XM Fireside Chat: Healthcare Experience With Bruce Temkin And Susan Haufe

Welcome to my XM Fireside Chat series, where we hare some of our thinking through an informal discussion format. I hope you enjoy it!

In this segment of XM Fireside Chat, I talk with Susan Haufe, Chief Industry Advisor for Healthcare at Qualtrics, about healthcare experience, with a focus on the current challenging environment.

The current pandemic is challenging the very structure of our healthcare system. Healthcare providers are being overwhelmed by the volume of patients and the lack of supplies and tests. All of this plays out through a network of human beings who are facing a multitude of stressful factors, including patients suffering from coronavirus, doctors and nurses lacking supplies, and administrators looking to manage and expand their bursting facilities. In this environment it’s more important than ever to stay connected with those people, which is what XM is all about.

Here are some related posts that you may find valuable:

XM Fireside Chat: XM Leadership With Bruce Temkin And Benjamin Granger

Our XM Institute team was looking forward to seeing everyone who was coming to Salt Lake City last week for Qualtrics X4 Summit. Unfortunately, that great event was postponed. So we decided to pull together an XM Fireside Chat series to share some of our thinking through an informal discussion format. I hope you enjoy it!

In this segment of XM Fireside Chat, I chat with the newest member of the XM Institute team, Benjamin Granger, Ph.D. This is a great chance for you to get to know Ben, and we also spend some time talking about XM Maturity.

Organizations don’t master XM overnight, it takes several years of evolution and change.  The XM Institute has found that this path often takes a consistent form. We’ve  identified five distinct stages that organizations go through as they build XM capabilities and increase their XM maturity (see graphic below).

If you’re wondering how to gauge your organization’s CX maturity level, complete our online CX assessment.

2003_5StagesOfXMMaturity

XM Fireside Chat: XM Leadership With Bruce Temkin And Aimee Lucas

Our XM Institute team was looking forward to seeing everyone who was coming to Salt Lake City last week for Qualtrics X4 Summit. Unfortunately, that great event was postponed. So we decided to pull together an XM Fireside Chat series to share some of our thinking through an informal discussion format. I hope you enjoy it!

In this segment of XM Fireside Chat, I chat with Aimee Lucas about XM Leadership.

Leadership is a critical component for driving successful XM programs, which is why “LEAD” is one of our Six XM Competencies. You can see a lot of different content about LEAD on this blog. Also, check out these free reports from the Qualtrics XM Institute:

XM Fireside Chat: ROI Of CX With Bruce Temkin And Moira Dorsey

Our XM Institute team was looking forward to seeing everyone who was coming to Salt Lake City this week for Qualtrics X4 Summit. Unfortunately, that great event was postponed. So we decided to pull together an XM Fireside Chat series to share some of our thinking through an informal discussion format. I hope you enjoy it!

In this segment of XM Fireside Chat, I chat with Moira Dorsey about the ROI of CX.

Ensuring that your CX program (or any type of XM program) delivers value is critical, which is  why “REALIZE” is one of our Six XM Competencies. If you’re interested in ROI of CX, then check out these recent research reports mentioned in the XM Fireside Chat that you can download for free from the XM Institute:

Tap Into XM To Navigate A Recession

Given the spread of Coronavirus and recent losses in the stock market, we’re facing the threat of a prolonged economic downturn. So it’s no surprise that I’ve been asked to share my opinion about how experience management (XM) would be affected by a recession.

If the downturn occurs, it would become the third recession of my professional career. During the last recession, I advised many companies on their strategies and even used this blog to provide advice to leaders on how to weather the storm.

The Great Recession started in late 2007, at which time I was a VP at Forrester Research focusing on customer experience (CX). While the overall environment was challenging, my area of the business was booming. That’s right, the CX business was booming. It turned out that companies increasingly recognized the importance of CX as a tool for actively prioritized customer retention.

I think XM will see that same type of surge if we fall into a recession. This isn’t a forecast about spending on XM technology or services, but instead it’s a prediction that leading organizations will become increasingly committed to XM as a strategic discipline.

To understand how XM will be affected in a recession, it’s important to look at how organizations respond to downturns. In general, companies take one of two approaches to navigating these difficult periods:

  • Manage their way through it. In this approach, executive teams react to market conditions by making widespread cuts in an attempt to maintain short-term profitability targets. After the recession lifts, these firms will often need to rebuild their employee and customer relationships.
  • Lead their way out of it. In this approach, executives intensify their company’s focus on the long-term purpose of the firm and make targeted cuts in areas that are not core to that purpose. After the recession lifts, these firms are set for a quick shift into growth mode.

Five Recommendations For Leading Through A Recession

One of the best perspectives for thinking about a recession is conveyed through this quote by John F. Kennedy:

The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity.

This insight is at the heart of my high-level advice to leaders during a downturn…

Be aggressively defensive in the short-term, while being increasingly aggressive for the long-term.

How do you manage this seemingly stark contradiction? By following these five recommendations:

  1. Protect your values. You will be forced to make very uncomfortable decisions. Make sure that you don’t allow them to undermine your organization’s core values and its brand promises. To quote Martin Luther King, Jr., “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” Continually ask yourself: how will this decision affect the core of who we are?
  2. Be bold. During a recession, you have three choices for how to make decisions: 1) hold on to the past, 2) respond when required, or 3) get in front of the wave. The first two option keep you locked into the past, while the third option allows you to start looking ahead. And that’s critical. The faster you can be forward-leaning, the more time you’ll have to outpace your competitors on the backend of the recession.
  3. Be clear. One of the realities of a recession is that just about everyone is anxious, especially your employees who are going to wonder what changes are coming. As I discussed in my recent post about coronavirus, follow four steps: 1) Don’t be shy with bad news, 2) choose certainty over uncertainty, 3) always share exact next steps, and 4) stay empathetic. Also, human beings are hopeful. We flourish when we envision a positive future. So paint a picture of how your organization will be better in the future. This will also be helpful with customers and partners.
  4. Prune against priorities. During a recession, companies have less opportunity for sloppiness so they need to more effectively align their offerings and efforts to the specific need of target customers. Take the opportunity to rethink your future direction and stop non-core efforts. It’s often much better to cut entire secondary efforts, then to enact across-the-board cuts.
  5. Incubate for the future. While you may not be cutting back on new products and features during a recession, don’t cut back on your innovation. Identify two or three big best that you will want to deliver to the market in 18 to 24 months and go after them, even if you need to cut other efforts to find the funding. Set your sites on coming out of the recession with a vigor.

XM Will Fuel Recession Winners

So how will the use of XM change if there’s a recession? Many of the organizations that successfully navigate the downturn will do so by actively adopting XM. During downturns, organizations are forced to intensely focus on what’s most important. For the Great Recession, that meant using CX as a tool for customer retention.

Over the last decade, organizations have recognized that employees are as critical to their success as their customers. So I expect to see leading organizations respond to a downturn by attempting to better understand what their customers and employees are thinking and feeling, put that information into the hands of the people that can do something about it, and make fast adjustments. That’s XM.

Here’s how we describe the capabilities that XM enables:

  • Continuously Learn. XM helps organizations more effectively sense and interpret what’s going on all around them, collecting and analyzing signals from the actions and feedback of employees, partners, vendors, customers, and even competitors.
  • Propagate Insights. XM helps organizations put actionable intelligence in the hands of people across their ecosystem who can use it, creating seamless access to the right information in the right form at the right time.
  • Rapidly Adapt. XM helps organizations act on the insights they’ve uncovered at an increasingly faster pace, finding ways to create new experiences and renovate existing ones.

These XM capabilities can be the foundation for success during a downturn as they will help organizations:

  • Tailor efforts to the most important customers
  • Stay aligned with customers’ changing needs
  • Prioritize the critical projects and programs
  • Engage and learn from employees

In addition, XM will be a critical ingredient for organizations to accelerate after a recession. The ability to stay connected to market signals will be woven into the operating fabric of new offerings that organizations incubate for the post-downturn era. Think about it, if you were building an organization from scratch, wouldn’t you want it to be able to continuously learn, propagate. insights, and rapidly adapt?

To better understand the capabilities that XM provides, here’s a chart from the report, Operationalizing XM.

2003_LearnInsightsAdapt

Previous Recession Posts

In case you’re interested in more information on managing in a recession, here are some older posts that I’ve written on the topic:

The bottom line: Use XM to weather a recession and to thrive in its aftermath.

New Research on EX Management and the Shifts Required for Success

The XM Institute has published new research that examines the current state of employee experience (EX) management programs and the mindsets, skills, and actions required for employee experience (EX) excellence. You can download both of these reports for free:

  • The State of EX Management Programs, 2020. This research – based on a survey of HR leaders at 250 large U.S. firms – looks at the current state of employee experience (EX) management programs and future plans for EX. It also compares organizations that are more mature in EX (EX Leaders) with those that are less mature (EX Laggards). EX Leaders have better financial results, deliver higher quality EX and CX, and are more effective at using employee feedback to improve experiences.
  • Three Shifts for Employee Experience Success. This research looks at how companies can overcome employee engagement stagnancy by shifting to 1) purpose-led empowerment from functional job execution, 2) collaborative understanding and action from disinterested surveying, and 3) employee-engaging leaders from HR-driven programs. It includes over 20 examples from companies of these three shifts in action.

The graphic below, from The State of EX Management Programs, 2020, shows how more mature organizations (“Leaders”) outperform their less mature counterparts (“Laggards”). Ninety-one percent of EX Leaders report the employee experience that their organization delivers is above average compared to their competitors and 88% of EX Leaders report better financial results.

The graphic below from Three Shifts for Employee Experience Success outlines best practices for each of the three changes in mindsets and actions that companies must take to overcome employee engagement stagnancy and mature their EX program.

You can download both of these reports for free from the XM Institute.

New Research Digs Into Industries And Consumer Feedback Patterns

The XM Institute is kicking off the year with a research bang.

In a previous post, I mentioned two reports from late last year that show the business value of CX, The ROI of CX and What Consumers Do After a Bad Experience. Since then, we’ve actually published a number of new research reports with an emphasis on industry-specific data. These reports are based on a survey of 10,000 U.S. consumers and examine almost 300 companies over 20 industries.

Enjoy these free reports:

200120_XMIResearch

Industry CX Snapshots

2001_CXRetailIndustryGraphics_v1This series of reports dig into CX data for a number of industries:  AirlineAutoBankingHealth InsuranceHotelInsurance, and Retail.

Each Industry Snapshot looks at how the highlighted industry’s XMI Customer Rating compares to the Ratings of the other 19 industries and examines the connection between a customer’s experience and the likelihood that they will recommend, rebuy from, and trust a company within that industry. These Industry Snapshots also explore the potential cost of delivering poor experiences, the most broken journeys within each industry, and how experience perceptions differ across age groups

How Consumers Give Feedback

Download the free report, Data Snapshot: How Consumers Give Feedback

2001_HowConsumersGiveFeedback_Graphics1Did you ever wonder what channels consumers use to give feedback, and how that differs between good and bad experiences and across age groups? Then this is a great report for you.

We found that people are more likely to talk about bad experiences than good experiences. When consumers do tell someone about an experience, only one-fifth of consumers provide that feedback directly to the company. We also looked at how consumer behavior differs across age groups.

Six Types Of Experience Data (X-Data)

One of the key building blocks of Experience Management (XM) is X-data, which helps establish an understanding of how people think, feel, and behave. In almost all circumstances, organizations lack the X-data they truly need. So how should organizations go about instrumenting their operations to collect the right data?

To identify the required X-data, it’s important to first understand how data flows from people’s experiences. That’s why you should start with the Human Experience Cycle (HxC). As you can see below, experiences lead to perceptions, attitudes, and behaviors.

1903_HumanExperienceCycle2

Using the HxC model, we examined the components of many XM programs and have identified six distinct types of X-data:

  1. Experience Expectations. How people think and feel about a future interaction with an organization, which can be collected on a regular cycle or periodically (e.g., whether a customer expects a product to be hard to use or believes they can accomplish a service interaction online).
  2. Interaction Perceptions. Feedback on a specific interaction, which can be tracked continuously or periodically (e.g., feedback after an online purchase or after an employee training course).
  3. Journey Perceptions. Feedback on collection of activities around a goal, which can be tracked continuously or periodically (e.g., feedback after an airline customer finishes a trip or after an employee completes her on-boarding).
  4. Relationship Attitudes. How people feel about an organization, including plans for future interactions, which can be tracked on a regular cycle or periodically (e.g., NPS or brand tracking study).
  5. Ad-Hoc Diagnostics. How people think or feel about a problem or opportunity, which is collected as needed based on other findings (e.g., pulse employee survey about a leadership issue or qualitative study into why a brand message didn’t work).
  6. Choice Preferences. How people would rank different alternatives, which is collected periodically (e.g., product feature selection or employee benefits optimization).

XM programs need to collect these six types of X-data for all human beings in their ecosystem (e.g., suppliers, employees, customers, prospects, stakeholders, etc.). This effort embodies what we call the “Experience Monitoring” skill within the XM Competency of “Enlighten.”

We’ll use this taxonomy in future posts and research to help organizations assemble the right XM programs. For now, think about where you might collect and how you might use these different types of X-data.

The bottom line: Every organization needs these six types of X-data.

Thankful For A Decade Of Great Experiences

Happy New Year!

Wow, it’s 2020… the start to a new decade. I’m really looking forward to what’s ahead. My previous post discusses how 2020 will be the Year Of Insightful Actions, but I also wanted to zoom out and share a broader perspective.

Appreciating The Past 10 Years

Before focusing on the 2020s, I’d like to pause and express my gratitude for the 2010s. It was a great decade! I’m very thankful for all of the wonderful friends, family, colleagues, and clients that I’ve been privileged to spend time with during the previous 10 years.

It’s been a fantastic decade from a personal standpoint. My kids graduated college and have started their paths towards highly productive careers. My Boston sports teams won many championships, and I was able to attend three Super Bowls. I adopted a healthier lifestyle, with better eating habits and more exercise. I expanded my worldview, traveling to many new countries.

I would never have had such an amazing decade if it weren’t for YOU. If you’re reading this post, then thank you! You’re one of the people who has motivated my work. I’ve always felt that my team’s primary audience are the many people who follow what we write, whether or not we’ve ever had the opportunity to meet or work with you.

And most of all, I’m thankful that I’ve been able to go on my personal and professional journey with my best friend, my wife Karen.

A Decade of Professional Changes

It’s also been a fantastic decade from a professional standpoint, full of interesting shifts and turns. Here are some of the highlights:

  • Forrester Research. I began the 2010’s as a VP and Principal Analyst at Forrester Research, introducing the world to the practice of customer experience. It was a great opportunity, as I built a wide range of new skills over my 12-year stint. In particular, I learned to be a strong researcher, writer, and storyteller, which enabled me to be the most-read analyst for my final 13 quarters at Forrester. This experience also provided me with the platform to establish a large community of people who followed my work.
    • Special thanks to the the many people across Forrester who helped me hone my skills, especially Bill Bluestein (R.I.P.), Bobby Cameron, Chris Charron, George Colony, Waverly Deutsch, Stan Dolberg, Bill Doyle, Harley Manning, John McCarthy, Chris Mines, Mary Modahl, and Ted Schadler.
  • Temkin Group. In April 2010, Karen and I founded Temkin Group. I still remember a meeting with my friends Ingrid Lindberg and Steve LaValle who convinced me not to name the company “CX Institute” (which is where we were heading), but instead to name it “Temkin Group.” It was a great decision. Over the next eight years, we built a fantastic team and worked with an amazing array of clients—all from our basement. Our little company built a large global brand, as our research and content was used by practitioners around the world. We never had to make any sales calls, as we were very lucky to build our business based on our reputation and word of mouth.
    • Special thanks to the Temkin Group employees who joined us on this journey. It started with Andrea Fineman who was brave enough to be the first to join us in the basement, followed by Aimee Lucas, Isabelle Zdatny, Denise Bahil, Julia Jaffe, Jen Rodstrom, Laura Wells, and Maggie Mead. Also, thanks to Mike Flint and the team at Metropolis Creative who built our websites.
  • CXPA. During the Summer of 2010, Karen and I started developing a plan to build a community of CX professionals, along with Andy Freed from Virtual (an association management company). We recruited Jeanne Bliss to co-found what became the Customer Experience Professionals Association (CXPA). And in April 2011 we launched the CXPA. We hired the amazing Lesley Lykins in early 2012 as the CXPA’s Director of Member Engagement, and she became the heart and soul of the community. I had the immense pleasure to chair the CXPA and to shepherd its growth into a thriving 4,000+ member non-profit association. Over those five years we established the CX profession and created many industry-defining things such as CX Day and the first professional CX certification, CCXP.
    • Special thanks to Karen, Andy, Jeanne, Lesley, and the entire staff at Virtual (especially Janice Carroll, Shannon Taylor, and Megan Cannon who managed the relationship). I also want to thank the initial CXPA board members who trusted our vision and helped bring it to life: Brian Andrews, Parrish Arturi, Lior Arussy, James Bampos, Jeanne Bliss, Erica Bullard, Ginger Conlon, Chris Davey, Kim Edmunds, Karyn Furstman, Ian Golding, Dorsey McGlone, Jason Mittelstaedt, and Karl Sharicz.
  • Qualtrics. In October 2018, Qualtrics acquired Temkin Group. While we were happy to keep going as-is with Temkin Group, Karen and I saw that Qualtrics was becoming the dominant market leader and we felt that its XM message aligned directly with our point of view. Joining forces provided us with the opportunity to amplify our impact on the market. So our entire Temkin Group team joined Qualtrics to create the XM Institute. Over the last year we’ve had the opportunity to work with a great team across Qualtrics and deliver new thought leadership around the world (including in-person sessions in Toronto, London, Dubai, Dublin, Madrid, Brussels, Stockholm, Helsinki, Singapore, Sydney, Melbourne, Kuala Lumpur, Paris, Berlin, and Munich).
    • Special thanks to the Qualtrics team that helped complete the acquisition at a very fast pace, especially Austin Bankhead, Cate Isert, Iris Ng, Zig Serafin, Jeff Shaw, Ryan Smith, Tucker Stockman, and John Torrey. And I’m also thankful for the entire XM Institute team, Moira Dorsey, Ben Granger, Aimee Lucas, Maggie Mead, David Segall, Karen Temkin, Laura Wells, and Isabelle Zdatny.
  • SAP. Three weeks after Qualtrics acquired Temkin Group, SAP acquired Qualtrics. Talk about a crazy month. Luckily, I’ve known SAP since my days at Forrester, and Temkin Group had worked with many large enterprise software companies. So we know that world. While it’s been somewhat dizzying to try and respond to requests from across our 100,000 new teammates, SAP provides the XM Institute with an even larger platform to bring XM to the world. Thanks SAP.

I feel great about all of my professional accomplishments over the past decade except for one gap… a book. I started to write one in 2011, but had to put it aside as the CXPA ended up taking up just about all of my time. While I’ve been too busy to get back to it, I’m committed to writing a book at some point during this current decade.

Comparing Three Exciting Decades

I’m even more excited today about the future then I was a decade ago. Over the past 10-years we’ve established the foundation upon which organizations will transform into the future. Here’s how I see the connection between this new decade and the previous two:

  • 2000s: The Decade of Process And Technology. While the phrase “people, process, and technology” has been around for decades, the 2000s were all about enterprise technology and process management (no real focus on people). It was a very internally-focused period. Laws such as Sarbanes–Oxley put pressure on organizations to establish enterprise wide control and visibility. This propelled the importance of CIOs, as they led programs to centralize and rearchitect the core infrastructure within most large organizations. The dominant form of transformation, business process re-engineering, was also very internally and cost focused. At the same time, the Internet started to penetrate technology and process boundaries, with companies enabling customers to start self-serving for simple purchases and a handful of basic service interactions.
  • 2010s: The Decade of Customers And Digital. With customers starting to directly touch enterprise technologies/processes and fueled by momentum from the end of the “Great Recession,” organizations not only acknowledged the value of customers in the 2010s, but they also started to focus much more attention on understanding and catering to their needs (thanks in part to the mainstreaming of academic domains such as neuroscience and behavioral economics). We defined and established customer experience management as both a critical capability and as a thriving profession. Disruptive online businesses such as Amazon, Uber, and Airbnb forced organizations to rethink how they interact with customers. At the same time, the rapid growth of mobile along with Cloud/SaaS models made every interaction—internal and external—fair game for digitizing. This customer/digital movement led to the rise of experience design, mobile-enabled processes, and the shift in customer research from a one-off activity to a more continuous process. At the end of the decade, the CX movement started spreading to other areas, most noticeably employees (which started the rise of XM).
  • 2020s: The Decade of Humanity And Intelligence. During the upcoming decade, we’ll build upon what we’ve learned from customer experience and apply it to every part of an organization. Driven by the momentum from the 2010s along with an emerging view among leading executives that the purpose of a corporation is to serve humanity, we’ll focus more on the needs and feelings of all human beings in our ecosystems (e.g., suppliers, employees, customers, influencers, etc.). Organizations will deploy more advanced and automated analytics on top of their growing digital/mobile infrastructures. This will make it much, much easier to discover and distribute tailored insights from increasingly larger and more diverse datasets. In this environment, organizations will infuse Experience Management—the capability to continuously learn, propagate insights, and rapidly adapt—throughout their entire operating rhythm. Using the distributed insights, enterprises will provide more individualized interactions and actively decentralize more decision-making.

I’m excited about where all of this is heading, and believe that the XM Institute is well positioned to keep helping organizations navigate through the change.

A Look Back At 2010 CX Recommendations

I thought it would be fun to close out this post by sharing content from a 10-year-old post that I wrote to prepare people for the start of the previous decade. It’s pretty cool that the recommendations are still relevant today. So here were my 7 keys to customer experience in 2010:

  • 1) Drop the executive commitment facade. It’s very easy for executives to say “customer experience is important.” But it’s much more difficult for them to dedicate the time and energy required to make it a real priority. So in 2010, executives should either get actively involved in customer experience transformation or drop it from their agendas.
    • Start here: Develop a customer experience dashboard and manage the results with the same energy that you manage financial results.
  • 2) Acknowledge that you don’t know your customers. When market research teams require long lead times and expensive projects to answer questions about customers, too many organizations go without this insight. But the path to customer experience success requires significantly deeper customer insight. So in 2010, companies need to develop voice of the customer programs that provide ongoing and continuous access to customer insights.
    • Start here: Create a voice of the customer program with a cross-functional team that focuses on four “LIRM” components: listening to customers, interpreting the feedback, reacting to the insights, and monitoring results from actions over time.
  • 3) Keep from getting too distracted by social media. Twitter, Facebook and other social media sites may seem sexy, but they aren’t the only channels for customer feedback. Other channels like comments on surveys and calls into the call center can often provide even richer insight. So in 2010, companies need to learn from social media feedback, but not overreact to it.
    • Start here: Treat social media as one of many listening posts in a comprehensive voice of the customer program that examines both structured and unstructured feedback.
  • 4) Stop squeezing the life out of customer service. My research shows that consumers care more about good customer service than they do low prices. It also turns out that many customer service interactions are critical “moments of truth” that drive customer loyalty. But companies often treat customer service an unwanted stepchild; focusing almost exclusively on aggressive cost-cutting. So in 2010, companies need to start viewing customer service as a strategic asset.
    • Start here: Measure customer service organizations based on how effectively they help customers instead of efficiency metrics like average handle times.
  • 5) Restore the purpose in your brand. True brands are more than just color palettes, logos, and marketing slogans, they’re the fabric that aligns all employees with customers in the pursuit of a common cause. They represent a firm’s raison d’être. Unfortunately, many companies have lost this sense of purpose in their brands. So in 2010, companies need to redefine their brand and embed it in the hearts and minds of all employees.
    • Start here: Translate your brand into promises you will make (and keep) with customers across every key touch point.
  • 6) Don’t expect employees to get on board. Employees are often the most critical element of any customer experience effort. But firms can’t just hope that everyone will participate in these change initiatives. So in 2010, companies need to actively focus on engaging employees at every level across the organization in their customer experience efforts.
    • Start here: Communicate (a lot) about “why” customer experience is important and allow employees to participate in defining “how” to make improvements.
  • 7) Translate customer experience into business terms. My research uncovered a strong correlation between customer experience and loyalty. An average $10 billion company can generate $284 million of additional revenues from customer experience improvements. But most companies don’t fully understand the link between customer experience and business results. So in 2010, companies need to identify how customer experience impacts their financial results.
    • Start here: Engage the CFO to develop a model which shows the impact that customer experience has on customer loyalty.

The bottom line: The 2010s were fantastic, but the 2020s will be even better!

2020: The Year of Insightful Actions

As 2019 comes to an end, it’s time to think about what we’ll see next year. I collaborated with our XM Institute faculty (Aimee Lucas, Ben Granger, Isabelle Zdatny, and Moira Dorsey) to pull together a picture of where we think XM will be heading in 2020. As we looked across the different elements we were expecting to see, an overall theme for 2020 emerged… The Year Of Insightful Actions.

Looking Back At 2019

In the Global State of XM research, we found that senior executives around the world recognize the importance of XM. That mindset propelled many companies to deploy components of an overall XM program in 2019. As we found in the State of CX Management where only 6% of large companies have reached the top two levels of maturity, most companies remain in the very early stages of building their XM competencies.

Customer experience (CX) remained the most common area of focus for XM efforts, with employee experience (EX) gaining significant traction.

Few organizations have yet to take an enterprise-wide view of XM, instead they’ve most frequently deployed XM within isolated compartments of their organization. While narrow XM remained the norm, we started to see a few companies take a more holistic view of XM, often starting with an integrated view of CX and EX.

Five Trends In The Year of Insightful Actions

While most XM efforts have focused on isolated data collection and reactions, we expect organizations to become much more intentional about how their efforts drive actions that create value. That’s why we’re calling 2020, The Year of Insightful Actions.

What does this mean? While many XM programs claim to drive action, they don’t treat this effort as a primary objective. We expect this to change. During the upcoming year, organizations will prioritize their XM efforts in areas that directly help their organizations make better decisions and deliver more tailored experiences. In this environment, we expect to see:

  1. The marriage of CX and EX. XM programs will spread into adjacent areas. The most common form of this diffusion will be the an increase in the combination of customer experience (CX) and employee experience (EX) efforts. Why? Because there’s an inextricable link between CX and EX. Insights from customers can target high priority employee improvements, while insights from employees can identify key customer improvements.
  2. The reversal of metrics mania. Many XM programs have built up a slew of measurements, viewing their experience data (X-data) as a source of metrics. As companies pivot more to insightful actions, they’ll cut back on some of those metrics and focus more of their attention on developing insights in specific areas where they see opportunities to improve.
  3. The reorientation to action-first. In early maturity XM programs, there’s often a focus on collecting as much data as possible. The data, along with some insights, is then delivered to different groups. We expect that many organizations will shift this flow. They’ll start by identifying the actions that people make and use that information as requirements for insights, and then focus data collection on fueling those insights.
  4. The creation of a new discipline, IXD. Rather than just distributing data, organizations will more actively design the insights they deliver to specific groups across the organization. We call this Insight Experience Design (IXD). XM teams will use their experience design skills to integrate insights into different teams’ operating processes and decision flows. This process will also require change management to increase data-centric mindsets across their organizations.
  5. The rise of XM-enabled processes. As organizations use XM to power more key decisions, they’ll spot new ways to inject insights into their ongoing operational processes. Leading companies will start redesigning processes like product development and employee promotion cycles to embed XM insights. Look for existing methodologies like Lean and Lean Startup to incorporate XM insights into their methodologies.

Impact Across The XM Operating Framework

This focus on insightful actions in 2020 is merely a step on the path towards increasing XM maturity. As we described in the report, Operationalizing XM, organizations are on a multi-year journey to create the capabilities to continuously learn what people are thinking and feeling, propagate insights across their ecosystem, and rapidly adapt based on the most important findings. To establish these capabilities, companies will continue to expand their XM efforts in 2020 across the three elements of the XM Operating Framework, technology, competency, and culture.

1912_WhatIsXM

Here are some of what we expect to see in 2020:

  • Technology: Within XM, technology plays a very important role. It allows the automation of key activities and it enables strong practices to scale across an organization. In 2020, we expect to see more use of text analytics to tap into rich insights from unstructured data, more predictive analytics to uncover insights from a growing volume of both X-data and operational data (O-data), more instrumentation of growing digital channels, more automated and customized distribution of insights, and the enablement of more closed-loop processes for responding to feedback.
  • Culture: The norms within an organization can both inhibit and nurture XM capabilities. As the Year of Insightful Actions rolls out, companies will need to make adjustments to their culture to ensure that employees understand why XM is so  important for their future success, recognize their personal roles in helping the organization deliver better experiences, and become increasingly comfortable with more rapid, distributed decision-making based on highly tailored insights.

Changes Will Affect All Six XM Competencies

As we often say, the key to path to XM success requires mastering competencies that are enabled by technology and nurtured by culture. Here’s a taste of what we expect to see across the Six XM Competencies during 2020:

  • LEAD: Organizations will expand their governance to cover a broader set of XM areas, starting by connecting many of their CX and EX efforts. The focus on actions will also drive organizations to adjust their program roadmaps to more efficiently deploy their resources.
  • REALIZE: As insightful actions become more of the norm, organizations will start making the case for XM based on the establishment of capabilities to rapidly adjust to changes in the market, not just based on near-turn upticks in business results.
  • ACTIVATE: The spread of insightful actions will force more employees across the organization to rely on data insights in their day-to-day roles. This will require new training to improve overall data literacy and the capacity to use insights to drive decisions.
  • ENLIGHTEN: To fuel insightful actions, companies will redefine what X-data they collect. Rather than relying on static mechanisms that remain as-is, they’ll build more dynamic approaches that they regularly adjust to fuel an evolving set of required insights.
  • RESPOND: This competency will get a lot more attention across the board, as XM programs turn their focus more explicitly on the actions they enable.
  • DISRUPT: With the spread of insightful actions, more employees will benefit from applying experience design skills. Look for organizations to find ways for propelling experience design across their organization.

The bottom line: Welcome to The Year of Insightful Actions!

New Research Shows Strong ROI of CX

The XM Institute has published new research that examines the impact that customer experience has on the loyalty of U.S. consumers across 20 industries. You can download these reports for free:

  • The ROI of Customer Experience. This research examines the correlation between customer experience and the likelihood of consumers to exhibit the following behaviors: purchase more products or services, recommend a company, forgive a company, trust a company, or try a company’s new product or service.
  • Data Snapshot: What Happens After a Bad Experience, 2019. This research shows how often consumers run into bad experiences, and then examines how consumer spending changes based on those miscues.

The graphics below from The ROI of Customer Experience show a strong correlation between good customer experience and improved levels of consumer loyalty. While these graphics cover some of the overall findings, the report also includes data showing the impact of CX on loyalty for 20 industries.

1912_ROIofCX_v2.png

The graphics below are from the Data Snapshot: What Happens After a Bad Experience, 2019. As you can see, the percentage of consumers reporting bad experiences ranges from a high of 17% for TV/Internet service providers to a low of 3% for retail and streaming media. We also found that the impact that a bad experience has on spending is greatest in fast food and smallest in health insurance and utilities.

AfterBadCX_v1

Remember, you can download these research reports and many, many more for free from the XM Institute.

The bottom line: If you improve CX, you’re very likely to improve customer loyalty.

New Research: The Global State of XM

GlobalStateOfXMThe XM Institute published a new report, The Global State of Experience Management (“XM”). The research is based on a survey of more than 1,200 senior executives from across six countries: Australia, Canada, Germany, Japan, the UK, and the U.S..

Before I share some of the findings, I just want to say that this report is free to download. As I’ve mentioned in the past, one of the cool things about moving to Qualtrics is that we get to share more of our research like this. Now on to my commentary…

First of all, we found that executives around the world regard XM as important – which is not surprising given its correlation with sales growth and profitability. However, the degree to which they focus on XM varies between countries.

Canadian executives are most likely to consider improving XM a top organizational priority, while German executives are least likely. Additionally, which experience areas executives are most concerned with improving also differs from country to country. Respondents from Germany and the U.S. are most focused on customer experience (CX), respondents from Australia and Canada are most focused employee experience (EX), respondents from Japan are most focused on product experience (PX), and respondents from the UK are equally focused on EX and brand experience (BX).

This report also examines how executives expect to use customer and employee feedback in the coming year as well as what obstacles are impeding their path to XM success. Organizations that are leading the way with XM most often describe technology limitations as an obstacle, while firms that are lagging in XM point to a lack of a clear strategy as a key obstacle.

Go ahead and download the report… it’s free.

Stop Employees From Asking For Good Ratings

Over the last few weeks, I’ve run into a couple of examples of a common problem with some Experience Management (XM) programs… “gaming.” Here’s what I found…

During dinner with a friend who is an executive at a large bank, our discussion made its way to XM (no surprise). He mentioned that his bank has an employee engagement study and that leaders are compensated based on the results.

Sounds like a good thing, right?

My friend then shared a conversation that his boss had with the leadership team. This senior executive told my friend and the rest of his direct reports that they needed to give him better ratings, because the current scores were negatively impacting his compensation.

Now for the second example. I’m a frequent flier, and regularly receive requests from airlines to provide feedback after a flight.

Sounds like a good thing, right?

During a recent trip on Delta, the flight attendant announced that we’d be receiving a survey and that she hopes they exceeded our expectations and will give them a 5 (see note about Delta below).

Do these two situations sound like a path to better employee experience (EX) or customer experience (CX)? Of course not! Both of these examples represent inappropriate behaviors. Whenever a person is pressured to give a specific score, the integrity of the measurement system is broken. We call this type of behavior “gaming the system.”

Gaming is a common problem. It happens when an organization puts too much emphasis on specific measurements — at the expense of the overall XM program.

The goal of XM is not to achieve some number, but to create a discipline to continuously learn, propagate insights, and rapidly adapt. This enables an organization to consistently deliver experiences that meet the needs of its key audiences. When an organization overly focuses on a number, often by attaching strong incentives to individuals based on the data, the system is bound to create these types of counter-productive “gaming” behaviors.

To help discourage this type of behavior, consider adopting these five rules to stop employees from gaming that I’ve described in a previous post:

  1. Don’t mention or refer to a score
  2. Don’t mention specific survey questions
  3. Don’t mention any consequences
  4. Don’t say or imply that you will see their responses
  5. Don’t intimidate customers (or employees) in any way

The bottom line: Make sure you’re not encouraging gaming behaviors.

Note: I regularly fly with Delta and this is the only time that I’ve run into this type of gaming behavior.

XM Versus BI: No Real Comparison

When I was at the SAP Select event in Berlin last week, I was asked a great question… Isn’t Experience Management (XM) just like business intelligence (BI)?

First of all, they’re nothing alike. However, I understand why they may appear similar at a surface level. That’s why I really like this question; it gives me the chance to provide additional clarity around XM.

Here’s why XM is nothing like BI:

  • BI is a technology, XM is a discipline. BI is a tool that takes streams of data and transforms them into presentable formats. XM is a discipline that helps organizations deliver differentiated experiences by continuously learning, propagating insights, and rapidly adapting. Organizations adopt XM by mastering a set of six competencies that are enabled by technology and nurtured by culture.
  • BI focuses on O-data, XM adds X-data to O-data. BI collects operational data (O-data) from a number of internal systems, looking at how operations are performing. While O-data provides some insights, it lacks the deep understanding that comes from people (customers, employees, partners, etc.) who can explain why things are happening, with information about what they are thinking and feeling. That’s why XM collects this experience data (X-data) and drives insights by combining it with O-data.
  • BI enables analysis, XM embeds analytics. BI provides a platform that analysts can use to manipulate data, often connecting it with other analytical tools. A strong XM platform uses analytics at the core of its data processing engine, so that all types of users can gain instant access to deep insights. The Qualtrics XM Platform includes Qualtrics iQ, which makes it easy for novices to tap into the power of powerful capabilities such as text analytics, predictive analytics, and voice analytics.
  • BI is about reporting, XM is about acting. The output from BI is typically a set of dashboards to be reviewed by a limited group of people across an organization. An XM effort may provide dashboards, but only when that format is part of driving smarter actions across an organization. That’s why the Qualtrics XM Platform supports a robust set of workflows based on insights that drive action across an organization and can integrate into process flows within systems such as CRM and HRM.

The bottom line: XM is a capability that is woven throughout your operating fabric.

Three Characteristics of XM Leaders

Earlier today, I led an roundtable discussion at SAP Select in Berlin entitled “Become a XM Transformation Leader.” This is a critical theme for many executives. If you want the benefits of Experience Management (XM), then you will need to lead a transformational journey across your organization.

If you’ve been reading my work, then you realize that XM is not about the delivery of a single great experience, but it’s a discipline that’s embedded across an organization’s operating fabric that enables it to Continuously Learn, Propagate Insights, and Rapidly Adapt.

How do you embrace this discipline? By adopting what the XM Institute has defined as the XM Operating Framework, which focuses on building six XM Competencies: Lead, Realize, Activate, Enlighten, Respond, and Disrupt.

This effort isn’t easy, and it requires a multi-year journey. In order for an organization to sustain a change agenda over that span of time, senior executives need to actively drive the effort. What does that mean for those leaders?

Three Characteristics Of Transformational Leaders

In my work with dozens of companies that have gone though transformations, I’ve observed that the most effective transformational leaders demonstrate three key characteristics. They:

  1. Communicate Why
  2. Model Desired Behaviors
  3. Reinforce Change

1) Communicate “Why”

The only way to get people to truly buy-in to change is for them to understand why it’s happening. Most executives tend to under-communicate, or they over focus on “what” the company needs to be doing and “how” it will get done. If you can land the “why” message, then people will support the change from a position of ongoing commitment, instead of just as an act of transactional compliance. Here are some ways that executives can improve their communications:

  • Develop a clear script about “why” the company is going through the change
  • Develop a clear script about “why” the change is good in the long run to your organization and its employees
  • Make sure that your direct reports fully understand why the change is going on and have their own scripts
  • Make sure that you regularly discuss the “why” in your ongoing communications

2) Model Desired Behaviors

One of our Six Laws of Customer Experience is simply: “You can’t fake it.” Your organization gauges what’s truly important not by listening to your speeches or reading your email proclamations, but by observing your actions. If people see that you haven’t changed, then they won’t change either. Here are some ways that you can model new customer-centric behaviors:

  • Look for new ways to use customer or employee feedback; consider regularly calling out to customers
  • Find ways to incorporate customer, employee, brand, or product data/insights into your decision-making
  • Start asking people-centric questions like: who is the target audience and how will this help them?
  • Make the XM change a top item on your meeting agendas; even above the normal operational items.
  • Make choices about what meetings you attend or decisions you make based on the signal it sends to the organization about your support for the change

3) Reinforce Change

It’s very easy for organizations to fall back into their regular, “comfortable” routines. So you need to make sure that you continuously and very purposefully reinforce the changed behaviors. Here are some of the things you can work on:

  • Hold your direct reports accountable for change in their organizations
  • Make “leading and supporting change” a key objective that you use to measure your direct reports
  • Publicly recognize and call out people in your organization that are acting consistently with where the company is heading
  • Don’t promote anyone in your organization, even high performers, if they are not proactively supporting the change
  • Embed the new direction in the hiring and new employee on-boarding process
  • Ask people in your organization what you could be doing to more effectively support the change
  • Develop personal goals every quarter for how you will reinforce the change

If you’re a leader who’s looking to drive transformation, then make sure to focus on these three characteristics. Your actions are more important than you think.

The bottom line: Transformation takes strong, committed leadership.