As a statement of intent, creating a Chief Customer Officer, Head of Customer Experience or similar role, helps organisations to switch from their traditional product/service orientation to one focused on customer value. But what organisational structure should go with the new role? A ‘full-fat’ CCO with a department of customer evangelists, or a more agile ‘minister-without-portfolio’ able to build alliances and form teams as necessary across a matrix organisation? Or is there a happy medium somewhere between the two?
In a lively breakfast debate on the building blocks of a customer function a group of Comotion associates got to grips with the issue. To become customer-driven means that these building blocks are not so much organisational structures but more a set of conditions and mechanisms that, when implemented, change the direction of the organisation.
There are a number of challenges that need to be addressed:
- Customers are ‘chaotic’ – they have needs that don’t fit easily into a set of predefined processes or a convenient structure.
- The length of a customer relationship exceeds the tenure of most CCOs. We can move away from viewing customers as an annual contributor to the balance sheet to a longer term, ‘lifetime value’ view but the challenge remains that any business case for a customer-centric initiative will inevitably be viewed in terms of payback within a couple of years.
- Customers are not the only issue that organisations deal with – prioritising customer initiatives versus other operational ones is more of an art than a science.
Addressing these challenges requires organisations that are serious about becoming customer-driven to:
1) Build propositions around the customer
‘Affordable luxury’ hotel chain citizenM is a good example of this: the whole experience is designed from scratch around what the target customer needs. Other types of business might find it harder to start from scratch but at some point you need to go back to ask some basic questions about what it is that customers value about your business, using Clayton Christensen question ‘what jobs does the customer need help with?‘ as the starting point, then organise the business around efficient delivery.
2) Embed the ability to challenge into the culture
Metro Bank has a rule: ‘there are no stupid rules’ – employees are encouraged to call out such rules (by writing to the MD) and the owners of the rules then have to justify their existence. Embedding the ability to challenge ‘the way do things around here’ into the company’s culture will ensure that customer-centricity extends beyond the typical tenure of most senior executives.
3) Develop the art of prioritisation through meaningful conversation
Balancing competing priorities is arguably the job of senior management teams but often the framework for making these trade-offs originates from a traditional financial perspective. A richer conversation is required that allows, for example, a cost-cutting operational improvement to deliver customer benefits as well. Managing this conversation depends on having good data available to inform the customer perspective (most businesses will have plenty of financial data already) and this capability to marry data, analysis and insight to link customer behaviour and opinions to improved company performance is the one essential component of any CCO’s organisation structure.
So whether a CCO function has its own dedicated teams or accesses those resources from other departments, the steps outlined above lay the foundation on which an effective customer function can be built, whatever its shape or size.
Nick Bush is a freelance management consultant and Comotion Associate who specialises in helping organisations deliver strategies that improve their customers’ experience. He has experience of implementing change across a range of industries, with extended periods in banking and telecoms. He writes on customer experience and related topics at knittingfog.blog.