The AI-Powered Organization

Creating an AI-Powered Organization

The modern history of business is littered with examples of companies that tried to cut their way to growth, but failed. Eddie Lampert’s Sear’s, Leo Apotheker’s HP, Motorola under CEOs Christopher Galvin and Ed Zander - each represents the vain hope that eliminating cost alone could magically make the firm more competitive, more innovative, more attractive to investors and talent.

And now comes AI. Will it join “re-engineering,” “lean Six Sigma,” and the lexicon of other trendy euphemisms for headcount reduction? Or can it provide new pathways to sustainable revenue growth?

The answers are “yes” and “yes.” And which “yes” you say “yes” to will depend on how seriously you consider the virtuous cycle of organizational performance - a cycle that definitively links leadership experience to employee experience to customer experience.

Like its fashionable business forebears, AI can deliver substantial time savings. But at the end of that routine, what’s left is an organization doing the same thing with fewer people. Untended, the firm isn’t creating new products, isn’t serving customers more effectively, and isn’t finding new markets. Worse, if not handled carefully, emphasizing cost reduction risks eroding a company’s culture, becoming the fix that fails.

The Three E’s

A more effective way to deploy employees’ energy and creativity and supercharge the organization’s growth is to focus on the three E’s: experimentation, empowerment, and enhancement. That’s a people-first approach to AI that can boost organizational effectiveness and get the firm’s growth flywheel spinning faster.

Let’s look at each.

Experimentation

New products, new services, and new markets do not just magically spring forth fully grown from the head of Zeus. They must be encouraged, and they must be processed. Processing is an operational constraint; it assures that innovative ideas are relevant, manageable, and viable. It’s also a second-order imperative: Ideas can’t be processed until they’ve been generated. Encouraging their generation is an obligation of leadership.

AI can reinforce a culture of experimentation. It speeds the insights-to-action loop, enabling an organization to try more things, more quickly. AI revolutionizes the way people in the organization turn data into insights, prototype products and experiences, orchestrate the customer journey, and predict, measure, and optimize the impact on business outcomes. While it’s technology that enables these opportunities - opportunities that are relatively inexpensive, compared with the costly R&D management protocols that dominated for much of the past century - the opportunities themselves won’t surface without the cultural encouragement of experimentation. That’s the leaders’ responsibility. As we said in our last Winning Experience Substack, leaders “learn through their own experience grappling with challenges, and by applying their energy to their organization’s mission, vision, and purpose. The experience of leaders (LX) can be cultivated intentionally and proactively, and acts as a multiplier for customer and employee experience (CX and EX).” (For more on LX as part of a people-first approach to AI, see “The Craft of Leadership in an AI-Fueled World” here).

One consumer packaged goods client that we worked with used the way its customer teams collaborates with retailers to catalyze a stronger culture of experimentation. Using AI to mine insights from social media, it optimized words-that-work and imagery for shopper solutions for a new product launch across a number of retailers. Over a series of agile sprints, it more than doubled sales for the test compared to the control.

Empowerment

A culture of experimentation requires trust - notably trust that the organization (and not just its leaders) can own the joys and responsibilities, the risks and rewards, of innovation. That’s the definition of empowerment, and here again, AI tools are force multipliers. AI enables leaders to democratize access to information, allowing more people to generate insights and collaborate on use-cases across product development, marketing, sales, and service.

Low-code and no-code platforms and other AI tools have enabled a broader set of people across the organization to contribute to the design and improvement of customer and employee experiences. Anyone can be a prompt engineer, without needing to learn to write code. Here, too, realizing this opportunity requires leadership focus on nurturing the right behaviors in the organization. It’s not enough to give people new AI-powered tools. Moreover, even as data is shared across functions, some data must remain proprietary to specific functions, for regulatory, compliance, and security reasons. Leaders need to champion the right behaviors that foster a culture of responsible collaboration, where employees feel truly empowered to serve customers. Again, the equation is simple: LX+EX = CX.

A BtoB client we worked with encouraged its employees to submit ideas for how to apply AI to enhance performance across the company’s business units. Each business unit funded a variety of ideas that teams submitted, supporting team members who spent a portion of their time further developing and bringing their submissions to life. The company tracked the value created across the portfolio of ideas and showcased success stories within each business unit.

Enhancement

When most people think of “innovation,” their mental model says “novelty.” But neither leaders nor their teams need to pressure themselves into trying for goals with every kick they take. Evolutionary advances - enhancements - can be as important as new-to-the-world concepts… and perhaps more so, when customer experience is understood as a significant growth driver.

Again, the value of AI tools cannot be underestimated. Rather than believing that AI will generate a new bet-the-company innovation (a conceit marvelously skewered in the recent episode of South Park entitled “Sickofancy”), or viewing it solely as a device to reduce human effort, use it as a mechanism to enhance employees’ attentiveness to clues along the customer journey. Every human-to-human interaction that leaves a digital footprint is an opportunity to create a continuous improvement cycle. A playbook that started in contact centers is now being extended across a broader set of frontline employee experiences, such as sales and customer success. In contact centers, quality assurance used to mean listening to a random sample of calls and then providing coaching afterwards. Now, AI can be trained to spot whether frontline employees engage in the right behaviors that evoke customers’ desired emotions along their journey with the company. Used as a discovery tool for locating the sweet spots in employee-customer interactions, companies can evolve their approach to training, engaging employees in habit-building exercises that are more fun and productive for them, and vastly more valuable for customers.

AI also enables real-time coaching, acting as a co-pilot to streamline the time it takes to find information, raise employees’ attention to signals from customers, and recommend potential actions they can take during the customer interaction rather than after the fact. In such cases, the robot isn’t replacing the human; instead, the machine is augmenting the human’s emotional, intellectual, and physical capabilities. AI is Robert Heinlein’s Waldo… for everyman, and every woman, and every worker.

One technology client we worked with identified a set of behaviors that sales reps engage in for more successful sales calls. These sales behaviors help customers to feel supported and reinforce trust, as well as help customers to feel more confident about the way they will use the client’s products to meet their goals. The company is investing in AI to better coach sales people and drive a continuous improvement cycle linked to business outcomes.

Getting Real Now

How can you best apply the Three E’s in your organization? Two pragmatic ways to drive value leap to mind. The first - apologies if it seems self-serving - is to get involved in one of the Mastermind Groups we recently launched together. The second is to build a movement at your company, extending what you learn (and the energy gained) in the Mastermind Group to others.

A Mastermind Group is a small, private collection of peers, from across companies or across functions within a company, who join together to share experiences and learnings, engage in collective problem-solving, and provide support and mentoring across a learning journey. Although it might sound very New Age-y, Mastermind Groups are quintessentially 20th Century American, popularized in the 1937 bestseller Think and Grow Rich by Napoleon Hill. They are a vital, if often overlooked, professional development exercise. As a partner in the Retail & Consumer practice at PWC, Matt led Mastermind Groups for executives at some of the world’s largest consumer brands. As CEO of the IAB, the digital marketing and media trade organization, Randall oversaw a score of Mastermind Groups (which the IAB called Committees and Councils) devoted to the development of industry standards and practices.

We kicked off a yearlong Mastermind Group called “Experience as a Winning Strategy” in September, with senior executives from the entertainment, consumer products, travel, retail, insurance, and healthcare industries. In our first monthly meeting, our dozen participants identified and prioritized a set of opportunities on which they want to collaborate, share progress with one another, get feedback on projects, and take lessons back to their organizations for propagation. We grouped these opportunities into three clusters that align with the Three E’s:

1. AI-Powered Insights & Experimentation

2. Scaling Emotionally Engaging Content Experiences

3. The CX Team of Tomorrow

Our intent is to visit each of these clusters in sequence each quarter of the year. The first cluster focuses on evolving customer listening, to better address customers’ emotions and the employee behaviors that evoke them. For example, the Mastermind Group will dive into how organizations are building AI-fueled insights engines across contact centers, sales conversations, social media, and agentic experiences. We’re exploring ways to modernize research and testing to “bring the customer into the room,” and to use the insights gleaned to generate content through the eyes of customer personas, for such use-cases as new product launches, marketing campaigns, website development, mobile apps, or other content-based experiences. This first cluster also addresses how to embed insights into agile test-and-learn cycles, changing the way teams work together. Finally, we are exploring how to democratize insights and foster intrapreneurship to source ideas and empower teams to work on them.

The second cluster of opportunities, “Scaling Emotionally Engaging Content Experiences,” builds on these discussions and learnings, and will focus on applying AI to speed the development time and lower the marginal cost of content. Content experiences are crucial to evoking the right emotions customers feel at peaks along their journey with the firm; they are what make your customer experience congruent with your brand promise. Content experiences complement the human-to-human interactions employees have with customers.

AI is enabling data-driven orchestration of the customer journey to better target the right content to the right persona at the right time. It enables teams to generate a larger number of content versions that are optimized through the eyes of your personas. Putting these opportunities into practice requires more than evolving the mar-tech stack. It requires a disciplined playbook for how different roles in the organization work together to ideate, test, and scale content-based experiences. It also requires new ways of working with external agencies and mar-tech vendors.Unsurprisingly, the field of generative AI marketing content startups has been overflowing with new entrants. Determining how to qualify them will undoubtedly be part of our Mastermind Group’s discussions.

Tomorrow, the Team

The third Mastermind cluster, “The CX Team of Tomorrow,” zeroes in on building capabilities and scaling new behaviors across the organization. If the CX team devotes itself fully to managing customer listening and collaborating on experience design projects, it will leave a lot of value-driving opportunities on the table. CX teams have the most impact when they also serve as culture champions to drive upskilling, adoption of new employee behaviors, and advancing new ways of working that deliver peaks along the customer journey. Indeed, with AI tools in hand, wielded with both the subtlety and power of a conductor’s baton, CX teams can be the orchestrators of productive change management across the company. They can help foster more effective collaboration among functions, realizing the multi-disciplinary promise of experience management.

Our Mastermind Groups do not end with the monthly meetings. We are conducting monthly coaching sessions with each participant, to help them apply at their organizations what they are learning in the groups. The promise of AI is not about the technology in isolation; it’s the promise of a cultural movement unleashed by the technology - in the way, for example, that the Internet turned millions of individuals into publishers, or YouTube turned tens of millions of humans into filmmakers, documentarians, and influencers. Working with a consulting firm or agency won’t build a cultural movement, unless it taps into the energy of employees to apply AI. Our coaching aims at identifying and overcoming the obstacles anyone will face in trying to foster a cultural movement within an organization.

Apply to join our mastermind group on “Experience as a Winning Strategy”

Interested in diving deeper with others on how AI is impacting marketing, sales, product development, and customer success? Join the monthly Mastermind Group hosted by Matt and Randall that meets monthly. In addition to monthly, virtual meetings, Mastermind members in the receive 1:1 coaching, participation in workshops, and curated event experiences. Go to JourneySpark’s website to learn more and apply: https://www.journeysparkconsulting.com/mastermind

Matthew Egol is the founder & CEO of JourneySpark Consulting, podcast host and author of The CX and Culture Connection: Creating a Growth Flywheel by Approaching Customer Experience and Culture Together. Previously, he was a partner in the Retail & Consumer practice at the consulting firms Booz & Company and PwC, where he specialized in customer experience, culture, and digital transformation.

Randall Rothenberg served for 15 years as the CEO of the IAB, the global trade association for digital marketing, media, and advertising, where he led the industry in public policy, technical standards, marketing, and thought leadership. Earlier in his career, he was the CMO and head of thought leadership at Booz & Company, a reporter and editor at The New York Times, and the author of Where the Suckers Moon: The Life and Death of an Advertising Campaign (Alfred A. Knopf, 1994).