case study: the cx transformation that revitalized hp’s ... · 4. leverage a holistic yet simple...

Case Study: The CX Transformation That Revitalized HP’s Printer BusinessHow A New CX Implementation Process Led To Successful Product Launches And Millions In Savings

by Angelina GennisJuly 12, 2019

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Key TakeawaysLeverage existing Cultural TraitsA cX culture change does not mean forgetting your identity. HP leveraged an innovation culture and engineering mindset to keep employees’ attention through the long road to transformation.

Bring CX Into Product Development And LaunchHP saw sales goals surpassed when insights, product, and marketing teams worked together to not only build a product that solved for unmet customer needs but also achieve emotional value in the product launch.

Have An Airtight Implementation ProcessHP’s prioritization and implementation process was repeatable and adapted by teams globally. it garnered external attention and was brought to the White House as a model for the open Government initiative.

Why read This reportThe Hewlett-Packard split resulted in HP inc. (HP) owning the computer and printer business during a time when the printer market was becoming increasingly commoditized with pockets of decline. A cultural change was needed to move from product- and feature-focused innovation to putting customers’ unmet needs at the center of everything the company did. Through this case study, customer experience (cX) leaders can learn how key efforts allowed HP to achieve gains in both cX culture and, ultimately, its bottom line.

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Table of contents

Situation: Split Left HP’s Hardware Business On A Burning Platform

Approach: HP Shifted Focus From Product Innovation To CX Obsession

HP And daggerwing cultivated Motivation And Alignment for An orgwide Transformation

Results: Success In Culture Change And Business Impact

recommendations

Be Consistent In Vision And Approach Through Your Transformation

Supplemental Material

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Case Study: The CX Transformation That Revitalized HP’s Printer BusinessHow A New CX Implementation Process Led To Successful Product Launches And Millions In Savings

by Angelina Genniswith Harley Manning, sam Karpinski, and shayna neuburg

July 12, 2019

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Case Study: The CX Transformation That Revitalized HP’s Printer BusinessJuly 12, 2019

© 2019 Forrester research, inc. unauthorized copying or distributing is a violation of copyright law. [email protected] or +1 866-367-7378

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How A New CX Implementation Process Led To Successful Product Launches And Millions In Savings

situation: split Left HP’s Hardware Business on A Burning Platform

After Hewlett-Packard announced its split into HP and Hewlett Packard enterprise (HPe) in 2014, industry experts and analysts suggested that HP faced a difficult road ahead (see figure 1).1 How could HP, a personal systems and printing company in a market with dwindling public interest in printers, hope to keep pace with its sibling, HPe, which was seizing the momentum around software-as-a-service (saas) and cloud computing? HP took an honest look at the state of its printer business and found:

› Industry challenges. experts predict stagnant growth for technologies like ink jet printers in north American and Western european markets due to market maturity.2 in general, consumers and businesses are printing less in the digital age.3

› Product centricity. HP’s strong product innovation mindset led to product evolution focused on new or advancing features rather than meeting customer needs. new models added complexity to the customer’s interactions with the brand without adding value and, in some cases, detracted from product value by causing frustration.

› Siloed ways of working. Business units did not share agreed-upon customer journeys, leading to over 30 differing views of the customer across the organization. on top of that, these journeys were treated largely as marketing touchpoints, and teams were messaging customers in ways that were redundant or counterproductive to each other. The lack of consistent focus on the end-to-end customer experience resulted in customers’ inability to distinguish between one product and the next. customers felt lost and frustrated during moments that mattered, such as when unboxing or setting up a product.




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fIGURe 1 Background on HP

HP was of�cially created when Hewlett-Packard split into two companies: HP andHewlett Packard Enterprise (HPE). HP kept the personal systems and printing components.

$34.622 billion

$58.47 billion

$20.81 billion$13.58 billion$4.67 billion$2.56 billion

Laptops and 2-in-1sDesktop computersPrintersInk and toner3D printingDisplays and accessoriesBusiness security, software, and services

Palo Alto, CaliforniaAfrica: �ve countriesAsia: 14 countriesEurope: 27 countriesMiddle East: three countriesNorth/Central America: �ve countriesSouth America: �ve countries

Asset valuation (October 31, 2018):

Global net revenue:

Revenue from printing segment:Printing supplies:Commercial hardware:Consumer hardware:

Lines of business:

Headquarters:Also operates in:

Note: Figures are up to date as of April 2019.

Source: “HP To Separate Into Two New Industry-Leading Public Companies,” HP press release, October 6, 2014; “About Us,” HP; and “Form 10-K: HP Inc.,” United States Securities and Exchange Commission

Approach: HP shifted focus from Product innovation To cX obsession

HP’s engineering mindset and motivation to innovate, though initially product focused, ultimately enabled it to drive toward winning customer solutions. HP recognized that its inconsistent views of and focus on the customer were contributing to many of its challenges. it wanted to instead build a coordinated effort across the organization, where communication, product development, and decisions and investments were centered on deep customer insights. With the fresh eyes of an outside consultancy, daggerwing Group, HP went back to square one in understanding the current customer experience, with a new commitment to customer centricity. its progress can inspire cX leaders to create a solid implementation process for cX initiatives that brings consistent results throughout a cX transformation.




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HP And Daggerwing Cultivated Motivation And Alignment for An orgwide Transformation

HP printing’s business transformation team, led by rob Wait, develops overall strategy that affects all corners of the business. They and cX consultancy daggerwing worked with product and marketing teams, “change champions,” agency partners, and research/analytics vendors to piece together the existing customer experience as well as build a platform to allow for continuous improvement of the customer experience (see figure 2). This process involved:

› Mapping a single journey per customer type. The business transformation team began by establishing common definitions of the target customer and the customer’s experience. The 30-plus journey maps that existed across the organization were distilled to three — one for enterprises, one for small and medium-size businesses, and one for consumers — with engagement gaps and their potential root causes identified. The team then conducted additional customer research to detail the ideal journey for each customer target and go deeper into understanding experience gaps (see figure 3).

› Identifying customer engagement focus areas. Wait and team implemented net Promoter score (nPs) as the key cX performance indicator for HP and overlaid it on the customer journey, prioritizing it above existing internal metrics, including average mean time between failure and warranty repair rates.4 They determined that four customer engagement focus areas in the journey have the largest impact on improving nPs: research/purchase decision, in-store experience, out-of-box experience, and post-purchase support.

› Starting a bottom-up movement. To empathetically bring HP executives and project teams into the customer journey, daggerwing conducted “customer experience wake-up calls,” such as showing them, in person, how a customer struggles to unbox, set up, and register a printer. HP and daggerwing created a temporary task force called Accelerated customer engagement, or Ace, mandated to champion the cX vision and implement a governance approach for cX initiatives that would include involvement from the entire organization (see figure 4). The customer engagement focus areas, and their respective success drivers, were part of training for employees involved in the cX initiative prioritization process. Ace instilled cX culture by supporting HP working teams in implementing cX initiatives and witnessing the impact of cX work firsthand.




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fIGURe 2 HP And daggerwing Group followed core Transformation Principles To integrate cX into The Business

1. Put customer needs at the center of every business decision.

2. Use a bottom-up approach to empower and leverage the knowledge of the whole organization.

3. Generate a wide and plentiful range of ideas for ef�ciency.

4. Leverage a holistic yet simple approach to evaluating/prioritizing every opportunity.

5. Keep processes human so change is empowering instead of scary.

6. Create a project management of�ce (PMO) that acts as a partner — coaching, tracking, and ensuring no one loses sight of the vision.

7. Shift the perception of governance to focus on shared accountability and encouragement to drive growth.

Source: Daggerwing




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fIGURe 3 HP Mapped The Printer customer Journey And identified experience Gaps

Source: Daggerwing




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fIGURe 4 HP’s Ace Task force Led Training in The cX initiative Prioritization Process

Source: Daggerwing

A CX Culture Change Required Years of Unwavering Conviction

As HP’s printer business found increasing success, Wait and his team had to contend with leadership changes. The current, supportive leaders were in demand to be ceos elsewhere, and as they moved on, incoming executives required alignment. To maintain continuity, Wait aimed to embed cX processes in HP’s culture so it could be resilient through these changes. HP achieved cX cultural resiliency by:

› overcoming setbacks to scale and optimize CX. At a particularly difficult point of the transformation, leadership had to focus on running an increasingly efficient business, and the organization as a whole felt pressure to focus all energy on product sales. This put them at risk of falling into functional roles instead of thinking holistically about the customer experience. fortunately, HP leadership stayed committed to Ace and the utilization of daggerwing as a resource to keep marketing, sales, customer support, and r&d connected around the cX north star. Ace and daggerwing found repetition to be crucial during these changes — leading cross-




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functional cocreation “over and over and over.” This meant repeating the process globally and engaging midlevel executives to apply the cX implementation process to their own experience gaps. With time, mapping customer needs and prioritizing cX initiatives became part of the companywide way of working.

› embedding a prioritization process. HP stuck to its prioritization process through years of leadership changes and market challenges, keeping the customer at the core of a consistent approach to making changes. Teams with previously competing priorities more quickly came to decisions. When business priorities shifted to driving efficiencies, customer needs remained at the core of the process. in one major initiative, HP identified 120 gap closure initiatives on the customer journey map, and it prioritized 69 of them as activities for implementation. Though inspired by customer experience gaps, proposed initiatives needed, firstly, a projected net-positive financial impact to score well in the cX prioritization process. (see figure 5). Any initiative with a low cX score but high financial cost would fail to make it through to implementation. However, the initiative still needed relative ease of implementation to score well, so the prioritization framework gave preference toward efforts that could leverage existing resources.

› Improving the product development process and aligning it with marketing. HP saw an opportunity to not only design and launch a product that addressed experience gaps in competitor products but to also instill cX into operations and processes. This meant changing reporting lines, employee competency models, and the product development process across teams to drive greater integration of insights. for example, early in the process of launching a Pc, a cross-functional team focused on customer experience gaps in competitor offerings. instead of a standard campaign, it built an end-to-end customer experience and drove switching behavior from competitors. Within three months of launch, it was 8% ahead of sales goals. The process proved repeatable, as a second successful product launch responding to customers’ unmet needs in the market was also achieved through early cross-functional coordination. in a marketing campaign for the portable photo printer, called sprocket, emphasis was placed on connecting emotionally as a family over showcasing the product itself.




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fIGURe 5 HP And daggerwing Group constructed A Prioritization Process for cX initiatives

Source: Daggerwing

results: success in culture change And Business impact

Ace eventually disbanded when it saw a cultural shift toward teams initiating their own customer-journey-centered thinking. Wait and his team maintain momentum through newly formed end-to-end marketing “growth councils.” The operations Growth council strives to improve the coordination and prioritization process, and the innovation Growth council identifies and shares innovations in products, process, business models, and go-to-market strategies. surpassed sales targets from successful product launches reflected larger, quantifiable achievements, including:

› engaged and empowered employees. over 25 countries embraced the cX processes to prioritize and implement 202 cX initiatives. The framework for implementation gained notoriety for producing repeatable results, at one point garnering an invitation from the obama administration to help apply a similar approach to the open Government initiative.

› Substantial savings directly attributed to CX initiatives. in-house capabilities were expanded to be less dependent on vendors, while processes were refined so teams better coordinated and avoided redundancies. for 2018, net revenue was up 12% from 2017.5




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Recommendations

Be consistent in vision And Approach Through your Transformation

HP believes in the “logic of reinvention,” and many of its executives were already leaders in big technology innovations like 3d printing. That makes it all the more impressive that they evolved their thinking to include consideration of how product innovations could meet changing customer needs and expectations. cX leaders can use this example of moving a global company toward thinking differently about the customer to:

1. Hold true to CX values in the face of new challenges. HP saw changes in leadership, budget cuts, and employees wanting to revert back to familiar, functional roles when the going got tough. cX leaders at other firms can expect to face similar challenges over time given that a cX transformation can take several years. in the case of HP and daggerwing, maintaining momentum meant sticking by their belief in customer insights driving growth and insisting everyone continue to participate in the prioritization process they set from the beginning.

2. Leverage existing cultural qualities. The mantra of “leveraging the innovation mindset” runs throughout the HP-daggerwing story. rob Wait and daggerwing used this mantra to show that they were trying not to reinvent the organization but to build on what historically drove company success, which was “technology innovation to benefit everyone.” They became hyperfocused on what made innovation meaningful to the customer — frictionless delivery and emotional connection.

3. Put a prioritization process in place that empowers everyone to move initiatives along. The print transformation office led a waterfall process for marketing and go-to-market optimization, with 19 steps ensuring that timing was right for an initiative’s success. for example, executive alignment occurred early on, but only after all the boxes had been checked for creating a strong business case and socializing to gain sponsors. A predictable, repeatable process meant oversight and coordination improved so that everyone involved could focus on what really mattered: whether the initiatives would improve the customer experience.




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daggerwing HP

endnotes1 source: Therese Poletti, “How HP is trying to resuscitate a declining business,” MarketWatch, July 3, 2017 (https://

www.marketwatch.com/story/how-hp-is-trying-to-resuscitate-a-dying-business-2017-06-30).

2 source: “inkjet Printers Market is Projected to expand at a cAGr of 6.5% during the forecast Period,” MarketWatch press release, January 10, 2019 (https://www.marketwatch.com/press-release/inkjet-printers-market-is-projected-to-expand-at-a-cagr-of-65-during-the-forecast-period-2019-01-10).

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3 source: Therese Poletti, “How HP is trying to resuscitate a declining business,” MarketWatch, July 3, 2017 (https://www.marketwatch.com/story/how-hp-is-trying-to-resuscitate-a-dying-business-2017-06-30).

4 net Promoter and nPs are registered service marks, and net Promoter score is a service mark, of Bain & company, inc., satmetrix systems, inc., and fred reichheld.

5 source: interviews with daggerwing Group, January and february 2019.

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