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.

Expansion Of Experience Management And XM Professionals

It’s great to see so many people starting to see the potential of Experience Management (XM). As I’ve discussed, XM is the natural evolution in enterprise transformation. XM will improve just about any organization with the infusion of intelligence and humanity.

The Discipline of XM

XM is more than just a technology. It’s a discipline that needs to be woven across an organization’s operating fabric. When an organization fully adopts XM, it will not only be fully aware of the human beings that it touches, but it will proactively cater to their needs by continuously learning, propagating insights, and rapidly adapting.

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Two Dimensions of XM Expansion

That’s the end point, but how do organizations get there? By expanding their efforts along two dimensions:

  1. Maturity of competencies. For an organization to adopt XM, it needs to build a set of capabilities that we’ve defined as the XM Operating Framework. This means mastering the Six XM Competencies (Lead, Realize, Activate, Enlighten, Respond, and Disrupt) and evolving through five stages of maturity (Investigate, Initiate, Mobilize, Scale, and Embed).
  2. Diffusion of use cases. Once an organization starts building its XM competencies, it will want to expand the use of those capabilities to other areas through diffusion stages (Isolated, Expanded, Adjacent, and Extended). For instance, a company may start with a customer relationship NPS program and expand into transactional in-product feedback effort or employee engagement.

The Rise of XM Professionals

Over the next decade, I expect to see organizations building XM competencies while expanding the places where they apply those capabilities. There will be a constant flow of learning in one area and then applying that knowledge to other areas.

You can already see that starting with customer experience (CX), which I consider to be the initial use case of XM. Skills that have been built up in CX such as shifting from annual surveys to ongoing insights and uncovering opportunities to improve with journey mapping, are now also being applied to employee experience (EX).

That’s why it’s a great time to be an XM professional. The capabilities you develop in whatever experience area you start (CX, EX, PX, or BX), will be valuable across just about every component of every organization. It’s a set of skills that will become increasingly important and will, therefore, be increasingly in demand.

The bottom line: The world needs more XM and more XM professionals.

Your Organization Is An Experience Factory

Experience Management (XM) isn’t just important, it’s the primary function of every organization. Let me explain…

The XM Institute team spends a lot of time thinking about and researching XM. Which means we spend a lot of time trying to understand how human beings think, feel, and behave.

What’s become clear is that experience is not just an interesting topic, it’s a fundamental component of life. As a matter of fact, I believe that it’s one of three core human domains:

  • Physiology: How we maintain life.
  • Psychology: How we think and feel.
  • Experience: How we interact.

Experience is the one and only way that human beings interface with the world. We create, consume, and remember experiences… that’s it.

If you want to communicate with or influence someone, then it requires some experiences. If you want to teach or love someone, then it requires some experiences. If you want to learn or enjoy something, then it requires some experiences. If you want to sell or provide services to someone, then it requires some experiences.

Our lives are a sequence of experiences strung together and built on each other. These experiences can be as mundane as ordering paper towels off Amazon or as life changing as giving birth to your first child. And though experiences themselves only last a short time, they can have long-lasting consequences, shaping our behavior, attitudes, and understanding of the world.

If experience represents how human beings interact with the world, then it’s also the input and output of every employee, every customer, every partner, every supplier, and every person that touches an organization.

Therefore, all that an organization does is create experiences. It creates experiences for the employees who spend 8+ hours every day at the organization. It creates experiences for the customers who visit its website or use its products. It even creates experiences for shareholders who benefit or lose financially based on the organization’s performance.

When you get down to it, experiences are the sole output of a company. Which means whether an organization thrives or fails comes down to the experiences it delivers.

That’s why every organization (including yours) is an experience factory.

With this new context, focusing on XM is not an optional decision; it’s already the primary activity of every organization. Think about the experience chain where your organization continually creates experiences for employees whose actions then continually create product and brand experiences for the rest of the world.

While you don’t have a choice about engaging in XM, you do have a choice about being purposeful in those efforts. Too many organizations fail to focus on the experiences they deliver and leave this fundamental activity to chance.

To create a thriving experience factory, you need to build the capabilities to continuously learn about the needs and feelings of human beings across your ecosystem, propagate those insights to the people who can take action on them, and rapidly adapt your operations to adjust experiences based on those insights.

How do you create those capabilities? By mastering Six XM Competencies, and remembering that your organization is—at its core—an experience factory.

 

Five Recommendations For De-Emphasizing Benchmarking

Benchmarking, benchmarking, benchmarking… it’s a popular subject.

I’ve been publishing CX benchmarks for more than 10 years, so you might be surprised by my point of view on the topic: benchmarking is often overused and misinterpreted. I’m not saying to give up on the entire activity, but people often spend too much time and energy focusing on industry comparisons that aren’t necessarily an accurate reflection of the genuine customer experience.

Let me start by saying that benchmarking is a perfectly good activity. It makes sense to periodically evaluate your performance relative to competitors, especially as an input to your strategy. And it’s also healthy to look at your performance relative to companies from other industries.

While benchmarking provides value, people often let it distract them from more important activities. So here are five recommendations on how to think about benchmarking:

  1. Focus on improving, not comparing. When it comes to the use of your insights activities, it’s critical that an overwhelming majority of your efforts are aimed at finding opportunities to improve — not scorekeeping. Many executives seem to feel as though a benchmark provides a security blanket of sorts—one that shows their remit within the business is in line (or better than) the competition. Whether it’s from internal metrics or external benchmarks, knowing where you are and where you’ve been is not nearly as valuable as knowing where you should be heading. Companies often use up a lot of their feedback capacity to ask customers (and employees) questions solely for the purpose of fueling a benchmark. My advice: Optimize everything you do on driving improvements, even if it means dropping some benchmarking questions.
  2. Obsess about customers, not competitors. One of the risks of relying too much on benchmarking is that it can mask your performance when there are shifts in the market, such as new competitive options or evolving customer requirements. You may be doing well against current competitors and with existing customers while the market is slipping away from you. Your critical strategic question should be are we delivering the right experiences to the right customers?, not how are we doing versus our competitors?
  3. Compare data within studies, not across them. Every industry benchmark is based on a specific methodology, with it’s own target audience, sampling approach, timing, collection mechanism, questions, and calculations. Each of these items has an impact on the results. As I often say, sampling patterns really, really matter. It’s often ineffective to compare results across different studies unless you control for all of those items, which can be very difficult. So don’t spend too much time trying to reconcile an industry benchmark with internal results.
  4. Set goals around key drivers, not necessarily industry benchmarks. As you think about setting goals for your organization, don’t fall into the trap of relying on benchmarked metrics just because the data exists. You should be setting goals for the items that drive the overall performance of your business, which may or may not look anything like the industry benchmarks. What’s unique about your brand and what creates a loyal customer? We recommend following five steps for creating a CX metrics program, starting with higher-level goals and working your way down to metrics on key drivers.
  5. Rely on internal insights, not external data. While external benchmarks can provide a high-level snapshot of relative performance, they lack the depth and adaptability to dig into critical company-specific topics such as the needs of target customer segments and your performance during key moments of truth. The additional value of internal insights are also dramatically amplified when you combine experience data (X-data) with operational data (O-data). The ability to dig into key questions and find more meaningful insights makes building internal insights capabilities a much more valuable endeavor than digging into external benchmarks.

The bottom line: Choose actionable insights over competitive comparisons… everyday!

Talking Employee Experience and XM With Ben Granger

Our team joined Qualtrics last October to create the XM Institute, and one of the great things that we’ve found is that there are many people across Qualtrics who are experts in different aspects of Experience Management (XM). So I decided to interview one of them, Ben Granger.

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Ben is a Sr. Principal for Global EX Strategy. He spends his days thinking about and helping organizations design leading-edge EX programs. Like many of the subject matter experts across Qualtrics, Ben had a strong background prior to joining the company. He has a PhD in Industrial Organizational Psychology and has worked in EX at Verizon.

Here’s our Q&A:

Q1: We describe experience management as a discipline where organizations “continuously learn, propagate insights, and rapidly adapt.” Based on our your work with companies, what do you think that looks like for a company that is really doing well with EX?

Ben: This shows up in the mindset that the organization has around employee experience. Namely, the belief that they will never get it perfect, that EX is a moving target and that they should always look for ways to improve. It’s ironic, actually, that some of the most mature EX programs I run into are run by organizations that seem to always feel like they are behind. They have this thirst to keep pushing things forward. Companies like Quicken Loans and Rogers Communications come immediately to mind – they are always very humble about the current state of their programs but in actuality, their programs are well ahead of others in their industries. I think this is because those organizations or either intentionally or unintentionally treating EX as a discipline.

Q2: We recently defined Six XM Competencies, LEAD, REALIZE, ACTIVATE, ENLIGHTEN, RESPOND, and DISRUPT. Can you share some best EX practices you’ve seen in one or two of the competencies?

Ben: Firstly, I should say that I am a big believer that the “best practices” organizations employ should be heavily dependent on their maturity. 

1907_6XMCOmpetencies3Some of the practices that highly mature EX programs use could backfire if an organization has never done formal employee measurement before. So that is always a consideration we make when we advise our clients. 

That said, one competency that I really like is “Activate”, which is about building the skills, support and motivation for EX. This is where many organizations get stuck in a rut. Leaders see the inherent value of measuring and improving EX but when they think about increasing the measurement of EX, it sounds very daunting because of the way that EX or engagement has been measured in the past. They are jaded by the old school process. So to “Activate” the organization, you really have to change leaders’ mindsets. You have to reframe what “action planning” is, which sometimes involves calling it something different! Basically, instead of handing leaders a dense report of data and charts, give them short and prescriptive readouts that are focused on “what they should do to improve EX”. Instead of forcing them to add “action planning” to their list of things they have to do, provide the EX insights in the same tools and systems they already use. These simple practices show leaders that it can actually be simple to leverage employee insights. 

Another that is a lot of fun is “Enlighten” which is about providing actionable insights across the organization. For this one, I like to borrow the principles and practices from the customer experience side of the house. For example, if you compare how organizations structure their employee surveys and their customer surveys, there is usually a huge difference. The CX surveys tend to be shorter, more conversational, more in-the-moment, and built into the apps and systems that the customers use. On the other hand, the EX surveys are quite the opposite – they are long, tedious and oftentimes require employees to completely leave their work environment to provide feedback. And to be clear, this is absolutely ridiculous and there is no reason why this has to the case! So when we are building the enlighten competency for our EX clients, we focus on those consumer-based principles – simple things like shortening surveys, giving employees multiple avenues to provide feedback (e.g., on their mobile phones), making the survey items more conversational, integrating the feedback into the systems that employees are already using to make feedback part of the process. 

Q3: When you run into companies that are just starting their EX efforts, what are the type of things that you typically recommend that they start with?

Ben: Employee engagement surveys have been under attack in the popular press recently but honestly, I think this is one of the most practical and reasonable places to start on the EX journey. So when I work with organizations that really have never done formal EX measurement in the past, I usually recommend starting with this approach. 

1907_EmployeeFeedback4I think this is important for a couple of reasons: (1) it gives the organization an opportunity to explicitly ask their employees for feedback. I borrow that line from professor Ed Batista because I think it summarizes how important it is for organizations to “explicitly ask their employees for their feedback, (2) it gives everyone in the organization the opportunity to give feedback, and (3) it gives the organization time to build some of those competencies like “realize” and “activate” without overburdening employees or leaders.

For example, if an organization has never done employee surveying before, then before jumping to frequent pulsing, for example, they have to build trust among employees that their feedback won’t be used against them, and that their feedback matters. And on the flip side, you have to build manager capabilities to understand and act on feedback. If this isn’t a natural activity for them, it will take time to build these capabilities. And a traditional engagement survey is a great way to start building that trust among employees and those capabilities among managers. And (4) this is the progression that most organizations have taken. So it’s a well worn path and we know exactly how to evolve EX programs from that starting point. 

Q4: Thinking about the future, what are some of the things that you imagine companies will be doing with their EX programs that they are not typically doing today?

Ben: I mentioned this earlier but I think that we will see a lot more consumer-based principles make their way into EX programs. We are already seeing it happen in mature organizations but this will accelerate in the next few years with the field of XM and the continued war for talent. 

Another that I think we will see more and more of is passive listening. For example, collecting employee experience data from social media and combining those insights with insights from formal, active surveys. We have some clients that are already doing this and it appears to be highly effective so long as organizations don’t misuse them and are transparent with their employees about them. 

And of course, I definitely see much more integration across the pillars of XM. We are only scratching the surface of what’s possible today. The linkage research across EX and CX is nearly 20 years old now and yet, there hasn’t been much in the way of progress in the field since. That will change and that will change quickly. Organizations are going to move well beyond the simple link between things like EX and CX and begin to have a sophisticated understanding of the interrelationships among practices that improve EX, downstream and long term CX outcomes, the brand experiences those practices create and how those brand perceptions, in turn, impact their ability to attract and retain employees and customers. And by the way, my guess is that this whole chain of events and experiences starts with EX!

Q5: When organizations are actively trying to improve EX, what are some of the obstacles that they really need to watch out for?

Ben: Trying to move too fast – this is a self-imposed obstacle in a lot of cases and it is completely avoidable. It is very tempting to want to go from nothing to best-in-class overnight. But this is rarely (if ever) a good idea. As I mentioned earlier, you have to first build trust among employees and capabilities and buy-in among leaders. This takes time to do. And business leaders can get impatient – they invested in improving EX and they want to see returns…today! I try to set my clients’ expectations – EX programs are kind of like diesel engines – they take a little while to get going but once they are running, they just keep on going.

Making assumptions based on anecdotes – this also is super common and avoidable. The point here is that organizations should not bypass legitimate measures of EX in favor of one-off anecdotes or examples. Within XM, we talk about experience gaps and oftentimes, these gaps exist between what organizational leaders “think” is happening and what employees or customers really think. There is nothing wrong with leveraging personal anecdotes and examples but using those as the sole source of information to drive actions or processes intended to improve EX is a terrible idea.

A quick example – I was working with a large retail bank a few years ago and one of the consistent themes that came out of their annual survey was that call center employees were not happy with their “career progression” opportunities. At the time, their survey was not sensitive enough to dive deeper into what employees meant by this. A few sr. leaders reasoned that the way to fix that was to build a formal career progression program to give employees line of sight into their next move. But we suggested that before they did that, we should really try and understand what the employees meant by career progression. And sure enough, we did a follow-up survey and looked at their open ended comments and the employees were actually much more interested in stretch projects and having more autonomy in their day-to-day jobs and opportunities to do different jobs in different departments. This obviously made a huge difference in what the company implemented…and saved them a ton of money by the way.  

Q6: What most excites you about the emerging category of Experience Management?

Ben: I mentioned it a few times but I am super excited about what we can learn and leverage from the CX space. I have learned so much from my CX counterparts over the last few years.

I also legitimately think XM is going to make the business world much more human. If you think about it, what XM essentially states is that it’s actually better for business if you do right by your employees, your customers and your stakeholders. Imagine if the opposite were true or if organizations perceived the opposite to be true? IF that were the case, our lives would be much worse! 

But luckily that is NOT the case. So XM will continue to prove this to be the case and eventually the organizations that provide the best experiences will be the ones still standing…and that is a great thing for all of us!

Q7: Now for something a bit more personal, what is your favorite quote from a movie, and why does it resonate with you?

Ben: “Where we’re going we don’t need roads” – Doc Brown from Back to the Future II.

First of all, this is one my favorite movie trilogies of all time – I could watch the first two movies over and over and never get tired. 

But tying it to EX, it really resonates with me that we often think about the future in terms of what we’ve done or what we’ve had to do in the past. Like when leaders immediately get scared of something like lifecycle feedback or pulse surveys because they immediately think about how painful running that one annual survey was in the past. Sometimes, we have to forget the past and imagine what it could/should be like. 

Operationalizing XM: The Report

I’m super excited to announce the publication of new research from the Qualtrics XM Institute, “Operationalizing XM.” It describes how organizations can tap into experience management (XM) to continuously learn, propagate insights, and rapidly adapt—capabilities that can be used by just about every organization. It’s a must read (and a free download) for anyone who cares about or is just interested in XM.

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The report outlines the XM Operating Framework, and goes into detail on Six XM Competencies.

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Here’s the executive summary of the report:

An ever-increasing flow of information is shifting power from institutions to individuals, while new technologies are redefining business models and shortening product lifecycles. To succeed in this environment, organizations need to adopt a new approach that focuses more on the experiences of human beings throughout their ecosystem. How? By developing a discipline called Experience Management (XM). This report introduces this new approach and provides details around:

  • The XM Operating Framework, which is built on a combination of competency, technology, and culture.
  • The six XM Competencies—LEAD, REALIZE, ACTIVATE, ENLIGHTEN, RESPOND, and DISRUPT—that organizations should focus on to improve their XM capabilities.
  • The five stages of XM maturity that companies will progress through as they master the six Competencies: 1) Investigate, 2) Initiate, 3) Mobilize, 4) Scale, and 5) Embed. This report also includes an XM Competency & Maturity Assessment organizations can use to calculate their own maturity levels.
  • The XM Diffusion path that companies should follow as they expand their XM efforts across their entire enterprise.

Stop Obsessing About Organizational Alignment

I was recently asked a question that I hear a lot, how do we get alignment across our large, complex organization? This is an important question since the path to Experience Management (XM) often requires large-scale change.

I’m now just saying: Stop focusing so much on it. Instead of trying to gain full alignment before you begin, build it over time in an iterative manner that I’m calling Agile Alignment.

When people think about transformation, they often make a false assumption that alignment is required prior to change. They believe that it’s a prerequisite to get all of the key stakeholders on the same page. It isn’t.

If you have limited bandwidth (which is the case for just about everyone I’ve ever worked with), then you have to make trade-offs on where you spend your time and energy. At a simplistic level, you will be faced with deciding between trying to build alignment with people who are not pre-disposed to supporting your efforts, or focusing on driving some elements on your change agenda. My argument is that, on the margin, the latter can be much more productive than the former.

We often assume that alignment is a precursor to change. But let me introduce a new thought: Successful change is the precursor to true alignment. In other words, you may be able to get people passively on-board with your plans, but they aren’t truly on-board until they see something is working and on the path to success.

The ideal approach for driving transformation, therefore, is an iterative process that I’m calling Agile Alignment. It goes like this:

  1. Identify key stakeholders who are actively aligned
  2. Drive successful change initiatives with those aligned stakeholders
  3. Build alignment with a larger group of stakeholders
  4. Go back to step #2

This way, you keep expanding the scope of your efforts and the breadth of your alignment over time.

The bottom line: True alignment follows success.

 

 

Is NPS A Dubious Fad?

Okay, it’s that time again. Every few years someone ignites the debate about whether Net Promoter Score® (NPS®) is a great or terrible thing. A recent article in the WSJ (The Dubious Management Fad Sweeping Corporate America) has sparked the discussion this time.

Rather than write something entirely new, I decided to share something I wrote in 2015 that addresses the issue. Before I share that post, I also suggest you take a look at these:

Below is the 2015 post, Is Net Promoter Score A Savior Or A Demon?

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Every couple of years, I get a resurgence of questions about Net Promoter® Score (NPS®). These surges typically coincide with research that shows how NPS is either an excellent predictor or a terrible predictor of company performance. That data often ignites a religious battle between the NPS lovers and NPS haters.

Well, it’s one of those times.

Let me start by saying that I’m an atheist in this NPS battle. We’ve had the opportunity to study and work with hundreds of companies that use NPS. I’ve recommended to some companies that they adopt NPS, to others that they stop using NPS, and to others that they start with a totally different set of metrics (see our VoC/NPS resource page).

Let’s look at what we know for sure about NPS…

The reality is that the metric itself is much less important than how it is used. I’d rather use a sub-optimal metric in a way that drives positive improvements across an organization, than have a perfect metric that doesn’t result in as much impact.

Here are some quick answers to key questions:

  • Is NPS the best indicator of customer loyalty and business performance? In many cases, no.
  • Can other metrics be used to drive positive change? Yes.
  • Does NPS provide an easy to understand metric that can be widely adopted? Yes.
  • Can NPS be used to make an organization more customer centric? In many cases, yes.
  • Will a company improve if it increases promoters and decreases detractors? In many cases, yes.
  • Can NPS be used inappropriately? Yes.
  • Can any metric be used inappropriately? Yes.
  • Would I ever recommend NPS for every touch point? No.
  • Should companies consider their specific business when selecting metrics? Absolutely.
  • What’s more important, the metric or the improvement process? The improvement process.

The bottom line: NPS is neither a savior nor a demon.

P.S. In case you didn’t know, NPS® and Net Promoter® are registered trademarks of Fred Reichheld, Satmetrix, and Bain & Company.

 

Exciting News From The XM Institute

The time has finally come for me to tell people to stop purchasing Temkin Group research reports. Are we eliminating them? No. Are they irrelevant? No. We’ve just decided to give them away for free on the Qualtrics XM Institute site.

That’s right, you can now get access to almost our entire research library for free. One of the reasons we joined Qualtrics was to be able to help more people and organizations. This move shows you the commitment that Qualtrics is making to help the world understand and deliver on the promise of Experience Management (XM).

One of the things you’ll notice on the XM Institute page is a filter to select reports based on Six XM Competencies. Yes, we’ve created a new model. It’s based on the following six competencies:

  • Lead. Architect, align, and sustain successful XM efforts. Driving XM transformation requires a strong program and active support from senior leadership.
  • Realize. Track and ensure that XM efforts achieve business objectives. For XM efforts to have lasting, positive impact, they must align with the overall priorities of the organization.
  • Activate. Create the appropriate skills, support, and motivation. People generally gravitate towards the status quo. To help overcome that inertia, the organization must ensure that employees have all the appropriate XM-related training and support needed.
  • Enlighten. Provide actionable insights across an organization. At the center of XM is the constant flow of data being transformed into useful information and shared with those most capable of taking the appropriate action.
  • Respond. Prioritize and drive improvements based on insights. An organization must act on what it learns by making constant improvements as insights are uncovered.
  • Disrupt. Identify and create experiences that differentiate the organization. Truly successful XM efforts go beyond simply reacting to problems to proactively developing innovative experiences that give the organization a competitive advantage.

That’s just a quick summary. We will be publishing much, much more on this model in the future. It will be the primary lens for all of our content, which is why and we’ve created categories on this blog for the Six XM Competencies.

Enjoy all of the free content on the Qualtrics XM Institute site!

Six Categories Of X&O Data Insights

Last week I attended SAP’s SAPPHIRE and CX Live events in Orlando. It was great to see 35,000 or so of my new friends. As you might expect, Experience Management (“XM”) was a dominant theme. Just about every SAP or Qualtrics keynote speech discussed XM, and it was a topic at many of the concurrent sessions. I really enjoyed seeing the XM message come to life in so many different ways.

One of the cornerstones of XM is the combination of operational data (“O-data”) and experience data (“X-data”). While each type of data can provide valuable insights on its own, the combination can unlock new levels of intelligence across an enterprise. These more inclusive datasets will increase in value as organizations expand their use of predictive analytics, as the combined data is inherently more insightful.

To help you think about where you can find valuable opportunities to combine X- and O-data within your organization, we identified the following six categories of use cases:

  • X Why: Find something happening in O-data and look for an explanation in X-data
  • O Drivers: Find something happening in X-data and look for operational situations that are causing the situation
  • X&O Predict: Build projections based on an analysis of X- & O-data
  • X&O Personalize: Adjust how you treat people based on a combination of X- & O-data
  • X&O Alert: Send alerts and other proactive information based on a combination of X- & O-data
  • X Value: Measure the value of improving experiences by examining the impact that those changes have on business results

1905_CategoriesOfXODataInsights_v2

The graphic above provides some customer experience (“CX”) and employee experience (“EX”) examples, but it’s not meant to be an exhaustive list of use cases. Hopefully the table provides you with a good sense of the insights that can be unlocked with the combination of X- and O-data.

Now that you understand some of the ways for gaining insights from X- and O-data, think about how the combination can impact your organization. If you have some ideas or examples of how it’s worked for you, leave them in the comments section of this post.  I’ll try and highlight some of the most interesting items.

The bottom line: Combine your Xs & Os to unlock more insights.

 

CX to XM: Propelling Humanity & Intelligence

As you have hopefully seen, I’m now running the Qualtrics XM Institute, where we will be producing easy-to-consume, compelling content and training that both inspires business leaders with experience management (XM) possibilities and helps them drive value from their programs. Many people have asked me recently about why we’re now focusing on XM instead of on customer experience (CX).

The quick answer is that we are still focusing a lot on CX. It will continue to be a critical component of our work. The longer explanation for this CX-to-XM transition requires me to first break down how these two domains work together.

I’ve had the opportunity to lead the CX movement for many years now, and I’m very proud of what we’ve been able to accomplish together. While CX still has a lot of room for improvement, the discipline now has a robust set of repeatable skills and practices, which are being used by a growing—and increasingly capable—community of CX professionals. We’ve come a long way over the last decade!

When I take a step back and think about how CX has changed the way leading organizations operate, it’s really reshaped their behavior along two key dimensions:

  • They have made human beings the center of focus
  • They continuously generate and act upon insights

We unlocked something powerful in CX. By combining an intensified understanding of how people think, feel, and behave with our dramatically improving capabilities to uncover and act on those insights, we’ve created an entirely new set of best practices. In fact, I believe that this combination of humanity and intelligence will form the basis of how organizations compete in the future. It will be the fundamental component that defines success or failure.

But the power of humanity and intelligence is valuable beyond just our interactions with customers. We need to take what we’ve learned in CX and extend it across the entire enterprise, from suppliers, to employees, to partners, to customers. Every part of our organization should be built on a platform of humanity and intelligence.

That’s what XM is all about—Propelling humanity and intelligence across an enterprise.

Think of CX as the initial use case of XM. Yes, there’s still a lot to do in CX, but there are many other use cases that we should be thinking about as well, such as employee experience (EX), product experience (PX), and brand experience (BX). And all of these different experiences should be built upon the same XM foundation.

Our CX efforts have already been extending to XM. Customer journey mapping has led the way to employee journey mapping, voice of the customer programs have defined the model for voice of employee programs, and the understanding of behavioral economics and the use of experience design is being applied across many new areas.

If you’re a CX professional, I hope you’re just as excited about XM as I am. Not only will it generate even more demand for your skills and capabilities, but it also gives us the opportunity to take all we’ve learned from CX and apply it in a myriad of interesting new ways.

The bottom line: XM expands the humanity & intelligence uncovered by CX.

Complexity Is An Experience Killer

I just spent two days in Miami with a great group of executives who are part of the SAP CX Client Advisory Board. One of their presentations described the company’s technology transformation, and included a stream of activity around “decomplexing.” I loved seeing that!

Complexity ends up oozing its way into all types of experiences. Complex products, prices, or processes lead to ill-prepared employees and confused customers. A complex set of benefits leads to ill-prepared HR representatives and confused employees. A complex brand positioning leads to erratic messages and a confused marketplace.

The problem even goes beyond confusion, as complexity causes people to make mistakes — or even to think they made mistakes when they hadn’t. It generates large numbers of unproductive interactions, as people try and sort through the complexity to figure out what they want to, or need to do.

People often try and mask complexity. And while that may be effective in some situations, it ends up failing almost all the time. Why? Because complexity oozes its way into everything. It’s extremely hard to contain. A complex pricing structure can be masked with a configurator, but customers end up being confused about why they have to buy something, the price associated with the purchase, or the information on their first bill.

Organizations have a natural tendency to create complexity. They add rules and processes on top of of other rules and processes. That’s why decomplexing is a great thing to work on. It requires an explicit focus and an ongoing discipline. Making things simple is often much harder than continuing to make them complex.

Decomplexing is worth the effort.

The bottom line: Simplification is a wonderful enabler of great experiences.