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Activating culture is key to making customer-centricity stick

 

Torso and hands of a man using a smartphone. To his left is an overlay of the image on his screen: a rating system for customer service with a frowning face, a neutral face, and a smiling face. The smiling face is selected.

Photograph Customer experience has become a key focus for companies in every industry. Business leaders understand that there’s long-term value in being customer-obsessed—and significant risk in failing to be. Our research has consistently found that organizations that lead in delivering superior customer and employee experiences also outperform on both growth and profitability. For instance, our evaluation of more than 125 companies found that a sizable majority (90%) of companies with strong capabilities in gathering and acting on customer experience (CX) and employee experience (EX) insights reported higher profitability and revenue growth than their industry peers. The push to become customer-centric is even more important as companies rethink their value propositions and business models in the wake of the COVID-19 pandemic.

But the devil is in the execution. Companies often achieve customer-centricity on specific projects here and there, but fail to make it a long-lasting priority across the entire organization. In other words, they fail to embed customer-centricity into their culture. We believe three main factors have contributed to the challenge of making customer-centricity stick.

Customer experience is viewed too narrowly. Customer-centric initiatives often focus too closely on the CX without considering how the EX and the leadership experience (LX) enable and influence the CX. These different forms of experience (CX, EX, and LX) reinforce one another so strongly that we advocate for an approach to culture activation that ties these three elements together. Improving customer touch points (e.g., self-service websites or redesigned apps) is a big part of improving CX, but employee behaviors are the real driver of good CX. When employees feel good about what they do and are empowered to act in ways that directly improve the CX, they gain motivation and pride, and help to power up the movement. EX and CX essentially create a continuous circle of good feelings, or emotional energy.

Ownership issues create confusion and impede progress. Efforts to improve the CX are often ad hoc, stand-alone projects that remain too siloed to be widely effective. They might be pursued as parallel but separate projects The current culture may be undermining customer-centricity initiatives. It’s difficult to rewire behaviors and create new habits if you don’t understand how the current ways of working may be at odds with your CX efforts. If there’s a disconnect between the internal messaging about being customer-focused and an employee’s actual on-the-job experiences, it will be difficult for customer-centric behaviors to take root.

We believe the way to fix these issues is to systematically activate customer-focused behaviors throughout the organization, calling on key people leaders to drive the effort. These leaders—who might be managing a sales team or supply chain, overseeing manufacturing operations, or supervising a credit department or call center—are essential to the adoption of the behaviors because they are on the front lines (and in the back offices) with employees and therefore wield everyday influence. We at the Katzenbach Center—a global institute for organizational culture and leadership at Strategy, PwC’s strategy consulting business—call the important behaviors the “critical few behaviors” and the leaders who promote the behaviors “authentic informal leaders” (AILs).

Getting to stickiness

We suggest a three-step process for creating a cultural movement that’s both top-down and bottom-up and that promotes the changes needed to make customer-centricity stick. At each step, it’s crucial to make sure your formal (top-down) leadership mechanisms are not working alone, but are complemented with informal, grassroots (bottom-up) efforts (see chart).

Graphic showing the causes and effects of using culture to activate customer-centricity.

1. Assess where you are—and where you need to go: Company leaders must understand their “cultural thumbprint.” This thumbprint is a collection of the traits and behaviors that define the corporate culture—and, more important, that help to energize and build a movement around customer-centricity.

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Employee surveys, focus groups or workshops, and other engagement tools, such as crowdsourcing and interactive discussion forums, are useful in understanding the prevailing traits and behaviors and evaluating which ones are conducive (or not conducive) to customer-centricity. These traits and critical few behaviors (typically three to five across the organization or business unit) will not necessarily be uniform throughout an organization. Certain business units or functional areas might have their own microcultures. For instance, in some areas of an organization, team performance might be emphasized over individual performance, or broad performance measures might be favored over financial metrics—both of which would influence employee behaviors.

The Katzenbach Center has identified several examples of culture traits that correlate with a customer-centric culture. For instance, customer-centric organizations prioritize customer needs over internal operations and have a limited hierarchy, so those closest to the customer are heard and empowered to make decisions. These organizations also improvise to address customer needs in creative ways.

The devil is in the execution. Companies often achieve customer-centricity on specific projects here and there, but fail to make it a long-lasting priority across the entire organization.

Traits are manifested through behaviors. For instance, customer-centric companies develop services and solutions from the perspective of customer needs, using their needs as a starting point and working backward. These companies fearlessly experiment to enhance the customer journey. And they identify, talk about, and test new ideas to serve customers while learning from failures.

It might help to think of traits as organizational values or aspirations intended to guide behaviors, and behaviors as what bubbles up in response. In this way, your top-down mechanisms are reinforced with bottom-up actions.

2. Catalyze change: Once you’ve prioritized cultural traits and behaviors that bolster customer-centricity, you can tap into the power of AILs to create a bottom-up movement and catalyze change. Think of them as the ignitor of change, the spark that lights the fire. AILs have a valuable ability to understand the emotional energy of the organization, which makes them important connectors between senior leaders and rank-and-file employees. Joey Coleman, best-selling author of Never Lose a Customer Again, refers to AILs as “cultural ambassadors.” Coleman explains in his book, “The best organizations in the world have cultural ambassadors—team members who are tasked with creating a workplace environment that fosters connection, support, and camaraderie. From keeping tabs on new hires who are still working to ‘fit in,’ to encouraging veteran employees to live the brand spirit in their words and actions, cultural ambassadors allow leaders to [continually take] a pulse on the employee experience throughout all aspects of the organization.”

The power of AILs to help catalyze change truly comes to light when their efforts are paired with signaling actions from leadership, which involve formal leaders visibly role modeling behaviors that might be a radical departure from their norm. For instance, a major utility was digitizing its workforce to pursue a more customer-centric strategy. To underscore to the workforce the important link between the customer focus and the new software, a senior leader who wasn’t required to use the software—and wouldn’t normally need to—committed to learning to use it. AILs within the organization can then offer candid feedback on the value and impact of these types of leadership actions in fostering culture change.

3. Enhance and sustain the movement: AILs are essential to helping companies create lasting culture evolution; other types of enablers serve to reinforce the critical few behaviors. Top-down formal enablers or mechanisms are the fuel that keeps the change alive. The following key enablers are critical to promoting stickiness.

  • Operating model: Is your organization structured to support customer-centricity?
  • Insights: Do you provide regular and timely insights that empower employees to take action and that reinforce the linkage between their behaviors and better CX?
  • Incentives and recognition: Do you reward customer-centric actions?
  • Technology: Do you have the right tools in place to make customer-centricity accessible to all employees?

For instance, at a global asset management company we advise, the adoption of customer-centric behaviors was enabled with formal mechanisms, such as aligning desired behaviors with management’s performance priorities as part of annual evaluations. Our client even launched a “see the behavior” award linked to a rewards and recognition platform to encourage rapid feedback and recognition of customer-focused behaviors.

Evaluating progress through multiple views: The ROX approach

Even if you have a strong bottom-up movement and reinforcing top-down mechanisms, there is no way to know if the gears are turning without continually tracking your progress and making adjustments. In addition, increasing the velocity of customer and employee listening and integrating it with other ongoing quantitative metrics helps to create a positive feedback loop that encourages employees to take proactive action because it helps them see their impact on key business outcomes.

Triangulation is the critical element in measuring a customer-centric transformation—that is, you’ll want to gather as many related data points as possible to not only ensure the movement is working, but isolate any levers that might not be pulling their weight. For instance, even if your employees are adopting the right behaviors and trying their hardest, customer service goals might still fall short if they’re not supported This type of broad approach to assessment and continuous improvement, a concept we call return on experience (ROX), can help you understand what’s working, what’s not, and where improvement is needed. By bringing together experience data and operational data, the ROX system allows companies to evaluate the customer-centric journey through multiple lenses—formal and informal, top-down and bottom-up, and employee and customer.

Why customer-centricity is having a moment

Ultimately, the need to make customer-centricity stickier is being driven To capture and keep today’s emboldened customers, companies need to take a more holistic view of experience, examining how EX and LX can be shaped and leveraged to consistently deliver a better CX. But only by successfully understanding their culture and activating the right culture for the types of experiences they’re trying to drive—throughout the organization—can companies truly reap the benefits of greater customer-centricity.

 

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