Customer Experience is a key focus area for all business leaders. However, in this fast changing world, the meaning of Customer Experience is changing dramatically. Do we really know what customer expects? How can we significantly improve our play on customer experience?
Before we understand how the customer experience is re-evolving, it is important to understand the context. I did write an earlier blog in detail about the VUCA world (Title – The World of Tomorrow). However, let us start with a quick introduction to VUCA.
VUCA is a term coined by US military in the post-cold-war era, to define the emerging multi-polar world with asymmetrical adversaries; and propelling terrorist cells bringing the battle home and making it difficult to identify the difference between terrorist and innocent civilian. However, the term gained currency post 2008 crash in business, when a new normal has been established and the business models/paradigms that worked prior to the crash are no more meaningful.
VUCA stands for Volatile, Uncertain, Complex and Ambiguous world.
Volatility refers to the rate of change in the World. Nature and dynamics of these changes along with the speed of change is creating volatility in the world. Uncertainty refers to the lack of predictability and high possibility for surprise. There is limited sense of awareness and understanding of issues and events happening around us. We are operating in a world where we are unclear about present situation and future outcomes. Complexity refers to the constant chaos and confusion that surround an organization. Multiple decision factors and forces outside of control have rendered business extremely complex. Ambiguous refers to the possibility of misreading the situation. With so many forces at play, cause and effect could become too confusing and could drive incorrect actions. Rapid technological changes, increasing global interconnections, climate change, population growth, global age and income disparities are combining to create a highly volatile and unpredictable terrain.
As someone said, we are moving from a world of problems (which demand speed, analysis and elimination of uncertainty to solve) to a world of dilemmas (which demand patience, sense-making, and an engagement of uncertainty). We are faced with dilemmas that are unsolvable, complex, often messy, threatening, and confusing and laden with puzzling choices; and with risks that cannot be avoided but need to be managed strategically. In such a World, companies cannot achieve success by being fast followers. They need to be able to create the ‘future’ and hence the importance of Innovation (no more as a differentiator but as necessity for survival). This requires different set of Leadership skills. For example, never ever before, the need for Inspirational Leadership has been as critical as it is required now and in the future. With VUCA, the teams can neither comprehend the rapid changes around them nor the implications of such changes on the business. Rationale explanations cannot work as the past is no more indication of the future. They need inspirational leadership to guide them towards the new direction.
When business leaders, with the powerhouse of their organization technology, analytics and talent, are finding it difficult to handle VUCA, Customers are overwhelmed and confused. With so many variables in play and constantly changing world, customers are unable to make decisions. They are looking for others to provide guidance, which is non-existent. Hence, they are looking to products/solutions where decision making is minimal or not required. To take an example from Asset Management, with so much of unpredictability around their income and expenses (given the current world where neither income nor expenses are stable/predictable/guaranteed), Customers are unable to decide upon their specific goals or portfolios. Instead, it is easier to opt for ETFs that could provide returns in line with the market and hence do not require the customer to make any complex decisions (it’s another point that ETFs are indeed generating good returns while active fund managers are struggling to grapple with the VUCA world).
Given the situation, Customers want integrated solutions that could handle as much VUCA as possible and insulate them from those effects. Solutions - that are designed to meet holistic needs of the customers and minimize the level of decisions that they have to make. Customer experience is no more driven by how we interact with the person (yes, it is still important) but more by how we meet their needs.
Most of the companies are still trying to find their way in the VUCA world, thus generating tremendous opportunities like never before. A truly customer focused company that could deliver holistic solutions will position itself to be the best customer experience company (not just in the industry - as in the VUCA world, the boundaries of industry are getting erased), would benefit from loyalty of customers and be a market leader.
