Will CIOs take ownership of stakeholder 'happiness'?

It's a very different world today for CIOs seeking to move their organizations into the future. With industry leaders proving that great customer experiences are the key differentiator, some IT departments are becoming much more stakeholder-centric, consumerized, and focused on their satisfaction.
Written by Dion Hinchcliffe, Contributor

These days it's become fashionable for forward-thinking IT departments to regard their service delivery through a more consumerized lens. As digital technology has become profoundly democratized around the world -- dramatically raising the bar for user expectations in the process in so many ways -- IT departments are beginning to emulate the techniques that have worked so effectively in the consumer space.

For example, a significant number of IT organizations I encounter today are now managing to marketing-style Net Promoter scores to gain a 360-degree view of internal customer sentiment and tap into the voice of the IT customer. Newer IT services are being enabled with consumer product-like packaging, promotion, support, and usability features. Enterprise data is at last becoming increasingly accessible and discoverable, Google-style, especially in more mature organizations. People in the business are even becoming self-service IT developers in some organizations.

It's clear that the internal IT customer in general is becoming more empowered: A growing percent of organizations are pushing the boundaries of bring-your-own-technology programs to spur new tech discoveries by internal stakeholders. An increasing number of enterprises are employing hackathons to unleash open innovation from outside IT to solve long-standing technology challenges. They're even enlisting and empowering foot soldiers across the organization to help drive digital transformation in ways that most suit the business.

Related: How can businesses keep up with tech change today?

The Outcome of a Data-Driven, Connected, Social, and Customer-Centric Enterprise

A Matching Business Shift to Customer-Centricity

IT isn't alone in this shift to a new customer focus. A comparable revolution is happening more broadly to businesses as a whole today, as organizations move away from a primary emphasis on brand, product, and/or functional structures to new models that are much more customer-centric.

The motivation for being centered on the customer, whether by IT or by the business, has become well defined: A growing body of industry data makes the point that's seemingly obvious on its face. Namely that customer-centric companies are more successful than those that aren't. This includes a long-standing research finding by Deloitte that customer-centric organizations are fully 60% more profitable than those that aren't.

However, the functional and product-centric models that most organizations are more familiar with evolved the way they did for a reason. While it may be more successful to organize around what the customer needs, I'd argue it's significantly harder to do, as many customer desires don't necessary align with how the businesses works today or what it's good at. At its best, customer-centricity requires significant real-time adaptation to customer needs, at least to the limit of what is practical and possible. What companies therefore actually need to be competent at in this new world is the mass customized delivery of their products, services, and overall customer experience.

The Future of IT and Digital is Understanding People

To begin doing this, however, the customer's actual needs and current state must be determined. This is first and foremost a systemic listening and empathy challenge at scale. In a customer-centric world, the mindset of the customer becomes of paramount importance. More interestingly in this conversation -- and perhaps the largest challenge overall to IT in terms of its core competencies and inclinations in moving toward customer-centricity -- is influential industry research from Forrester and others that it is emotions that actually drive the larger share of the customer decision process, not logic.

The unexpected insight in this for IT -- and digital efforts in organizations in general -- is that today we must now seek to understand the customer state, as individual people, often better than they generally do themselves. Successful customer-centric organizations must map, navigate, and attempt to satisfy the various emotional states of their stakeholders with their service delivery experiences, just much as they must meet the requisite functional needs that IT is traditionally much more familiar with.

Managing stakeholder satisfaction in this way is a rather foreign view to most technologists today. Yet it's a requirement that is already very well-known to customer-facing functions like marketing, product development, and customer care. For example, these groups have long used user journey maps that describe how to effectively help customers move from negative emotional states to positive ones in order to achieve a successful outcome in a given interaction.

The bottom line: Customer satisfaction is the value creator and prime competitive differentiator today. IT departments must learn how to deliver well on it in all its forms as technology effectively becomes the business.

Anecdotal Evidence of a new CIO Mindset

We've begun witnessing this new, more personal style of customer-centricity first hand from top IT leaders. Recently, myself and fellow ZDNet columnist Michael Krigsman had an interesting chat with the new CIO of global software giant SAP, Thomas Saueressig.

It's worth emphasizing that Saueressig is one of the very first millennial IT leaders of a Fortune 500 company. His use of language clearly here shows a generationally different way of thinking about IT's new role in having positive personal and emotional impact to stakeholders across the business, all the way to SAP's customer base:

My most important KPI is customer satisfaction [of SAP employees]. Happiness is a competitive advantage; if we have happy employees, they will make our customers happy. This is a direct correlation. We need to put employee productivity at the center of our activities. The key goal for every IT employee is customer satisfaction and put the user at the center. We want to excite them and inspire them.

This is quite literally the first time I've heard the word happiness used by a major CIO, or tied it to competitive advantage (although I have heard CIOs use the word 'unhappy' in conjunction with stakeholders many times.) In my opinion, this statement exemplifies the very different, far more personal, consumerized, and connected operating environment that we now find ourselves in.

For those paying attention, the mandate is clear: It's now upon us to acquire the skills necessary to use the vast universe of new and emerging technologies to influence and deliver on this kind of happiness.

Achieving Technology-Embodied Stakeholder Happiness

Today we are literally connected to our stakeholders constantly in digital channels. They are closer and more immediate to us than at any time in history. It's all too easy to actually understand what they are thinking and feeling, if we have the will to do so. But today, most organizations are relatively immature in how to make the most of this connectedness to be genuinely customer-centric. In other words, to do the very best to use these assets and knowledge to create and sustain high levels of customer satisfaction.

I've explored many times over the years of the key challenges and opportunities of being super connected, a very new phenomenon that has literally emerged only in the last few years of business. Our customers actually want to talk with us, and we want to learn from them, but issues of scale, ownership, and operational processes for doing so has largely eluded us as we figure out how to best shift to focus more on the customer.

Fortunately, another important technology-enabled trend has arrived on our doorstep of late that may indeed be the key to helping us make this transition. The data-driven organization has become a significant conversation as well, the phrase describing enterprises that proactively and systematically capture and use data to inform their key decision making processes in a dynamic way.

Simultaneously, as we've become surrounded in recent years by vast new, open digital channels of conversation, from enterprise social networks inside our companies to customer communities, partner engagement portals, and broader social media, we've come to understand that we can actually see and analyze everything that's being said that's relevant to us.

That furthermore, we can tap into and harness these conversations for knowledge, insight, sentiment, stakeholder needs, and even emotional states, like happiness. This is, in addition, of course, to just asking our stakeholders, though this is where the challenge of scale comes in and where social listening, natural language processing, and machine learning can all help guide us towards a more customer responsive organization.

The Data-Driven, Connected, Customer-Centric Organization

Though as I've frequently said, the biggest underlying challenge in realizing customer satisfaction in this way is effectively operationalizing it within core business processes. In the same way that today's digital environments have shown to help with employee engagement, our digital networks and analytics are a major tool for achieving customer satisfaction at scale.

Looking at all of these trends as they combine together into our future, we can see that as organizations become much more digital, more data-driven, more connected, and seek to be more fully engaged, that it's apparent that we actually have a good many of the right pieces in place to deliver on customer-centricity. The rest can be added. The hardest part is making the structural and process shifts in our businesses toward actually guiding the organization through the lens of the needs of the customer.

It should also be said that the reality in most organizations is that quarterly revenue usually trumps all, including often what's best for the customer. But revenue is a trailing indicator for customer satisfaction, and often isn't a good indicator at all. A more important leading indicator of business success is customer happiness. That's what they'll pay for and come back for. The key insight here is that technology is now a primary delivery vehicle for it, and perhaps the fundamental competitive differentiator now for organizations able and willing to employ it.

Additional Reading

Can we achieve a better, more effective digital workplace?

Digital priorities for the CIO in 2016

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