Customer Experience (CX) initiatives often have a strong focus on changing the corporate culture. And rightly so. But culture is hard and we have found it useful to consider the opposite question: how understanding your company’s culture can help you define your priorities for Customer Experience transformation to ensure CX success and early impact.
A simple model for company culture
Consider the simple but helpful model for understanding company culture proposed by Groysberg et al. in the January-February 2018 issue of Harvard Business Review: Integrated Culture Framework.
This model uses two dimensions to understand company culture. One is how people interact, from valuing independence to interdependence. The other dimension is how people react to change, from valuing stability to flexibility.
Within this framework the authors identify eight archetypes or primary culture styles as shown in the diagram. These will have different importance or weights in different organizations, and in different parts of the organization.
Many organizations will be Results focused with clear lines of P&L responsibility cascading down the organization to rest with individual managers, ie a strong commercial culture of independence and typically a focus on continuous improvements (weak stability) in sales and costs. Inside, the organization will be supportive of employees, valuing team-work (interdependence) and offering (controlled) personal development and career progression (weak flexibility), which helps explain why Caring is the other of the most common culture style in self-reported surveys.
Different cultures favour different CX priorities
Customer Experience (CX) initiatives are by nature complex change programmes and they will always involve an element of culture change. You can increase your chances of success and ability to deliver quick wins by aligning your CX priorities with the organizations existing culture.
For companies with strong Authority or Safety cultures, you may have more success if you introduce CX Governance and Change Management capabilities early on. Heavily-regulated industries such as Finance and Health Care often have a strong element of Safely culture, as do many heavy industries such as Energy and Oil and Gas. Bupa Global is a leading provider of international health insurance and an early and strong element of the CX programme was the Treating Customer Fairly (TCF) forum which provided governance and policies for how we dealt with our customers. This was an early priority not just because it is a regulatory requirement but also because it is the right thing to do: decisions we take has the potential to massively impact our members—in some cases they are life and death decisions. They have to be right, and trying to implement CX without addressing this priority early on would have failed.
At the other end, companies with a dominant Learning or Purpose culture would do well to adapt what we call a Culture-first approach to Customer Experience. Many CX programmes start here and build mission statement, develop clear vision for the future, and design ambitious three-year change programmes. For some organizations, this is the right thing to do. At Bupa, the corporate centre was very strongly lead by a Purpose culture, which guided the central Customer Experience function. However, the individual business units including Bupa Global were as much or more Results driven; being nearly opposites there was a strong tension between the centre and the business units which required careful management.
The remaining four cultures (Results, Order, Caring, Enjoyment) do well with what we call an Operations-first approach. Priorities include making a clear financial model for Customer Experience (CX Economics) that the leadership team trusts and developing clear processes for how to identify, prioritize, and then implement the right actions that will positively move the experience and deliver the financial results. This is CX Impact and we have a section on our web site about how to do this at scale.
Many of the companies with with we have worked are in this camp. A1 Telekom Austria, Vodafone, and RSA are three examples. A1, inspired by Vodafone, was strong Results cultures and the priority was on the economic model and business case for rebooting Customer Experience. Likewise, at Bupa Global we clearly linked NPS to Customer Lifetime Value which guided our strategic and operational decisions. The insurance company RSA was a typical mix of Results with Caring, and there we started with Customer Journey Mapping to look at the end-to-end experience and identify where organizational units and teams were not joined up, which led us to identify lost opportunities worth +5.5% revenues.
From Insurance to Gambling, from Telecommunications to Automotive: the quick win opportunities for the Operations-first CX Impact approach are typically of the order of +5% EBITDA. That is the money left on the table, today.
The way forward
Customer Experience implemented well will deliver in excess of 20% EBITDA growth, with 5% typically available if the first 6 months through quick wins. Understanding and acknowledging the dominant company culture and aligning your CX initiative with this culture will increase your chances of successful implementation that deliver value to your company now and sustained in the future.
Aligning your priorities with company culture does not mean that you don’t have to build the other capabilities. Even the strongest Learning organization will have to build some CX Governance, but that is probably not your first quick win. Starting with soft values, mission and vision in a strong Authoritarian and Results oriented organization is swimming against the tide.
Equally, CX can be a strong enabler of culture change. For this, understanding and being clear about both your current and target culture is tremendously useful. Pick your battles for the change carefully to ensure that they will be successful with outcomes that clearly demonstrate the value of the new culture.
Let us continue the conversation
Contact us for a demonstration of how to deliver CX Impact at scale throughout the organization. If you are in any of the middle four cultures, then this should be one of your top priorities. We show how to deliver continuous operational actions in plain English, prioritized and with clear and trusted financial linkage to demonstrate the impact CX has on EBIT and the other financial KPIs that the leadership cares about.
Let us know if this model was useful to you and if you have any builds or enhancements.