Report: The State of Customer Experience Management, 2014

1404_TheStateOfCX2014_COVERWe just published a Temkin Group report, The State of CX Management, 2014. It examines the CX efforts within more than 200 large companies. Here’s the executive summary:

We surveyed more than 200 large companies and found an abundance of Customer Experience (CX) ambition and activity. Most companies have a CX executive leading the charge, a central team coordinating significant CX activities, and a staff of six to 10 full-time CX professionals. Using Temkin Group’s CX competency assessment, we found that only 10% of companies have reached the highest two levels of customer experience, although this does represent a slight increase from last year. Most firms struggle most to master Employee Engagement and Compelling Brand Values. When compared with CX laggards, CX leaders have stronger financial results, enjoy better CX leadership, and implement more successful employee engagement efforts. Executives in companies with stronger CX competencies also tend to focus more on delighting customers and less on cutting costs.

Download report for $195
BuyDownload3

The percentage of large organizations that have reached the two highest levels of customer experience maturity has grown from 6% in 2013 to 10% this year. During the same period, the percentage of companies in the lowest level of maturity has dropped from 40% to 31%.

1404_CXMaturity

Here are some additional findings from the research:

  • Companies with good or very good ratings in Purposeful Leadership rose from 39% to 45%, the largest improvement for any customer experience competency.
  • The research also revealed a significant focus on improvement. While only 6% of companies believe that their organization currently delivers industry-leading customer experience, 58% have a goal to be an industry-leader within three years.
  • Sixty-five percent of companies have a senior executive in charge of customer experience.
  • More than half of companies have at least six full-time customer experience professionals.
  • Almost two-thirds of respondents rate customer experience with phone agent as good or very good, the highest rated interaction. Less than 30% rate mobile phone and cross-channel experiences at that level.
  • The top obstacle to customer experience is the same as it has been for four years, “other competing priorities.”
  • We compared companies that have strong customer experience maturity with those that are weaker and found that customer experience leaders have better financial results, have more senior executive commitment, and focus more on their organization’s culture.

Download report for $195
BuyDownload3

The bottom line: Most companies are in early stages of CX maturity, but are getting better

10 Behaviors That Distinguish Purposeful Leaders

To better understand the behaviors that are most indicative of successful leaders, we asked 5,334 U.S. consumers who are currently employed to answer some questions about their direct managers. We asked them to rate the success of their manager as a leader within the organization and to describe how often those managers demonstrate 41 leadership behaviors that we tested (click to download full list of behaviors (.pdf)).

We compared the frequency with which very successful leaders demonstrated the behaviors with the frequency demonstrated by other managers. The behaviors with the largest gaps represent the most distinguishing characteristics of purposeful leaders. It turns out that these very successful leaders are much more likely to:

  1. Motivate other people to deliver their best work
  2. Help people understand complex situations by describing things in simple terms
  3. Help people make decisions by presenting clear options
  4. Motivate other people to work together to achieve a common goal
  5. Look beyond obvious choices to find innovative solutions
  6. Admit to his or her mistakes when there is a problem
  7. Help his or her employees identify and achieve their personal goals
  8. Make decisions that will help the organization achieve its long-term goals even if they do not benefit the organization right away
  9. Coach and mentor other people
  10. Communicate a clear and compelling vision of the future

1402_10TopLeadershipBehaviorsThe bottom line: Purposeful leaders help their people succeed

 

NCAA Provides A Lesson (Not) in Values

In a recent Boston Globe article, Northeastern University’s athletics director Peter Roby reflected on the notion of the NCAA’s “values” given Louisville’s hiring of Bobby Petrino as its football coach. Petrino was fired by Arkansas because of a scandal involving a motorcycle accident and an improper relationship with a female employee.

Here’s an excerpt of Roby’s comments:

“If we’re going to have a conversation about values, then we should understand how those things are lived on a daily basis and what it looks like when you’ve got a set of values that underpin what your activities are… I just didn’t feel like the hiring of someone like Bobby Petrino was consistent with what we say our values are. I wanted people to understand that if we’re going to put values on paper, we better be prepared to defend them and to be held accountable for them.”

My take: Roby is absolutely right, and his comments are applicable to any organization. True values aren’t the things you write down or proclaim in a speech in front of customers, employees, and shareholders, they’re the principles that shape how you make decisions. What you do and don’t do are the only accurate measures of true values. That’s why one of our Six Laws of Customer Experience is “You Can’t Fake it.

Without a clear set of true values, companies lack a “due North” that empowers everyone in the organization to make decisions because they understand what’s important. One of our principles of People-Centric Experience Design is Align with Purpose, an approach that would fail unless organizations have true values.

It’s okay to change your values or aspire to a new set of values, but it’s very hard to live up to them. You need to be very conscious of every decision you make and constantly look in the mirror and ask yourself, is that decision consistent with what I believe my values to be?

The bottom line: True values are defined by actions, not words

CVS Drops Tobacco, Demonstrates Purposeful Leadership

CVS/Caremark announced that it will stop selling tobacco products. According to Larry Merlo, CEO of CVS:

We have about 26,000 pharmacists and nurse practitioners helping patients manage chronic problems like high cholesterol, high blood pressure and heart disease, all of which are linked to smoking. We came to the decision that cigarettes and providing health care just don’t go together in the same setting.

My take: Given the horrible affects of tobacco (I lost my sister, an active smoker, to cancer over 15 years ago), there’s certainly commentary to be made about how this affects the public at large. But that’s not what I want to discuss. Instead, I applaud CVS for behaving consistently with what we call Purposeful Leadership, which is one of Temkin Group’s four customer experience core competencies.

We describe Purposeful Leadership as operating consistently with a clear set of values. In a large organization, leaders influence only a very, very small portion of the day-to-day decisions of their employees. That’s why values are so important, they keep the myriad of things that people do every day collectively heading in the same direction.

While it’s easy to write up something you call values or even announce them at a company meeting, the measure of true values is that they jibe with the decisions that executives make. If leaders aren’t willing to forego short-term profits to advance their values, then they aren’t really values; they’re just bumper stickers. That’s why our last law of customer experience is simply, You can’t fake it.

Here’s how the CVS/Caremark’s About Us page describes its collection of operations: “Our businesses help people on their path to better health.” Selling products like tobacco that are known to have negative health effects is not consistent with that statement. Removing those products from CVS shelves make it much more believable, and an act this is consistent with Purposeful Leadership.

The bottom line: Congratulations to Merlo and the rest of CVS/Caremark leadership for being purposeful.

CX Tip #5: Lead with “Why” in Communications

50CXTips6b_65

CX Tip #5: Lead with “Why” in Communications
(Purposeful Leadership, Employee Engagement)

How does Herb Kelleher, Founder of Southwest Airlines, describe the company’s secret to success?

“If you create an environment where the people truly participate, you don’t need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.”

To elicit this type of connection with employees, leaders must focus their communications on answering a critical question, “why?” Most corporate communications focus on “what” and “how,” telling people what needs to be done and how they should accomplish it. This command and control pattern may elicit short-term compliance, but it’s efficacy decays quickly and it loses value completely when situations change and the “how” no longer applies. Leaders need to elicit buy-in from people by starting communications with “why,” explaining the reason that something is important to the company and to the people who are being asked to do something. To fully empower people, share “why” a goal is important and “what” success looks like and leave it up to the individuals to figure out “how” to make it happen. Click for more info

See full list of CX Tips

CX Tip #14: Continuously Test Your Value Proposition

50CXTips6b_65

CX Tip #14: Continuously Test Your Value Proposition
(Purposeful Leadership)

Samuel Palmisano revitalized IBM during his decade as CEO of the IT behemoth. He led the company using a framework based on four questions that he used to focus thinking and prod the company beyond its comfort zone:

  1. Why would someone spend their money with you — so what is unique about you?
  2. Why would somebody work for you?
  3. Why would society allow you to operate in their defined geography — their country?
  4. And why would somebody invest their money with you?

Click for more info

See full list of CX Tips

CX Tip #20: Use Founders to Instill Values with New Employees

50CXTips6b_65

CX Tip #20: Use Founders to Instill Values with New Employees
(Purposeful Leadership, Employee Engagement)

The first day at work for new ZocDoc employees includes lunch with the company founders. During the course of the meal, employees hear about the early days of the company, what the executives are focused on now, and what they love about the organization. Employees hear about the 7 Core Values and see them in action. In particular, this lunch reinforces the “Speak Up” core value which is about leadership accessibility and that everyone in the company has a voice – that their questions and opinions matter.

See full list of CX Tips

CX Tip #27: Continuously Re-Recruit Your Team

50CXTips6b_65

CX Tip #27: Continuously Re-Recruit Your Team
(Purposeful Leadership)

Linda Heasley, CEO of Lane Bryant and former president and CEO of The Limited has said:

I believe that my associates can work anywhere they want, and my job is to re-recruit them every day and give them a reason to choose to work for us and for me as opposed to anybody else.”

Click for more info

See full list of CX Tips

CX Tip #32: Create a Mission that Inspires Employees

50CXTips6b_65

CX Tip #32: Create a Mission that Inspires Employees
(Purposeful Leadership, Employee Engagement)

Temkin Group research shows that employees who are inspired by their employer’s mission are significantly more committed and productive. Here are some examples of inspiring missions:

“To inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research.” (Mayo Clinic)

“In times of war or uncertainty there is a special breed of warrior ready to answer our Nation’s call. A common man with uncommon desire to succeed. Forged by adversity, he stands alongside America’s finest special operations forces to serve his country, the American people, and protect their way of life. I am that man.” (U.S. Navy SEALS)

“The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.” (Ritz-Carlton’s Credo)

Here are five questions to examine your organization’s mission: Is it written? Is it real? Is it simple? Does it connect with employees? Will it create value?  Click for more info

See full list of CX Tips

CX Tip #33: Adopt Coach K’s Five Fundamentals of Team Building

50CXTips6b_65

CX Tip #33: Adopt Coach K’s Five Fundamentals of Team Building
(Purposeful Leadership, Employee Engagement)

Michael William “Mike” Krzyzewski known as “Coach K” owns the record for the most wins by an NCAA division 1 basketball coach. Coach K’s style is to empower, challenge, and inspire his players. He recognizes that wins are the byproduct of a team performing at its best. To understand his leadership style, here’s an overview of his philosophy on teams:

There are five fundamental qualities that make every team great: communication, trust, collective responsibility, caring and pride. I like to think of each as a separate finger on the fist. Any one individually is important. But all of them together are unbeatable.”

Click for more info

See full list of CX Tips

CX Tip #34: Create Path for Grassroots Communications

50CXTips6b_65

CX Tip #34: Create Paths for Grassroots Communications
(Purposeful Leadership, Compelling Brand Values, Employee Engagement)

Started in the early 1990s, PRIDE Teams—made up of a network of 700+ employees—are one of USAA’s ongoing listening efforts. Each of the 70+ teams is led by a director or executive director who facilitates grass roots communications across the organization. PRIDE Team members have their day jobs, but spend up to ten percent of their time on two-way communications between the team and their workplace colleagues. They reinforce key messages from senior leadership and connect with their peers, bringing key insights from their colleagues to USAA leaders. Click for more info

See full list of CX Tips

CX Tip #38: Discuss CX Metrics and Initiatives at Company Meetings

50CXTips6b_65

CX Tip #38: Discuss CX Metrics and Initiatives at Company Meetings
(Purposeful Leadership)

To keep employees aligned, leaders discuss customer experience in every quarterly employee meeting. Citrix executives share initiatives and progress against goals for key customer metrics. Through reporting and dashboards, customer metrics such as NPS and customer retention are shared broadly throughout the business. In addition, the company shares deep-dive analysis of drivers and opportunities for improvement.

See full list of CX Tips

CX Tip #41: Create Peer-to-Peer Executive Relationships with B2B Clients

50CXTips6b_65

CX Tip #41: Create Peer-to-Peer Executive Relationships with B2B Clients
(Purposeful Leadership, Customer Connectedness)

Stream Global Service’s Executive Sponsorship Program charges Stream’s senior leaders with establishing peer-to-peer relationships with senior executives from one to three of its largest clients. The goals of this program are to extend the relationship beyond the sales team, to better understand the customer’s business direction and goals, and to ensure the customer is receiving the value it expects from Stream. On a quarterly basis, the two leaders meet with each other and discuss the customer’s big initiatives, functional area goals, and how Stream can support their efforts. Feedback from these meetings is integrated with other VoC captured from that customer relationship. Click for more info

See full list of CX Tips

PCxD Principle #1: Align Through Purpose

I recently introduced a concept for enlisting the support of employees that uncovers and fulfills the needs of customers that we call People-Centric Experience Design (PCxD), defined as:

Fostering an environment that creates positive, memorable human encounters

PCxD

Principle #1: Align Through Purpose

Just about every large organization has vision and mission statements floating around their hallways. But when it comes to making decisions on a day-to-day basis, these documents are nowhere to be found. They play NO ROLE in how the company is actually run. But things are different within customer experience leaders.

USAA earned industry-leading scores in credit cards and insurance in the 2011, 2012, and 2013 Temkin Experience Ratings. What makes USAA so special? Here’s what Wayne Peacock, Executive Vice President of Member Experience at USAA, told us:

“We are a mission-driven organization. Everything we talk about is focused on helping military families with their financial security. Everyone in our organization has an intense focus on serving our members. It’s our true “North Star” that allows us to do things differently.

Southwest Airlines has also led its industry in the previous two years of Temkin Experience Ratings. How does Herb Kelleher, Founder of Southwest Airlines, describe the company’s secret to success?

“If you create an environment where the people truly participate, you don’t need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.”

Southwest Airlines and USAA are examples of companies that lead with purpose. Their leaders understand that human beings have a desire to affiliate and being a part of something in which they believe. In Temkin Group’s recent study of more than 5,000 full-time U.S. employees, we found companies that focus on a mission beyond just making money are 80% more likely to be customer experience leaders in large part based on the effort and commitment of their employees.

Purpose

Here are some ways that companies can master this principle:

  • Make the mission personal and central to HR. Companies with a highly engaged workforce often have very clear and well-known mission. To help an organization embrace the mission, it needs to be written, letting people know what’s expected and what’s valued. Tony Hsieh, the CEO of Zappos explained that the company’s 10 core values, that start with “Deliver Wow Through Service” and ends with “Be Humble” are the cornerstone to how he runs the company.  He expects hire leaders to hire, fire, and promote people based on how well they live up to and support those values. Every HR activity, from recruiting through releasing of employees, needs to reinforce an organization’s purpose.
  • Translate your mission into brand promises. True brands are more than marketing campaigns and advertising slogans. They reflect the promises that the company is committed to deliver to its stakeholders. If your company has a strong purpose, then it should be translated into specific promises that it will make (and keep) to customers, employees, and to the communities in which it operates.
  • Lead with why. Most corporate communications focus on “what” and “how,” telling people what needs to be done and how they should accomplish it. This command and control pattern may elicit short-term compliance, but it’s efficacy decays quickly and it loses value completely when situations change and the “how” no longer applies. Leaders need to elicit buy-in from people by starting communications with “why,” explaining the reason that something is important to the company and to the people who are being asked to do something. To fully empower people, share “why” a goal is important and “what” success looks like and leave it up to the individuals to figure out “how” to make it happen.
  • Focus on intrinsic rewards. Companies often try and force employees into doing things by slapping on metrics and measurements. While these types of extrinsic rewards can change some behaviors, they can often cause conflicts and lead to unexpected consequences. When Staples put in place a goal for $200 of add-ons per computer sold, some store employees stopped selling computers to customers who didn’t want to purchase add-ons.  It turns out that people tend to be more motivated by intrinsic rewards. To build commitment from employees, stop piling on extrinsic rewards and focus on providing them with the sense of meaningfulness, choice, competence, and progress. These types of rewards build an emotional, instead of a transactional, commitment from employees.
  • Act consistently. Memos from the executive team and proclamations at quarterly meetings do not define what’s important to an organization. An organization’s true purpose is more than words. It needs to show up in every decision that the company makes. Employees can tell what’s really important by looking at what decisions executives make and how they spend their time. If execs want to lead with purpose, then they need to make sure that they act consistently with what they say is important. Corey Booker, Mayor of Newark, once shared this advice that he follows: “My mom used to say that who you are speaks so loudly that I can’t hear what you say.”  Remember, you can’t fake it.

The bottom line: Inspire loyalty and alignment by tapping into the power of purpose.

CX Tip #45: Use Blog to Connect CEO with Employees

50CXTips6b_65

CX Tip #45: Use Blog to Connect CEO with Employees
(Purposeful Leadership)

Safelite AutoGlass’s CEO, Tom Feeney, maintains his “Ask Tom” blog where any employee can ask any question with no fear of retribution. Mr. Feeney researches the answers and provides a personal response.

See full list of CX Tips

Follow

Get every new post delivered to your Inbox.

Join 2,631 other followers

%d bloggers like this: