Most large organizations are designed according to 20th-century principles. They were founded on rigid structures to organize people only. The last century’s operating principles also dictated the division into functional silos that create competition and disconnections at critical points along the customer value chain.
CMOs and other customer-facing leaders need to work with the C-suite to embed humanistic customer centricity across all business areas and anchor it to business model reinvention. Yet, according to an EY global C-suite survey and interviews with CEOs and industry researchers, while 85% of the C-suite say transformation is essential to becoming future-ready, they are less certain about whether they are taking the right steps to steer their organizations.
Based on EY's experience helping clients transform their operating models for customer centricity, EY teams identified four key actions CMOs can take in partnership with the C-suite to turn their visions of customer centricity into a reality.
1. Create pods that align to customer journeys.
Leaders of the pods, such as small teams, will own all aspects of how to make the customer journey successful across the enterprise. For example, a bank may currently be organized by division (retail, commercial, business, wealth and asset management, etc.).
Under a customer journey model, a multidisciplinary, multifunctional pod may be dedicated to delivering all new customers a great welcome experience in their first six months, regardless of the product or service they have bought.
2. Master design thinking.
Service design is a human-centered approach where designers consider the complex chains of interactions involved in innovating, producing and delivering a product or service. Companies will want to embed service design thinking as a discipline, making sure that the approach is squarely centered on the user and includes all relevant stakeholders in the design process.
For example, a pharma retailer wanted to improve its drive-through experience for customers. To achieve better customer outcomes around this objective, the company had to consider, among other things, the physical layout, implications to the traffic pattern of the drive-through, impact to the pharmacists and the supply chain of medications that needed to be delivered.
3. Give pods the data and empower them to make decisions.
Under more traditional operating models, data was carefully controlled. Modern organizations are democratizing the data. They are putting anonymized or pseudo-anonymized data in the hands of pods and front-line customer-facing employees and empowering them to make decisions. Because they are on the front lines, they can see how a product or service is performing. Companies need to allow these customer-facing and customer-focused employees to make data-driven decisions to pivot or shift the direction of a product or service without intervention from core leadership.
4. Create an empathy mindset.
Service design thinking begins with empathy. Companies need to create a culture that prizes empathy. Empathy with the end customer enables pods to intensely channel personas and optimize products and services for maximum customer engagement. The feeling and energy in leading organizations that have made this shift is palpable. Their pods know that their job is to make sure their customers have a better day because of their company’s products or services.
The road from wanting to doing is worth the hardship.
Unquestionably, the road to building a customer-centric operating model is hard, which is one of the reasons why so many business transformations fail. Transforming operating models to become a customer-centric organization requires every employee at every level to be squarely focused on the customer at all times — not only at the surface, but deep into the tissue of the organization.
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This piece was written by Laurence Buchanan, CEO at EY Seren.