Part 3/5: Experience-led Transformation : Growth Hacking for Experience Equity

I see Experience equity as a ‘new’ asset class. It makes sense – Experience Economics was introduced ..; it’s the perfect storm – a low touch env, coupled with #DeFi and #NFTs, a passing of the ‘baton’ between inter-generational leaders; today we require Extreme Empathy to reach out 2 stddev, we are no longer dealing with personalisation, but individualisation #p2p & ecosystems. Just like investors/traders riding out bear/bull markets- the money market- what we know of (how to handle) Experiential equity, we best extrapolate/ forecast given current trends but with a twist this time ( as it revolves around humans.. Trust…complexity & chaos of emotions). We need design. To rely on design – design as a way to reimagine the future. Much like how systems thinking, processes, lean, bpr optimised the Industrial Age, we must hop onto a new S-curve. Org designs, leadership and management theories and constructs from the 60s, 70s – stuff that we’ve been oversweating/over leveraging, won’t get us from here (now) to there (future). Design and Innovation has been largely quiescent but has never been more critical for human-kind.

The Benefits of Experience-led Transformation

The FAANG companies as we know them – they built and leveraged substantial experiential equity over the (short) years; achieving [initial] critical mass by providing singularly satisfying, consistently outstanding experiences – but what’s less apparent: the way we/consumers ‘consumed’ those experiences, also known as our ‘jobs to be done’ has shifted. Much like in making a PC (personal computer) there’s the circuit board, chips, graphics card, storage drive etc – Apple came along many years ago to help us reinvent what a PC is – we ‘hired’ their products/services to do increasingly complex tasks (tasks that could only be solved by supercomputers 60-70 years ago). But what’s interesting is that – if you ask Intel, AMD, Seagate, NVDA (use any component/part maker brand you want) to come up with a PC – they would all offer faster chips, better graphics, more storage etc- we need the Experience to be the Product. Something that Apple did for us, they reinvented the PC many times over.?

China’s biggest tech giants albeit under a regulatory crackdown – continue to serve trillions of customer journeys, and serve them well! They leapfrogged most of what dogged the West e.g. payment & financial systems, credit cards and have in the last 10 years or so, created the most integrated ‘life journey’ ecosystems known. Life journey? Think super-apps that was en vogue a decade ago in China – now it’s unfathomable not to use Alipay, or WeChat to get stuff, every day stuff, done. So we also say, these brands have had a massive headstart building, accruing, investing in Experience Equity as a ‘new’ asset class.?

First and foremost we need to think of XM = CX + EX (these are the major 2 – think of them as a binary star system, accounts 90% of gravitational pull; there are ‘smaller’ entities encircling, e.g Product, Branding etc). For most purposes, XM = CX + EX will hold true. Anyway, I’ve discussed that EX has been ‘neglected’ in the past decade of sorts with most transformational efforts being centred on the customer-centricity, front of house. Some early numbers have shown that these efforts have yielded between 30-35% of resulting upside YoY, meaning there’s ‘dark matter’ unaccounted for. EX. It takes a pandemic to get everyone talking about human centred design, and (re)cementing Trust – now it’s almost all EX related transformational kernels – which is good.

We've irrevocably raised the bar on experience. We're as irritable and impatient as ever; the pandemic really gave us all short fuses. Suffice to say, our general expectations of quality/ experience delivery is higher than ever. It's quite telling really - those minorities that have never experienced the 'edges' of digital transformation, e.g. food delivery, ?well that's all tablestakes now. But there's a flip/ dark side - you're being 'judged' more ostensibly. What was 'good' now gets amplified, talked about, goes viral very quickly. Same with what's 'bad'. The 'market' is generally impatient - winners/losers are determined very quickly; hardly time to get all the fundamentals right (if it ain't already humming - opening up for business online is punishing). Majority of customers say standards for good experiences are higher than they’ve ever been - new players sprouting up overnight; most expect brands and service providers to understand what they need contextually - and meet their (individualised) expectations; and most find positive customer experience superseding price when making a purchase. Clearly experience drives customer value creation and loyalty.

There’s a measure of the efficiency generating experiential equity: Return on Experience (RoX) – or RoE if you prefer. Regardless we need to detach from present-forward RONA biasness; as we’ve seen reducing assets or going asset light drives up profits but at the expense of the incumbent (the big Detroit automakers being crushed by Toyota, mini mills taking over the steel industry etc etc). We are certain experience economics is mandatory, that it’s not on the balance sheet (today) doesn’t surprise me. But make no mistake it’s hygiene as we navigate these current lowtouch conditions. Experience-driven businesses amass~2X cagr higher YoY financial value growth, attesting these to increasingly equitable journeys (which contain distinct experiences and episodes such as repurchase, buying/ activating / usage etc). Meaning? Meaning plugging these experience gaps is progitable(but not necessarily in the short term, but focus on equity growth) . The leadership must demonstrate relentless conviction executing towards a shared purpose; if we get the direction #northstar wrong it’s very obvious as value and equity is destroyed. Something we describe as “getting better and better at the wrong things!”

What’s the so what? The logic and rules of industry and economies past no longer holds. We are in a transition phase, think of it as grace period, to make that hop onto the new S curve. It’s no longer optional, the climate has drastically changed! : the org design we’ve been adapting since the early 60s will no longer work. Think of it as humans discovering warp & interstellar travel capability. If you’re a Trekkie like me that means we’ve no vehicle in existence capable of handling that kind of speeds. Analogy: consumers today are individualised, instantaneous & self curating. They want to own their own experiences with Brand’s. They want their own personal piece of asset. That’s what apple has done- they’re in fact a luxury brand not consumer electronics. With DeFi and NFTs (part 5/5) the demands of our vessel going at warp speed are tremendous. The levels of complexity and chaos that needs to be solved – in the backroom & messy middle – to provide and render the simplest, most elegant of experiences and services!?

Common Challenges Transforming Experiences, sustainably..

Some of the common gripes heard from execs having done this 20+ years:?

1. XM is intensive (actually I say this, set expectations first before clients get too excited) is a downtrodden, recursive, repetitive, systematic, meticulous (the science !) , daunting & thankless (we’re talking beyond quick wins) task that involves every single muscle of the organisational mind, body and soul. I often use a fitness program/gym analogy. How and where do we even start?
2. Skills and people; beyond those few ‘quick wins’ capturing board attention, how do we actually scale and sustainably do this – day in, day out – for years and years. Yeah, it’s an Infinite Game so there’s no Finish. No Finish line. It’s quite hard for the current cadre of present-forward leaders to wrap their heads around – “there’s no end game”?
3. Economics of experience. The % and upside we promised the Board sounds rosy- that got most of the C suites another 2 year extension but how do we know if we are making progress? How do I measure this? Read: how do we report profits and balance sheet impact.?

Where to Start with Experience-Led Transformation

There is such a thing as XM maturity – it’s not so much ‘where’ but to establish the ‘gap’ aka potential unlocked at end-state. It’s a way to directionally ascertain strategies and tactics (and there will be plenty..); [continuously] start & prioritise solutions to close experience gaps – also sequencing efforts producing a more robust timeline. I can’t stress how critical this is in a multi-year, ongoing, large-scale transformations. Typically, we have 6 criteria that defining an org’s?XM?maturity:

• Purpose ->?Vision & Strategy: to what degree does the org (especially founders and CEO- #Purpose) share a XM-centric vision and govern XM with a formal, top-down, enterprise-wide process? Sounds clunky but it’s not easy to as I say, transpose and lay an org on its belly – and look solely at Customer P&L (new roles such as CCO, journey leads come into play).?
• People/ Culture/ Employee Experience (EX):?to what degree does the focus on XM drive the formal and informal cultural rituals and processes – big words for agile rituals, but not a necessity ~ as de riguer ; what’s more important – the % of the org composition of XM dedicated <multi-disciplinary> teams, cross-functional integration (easy to say, but always work in progress), is consistently adopted?
• Ability to dig into the details, downtrodden details. (Design & Deliver aka Closing Experience?Gaps – One at a Time): to what degree does the org translate the XM vision to detailed blueprints – there’s % attenuation at all junctures, e.g. Purpose > Vision > Blueprints > Execution > Measurement : and use it to manage the day-to-day AgileOps operations and understand the degree to which the delivery matches the (journey, service, experience) designers’ intention and deliver on the specific customers’ jobs to be done – yes jobs/jobs map precedence over needs/wants!?
• X+O, Experience Data Fabric/Spectrums :?to what degree does the organization have clear alignment on the jobs x job maps x personas x customer segment(s), their priorities, and assimilate, synthesise multiple + new spectrums of data to track the holistic experience across journeys – which are transient and intertwined (as we play on average >10 distinct roles in/across ecosystems) “, omni+opti channels, and have a clear data integration, live dashboard reporting, socialization & governance process in place?
• Journey Science *Analytics, Measurements & Continuous Improvements/ Enterprise Feedback Loop:?to what degree does the org utilise integrated data and advanced analytics (Desc, Predictive, Prescriptive, Cognitive AI) to guide continuous decision mgt, investment prioritisation , improvement process and put bookends (I am realistic) on RoX, RoE, CLTV and RONA ROI? There will be baskets/tranches of vanity/non metrics, we need to choose, almost as if we’re fitting a tailored suit to the orgs’ body/Purpose – sets of diff metrics will have diff ease/implementation dynamics, which we need to retrofit.?
• Agile, DevOps, AgileOps, DevSecOps, Execution Management:?this is where rubber meets road; to what degree is the XM process dynamic, real-time, based on maximising benefits realisation/ value capture and is tied to key individual incentives? The CTrO (Chief Transformation) role takes charge of multiple backlogs across journeys/front+middle+back office. He/she mediates across the entire C suite, typically works ‘closest’ with the CDO, CxO (front office) and CTO/CIO, with a dotted line to the Board, or at least the CEO.?

The Power of Organisational Alignment

Most org designs as I’ve said are adaptations from the 60s and 70s equipped for lean ops and efficiency. Again using the PC analogy, they’re made up of siloed functionality e.g. chips, graphics cards, storage units and typically do not have full line of sight what the customer is trying to achieve. There’s sales, there’s service, there’s marketing – each ‘lobbing” metrics at one another – but talking a different language. These are reactionary constructs that we need to tear down, it ain’t going to be easy. But we need a Journey-led Org in the next 5-10 years. That’s pronto in pandemic timelines.?

Getting sponsorship for those first few sprints and pods- selected user stories and epics = less of a challenge??. Industrialising, broad launching these efforts org wide = huge inertia. We have to understand the current cadre of leadership, even their education:indoctrination is biased towards cost optimisation and efficiencies. The Welches of past and their heydays. Nothing wrong with that all- exemplary for a different time. What got us here won’t get us there! But what’s obvious is that without leadership alignment on the purpose>vision of transforming XM and carte blanc’ing commensurate investments by creating a case for change is crucial (XM is in itself a ‘low hanging fruit’ or today, a hanging man’s mandate)– without leadership alignment and focus businesses prolong the vicious cycle and incur wasteful costs.

Once orgs achieve (somewhat a degree of) alignment – I discuss +/-15 degrees of North – , the next step must be to prioritise the most critical use cases (nothing but wrappers and initiatives to close experience gaps identified) and identifies the things standing in the way from delivering against these use cases. Approaching XM methodically, scientifically this (data driven) way ensures that the transformation will have the greatest (optimal, as greatest might not be optimal) impact and more importantly allows for the creation of a targeted initiative pipeline to close these experience gaps. Trust me, there will be a plethora of these initiatives, and underlying, a gazillion pain points to solve for. Never ending.?

The key is to have everyone talking more or less the same language; to make xm the lingua franca. Sometimes I feel it’s like the Tower of Babel- we tried so hard and God made us all speak different languages ???

With the same language, once the hieroglyphs to that settles, we are able to prioritise using data driven decisions . What’s ‘painful’ what’s voluminous means more or less the same things to everyone across the transposed journey; or departments if you must. I suggest having a test/control, some parts Journey-led vs traditional departments sales/service/marketing and see how they crunch on a set of user stories. Track how efficient they become over time. Hopefully the Journey-led teams will ‘infect’ the rest of the org, in fact we might use % of Journeys executed as a prelim sub metric to get everyone going.?

Approach to Transform Experiences

Here are some ‘proven’ ways – just empirical – to consider:

1. Lead with the Customer:?focus on their jobs to some, what are they trying to solve; and form a new lattice in persona x archetype x job maps: fine tuning the ‘segmentation’ to lend more insights about customers (which could mean Employees!) , identifying their needs, wants and motivations – innovate the experience in journeys/jobs. Do not innovate your product/service just yet.?
2. Economics. Balance Sheet Impact:?consider journey orchestration/science to implement metrics and track and trace. Tie that back to benefits realisation and value capture. Be greedy – feed your Experience Calculator, CJO with as much data/spectrums as possible. There’s a “data model” we can talk about but don’t start with that- the actual discovery process, combing through data is a right of passage so don’t miss out on that!?
3. Decision Management: insights to action. I can’t stress that enuf. The conviction and commitment to act on insights; the only way to accrue and realise benefits. Else it stays well, a piece of paper(s). This is integral to execution – the insights gained through Journey Analytics must be syndicated to all business leaders. Everyone should have part of the personal metrics tied to XM; the higher up the leader, the bigger the % pegged to outcomes/Experience equity. That itself is an oxymoron, as XM is long term, and we still report short term quarterly profits. Completely counter intuitive.?

Bottom line - the elevated importance and urgency of quiescent experience-led transformations are game clinchers (Infinite Game) for the next evolution of the economy. We've already heard lots about the Experience Economy - but it so happens we're in an ultra-low touch epoch/segment. Get started, and get started quick - time in the market vs timing the market. Meaning, start compounding Experience Equity. In the near future, say 3-5 years from now, RoX will definitely make an appearance in our balance and income sheets- taking it's rightful place amongst other P/L 'luminaries' such as PE, ROE and RONA ;) it's really not about the product/service - its about progress. It's actually more about the Job your customers are trying to solve!