Build a case, build a following:

Laying the groundwork to

transform customer experience in
government
Transforming government agencies to serve people better relies on making a compelling
business case and inspiring supporters willing to champion the change. Here’s how.

Tony D’Emidio and David Malfara

MARCH 2018 • PUBLIC SECTOR PRACTICE © Trevor Clark/Getty Images

 Organizations of all types have amped up their focus But making the case for reforming an agency’s
on understanding and improving the experiences of approach to customer experience is not as simple
the customers they serve. Private-sector innovators as pointing out shortcomings. Improving customer
like Amazon and Apple continually set the bar on what experience is a complex task, since it requires
constitutes superior customer experience, and choosy employees to change mind-sets and behaviors, and
consumers push it ever higher. Government agencies requires organizations to rewire operations with the
are by no means inured to these rising expectations, customer in mind, rather than adhering to traditional
but evidence suggests that they have a long way to functional silos. Delivering transformational
go to satisfy their customers’ demands.1 In a recent change is also difficult. According to our research,
survey, we found that government agencies ranked only 30 percent of organizational transformations
last forPublic
McK satisfaction among
Sector 11 researched
Customer industries
2018 are successful, and of the 70 percent that fail,
(Exhibit
Build a 1).
caseA recent study
build by the Pew research center
a following nearly three-quarters do so due to unsupportive
found that only
Exhibit 1 of 3 18 percent of Americans trust the management behavior or employee resistance to
government to do the right thing.2 change (Exhibit 2). 3 In government, these obstacles

Exhibit 1 Public-sector services have ground to make up relative to private-sector

industry leaders.

Customer satisfaction with industries by industry sector, average score out of 10

8.3 8.2 8.1

7.7 7.6 7.6 7.5 7.4
6.9
6.2
5.6

Grocery E-shopping Bank Credit Car Mobile Airline Electric Cable or State Federal
store site card insurance phone utility satellite TV gov gov

Source: McKinsey Public Sector Customer Experience Survey, December 2016; McKinsey Cross-Industry Customer Experience Survey, 2016–16

2
 McK Public Sector Customer 2018
Build a case build a following
Exhibit 2 of 3

Exhibit 2 Around 70 percent of transformation programs don’t succeed, mostly due to employee
resistance to change, and management behavior.
Transformation success rates, %

~30 succeed
Employee resistance
39 to change

Management behavior
Reasons for transformation 33 does not support change
failures, according to senior
~70 fail executives, %

Inadequate resources
14
or budget

Other obstacles
14

Source: Scott Keller and Colin Price, Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage, Hoboken, NJ: John Wiley &
Sons, 2011; McKinsey analysis

can be compounded by the constraints of public- a compelling business case that builds a value-
sector service, as well as by the predictable cycle of based argument for improvement and secures
leadership changes that inevitably shift priorities and the operational outcomes to create momentum.
organizational focus. Leaders then finish the groundwork for success by
building the organizational following essential to
So, given the task of shifting an agency toward a inspire colleagues to support change and win the
more customer-centric focus, how can leaders organization’s emotional support to advance it. This
succeed in making the case for change and building article will explore these two interlocking efforts
the momentum necessary to spark a customer- critical to launching a government agency’s efforts to
experience transformation at any scale? From build a superior experience for those it serves.
our research and work, we have distilled what we
believe are the fundamental elements in laying the Building a business case
groundwork for a successful customer-experience- Changing the way a government agency works
improvement effort in government agencies. We means facing challenges that may not exist within
find that successful transformations start off with the typical firm. While private-sector organizations

3
 may be willing to place a bet on improving customer Some agencies have put this connection into practice
experience based on the promise of increased to gain momentum and advance their customer-
revenue, government-agency leaders must consider experience programs. For instance, in the early days
a broader set of factors. In the case of a customer- of the US Social Security Administration’s (SSA’s)
experience-improvement effort, the task would be customer-experience-improvement program, then-
to show how a focus on customer experience would acting commissioner Carolyn Colvin focused the
create real value in order to secure budget dollars organization with a strategic plan. As part of the plan,
for a new program, or to defend against the critical the team outlined the ways the SSA’s customer needs
eye of a congressional inquiry. were changing in the marketplace and the impact
of those changes on the SSA’s work and mission
A strong business case can help agencies stay on execution. The plan produced an aspiration for the
track and avoid false trade-offs between customer SSA’s future built around three pillars: superior
experience and mission outcomes. At the US customer experience, exceptional employees, and
Transportation Security Administration, for an innovative organization. Establishing such a link
example, the progress of a transformation effort between customer experience and positive mission
was threatened by long security lines and failed outcomes can serve as a cornerstone for any
security tests. It would have been easy to shift business case to start a transformation within a
priorities away from the transformation work government agency.
during that time. Instead, the transformation team
maintained strategic focus and kept momentum Meeting or exceeding financial goals
going by recognizing the closely linked value Customer-centric programs can also have a concrete
created by succeeding in their core mission (that is, impact on budget goals, providing a tangible outcome
security effectiveness) while simultaneously driving against which appropriators can build proposals. For
operational efficiency and delivering an improved agencies with revenue responsibilities, such as the US
customer experience at checkpoints. National Park Service or the Export–Import Bank of
the United States, a focus on improving the customer
In our experience, three elements are critical experience can create opportunities to sell additional
for building a compelling business case that services or reduce churn, thus improving revenue-
demonstrates the value for investment in generating opportunities. Survey respondents who
government-agency customer experience. They were satisfied with the service of the United States
include the contribution to achieving an agency’s Postal Service, for example, engaged it for their
stated mission, meeting or exceeding financial goals, shipping needs 67 percent more often than those who
and deepening employee engagement. were not satisfied. Across private industry, successful
projects for optimizing the customer experience
Achieving stated missions
typically increase revenues by 5 to 10 percent.4
US government agencies have vital missions to
execute, and our research has shown that a positive Efforts to improve experience need not come at a
customer experience can have a direct impact on heavy cost to operating expenditures, nor do they
mission outcomes. In 2016, we found satisfied necessarily involve large capital investments. When
customers of the US Department of Veterans Affairs experience-improvement programs are executed
(VA) were 44 percent more likely to feel secure in systematically, they reduce costs or, at worst, are cost
their healthcare coverage, and customers who were neutral. (Across private industry, successful projects
satisfied with the US Citizenship and Immigration to optimize the customer experience typically
Service were 14 percent more likely to apply for reduce costs by 15 to 25 percent within just two or
citizenship (Exhibit 3).

4
 McK Public Sector Customer 2018
Build a case build a following
Exhibit 3 of 3

Exhibit 3 Not a surprisingly, more satisfied customers are more likely to continue with a process.

Customers 91 Customers'
87
feeling secure likelihood of
with Veterans applying for 79
77 76
Administration naturalization,²
healthcare,¹ % %
63

Respondent Respondent
share, % 49 32 19 share, % 42 38 19

Satisfied Neutral Dissatisfied Satisfied Neutral Dissatisfied

1 Based on response to “I feel secure in my healthcare coverage”: dissatisfied is customer-satisfaction score (CSAT) 1–6, neutral is CSAT 7–8, satisfied is
CSAT 9–10; n = 462.
2 Based on average response to the question “I am commited to becoming a naturalized US citizen”; n = 396.

Note: Figures may not sum to 100%, because of rounding.

Source: McKinsey Public Sector Journey Pulse Survey, Nov–Dec 2016

three years.)5 An effective program can identify the Deepening employee engagement
experiences that matter most and focus investment The US Office of Personnel Management’s
on improving them while demoting, automating, 2017 Federal Employee Viewpoint Survey found
or eliminating operations that customers don’t value. that for government employees, levels of engagement
For example, one federal agency was able to realize have hovered around 65 percent since 2012.6 Like
a cost reduction of about 20 percent over a three- most private-sector companies, many government
year period due to efficiencies identified by its agencies struggle to make significant strides in
customer-experience program, while also boosting promoting an engaged workforce. A focus on the
customer-satisfaction scores. Another federal customer experience can help to reverse slumping
insurance agency achieved around a 30 percent employee-engagement numbers because superior
reduction in claims-processing costs through its employee engagement and a superior customer
customer-experience initiatives. experience reinforce each other. Through our work in

5
 the private sector, we’ve found that programs from the start, transformations must manage the
to improve the engagement of frontline workers organizational dynamics of supporting positive
can have a significant positive impact on the change at scale once a compelling business case
customer experience. is made. In other words, a strong business case
supporting change is not enough if you don’t create
We’ve also found the reverse to be true: a focus on the groundwork within your organization that
the customer experience has an equally important inspires colleagues to support the change. In fact,
impact on employee engagement and satisfaction. A change efforts that balance these two factors are on
well-run customer-experience program can give the average 1.5 times more likely to succeed, compared
staff a common, unifying, and customer-centered with those that focus on one of the two. 8 There are
purpose while reducing complexity and unnecessary many practical steps that can build momentum
work in frontline processes. One federal agency and support throughout a customer-experience
held a cross-functional journey-mapping workshop transformation. Here we’ll explore two change-
to launch a transformation effort and focus on management topics that we believe are critical to
customer needs. After the session was complete, one get customer-experience programs off the ground
of the more vocal participants, a 25-year veteran within government agencies: establishing the right
of the organization who had recently tendered his leadership and creating “evangelists,” or vocal
resignation, requested to revoke his resignation advocates for the program within the employee base.
and continue on with the team. When asked why, he
replied that the new focus was a complete change Establishing the right leadership
in the way the agency was approaching its work If a third of failed transformations are due to
and that he was excited to follow it through. Stories unsupportive leadership behaviors, it’s clearly
like these are common, and the increased important to establish strong leadership from the
employee engagement from customer-experience outset to ensure success down the road. In most
efforts can drive real improvements in employee successful customer-experience improvement
satisfaction, morale, and turnover rates. One federal efforts, someone at or near the top of the organization
insurance agency, for example, saw a more than champions the change, models supportive behaviors,
50 percent increase in its organizational health over and inspires the organization as the face of the
a two-year period as a result of its customer- transformation effort. For example, at the Federal
experience program.7 Emergency Management Agency’s (FEMA’s)
insurance and mitigation unit, the chief executive of
Building a following the national flood-insurance program championed
Our research has shown that successful change the “survivor experience” as his number-one priority,
programs do not focus only on financial performance sponsoring new customer research, creating a
and operational outcomes. To be truly successful new customer-experience office, and dedicating a

A focus on the customer experience has an equally important

impact on employee engagement and satisfaction.

6
significant amount of his energy and time (across Calling all evangelists
internal and external audiences) to driving a step- Some 40 percent of failed transformations stumble
change improvement in the experience of five because employees resist the proposed changes from
million flood-insurance policyholders covered by the start.9 So, hand-in-hand with establishing strong
the program. Another example of this top-level leadership within the organization goes the need to
support can be seen within the VA, where the former create a network of influencers within the employee
secretary, Robert McDonald, focused on driving base to serve as advocates for the daily series of
a better experience for veterans. Such firm top- changes that transformation brings. Within public-
leader support sends a clear signal that customer- sector customer-experience programs, we’ve seen a
experience efforts are a top priority, establishing few simple strategies excel at creating a groundswell
the credibility and inspiration needed to ensure that of support. First, invest in developing individual
transformation programs get off to a strong start. leaders at the front line. For example, find influencers
in the organization and give them leadership roles in
Securing an inspirational top-executive champion the program. At one airport, transformation team
is necessary, but not sufficient to establishing the leaders intentionally sought out frontline managers
right leadership mix for a successful transformation. who displayed support for customer experience and
Customer-experience programs are by nature influence within the organization to lead change
multidisciplinary and require cross-functional teams that drove enhancements to the passenger
collaboration to drive improvement across customer experience. Nearly four years into a transformation
journeys. To effectively advance change, a day-to- effort in one of the toughest customer-satisfaction
day leader is needed who can create the connective settings, those leaders continue to recruit other
tissue across functions and produce results. passionate individuals from among the airport’s
Without establishing this kind of tactical day-to-day more than 18,000 employees to design and take part
leadership, change programs can feel like a “flavor in new and ongoing customer-experience initiatives.
of the month” and lose the emotional support of the In 2017, the airport was rewarded for its efforts when
organization due to lack of follow-through. At the VA, it achieved the number-one ranking for customer
McDonald was the face of change for the veterans satisfaction among its peer set from J.D. Power.10
experience program, but he quickly established a
chief veterans experience officer, Tom Allin, who Second, make sure to celebrate successes publicly,
built the VA’s customer-experience office from especially in the early days. During recent interviews,
the ground up. Allin defined functions to harvest leaders from the VA and the Social Security
insights, propose new designs, measure problems Administration emphasized the importance of
and responses, build community, and establish town-hall meetings to energize their efforts. These
enterprise operations. He also worked across the events prove critical for sharing stories of success and
other major departments at the VA to establish the creating a sense of excitement and ownership while
customer-experience office as an internal consultant also providing a forum to hear real feedback from
and advisor, helping his colleagues understand what frontline staff who are taking on the challenges of the
underlies satisfaction across customer journeys and transformation program.
acting as a catalyst for improvement. Establishing
an effective tactical leader in this way is critical Finally, try to communicate changes and progress to
to ensure focused momentum on the things that the full organization, and don’t forget to demonstrate
will drive early progress and keep the organization how input from frontline employees is being
engaged on the vision set by the executive champion. recognized and applied. In a recent interview, leaders

7
 at the SSA talked about the importance of focused Governments serve their citizens as well as an array of other
1

constituents and stakeholders. In this article the term “customer”

methods for gathering ideas from the employee
refers to all those who make use of government services.
base. The Commissioner’s Challenge, a unique 2
“Public trust in government: 1958–2017,” Pew Research Center,
employee-feedback program created at the SSA, gives May 2017, people-press.org.
the entire base of employees the chance to provide 3
Scott Keller and Colin Price, Beyond Performance: How Great
input on what they would change if they were the Organizations Build Ultimate Competitive Advantage, Hoboken,
NJ: John Wiley & Sons, 2011.
commissioner. Again, this helps to create a sense of 4
See Ewan Duncan, Harald Fanderl, Nicolas Maechler, and
excitement and ownership among the full base of Kevin Neher, “Customer experience: Creating value through
employees. But gathering input is only the first step. transforming customer journeys,” July 2016, McKinsey.com.
In addition to celebrating progress and input from the 5
Ibid.
front line, don’t forget to revisit ideas that may have In the study, engagement has been relatively flat, hovering around
6

65 percent, ranging from a low of 63 percent to a high of 67 percent,

been made less of a priority at the start of an effort. since 2012.
Through these closed and updated feedback loops, 7
Measured by McKinsey’s Organizational Health Index, “health”
leaders can help ensure that frontline workers feel refers to how an organization aligns itself, executes with
excellence, and renews itself to sustainably achieve performance
they have been heard and that they have an emotional
aspirations.
investment in the success of the customer-experience 8
Keller and Price, Beyond Performance.
improvement effort. 9
Ibid.
10
“North American airports effectively navigating construction,
capacity challenges, J.D. Power finds,” J.D. Power, September
21, 2017, jdpower.com.
Building a compelling change story for taking
on a customer-experience transformation is not Tony D’Emidio is a partner in McKinsey’s Washington,
always easy. Leaders build both a fact-based and DC, office, and David Malfara is a specialist in the
emotional commitment to positive change across Miami office.
their organization when they establish compelling
business cases across mission, financial outcomes, Copyright © 2018 McKinsey & Company.
and employee experience while at the same time All rights reserved.
engaging employees to advocate for the program
and recruiting influential supporters.