4 core operating principles to accelerate CX: Forrester

Analyst firm recommends evolving from customer aware to customer-led, and shifting from data rich to insights-driven

Michael Barnes
Michael Barnes

Forrester APAC vice-president and research director, Michael Barnes, is convinced CX leaders need to “fundamentally change” the core operating principles of their organisations in order to become a more customer-centric entity and be the engine of growth.

“It’s going to impact all of the organisational levers within firms: Structure, talent, culture, metrics, processes and technology. It is a massive change. And to move these levers in a positive and more consistent direction towards a more customer-centric approach requires strong leadership,” Barnes told delegates at Forrester CX Sydney 2018

“How can you step up? How can you spread the gospel of CX across your organisation? How can you spread the importance of a customer-centric focus through different groups of the organisation, who may not feel particularly close to customer engagement or customer facing responsibilities.”

“How can you help lead this transition for the organisation? How can you identify through your knowledge of customers their unmet needs and identify adjacent opportunities for services, for products.”

In 2018, consistent, iterative improvements to CX, fixing CX problems and even elevating CX isn’t enough. “In 2018, when it comes to CX, good enough simply isn’t good enough. CX leaders are moving beyond incremental improvements. They are embracing radical innovation and it is a massive change in the organisation, in all aspects of the organisation. We refer to this as customer obsession.”

Becoming customer-obsessed will help companies survive as organisations and keep them from failing. “It will help you drive growth. It will help you identify areas of growth for your organisations.”

Four steps to success

He identified four core operating models companies need to implement to drive a customer obsessed strategy. The first approach is to evolve from being customer aware to being customer-led.

“In 2018, it is nowhere near enough to simply know your customers. In 2018, to lead in CX, to thrive in your industries, you need to understand your customers expectations, their behaviour. You need to be able to predict what else they might need from you.”

Journey mapping can provide a baseline for that, but it extends far beyond that. It involves things like ethnographics to understand the underlying motivations for customers and their values.

“This isn’t something that can only be done within the CX discipline. This has to be embraced and internalised from the top down. Leadership needs to be  involved to truly be able to shift an organisation towards becoming customer-led.”

As an example, Hesta has put their entire executive team through human centred design training to understand and be able to think from an ‘outside-in’ perspective.

The second core operating principle is to shift from being data rich to being insights-driven. “Being able to leverage data far more effectively and not only to be able to provide that data for various groups or roles to consume within the organisation, but to put a far more systematic and effective process in place to be able to enable folks to transform that data into insights.

“And then transform those insights into action. If done properly, it needs to be a closed loop. Because the actions that we take in service of the customers and the responses of the customers to our actions, drive more data. So it’s a continual learning process.”    

As an example, IAG was looking to augment its existing personas and the existing segmentation being used, so started to look at external data and social data to get a far better handle on the values and the ambitions and the needs and wants of customers, he said.

“It is not nearly enough for traditional segmentation of things like age of income,” Barnes said. 

The third principle is to evolve from being perfect to being fast. This puts ‘mindset’ under the microscope, he said.

“That includes some initiatives that we were already embracing. Things like agile, minimum viable product, doing more prototyping. But it is more basic than that. We’re actually talking about a mindset here. It is institutionalising within the organisation a bias to action. Looking to implement change whenever and wherever possible.”

As a third principle, Barnes said companies need to be careful when they focus on agile and not become divorced of customer value, which will only lead to organisations getting far better at delivering things that nobody wants.

The fourth principle involves evolving from being siloed to connected and recognising the reality that customers have no respect for a company’s internal barriers, or the siloes and divisions and distinctions between them and the ensuing inefficiencies.

“You need to break them down," Barnes concluded. 

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