7 Components of Customer-Centric Operating Models

As companies across most industries continue to evolve their business strategies, new practices are required to deliver value to today’s more tech driven customers. Very often it means moving beyond “translating strategy into execution” and into “we better close the gap with our customers or we’ll be irrelevant.” In order to sell more, business leaders are executing more customer-centric strategies that are so disruptive entirely new business models are created (Uber, Amazon, Blue Apron, and AirBnb are representative examples). These new strategies and business models are designed to close the gap between customer expectations and the products and services being brought to market.

But what happens when new strategies require an existing businesses to elevate, modernize, and change in order to be more relevant to customers?

These business strategies often require implementation of more adaptive and scalable operating models — especially within shared services organizations that act as a “supply chain” behind growth oriented functions such as sales, product, marketing, service, and consulting (where perceived value is monetized).

What’s an Operating Model?

An operating model is the execution-focused operational design that activates and delivers on the organization’s business strategy. While this may seem academic, the reality is anything but. If customers (and ultimately the customer experience) are the focal point of new business strategies, modern operating models also put the customer at the center of how we work. And unfortunately, if your customers were allowed to participate inside your company, many of our processes, people, and technologies wouldn’t make the customer-centric cut. For example:

  • What if your customers read your team’s email and messaging inbox? What value would they “see”? Most likely, none.
  • What if your customers attended your team meetings? What value do those meetings create to them? Most likely, they’re a waste of time from a customer’s perspective.
  • What if your customers unpacked your workflows and processes? Most likely, they would wonder why your company has made things so complex.
  • What if your customers demanded to know what value they’re getting from every employee they’re paying for? Most likely, employees would not be able to explain the value they personally create for each individual customer.

Let’s face it. Most (not all) people working within the company define their value based on their position in the organizational chart, hierarchy of divisions, departments, and management structures. But the problem is, 100% of your customers don’t care how you’re organized. They just want the value.

The organizational structures of yesterday aren’t adequate to align to the customer’s experience of today.

It’s time to revisit our thinking. Leaders know they have to “break down silos” and “embed more design thinking.” But, what leaders need to do is drive change in how cross-functional teams work and how those cross-functional teams deliver value to customers. This is especially true in enablement functions such as Sales Enablement, Learning & Development, Knowledge Management, and employee communications (to name a few). It’s highly likely these functions need to re-think their alignment to the new customer-centric business strategies they support. Perhaps in doing so, the relationship can also work the other way around, whereas ideas for operating model improvements can also lead to changes in business strategy?

To align shared services functions to the business strategy, our team has focused on elevating and modernizing 7 components of more customer-centric operating models (we have a background in learning, enablement, and organizational design that helps us accelerate execution strategies with people who support more customer-intimate business strategies). These 7 components require investments in time, effort, and resources in order to evolve to meet, or exceed, customer expectations. They are:

Component 1: Service Capabilities

These are investments required to modernize the way services are delivered to the business. These can be L&D services, sales enablement services, onboarding services, quality assurance services, and even program management services (to name a few). Most shared services functions aren’t in the services business. They’re ‘product pushers’ who expect internal customers (and external customers) to find value in what they’re doing, instead of being maniacal about adding the right value to improve the experiences of the customers they support. Ideally these service capabilities support critical business workflows aligned to the customer’s journey and are linked to measurable outcomes: such as increasing employee skills, improving product launch results, accelerating order-to-cash processes end to end.

Component 2: Organization

Investments to modernize the organizational structure including roles, responsibilities, reporting relationships, culture and governance model required to deliver services aligned to the business strategy.

Component 3: People

Investments in plans and role specifications supporting the recruitment, development, and retention of human capital required to execute the future vision, mission, and operating model of the function.

Component 4: Processes

Processes fall into 2 groups:

  • Service management processes: These are investments necessary to build and standardize the processes involved in managing services to ensure services are aligned to achieve business outcomes desired by key stakeholders. Includes catalog management, financial management, SLAs, demand / availability / capacity management, help desk for end-user support, business relationship management for consulting support
  • Service delivery processes: This includes the investments necessary to standardize the agile and collaborative teaming involved in building and delivering services that achieve business outcomes. This includes processes to manage requirements, design and build different service methods, quality assurance and user acceptance testing, and maintenance of existing services to align with changing needs of the business.

Component 5: Technology

Investments to standardize, modernize on technology and management tools used by a variety of different teams involved in the development and delivery of services. Technology can help break down silos, and it needs to enable customer-centric value. This includes hardware, software, and devices supporting content development and delivery platforms, authoring tools, portals, libraries of content, and learning enablement technologies and integration with other platforms such as ERP planning, candidate application software, and performance management platforms.

Component 6: Infrastructure

Investments to modernize training infrastructure including physical facilities, conferencing spaces, classrooms, and associated physical assets such equipment, office furniture and supplies. This is more important than most executives realize — especially in environments where new creative skills such as design thinking, collaborative problem solving, and agile development are required.

Component 7: Performance Measures

Investments to define, measure, and report service performance measures and service levels (SLAs) that are aligned with defined business objectives. Performance measures and reports provide insight, are actionable, and improve decision-making

What’s the Impact?

As leaders begin to transform from a siloed approach to a more cross-functional and services-oriented approach, they can expect:

  1. More business impact: A modern operating model will drive measurable business impact through a new operating model that evolves the services function that will enable the organization to transform the customer experience.
  2. More efficient processes: A modern operating model will improve repeatability and consistency of essential processes to ensure value added contributions by all team members aligned to customer-facing, revenue-generating teams.
  3. Better and faster outputs: A modern operating model will help leaders and teams transform and reengineer the way they approach their value contribution by creating updating, and delivering outputs (deliverables) faster, more consistently.
  4. Improved partnership with internal business unit leaders: A modern operating model will improve and tighten the collaboration and integration with internal leaders and partners (Such as IT, integration teams, product, and training).
  5. Coordinated mergers and acquisitions: A modern operating model will accelerate merger-integration of disparate functions into interim and final operating models that align to the customer.
By | 2017-09-29T12:15:48+00:00 May 13th, 2017|LinkedIn|