Best Practices in Managing CX: Governance

If you read last week’s newsletter about Closed-Loop Processes, you know how passionate I am about those being part of a robust CX program. I am nearly as adamant about my fourth pillar of successful CX programs: Governance, or how companies get organized to take action and manage improvement activities across the organization.

When I talk about governance, I use it as shorthand for three key functions of your CX transformation efforts:

1. How you get organized around taking action and manage that process on a regular cadence
2. How you manage the action planning and closed-loop processes
3. How you practice portfolio management to prioritize the improvement activities

?Getting Organized

Establishing a governance committee or council is the most important piece to managing your CX transformation efforts. Ensuring the right people and functions are represented and that you have complete coverage of the entire customer experience is critical. And this council must fit into the rhythms of the company rather than be seen as something extra. It should have executive sponsorship and be chaired by either the CEO or one of their direct reports. You see a lot of companies now with Chief Customer Officers, so this may be the person that chairs the council.

At a minimum, you need to have the following individuals or teams involved: head of digital and/or e-commerce, sales leadership, marketing leadership, operational leadership and regional operations VPs, product development, head of customer care, and anyone else who may own a function that interacts with the customer. As support functions, you may also want to include HR, finance, pricing or revenue management, and IT. This can get unwieldy, so strive for somewhere in the 10-20 range that. Beyond that, you end up with too many cooks in the kitchen.

There are generally three models of governance:

• Centralized—This model typically is top-down and managed at a corporate level, with representation from business units or regional leadership, but no customization or flexibility without the approval of this team. Decision-making for improvement initiatives is all managed within the team. This team also has responsibility for budget, analysis and insights, and communication of status and progress.
• Distributed—As the name implies, this model has distributed responsibility across BUs or geographies. Typically, this model exists when there are multiple teams involved in CX execution and decision-making across the company. A central team may share data, tools, and coaching to enable groups to identify and execute action, but responsibility is distributed across various business units. Responsibility for training, change management, and closed-loop processes resides within each BU.
• ?Hybrid—As suggested by the name, this model tries to blend the advantages of the centralized and distributed models together. A centralized CX team with executive leadership is primarily accountable for overall customer experience management and prioritization. The team typically manages cross-group governance, vendor relationships, and facilitates prioritization, while responsibility for execution and action lies within the distributed groups.

In the interest of space, I will not get into my view of the advantages and disadvantages of each model here, but if you are interested, please don’t hesitate to reach out to me.

Action Planning

Action planning is about managing the closed-loop processes that I discussed last week. The governance council may make the decisions on how to execute the inner closed-loop: which customers to contact, who or how the contact will be made, and how quickly contact will be made. And it will monitor performance across the inner loop.

More importantly the council will own the root cause and outer-loop processes. Managing this outer-loop process begins with agreeing on a fact base. What is the organization hearing across all its listening posts: surveys, social media feedback, reviews, call center and chat transcripts, feedback given to account managers, website feedback, etc., and what are the major issues bubbling up across all of these inputs. This should be based on data and not just gut or 1 to 2 customer interactions that an executive may have had.

The council then decides which issues are most important to pursue and assigns individuals or teams to investigate the issue, why it is happening, and potential solutions. As these teams get chartered and resourced, they define the problem and scope and then begin a monthly report-out process, keeping the governance council up-to-date and securing additional resources or assistance where necessary. When one set of projects gets completed, new projects can be commissioned.

The council also owns the internal and external communications regarding progress and the completion of initiatives and the expected positive impact on the customer experience.

Portfolio Management

The governance council manages the activities of the tactical working teams that are striving to improve the customer experience, which means they are really managing a portfolio of projects at any given time. There will always be a mix of short-term and long-term projects and those addressing low-hanging fruit versus larger strategic problems. The best way to vet a project is to understand:

• How many customers will it impact?
• How many resources and how much time will it take to make the change?
• What is the potential ROI of making the change? Some projects may cost more than they yield, and thus, are rejected.

And there is a rhythm and cadence to managing this portfolio of transformation projects. You can choose how often the governance council meets, but I have generally found that monthly is the right frequency. It doesn’t overload calendars with meetings; it gives the working teams time to make progress from meeting to meeting; but it is frequent enough to maintain progress and accountability.

I don’t believe you can have effective CX transformation without a strong governance model in place to guide the activities and ensure communication throughout the company. If your company is still allowing improvement projects to be managed within each of the functional areas or silos, figure out which of the governance models I discussed might work best in your organization. The organizational benefits to a strong governance model are:

1. Alignment: on the priorities and improvement activities of the company; you break down the silos and create collaboration.
2. Focus: on a vital few projects that the governance council believes will have the most impact on your customer experience, rather than a hodgepodge of projects scattered across the company and usually managed within a single silo.
3. Visibility: because all the major functions that impact the customer experience are represented, there is cross-company visibility to the priorities and the status of the improvement activities.
4. Accountability: The council is a forcing mechanism because stakeholders and project owners must report their progress on a regular basis. When everyone has visibility, it is nearly impossible to shirk the project commitments you agreed to at the council.

Learn more about all four of my best practices for managing an ongoing customer experience program by reading the full series:

1. Start with your employees—they often know the answer because they are closest to your customers, and you can’t have great CX without strong EX.
2. Understand the linkages—between your internal metrics, your customer feedback and your business outcomes.
3. Have robust closed-loop processes—It is one of the best ways to resolve customer issues in real-time, learn how to improve your products, services, and experiences, and drive retention.
4. Governance—how you are organized to drive customer experience improvement and how you are managing the portfolio of improvement projects.

There are certainly other best practices that mature and highly successful CX programs employ. What did I miss or what other best practices do you consider a must-have for managing CX?

To discuss how I can help your company’s VOC or CX efforts or to arrange speaking engagements, please schedule time with me here.

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