Today’s companies need to take a hard look at how, and if, their organizational design is helping them meet customer needs and demands. By sitting back, businesses may soon find customers looking to spend their dollars elsewhere.
In most market segments today, the customer is gaining a new perspective.
From intelligent automation to data and analytics, the explosive growth of mobile device use to the Internet of Things (IoT), today’s fast-paced digital environment combined with shifting demographics is changing—mainly raising—customer expectations. For one, the customer’s environment has become more mobile and web-based, with less human interaction. Millennial preferences are changing the way people consume and pay, forcing business models to become more personalized and agile. Customer solutions are much more data-driven and becoming increasingly tailored to unique customer needs. Finally, businesses are being pressed to create a level of customer service that, as consumers, customers enjoy in other aspects of their everyday lives (e.g., Apple, Netflix, etc.).
Consequently, driven by digital disruption and advanced technologies, today’s customer centricity differs from that of the past. Today’s customer-centric businesses must understand who their customer is, what their needs and requirements are, and what they value most. Businesses also need to deliberately create and design an experience to meet, and in some cases exceed, those needs. Additionally, they must work to continuously enhance the customer experience, by leveraging tools (e.g., data and analytics) to understand the changing demographics, needs, and expectations of their customers in order to develop a clear customer agenda.
Thus, the major shift in how customer centricity differs today is driven by customization of services and aligning all capabilities behind the customer agenda. This means that businesses need to be organized around the customer journey and consider the design of the customer experience in day-to-day operations.
In short, smart businesses are reevaluating existing organizational design to meet these new, emerging customer service realities. From an organizational design standpoint, boosting customer centricity will require looking holistically at your organization’s design across the front, middle, and back offices. Doing this enables you to start thinking about how each distinct element of your organizational design is contributing to or hindering the customer agenda.
Focus on logical changes first
A good first step is to focus on the areas make that make the most sense, the so-called low-hanging fruit. For example, many businesses offer different types of services across the customer’s lifetime journey. Others have business models that are more flexible and often provide a better opportunity for organizational redesign efforts on the front end. These “quick wins” can help drive momentum and provide tips and lessons learned for future organizational redesign efforts in other areas.
Determine how to differentiate yourself
Next, organizations need to define a clear customer agenda. To do this, they will need to understand who their customer is and what the customer needs. Once the customer agenda is clear, businesses can define a high-level organizational design strategy for making that agenda happen. They need to answer questions around how they will operate to fulfill customer expectations, such as: Will they be operationally focused, striving towards speed and cost efficiency? Will they provide “white glove” service, providing tailored solutions to each customer? Will they be focused on simplicity and ease, providing the best end-user customer experience?
Mind the gaps!
How do you go about identifying any existing customer service gaps? First, each key organizational design element requires identifying what criteria for success looks like relative to the customer agenda.
For instance, what type of talent is needed to achieve the customer strategy? What types of capabilities/competencies and training do your employees need to successfully deliver the right customer experience? How does this structure link to current operating models (front, middle, back)? What type of organizational structure will enable you to deliver on the customer agenda?
Comparing defined success criteria to current realities allows organizations to understand where they need to take action, and what organizational elements they may need to redesign to fulfill the customer agenda.
To sum up, adapting to today’s rapid, technology-fueled and changing customer-centric delivery strategy likewise requires new, innovative thinking in matching your organizational design with the customer agenda. It isn’t just a good idea; it’s the only idea if you are trying to succeed in creating a win-win result with your clients.
Where to start
Re-examine where your customers stand today. Customer expectations are changing at a faster pace than ever before. Understanding the customer’s perspective is critical to defining a path forward.
Develop a strategy to better align your organization to the customer agenda. Determine how you will create incremental value for your customers, based on what they want and need.
Define what success looks like. Clearly articulate what behaviors, actions, and experiences are necessary to achieving your customer-centric strategy. Understand what new capabilities and ways of working you and your team need to be successful.
Evaluate the differences between where you are, and where you want to be. Be ruthless in understanding your blind spots and bench strength, and have a robust plan to close the gaps.
For more information on how KPMG can help businesses adapt and update their organizational design to meet the customer’s service expectations and agenda, click here.