Building A Customer-Obsessed Operating Model

Empowered customers, armed with ever-increasing digital capability, increasingly expect any information, any service, at their moment of need. We call this the age of the customer. Innovative brands, from Delta to Southwest, T-Mobile to Verizon, Home Depot to Walgreens, and Caterpillar to Rolls Royce, are sharing with Forrester how they are disrupting the way they work to meet their empowered customers’ needs, to become customer-obsessed. Becoming customer-obsessed gives you, the CIO, an unprecedented opportunity: to overcome the nagging frustration of IT gravity that suppresses your and your team’s ability to influence the direction of your business, to build new competitive advantage. But you have to be willing to change the way you work.  

You’re in an enviable position and are more essential to your firm’s success than ever. Together with your CMO, you have the best overall knowledge of your customers and the technology know-how to deliver a superior customer experience and drive growth.

We’ve begun to identify how leading firms change their operating models to deliver more value and become truly customer-obsessed. Much of that change falls on the CIO to drive. This research is ongoing, but the actions leaders take to shape their customer-obsessed operating model — focused on customer loyalty, innovation, and most importantly, growth, and fueled by customer insight — are becoming clear:

• Investing in new skills. Software and data are central to how you deliver value. We believe customer-obsessed firms cultivate software engineering, analytics, and customer experience design competencies to meet and exceed customer experience expectations.
• Disrupting processes. Your customers get value-added services and capabilities from other firms they do business with almost daily. We know yearlong, or even quarterly, delivery cycles can’t keep pace. And we believe you have to rethink your processes with your end customers — not just your business stakeholders — in mind. We believe you have to be agile, at scale, and not just within your teams but across the entire organization. That includes marketing, finance, and business units designing, funding, and delivering to your customers’ moments of need.
• Re-engineering systems. Monolithic systems once served a purpose. Today, you have to deliver to your customers’ moments of need. That moment may be digital, but it may also be when they’re on the phone with a customer service representative or talking directly to one of your sales representatives. We know leaders constantly re-engineer their systems to deliver capabilities and micro-services that can be assembled into moments of need defined by customers’ journeys.
• Assembling new teams. Leaders define their organizations to drive greater collaboration around customer needs and growth. These firms abandon functional models in favor of centers of excellence and teams that come together on shared goals and outcomes.
• Modifying governance. From the top down, these leading firms put customer insight at the center of their decision-making and governance. ROI and contributions to EBIDTA still matter, but leaders use new metrics, like our own Customer Experience Index, to drive project investment strategies and measure outcomes. Failure is also tolerated, so long as failure happens quickly.
• Transforming culture. Corporate cultures can no longer be rigid. Leaders embrace purpose-driven, customer-focused cultures. They also value insight-driven decisions, showing low tolerance for decisions based on assumptions that cannot be backed up by data. Leaders drive this culture by changing how people are goaled and measured and supported by more continuous learning for employees to help them become more tolerant of change.

Now is the time to become customer-obsessed and focus your strategy and budgets on the business technology agenda — technologies, systems, and processes to win, serve, and retain customers. Doing so doesn’t just help you deliver better customer experiences, deliver innovative products and services, or accelerate your path to a digital business future. Doing so helps your firm create new competitive advantage — if you’re willing to change.

Stay tuned for more on our research in these key areas of the customer-obsessed operating model. And reach out to me if you have questions or ideas on what we may be missing at kmcnabb@forrester.com.

SOURCE: Forrester