Components of Experience

Preface

I've been very obsess with "experience" and written series of post which I think might be good to read them (or you can skip them) as listed in below:

• Core Values - An article on why core values boost employee experience
• Agile Organization - An article on how to transform and why needs to be agile
• ReThinking HR - An article on how HR department can cause employee experience
• Culture Framework - A methodology on how to build corporate culture
• Thinking Better - An approach to think and transform systematically
• Experience - A post on what is Experience
• Engineering Experience - A framework on building experience
• Know-* Management Team - An article on how to build a management team
• Core Values are not simply your DNA - Trying to go a bit deeper on what's core value
• Experience Engineering by Digital Transformation - Building an experience using technology

I am inspired by folks in Rocket Source and amazed how much we have in common. This article is more like echoing some of their thoughts and also enhancing my own models.

Components of Experience

It is like a loop this topic of Experience; the more I am learning, building, failing and experimenting on the topic of "experience", I am discovering more and more elements that are critical components of Experience. It has been a journey beyond my capability to explain it. Ironically, probably someone needs to experience "the experience".

So far, I believe these are the key components of an experience: brand, customer, data, technology, business & solution architecture, business model, culture, knowledge, people, process, platforms, products & services and channels. Each of these components by itself is standalone expertise, however most of C-suites must be a T-shaped and know these things quite well.

If we’re only looking at the problem one way, we’ve got a blind spot. You can read more about how to think better in my last blog where I have put together series of mental models I have been using which is gathered from all over internet. The foundation of all components of experience can be simplified into one reusable design pattern which is the following iceberg:

Transformation is also an overused term but it is important I define what do I mean by transformation. I always like to go back to nature and find a mental model that can conceptually shares what we mean by any terms, I did the same for transformation. I researched and I found in genetics engineering they are also using a term called "transformation" which is exactly conceptually represents what do I mean when I use transformation across my articles.

Transformation is the process by which an organism acquires exogenous DNA. Transformation can occur in two ways: natural transformation and artificial transformation. Natural transformation describes the uptake and incorporation of naked DNA from the cell’s natural environment. Artificial transformation encompasses a wide array of methods for inducing uptake of exogenous DNA. In cloning protocols, artificial transformation is used to introduce recombinant DNA into host bacteria (E. coli). The most common method of artificial transformation of bacteria involves use of divalent cations (e.g., calcium chloride) to increase the permeability of the bacterium’s membrane, making them chemically competent, thereby increasing the likelihood of DNA acquisition. Another artificial method of transformation is electroporation, in which cells are shocked with an electric current, to create holes in the bacterial membrane. With a newly-compromised cell membrane, the transforming DNA is free to pass into the cytosol of the bacterium.

Regardless of which method of transformation is used, outgrowth of bacteria following transformation allows repair of the bacterial surface and selection of recombinant cells if the newly acquired DNA conveys antibiotic resistance to the transformed cells.

Transformation basically means, you receive or discover something that you could not do that before and by receiving, learning or discovering it now you are able to do it.

• By Digital transformation I mean an organization is able now to use technology that they were not able to use it before;
• By Organizational transformation, I mean an organization finds a new model of working that helps the organization to achieve the KPI and ultimately vision; something like agile methodology
• By Transforming Organizational Growth via Digital Experience, I mean an organization by using a methodology that I am trying to write in series of articles on "Experience" and Digital can now be able to use technology and experience methodology in a way that can build a great and robust customer & employee experience that they could not do it before (I am not claiming this is the only way but just I am simplifying and sharing the definition of words that I am using.)

Experience Glossary

There are many terms that has been used across my articles as I just explained transformation in above, it is important I give a simple explanation on some of the key terms I have been using to avoid creating complexity any further. I have been using Rocket Source and other sources as a reference.

360 Customer View - compilation of all the data about a customer in one place. Linking on-line behavior, off-line behavior, preferences, transaction data, etc. in a single view of the customer experience. 

I've written an article on my experience of building customer 360 view in a fintech company in this post.

Online-2-Offline or Brick-to-Click or Click-to-Brick - is essentially the process of connecting the customer experience seamlessly across each human touchpoint (i.e. Brick-and-Mortar, etc.) to each digital touchpoint (i.e. register for an online webinar).

Customer experience management (CEM or CXM) - is the collection of processes a company uses to track, oversee and organize every interaction between a customer and the organization throughout the buying journey.

Customer Experience (CX) is the sum of all the individual experiences a customer has with your brand, product or company over time.

Each side of the framework is a little bit different. The Brand Experience side answers what a business needs to succeed. It starts with the business story at the center and core of everything. Then, the business model is shaped around the WHY, giving a logical process for how the why will be brought into the world. The 3 Ps — people, processes, and platforms — address the three core tenets that will put that business model into action. It’s only then that the products and services are built and considered, followed closely by the channels that they’re delivered and promoted on. Each of these leads to the overall experience the end customer has with the business.

The path-to-purchase side of the framework answers the predictable pathway that consumers travel. It’s a combination of past experiences that spark an emotional trigger to start a search for something. These emotions blend into logical thinking about the present and future that ultimately leads to the purchase. When the purchase is complete, the buyer reconciles their past, present, and future into feelings of excitement, hope, and confidence.

It’s quite a bit deeper, wouldn’t you agree? In this framework, I’ve done two things to add depth to the concentric circles. First, I changed the colors, and second, I added horizontal lines to showcase the many layers and depths involved in both the organization’s success and the customer’s path-to-purchase.

As you might recall from my research, the best employees had to have more than just smarts—they had to have passion and an emotional vestment into the organization. That meant that they had to buy into the company’s WHY. They had to believe in why the company existed. They had to know why it was beneficial to the market.

This buy-in to the why isn’t enough though. The why must also be validated by the business model. No matter how cool the vision, the brand has to showcase that they to have a sustainable business model and can make money. In other words, it has to make sense.

Once the person is within the company, they have to see that the team they’re working with—the people—are competent and enjoyable to be around. They have to like the processes that are in place, or at least feel empowered to shift the processes when necessary to become more productive. The tech stack, or platforms, they’re using have to be up-to-date and allow for efficient communication. Even top talent won’t be productive if they’re forced to work on outdated or disjointed platforms. The technology used organization-wide must spur productivity and reduce friction, so the only focus is getting the job done well.

All of these components bleed into a passion for what’s being sold. The employee has to believe in the product or service wholeheartedly. It has to be something they’d be proud to use themselves.

Employees must also have an understanding and appreciation for the channels on which it’s being marketed and delivered. For example, if the business is selling a digital product but only promoting it via direct mail, something’s off and the employees will feel that disconnect.

It’s the sum of all of these parts—the why, business model, people, processes, platforms, products and services, and channels—that make up the employee’s experience. But this is only half of the equation. The customer’s experience is equally powerful as we look at how these layers maneuver together in a predictable pathway to purchase.

The way we process information as consumers with purchases is complex, especially for purchases that bend our budget a little more. Despite the complexity, we, as buyers, move methodically through a predictable pathway to purchase to make decisions, each step getting amplified by the one before it.

It starts with an external stimulus. A memory from our past buried deep in the limbic system gets triggered. It’s at this point that we have an emotional, and many times a physical, response to something that enters our worldview. This emotional and physical response is called the Cannon-Bard theory, which causes a physical and psychological response, like trembling in fear or getting butterflies on a first date.

As seductive as the stimulus might’ve been, we’re quickly catapulted into the present, engaging our neocortex in a logical thought process. It’s now that we’re trying to decide if what we think we need is really relevant to our current lifestyle. We weigh the time vs. effort of the purchase to decide if it’s worth our while to pursue.

Upon deciding to move forward, we start to progress more from the present into future consideration as we weigh our expectations. Will the purchase meet our needs? How will our life be different if we buy? Will it be better? Could it be worse?

Once we’ve solidified what we want and need, we start to look specifically at brand trust. It’s in this stage that we’re looking at the cognitive associations buried deep in our brain about a brand to decide whether we can trust them to fulfill on their promises and our expectations.

Finally, we buy! In one glorious experience, we’re filled with an overload of emotions about our purchase. We’re hopeful about the future, confident or anxious in our purchase decision and excited about what life will be like now. This reconciliation of past, present, and future experiences is the answer to each of these layers getting stacked one on top of each other throughout the path-to-purchase.

Customer Insights Map - A data-centric visual guide to how customers progress across their journey with an organization. A Customer Insights Mapping includes the following:

• Empathy mapping broken up across the various customer journey stages
• The various touchpoints along a buyer’s journey
• Employee and customer experience scores across each touchpoint
• The departments that contribute to each touchpoint
• The platforms used at each touchpoint
• Assets available to the organization
• Opportunities at each stage of the buyer’s journey
• Metrics and key performance indicators to monitor
• Path-to-purchase comparison model

Customer Journey - Refers to all interactions a customer has with your company or brand throughout their entire customer experience. The Customer Journey does not reference one single interaction or transaction; but instead looks at the big picture, and combines all the interactions to demonstrate the customer’s overall experience with you and your company.

Customer Journey Mapping - A visual representation how the organization is or isn’t aligned to customer needs, created in order to assess:

• Inbound interactions that are customer driven
• Outbound interactions that are company driven
• Interactive and face-to-face interactions
• How different interactions tie together
• Customer needs, emotions, perceptions
• The customers’ expectations of their experience with the company
• Areas where the company may be failing to meet customer expectations

Data-Centric - Data centric refers to an architecture where data is the primary and permanent asset, and applications come and go. In the data centric architecture, the data model precedes the implementation of any given application and will be around and valid long after it is gone.

Data-Driven - Being data-driven means adopting a data-aware culture which encourages its people to turn data into insight and action.

Digital Transformation - is the profound reworking of business and organizational activities, people, processes, platforms, business strategy and business models to fully leverage the digital technologies impacting consumers. Digital transformation’s core drivers are meant to improve efficiencies, enhance the customer experience, manage risk and uncover new growth and monetization opportunities. Also there are different models of digital maturity which is shared in below figure, which each company based on their business model, 3Ps and other elements will pick one digital transformation approach.

The amount of gumption organizations put into both their management and digital intensity determines into which quadrant they fall. Most organizations start in the Beginner quadrant and work their way outward. The companies with shiny object syndrome, known as the Fashionistas, often latch onto advanced digital capabilities but lack the know-how to implement them. Similar to organizations who have a perceived lack of time and resources, conservatives often have the drive to develop digital initiatives but lack the tools and expertise.

Companies that become fully digital are known as the “digitari” of the corporate world. It’s the digitari who are best able to gather, analyze and execute on Big Data through a tightly-woven culture and infrastructure. In doing so, they’re able to advance and outperform their competition in three core areas:

• Driving Innovation — Increasing organizational capacities via bioholonics of people, process and platforms to promote perpetual optimization and innovation across the business
• Remediating (Flattening) Costs – Recursive usage of an informational ecosystem via the capturing of knowledge (data, insights, insight meta-data, target (variable) definitions, tribal knowledge) and dissemination via a semantic feedback network
• Fueling Growth — Reaching customers anywhere, anytime in existing, emerging or new markets, including through ever growing mobile and social channels

The financial performance of the digitari is consistently higher than that of their counterparts in three areas — revenue generation, profitability and market value.

The traditional economic mentality has deemed data the new oil. Oil is notoriously expensive to find, extract and transport. It’s also hazardous to the environment and depletes slowly over time. In reality, none of these characteristics accurately apply to digital assets. Digital transformation trends lean more in the direction of a “data is the new sun” mentality. It’s readily available in an infinite number of uses, doesn’t deplete over time, and is cleaner to find, extract and transport.

This mentality is the basis of the “Schmarzo Economic Digital Asset Valuation Theorem.” In essence, this theorem deems that an organization’s digital assets possess a unique ability to synchronously decrease costs while increasing economic value via the intraoperative usage of digital assets. Here’s what it looks like:

Schmarzo’s Economic Digital Asset Valuation Theorem takes into account a digital asset’s unique ability to simultaneously drive down marginal costs (via digital economies of scale) while accelerating its economic value (via digital asset reusability). As economic values grow, so do profits.

With this theorem Schmarzo has, perhaps unintentionally, identified a common key driver of digital transformation — cost savings. While we believe that cost savings offers a strong case for these new initiatives, this benefit alone doesn’t paint the full picture regarding the importance of digital transformation and how to gauge its success. The concepts behind Schmarzo’s theorem are tactical and relevant in nature. There’s a lot more to be said about the nuances and complexities involved in actually bringing data together in a meaningful way.