Is the Role of the CXO in Jeopardy?
Demonstrating concrete, measurable results and advantages that arise from experience-driven strategies is a critical KPI for CX leaders. The CX function is strategic, not functional. But, is it effectively demonstrating business potential?
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Six good customer experience leaders across multiple sectors were fired this year. If you can’t show a direct link between experience and business outcomes, then you might also be fired. A wave of panic swept through the conference hall where this scene broke out during a keynote speech. CX leaders realised the stakes were high as failure to demonstrate this link could cost them their jobs. True story.
Sharing the incident was David Hicks, Founder & President of TribeCX Ltd, Owner & Chair of TMD. “All the CX practitioners should be worried. When I talk to them, the one thing they all seem to say is, ‘I’ve not been able to convince the organisation that improvements in performance, improvements in experience directly translate into improved business performance.”
Amid financial scrutiny, uncertain economic outlook, and rapid automation business landscape, CX leaders are usually the first to be set on the chopping block. Elena Garvey, Former Senior Director of Customer Experience told Martechvibe that every leader must show the non-discretionary nature of their function and individual role at all times, especially during moments of significant change.
Show And Tell
The challenge lies in demonstrating the impact of customer experience initiatives to organisational stakeholders. Tracking metrics such as Net Promoter Score, satisfaction score, or effort score is crucial to measure improvements in customer experience. However, CX leaders must be adept at convincing and showing the organisation the tangible outcomes and benefits of these initiatives.
– ‘Look, if we change this, this happens.’
‘If you don’t invest in this experience, you won’t get access to this improved business performance.’
Showing direct correlation is essential in gaining support and investment in customer experience initiatives. CX teams have often been perceived as overheads rather than strategic assets.
During layoffs, the question is, what functions are essential versus nice-to-have?
“Teams that aren’t directly responsible for customers are more vulnerable to cuts. Even when CX leaders show their value through revenue upside and operational savings generated through better experiences, those dollars are likely to be considered ‘indirect’ or ‘influenced,’ as the metrics are ultimately owned by other functions. For better or worse, the CX team’s role as the experience orchestrators may be seen as discretionary unless prioritised by the CEO,” added Garvey. However, the shift towards understanding the importance of CX drivers is slowly brewing.
There are character roles that a CX leader must perform to build consensus and achieve results. Firstly, as advocates for the customer. They not only promote the collection and understanding of customer insights but also drive the implementation of necessary changes based on these insights. Secondly, the CX team must be comfortable being the organisation’s Challenger. They should provide an external perspective and represent the voice of stakeholders, especially during the early stages of developing the CX strategy.
Who Are Your Allies?
According to Hicks, having close friends within the finance team/ function would be beneficial as they can provide authoritative insights into the unique advantages of investments in this field.
“Get the financial appraisal team on your side. Get them involved in experiences so that when you are in front of senior leadership, you can say, Hey, we’ve done this in terms of changing the onboarding of new customers. Look what it’s done in terms of advocacy. Look what it’s done in terms of penetration. Look what it’s done in terms of the cost to serve. These are numbers that are not our numbers. They’re numbers that have been, that have been. Validated or created by the financial appraisal team or the accounting team.”
The rationale behind the need for connecting customer experience to business outcomes is to ensure that it receives equal consideration compared to other investments. Whether investing in a new sales team, adopting new technology, or acquiring a new company, customer experience must be positioned alongside these options.
It is important that any CX leader demonstrates how customer experience aligns with these investments. They can also then help make objective decisions based on concrete evidence, keeping their career in good shape. Otherwise, being let go is understandable because promoting the idea of improving customer experience without a clear link to tangible results can potentially be detrimental to the organisation.
Can financial service enterprises mobilise employees to commit to a common purpose and CX goals that may not directly impact their role? “You need to ensure that as many people as possible can design experience, not just the designated team. The key lies in establishing a central approach to experience design within our organisation. Why? Because it has been demonstrated to significantly improve results in this business,” said Hicks.
Follow Six Sigma Footsteps
Consider the Six Sigma. It is a data-driven methodology for process improvement, aiming to reduce defects and improve efficiency. It follows a structured approach known as DMAIC: Define, Measure, Analyse, Improve, and Control.
According to Hicks, the same approach works for experience. “When Six Sigma discipline is applied, it increases the likelihood of a project being successful, reduces costs and all sorts of good things. I think the same is true of experience, disciplines, and capabilities. It’s easy to get caught up in the echo chamber of ‘this is the right thing to be doing’. But no, you’re only doing this because it’s been proven to make unique improvements in business performance.”
Accountability always lies with someone in the organisation to ensure consistent implementation of experience practices, and proven to be effective. When a CXO introduces experience-driven approaches to the business, they might receive initial funding to demonstrate its effectiveness. Once they gather evidence of success, they can develop an evidence-based plan similar to Six Sigma.
“Somebody in the business is accountable for ensuring experience gets done in a common, persistent, consistent way because it’s been proven to work here. It’s up to the CX leader, and it’s their job to ensure it delivers business results. If you’re a smart, experienced leader, you cosy up to, say, the Head of Transformation, and you say, ‘these three programs are business critical, and I think I can help you to reduce the risk and improve the speed of delivery.”
The CX leader becomes a unique resource that helps accelerate and de-risk business initiatives. “If you are going to own the experience agenda in your business, and you have that distributed team, you’ve got to own it – ‘this is the way we do experience here because it’s proven to work in our business’,” added Hicks.
According to Forrester, it is anticipated that approximately one-third of organisations will have effectively mastered the integration of customer experience and business performance by next year. These organisations will heavily invest in this area as they recognise it as a significant source of differentiation and competitive advantage.
