Video Quick Take: Accenture Interactive’s Baiju Shah on Why Experience-Led Companies Win – SPONSOR CONTENT FROM ACCENTURE

Baiju Shah, Chief Strategy Officer, Accenture Interactive

Julie Devoll, HBR
Welcome to the HBR Quick Take. I’m Julie Devoll, editor for special projects and webinars. And today I’m joined by Baiju Shah, chief strategy officer for Accenture Interactive. Baiju, thank you so much for joining us today.

Baiju Shah, Accenture Interactive
Well, thank you, Julie. It’s a pleasure to be here.

Julie Devoll, HBR
Accenture Interactive recently launched a new piece of research called the “business of experience.” Can you start by sharing why you set out on this research and what you were seeking to answer? And then what did you uncover that might be helpful for today’s companies?

Baiju Shah, Accenture Interactive
Of course, Julie. So, to understand the business of experience, we really don’t have to look further than our own lives. This last year changed the structure of everything we experience—how and where we work, how we shop, how we exercise, even how we engage in relationships.

Now, as the vaccines are being rolled out, organizations are really seeking to pivot from pandemic recovery back to growth. But many are realizing their growth formula needs to be recalibrated and perhaps completely redesigned, because many of our new behaviors and values are structural. And that means they’re going to stay with us, as will the pace of change.

The key question is how do you create relevance in people’s new and ever-changing lives? How do you grow when the traditional growth formula is just that—it’s traditional? And so the opportunity really lies in the realization that everything we experience is up for reimagination.

We as humans all have a very, very sharp focus on the products, the services, and the brands and the role, their relevance in our lives as both customers and employees. And so, what we uncovered with the research is we actually think we’re entering an era of a renaissance of sorts, an experienced renaissance. And in this era, a new category of leadership will emerge.

And it’s going to emerge by those who don’t just observe the shift in customer expectations but shape their organization to create new mutual value with their customers and employees through meaningful and authentic experiences. And, of course, that new category of leaders is what we’re calling businesses of experience.

The good news is business leaders actually recognize this. In our research, we actually found 80% of CEOs say they feel the need to deeply reimagine how they engage with and treat their customers. And so, our research was really centered on what is the route back to growth that focuses on experience but goes beyond traditional customer experience, or CX.

And it’s really a route. It’s an evolution from CX to BX, the business of experience, where experience and customer obsession is not just about optimizing a touchpoint or a workstream. But it’s a new way of working. And it’s a top priority for the C-suite. And Julie, it does pay off. Our research found BX organizations have profitability growth that outpaces their industry’s peers by six times.

Julie Devoll, HBR
That notion of needing a new growth formula for the new era is really interesting. Why is CX no longer enough to drive growth?

Baiju Shah, Accenture Interactive
That’s a really good question. So, customer experience is certainly popular. But we’re finding the payoff from customer experience is increasingly elusive. And as we have dug into why, it’s because in many organizations, CX, customer experience, is just implemented as “glitter.” And it manifests as a slick website or a #MeToo product, even sometimes purpose-wash marketing.

But it’s often disconnected from actual human needs. And so, customers are often left wanting more. So the new pathway to growth that we prescribe is really about the evolution from CX to BX, business of experience. And that’s where human needs actually inform every facet and function of business, bringing the entire organization to focus on fulfilling those unmet customer needs.

The leading BX organizations, if you think about it, they really define themselves not by what they sell, but by the experiences they actually redefine. A very standard example that everyone’s familiar with is Netflix. Netflix doesn’t define themselves by a specific technology or an entertainment product. Rather, they are defined by the change they continuously create in the entertainment experiences.

The easiest way to answer your question is that CX is often glitter. And business of experience is actually about strengthening the fabric of the organization and making sure that customer needs are that unifying priority across the entire C-suite.

Julie Devoll, HBR
What then do brands need to focus on when shifting their focus from CX to BX?

Baiju Shah, Accenture Interactive
Yes, it’s a really good question, Julie. BX is about using experience to rewire the DNA of your entire organization. When you improve experience, you improve lives. And, in turn, you improve business. So ultimately, our research uncovers four key ingredients of BX leaders.

First, they obsess, absolutely obsess, about customer needs. And they use that as their strategic compass. So this is really about building organizational empathy. And leaders go beyond the traditional customer segmentation or market research. And they bring together all customer data—quant and qual—to form a complete view.

The second thing they do is the leaders make experience innovation an everyday habit. So this is really about culture. The leaders view innovation beyond incremental gains and move beyond what’s often a bias to copy from peers. And they often use customers and employees as collaborators in the innovation process.

The third thing that we uncovered is these leaders expand the experience remit across the entire organization. It’s no longer just the responsibility of the CMO or COO. It’s everyone’s business. This is really about a new way of working.

And finally, the leaders think the tech agenda, the data agenda, and the human agenda. What we’re finding is, too often, there are three different agendas. One for experience, one for analytics, and one for cloud. But the BX leaders connect the three by design. And they really go out of their way to understand what new experiences can be enabled through the new tech and data platforms.

Those are the four ways, Julie. And what’s really important is that those who operate well across all four of these areas—they not only operate as a business of experienced leader, but they’re achieving growth and durable growth. And our research found that the growth happens over the one-, three-, five-, seven-year horizon. So there’s business cycle insurance as well.

Julie Devoll, HBR
You talked a bit about the pace of change, especially a change in the customer expectations. So, what are some of the key considerations brands need to think about as they emerge out of the pandemic?

Baiju Shah, Accenture Interactive
The key consideration is that the customer you knew is not the customer now. So needs have changed. The values have changed. Our needs have changed. Our values have changed. It’s so crucial to understand the customer now and to understand what changes are structural and what are cyclical.

I was reminded in a conversation with my kids the other day that Pantone chose two colors as their colors of 2021. They chose ultimate gray. And, of course, that reflects the need for strong fundamentals—solid, safe, clean. But they also chose—I think it was called illuminating yellow. And that reflects warmth. It reflects cheer, perhaps even fun.

As brands look forward and think about the experiences and their brand voice, they need to consider both sides. They need to consider the safe and clean needs. But they also need to address the pent-up need for warmth, for belonging, for fun.

This wasn’t the case a year ago. And over time, we should expect these needs to evolve. So the real key here, the real consideration, is not to chase yesterday or just to respond to today. But build up a system—a system for systemic learning and getting comfortable with constantly evolving with the customer.

Julie Devoll, HBR
In your mind, how does BX change what’s required of future business leaders? And what does it mean for the relationships among the C-suite, such as the CEO and CMO relationship?

Baiju Shah, Accenture Interactive
This is a pivotal moment for the entire C-suite. And it’s one that’s going to impact how they collaborate and, in turn, how they’ll grow. Certainly, to lead an organization through a business of experience journey requires the entire C-suite to collaborate in new ways. They’re going to flex new leadership characteristics, like empathy and perhaps even vulnerability.

But across the C-suite our research unveiled a very interesting chasm. And I’m happy you called out the CEO and CMO relationship. We found that eight in ten CEOs say they need to change how they interact with customers. But only four in ten CMOs agree. So that finding spotlights a chasm of strategy, perhaps a chasm of communication, or it could be both. We really feel this is an inflection point for the CMO. It’s an opportunity for CMOs to rise up and partner with the CEO to seize business of experience as their North Star. At the end of the day, look, we’re going to see a growing separation between two types of CMOs. There’s going to be those who really embrace business experience and become a partner to the CEO and then those who stay more narrowly focused on their function.

Julie Devoll, HBR
How can BX success be measured?

Baiju Shah, Accenture Interactive
Yes, it’s such an important question. In the short term, there are operational experience indexes. There’s quality of experience like NPS and customer effort score and brand love measures. But ultimately, we believe there will be organizations’ need to drive experiences that create mutual value. And that notion of mutual value is very important.

But see, if you follow that line, the leaders will hook experience directly to growth. And it’s growth of the business. But it’s also growth of people’s lives. And so, if you really look out into the future, you can anticipate businesses actually holding themselves accountable for like a P&L of their customers.

Julie Devoll, HBR
Baiju, as leaders work to steer their organizations back to growth, what are some final thoughts you’d like to share with them?

Baiju Shah, Accenture Interactive
For me, the most important is the time is now. If there’s any doubt, again, I would encourage you to think about your own lives and how much has changed. We really have been given a once-in-a-generation opportunity to reset and rewire around people, around their needs. And even the biggest household names have a permission slip to completely reimagine how they do business.

I just don’t think there’s ever been a better time to embrace the business of experience. But let’s be clear. It’s a journey. It’s a significant mindset shift. But we believe that over the years to come, it’s just going to be an incredible engine for meaningful disruption, market differentiation, and customer satisfaction.

Julie Devoll, HBR
Baiju, this has been a great discussion. Thank you so much for joining us today.

Baiju Shah, Accenture Interactive
Well, thank you, Julie.

To read more on moving beyond CX to the Business of Experience, click here.

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