How to truly improve customer orientation and time-to-market

Customer orientation and time-to-market for new customer experiences are key objectives of almost every digital transformation initiative. Most companies however fail to realize, that their existing organizational and incentive models work - most of the time - directly against those objectives. Unless you first enhance the way you organize and share work and objectives, customer orientation and execution efficiency will most likely not reach a sustainable improvement that truly impacts the customer experience.

The following model has been derived and evolved from working in transformational efforts with multiple successful global organizations in telecommunications, travel, consulting, financial services, retail, fashion and automotive over past years. I call it the "Target playing Field" and believe, that you need to pick a quadrant you want to be in and then start to play by the rules of that game. Let me explain...

Many successful vertical organizations today benefit from principles of job specialization and the division of labor, a cascaded budget structure and a people hierarchy. Strategies are complicated multi-dimensional structures of activities and measures acting against a set of long-term objectives – often projected in 2D to fit in a matrix or a single slide strategy house view. They are then usually broken down into a tree of measures serving as personal goals of managers and their departments. And a manager’s career is based on his or her ability to deliver against these sub-objectives and master a local duty or situation better than others. If everybody does a great job, the company will thrive. This success model has served generations of managers to handle complicated businesses and grow people and organizations by delivering deterministic results based on best practices.

But in a world dominated by ever changing customer demand, connected channel experiences and an exponential development of technology and opportunities, this model is no longer a sufficient winning strategy - at least as long as organizations lay their work out along a supply chain in vertical chunks. The questions “who does what by when?” and “will we stay in budget?” will push most initiatives towards a fixed, thus deterministic set of use cases trying to address the local part of the objective to be achieved. What has served as an insurance in the past to achieve as much as possible through individual partial successes, turns into a trap that will best case create a fragmented portfolio of outcomes, that are not integrated, not customer oriented and not fast or efficient.

We have all seen highly skilled teams and managers backed with budget and stakeholder support engaging in highly motivated cross departmental initiatives focusing solely on the customer value to over time end up in a crunch time delivery of a rudimentary feature set based on a disposable solution architecture ignoring most of the synergetic ideas – done is better than perfect. And often they never re-iterate after the initial press release celebrating the go-live.

Assuming your target playing field is the top right quadrant, successful first steps that qualify as a real minimum viable product (MVP), that over time serve the purpose of customer benefit and economic efficiency most sustainably, usually apply multiple of the following principles:

Capability Mapping

Knowing where to go and how to get there is a great strategic foundation. If you take the time to look at the capabilities required and mapping them against your existing and future organization, you will identify both skills and tools required to succeed. Splitting jobs to be done in horizontal layers of components and capabilities andin vertical solutions gives you end-to-end product responsibility and transparency at the same time.

EnBW, a large German energy company, totally restructured their sales organization in 2016 to a matrix of flexible but integrated skills, mapped and transparent capabilities and services managed as a portfolio to completely re-work the digital customer experience across their three energy brands within 2,5 years to become the market leader in most of their categories.

Joint incentives

It is not always possible to bundle all required accountabilities in one organization unit like at EnBW. Reasons can be size, geographical distribution but also time, change resistance or complex change processes that involve legal restraints. Making teams and departments jointly accountable for the same objective can help to accomplish what each of the individual teams can’t. 

A large German premium fashion brand decided to remove the channel specific sales targets from their e-commerce and retail teams early to enable true multi-channel evolution and thus the anticipated growth.

And a German premium auto maker introduced the concept of a swarm organization and removed personal MBOs to incentify individuals against the objectives of their cross-departmental projects or products – jointly and independent of department, manager and salary.

OKRs

Objectives and key results (OKRs) are a methodology invented by Andy Grove of Intel in the early 1970ies and well described in John Doerr’s book “Measure what Matters”. OKRs make you focus on “why?” you are doing things, take the “how?” you are going to address the objectives into account and are fully transparent to the entire company or group. The approach differs significantly from the average Management by Objectives (MBOs) implementation as the view below illustrates.

OKRs really became famous as a best practice and most valued management tool at Google since 1999 to set ambitious goals and track progress.

Internal APIs - The Secret to Amazon's Success

Unfortunately, not truly framed as key results against an ambitious goal, but very similar and with immense impact, Jeff Bezos of Amazon issued the following mandate sometime around 2002 as a joint objective for all Amazon employees:

1. All teams will henceforth expose their data and functionality through service interfaces.
2. Teams must communicate with each other through these interfaces.
3. There will be no other form of inter-process communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network.
4. It doesn’t matter what technology they use.
5. All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.

The legend goes, that he also mentioned:

• Anyone who doesn’t do this will be fired. Thank you; have a nice day!

Every team of the roughly 7.500 employees at Amazon at the time had to use a technical service interface to communicate with each other. Bezos made every team decouple, define what resources they had, and make them available through an API. Every team within Amazon thus became partner of the other and a potential partner to any other entity or service in the world.

A successful (digital) strategy

A holistic approach to a strategy for the post-digitalization era will make you address the following questions:

1. What role will we play in the future in which ecosystems?
2. How capable are we to get there? 
3. What are the jobs to be done on the way? 
4. And how do we manage the journey? 
5. How do we continue to improve? 

Obviously, you will need to get the hard performance components right. Business case, technology, budget, partnerships and so on. But the soft factors including the humbleness to consider the internal weaknesses and to identify tools and methodologies to overcome or compensate for them, will not just improve the odds of your success. They will replace all the tools and approaches that have stopped working a long time ago, when the world was still only complicated but not complex.

They will make every employees lives better again and – over time - serve as the basis for true resilience and future change readiness (but that is another post).

Sebastian Wohlrapp is the Co-founder and Managing Director of Field 33, the technology company that grooms the FLD 33 standard. FLD 33 leverages platform, crowd, open science and machine to quantify success factors for digital business models and transformation across individual disciplines for sustainable end-to-end success.