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The Customer Experience Driven Operating Model

Posted: Jun 23, 2022
Read time: 8 minutes
#CX Strategy
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What is a Customer Experience operating model?

In my previous article, I wrote about the role of CX as a strategic methodology for continuous business transformation, that leads organizations to focus on what matters most for their customers instead of other low-return activities. The most common technique associated with CX is customer journey mapping and persona profiling, but this gives us partial results since it focuses on the outside-in story without revealing the inside-out story (the operating model), which is responsible to produce the experience.

Going beyond the CX strategy

Therefore, the real key to create a meaningful impact on Customer Experience is to work on the organizational layers. These backstage activities (below the customer visibility line) are the ones that drive the transformation and form the operating model. The primary focus of organizations should be the alignment of the operating model with the CX strategy which will result with increased efficiency and better customer experience.

Touching the organization´s operating model is not a simple task, as it requires various skills that are different than those used to build personas and customer journeys; they involve internal politics, change management, business process modeling, information systems implementation, data optimization and local/international regulation, that all need to be taken into consideration.

In this and subsequent articles I propose a way to build a Customer Experience driven Operating Model which supports the CX strategy and helps the business to create a meaningful impact on its customers when reaching the execution phase.

Whether the organization does something or not an experience will always be generated.

The place where experiences happen

An experience is an outcome of an interaction a customer has with a brand through one of the communication channels (touchpoints). We often consider an experience as something amorphic, that is expressed as a positive, negative or indifferent sentiment or emotion, but an experience is something tangible that can be controlled in most parts of the journey via the communication infrastructure that its customers interact through.

Whether the organization does something or not, an experience will always be generated, which is something important to acknowledge leading us to design an intentional experience approach, that guides the customer through the journey and that provides an omnichannel experience with each product or service. The better control the business has on the way the experience is handled over the stages of the journey, the better chances are that things will work properly from a customer perspective.

What are the limitations of customer journey maps?

Designing experiences requires using methods and tools that will uncover the brand perception of the customer. Customer journey maps are one of the efficient techniques to empathize with your customer segments and detect issues in the experience throughout the different stages of the journey while interacting with your brand (both digital and physical).  By centralizing the data you hold from across the business including customer feedback, KPIs etc. into your maps, you start to build the full story. The story of the journeys gives a clear view on the way customers interacts with the brand, their perception of the experience and the gaps between their expectations and the experience that is actually delivered.

The real challenge comes when the journey outcomes need to be transformed into action, translating the CX strategy initiatives in your CX management platform to an actual change in customer experience. Many companies get stuck at this stage due to issues in prioritization, budget constraints, lack of accountability, internal politics, cross functional siloes and a stagnant organizational culture.

Organizations face this challenge simply because the language of the customer journey is an outside-in language, which needs to be translated into a roadmap of actions that speaks an internal language. In other words, customer journeys are only one piece of the puzzle that has to be completed by a service design which explains what needs to be done internally.  How do you shape a product, offer, service or operational process to align with experience improvements?

How to transform your organization with a CX driven Operating Model

Every organization has an operating model which translates the purpose into business value to its customers. Most organizations will invest their energy in turning this machine to be more efficient in order to produce more with less means. 

While the machine can run smoothly it's not a guarantee that it produces the right value for customers, it is therefore necessary to inject into the operating model some "CX fluid" to orient it.

Shutterstock 692687179

Let's focus on the process from a CX perspective to understand how companies can transform an operating model into a CX driven operating model with success. 

The outcomes of the customer journey process are transformed into a list of actions aimed to improve customer experience and personalize the service/product offers. 

These go through a prioritization exercise, based on a cost/benefits analysis model, highlighting the initiatives that will bring the most value to the organization

Next comes the execution part that needs organizations to take into consideration the implications these transformation initiatives are going to have on the organizational layers that produce the experience. Such as the organizational structure, business processes, data, information systems, internal policies and more, which will all play a role in the transformation.
One of the techniques used to describe the operating model is known as a Service Blueprint, which serves as a bridge between the audit of current operations and the execution part, telling the story of the journey from the organizational perspective (inside-out).

Incorporating the Voice of the Business in your new model

For the CX driven operating model to work properly, with strong alignment to the CX strategy, we need to put the focus on three important elements of the machine (the three voices that form the voice of the business):

  1. Fostering engagement among the producers of the experience = the employees. The operating model can be adapted through a set of rules that are forced upon team members or it can become a natural way of doing business by embracing the customer-centric culture through proper change management.
    Measured through: VOE (voice of the employee) = employee experience.
  2. Implementing a Customer Listening platform structure, composed of all the technologies that help collect, analyze and visualize customer insights. Based on this layer the organization can build a holistic customer 360 view containing demographic, behavioral and transactional data, serving as a source of truth for the different departments and information systems.
    Measured through: VOC (voice of the customer) = customer satisfaction.
  3. Business Process remodeling putting the customer at the heart of the activity by designing processes that start from customer requirements and translate into a flow of actions that best serve the customer.
    Measured through VOP (voice of the process) = health of the process.

Developing a customer-centric operating model

Mapping journeys is an important technique that helps detect customer pain points and ideate solutions that will improve customer experience. Transforming this exercise into action requires designing the backstage activities inline with the CX strategy that was defined. This is achieved through techniques like Service Blueprint and other methods that complete the view of the journey combining the inner and outer perspectives.

Creating a holistic approach to operate as a CX driven company

Some practical tips for a governance model of continuous improvement:

  • When you move to execution make sure you have, in addition to the current state and future state customer journey maps, a Service Blueprint design that covers all operational aspects required to make an impact on the end customer
  • Plan a change management process that will work the customer-centric culture aspects, building a longer-term commitment of employees and managers to integrate customer needs as part of their daily job
  • Put in place a Customer Data infrastructure that will allow your organization to listen to customers and act upon their feedback in a systematic manner

To conclude, I suggest that customer journeys and the operating model are two sides of the same coin and need to be worked on at the same time in order to create impact on customer experience. In customer-driven companies, the operating model is a CX-driven operating model differing not in the means that all organizations put in place to run their business, but in the customer-centric mindset of their employees, the holistic view of customer needs and expectations reflected from the customer 360 view and the business processes that are designed to serve customer requirements.

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