- Technology such as AI and blockchain is enabling companies to enhance customer experience, but they rely on an underlying structure that supports innovation.
- Successful companies are overhauling their ‘core’ and restructuring their business to be customer-centric, adopting an agile approach and even turning to customers to crowd-source their products.
- Technology must not be an ‘add on’ or siloed into a team. Scalability and firm-wide integration is key.
“You need to be using artificial intelligence to analyse everything… Like most people, I have no idea what AI means or how I would go about using it… But these constraints should not hold me, or you, back. You need lots of intelligence and it needs to be artificial” – Mark Ritson¹
It’s early days, but if 2017 was defined by a bombardment of emerging technology, it’s stepping up a notch this year. AI, blockchain and mixed reality are now mainstream and becoming rapidly adopted by business, or at least front-of-mind for executives.
We have all heard that ‘you have to be customer-centric’, or ‘you must embrace innovation’. Yet many organisations are still at the starting blocks in terms of understanding how these technologies add value or what they even mean. Those that do often struggle to embed them at scale across large, complex organisations that are inherently resistant to change.
We will be hearing a lot more about customer experience and innovation and the amazing technologies such as AI and cloud computing that underpin them in 2018. But first, let’s take a step back.
In our conversations with clients this year we are emphasising why this technology is meaningless unless the underlying structure is reshaped to support these innovations and deliver an enhanced customer experience. This can be achieved three ways: the organisation design, ways of working and the sourcing model.
1. Organise around
Financial Services regularly tops the list of ‘least trusted’ industries worldwide.² Yet American firm USAA find itself among most respected companies lists alongside the likes of Apple, Disney and Amazon?³
Answer: it reorganised its entire organisation around the customer journey.4 To start, it identified key life events such as buying a house or having kids and oriented its entire product range around those life events. Rather than going to USAA for a mortgage, customers go for help realising their dream of owning a home. The company also redesigned the organisation structure around the customer journey, with cross-functional teams aligned to each life event.
Using the customer journey as an organising principle rather than a box-ticking marketing exercise, companies in the process do away with the traditional functional or product/service lines that have underpinned organisation structures for over a hundred years. Having a CX team or a digital lab on the periphery of the organisation just isn’t enough
In 2017, ANZ CEO Shayne Elliott announced that the bank was blowing up its organisation structure and moving to an agile delivery model. Like almost all banks, ANZ has traditionally been run around strict reporting lines and centralised control. Agile couldn’t be further from that world, and ANZ’s ability to adapt its mindset to a completely different way of working will determine its success.
ANZ is the most prominent local example amongst a wave of companies replacing scoping documents and waterfall development processes with a new reality that hinges on quick, iterative development cycles, rapid prototyping, constant customer intimacy and testing, and tight collaboration among many small, cross-functional teams.
Transitioning to new ways of working is essential for any organisation that wants to deliver great customer experience because it helps shift innovation ownership from the periphery of the organisation to the core. Many organisations can innovate the CX in a particular team. In our experience, the fundamental challenge for many incumbents is scaling the experience across a whole organisation, especially one that has legacy processes, systems and cultures.
GE is a leader of internal marketing innovation, spending $US5.2 billion on R&D each year. But in 2015 it made the apparently odd decision to engage a group of strangers across the internet to design a new consumer product.
Using ‘FirstBuild’, their online co-creation community launched in conjunction with the University of Louisville, GE asked the world, of all things, how they could make better tasting ice cubes. A competition to create ‘munchable ice’ (a semi-frozen, chewier type of ice) kicked off and engineers and designers from all over the world got involved. The winning design was taken by the GE FirstBuild microfactory and put into development, regularly interacting with the online community as they went to ask questions, test ideas and seek feedback. At the same time, GE launched a crowdfunding campaign to financially support the icemaker. It raised an impressive $SU2.7 million, and the finished product was shipped to more than 5000 pre-order customers.5
This is an example of companies that are bringing together online ‘crowds’ to help them create new products, invest in new initiatives and provide rich market intelligence. Organisation don’t have all the answers. In fact, new knowledge is often slow to reach ‘the core’ of big organisations.
Embracing your customers as part of the creation process can help get volumes of work done that a single organisation just couldn’t achieve (think Wikipedia’s army of researchers), identify the correct resources for particular challenges (think Airtasker’s on-demand problem solvers), absorb rich market research (think American Airlines’ panel of elite customers, who have helped changed everything from the airport lounge menu to the design of first class seats) as well as acquiring new customers (think Lego and its customer ideas platform).
This is a new reality where your customers aren’t just receiving your products and services, they are your trusted advisors at every stage of the design and development process.
Below the tip
of the iceberg
It’s tempting to look at the elegant simplicity of an iPhone, or marvel at the frictionless Amazon purchasing experience, and wonder, ‘why can’t every business be like that?’ The answer is below the waterline of the iceberg. Every company that delivers extraordinary customer experiences is underpinned by an organisation that is totally geared towards that mission.
This year, when you’re told to invest in this technology, or asked to redesign that experience, think about the ‘organisational infrastructure’ that will sit behind it. Innovating around the edges is easy; real customer-centricity is forged below the tip of the iceberg.