How Organizational Structure Limits Your Ability to Achieve Service Outcomes
The current organizational structure of your Services team and alignment with other customer facing resources may inhibit your ability to retain customers and expand relationship value. Organizational alignment, increased cooperation, and shared goals are key to customer retention and revenue expansion initiatives.
The State of Service Organizations
Service organizations are optimized to achieve task-based service objectives such as case closure efficiency, onboarding and adoption milestones, case deflection, and attainment of target Net Promoter Scores. While these are all important objectives, they are inadequate goals if not directly aligned with the attainment of strategic outcomes such as retaining customer relationships and growing account value.
Companies that focus on attainment of transactional tasks may not be able to maximize retention and expansion of customer relationship value. Sub-optimized organizations may:
- Archive transactional success but miss opportunities to identify customers at risk.
- Create delivery efficiencies though self-help and service automation but fail to deliver services necessary to help customers adopt and use products effectively.
- Establish new relationships but fail to retain them for more than a year.
- Provide a timely accurate response to a support issues but miss an opportunity to upsell additional services.
Characteristics of sub-optimized service organizations may include the following:
Narrowly Defined Customer Experience Strategy
The lack of a well-defined and coordinate Customer Experience strategy perpetuates inefficient and siloed organizational structures. When specific teams and individual are not held accountable for contributing to overall CX strategic objectives revenue and retention opportunities will be missed.
Siloed Organizational Structures
Service remains predominantly siloed with separate departments for Support, Education and Professionals Services and are often separate from Product Management, Sales and Renewal teams. Siloed organizational structures inhibit the ability to provide coordinated and efficient resource allocation to deliver the services necessary to sustain healthy customer relationships.
Lack of Common Goals
It is unrealistic to expect that teams will regularly coordinate activities if there are no incentives to support this behavior. The lack of shared goals that transcend organizational boundaries assure that teams will focus their efforts on the tasks and activities they are goaled on.
Siloed organizations do not actively coordinate activities throughout the customer relationship lifecycle. The lack of coordinated action is often the result of narrowly focused practices to achieve specific tasks and silo-specific goals with little or no incentives to promote cross-functional cooperation.
Sub-Optimized Resource Utilization
Use of overlapping and complementary resources from post-sales teams are not coordinated or pooled to drive customer success or achieve service delivery cost-efficiencies.
What is Your Optimal Organizational Structure?
There are many ways to organize and align teams and resources. Which organizational model do you use today? Is it optimized to achieve your strategic objectives?
Organizational Transformation is Inevitable
As companies refine their customer experience strategies and recognize that retention and relationship growth are paramount objectives, organizational transformation is inevitable.
The imperative to successful organizational transformation is to organize teams and resources in the most efficient means necessary to achieve clearly defined strategic objectives. This process begins with the articulation of the customer experience strategy followed by a description of how specific roles and teams will contribute to expected outcomes. Consider the following transformational imperatives.
Get Ready for Change
Change can be difficult especially when it challenges current operational and organizational norms. When you can recognize the conditions that require change you can prepare for a smooth transition to a new operating and organizational model. Consider the following indicators that signify change is necessary:
- Customer Demand – Customers express explicit need for better coordination between service entities and enhanced responsiveness to product needs.
- New Leadership / Vision – Service or corporate executives edict.
- New Revenue – Pursuit of new revenue opportunities from new service sales (up-sell | Cross-sell).
- Customer Retention – Effort to stem customer defection due to product and or service deficiencies.
- Competition – Competitors (partners and/or product competitors) offer differentiation from coordinated service offers.
- Product Transformation – Changes to product demand new types of customer engagement and/or programs.
Overcome Inhibitors to Change
Inevitably there are reason not to change. Consider the reasons that may inhibit changes to the alignment of teams and individual resources. Consider the following inhibitors to change and develop a response to address each:
- Incentives – The specific goals of teams and individuals do no foster cooperation. Individual and team goals and incentives may need to change to drive new behaviors.
- Executive / Corporate Philosophy – “Technology first”, “we never did it that way before…” “let the channel do it…” attitudes inhibit organic service transformation. Change the culture with fact-based evidence to justify the reasons for transformation.
- Lack of Vision – Lack of visibility into opportunities or risks of not making changes diminishes executive support. Make the case for why change is necessary. Quantify the net benefits to change.
- Parochial – Views that protecting organizational “turf” is more important than corporate growth. Convert detractors of change into champions by convincing individuals that the change will result in a net personal benefit.
- Rapid Growth – No perceived need to change during growth. It is hard to make the case for change when all performance indicators are positive. While change during high growth periods may not be necessary or possible, be prepared for when growth slows.
- Too Busy –When there is a justifiable reason to change, then everyone can make the time to do what is right. Make the case that the benefits of change are worth everyone’s time.
- Risk Averse – Change for the sake of change is never a good idea. All changes should be well thought out and understood. A good plan should outline the risks versus rewards.
Transformation to a Future State
Transformation to a future organizational state demands that there is a clear vision for what this future state organization will accomplish with clear goals, objectives and measures of success. This process begins with the articulation of the customer experience strategy followed by a description of how specific roles and teams will contribute to expected outcomes. The successful determination and transformation to the optimal organizational structure depends upon the successful definition of the following:
Established CX Strategy
Clearly Defined Organizational Goals and Outcomes
Well Defined Service Programs
Optimized Service Capabilities
Means to Measure and Improve Performance
Read more about The 5 Principles of Service Success
ServiceXRG examines the current state of service organizations and the forces at work that are driving organizational transformation. This study reveals how the isolated service silos of the past need to evolve into unified entities to drive Customer Success.
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Corporate financial performance depends on Services to nurture, retain, and grow customer relationship value. Companies are taking steps to modernize services and shift them to proactive, success-focused growth engines
Change is inevitable in Services but often difficult, especially when it challenges current operational and organizational norms. When you can recognize the conditions that require change and can address the potential inhibitors you can prepare for a smooth transition to a new operating and organizational model.
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