In the 1980s, former Scandinavian Airlines System (SAS) CEO Jan Carlzon transformed the struggling carrier into a leader by turning customer service into an obsession. In doing so, he coined the phrase TheMoment of Truth to describe the exact point in time a customer made contact with a SAS employee — when SAS had to prove its value in order to keep the customer.
For SAS, Carlzon preached, the collective outcome of these Moments of Truth — 50 million of them per year, he tallied — ultimately determined the success or failure of his company.
Walmart founder Sam Walton put the same phrase into action by instituting the retailer’s famous Ten Foot Rule. Employees who came within 10 feet of customers were expected to greet them to influence The Moment of Truth at the shelf when they decided whether to buy a product.
In 2005, Proctor & Gamble declared The Moment of Truth to be about the customer’s experience with a product:
- seeing it in a store or online,
- buying and
- using it, and
- offering feedback about it.
In 2011, Google (perhaps not surprisingly) proclaimed The Moment of Truth to be when a customer researched a product online before making a purchase.
Fast forward to today. Given the massive disruption in retail over the past decade, if you asked a hundred consumers or retailers to define The Moment of Truth, you’d get just as many answers. That’s because for retailers and brands, The Moment of Truth has passed. It’s been replaced by the sum of the consumer’s connected experiences.
Here’s why: As consumers, the value we once associated with the act of buying a product has diminished. Sure, there are lots of ways to buy products today — online, in stores, using mobile payments and even digital currencies. But in an omnichannel world, every successful transaction is still just a transaction. A non-event, not a memorable experience that creates lasting value. Ironically, it’s often memorable only if something goes wrong.
Today, brands at the vanguard don’t push products. They curate connected customer experiences by leveraging partners to create ecosystems of value for consumers.
Take Airbnb. They’re not just selling rooms, they’re delivering a broader, more satisfying travel experience involving such diverse experiences as violin making in Paris, truffle hunting in Tuscany or driving classic cars in Malibu.
Or consider Ikea’s acquisition of Task Rabbit. It improves the home furnishing experience by taking the frustration of assembling furniture off the table.
For consumers, it’s no longer just about buying a product or service. It’s about anticipating memorable experiences from their favorite brands, regardless of industry. In today’s connected economy, customers are placing more value on their experiences than the products or services they’re consuming. They want experiences that make their lives easier and precisely reflect their preferences, needs and aspirations.
Think about it. Decades ago, a Moment of Truth with a retailer or brand was when a customer in a store interacted with a salesperson or spoke with a customer service rep by phone. With the dawn of the Web and e-commerce, the number of these touch points exploded. Today, the Internet of Things has brought the digital insights of the online world to the physical world. Using machine learning and augmented intelligence, retailers and brands design highly personalized customer journeys spanning the real world and the digital world, which to consumers are one.
For today’s connected consumer, the most recent great experience with a retailer or brand automatically raises the bar for all other competitors going forward. It’s become a virtuous cycle that’s made them feel empowered, always expecting more.
For retailers and brands, this has made connected customer experiences the new competitive battlefield. Instead of pushing products, they must now sell great customer experiences that play out seamlessly across their integrated physical and digital worlds.
Leading born-on-the-Web retailers such as Amazon understand the importance of connected consumer experiences for creating greater value. That’s why industry pundits are so intrigued by the company’s foray into brick-and-mortar stores and its acquisition of the Whole Foods supermarket chain. They’re eager to see what it holds for the connected customer experience.
For retailers and brands, the implications of Connected Consumer Experiences are daunting. How do data-driven marketers reconcile the new Moment of Truth — the sum total of the consumer’s connected experiences?
They have to go well beyond selling products to address broader consumer needs and aspirations like beauty, adventure, health or wellness. They must orchestrate customer experiences that span multiple brands, service providers and commercial ecosystems.
Instead of static product offers, carefully designed connected experiences need to continuously raise the bar, feeding the virtuous cycle of consumer expectations. Imagine if a fitness equipment store went beyond its traditional boundaries to serve its customers — as an example, when a consumer buys a rowing machine, the store offers not just assembly services but also
- fitness apparel,
- nutritional supplements and a
- trial membership at a local rowing club.
Doing this at scale is a tall order. It requires capitalizing on the gold mine of customer data retailers are sitting on and IoT insights from the physical world, including stores. Connecting, analyzing and sharing it in real-time across company silos and with their new partners in value to
- understand,
- anticipate and
- satisfy customer needs.
And most important — continuously detecting and learning new consumer consumption patterns so customer experiences get better and better.
The new marching orders for retailers and brands are clear: they must deliver connected consumer experiences that add up to The Moment of Truth.
Scaling Agile is not the Path to Business Agility
Back then, when we were in the engine room, we all knew that one of the by-products of misguided Agile software development was an increase in technical debt. That to deliver working software at speed, we traded off reuse and generated some level of fragmentation. This sort of waste was acceptable as we worked to prioritise responsiveness over efficiency.
We knew that we had to stop and clean up on an ongoing basis. The technical term for this technique is called refactoring
.. As we matured, we started differentiating between efficiency and effectiveness. We realised that our focus on velocity was killing agility, that technical discipline is necessary to enable and maintain responsiveness.
..There are attempts to aggregate initiatives into roadmaps, evolve the strategy based on insights, and enable better innovation accounting, but if you go through the literature available, the focus is on the process, not the customer.
Andrew Ng warns us that as we move from the Internet Era to the Artificial Intelligence Era, we will likely need to shift our approach radically. In the internet Era, we focused on AB testing, on short cycle times, and on pushing decision making to engineers and product managers. Sounds familiar? It should, these are all linchpins of Agile.
.. When it comes to codifying and envisioning what enterprise/business agility looks like, the Agile movement is falling short of expectations. In parallel, the digital agencies and consulting firms that are stepping into this white space, lack the independence to pull it off successfully no matter how many articles are published in the Harvard Business Review.
.. The companies that were once known for exceptional product design innovation, fail to recognise until it is too late that they are losing their most loyal customers because they neglect to design the experience ecosystem thoughtfully. I decided to use a hardware example to represent best the fragmented experiences customers endure when interacting with the Enterprise. Yes, I’m looking at you Apple, the dongle company.
.. The enterprise found itself owning a multitude of disconnected platforms, solutions, and products. Quality, security, and privacy suffered as the years of decentralised velocity at the edges generated a bloated, complicated, disconnected, and unmanageable digital ecosystem.
.. there was a well-intentioned and healthy tension between effectiveness and responsiveness. A tension we should not shy away from because, as Jim Highsmith framed it many years ago, adaptive leaders understand they must ride the paradox between these two forces.
.. This time, code refactoring wouldn’t save us, what we needed, spoiler alert, was customer-centred, organisational refactoring at scale. And refactoring did occur, in the form of backlash against fragmentation, waste and the following flavour of “agility”, “Why do I need to write a story and wait for a programmer to add some content on the website?”. Why indeed!
THE CUSTOMER EXPERIENCE ERA
.. The darlings of the Gartner Quadrants and Forrester Waves announced that we were now in the Age of Customer Experience
.. they witness velocity killing both agility and their work-life balance.
.. The CIO and the Agile and Lean communities shifted their attention from products to platforms. They refactored architectures to become evolutionary. The epicentre of this mammoth effort was still centred around APIs, technology and operations in service of the business strategy. The focus wasn’t on the customer’s experience.
THE CUSTOMER-CENTRED INTELLIGENCE ERA?
.. The commoditisation of technology and the digitisation of the world helped us to get closer to the customer; in some cases, with analytics and programmatic, we managed to get too close without ever considering their experience and trust. We managed to get close to the customer without being customer-oriented.
Frankly, it was not that astonishing when the news broke of the 87 million Facebook users affected by Cambridge analytica’s election meddling. Or was it election advertising? For some of us, it was an expected and inevitable outcome.
.. Perhaps, the current crisis in customer trust will finally propel us into a true experience age — Intelligent, personal, relentlessly relevant, connected, dynamic, and consensual experiences. What Prophet describes as living and breathing brand systems with the ability to learn and evolve at scale. The goal has always been to continuously respond to customer needs, right?
.. In Agile management, there is no such thing as an “internal customer.” The only purpose of work is the ultimate customer or end-user. Under the Law of the Customer, the original producers not only meet the needs the internal customers: they are given a clear line of sight as to what value is being provided for the ultimate customer. Satisfying so-called internal customers is merely feeding the bureaucratic beast. It is a pretend-version of Agile.
Act 15. How Do We Get There?
- Ask the right (human-centred) questions.
- Design Led. Agile Enabled.
- Transformational, Visionary Leadership.When companies get where they’re sort of living by so-called making the numbers, they do a lot of things that are really counter to the long-term interest of the business.
-Warren Buffet.. Business Agility is the ability to achieve sustained business growth by responding to customer needs. If you are not focused on gaining a deep understanding of your customer and on delivering exceptional experiences, you can’t be responsive, neither can you assure their privacy, security and safety. If you have all that but lack operating model agility you are not a responsive business.
.. Technology must no longer serve the business; the business must no longer serve the business. If we are shifting the focus of the Enterprise from looking inwards to the needs of their customers and hopefully also to the benefit of their ecosystem and society — if we accept that this is the formula for long-lasting Business growth and sustainability — then it’s time to look beyond Agile.