Introduction to the Realize Competency
Organizations don’t invest in Experience Management (XM) because it’s a “nice” thing to do for their customers or employees. They invest in XM because they recognize that systematically improving the experiences they deliver will produce tangible value for their business. Without an explicit, convincing connection between your XM activities and the business outcomes that matter most to executives and stakeholders, XM teams will struggle to secure the resources and support they need to implement their strategy and achieve their program objectives. And establishing this connection cannot be a periodic, snapshot exercise. Teams need to continuously track and manage the value they’re creating – or expect to create – adjusting their forecasts, metrics, and activities regularly based on the results.
To build the capabilities necessary to continually demonstrate the value of their efforts, XM Programs need to build the skills and actions associated with the Realize Competency – one of the Six XM Competencies that are foundational to the discipline of Experience Management. This particular Competency is about:
Tracking and ensuring that XM efforts achieve well-defined business objectives
When you develop your capabilities across the Realize Competency, it will help you:
- Secure XM investment through stronger justification. Like all groups, XM teams must compete for a finite reserve of organizational attention and resources. This requires convincing decision-makers that, of all the potential investments they could make, funding Experience Management efforts is a prudent choice. Many XM programs, however, struggle to make this case. Other competing priorities is consistently cited as a top obstacle to XM success, especially for customer experience efforts. Mastering the skills and activities associated with the Realize Competency will allow XM teams to construct persuasive, data-driven narratives that explain how their work creates value for the business. These narratives will not only convince budget holders to prioritize funding XM efforts over alternatives, they will help secure the cooperation of any key stakeholders who will need to support these initiatives with their own time and resources.
- Prioritize and validate activities. At any organization, there is a universe of potential experience improvements an XM team could address. Rather than tackling them at random, XM teams need to prioritize the activities that will have the most outsized impact on key experience and business outcomes. The Realize Competency includes a set of tools and approaches that enable XM teams to pinpoint which areas require the most urgent attention and which opportunities will generate the most value for the organization. This includes a suite of experience, behavioral, and operational (BOX) metrics that are aligned with broader organizational goals as well as various analytical methods – like correlation, driver, regression, and linkage analysis – that allow XM teams to understand and quantify the relationship between their metrics and specific business outcomes. These insights help XM programs allocate their human and financial resources more effectively and make more targeted, prescriptive recommendations to their partners across the organization.
- Build stronger alignment across the organization. Organizations today often operate in silos, with each department or team accountable for its own specific set of measurements and goals. While some specialization is necessary, such rigid divisions create misaligned priorities and strategies, hamstringing the organization’s ability to manage and improve people’s experiences at scale. The skills and capabilities associated with the Realize Competency will help XM teams translate their activities into language and measurements that resonate with groups across the organization, demonstrating to each one how experience improvements can lead to improvements in the business outcomes they care most about. The Realize Competency also helps XM teams ensure their efforts align with the priorities of both their key stakeholders and the organization more broadly. This ability to knit together the objectives and interests of numerous different groups into a common set of XM goals is critical for coordinating decisions and activities across the organization.
Mastering the Three Skills of the Realize Competency
To build the skills and capabilities that allow you to continuously demonstrate and communicate the value of your XM efforts, focus on developing the three XM Skills associated with the Realize Competency:
- Value Planning. Before XM teams can begin demonstrating the value of their activities, they first need to articulate how they expect changes in people’s experiences to translate into better results for the business. This Skill is about forecasting the business value of your XM efforts.
- Metrics Management. Once XM teams define the specific business value they expect their efforts to generate, they then need to establish a measurement system capable of tracking that value and driving accountability across the organization. This Skill is about tracking metrics that are explicitly connected with value.
- Value Delivery. Just predicting the expected value of XM efforts isn’t enough. After deploying a project or initiative, XM teams need to regularly reexamine – and potentially reset – their initial value projections. This Skill is about ensuring that value is created and recognized.
XM Skill: Value Planning
Experience Management efforts need to start with a clear understanding of the value they aim to deliver. This encompasses not only the value generated for customers or employees – like easier interactions, more delightful products, or more meaningful work – but the value generated for the business as well. XM teams often struggle to convert the customer or experience outcomes that matter to them into the financial or strategic outcomes that will resonate with their stakeholders. This both limits the effectiveness of their XM activities – which invariably hinge on the cooperation and support of business partners across the organization – and leads XM teams to focus on areas that don’t align with other organizational priorities, making it harder for them to demonstrate the value of their work.
To calculate and communicate the value they expect to deliver, XM teams need to hone the XM Skill of Value Planning, which is about forecasting the specific business value of XM effort. This critical Skill ties XM activities directly to the business priorities of key stakeholders and then provides them with an objective method for evaluating the success of these efforts. It also gives XM teams a framework they can use to track, quantify, and articulate the value their activities eventually produce. It allows them to show how changes in people’s experience deliver desired business results.
This business value you are linking your XM efforts to will often fall across five categories:
Effective Value Planning requires these three things:
- Alignment with stakeholder ambitions. The senior leaders you answer to and partner with do not necessarily care about improving experience outcomes. They care about how changes in those outcomes – like satisfaction, engagement, or effort – connect to changes to the business results they are accountable for, like quota attainment, digital adoption, and attrition. Start Value Planning efforts by identifying the objectives and priorities of your key stakeholders, which KPIs they care about (some examples in the value table above), and how your efforts might align with and support these results. Then, optimize your value management strategy to track how effectively your XM efforts impact these specific business outcomes and prioritize activities that are more closely tied to those ambitions. For example, when ServiceNow’s full-time Customer Experience team first formed a few years ago, they facilitated Design Thinking workshops for vice presidents and senior directors across the organization to understand each stakeholder’s strategic plans and major blockers. The team then used insights from these sessions to shape their three-year program roadmap as well as their listening infrastructure and core metrics.
- Defensible analytical models. It’s not enough to forecast strong ROI for your XM efforts, you must do it in a way that resonates with your stakeholders. This requires using the right techniques to establish defensible causal links between your XM activities and desired business outcomes. The exact analysis you use will vary depending on context and the data available to you. For example, regression analysis can help you identify and quantify the relationship between a dependent variable (e.g. average handle time) and one or more independent variables (e.g. level of participation in agent enablement sessions). Meanwhile, propensity score matching might help you estimate causal effects by matching a participant in a treatment group with a similar participant in a control group, and longitudinal studies could help you understand the effects of time and various factors on outcomes. To ensure that your analysis is defensible, enlist support from the finance department at the onset of the effort. Ideally, you should work with an analyst who is highly trusted by the CFO.
- Compelling Value Narrative. Once you have forecasted the expected business value of your XM efforts – which should be aligned with stakeholder priorities and supported by data and analytics – you then need to document and share these projections in a persuasive form. The specific shape this value narrative takes will depend on its intended audience. If you are trying to convince budget holders to fund a proposed XM initiative, you might need to develop a detailed business case linking the planned activity to cash flow. To share projected value with executives or convince functional leaders to support behavioral changes in their organization, you might instead create a shorter value narrative. This could be captured in a more visual form, like a Value Chain tool, or a brief statement that includes a targeted insight, your planned action, expected business impact, and value goal. For instance, “Our customer experience efforts will more quickly identify customers who are about to churn, which will enable us to establish more timely recovery plans, which will increase our retention rates. Our goal is to increase retention by five points over the next year.”
XM Skill: Metrics Management
Once an XM team has forecasted the value it expects to generate, they then need to monitor how they are performing against these targets. This requires them to continuously examine the results of their activities by tracking and managing a robust portfolio of metrics. These metrics should explicitly tie changes in people’s experiences to desired business outcomes and should permeate all areas of the organization, from executive scorecards to operational KPIs to frontline performance measurements.
To build a measurement system capable of monitoring progress toward their value goals, XM teams need to develop the XM Skill of Metrics Management, which is about identifying and tracking a set of metrics that are explicitly connected with value. Building this Skill allows XM teams to pinpoint exactly where improvements in specific journeys or moments will drive the most impact, helping them prioritize their activities and allocate resources effectively. This Skill also helps embed Experience Management into the rhythm of the business by incentivizing XM-centric decisions and behaviors in groups across the organization.
Effective Metrics Management requires these three things:
- Commitment to a core set of XM metrics. At the heart of a strong XM program lies a set of core experience-related metrics that are empirically correlated with the value you defined under Value Planning. Your portfolio should include at least one relationship-level metric (e.g., Net Promoter Score, employee engagement, trust), which will allow you to monitor the overall health of your relationships, identify key experience drivers, benchmark your performance, and set the strategic direction and vision for your XM program. This portfolio should also include journey- and interaction-level metrics (e.g., satisfaction, success, effort) to measure how people feel about a specific episode or collection of episodes, allowing you to quickly surface and address improvement opportunities. Along with experience metrics, a robust XM program also includes relevant operational and behavioral measurements, such as product return rates, sales data, and voluntary turnover rates. The goal here is to build a metrics program that provides visibility into your value system. So rather than selecting metrics at random, make sure you are choosing ones that are demonstrably correlated with the experience or business outcomes you care most about.
- A prioritized set of key drivers. While passively tracking a set of metrics may allow you to monitor trends or compare your performance to competitors, it won’t help you pinpoint where to focus your improvement efforts to drive the most impact. So after selecting a set of core XM metrics, you need to identify the key drivers influencing those scores. These can come in a wide variety of forms, including specific “moments that matter” (e.g., check-out experience, first meeting with manager, unboxing a new product), end-to-end journeys (e.g., service recovery, onboarding, purchase journeys), employee characteristics (e.g., friendly, knowledgeable, helpful), product features, brand drivers, and non-addressable factors such as employee tenure, customer tier, and region. Use analytical techniques like correlation, regression, and linkage analysis to uncover the relationship between different factors and your XM metrics. If you are early in your journey and don’t yet have the requisite data, you can hypothesize potential drivers based on qualitative insights from stakeholder interviews or run small controlled experiments.
- Clear metrics accountability. Metrics only generate experience and business value when they drive XM-centric decisions and behaviors. This starts with assigning ownership for specific metrics to the teams or individuals who have the power to influence them. Then define ambitious, yet achievable targets and goals for improving those scores and their drivers. Set up ongoing reporting mechanisms – like dashboards, alerts, and visualizations – to help these metrics owners monitor their progress and quickly adjust their efforts based on XM insights. In addition to equipping these owners with the skills, support, and motivation they need to achieve their targets, you will also need to communicate expectations clearly, incorporate metrics into regular reviews and meetings, and, where appropriate, thoughtfully link scores to performance incentives.
XM Skill: Value Delivery
Once XM teams have a set of metrics that drive accountability across the organization and clearly connect individual activities to the value outcomes the rest of the organization cares about, they then need to actively monitor and manage the value they’re creating. This requires them to prioritize their efforts to actualize the value statements they created under Value Planning. And if their efforts are not driving the expected value, they need to either make adjustments or socialize a different set of value statements.
To make certain that XM efforts are delivering against expectations, XM teams need to develop the XM Skill of Value Delivery, which is about ensuring that value is created and recognized. This Skill enables XM programs to optimize their value management strategy by instituting a regular cadence of examining – and potentially resetting – value goals. It also helps them share their progress with all their key stakeholders in an engaging way that builds enterprise-wide commitment and enthusiasm for Experience Management activities.
Effective Value Delivery requires these three things:
- Value monitoring. Your work isn’t done once you roll out a new XM project or initiative. You need to actively manage your efforts to ensure you deliver on the value you forecasted. Your team should be constantly asking itself, “Are we going to generate the value that we promised to the organization?” If the answer is “no,” then you need to make adjustments to your priorities and find alternative ways to realize that value. Work with your business partners to continuously track and regularly review the projected value from your efforts, and then use your findings as a key input to both short-term and long-term planning. Monitoring the accuracy of your value forecasts and adjusting your efforts accordingly will also help you build credibility around the organization and improve your projections going forward.
- Value validation. The context in which organizations deliver value is constantly changing – people’s expectations change, competitors change, business strategy changes – which means you need to periodically revisit the value objectives you have aligned your XM efforts to and ensure they still reflect the strategic priorities of your stakeholders and organization. For example, if you created a value narrative explaining how a DEI initiative would reduce voluntary employee attrition by five points over the course of a year, you need to examine whether attrition is still the key value objective for the business. If it’s no longer a priority, you would need to go back and focus again on Value Planning to connect your XM program with the outcomes that are now most important to key stakeholders.
- Value success stories. One critical, often overlooked, activity under Value Delivery is sharing success stories and examples of specific instances where you created meaningful business value. There are a variety of methods you can use here to inform and inspire your organization, such as highlighting the ROI benefits of XM within company-wide communications or embedding customized messaging into internal reports or data-sharing workflows. Supplement the drier, more data-centric aspects of this value message with anecdotes, quotes, and videos that bring these stories to life and engage the emotions of your audience. Communicating and reinforcing the net-positive and multiplier benefits of your XM efforts to people across the organization – everyone from executives to managers to the frontline – is critical for building both awareness and ongoing support for your program.
The Bottom Line: Continuously track and manage the value your XM efforts generate by building the three Skills of the Realize Competency.
Isabelle Zdatny, XMP, CCXP, is the Head of Thought Leadership and an XM Catalyst with the Qualtrics XM Institute
Bruce Temkin, XMP, CCXP, is the Head of Qualtrics XM Institute