Problem: Championing the customer experience is limited by current organizational methods of measurement and management.
Opportunity: Deliver a multi-channel, multi-touch customer experience that continually reinforces connection, affinity, and community and provides sustainable and profitable growth for the organization and its leadership.
Resolution: Re-align the internal scorecard to encourage segment and channel managers to work together under the leadership of a portfolio management team to deliver an integrated, customer-centric experience that results in maximizing lifetime value.
Organizational structures are the most significant culprits when it comes to what's inhibiting leaders from delivering on a deeply integrated and interdependent customer experience that leads to rapid delivery of "surprise and delight" experiences.
In fact, the larger an organization becomes, the less likely it is to deliver that dynamic and relationally centric experience.
It's a strange phenomenon that warrants a closer look.
The traditional division of labor approach would suggest that segment managers and channel managers are separate and cumulative functions. Each delivers on key results that are oftentimes developed separately from one another. Some organizations I've served even keep campaign and persona intelligence separated by department. That practice alone means key decisions and commitments are being made that don't account for all available information, both quantitative and qualitative.
Rethinking Industrial Management in the Age of the Customer
To understand this reality, we have to look deeper at how we've executed on the division of labor, report on campaign results, and, in general, measure the value of every part of the internal workflow that shapes the customer experience. The industrial era provided the blueprint for many of today's organizational leadership methodology. Many senior executives who are in positions that wield the most influence have not yet been exposed to or dismiss collaborative, integrated, and interdependent ideas such as design thinking or lean development. I don't believe it's because of a lack of interest; I think it's far more complex than that.
To buy into these new approaches requires executives to let go of traditional utilization and realization management metrics without having clarity around what will replace those key measures.
As a result, organizations and their leaders are still negotiating how to achieve the customer experience within current known realities. And the painfully slow process is grinding some organization's capacity to grow to a screeching halt. Until these new realities are resolved, we should expect institutionalized conflict between what we say we want and what we do.
It's not uncommon to sit in a marketing leadership meeting and hear two opposing realities:
The results of our campaign exceeded the last attempt.
The intended outcome (revenue from such activities such as acquisition, retention, upgrade, etc.) was down.
How can these two realities be equally true? Easy. Measure them separately. The first statement is likely to come from a channel manager (e.g. social media, direct mail, digital marketing, etc.). The second observation is likely to be delivered by a segment manager or business analyst who is taking into account "value creation" that exists beyond one individual campaign.
A Better Framework of Dimensions and Measures
The truth is only a few people within an organization see the top and bottom-line impact of any single campaign, initiative, or department. As the executive table determines the corporate goals, it is then translated into divisions and departments.
Each time the goals are interpreted for a specific audience downline, the risk is high that the context in which those goals are presented won't account for all the variables, especially those that exist beyond a single department's responsibilities.
As long as each department, function, or team delivers on their stated goals, as they understand and know them, they get an "A" on their scorecard. But the place where this falls apart is at the executive or board level where high-capacity leaders are seeing the net effect of activity and productivity but also the lack of symmetry and interdependence that leads to a more desirable and profitable growth trajectory. This deficiency in management's measurement framework is what makes room for two results (such as exemplified above) to be both true yet also inconsistent with the desired outcome.
The only way to solve this is to re-imagine how to manage the customer experience, not the segment or channel management functions. This requires a different way of thinking and a slightly augmented approach to leadership. I'm not suggesting that we abolish and radically re-engineer management structures. That would be chaotic and only applied in the most extreme situations and circumstances, if ever. However, I am suggesting a truly practical yet radical departure from current norms.
Portfolio Management as a Solution
A portfolio management approach aligns segments, channels, and campaigns to drive a customer experience that will deliver the desired customer experience irrespective of one dimension of that experience.
A portfolio manager is someone who has revenue responsibility, but not in the traditional sense. They are accountable to the executive team to drive the value necessary to deliver on corporate outcomes. Each portfolio sits on top of current segments and channels and becomes the arbiter to any conflict that exists between departments and functions.
The executive team interprets corporate goals, both leading and lagging indicators, into portfolio value targets. Then each portfolio manager is responsible for understanding what key measures and results to ensure their portfolio performs at or above expected levels. Of course, the balance is that each portfolio manager must create a dependency on the success of the other. The portfolio management team must win individually and collectively in order to succeed.
Just about any database can be divided into four quadrants:
Each portfolio is immensely important. New and Plateaued are leading indicators for Growing and Declining. And the cumulative impact of every portfolio manager delivering on their goals is the entire organization delivers on its revenue, margin, and growth commitments.
Balancing the Customer and the Corporation
The one thing each portfolio manager must remember is that they are the internal advocates to the customers their portfolios represent. While delivering on their specific goals, they must never let corporate objectives subvert nor diminish the customer experience as it was intended and promised.
This is, no doubt, a remarkably difficult balance to strike. It will require some fiercely independent critical thinkers to function in these roles who will also have enough authority to speak into and override any decision or initiative that is in conflict with their strategies and goals.
If you want to change behavior in an organization, change the scorecard. And until the scorecard changes, any talk about championing the customer experience is just that ... talk.
What I find most intriguing about the rise of the customer experience as a way to define growth is the relational context it provides to the measurement process. Relational measures aren't "soft" but are merely ways of holding ourselves accountable to the personas and behaviors we believe to be representative of the ideal customer experience.
Just as people are multi-dimensional, so should our application and implementation of management structures that deliver the full spectrum of dimensions and measures that support, sustain, and enhance the greatest asset of all—lifetime value.
Ben Stroup is Chief Growth Architect and President at Velocity Strategy Solutions where he helps leaders design, develop, and deploy smarter business growth strategies. Ben is a futurist, disruptor, and data champion. He leads a team that takes a structured learning approach to business challenges, which allows them to assist leaders in bridging the gap between ideas, innovation, and revenue—taking ideas from mind to market.
Velocity Strategy Solutions is an on-demand, next-generation business strategy and management consulting firm which provides clients with a relentless focus on data, execution, and results that positively impact the bottom line. Velocity delivers integrated people and revenue strategies combined with a disciplined approach to growth architecture that elevates the capacity of leaders, teams, and organizations to succeed and win more.