Why your company isn't structured to serve customers


Most businesses are not organised to serve their customers' needs. So what are the structural, functional and process obstacles that exist?

19th Aug 2019

Is there a big relationship split on the cards? Is heartbreak on the horizon? Because the truth is that you and your customers have been growing apart for years - and now it's crunch time.

So what’s gone wrong?

Customers have become increasingly restless. The modern customer is channel agnostic, and their purchase journeys are no longer linear, hopping from device to device, and channel to channel, sometimes even within the same conversation. This is all well-documented, of course.

What is less clear, however, is how successful the response to this has been - whether brands’ efforts to keep themselves appealing to customers is working.

Certainly there is increasing lip service to the customer experience, and a growing awareness of its importance. There has been a rise in investment to support new digital channels and service models that are favoured by today’s customers. But the concern is that digital transformation and the introduction of new channels is, in many cases, building on foundations made of sand. Because while new innovations, touchpoints and technologies are being added, businesses are failing to address the structural, functional and process problems that are the main culprits for customer dissatisfaction.

Indeed, digital transformation could even be contributing to the problem – some organisations are merely increasing the number of disconnected touchpoints that they provide, and creating an even more fragmented customer journey.

This is bad timing because of course evidence also suggests that today’s customers are becoming less forgiving of poor experience and less brand loyal.

Business structures and the customer

So what is the cause of the structural, functional and process problems that are tearing companies and customers apart?

The short answer is that, in most cases, businesses are simply not organised around their customers - and they never have been. They have evolved and developed to support accountability and ownership, rather than serve the customer.

Michael Hinshaw, managing director of McorpCX, points to studies by the likes of Forrester Research and the American Management Association that demonstrate how the vast majority of company executives believe they have siloed organisations, which they acknowledge is hampering their performance – and their customer experience.

And this jives with Hinshaw’s own conversations with customers, he notes. “We hear from customers all the time about their frustrations as they attempt to accomplish goals when they deal with companies like these across channels or functions. And these frustrations are growing – because customer expectations for better and more consistent cross-channel experiences have radically increased.”

Organisations are not organised around their customers - and they never have been.

The reality is that while it is convenient for organisations to divide their business into silos, customer experiences to not fit into these silos. As Hinshaw adds: “Customers interact with a company horizontally, across silos, bouncing from the web to the call centre, or from marketing to sales.

“Time and again, we see that managers and employees within each silo are often doing their level best to deliver great customer experiences within the context of their ‘silo’ – and the incentives and reward structures they operate under to do so. The problem is, even when each group is doing their best, it can feel disconnected and broken to your customer.”

What silos are damaging customer experiences?

Let's briefly examine the silos that are contributing to these inconsistent, fragmented and ultimately frustrating experiences. The three most notable silos are operational silos (functional), channel silos (interaction) and hierarchal silos (organisational). These in turn then perpetuate or cause a further tier of silos, such as data silos, metrics silos and systems silos.

Tim Pickard, whilst at NewVoiceMedia as CMO, wrote a whitepaper examining the three most prominent silos:

  • Operational silos. “Operational silos tend to present across functions; marketing, sales, service, finance. This can be readily understood for two main reasons,” says Pickard. “Firstly, the development of a function, take mine as an example, focuses on the needs and goals of that function. That may be building marketing campaigns designed to engage potential customers, measuring levels of success in that process through campaign views, clicks, marketing qualified leads. Many different measures, but focused on the success of that function. Secondly, the allegiance of functional team members is firstly to the team and secondly to the brand. That engenders behaviours that lead to the success of the function, but also drives a somewhat myopic view and consequently set of behaviours. We therefore have situations where marketing run a campaign that sales know nothing about. Or, sales sell products or solutions that don’t meet the customer needs, all creating failure demand for the function further down the line, ending with finance who have to try and collect payment.”
  • Channel silos. Customers have multiple channels with which to interact with most every company, and the number of touchpoints is ever-increasing. But companies make it extremely difficult to interact with them across multiple channels without excessive effort on the part of the customer. Often companies don’t act and speak in one voice across the different channels, while customers often have to start anew with the company any time they shift to another channel. And this is a big problem when the modern customer is keen to hop across channels. “There are instances where a customer either wants or needs to switch between channels. Moving from chat to voice for example, where the capability of the former has been exhausted. Ideally, the context of that communication are not lost and can be transferred to the customer service specialist who picks up the voice call,” says Pickard. “We all know the frustration of having to re-explain the problem when our call is transferred to another agent. This is the same deal, except across channels. This is increasingly frustrating as it means that firstly identification and verification have to be re-established, you are who you say you are; secondly, re-explaining the situation/problem that needs to be resolved, and thirdly as you go through each channel, what you have managed to achieve in each.”
  • Hierarchal silos. Pickard notes: “The thinking here is that simpler problems can be managed by more junior and less experienced employees, who consequently have lower authority levels. Once a problem becomes too complex or there is a requirement for a resolution that carries a cost burden, then this needs to be escalated. You have heard the words, ‘I’ll have to check with my manager’ or ‘I need to pass you to my supervisor’. This behaviour is a symptom of a hierarchical silo.”

Digital transformation and the customer

So how are businesses attempting to tackle these silos and refocus their operations around the customer?

The most dramatic measure is, of course, to take a wrecking ball to the existing company structure, in a bid to rebuild it to ensure that it is a better fit to deliver a better outcome for both company and customer. Innovative structures that have emerged in recent years include holocracy, which has been adopted by shoe retailer and CX leader Zappos, and the flat lattice organisation adopted by W.L. Gore & Associates, an organisation that is not only regularly ranked as one of the best companies to work for, but is also beloved by customers.

But organisations needn’t overhaul the entire structure to tackle silos. One popular measure, of course, is to establish a set of principles and an overarching philosophy that can guide the organisation, and help staff understand the right and wrong ways to act and behave. Working with a common set of principles, the idea is to encourage consistency and common-thinking.

A further action is to create cross-functional roles. For instance, the role of chief customer officer (CCO) has emerged in recent years in forward-thinking businesses, as a way to lead customer experience efforts across the entire business, spanning multiple departments and units. The thinking here is that this cross-departmental role can encourage the sharing of information, encourage collaboration and nurture a consistent approach to the customer.

Also on the agenda for organisations is a re-evaluation of governance structure. Detailing the roles and responsibilities of those in the business, the idea is to organise the company around the customer, and in line with the wider customer experience strategy, creating alignment and accountability, but without silos. 

At a more tactical level, the proliferation of customer journey mapping exercises demonstrates how a growing number of businesses are working to better understand where customers are experiencing disconnections as they travel across the organisation. Customer journey mapping efforts are an increasingly popular way of visualising where improvements need to be made.

Given the evolution of the modern customer, and what is at stake, Pickard is unsurprised that a growing number of businesses are exploring how they can better structure their organisations.

“The expectation levels of today’s customer are much higher,” he notes. “They expect to be able to resolve most of their queries through self-serve techniques; if not then they want the most efficient route for them. That could mean a suitable channel dependent on situation, availability of device, preference. The ability to move between them with ease is also becoming expected.

“The challenge for business is that customers have huge choice, and switching costs are, in the main, extremely low. That means poor customer service leads to decreased customer loyalty and higher propensity to switch. In addition, many customers will now ‘talk’ online about their experience multiplying the damage caused to a much wider audience.”

For most organisations, there is still time to rescue the customer relationship. But now is the time to act and avoid a messy separation.

Replies (1)

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By PaulineAshenden
28th Nov 2016 16:39

As you say Neil traditional departmental structures don’t necessarily work in today’s customer-centric work. Essentially serving the customer is now everyone’s job – whatever their role in the organisation. There are some ways to help reinforce this in this Eptica blog

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