Yesterday’s decision by UK citizens to leave the European Union (“Brexit”) brings about short-term uncertainties and unintended consequences that will make it harder for UK businesses to keep customers and attract talent. While times of high-market volatility can tempt firms to panic and cut spending on customer-focused initiatives, now is the time to drive innovation in order to win, serve, and retain customers.
As decisions over the next several years are determined by legislators and driven by compliance, UK companies will be challenged to operate as customer-obsessed firms. Forrester believes that the UK’s decision will have five major implications, including:
Digital and customer-facing talent will migrate out of the UK. Concerns about immigration laws (i.e., who will have the right to stay) will both drive footloose talent to look for jobs abroad and dissuade others from coming. And CIOs will find it even more difficult to recruit already-scarce developers and engineers to build customer-facing systems.
Product and delivery innovation will slow. Companies will now have to spend more time and effort to deliver products across borders and less time innovating on new customer-focused solutions.
Leading through change requires that right mix of imagination, inspiration, and gritty execution. And we are in a world of change. Empowered customers and the constant and rapid wave of digital innovation are changing market fundamentals. Leaders are now challenged to respond.
I had the pleasure of hosting a discussion with James McQuivey, Carl Doty, and Sam Stern to talk leadership in the age of the customer. Our conversation covered a range of topics from having the wisdom to see the market for what it is versus how we would like the market to act to putting in motion strategic and operational change that is necessary, new, and risky. Here are the five takeaways:
The customer is in motion. Customers rapidly adopt — and rapidly abandon — technologies, services, and brands. That is wonderful and scary thing. It creates new possibilities. But it also redefines the norms for churn where a decision to shift spend is made by a single experience — good or bad. This dynamic can represent a major threat to growth if companies need to absorb 10%+ churn.
Five years into the age of the customer and it's clear that we're just getting started. More technology is coming — Amazon Echo, anyone? — and that doesn't even begin to touch on the stuff that will hit closer to 2020 and beyond: virtual reality, augmented reality, self-driving cars, and robot assistants.
I'm pleased to introduce my latest report: "Leadership in the Age of the Customer." This project is the result of months of work to update our view of the age of the customer, a 20-year business cycle in which power is shifting from businesses and institutions to end consumers. Technology, information, and connectivity are combining to instill in people a belief that they can have what they want, when, where, and how they want it.
The key to emerging triumphant through all of this will be customer obsession. Organizations that put the customer at the center of their process, policies, and practices will successfully develop and deliver the experiences that hyperadoptive customers are ready to embrace. That will mean changing the operating model of the organization to be more customer-obsessed. It will also require that executives consciously lead the organization to customer obsession.
In the coming weeks Forrester will publish its annual set of predictions for our major roles, industries, and research themes — more than 35 in total. These predictions for 2016 will feature our calls on how firms will execute in the Age of the Customer, a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers.
In 2016, the gap between customer-obsessed leaders and laggards will widen. Leaders will tackle the hard work of shifting to a customer-obsessed operating model; laggards will aimlessly push forward with flawed digital priorities and disjointed operations. It will require strong leadership to win, and we believe that in 2016 CMOs will step up to lead customer experience efforts. They face a massive challenge: Years of uncoordinated technology adoption across call centers, marketing teams, and product lines make a single view of the customer an expensive and near-impossible endeavor. As a result, in 2016 companies will be limited to fixing their customer journeys.
CMOs will have good partners, though. As they continue to break free of IT gravity and invest in business technology, CIOs will be at their sides. 2016 is the year that a new breed of customer-obsessed CIOs will become the norm. Fast-cycle strategy and governance will be more common throughout technology management and CIOs will push hard on departmental leaders to let go of their confined systems to make room for a simpler, unified, agile portfolio.
Writing software to make the world a better place -- that's a lofty goal, even for Gavin Belson on the HBO hit comedy, Silicon Valley. Yet why is it that we've spent years doing the exact opposite with software in enterprise IT? We've built applications to simply show data living in our data centers. Have a lot of products to sell? Put them all on a web page! Myriad of services you offer to your customers? Throw them all on that web page too! If they really want our help, they'll figure out what it all means, right?
Unfortunately this is a terrible way to create applications, regardless if it's on the web, mobile, or any other emerging digital channel. The data is good, but we cannot start with our data in mind -- instead we must start with our customers' needs in mind. But why this change and why now? Our customers (and increasingly our employees) are being presented with so many more options from your competitors, both those known today and tomorrow's digital startups. Simply put, the barrier to creating new software solutions is approaching zero. Making this transformation is central to the BT Agenda -- applying technology to win, serve, and retain customers.
The age of the customer demands more of companies, forcing them to change how they develop, market, sell, and deliver products and services. In response, CIOs must invest in business technology (BT) — the technology, systems, and processes to win, serve, and retain customers. At Forrester’s Forum For Technology Leaders in Lisbon (June 2-3), leaders from firms like BMJ, Portugal Telecom, BBVA, Mastercard, Alliander, DER Touristik and UniCredit will share strategies that you can use to achieve Read more
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: