CX as a methodology for Business Transformation

Now imagine the business perspective of the VUCA world as a Formula 1 racetrack of companies competing to take the lead. Each of them needs a passionate driver, a solid car, professional gear and a skilled racing team that will make sure the construction and maintenance of the car is performed quickly and efficiently.

Keeping the lead on a dynamic environment, such as a racetrack, is challenging as it gives little time to rest, plan your next steps or reorganize your teams. Winning the race requires constantly reacting to changes as they occur and adapt accordingly. The issue with the VUCA race is that it never ends, you can be a winner today and a loser tomorrow.

The pace of change and the volatility of the market have quickly rendered many of the past business lessons learned irrelevant and the future unpredictable.

How does this change the way businesses need to operate?

The key answer to cope with this kind of VUCA landscape is to work in a continuous business transformation model.

We often hear of the need to stay “agile” which holds true. However, to simply cut the usual annual waterfall plan of one, two or five year cycles into half or quarter years, whilst useful to deliver quick wins and short executions, is not enough. This is the “when” of formulating and executing plans around your business strategy but there are crucial elements that are being missed.

The VUCA world is turbulent, but hasn’t changed the basic business goals that most companies are aiming to achieve like increasing revenue, profitability, decreasing costs, acquiring new customers, retaining the existing, etc. The change is not in the objectives themselves, but in the means we need to put in place in order to reach them. This is where the risk lays, launching many initiatives while facing constant changes, turning a big part of them quickly irrelevant, and as a consequence a sunk cost.

Acting fast by itself is not a guarantee that you are doing the right things. You must add in the “what” which defines the initiatives that will be carried out, the “how” - the way you are going to execute and the “who” which defines the taskforce responsible to deliver and the audience.

Customer Experience methodology

CX is an approach that helps organizations design processes that are aimed at optimizing the experience of customers across all communication channels. The approach brings tangible business benefits such as a positive brand image, improvement in retention rates, attraction of new customers, better customer satisfaction levels, higher conversion rates, an increased personalized service and more.

The Customer Experience approach is supported by 3 pillars:

• CX Program management (methodology): the introduction of the CX approach in an organization needs to be accompanied by a structured program that encompasses several elements - designing a customer-centric strategy, defining persona segments, building customer journey maps, identifying pain points, ideating solutions for CX improvement, prioritizing the ones that bring the most benefits to customer experience versus the minimal implementation cost/effort, execution in agile sprints, feedback collection (VoC, VoE, VoP), analysis of the impact on customer experience, measurement of the KPI and refinement of the whole model over again as part of the governance of the program.
• Customer-Centric DNA (culture): in parallel to this process organizations invest time, energy and money in the development of a customer-centric DNA that will translate into the integration of customer needs in daily operations. Employees that think of the customer when they do their job are providing a better experience over time comparing to those that will leave it to coincidence, because experiences are happening whether we do something or not.
• Business case (ROI): this is the part that creates the connection between the business goals and the CX initiatives. Aligning the operational model (known as Service Blueprint) and the customer journeys is the key to make sure the improvements that are done to customer experience across stages and channels will result with a positive and measurable business impact (return on investment from both a financial and business levers perspective).

So how do we use the Customer Experience methodology to support continuous agile business transformation?

CX as the driver of continuous and agile Business Transformation

If we would like to use CX as a methodology for continuous business transformation we need to structure an operational model that connects the CX pillars to the business strategy and goals. Then everything we choose to do as an organization needs to be based on the outcomes of the CX methodology. This is done at a couple of levels as a repetitive process of feedback collection, analysis, action, measurement and adoption while continuously assessing the impact of the execution on customer experience and the business targets (which are two sides of the same coin).

By using this methodology, we inverse the decision cycle while defining the starting point as the customer feedback upon which we are acting. This is an outside-in approach, which presumes a shift of mindset from decision makers that are naturally used to proposing mitigation plans that reflect an inside-out perspective. It requires some courage to put your trust in your customers as well as a reliable feedback collection process that will represent the real needs of customers, but it is also the only way in my opinion to assure that we got the “what” right.

These principles are not holistic. They are a foundation the organization needs to put in place and then build additional layers that will support the business purpose.

Applying this method results in a business that transforms its organizational structure, business processes and information systems in the right way. It is also a flexible model that puts the focus on the customer and reflects the latest version of the business purpose.

Conclusions

Being flexible doesn’t guarantee proper results if the changes made are not the right ones. To move in the right direction, I propose the customer experience methodology as the most efficient tool to keep the business up to date.

Looking at the benefits of the CX approach, it is clear that the best way to know in which direction to transform the business is to listen to your customers. They have the key to your product/service offers roadmap, they will tell you what they need, what they expect and what frustrates them. But you must ask them and ask them frequently.

In future articles I will build on this premise and bring you practical steps on how to make the connection between your strategic execution and CX.