Just one conversation with CCO, Rachael Powell, reflects her deep experience and understanding of organizational strategy, psychology, and being a change agent. Those are all things that great people officers do well, so it won’t come as a surprise then, that Rachael joined Xero as Chief People Officer five years ago before transitioning into her role as Chief Customer Officer in August 2019. The scope of Rachael’s current role is expansive. As the CCO at Xero she oversees global sales, marketing, communications, digital, customer success and education.
Xero has close to 4,000 employees, and is a small business platform with over 2.7 million subscribers globally. It’s headquartered in Wellington, New Zealand and was one of the first companies to put accounting software in the cloud. Xero has scaled its global reach through a strong relationship with accountants and bookkeepers who are an extension of the Xero family and they act as a sales channel whilst supporting the compliance and advisory needs of their small business clients.
This customer base structure has guided her strategy of extrapolating the company’s internal philosophy beyond its employees to its entire partner ecosystem, which she has dubbed Xero’s “inside-out” approach. In this newsletter issue, Rachael walks us through how her experience as Chief People Officer set her up for success as Chief Customer Officer and why adopting the inside-out philosophy contributes to a better experience for customers.
The 'inside-out' company philosophy
Becoming the Chief People Officer in 2016 at Xero was an important move because it proved to me the importance of winning the hearts and minds of our people before ensuring that we won the hearts and minds of our customer community. At Xero we call this operating principle our ‘inside-out’ approach.
"It does have to start on the inside. If you can’t win the hearts and minds of your own people, you’ll never be able to do it with your customers.”
Our ‘inside-out’ culture (basically making sure we get it right on the inside so we can quickly extrapolate that through to the customer base) works particularly well in a world where you have to heavily rely on channel partners.
It’s evident at Xero that the accountants and bookkeepers we work with are an extension of our organization because they basically become the bridge between the internal company and end users. That’s why at Xero, we have to focus on our internal team and then work our way out.
The ‘inside-out’ approach only works once you’ve hired the right people
When I started as Chief People Officer, I knew the only way we could succeed was if everyone at Xero operated with the same vision and aspiration to serve the small business community—to make life better for them, their advisors and the communities in which they operated across the globe.
90% of the businesses across the world are small businesses and it's likely the most underserved segment of the market. Developing the ability to help those small businesses become effective started with our people and it was my job to make sure that we brought the right people into the business.
Here are two qualities we look for when hiring at Xero:
1) Small business experience: Many Xeros (our employees) have owned small businesses themselves, grew up in a family that ran a small business, or have accounting experience. Because of their background, they believe in what we're doing for the small business economy. That’s powerful and important—they understand that small businesses will continue to grow economies across the globe.
2) Passion for our purpose: It’s crucial to recruit the right people who are passionate about our mission and have some sort of affinity to our purpose of making the lives of people in small business, their advisors and communities across the globe. We had to get that right on the inside by hiring people who could play to their strengths—that's a principle of Positive Psychology as well. It’s not just about finding people who have done these jobs before. We look for people who want to do what you need them to do—things that they are good at and energized by.
So when I started as Chief People Officer, there's a lot that went on in terms of making sure we were: 1) job crafting to put the right people in the right roles, 2) setting a really clear vision, 3) making sure people had the agency to excel in their roles, 4) aligning all of those people across a global organization, and 5) scaling that at hyper-speed.
“You have to make sure people are clear on your vision, are capable in their roles, and then you must align all of those people across the organization to be able to speed up, go fast, and deliver on promises made to the customer. That’s the ‘inside-out’ philosophy.”
If we could get things right on the inside, then working with our Customer Experience team became about actually extrapolating that magic, that culture, that passion, and that purpose through to our channel partners, who would then look after the millions of small businesses on the other side of their books.
That’s a huge component of our success—really understanding how we actually get it right on the inside so that it becomes almost like this contagious culture that our partner community wants to be a part of and that eventually, small businesses are the beneficiaries of.
Once the people experience is right, move on to the customer experience
When I started at Xero, I was the Chief People Officer. Over time, my role expanded to the Chief Customer Officer where I own CX and has further grown to own the end-to-end customer journey. My role was purposely created to bring together disparate groups across sales, marketing, digital, communication and customer experience within Xero to and offer an end-to-end customer experience that meets both our partners and small business needs in an agile and coordinated fashion.
My move into the CCO role would not have been possible without my time leading our people organization first. I learned the magnitude of focusing on the people experience to start, so team members would naturally amplify their passion for our solution and mission out to our customer base.
When I took on CX, our function was, rightly, planning for a world where we had 10 million+ subscribers—we were planning for the future. We were not thinking about traditional support models. Instead, we were thinking about how we could put support models in place that could scale and be efficient and effective for customers to be able to serve themselves using AI and machine learning.
We developed a platform called Xero Central, which is an intuition education and support platform, driven by machine learning and AI where customers can find their own content at a time that suits them. In fact, given the sophistication of the technology Xero Central often predicts what a customer would need to know next based on what they search for first. Customers can still raise cases with our CX advisors if they are stuck and they need to speak to a human being.
One interesting piece about Xero is that we don't have an inbound phone support line, however that doesn’t mean we don’t speak to customers. We have outbound phone support where our CX agents are empowered to serve customers who have raised a case via a communication channel that best suits the need. So when the cases come through, we make sure the right person out of our Customer Experience cohort reaches out, which ensures that our customers never have the negative experience of being passed around from person to person. Overall, 96% of our customers serve themselves because of the quality of the content and the technology that we've invested in the Xero Central platform.
What gets measured gets done
As CCO I own the end-to-end customer journey—from awareness, to the buying decision, through trial and onboarding, discovering how we can deepen the relationship by helping our customers connect to additional apps and services that we offer either through our ecosystem or directly, to the final stage of the customer journey of delight.
It became important at Xero for one executive to own the entirety of the customer journey to ensure that there was a balanced focus on every part of the customer experience. What gets measured gets done. But when I first took on the remit of CCO, I noticed that though there were a plethora of measurements across our different functions, what executives consistently had visibility into only represented a limited portion of that customer journey.
I'd been at the executive table at Xero since 2016, but it suddenly dawned on me that we were looking at predominantly two metrics: 1) number of customers and 2) revenue.
What these metrics didn’t give us was any insight into what specific part of the customer journey and specific region we needed to focus on. I wanted to create a more balanced scorecard across the five stages of the customer journey and be able to monitor and measure if customers were getting a good experience at every touch point. That’s why we developed a scorecard called Journey Experience Data and Insights (or JEDI for short).
The JEDI scorecard
It’s a scorecard (JEDI = Journey Experience Data and Insights) that we’ve developed over time. In short what it allows us to do is to have a hero metric for each of the 5 stages of the customer journey:
1) Awareness (brand)
2) Consideration (trial)
3) Buy (sales)
4) Deepen relationship (retain & grow)
5) Delight (advocacy)
Along with hero metrics for each customer stage, we also have RAG (red, amber, or green) status and we can filter by region or submetrics. With this scorecard, we are able to easily detect which stage we need to divert our energy to. If Awareness is not where it needs to be, then we know that we need to dial up on our marketing activity. If we can see that Delight isn’t doing well, we know we need to lean in and support our customers with proactive customer success campaigns that help build their confidence and engages a memorable connection.
How to expand your remit
Most CCOs who read this likely oversee CS, support, professional services, operations, but they probably won't own sales or marketing. If you’d like to own a similar remit as I do, I encourage you to not think about it in terms of ‘how do I want my world to look?’ and then ask for it.
I think it's more about showing the value you bring. Since I was the Chief People Officer at Xero, I came from a perspective of thinking through the lens of the customer and wanting to make sure that we could reflect that on the inside rather than shipping our organization chart. Because when you do that (and all of us have experienced this as consumers), a disjointed customer experience occurs. The CCO is hired for their ability to ensure that the customer experience is incredibly seamless. Customers need to know that they are cared about during every stage of the customer journey.
My advice to executives who want expand their remit is twofold:
1) Work on your mindset, your ability to evolve, and build ambidextrous skills. I worked in marketing, accounting, recruiting, and more—all of which made me highly curious about people, so I went back and got a Masters in Positive Psychology. I eventually picked up the reins as Chief People Officer, which was a new mandate for me, but it only added to my repertoire of skills. Then the opportunity of leading our CX team opened up, which was perfect because I could take my people experience skills and apply them to the customer experience. Having that curiosity and growth mindset put me in good stead to be an executive that could own a multitude of functions.
2) Make sure you hire awesome people who are also disciplined experts. I certainly don't do this alone. With the right people, my role has gravitated towards being a change agent for Xero.
In this world of uncertainty and VUCA (Volatility Uncertainty Change and Ambiguity) that we're living in today, any executive's role is about being a change agent. As a change agent your role is to understand and navigate an ever-evolving environment, while creating a psychologically safe space where team members can have clarity, alignment, and the right capabilities to succeed.
Executives shouldn’t think so much about their specific discipline, but instead how they can take a company strategy to create clear, capable, and aligned teams to execute on it.
This week's top posts
PRINCIPLES
The Ten Customer Commandments
Megan Bowen encourages us to follow 10 customer principles. Skip to Takeaway 2 in this podcast episode to hear the entire list of commandments—a few of my personal favorites were #8 “The customer will forgive mistakes, but only if you are accountable and take responsibility” and #9 “The customer decided to engage to drive an outcome. Don’t lose focus on driving the desired result.”
ONBOARDING
How to Increase the Lifetime Value of Your Customers
Here, Donna Weber offers a few tweaks you can make to your customer onboarding process that can make a big difference. She also reminds us that “Delivering ongoing onboarding ensures customers get continuous value from new features, new products, as well as from their new users.”
LEADERSHIP
How New Managers Fail Individual Contributors
This piece addresses the source of a common problem—when an exceptional Individual Contributor gets pushed into management because it’s the only promotion path available to them. Camille Fournier thinks this issue “starts with managers” and shares the pitfalls they should avoid like “neglecting to give feedback” and “hoarding information.”
CULTURE
10 Observations From Implementing CS
A quick read from COO, Nigel Sterndale, sharing his perspective on investing in Customer Success. One piece of wisdom he shares: “Never lose sight that Customer Success’ goal is to help the customer obtain the maximum value from the products or service they have purchased from you. In doing this we improved retention and development. Customer Success works. Spectacularly.”
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