Customer Experience is the CEO's Job

Presentation given in London at the Leading Design Conference, held 24-26 October 2016 at the Barbican Centre.

Transcript

1. CX IS THE CEO’S JOB Leading Design, London 23 October 2016 @farrahbostic
2. HI, 
 I’M @FARRAHBOSTIC. I RUN…
3. HISTORY!
6. “It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.” 1911
8. IF I’D ASKED PEOPLE WHAT THEY WANTED, THEY WOULD HAVE TOLD ME 
 ‘FASTER HORSES’.
9. IF THERE IS ANY ONE SECRET OF SUCCESS, IT LIES IN THE ABILITY TO GET THE OTHER PERSON’S POINT OF VIEW AND SEE THINGS FROM THAT PERSON’S ANGLE AS WELL AS FROM YOUR OWN.
10. The opening up of new markets and the organizational development from the craft shop and factory to such concerns as US Steel illustrate the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one ... [The process] must be seen in its role in the perennial gale of creative destruction; it cannot be understood on the hypothesis that there is a perennial lull. Joseph Schumpeter, 
 Capitalism, Socialism and Democracy 1942
11. BECAUSE THE PURPOSE OF BUSINESS 
 IS TO CREATE A CUSTOMER, 
 THE BUSINESS ENTERPRISE HAS TWO – 
 AND ONLY TWO – BASIC FUNCTIONS: MARKETING AND INNOVATION. 
 MARKETING AND INNOVATION PRODUCE RESULTS; 
 ALL THE REST ARE COSTS. http://www.forbes.com/2006/06/30/jack-trout-on-marketing-cx_jt_0703drucker.html 1954
12. A COMPANY'S PRIMARY RESPONSIBILITY IS TO SERVE ITS CUSTOMERS, TO PROVIDE THE GOODS OR SERVICES WHICH THE COMPANY EXISTS TO PRODUCE. PROFIT IS NOT THE PRIMARY GOAL BUT RATHER AN ESSENTIAL CONDITION FOR THE COMPANY'S CONTINUED EXISTENCE. 1954 https://www.amazon.co.uk/Practice-Management-Classic-Drucker-Collection/dp/0750685042
13. FIVE PRINCIPLES: 
 PRECISELY SPECIFY VALUE BY SPECIFIC PRODUCT, 
 IDENTIFY THE VALUE STREAM FOR EACH PRODUCT, 
 MAKE VALUE FLOW WITHOUT INTERRUPTIONS, 
 LET THE CUSTOMER PULL VALUE FROM THE PRODUCER, 
 AND PURSUE PERFECTION. 1948-1975 Womack, James P.; Jones, Daniel T. (2010-11-23). Lean Thinking (Kindle Locations 115-117). Simon & Schuster, Inc.. Kindle Edition.
16. NOW.
17. BIG COMPANIES ARE FAILING FASTER THAN EVER
18. CEOS ARE GETTING PAID MORE THAN EVER
19. YET CEO TENURES ARE SHORTER & INFLUENCE IS QUESTIONABLE
20. CEOS ARE 
 GETTING PAID MORE 
 TO FAIL MORE
21. CEOS SPEND MORE TIME TALKING TO THEIR BEST CUSTOMERS THAN THEIR NEXT CUSTOMERS “[M]ost companies with a practiced discipline of listening to their best customers and identifying new products that promise greater profitability and growth are rarely able to build a case for investing in disruptive technologies until it is too late.” Clay Christensen, 
 The Innovator’s Dilemma
23. THE CEO’S WIFE/KIDS “I keep a lot of kids around me and ask them questions and peek around the corner when they think I'm not listening. My master plan was I had a lot of kids. I have six kids. Three girls that are six, a 15-year-old, 18-year- old and 22-year-old. I have the perfect research team in my house." http://acupofteawithphd.wordpress.com/2013/06/19/live-from-cannes-cannes-lions-2013-so-farpart-4-its-diddy/
24. VANITY METRICS “I actually think I'm going good, 
 I have the biggest crowds.”
25. http://projects.fivethirtyeight.com/2016-election-forecast/?ex_cid=rrpromo
26. FOMO LEADS TO DALLIANCES NOT MARRIAGES http://blog.gotinder.com/swipe-the-vote-uk-edition/
27. THE CEO WASN’T 
 IN THE ROOM
28. THE LONG TERM TREND IN INFORMATION GATHERING & INSIGHT DEVELOPMENT IS TO GET FARTHER AWAY FROM ACTUAL PEOPLE.
29. CEOS TEND TO DISAPPEAR IN PHASE 2.
30. A STRATEGY IS A PLAN FOR A DESIRED OUTCOME WITHIN A SET OF CONSTRAINTS DATA ACTION
31. INFORMATION REQUEST RESEARCH RFP STUDY DESIGN RECRUITMENT FIELDING ANALYSIS BRAND/PRODUCT TEAM RESEARCH & INSIGHTS RESEARCH COMPANY RECRUITER/PANEL MODERATORS RESEARCH COMPANY
32. THEY ORDER TRADITIONAL RESEARCH, AND STAY AT A DISTANCE FROM REAL PEOPLE.
33. STOCKPILING DATA
34. “THE DATA WILL TELL US 
 WHAT TO DO.”
35. LOOK,
36. WE DO THINGS WE THINK ARE IMPORTANT.
37. WELL, IS IT IMPORTANT?
38. YEP.
39. THERE’S ALWAYS AN APPLE SLIDE steve@apple.com http://stevemail.tumblr.com/
40. WON’T LEAVE AMAZON OUT, EITHER. jeff@amazon.com http://99u.com/articles/7255/the-jeff-bezos-school-of-long-term-thinking http://media.corporate-ir.net/media_files/irol/97/97664/reports/Shareholderletter97.pdf
41. INDUSTRY OUTSIDERS DRIVE DISRUPTION
42. CREATIVE DESTRUCTION 2.0 The life span of a corporation is determined by balancing three management imperatives: 1) running operations effectively 2) creating new businesses which meet customer needs 3) shedding business that once might have been core but now no longer meet company standards for growth and return. https://amzn.com/038550134X https://www.innosight.com/insight/creative-destruction-whips-through-corporate-america-an-innosight-executive-briefing-on-corporate-strategy/
43. SO HOW DO CEOS CHANGE?
44. IT’S NOT EASY - AND MAYBE IT’S NOT FOR EVERYONE Customer-Centric Org Charts Aren’t Right for Every Company, HBR, July 1, 2015
45. SOME MIND-SET SHIFTS TO EXPLORE
46. The Business Model Canvas Revenue Streams Channels Customer Segments Value Propositions Key Activities Key Partners Key Resources Cost Structure Customer Relationships Designed by: Date: Version: Designed for: designed by: Business Model Foundry AG The makers of Business Model Generation and Strategyzer This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? is your business more Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing) Value Driven (focused on value creation, premium value proposition) sample characteristics Fixed Costs (salaries, rents, utilities) Variable costs Economies of scale Economies of scope Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? channel phases 1. Awareness How do we raise awareness about our company’s products and services? 2. Evaluation How do we help customers evaluate our organization’s Value Proposition? 3. Purchase How do we allow customers to purchase specific products and services? 4. Delivery How do we deliver a Value Proposition to customers? 5. After sales How do we provide post-purchase customer support? For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? For whom are we creating value? Who are our most important customers? Mass Market Niche Market Segmented Diversified Multi-sided Platform What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they? examples Personal assistance Dedicated Personal Assistance Self-Service Automated Services Communities Co-creation What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? catergories Production Problem Solving Platform/Network What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? types of resources Physical Intellectual (brand patents, copyrights, data) Human Financial Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquairing from partners? Which Key Activities do partners perform? motivations for partnerships Optimization and economy Reduction of risk and uncertainty Acquisition of particular resources and activities What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying? characteristics Newness Performance Customization “Getting the Job Done” Design Brand/Status Price Cost Reduction Risk Reduction Accessibility Convenience/Usability types Asset sale Usage fee Subscription Fees Lending/Renting/Leasing Licensing Brokerage fees Advertising fixed pricing List Price Product feature dependent Customer segment dependent Volume dependent dynamic pricing Negotiation (bargaining) Yield Management Real-time-Market strategyzer.com
47. IDENTIFY YOUR 
 CORE ACTIVITIES What behavior is your organization engaged in that aligns with your purpose?
48. FOCUS ON 
 YOUR CORE BELIEFS About your business model, how you create value, 
 and what your assets are.
49. UNCOVER YOUR RISKIEST ASSUMPTION What’s the one belief you hold, that if untrue, 
 risks destroying your company?
50. GET TO KNOW YOUR NEXT CUSTOMERS The people who are hacking their own solutions 
 or turning to unexpected players to solve their problems. 
 Develop opportunity spaces that 
 meet emerging customer needs.
51. COMMIT TO CHANGE Provide management air cover to protect your teams, 
 and enlist ground support from those 
 who will carry out the change.
52. MAKE RUTHLESS SACRIFICES Shed product lines and lines of business that don’t meet your objectives and align with your mission.
53. THE PATH TO GROWTH Attain Sustain Gain Make something people want Find product/ market fit & fine-tune the product Get the product into people’s hands (aka, “scale”)!
54. CEOS SHOULD BE ABLE TO EXPLAIN WHAT CREATES VALUE FOR CUSTOMERS ➤ They should develop hypotheses that: ➤ Help their organizations make decisions ➤ Help their organizations create value for our customers ➤ Help their organizations develop empathy for people so deep we can anticipate solutions to problems they can’t yet express
55. COOL STORY, BRO.
56. CEOS NEED TO UNDERSTAND 
 PEOPLE AND BEHAVIOR 
 TO MAKE BETTER PREDICTIONS 
 AND MEASURE OUTCOMES MORE EFFECTIVELY.
57. THANKS FOR LISTENING.