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Posted by Victor Milligan on October 7, 2015
It’s not news that the digitally empowered customer is changing our world. What is news is 1) the pace needed to catch up to an extremely dynamic and impatient customer and 2) the magnitude of real change needed to meet the challenges (and opportunities) of a customer-led market.
The magnitude and pace of change driven by customers, competitors, and innovation can be dizzying:
- As loyalty structures erode, customers are conditioned to rapidly adopt and abandon services.
- Digital disruptors can launch, stand up a capability, and begin to disintermediate traditional companies almost immediately.
- Innovation cycles that were measured in years are now measured in months.
The pressure to respond at similar speeds is real and daunting. It’s a good-news and not-so-good-news story.
The good news is that technology offers the opportunity to respond rapidly when driven by agile processes. The bad news is that rapid technology releases are only possible if people and operations can use those capabilities across human and digital touchpoints — and do so while delivering consistent, high-value, and personalized experiences. But people and operations are notoriously resistant or inflexible to change:
- The desire for certainty trumps change. People will hold onto existing biases, habits, and practices even when they know that change is more productive and delivers far superior customer value.
- Silo operations are clumsy and formed around prior political and structural logic. This gets in the way of moving fast and operating differently.
- Budget processes are annual, while agile investments are highly iterative.
- The need to preprove the benefit of change often trumps an experiment-heavy approach. The tradeoff is small failures with sometimes-unpredictable break-out innovations.
- Nondigital leadership has little context or experience, and this new reality must look like utter chaos to them.
To win in an age where time is of the essence, we can quickly identify that of all the strategic levers to drive the business forward, the people and operational lever is the most powerful. It is also the hardest. People can be emotional irrational beings. And operations are often a complex layering of past civilizations that are difficult to disentangle and re-engineer. Ultimately, people and ops can be your downfall by slowing your response time to ever-increasing customer expectations and more acute, disruptive competition.
The people dimension will likely be the most important factor determining who thrives and who struggles in a customer-led market:
- Leaders will see the people dimension as hard and long. They will address it aggressively to shrink the time to shift to a true customer-obsessed business.
- Laggards will also see the people dimension as hard and long. But they will defer because of those same reasons, elongating the time to shift to a customer-obsessed business as they lose share, customers, and time.
Successfully shifting people and operations means that you are no longer running at the speed of business (a term coined when annual progress was impressive). It means that you are running at the speed of dynamic customers and disruptive competitors. Shrinking the time-to-customer value puts you on par with the pace of startups — but with the powerful brand, data assets, and market footprint that resets the game.
We’ll be discussing strategies to close the people and operations gap — and how to engineer an agile customer-focused organization at Forrester’s Age of the Customer Executive Summit this November. To learn more and RSVP, visit our event page.
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