(EP 22) Rich Hawker – How do you create spectacular Customer Experiences?

Welcome to the #CriticalFewActions™ to improve your business podcast. I’m John Downes and I’m here to help you cut through the overwhelm and prioritize what matters most to improve your business. Let’s get started and discover the #CriticalFewActions™ that have the biggest impact.

I’m very excited to introduce my guest, Rich Hawker, who worked with me at Deloitte early in his career. He was later an associate partner at strategy consulting legend Bain Co. Rich is driven to create magical new experiences for customers of the world’s most relied upon organizations and has led programs that brought delight to customers, improved their returns, created new growth and strengthened their operations.

Rich. Welcome.

Thanks, John. Wonderful to be talking to you.

So Rich, how did you get into customer experience design?

I love solving problems, and I love creating beautiful things. And so, opportunities to make people’s daily lives better fits those two desires. And certainly some of the greatest opportunities to do that is with large organizations that have often millions of people who rely on them, who have imperfect experiences.

And so that is now the space in which I work and it’s wonderful. How did I get into that? I started in professional services at Deloitte where you and I met and doing that project work exposed me to a number of different types of business problems. And over time I just gravitated toward the ones that had much more subjective problems to solve.

What I mean by that, human problems where you can’t put them into spreadsheets that gives you certain answer. So I started to do much more of this work. I joined Bain Company after Deloitte Consulting, as you said, I ended up specializing this area and became the practice lead for one of their service design departments that did this work specifically. But I still had a bit of an itch.

We were doing wonderful work in this space. But we were still using tools that came directly from the executive’s playbook or structured problem solving or all the training approaches that consultants get. While that was yielding results, it wasn’t generating enough opportunities to create magic in people’s lives. A few of us about 10 years ago, started experimenting with techniques that the world now knows as Design Thinking, Human Centered Design, and doing it in a way that was very agile, experimental, at the same time that Agile was, jumping from software into the mainstream.

We experimented with these techniques. It worked. It allowed me to fuse. The left and right side of my brain. The structured analytical deductive side with the creative, intuitive, wonderfully original side. And that’s the space that I have loved to remain in.

The work that I do now is fulfilling and valuable to the companies that I help.

Fantastic. So, tell me a bit more. What is customer experience design? There is a straightforward definition and then there’s a sophisticated bunch of tools and disciplines that you need to throw at it. It means being able to design and then deliver the experiences that an organization’s customers will have when they have particular needs they need fulfilling in their lives and we define those needs is the ones where those organizations play a role.

It’s very easy to conceive of if you think about an airline, or a telco, or a utility, or a software provider. They will have products and services that we all consume, and therefore we all have an experience through that consumption. So that’s a relatively simple way of looking at it. The way that you actually make those experiences better for millions of people.

That’s where it gets sophisticated, and that’s where you need a set of tools that will guide you from one end to the other. So you can do this reliably and at scale.

Okay. So what’s the benefit of customer experience design that businesses are actually achieving? The benefits ought to be clear. I mean, irrespective of a mission statement, every company or organization is going to have customers. This is an imperative that you can’t get around. I’ve tried to think myself, what is the business out there that has so many customers?

And the closest I come to, I think is a lighthouse operator, but they still have customers, right? You can’t get away from serving some constituent because of the thing you put out into the market. So the first imperative, you only have a right to exist if you have customers that want to deal with you. The second two imperatives are a bit more measurable and apparent. First of all, customer centered businesses make more money and that is undeniable. The research is back. There is an empirical link between business outcomes and happy customers. And that is both on the side of improving revenues and saving costs. Experience and economic drivers are wonderful in that they move together.

That’s the second imperative. The third one is it’s the reason why people stay at work. It’s the reason why they stay in your organization. If you didn’t do a good job of looking after your customers, then your employees, particularly your front line, can’t discharge their mission. They can’t get the most out of their own careers and, you know, professional purpose.

If you’re particularly impaired at looking after your customers and this is again a good example when you think about the front line, they only have finite willpower and resilience. If you can’t do a good job for your customers and you have more unhappy or furious customers, eight phone calls out of ten.

Eventually that’s going to create a psychological barrier for you to be able to turn up and actually do the thing you’re paid to do. So the wonderful thing is there is a virtuous circle between happy customers and happy employees.

And profitability?

Indeed. And the good news is, as I said, these things are measurable. So it’s apparent and measurable. It’s an easy mission to pursue.

So tell us about your approach. How do you go about this process? If I was to start at the ground floor with an organization at the start of this journey, there’s four areas that I would want to explore and then, work within for a company. The first one is to allow them to properly understand their customer challenge, who their customers are, what they want and what their expectations are.

That sounds obvious but being able to do that at a disaggregated level, at which you can make proper decisions for the good of the customer is difficult. And so you need to find the tools, the analysis, the research, the insights to be able to dimension your customer populations in a way that they become meaningful cohorts.

The next point, is to be able to create experience and economic performance levers that allow you to understand exactly how you’re affecting the customer experience for all those people.

How do you mean? Hmm.

So, let’s use an example of a service interaction, we can call it a service journey where you call a provider and want to change your address with them.

You’ve moved house. They need to have your address because they need to correspond with you. This is a need to be fulfilled on behalf of the customer. They can wake up and on their to do list that day is I need to change my address with my providers.

Very easy, and that’s what a customer journey ought to be bounded by that need. The performance levers here can be things like, when that interaction happens, you want to get it right the first time. You don’t want the customer having to walk into your branch or make a separate phone call again because it didn’t happen. We want to avoid unwanted customer effort as well as unwanted frontline effort. Not only get it right the first time, but do it as quickly as you can, or as fewer keystrokes as I would need to do. Ideally, automate this away if it’s a chore that I don’t want to have part of my to do list anyway. And so these things become the performance levers that we care about. So it could be right first time, it could be cycle time, it could then be things like how you create an emotionally resonant environment during that experience. All of those things typically have economic and experiential outcomes that move in step.

Those three areas I just mentioned, you can imagine, makes for a better customer experience, but also saves money because you’re avoiding errors or unwanted effort. I’ve just talked about body of activity number one in the approach. Understand the customer challenge and put some sophistication around how you bound the units of experience that those customers perceive.

Step number two, which can be done in parallel with number one, depending on where you’re at is to set a customer led ambition. This is separate from a corporate strategy or publicly available mission statement, those sorts of things or your brand vision.

This is where you are determining the level of customer excellence that you believe you can achieve that will create the economic outcomes your company needs to pursue. This could be in reaction to market realities, or you could be thinking about the next wave of growth that your company can pursue. One way or the other, you’re able to render an ambition in customer terms that can be measurable and therefore cascadable down through the organization.

So people understand what choices they can make in pursuit of that ambition. There’s a few pitfalls here. You can’t make it motherhood. I don’t want to see things like we’re going to treat our customers beautifully, or we’re going to be number one in service. That’s great. And if you achieve that, you’ve done well. But that’s not an example of the ambition that we’re going to be able to sit here.

There’s a bit more science behind it than that. And the last part of that ambition is you have to render it in a way that is going to inspire commitment in the company. Customer experience is a team sport, not one person or department.

You’re going to have to bring the organization along with you. Therefore you need a rallying ambition that mobilizes those parts of the organization in the right way. That’s the frontline middle management, executive, products, services, digital channels, enabling groups. All of them typically have some stake in the mission line.

So that’s numbers one and two work out what your customers want to see. and set a customer ambition. They’re your initial pieces of work that you want to wrestle with the ground. After that, number three is actually improve the lives of your customers, your workers and your shareholders.

Those three groups can be advantaged by this type of work at the same time. This is where you have to start doing the heavy lifting, the design and the delivery of improvement programs in line with the customer ambition that you’ve set. Service designers, digital folks, channel improvers, you know, business process hardheads all have a role to play in order to make that better. Underpinning all of these is the need to have customer and operations infrastructure running nicely to make it easy to design and deliver improvements. And that customer and operational infrastructure are things like a customer learning system like a net promoter system that runs off a net promoter score feedback loops.

So decision makers are actually learning about what the, customers in front line of feeling and in a way that allows you to make better decisions rapidly the next time. Experimentation, support, agile ways of working and that’s not their buzzwords, by the way, but they actually mean something here because customers don’t stand still.

They’re annoying in that their expectations are always changing at least from a problem solving perspective, and they learn about new things that are outside of your sector. And so you have to move quickly to keep your finger on the pulse of how customer populations are behaving and what they want so you can pivot one way or the other. And the final part of the infrastructure is customer oriented leadership and an operating model. Often, in my experience, a CEO or an executive will buy into this and evangelize what this can mean for the company. And at the other end, you have a frontline that lives this every day.

So they’re all in. They know what it means to do well by the customer because they’re the first to feel the benefits or otherwise, if it goes right or wrong. And then there’s, 10 or 20 steps in between those two groups of folks that are probably well intended, but don’t have the tools.

Yeah.

There’s a great deal of work to build the infrastructure with that group as well, to make sure that there is a sponsorship spine between the executive and the frontline that organizes everybody in pursuit of the right customer mission. So just to recap, John, I just talked about the four areas.

Understand your customer challenge, set a customer led ambition, do the design and delivery work that improves the lives of the constituents of that ambition, customers, workers, and shareholders, and install or upgrade the customer and operations infrastructure that supports everything.

And then of course, measure and monitor.

Exactly. And you can’t get enough of that in this business

Yeah.

You need special ways of doing that. We’re not measuring and monitoring widgets coming off a production line that behave in unsurprising ways. We are actually dealing with millions of heterogeneous, irrational, emotional, meat based widgets that behave in surprising ways.

And that just elevates the necessary sophistication of your monitoring. And that’s half the fun to do that work. Excellent. So it’s quite a rigorous approach.

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Can you walk me through a client example so that we can make this quite tangible. I’ve got a few examples.

From a few sectors that I’ve worked in. I’ll run through a couple of them because each one hits a specific area that I’ve outlined. One of the more recent ones was when I was working with a life and insurance company over the last couple of years, that is an international company, but I was dealing with their Asian business that operates in about eight or 10 Asian markets.

And so that was a multi year program to completely redefine all of the service experiences that an insurer would provide to its customer groups.So we ended up having to set an ambition for each market in Asia, because they all had different expectations and structural, dynamics that meant we could pursue different types of outcomes.

Now that was a whole heap of work just in and of itself. Walking through where the company sat, what its potential could be based on analogies and other sources of inspiration, even internal benchmarks of what they were able to achieve elsewhere, as well as sprinkling in some of that magic that enabled them to think more differently and courageously about what it would actually mean for people to deal with that company.

Remembering life and health insurance. Turns up in people’s lives in incredibly important or infrequent ways, you have to get it right. And then we ended up running a structured process of defining all of those customer journeys based on actual needs for these insurance products and stratified all of the customers

according to those needs. That by itself uncovered a great breadth of performance variability when we started to look at the customer needs according to the disaggregated needs for which they were showing up to the provider’s door. Once we did that, that was much of the work, setting individual ambitions for each one of their markets, understanding and then disaggregating the customer basis according to needs based journeys.

And then running a design and delivery program that chipped away at the most important areas of value in each one of those markets and journeys. That work is ongoing. There was a great deal of technology intervention that ended up being brought to bear, but the results were in the tens of millions.

And that was just in savings from avoiding unwanted, often paper based manual processes that people did not want to be part of.

Yeah.

So that’s one example.

Hmm.

Another example that hits much more of that infrastructure that I talked about was I was working for a US telco a couple of years ago. I like this example because this is probably one of the biggest companies I’ve ever worked for.

It’s one of the top five volume generators of customer interactions in the world. It’s a big deal. So you would imagine that the frontline, service operation environment they had was incredibly big sophisticated and a little bit haywire in some places. They had a problem where the customer experience, and this is to do with the call centers specifically, the customer experience was not good across most of their journey types, the needs for which they were being called.

And it was hard for them to understand because they were paying well. Their frontline was well trained and well tenured, which makes a big difference in call centers. Things like attrition, absentees, and all those operational metrics looked good. Objectively, it was a well set up and run set of call centers.

But that wasn’t translating to happy customers that only had to call once to have their tasks addressed. And after a little bit of scratching around, I mean months of night shift in the Philippines, which is a separate story. We determined that the very simple metrics for which the frontline were held to account were not set up with customer outcomes in mind.

Yeah.

And so often we see something like handling time, which is a massive driver of cost in a call center, how quickly a phone conversation can be wrapped up ahead of other customer oriented metrics. This made sense because the client had gone through decades of cost containment strategies a natural consequence of a top down imperative like that.

But at the frontline, it was counterproductive. Because it meant the frontline could not attend to the task at hand. They felt like they had to cut corners or otherwise impair the experience because they’re pursuing pretty much a race to hang up the phone. And that was an easy fix once that was identified to change that.

Now, some of the managers we’re worried because they would lose a tight grip on a particular cost driver, but that cost driver of handling time was replaced with a much larger cost outcome of fewer phone calls. Why? Because the phone calls that were happening were better, more productive, more emotionally resonant with the folks on the other end of the phone, a much better experience.

Now you roll that out across. An organization this size and the results become quite compelling very quickly.

Yeah. And of course, the, customer experience dramatically improves call volume significantly reduces cost of delivery of support service, reduces and far more importantly, the employees actually feel like they’re making a real contribution,

Exactly. Right.

Which beefs up their resilience to handle challenging calls.

It also gives them a sense of purpose and fulfillment.

Exactly right. It’s obvious when you talk about it like that. Why is it still hard though? Because often the inputs and consequences of such choices are far removed from the executive or the decision makers, or there isn’t that measurement and monitoring infrastructure, as you mentioned earlier, in place.

It’s reliable enough to tell you this is the problem, not that.

Yeah.

There’s always work to be done to get some of those foundational elements installed to light up the dashboard to say this is actually what’s going on.

We’ve got a rigorous approach that helps navigate us from where we are today to where we want to be and the experiences from a customer and employee and a performance perspective. What can go wrong with that? Because I’m sure that Nirvana isn’t just one step away.

There are pitfalls and frequently occurring failure patterns in this space and that’s unfortunately unsurprising. Both you and I, John, are likely to go through at some point today some experience with a service provider that will be imperfect. I guarantee that will happen and your listeners may also suffer the same thing.

That’s because the world has, yet to achieve perfection here. From what I have seen in this area, those four steps that I walk through typically have their own points of failure for the CEOs and decision makers to, get this right. And It starts with, understanding customers properly, that’s the first area that I see.

A great deal of rework often has to be done, and it’s because companies through a collection of very explainable historical reasons have trouble correctly identifying customers actual units of experience.

Hmm. Customer journeys is a well trodden term in customer experience work, and a journey’s meant to represent that authentic unit of experience.

Now, that by itself is fraught because, depending on who you ask, a journey can mean very different things. To me, it’s very easy. A journey is just a journey. The expression of a need through to its fulfillment. That’s the easiest way of thinking about it. And those needs are varied depending on the context, the customer, the provider.

It might be that you need to explore for the first time, a new product or service. It might be that you actually have a need to use the product or service. I need to go for a run with my new running shoes, or I need to travel from Melbourne to Sydney on this airline. They are episodes where you are actually paying money to do the thing that you want to do.

And they’re all the service episodes. I need to be able to modify or manage my relationship with the provider. Something has gone wrong. I need to have a problem resolved or I need to cancel the service or relationship and a few other flavors. But that’s the easiest way to think of a unit of experience.

And most companies aren’t able to perceive those units, much less report on them or make good decisions. Why? Because general ledgers aren’t set up to account for units of experience like that. Organizationally, companies don’t have a structural responsibility for those needs typically. Now that is explainable.

Accounting has been around for about 400 years as a discipline. Customer experience, maybe 20 or 30 years. So the little puppy dog still has a bit of work to do in, facing off against a 600 pound double entry bookkeeping gorilla. So that’s an explainable reason, but there is ways to make that work.

And some clear thinking will get you to be able to identify those. So that’s pitfall number one. Not being able to understand that need and instead focusing on interactions or cost drivers or customer cohorts instead as the operative leader. The next one to do with setting that customer led ambition

is too often, people don’t know exactly what they want because I haven’t seen the empirical facts or insights that allow you to draw a line between today’s start point and where they want to go. The consequence of that are beautiful sounding, inarguable vision statements that are motherhood.

I gave an example a few minutes ago and they sound good. No one can ever prove them wrong, but they don’t stimulate action because no one knows exactly what to do about it. We’re going to have the happiest customers in the world. I believe it. I want that too, but where do I start? What do I do next?

What investment should I make to pursue that thing? Ambitions can suffer a lack of sophistication, which can, mean people lose faith in that mission. On the design and delivery front, are often separated.

When people talk about customer experience design, they think about workshops and post it notes producing beautiful posters of nice clip art and people, clapping and smiling. That is a large part of the design profession. I shouldn’t be dismissive that all has an important role, but that can’t be separated from the backstage plumbing that has to go into the onstage experiential design.

And so those backstage elements of human digital policy process underlying systems. They should be designed for simultaneously with the on site and the on stage experiential design. If nothing else, you will enjoy fewer iterations between the designers and engineering department. Plus, you’ll get a better answer because we then have problem solvers looking at the same problem from different angles.

Yeah.

This best done fused with on stage and backstage. Separating those, especially if you outsource that work to a design shop, will mean you will always get beautiful artifacts back. That then people will be scratching their head understanding how to operate.

Yeah. Another area of design.

I fall into this trap a little bit myself. Emotion design matters so much.

Emotion design.

It’s how you design specifically to make people feel more positive things and fewer negative things.

There is such upside in getting this right. If you think about emotions, having the greatest impact on behaviors and behaviors of customers having the greatest impact on how much money you make, if they like you or they don’t, if they stay with you or they don’t, then emotions need special attention.

It’s an explainable pitfall to avoid looking at emotions because, there is no decoding and quantifying of emotional inputs and outputs. It’s really hard. It doesn’t turn up neatly in a spreadsheet where you can make a decision because that number looks right, that one doesn’t. Therefore we’ll pursue the outcome that gives us that number.

This is an ongoing discipline that is evolving and getting better. Specialists are out there that can do this work. Detecting emotions, understanding what it means, and making good decisions on their behalf. Unless you’re a psychopath, chances are you feel emotions yourself.

And that’s a start. But to be able to design reliably and at scale an emotional environment is difficult, but necessary.

That sounds like a complete field and, approach in itself. It is, and believe me, I wish I went back and did a PhD in neuroscience, because the technical facts about this are beyond me, but I still haven’t found that perfect book or paper or scientists or anyone that says, yep here it is, I’ve decoded it, here are the fingerprints of emotions, it fits on a nice wheel that’s rainbow colored, you just spin it and that’s your answer and off you go.

I wish it was that easy, but maybe artificial intelligence ironically plugs that gap. We have to do it the old way, the manual way.

Yes, I think perhaps I might be the shortcut to that but I suspect that actually that’s a conversation for another day. So they’re the core elements of what can go wrong. Anything else that we’ve missed on that.

Exactly. Yeah last point is not having a way to understand and learn from customers. So you can make great decisions but you need to know that you’re making them. More important, you need to know if you’re not making them. And so you need typically high velocity feedback loops that give you the information back again.

And that can be both quantitative information, but as well as proper visceral insights coming from your frontline and customers. Whatever it is, you need a machine that taps into the feelings of your frontline and customers and feeds it back to the decision makers reliably. And that’s difficult.

That’s, something that general ledgers don’t do, but there are plenty of ways of doing this. Voice of customer platforms, net promoter scores, other dipsticks you can thrust in. All of these things have a role to play in getting reliable measurement. So if I’m leading an organization, how can I get ready for a customer experience design process? What’s going to help me be successful?

One is, make sure you know who your customers are. You’ve got to put together the facts that you have on your customers, their needs and their expectations.

Customer’s needs and expectations is very simple. Three things to look at that does take some insight to actually unpack properly. And then confirm if you’re meeting those. So where are you doing a good job? Where are you not? It’s the fact base that starts where to look at next. The second one I do is find the people in your organization who can genuinely make a difference here. So, as I said earlier, CX isn’t a team sport. You need to create a working group of people who are senior enough to make wide ranging decisions, but also representative of all areas that will have a stake in the outcome, both an input and as a beneficiary down the road.

Get your working team together, and if they’re not on the executive or the top rungs of the company, make sure they’re supported visibly to do this work.

Yeah.

And then you need to set up a way to directly tap into your customers and your frontline if you don’t have a well oiled machine, because soon enough you’re going to be asking them some questions and gauging their reactions. The last preparatory step is to apply some clear thinking into those customer behaviors that you find, or you believe are desirable, that actually beneficially move the company’s results. So, identifying those experience and economic performance levers in a way that’s, mutually exclusive, collectively exhaustive, per journey type

that you have at your disposal to pull in different combinations, because that allows you then to start running hypotheses, scenarios, ultimately these are going to be the levers that will inform your ambition. Once you have those identified, everything becomes demystified in terms of the things that you can then do.

Can you give me a, for instance on that Rich?

So again, coming back to the major things that affect journeys, make them right first time, avoid unwanted journeys, get the channel mix right, some channels are more appropriate and cheaper than others and do a good job. I’d start with that, just journey right first time, channel mix, avoidance of unwanted journeys.

There are three performance levers that are perfectly in step both experientially and economically. There are many other ones that are particular to certain needs, but that’s a good, holy Trinity to start with.

Fantastic. So Rich, customer experience design is essential, but not simple. How do you help?

I’ve experienced all of the things I’ve just walked through. I help companies and organizations do all of this. Some of them are small, but rapidly getting bigger. Others are ginormous already and have, you know, lost touch with the millions of folks they’re trying to help.

The support that I can give is fairly wide ranging. It comes in several formats. I advise companies on many of these steps. I run teams that do much of this work on behalf of my clients. And I’ve also been an executive in charge of customer experience for one of Australia’s largest listed companies.

And so I’ve got some applied understanding of the sorts of decisions that an executive will face when pursuing this mission. I’ve got experience in all different flavors of how this mission shows up and what can be done about it. So tell me if a CEO is looking to drive, better customer experience in their organization, what #CriticalFewActions™ should they start tomorrow if they did nothing else? It’s largely the same points I made a little earlier to get, CX ready,

Yeah.

Get the fact base understood of what customers want, their needs, their expectations, get your group of decision makers that have genuine motivation and authority to make the world better in pursuing this. Work out how you can directly and quickly tap into customers and front line.

And then work out the levers at your disposal. The extra one that I’d add for the critical view is get in touch. I can help.

Yeah, good. Rich, that’s been really helpful. And I’ve learned a lot through this process. So thank you so much for your time. I really appreciate it.

It’s been my pleasure. I love talking about this. I love doing this work. There’s always fertile ground to tread. Excellent. Thank you.

John, all the best.

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