How to lead and manage the cultural change required to see your team embrace customer-centricity. By Tom Champion and Samuel Stern.

This article originally appeared in The Culture Issue, our August/September issue of Marketing magazine. 

 

It’s rare for executives to go on record to say that treating customers well is the wrong thing to do. Most think that customer-centricity is both common sense and something they already do. However, in reality, as Forrester’s ‘Customer

Experience Index’ data show, most of these brands fail to deliver experiences that customers value.

According to our 2016 data, Australian customers said that the CX (customer experience) of 76% of the brands they interacted with was just ‘OK’, and none of the brands in Australia even made it into the ‘excellent’ category.

Customer-centric cultures matter because they enable companies to deliver great experiences by default and resist forces that may degrade the experience. In addition, because transforming a culture is so difficult, firms that do manage to transform their cultures will enjoy a competitive advantage for years. Forrester defines the culture competency within the CX discipline as:

“Creating a system of shared values and behaviours that focus employees on delivering great customer experiences.” To develop their desired culture, companies need to establish two essential activities that will help create that system of shared values and guide employees to adopt customer-centric behaviours:

• educate employees about their customers, the CX vision and the employees’ roles in fulfilling that vision, and
• reinforce customer-centric behaviours through routines, celebrations, and rewards aligned to the company’s CX metrics.

 

Successful cultural transformations start with these five steps

Successful culture transformations clear through the fog by starting with five essential steps that make a compelling case for change, and they provide guidance for how to be customer-centric in ways that customers will appreciate.

In the first year of a successful culture transformation, companies must:

 

1. Develop a clear ‘why’ for the culture transformation

A crisp statement of purpose for the culture transformation is an insurance policy against the inevitable setbacks that every customer-centric culture transformation encounters. The ‘why’ must draw a causal connection between culture change and business success.

 

2. Secure executive support for leading the transformation

Every successful culture transformation Forrester has studied had the full support of senior executives. Long-term support from executives for the culture transformation depends on their developing internal beliefs in its importance, and it’s best when led by the CEO.

 

3. Identify a set of shared values

Without clear guidance, employees will interpret customer-centricity in their own way, leading to many conflicting definitions. The shared values must be high-level enough to apply across the organisation and be socialised by senior executives. Base these values on the observed behaviour of employees delivering great experiences today.

 

4. Recognise and reward employees’ CX success stories

In the early days of a culture transformation, catching employees in the act of doing the right things is a powerful force for change. It highlights that the organisation already has bright spots to build on. It also shrinks the size of the change in the minds of employees when they see that their own behaviours, or those of their peers, are already customer-centric.

 

5. Select key performance indicators of progress

Successful transformations take at least four to five years. Organisations need metrics to track their progress. Existing customer and employee metrics like NPS (Net Promoter Score) or employee engagement are not the best fit. They are lagging indicators of progress. Organisations need metrics that are both leading indicators of change and more fine-grained than benchmark relationship surveys.

 

Managing organisational expectations for the pace of culture change

Culture transformations are hard, and they take a long time. Companies will find success more likely if they set reasonable expectations for the difficult road ahead and the pace of change. To do that, CX leaders should:

Analogise organisational culture change to individual behaviour change. While the challenge of culture change is abstract and hard to internalise for individuals, behaviour change is not. Culture changes are composed of a collection of individuals changing their behaviours. Employees can identify with the difficulty of personal behaviour change. In our lives, we have all tried to shed bad behaviours like smoking or a poor diet and adopt good behaviours like reading or regular exercise.

Reinforce that the transformation will take at least five years. Make sure that all employees, especially executives, know that they are signing up for a long-term project. Customise the timeline to create your own version of a high-level roadmap that highlights major milestones of the transformation. Be transparent about which metrics should be used to gauge the success of the transformation and what degree of improvement you’re looking for in those metrics.

Cite examples of companies that have transformed their cultures. Finally, provide hope to your colleagues that achieving customer centricity is possible. Organisations in Australia like Service NSW, CBA, Deloitte, Kmart, Telstra and Aurecon have pulled o transformation.

Their examples push back against sceptics who point to companies like Shoes of Prey, REA Group or ING Direct, and assert that if you don’t start out as a customer-obsessed organisation there’s no hope. They’re also a reminder that transformation isn’t reserved for global behemoths like Apple and Amazon. Transforming organisational culture to be customer-centric isn’t easy, but that just means that transformation success provides a defensible competitive advantage for a long time.

The five steps described above are just the beginning of a successful culture transformation. Done well, however, they provide a strong foundation for the next phase of change: optimising the culture transformation by making customer-centric behaviour adoption a probability, not just a possibility.

 

Tom Champion is senior analyst at Forrester. Samuel Stern is principal analyst at Forrester.

 

 

 

Image copyright: stockbroker / 123RF Stock Photo