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Building an organization with winning customer-centric focus is key to lasting customer value and profitability.
A great fallacy of organizational structure is that its impact is only felt internally. Internal structures have serious implications on an organization’s ability to deliver a best-in-class customer experience. Take Amazon, for example. CEO Jeff Bezos coined the term ‘Day 1’ as a shorthand for commitment to maintaining an agile, startup-inspired, customer-driven mindset to avoid the stasis and eventual irrelevance of ‘Day 2.’ Said Bezos, “There are many ways to center a business. You can be competitor-focused, you can be product-focused, you can be technology-focused, you can be business model-focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.”
In disruptive and tumultuous times, investing in customer-centricity can help build resiliency within organizations, freeing them to innovate and adapt to customer needs. Here are five steps to organizing around your customer.
1. Establish a customer-obsessed culture. The old models of relying on incentive schemes to help achieve short-term financial targets across disparate, sometimes competing departments are over. Too often, these tactics translate to a substandard customer experience taking the form of aggressive salesmanship, hassle-ridden return policies or even low quality products or services. Modern organizations understand that a more viable option for sustained profitability is to establish a culture that puts the customer first. To be successful, this culture must be fostered across the organization, from the C-level down to frontline staff. One example of this culture creating a strategic advantage is at leading retail giant Nordstrom. The company’s employee handbook famously has one rule: “Use your best judgment in all situations. There will be no additional rules.” While a supplemental handbook offers more traditional policies, this handbook serves a symbolic purpose: establishing a culture that empowers employees to provide the best possible service.
2. Dismantle functional silos to organize around the customer journey. Lured by the promise of economies of scale, organizations have traditionally been structured around functional expertise. By design, these silos inhibit cross-functional collaboration, an essential component to innovation in customer experience design. This can be seen in all sectors. If you have ever asked a doctor what your out-of-pocket expenses would be, you were most likely ping-ponged between the billing office, your physician, and your insurance company. As an alternative, Kaiser Permanente is organized as an integrated health system that combines hospitals, physicians and insurance to ensure high-quality care and transparency in costs across moments in the patient journey. And it is why J.D. Power has ranked it highest in member satisfaction for nearly 10 years in a row.
3. Incentivize agile thinking, not tenure. While there is no substitute for work experience, tenure doesn’t always translate to relevancy. It’s nearly impossible to imagine a world without Google, the iPhone or Facebook, but all of these were invented within the last 20 years. By over-indexing on traditional ways of working, organizations become susceptible to transformative disruption. Take Kodak, for example. Once one of the most iconic companies in the world, it is now a storied legend known to harrowed CEOs. Contrary to popular belief, Kodak anticipated digital photography, and preemptively acquired a photo sharing site called Ofoto with the objective of getting consumers to print more photos. However, senior executives were blinded from seeing the business right under their nose—one built not on printing, but on sharing Kodak moments. Consumer preference can change overnight. Building adaptable organizations requires investing in agile thinking.
4. Absorb complexity. Offering a simple, hassle-free customer experience requires organizations to absorb tremendous levels of complexity internally. Consider the financial services industry, one where complex transactions occur on a daily basis. Bank customers typically hold multiple accounts and financial products with their primary bank. However, we have probably all had frustrating conversations when our credit card, checking account, mortgage and business accounts have felt like they were operated by totally distinct companies. This difference is felt by inconsistent policies, disparate customer service staff and redundant requests for information. USAA has chosen a different approach, offering members expert advice on a wide range of topics related to financial services, regardless of the financial products they currently own. This investment in interdepartmental expertise does mean increased internal complexity, but USAA’s commitment to helping members understand their own financial security has landed it some of the highest satisfaction scores in financial services and insurance.
5. Appoint a Chief Experience Officer. Today, customers expect to engage with organizations through multiple channels—be it mobile, web or brick-and-mortar. They expect seamless and consistent omni-channel experiences across all touchpoints. The role of a Chief Experience Officer (CXO) is to be an advocate for customers, to walk in their shoes, and to ensure that business and product decisions made at the executive level enhance customer experience across the entire journey. The CXO keeps a strong pulse on the current and future needs of the customer, and guides the company to deliver on those needs. Walt Disney is considered by many to be the first true Chief Experience Officer. As a visionary, Disney understood the importance of choreographing a magical experience for all customers at all points of their Disney experience.
With intense focus, organizations can win the hearts and minds of customers, ensuring lasting relevancy and value by building a more customer-centric organization. At frog, our Org Activation discipline helps companies organize around the customer to grow their businesses from the inside out.
You can also learn more about how to organize for customer experience by enrolling in frog’s newest Lynda course, “Design Thinking: Customer Experience.”
As an Associate Strategy Director at frog, Viral focuses on helping clients define and achieve their business objectives while pioneering innovative products and services for their customers. In today's world, where consumers are more discerning than ever before, Viral believes the future is ripe for those that can create products and services that consumers want—well before they know they even want it.