Four areas of focus that will help CIOs adjust and thrive in the Age of the Customer. Part 1 in a two part series by Joe Topinka.
A digital heat wave is hitting companies today, making c-suite and IT leaders sweat about their marketplace response. Much is being written about how companies are becoming hyper-focused on customers and systems of engagement.
The premise is simple: Today’s customers have a lot more to say about their satisfaction with a company’s products and services. People depend on social media and on-line ratings and reviews, product Twitter feeds, and company Facebook pages to guide their engagement and buying decisions. The buzz-word title assigned to this is “The Age of the Customer”.
There is much to do to shift an organization and adapt more responsively in this new environment. Marketing departments have to get engaged in social networks and companies need to invest more heavily in digital go-to-market solutions. This phenomenon is impacting everyone and IT organizations are reeling as well. In fact, you could argue that the new methods and approaches behind the digital glass, and powered by good IT, are probably doing as much or more to influence customer engagement than the traditional functions of, say, marketing or finance. This makes it critical for IT to adapt quickly.
In this two part blog, I outline four areas of focus that will help IT organizations adjust and thrive in the Age of the Customer.
Series Part One: External Agility
- Get Externally Focused
- Adapt Minimum Viable Product & Agile Methods
Series Part Two (Coming Soon): Partner like a Business Unit
- Wrap It Up in a Bow with Business Partnerships
- Get the C-Suite to Treat IT Like All the Other Business Units
Part One: External Agility
1. Get Externally Focused
Doesn’t it make sense that the more companies and IT organizations know about their customers, the more they are able to deliver solutions that meet their needs? Of course it does! So why do so few CIOs and IT organizations fail to adopt a more customer obsessed mantra? Too few CEOs understand that the customer experience is the brand. Companies hold on too long to aging, historical operating models and are reluctant to change focus. There are plenty of examples we can all think of where companies didn’t respond to market shifts and the lack of change brought their companies to the brink of disaster. By contrast, Walmart and Netflix have both pivoted to digitally focused customer solutions and their numbers are rising. Walmart’s digital business is growing faster than Amazon, and Netflix now has over 44 million subscribers.
Another challenge in companies is that the owner of customer experience is largely relegated to marketing or customer experience functions. While this may have made sense a decade ago, today’s operating model requires a collaborative approach to customer experience management. CIOs need to make the case to implement IT Business Partners or Business Relationship Managers (BRMs) that are not only focused on internal business units, but, more critically, on external customers. CIOs need to ensure that IT Business partners routinely spend time with external customers to see firsthand how products and services impact customer engagement.
CIOs and IT organizations must get immersed external customer environments and live by these axioms:
- The customer experience is the brand
- Hide the technology, surface the work
In the past, IT organizations planned their work annually by securing capital that drove investments for the year. This has become the predictable annual cycle of budget – plan – build - deploy. This model worked well for many companies in the past, before the Age of the Customer. In today’s customer-driven marketplace though, customers co-own company brand and have significant influence over price, terms, expectations, and company engagement. They use ratings and reviews to guide their purchasing decisions instead of the traditional messages spun by marketing departments. They use smartphones to research and buy products. Digital commerce numbers are rising by double digits every year. For companies, and especially for IT departments, new approaches to capitalize on The Age of the Customer are mandatory for success.
For starters, adopt a minimum viable product (MVP) approach to building and releasing products. This method breaks the traditional annual cycle of budget – plan – build – deploy. It means that teams now envision a product and its full feature set, but instead of building all of it at once, a smaller subset of functionality is selected, built, and pushed into the marketplace. Once there, teams can observe customer interaction and comments on the product. New product releases are then planned, built, and deployed based on real-time, direct feedback from customers. This method uses a probe – sense – respond approach that allows teams to see the customer’s most desired features. The trick is to repeat this process 6 – 12 times per year. Think of your smartphone, how many updates happen on your favorite app each year? Ahhh, now you’re getting the picture!
IT organizations need to be more nimble and responsive to the market. Adapting agile development methods is a great place to start. When done well, business results come faster and with higher quality. Go out and get a top-notch agile coach to ensure that people aren’t focusing too much on the process and not enough on the value that process is delivering. We have all seen process zealots in the past who focus on the how of methodology and lose track of why teams are building a solution in the first place.
SUMMARY: The Age of the Customer, Part One: External Agility
The digital heat wave has arrived. To survive and thrive, the c-suite and IT leaders need to collaborate. IT organizations must take the lead in digital transformation. They can start by getting immersed in customer’s environments to see firsthand what drives customer engagement. Next, IT organizations must adapt agile principles and the minimum viable product (MVP) development approach to ensure solutions hit the customer engagement bull’s-eye.
In part two of the series, I will outline the critical importance of implementing IT business partnerships and helping the c-suite view IT as a genuine business unit. Until next time, see you in the field.