Improving the customer experience is a goal for many leaders. Some companies have attacked this challenge by introducing so called customer experience councils.
As an example, the Danish company Maersk has established a customer experience council in each of its 55 regions. The purpose, according to a case study, is to bring together all departments that impact the customer experience. Participants in the meetings review customer data, make sure that everyone understands the interdependencies between departments and the effect of the customer experience, and identify improvement areas and actions.
This seems like a sensible approach to create awareness and generate suggestions for improvements.
I also agree that it’s important to focus on cross-unit interdependencies (I dedicate a chapter in my book to this topic).
However, the governance aspect may be a challenge with this kind of structure. We are talking about a “parallell structure” – an organizational solution that is added on top of the existing line management structure.
You basically have two options: Either to give the customer experience council suggestion authority only, or to give it decision authority – that is, the authority to make decisions and allocate resources to specific improvement projects aimed at improving the customer experience.
Let’s assume that you give the council decision authority. Then you have basically created a decision forum that may overlap and compete with the existing leadership team.
In this case, it will be hard to define up front what the precise mandate for the council should be. After all, you don’t know what the necessary improvement areas are going to be – they are likely to affect several departments and functions, and may require funding, something which will impact the budget available for other initiatives too.
Then let’s assume that you only give the council suggestion authority. In this scenario, the council can generate ideas, but will need to convince line management in order to have the ideas funded and implemented.
This is even more challenging.
Remember Quality Circles? These were small groups of employees that came together at regular intervals to solve quality and productivity issues. They were popular during the 1970s and 80s. It was originally a Japanese concept that was imported to the West by the quality gurus that had studied Japanese manufacturing practices.
In 1982, a study in the US showed that 44% of all companies used Quality Circles. During the following years, they gradually declined and disappeared.
A lot of research was done to find out whether they worked or not. The conclusion: They didn’t produce any significant results.
Here’s an excerpt from a report written in 1984 by Susan Mohrman and Edward Lawler (two very well-respected US researchers)*:
Most of the individuals who have to act on the ideas from the Quality Circle Program are middle level managers (…) They are often presented with ideas that in many cases they feel they should have thought of themselves or with ideas that change their own work activities. Not surprisingly, they often resist the new ideas and, as a result, either formally reject them or are simply slow in responding to them.
Quality Circles were easy to set up, but were often disbanded when people lost interest, or when leaders became disappointed by the lack of results from implementing the early suggestions created by the groups.
Mohrman & Lawler came to the following conclusion:
(…) the only solution we see is to design the participatory approaches so they are not parasitic to the regular organization. This implies the transfer of responsibility and authority, and the alteration of role expectations and reward systems in the organization.
Customer experience councils may be a valuable first step toward building a more customer oriented organization. Given the experience with Quality Councils, however, one should think through the governance implications, and one should probably consider them a temporary solution.
“Parallel structures” are inherently unstable. To create a solution that lasts, you’ve got to redesign the formal line organization to make sure it is aligned with the market. That’s the best approach to ensure you have a customer oriented organization.
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*Source: Mohrman, S. & Lawler, E. (1984). Parallel participation structures: The case of quality circles. Working paper, Center for Effective Organizations.