The customer is changing market fundamentals…and customer experience (CX) is changing operating fundamentals.

In a recent webinar, key CX analysts Moira Dorsey, Harley Manning, and Blaise James tackled how CX is changing operating fundamentals with a deep dive on the state of CX and special attention to the real implications of CX.

There is broad market acceptance that winning on the basis of experience is a customer-led mandate. You can look at the reasons why from two different angles:

So we asked: if I buy into the need to stand up an initiative to measure and consistently improve CX, how do I best operationalize CX to drive the expected gains?

We came to six key takeaways that give leaders an ability to anticipate and plan for people, technology, process, and financial issues:

  1. Organizational design (re)thinking: Companies and their associated functions have traditionally been organized around internally-oriented measures of efficiency and control. Customers have disrupted that logic. Customer journeys transcend functions and can include physical, human, and digital touchpoints. This is forcing companies to place experience as a top design consideration to ensure consistent experiences across all touchpoints. Our panelists considered whether this will cause large-scale reorganization or some tuning and came to the conclusion that it may spawn customer-oriented teams that span sales and support but will manifest in process change across functions.
  2. The new process reengineering model: The process buzz is back. Different than the heady days of lean six sigma, we are now in a customer-led process world. In this shift, three outcomes are vital: 1) that customer journey analytics become the critical currency to deliver personalized, high-value services; 2) CX becomes an effective method to eliminate steps that don't produce customer value; and 3) process change can become the conduit for tangible, long-lasting cultural change.
  3. The theory of relativity or the speed of people: Of all the changes considered by fully executing good CX, the people equation is the thorniest. It's the difference among head, heart, and feet: people will eagerly agree intellectually but struggle emotionally when they realize that they themselves need to change. The buy-in phase is tricky and can be long — it can delay when employees finally get moving their feet in the new model. This is a well-known dynamic in change management. The challenge is that while there can be a meaningful distance in head, heart, and feet in employees, that distance is narrowing for customers who will switch more often and fast if they think or feel the experience is subpar. This creates a dangerous dissonance where customer-led change far outpaces employees' ability to catch up. Of all the dynamics that define the leadership challenge, this one is arguably most important.
  4. Measures, not gates: You can't improve what you can't see. Measurement is essential to understand reality and manage to success. This logic comes with big attendant risks: gates. Fully executing CX quickly brings in some large, complex items like organization, people, and process. It may not be possible to stand up a business case that can anticipate either/both costs and returns in the first year and yet we see firms seeking to place funding gates in the first year. Leaders should measure and have a clear sense of total impact – but on a practical basis. Gates will only defer or interfere with the hard and necessary discovery and structural work that will dominate year one.
  5. The world keeps spinning: Competing on experience is hard but necessary work. And some market leaders are already gaining share and driving growth by moving fast. We see that in our CX Index scores year-over-year. But CX is not a "one and done" accomplishment, as customer expectations seem to be ever-increasing and wave-after-wave of digital innovations just fuels their appetites for more. Even leaders need to maintain their edge and continue to drive CX improvement – but this is really a comment to the followers. Don't wait. Customers and market leaders will continue to advance – don't let the gap get too big that even the best execution is insufficient.
  6. CX in a dynamic economic environment: One of the last items we discussed was whether CX is vulnerable to become a secondary strategy if Brexit anxiety or other factors put pressure on economies. The answer was no – but not for philosophical reasons – but due to the practicalities that CX is THE best weapon to retain customers and garner the kind of affinity to compel spend if consumer confidence wanes.

If you did see the webinar, I hope it proved helpful as you take on the CX quest – if you did not, please watch the replay and enjoy.