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“As I use the term here, the job of a leader is to accomplish transformation of his organization. He possesses knowledge, personality, and persuasive power.”
― W. Edwards Deming
I love the quote from W. Edwards Deming that says the job of a leader is to transform the organization — especially when it comes to CX.
The reason for this comparison becomes clear when you consider what customer experience actually is. CustomerThink.com defines customer experience management as the process of designing, delivering and reacting to customer interactions in ways that meet or exceed customer expectations. By its very nature, managing customer interactions to exceed expectations means fostering cross-organizational business processes and strategies, aligning organization structures, fostering collaborative cultures, and overseeing the integration of a sometimes-bewildering number of technology systems.
For almost every organization I have ever worked with — this requires a significant transformation.
Next Best Offer Initiatives Are Coming
In their Future of Consumer study, IDC highlights a prominent CX trend that illustrates this quite well. They believe that by 2024, 30% of fortune 2000 companies will deploy next best offer (NBO) initiatives across all channels for all customers. To illustrate just how much transformation a company must undergo to make this happen, let's look at one example — a bank marketing department implementing a NBO initiative. The initiative is more limited in scope than what IDC is predicting — targeting only certain segments of customers and including only product offers rather than all communications.
The various marketing groups across the bank generate individual targeted lead lists based on customer segments which are submitted to a central decision engine. The engine uses a combination of predictive analytics and machine learning, business rules and pre-determined constraints to develop a list of potential offers for each customer.
When a customer in one of the included segments (we will call him Jason) visits an included channel, the channel contacts the decision engine for a list of possible offers. The analytically generated and prioritized offers for Jason include a home equity line of credit, a relationship review to move him to an account package that better fits his usage patterns, and a discounted car loan. The highest priority offer, the HELOC, is passed back to the requesting channel and delivered to Jason.
Related Article: Foundational Steps for Customer Journey Mapping Initiatives
Navigating Conflicting CX Objectives
On the surface this seems pretty simple — right? Not really — you don’t have to look very far to see that it is not simple at all. In this example, there are three individual business areas: the branch, the auto-loan product area and the mortgage product area. Each have their own sales goals and objectives which rely on customers like Jason actually receiving their particular product offer.
At the very minimum, the CX leader (or marketing leader in this case) has to navigate conflicting objectives across the business areas, gain agreement on how to set the priorities and possibly build confidence in the models that are generating the analytically driven offer priorities. This most likely also means developing a new set of shared objectives that all participating business areas get credit for — things like digital strategy milestones, improving net promoter scores and increasing customer lifetime values. Unless the CX leader is the CEO, it is highly unlikely that they have the unilateral authority to command participation in the NBO initiative much less change incentives or objectives across departments.
Who's Leading the CX Charge?
A new study conducted by MIT, CX Champions Share Their Secrets, reinforces this point pretty strongly. The study looked at CX trends, challenges and priorities resulting in a CX maturity curve in which 15% of participants are classified as CX champions, 70% are followers and 15% are laggards.
One of the areas that MIT examined was who is in charge of CX efforts. They found that despite some admonitions to charge a single C-Suite executive with the entire effort, these executives don’t account for a majority of those placed at the helm. Only 22% of Champions have a C-Suite member in charge. More than 75% rely on someone below the C-Suite, such as a senior, supervisory or middle manager.
This is exactly why companies trying to excel at CX should take W. Edwards Deming’s advice to heart when he says that leaders must possesses knowledge, personality and persuasive power.
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And MIT agrees.
They found that organizations at the top of the CX maturity curve say leadership skills that are essential for successful distributed authority, such as the ability to communicate, are the most important. Champions seem to have the most empowered environments, and their leaders tend to focus on soft skills, such as the ability to inspire. These organizations also don’t appear to have hierarchical decision-making structures, which likely accounts for the premium placed on the ability to delegate and communicate, including articulating boundaries and implementing guardrails.
Given these sentiments, I want to conclude by reinforcing several characteristics that I think are essential for CX leaders to have, wherever they reside within the organization. These are soapbox issues for me so if you read my columns, you have most likely seen them before, just not in the context of what Deming says about leadership in general and what MIT found about CX best practices:
Related Article: 3 Ways CX Can Become a Driver of Business Strategy
Leaders Must Be Transformative, Able to Forge Dramatic Change
This ties directly to the requirement to develop and implement multichannel strategies and business processes like NBO. It is no wonder that communication skills were the highest ranked skills for CX champions in the MIT study, and that 62% ranked themselves as very strong here. I would equate this to Deming’s persuasive power as well.
Leaders Must Be Able to Facilitate Cohesion
And they must be well integrated into the organization and unifying. Being cohesive is indispensable because as we saw with the banking example, leaders must foster cooperation and coordination across business units in order to implement the sweeping cultural change necessary for multichannel business strategies such as experience management.
CX champions told MIT that the ability to inspire and delegate were also among the top three most important skills. And as Deming says, “A leader is a coach not a judge.”
Related Article: 10 Skills and Traits for Customer Experience Professionals in 2021 and Beyond
Leaders Must Be Cogent, Telling Clear and Compelling Story
Data-driven CX leaders must be able to use customer insights and advanced analytic techniques to present a clear and compelling story to the rest of the organization: about market direction, about customer behavior and value and about ROI on marketing and experience management activity.
Deming hits on this when he advocates for knowledge as a part of leadership. Surprisingly, MIT found that champions did not rank analytics in the top three or four skills needed for CX leaders; however, when asked about skills they were very strong in, more than twice the number of champions indicated that they had strength in analytics versus followers or laggards.
