Chapter
1
The Need to Become a Real-Time Organization
Evidence of the real-time revolution is upon us. Most customers expect companies to provide immediate service. Furthermore, they are willing to switch from those that do not. Evidence for these customer real-time pressures on companies comes from Salesforce surveys of consumers and business buyers in 2016 and 2018.6 These surveys of over 7,000 participants in 2016 and over 6,700 in 2018 occurred in a world where almost everyone uses a smartphone. Salesforce noted, “This constantly connected lifestyle has created a culture of immediacy in which customers’ definition of timely interactions means instant. Sixty-four percent of consumers expect companies to respond and interact with them in real time.” Salesforce also noted, “Customers expect a lot from companies, but don’t have faith in them to deliver.” Failure to deliver is a threat to survival, while the ability to do so provides a competitive advantage. “Fifty-seven percent of customers have stopped buying from a company because a competitor provided a better experience.”
Even though most companies do not meet customers’ real-time expectations, a number are striving to become more real-time organizations by providing faster, more convenient service. An example is Stop & Shop, a neighborhood grocer with more than four hundred stores. “We recognize that our customer is changing, and we’re evolving our entire shopping experience to better serve them. They’re focused on getting back to their lives, juggling many responsibilities and we want to make grocery shopping even easier and faster for them,” said Stop & Shop president Mark McGowan. For example, customers can save time when shopping in-store by using a mobile app to scan items as they select them. That eliminates their waiting in a checkout line.7
There are many other examples of real-time customer experience transformations. Rapid ordering has been a focal point for many organizations’ real-time transformations. Besides reducing the time for customers to place an order, many companies have focused on real-time transformation for their delivery of products and services, as observed through Amazon Prime and its competitors.
Customers expect organizations to provide instant responses or at least provide experiences that are better than the competition. Organizations that fail to meet these customer real-time expectations put their survival at risk. To ensure survival, leaders must transform their organizations to value customer time more effectively than competitors do.
Time: The Most Precious Customer Resource
Consider the consumer who has been in a minor traffic accident. Taking time to deal with insurance companies, getting estimates for repairs, getting repairs, and making rental car arrangements while the car is being repaired are all time drains. This unhappy consumer is already disturbed at having to spend precious time on these activities. What if the consumer encountered delays, such as being put on hold to talk with an insurance adjuster or having to wait beyond the arranged pickup time at the repair shop? Those delays would surely compound the feeling of wasting the precious resource of time.
It is not uncommon for people who are waiting on the phone or in lines at drive-up windows to drop out of the queue, aborting an intended task. Customers often consciously avoid going to establishments where lines are likely to form. As the Salesforce data indicate, customers have come to expect instant responses.
Time matters. It matters now, and it will matter more in the future when there will be continually growing demands for our individual time and attention. Time has become the most precious resource for many customers, and the value they place on it is only likely to increase. Unlike wealth, time cannot be accumulated. If a company can save its customers time, it demonstrates that it respects the high value that customers place on their precious, scarce, nonrenewable resource of time.
To illustrate how customer time could be more highly valued, consider the case of calling customer service. When a customer is told, “You are the tenth caller in the queue,” this message is perceived as an improvement over the “please hold, your call is important to us” message. Being told how long it is likely to be before the customer will be able to talk with a customer service representative is even better. Customers consider more information helpful, as it allows them to better judge whether they want to invest their precious time waiting. When customers are given the option to be called back in a specific amount of time, that proves to be even better because it gives them a degree of control. They then have the choice to wait on the phone or do something else with their time while their place in line is held for them. The company that values a customer’s time even more increases the number of customer service representatives to minimize any delay in responding to their customers’ service needs. Immediate service from a trained, knowledgeable, and empowered source is the best real-time response to a customer’s phone call. However, the company that demonstrates that it values the customer’s time by designing, testing, producing, and delivering a product that needs no service reduces the need for customers to call for service in the first place. This approach is likely the ultimate winner as long as the rare service calls that inevitably will arise even under this approach are not protracted.
Chad Wright, chief technology officer at MicroAutomation and leader of the company’s commercial practice, focuses on valuing customer time. “I find this missing with so many of the companies I do business with,” he says. He wants his clients to recognize that time is the most precious customer resource. He advises clients who are looking at transforming via changing existing systems and processes or adopting new technologies to ask, “How will this value my customer’s time?”8 That’s a powerful question!
The different examples of how companies handle customer service calls illustrate ways to value customer time more than competitors do. Companies that intentionally seek to value the customer’s time have adopted the spirit of the real-time revolution. As the Salesforce research indicates, companies that are not responsive to customer real-time expectations lose customers to competitors that provide better customer experiences. The lesson here is this: Strive to become a more real-time organization. Provide better real-time customer experiences!
Real Time Is a Moving Target
The traditional meaning of “real time” is the actual time an event takes. The Salesforce research cited at the beginning of this chapter indicates that many customers expect an actual response to be an instant response. Since most companies do not meet this expectation, customers migrate to those that provide a real-time customer experience that is closest to instantaneous.
A more recent meaning of “real time” is “immediately,” which is consistent with customer expectations that companies should respond instantly. Given that most companies are unable to deliver on the expectation of an instant real-time response, companies should view an instantaneously effective interaction as an ideal real-time response. This ideal applies to interactions that customers expect to be efficient. For other kinds of experience, this ideal shifts from a minimum amount of time to the maximum quality of time spent because customers expect the experience to be enjoyable, productive, or otherwise satisfying. The ideal real-time customer experience is what real-time organizations ultimately strive to achieve. An organization becomes more real time when it provides a customer experience that is closer to the ideal than the experience provided by the competition.
Customers’ expectations of the actual time it takes for a response will change as they learn what is possible via interactions with an organization and its competitors. Jeff Toister surveyed consumers over several years to learn how fast they expect businesses to respond to emails. In 2012, only 5 percent expected a real-time response of one hour or less. In 2018, the percentage with that expectation had risen to 30 percent. The vast majority, 75 percent, expected a response of one day or more in 2012. In 2018, the percentage expecting that slower response time had fallen to 56 percent.9 These results show that “real time” is a moving target. Once customers have learned what is possible, they adjust their real-time expectations. What is possible becomes their standard for future interactions with a company and its competitors.
Customers’ real-time expectations evolve as they learn over time. Customers learn based on their own experiences with their immediate provider. They also learn from that company’s direct competitors. They learn from others via word of mouth or postings on the internet. Moreover, customers learn and adjust their real-time expectations based on experiences from indirect competitors. These indirect competitors do not provide products or services similar to those of the immediate provider. Nevertheless, if customers believe another company in a different industry demonstrates a greater appreciation for their time, they will expect that those techniques should be applied to a different but more immediate situation.
For example, a customer’s general experience with online retailers may have led to an expectation that every organization requesting personal information should have the capability to store and display previously entered information. Rather than having to take the time to enter it again for a new interaction, it would be displayed automatically. This expectation could transcend the online retail space. For example, it could drive expectations about health-care service even if health-care providers currently fail to meet this standard. How many times have visits to a health-care provider’s office required the entry of data already in the office’s possession?
With more direct and indirect competitors transforming to value customer time, customers and businesses will learn that the different times associated with various steps in the life of a product or service (e.g., acquiring, using, and maintaining it) are moving targets. They will set their real-time expectations accordingly. Organizations that do not keep up with this moving target will fall behind. Given the priority that customers put on the value of their time, organizational leaders must vigilantly transform their organizations to respect that reality. Organizations that meet the moving target of rising real-time expectations will avoid the loss of customers that will inevitably befall those that fail to meet the rising bar.
A company wishing to transform a process to improve customers’ time experience must first understand how customers spend their time. That includes the time to acquire and use a company’s products and services. It also includes the time for any other experiences with the company, its products, and its services, such as, for example, participating in testing a product, maintaining it, and disposing of it. A business must expect that its competitors are continually upgrading their ability to improve the customer’s time experience, so the goal of any rival company has to be not simply to match a competitor’s time experience but to exceed it. By seeking to perform better than the competition, the successful rival company will become the industry leader in meeting real-time expectations. In this race to master time, the business that best understands how and where customers spend their time interacting with the company has the best opportunity to target its efforts to improve the customers’ time experience in a meaningful way. Coincidently, this is also one clear approach to winning market share, as the Salesforce research cited at the beginning of this chapter indicates. If an organization fails to meet customers’ evolving time expectations, it must provide other superior features to succeed. Those features, such as better product capabilities, quality, distribution, price, pre- and post-sale support, and ease of changing supplier, must be so attractive that they offset the less-than- optimal time experience customers will be forced to endure.
The Real-Time Continuum
Common interpretations of the term “real time” are “immediately,” “here and now,” “quickly,” and “fast.” Thus, a common interpretation of a real-time organization is that it is fast. Although a real-time organization’s speed meets or beats that of competitors, that real-time response may not be demonstrating that the organization really values customer time. Being faster is important, but it is not everything that customers seek when interacting with a company. Customers ordering a Market Fresh Turkey and Swiss sandwich from an Arby’s drive-through expect to be charged the correct amount, receive that sandwich correctly made, be treated with respect, and complete the transaction at least as quickly as if they had gone to a competitor. So speed is important; however, so is accuracy of the price charged, the quality of the sandwich, and the manner in which the customer is treated. If any of these other expectations are not met, the reduced effectiveness of the transaction diminishes the real-time experience.
For example, customers do not want to find that they received a different sandwich. Besides violating the expectation of receiving the sandwich they actually ordered, that would increase the time spent if they chose to have the sandwich replaced. Even if the amount of time meets or beats real-time expectations, any unmet expectations will lead customers to expect something less when they next consider Arby’s. Conversely, if all goes as expected, Arby’s remains a competitive alternative in the future since it would have demonstrated that it values customer time at least as well as the competition. An interaction that is fast and effective in meeting all other expectations in addition to time demonstrates that the organization values customer time.
Ideally, a real-time organization is so fast and effective that its interactions with customers are instantaneously effective. Such ideal real-time customer experiences may not be a realistic goal for all, but as more organizations strive to provide such experiences, more interactions with customers will have faster real times. Competition will raise the standard for what is considered to be fast enough. “Fast enough” is based on meeting current customer speed expectations. However, the current standard will change over time. What is considered fast enough today will be not be considered fast enough tomorrow as competition raises speed expectations.
To show progress toward the ideal instantaneous real-time interaction, leaders and organizational members striving to value customer time better than the competition can plot the real time of their customers’ effective experiences on a continuum. The continuum would show the ideal and actual times the experiences take. One end would have zero, representing the ideal instantaneous real time. Assuming the real time of customer experiences is greater than zero, the other end of the continuum would have the real time that those experiences actually take. As a leader or member of an organizational transformation effort, ask questions such as, “Do we monitor the time our customers spend on product testing? Placing an order? Interacting with customer service?”
The real-time continuum can be used for several purposes. For example, it can show progress from one transformation to another. It can show progress toward the ideal real time. It can show the times for various experiences that customers view as fast enough and how those compare to your organization’s times.
Organizational leaders and members can be inspired by real-time customer experiences that approach the ideal real time. For example, transferring funds from one account to another at a credit union can be accomplished almost instantaneously online. Customers do have to take time to access the account and specify the details of the transfer. Compared with pre-internet days when customers had to physically go to the credit union and have a teller make the transfer, which could have taken over an hour for those at a distance from the credit union, current real time is much faster.
For other customer experiences, real time is not so immediate. Real time could be weeks, months, or even years. Consider the time it takes to restore an antique automobile to its original condition or the time it takes to earn an undergraduate education. Thus, the real-time continuum has a range of real times, depending on the organization, product, or service and the kind of customer interaction.
Quality of Time Can Be More Important Than Speed
In some circumstances customers expect an experience that is productive, enjoyable, or otherwise satisfying. For example, utilizing a gym membership to work out or visiting the Grand Canyon is not driven by speed of the experience but instead a desire to spend time productively or enjoy the experience. Customers seeking a thirty-minute workout are not expecting the gym to provide a workout that is faster than other gyms. Rather, they expect to use equipment without waiting so that they can work various muscle groups. Visitors to the Grand Canyon are not expecting the US National Park Service to provide a faster experience than other vacation spots; rather, they expect that the awe-inspiring landscape can be experienced and enjoyed without significant impediment of crowds or delays due to parking. In these situations, the quality of time spent using the product or service is increased by the productive use of time or the pleasure experienced by these customers. The time delays and other impediments reduce the quality of the experience.
Real-Time Management—Prioritizing the Value of Customer Time
Business leaders transform their organizations to become real-time organizations by prioritizing the value of customer time. One place to begin is to rethink what an organization can do to provide products and services faster. A comprehensive rethinking includes an examination of the time and resources it takes for various processes, such as designing products and services, testing them, and producing, delivering, and servicing them. This starting point focuses attention on improving internal efficiencies and the efficiency of suppliers. Increasing efficiency typically reduces resources, including time. Assuming increased efficiency would allow a company to provide products and services faster and at a lower cost, that could mean that the company has demonstrated that it values customer time more than previously. However, if the reduction in the organization’s time does not carry over to the customer or, even worse, increases the time expenditure of the customer, the company will have failed to demonstrate that it values customer time. For example, if a company redesigns a business process to improve internal efficiencies, it may save internal time. However, if this time savings is at the expense of customer time, as would occur if the new process required customers to spend more time assembling the product instead of receiving it in an assembled state, the end result would be counterproductive. Furthermore, if the change in the company’s processes made one department more efficient but forced another department to be less efficient, the change could also be counterproductive.
Consider the company that contemplated saving time by reducing product testing. Although increasing efficiency for the testing process, this change could lead to a less reliable product design, which would increase customer service time, create customer dissatisfaction, and, thus, backfire. Optimizing one process in the system of beginning-to-end processes does not necessarily lead to overall optimization.
Understanding customer use of a company’s products and services is essential. Monitoring and assessing the amount of time expended, the quality of time expended, and the effectiveness of other aspects of the customer use experience would provide valuable information. Similar data collection and assessment would also be valuable for understanding internal processes and any other interactions between the customer and the organization. The resulting information would help guide transforming products, services, or processes to prioritize the value of customer time. To transform an organization to value customer time more effectively than competitors also requires similar monitoring and assessments of competitors.
Real-Time Management Research—A USC Marshall Research Project
The concepts of real-time management, the real-time revolution, and real-time organizations have been inspired by the research of Omar El Sawy and Pernille Rydén.11 Their research found that companies that were more profitable and growing the fastest looked at efficiency and time differently than other companies. These high-growth companies considered time and efficiency from their customers’ perspective. Though many companies are focused on their own time, including improving factory or logistics efficiencies, high-growth companies are focused on customer time as a journey with the company. They understand the customer journey begins upon discovering the company and continues through product or service delivery and use. More profitable companies have more ambitious time scales. They target resources to improve customers’ experiences over the entirety of their journey with the company. Consider that in some cases, customers may be willing to accept a longer time period in one aspect of the journey if it allows a greater improvement in experience at other places in the journey.
Real-time management is most directly realized through fast action! It is the ability not only to make quicker decisions but also to execute the outcomes of decisions faster, sense problems and opportunities, improvise actions, take advantage of the speed of digital platforms, ingrain a rapid- response culture into the workforce, and reorganize human resources.
Real-time management puts a high priority on the value of customer time. It recognizes that the duration and quality of customer experiences are both important. To help optimize customer experiences, each interaction with customers is monitored. For example, customer interaction with a company’s website can be tracked to determine how long it takes to find the desired information and place an order. Once the order is placed, other processes are used to measure the delivery of the product or service. Usage is also monitored. Support calls are tracked from the initiation of the call to the resolution of the issue; follow-up assesses customer satisfaction. Ultimately these monitoring processes are translated into value for customers via the use of that data to identify and solve customer problems. In addition, a real-time company uses the data to prioritize its transformation efforts. The business, the customer, and society in general benefit—a win-win-win situation.
For anyone, time is a precious and nonrenewable resource. If a company begins to look at time from the customer’s perspective, it will begin to find ways to change products or services to save the customer time. It will also consider changing operations to recognize that the time a customer spends with the company is a resource that needs to be respected. As a result, the company will move closer to its customers. In effect, they become partners. By always striving to make customer experiences optimal, a company makes it easier for a customer to commit to working with the company. The operations that support ordering, delivering, and learning to use a product or service, as well as those that support maintaining it and disposing of it, can be complex and time consuming. Changing the product or service and time-consuming operations to recognize time as a customer’s precious resource helps win customer hearts and minds. Furthermore, improving the quality of experiences throughout the life of the customer’s journey with a product or service also demonstrates the company values customer time.
As leaders strive to make their organizations more real time, they will need to adapt their understanding of real-time concepts to fit their markets and operational environments. For example, leaders of Stop & Shop groceries need to understand what real time means in actual time for an average customer’s total shopping time in their stores and their competitors’ stores. The shorter of those two average times is one indicator of the current real time that they are trying to improve so they can make grocery shopping “faster” and get customers “back to their lives.” As leaders seek to develop their views of real-time priorities that fit their unique businesses, the following points should be kept in mind:
Since real time is determined by the customer, a company must set its clock by the customer’s perception of time. An extra level of testing in the factory, which takes company time, is nevertheless likely to be beneficial if it lowers product malfunctions in the field. If a customer believes a product or service has not been usable or is faulty, the customer clock is still running. That customer requires service, which also takes the customer’s time as well as the company’s and opens the door for competitors with better products or better customer service.
Real time is related to faster decision making. If the decision-making process is poor, though, the attempt to become real time can end up costing more time as a company undoes the bad decisions. Thus, faster high-quality decisions, based on solid data collected throughout the product or service lifetime, are required.
Real time is highly dependent on the competition. A competitor with access to better data on customer real-time experiences has an advantage. If a company’s transformation efforts are targeted at improving some customer time experiences, but those experiences were selected without the aid of data, they are not necessarily those most in need of improvement. The company must collect and evaluate data on customer real-time experiences to determine future improvements that are clearly necessary to meet or beat competitors.
Product or service cost is important, but this cannot be the only driver of business strategy. For example, a customer-centric company might put a few extra nuts and bolts into self-assembly kits. The cost of the extra parts is low, and the extras save time for the buyer/assembler if a nut is lost during the assembly process. A lost nut is frustrating and takes time to recover, extending time in the customer’s eye.
For some products, customer time is driven by ordering complexity. Including in a shipment the components that allow a single product kit to take on different configurations portends that the customer does not need to decide on a specific configuration during the ordering process. A single kit can be delivered to all customers.
For some, customer support systems are critical components in the customer’s time line. Corporate decisions to provide a variety of types of support (e.g., technology-supported, service-oriented chat rooms, email, chat boxes, and efficient call-in numbers) are appreciated by customers in environments where different customer segments may have different support expectations and needs.
Achieving product, service, operational, or technology changes that recognize customer time as a critical resource will likely require more than a few employees to recognize the value of customer time. Consider whether the situation also requires time and resources for changes in strategy and culture that will fully support responding with other needed changes.
Joining the Real-Time Revolution
A real-time organization values customer time. Its leaders adopt a customer-centric view of the importance of time. They continually work with employees and other stakeholders to transform the organization to value customer time more effectively than competitors do. This continual striving to value customer time means the organization has joined the real-time revolution.
Helping customers save time is a tangible demonstration that the company has the best interests of the customer at heart. Besides helping customers save time, companies engaged in real-time management strive to ensure that expenditure of customer time satisfies customers’ expectations of high-quality experiences. High-quality experiences (rather than fast, effective experiences that save time) are particularly relevant when customers expect their interactions to be enjoyable, productive, or otherwise satisfying. When a company accepts that customer time is precious, it has the opportunity to win the hearts and minds of customers. It has the opportunity to compete successfully. It has the opportunity to survive and thrive.
Organizations that have not joined the real-time revolution have leaders who have not adopted a customer-centric view of the importance of time. These organizations are more likely to provide challenging customer experiences, view customers less admirably, and face a dimmer future. When websites are difficult to navigate, when ordering and status verification are complicated, when assembly instructions are difficult to follow, and when obtaining customer support is burdensome, these difficulties demonstrate that the company considers the customer insignificant and unimportant. As a result, customers will seek out competitors who provide better customer experiences. The migration of customers away from organizations that are not focused on valuing customer time threatens their survival.
Companies, regardless of how good they are today, must continually drive themselves to improve the duration and quality of time associated with customer experiences. The constantly connected lifestyle with its culture of immediacy has driven customers to expect instant responses from companies. Customers do not hesitate to switch companies for better experiences. This customer behavior is cause for companies to reconsider the way they interact with customers and assess success. Rather than assessing success primarily by traditional measures that are inwardly focused, companies would be wise to accept that the duration and quality of time customers expend interacting with them, their products, and their services also serve as valid measures of success.
For example, the real time of customer interactions should be measured and managed intentionally throughout the life of a product or service, from beginning to end. Examples of stages in that life include design, testing, production, delivery, use, maintenance, and disposition. Customer interactions must be actively managed, not as independent programs for each life stage, but as an orchestrated whole. This change in perspective is an essential element in driving the real-time revolution. It changes how real-time organizations measure their relationship with their customers. Leaders who are seeking to transform their organizations to become real-time organizations are the revolutionaries who are defining the future of business.
Key Takeaways
The real-time revolution is upon us. As an organizational leader, join the revolution by helping your organization transform to value customer time better than competitors do. Organizational survival is at stake. The big risk is losing customers to organizations that also join the revolution.
Time has become the most precious resource for many customers. The value they place on it is only increasing.
Real time is the actual time an event takes. It is a moving target. Customer expectations of the time it actually takes for a specific interaction with an organization, its products, or its services will change as the customer learns what is possible.
A common interpretation of a real-time organization is that it is fast. Ideally, a real-time organization is so fast and effective that its interactions with customers are instantaneously effective. In reality, though, not all customer experiences are so immediate. Real time ranges from instantaneous to weeks, months, or even years. Thus, real time is a continuum of effective real-time customer experiences. Instantaneous experiences are at one end. Longer experiences are placed toward the other end.
Real-time leaders put a high priority on the value of customer time. They recognize that the duration and quality of customer experiences are both important. Fast, effective experiences that save time are important when customers expect the experience to take little of their time. High-quality experiences are important when customers expect their interactions to be enjoyable, productive, or otherwise satisfying.
Understanding customer interactions with your company, its products, and its services is essential. To develop that understanding, start by asking questions similar to these: “How do we monitor the time our customers spend on product testing? Placing an order? Using our product? Interacting with customer service? And how do we similarly monitor competitors?”
Real-time organizations do not simply minimize the time customers must spend; instead, they optimize customer experiences to meet expectations. That allows them to retain customers, survive, and thrive. Customer expectations are determined by customer experiences. In this constantly connected world with its culture of immediacy, customers demand a new level of obsession. Companies must customize customer experiences from the start to the finish of the customer journey. Based on understanding customer expectations, companies must understand when to design relatively fast, effective experiences as well as when to judiciously design experiences of high-quality engagement.