The Changing Customer

by Braden Kelley

The Changing Customer

In previous articles I’ve spoken about how the pace of change is accelerating, and how for many people (and organizations) things are changing so fast that they feel overwhelmed and that things may be changing faster than some of us humans are able to absorb. I’ve spoken about how we are in the middle of a period of discontinuity thrust upon us by the rapid advances in computing and mobile connectivity that have put a supercomputer in everyone’s pocket and a target on most organizations’ backs.

Why are things changing so fast?

Is it that we’ve hit some sort of inflection point never achieved before in human history that is allowing us to innovate and displace the status quo faster than ever before?

Maybe.

Have we reached some sort of perfect storm where the innovation curve has gone vertical and the singularity will be here tomorrow?

Probably not.

So if we are not necessarily innovating faster than ever before or destined to reach the singularity tomorrow and become one with machines, then what is creating the feeling that things are changing more rapidly?

One word…

“Expectations”

Changing Customer Expectations

It feels as if the world is changing faster than ever before because the expectations of our customers and our expectations as customers are changing faster than ever before. Why?

Because we as consumers are seeing better customer experiences enabled by digital technologies in parts of our personal lives and more efficient and effective business processes in parts of our business lives, we are now expecting every organization (not just companies) and every aspect of that organization to deliver an efficient, effective experience and information exchange in whatever channel we choose, whenever we want to experience it.

This incredible change in expectations is being thrust upon all organizations simultaneously and threatening the very existence of entities that have existed for dozens or even hundreds of years. This discontinuity has created immense technical debt for organizations large and small to overcome and the only way for an incumbent organization to recover and to survive in this new digital age will be to undergo a complete digital transformation.

This doesn’t mean creating a digital strategy to address one part of the organization or a single constituency, but a path to a complete transformation that brings digital approaches to both every part of the organization and its operations, but also to all of its constituencies, at the same time. This means re-imagining every system, every policy, every procedure, and every process as a digital native organization looking to enter and disrupt your industry might, and then make a plan for transforming yourself. This will require IMMENSE amounts of change, and is no small task given the 70% change failure rate, but it is the key to your organization’s survival.

The problem is that the organizational change thought leadership status quo isn’t up to the task of planning and executing the scope and scale of change required for existing organizations to survive the digital evolution underway. A new set of tools is needed. My new book Charting Change and the accompanying Change Planning Toolkit™ were designed to inspire a change revolution to free people from the tyranny of the blank word document and poorly planned change efforts.

Why the Pace of Change is Accelerating

Economics 101

Because the challenge we face is not a static one. Organizations that focus on catching up to where the customer is today and wedging their efforts into existing budget constraints are those that will find themselves falling further behind the curve of changing customer expectations.

No longer is it a victory to be seen by customers as ‘best in class’. No, now customers are expecting every organization to be ‘world class’. This means that increasingly customer satisfaction will be achieved only by providing one of the best experiences in the world. Talk about changing expectations!

And so given the time to develop new technology solutions, you should be aiming not to incrementally improve your current experience to get closer to the leaders in your industry, but instead investing in a solution that will anticipate what the best customer experience allowed by technology 12-18 months from now and start building that instead.

It’s Economics 101 all over again. In today’s reality, as most organizations seek to move up the customer experience supply curve, the customer experience demand curve is constantly shifting outward, leading your share of the market to wither and die unless you make the strategic investment required to actually shift your customer experience (CX) supply curve outward as well.

I’ve tried to capture the scenario in the figure above titled ‘Why the Pace of Change is Accelerating’. Most organizations when they see at Time0 that their level of customer experience is below Customer Expectations0 they invest in projects to increase their CX Supply0 up the CX Supply curve to CX Supply1 thinking that they will then be meeting the customers’ level of expectations at Time1. But that’s not how it works in the digital world of today, as customer expectations are changing (shifting upward) just as fast as the technology used to create better customer experiences. So, organizations that invest in moving up the CX Supply curve to catch up with current customer expectations find themselves continuously falling short of future customer expectations.

Conclusion

The reason nearly every organization follows this approach of climbing the CX Supply curve to close the gap on customer expectations is usually financial. Most managers are forced (or compelled) to try and close the gap with existing budgetary resources and by creating a digital strategy as part of these efforts. Very few organizations have visionary leaders willing to invest in a digital transformation and fundamentally re-think the architecture and capabilities the organization needs to successfully compete in a digital age. Very few organizations see how to properly use technology to fulfill the mission of the organization and to exceed customer expectations, and as a result create a shift outwards in the CX Supply Curve itself.

Choosing not to digitally transform your organization, creates the space in the market for new digital native organizations to enter and establish a beachhead and attack the incumbents.

At the same time, as our world and organizations continue to digitize this will result in decreasing variable costs and increasing fixed costs, leading to increased consolidation in many fragmented industries. Those organizations bold enough to invest in shifting their customer experience supply curves outward by undergoing a true digital transformation will improve their position to be a buyer instead of a seller as this consolidation occurs. So the real question is…

If we are living in an era of survival of the digital fittest, which side of the digital evolution do you want to be on?

I hope you’ll join the change revolution, get your copy of Charting Change today and check out the Change Planning Toolkit™!

Image credit: Winggz.com

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Braden KelleyBraden Kelley is a popular innovation speaker, builds sustainable innovation cultures, and tools for creating successful change. He is the author of the five-star book Stoking Your Innovation Bonfire and the creator of the revolutionary new Change Planning Toolkit™. Follow him on Twitter (@innovate) and Linkedin.

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