The world is oriented around verticals. It’s accepted wisdom that verticals help us organise service delivery. Hierarchy, control, order – these things flow top to bottom right? Government departments, corporate divisions, contact channels – this is the way of things. They appear to provide us, as service providers with benefits. But it’s my opinion that they actually cause more problems than they solve.
I propose that verticals are holding back business performance in the digital age. They’re a hangover from an industrial era of management and we need to challenge them. I also propose that we already have the tools at our disposal to do so. In fact I want to propose a Horizontal Manifesto.
So what’s the problem? Clearly the most obvious one is that verticals give you unhappy customers. Because traversing verticals takes effort, and customers hate expending unnecessary effort. But the biggy is actually cost – verticals cost business huge amounts in wasted cost. If one department sends me a letter that I don’t understand, then I’m going to make you pay by calling you and getting you to explain it again. And verticals undermine revenue generation – because unhappy customers are unlikely to buy more stuff. If I think you’re hard to do business with, I probably won’t buy more stuff (British consumer apathy and inertia being taken into account of course…)
For me verticals are the long sharp things that puncture holes in your bucket, out of which leak a constant stream of hard-won customers.
Indulge me as I draw this out a bit.
How verticals hurt
The sales team sell me a phone and tariff. They do this quickly and efficiently, because they’re incentivised to win the sale. 3 months later I go over my data limit and get a surcharge. My reaction – I am surprised and call in for an explanation. I spend 3 minutes on the phone. “I didn’t know I was near my limit.” “How am I supposed to know how much I’ve consumed?!” “No-one ever told me what to do..!!!” The agent fobs me off – they see it as my fault. I take another route through the phone menu, and speak to a different department for 5 minutes. They say someone from ‘back office’ will get back to me. I don’t hear back, so go on a web chat. They can see that I have contacted in the past 3 days, but can’t see the full details on their system, so ask me to explain my issue… and so it goes.
We all know this picture. Of course the customer hates it as it makes them feel like a mug. And of course business leaders hate it because it is deeply inefficient (this scenario will have cost £100s in servicing unnecessary costs, undermined £1,000s of brand and marketing investment, and lost them the opportunity for future revenue gains).
But the really sad and maddening thing is, the manager of the vertical will likely have been in tolerance of most of their targets, eg short calls with good AHT (Average Handling Time), even if they do get a monthly bang on the head about poor RFT (Right First Time). Budgets will remain balanced. Customer satisfaction as we record it (how people think the call / web chat went) will be okay – the agent was nice even if the outcome wasn’t.
The manager will have successfully minimised the cost of supply within their vertical – ie the amount spent on handling the demand. Never mind that further supply costs are incurred in the next vertical along. The problem being that tracking costs across verticals isn’t really anyone’s job. More on that later…
Customers are ruthlessly horizontal
The thing vertical businesses need to wake up to is that customers are ruthlessly horizontal, and ruthlessly impatient. This is not a good combination for vertical service providers – meaning almost all service providers. Customers want to get things done, and those things invariably involve interactions with different verticals.
As we’ve seen, the worst bits are clambering over the seams of the verticals – being passed from call centre to call centre, and having to re-state your details to each agent – having to learn new interfaces between the sales website and the service website, and often encountering different sets of facts on the page – going into the store and getting quoted a different price to the one you got on web chat. At the best of times these are speed bumps, at the worst crevasses.
Customers are lazy. I’m not being rude here – we are all customers. I am a customer, and as a customer I am lazy. I resent making an effort. This is particularly the case in the digital self-serve world. If you want me to buy something AND do all the work relating to that transaction (ie self-serve ie you’ve outsourced it all to me) then you better work bloody hard to make that simple, easy and convenient to do – if not desirable even. Your part of the deal is to remove all the effort. “If Amazon can give me a One Click impulse purchase on any device then WHY CAN’T YOU?” That’s what people are thinking.
There’s a reason why Customer Effort Scores are emerging as the best indicator of loyalty – it’s because we are fundamentally lazy. And the internet has made us all MUCH lazier, and as a result made the job of EVERY channel MUCH harder. (Incidentally Gerry McGovern makes a great point of this here.) You cannot afford to let your verticals get in the way of this dilemma. Or you could, but you’d need to become an expert in gamification – make it fun for them to traverse the verticals 😉 !!
Okay gripe over – let’s put a more positive lens on this…
In the case I’ve presented, surely what we want is an educated customer who is capable of self-helping. We want a customer that knows their data limit, can set notifications if they go near the limit, and have the option of buying more when they need it. Because this would have provided us with an empowered and more responsible customer, and avoided the need for the call in the first place. Small upstream education cost in the sales and set up stage – large saving downstream in the manage and use stages.
Upstream, downstream. This is horizontal language. It’s no mistake that ‘customer journey’ was lampooned in the paper this last week – it’s become a faddishly over-used expression. But as with all fads, there’s a germ of value in there. Everyone is abuzz about journeys because they are anti-vertical – and everyone knows that verticals are bad. They’re bad if you’re a customer (effort), and they’re bad if you’re a business leader (cost and lost revenue).
But why is it that the organisation can’t get Sales to deliver the upstream education in the above example? Well it comes down to the old adage of ‘culture eating strategy for breakfast‘. If your culture is vertical because for eons your money and power has flowed that way, writing a strategy about customer journeys and service design is not going to work. You will get cosmetic improvements at the interface, which will improve your service hygiene levels and bump CSI, but you won’t change the system.
You’ll come into contact with plenty of managers who have their entire careers wedded to being brilliant vertical deliverers. To get them to work horizontally will make sense to them as customers, but as professionals it runs counter to everything that’s come before and everything they want to go on to do. You are proposing risk and disempowerment. When you suggest that money should be spent according to the needs of the customer, as defined by a service design or customer experience team, rather than by vertical managers – well this becomes an exercise in kingdom destruction. The logical conclusion for them is that they lose budget to some new fancy sounding department, to do stuff on brown paper over big walls… (Ps it’s great to watch Barclays – a 350 year old bank – going through this. I’m hoping it can help us turn a corner.)
Well we service designers are all diplomats right? We’re all playing for the long game. We have integrity and decency. We aren’t here to destroy vertical kingdoms. But the kingdoms need to be turned to a new purpose or they too will perish when the customers naff off.
So we need a Horizontal Manifesto…
1. We need to see horizontally
We need to see our organisations as our customers do. It’s a long-term bad joke now that the only person who sees a whole company is the customer. Well that needs to be put to bed.
Luckily we have big chunks of this in place or coming into place. Certainly the quantitative bit has developed a lot. My read is that the Customer Experience Industry has done a huge amount to connect quant operational and customer data together, and marry it with better metrics to measure performance. But I have to admit to beng worried about the CX industry and it’s intent to boil down oceans of data to find problems. It’s all very analytical and arguably in keeping with the industrial mindset that gave us verticals.
My hope is that the qualitative insight service designers bring can be married to this work. I guarantee you that standing in the shoes of the customer for a day, will get you closer to an understanding of the customer pain points faster (and more cheaply) than the data can be crunched. Give it to a good service designer, with the tools to trigger the same empathetic viewpoint in your vertical teams, and you get a quantum result. Regardless of what vertical I represent, and the baggage I carry as a result, I can always be made to empathise with 78 year old Ethel struggling to log in. We are all human. We can all see this way. We just need to do it corporately.
2. We need to think horizontally
Once we’ve got a good panoramic, horizontal view of the problem, we need to think in new ways to solve them. We can’t think in the vertical way anymore. Vertical thinking is done in meetings, disaggregated through lengthy reports, communicated by emails and internal newsletters – and ignored by almost everyone. Horizontal thinking isn’t part of the day job.
We need to bring together the vertical decision makers into rooms where we can look at the customer’s journey, and think collectively and creatively of ways of fixing their problems. What we need to do to achieve this is get permission for people to do this (saving the business from angry customers, falling revenues and rising costs) as opposed to ‘doing the day job’.
3. We need to act horizontally
We then need to act horizontally. Because the product of thinking is generally thought to be strategies and graphical visualisations of future services. The simulacra of action, ie not action at all. We need to not just think in these brown paper rooms, we need to take decisions in this way too. These collaborative multidisciplinary rooms generate great thinking – great ideas – but they often don’t scale commercially and horizontally because the organisation can’t back up horizontal thinking with horizontal action. Decision making outside of the C-suite is often highly verticalised.
This is by far the hardest pledge to make as it means getting into the guts of how your organisation runs – where the power sits, who has the money, how decisions are made, the environments people work in.
And doing so threatens much conventional wisdom about how action takes place. Those who try to act horizontally so often lose all their energy in the thick long grass of established bureaucracy. Change management, project and programme controls and IT releases – these have all become necessary and useful parts of business, but the eternal rounds of effort persuading each and every vertical to work horizontally saps the strength of those flying the flag. (Incidentally, I like the argument that turns the tables – “you write a business case to say why it SHOULDN’T be done.”)
Many business leaders pledge that they want to be ‘customer-centred’, without realising that the vertical structures on which their business hangs, also undermines their ability to meet that pledge. For that reason I propose developing this out into a fully fledged Horizontal Manifesto that business leaders can understand and, with a bit of cajoling from you good folk, readily sign up to.
I’m warming to this idea so much that I’m going to do more work on it. If you’ve got input / thoughts, I’d love to hear them via @joelbaileyuk
Thanks for reading. Joel
You’re 74. One day you wake up with a chronic medical condition – maybe even co-morbidity with lots of conflicting issues. A meeting with a GP spawns umpteen consulting appointments. You spend the next 12 months receiving alarmingly written letters for appointments you can’t make, listing phone numbers that go unanswered. You spend hours wandering lost in hospitals trying to find the right department. (But on the plus side you develop guns of steel carrying a lever arch file under your arm that describes your horizontal life for the benefit of each vertical you encounter. You see they hate talking to each other)). You struggle to make sense of the adult social care worker when she quite honestly admits that it’s not in her remit to help you with the things you need – its the health team you need to speak to. Your battle with horizontals becomes a matter of life and death. If you’re lucky you are middle class and can navigate all this. If not, it’ll probably be a series of collisions.
I’ve spent 2,000 words describing how verticalism undermines private sector businesses. I could write 5,000 on how it undermines public sector organisations. The killer fact is that most of us will end up in the above scenario – CEOs, COOs as well. Just another reason to make the pledge…