How to build ‘customer obsession’ in Operations

Developing customer-centric, digital-first operating models that embed customer preferences throughout the organisation is a key task for most COOs. Here are three ways to get started with one of the most difficult, but rewarding COO tasks.

COOs of today have a lot on their plate: Driving operational efficiency, reducing costs, paving the way for organic growth and/or M&A, implementing sustainability initiatives, fostering innovation, increasing operational resilience, managing risks, and so on.

But one thing is equally important to remember: the customer. After all, in today’s hyperconnected world where customer expectations are at an all-time high, it is critical to put the customer at the centre of Operations. A customer-centric operating model is not just about developing products and services that meet customer needs; it is also about transforming your organisation’s capabilities by bringing together a mix of structural, process and technology changes in a way that aligns to your strategic ambition and delivers the right experience for your target customers.

Paving the way for success
So how can COOs keep customers at the centre of transformation efforts? What does it take to translate new customer-centric strategies into distinct operational tasks? And is it even possible to let customer experience guide your operating model?

Well, it is not easy, for sure – especially since trying to be good at everything only adds complexity, requires additional resources and reduces focus. Even just finetuning your operating model to continuously meet customer needs is challenging and most often requires a set of interconnected choices.

Yet, in spite of the many challenges of customer-centricity, COOs everywhere are engaged in the work to develop customer-centric, digital-first operating models that optimise experience, earn loyalty and enable growth – and at Deloitte we are very lucky to support many of them.

In my view, at least four things characterise these kinds of customer-centric operating models:

• Connected. The best COOs are already building operating models that are explicitly linked to business ambition, operations strategy, and strive for innovative operating constructs to supercharge the customer experience ambition.
• Dynamic. The best COOs also strive to build an operating model that is dynamic and self-learning, leveraging emerging technologies that harness customer and transaction data to simplify and optimise customer experience – and facilitate more efficient and effective interactions.
• Ecosystem-based. Third, organisations are increasingly part of ecosystems that deliver value for customers, often requiring renewed strategic choices by the COO about which capabilities to provide via partnerships versus internally.
• Bold and unconstrained. Finally, guided by the business ambition, successful COOs create an operating model that has a transformation path to a bold vision of the future – an operating model that deliberately looks past current organisational, process and technology constraints to deliver a customer experience that outperforms competition.

How to accelerate progress
The gist of the story: Tomorrow’s COOs will increasingly have to see around corners and position their companies for sustained success, driving their organisations’ growth agenda in much bolder ways than “just” operational excellence. Doing so, as COOs we will need to harness the power of digital technology to explore new strategic possibilities, reset cost structures, identify new market opportunities and, most importantly, improve the overall customer experience to outperform competition.

Here are three things to think about in order to accelerate progress:

1. Work outside-in: First, when trying to increase customer-centricity in your organisation, start by something as simple as articulating performance measures that reflect the customer’s outside-in view of value as opposed to the company’s own inside-out view of products and services. In fact, applying measures of both customer value (business value, experience value, and performance value) AND traditional business outcomes-focused metrics (for example, increasing revenue, increasing tenure, lowering costs etc.) can help COOs produce a comprehensive value scorecard that identifies both customer and company benefits.
2. Secure buy-in: Secondly, a customer-centric operating model typically requires the buy-in of the entire management team under the COO. By applying a customer-segment lens to ongoing management routines (e.g., overall business performance, opportunity reviews, strategic planning, etc.), you will begin to see a sea change in the substance and cadence of key management decisions, with the voice of the customer and the strategic intent of the segment becoming the top-of-mind reference.

Finally, simplify – also for the sake of your customer! Let simplicity be a guiding principle for any decision around customer experience as it will allow you to challenge each process and approach to identify which is the most efficient and best suited for its particular purpose. Doing so effectively, companies can overcome the threat of increasing complexity, which is far too often the root cause of operational challenges, lack of transparency, disjointed handoffs and poor overall customer experience.