure of customer satisfaction. Single metrics like CSAT or NPS out of the full context can cloud the real work at hand. CX has to go deeper and focus on actionable insights to improve our customer experiences, our relationships. This is a limited mindset that misinterprets the role of CX and customer-centricity in digital transformation initiatives. Provide a customer-centric toolkit to aid in the design and development of key customer experiences, platforms, and services.