Enjoy the full Transcript of the Podcast
Debi Potgieter, Michael Hinshaw and Diane Magers
Debi Potgieter 0:33
Hi, I'm Debi Potgieter, a certified customer experience professional with over 30 years of experience in all things CX. Welcome to the XM Gage podcast, where we bring you insights from industry CX experts exploring actionable strategies to elevate customer experience and drive real business impact. Whether you're a CX leader, practitioner, professional, or just passionate about customer experience, this podcast is for you. Let's dive in.
Good evening everyone, and welcome to XM Gage, the podcast where every interaction counts. I'm your host, Debi Potgieter, and if you have been following our journey, you will know we are not just talking about experience. We are challenging how organizations think, lead, and grow through it.
Today's guests are nothing short of exceptional. They are our book club authors, Diane Magers and Michael Hinshaw. So happy to have you online with us on episode three of our XM Gage podcast. Welcome and thank you.
Diane Magers 1:51
Thank you. Thank you. Pleasure to be here.
Debi Potgieter 1:56
You have been thought leaders and builders of a new blueprint for business—the Experience Operating System, or EXOS—and you also happen to be the brilliant minds behind my favorite book, Experience Rules. And we are so delighted to have had you come and join without us even offering—you just came on board and said, “We're going to be in there on that first book club.” And you really made it very special. And because you were there, I know that our next book club session debrief is going to be just as popular. So thank you very, very much for that.
I really would like to welcome you and say that you are two incredible humans who have lived, breathed, and led transformational experience. So, the spark—I want to start at the very beginning. Michael, you both have carved out unique paths through experience management. What sparked your obsession with experience? Was there a moment that lit you up on fire?
Michael Hinshaw 3:09
Yeah, actually, for me, it was a series of moments, and I think it is for most of us. But I discovered that I was able to build a business from an idea to a $300 million company by using the principles of experience leadership. I didn't know that I was doing it at the time, but by taking that outside-in, customer-first perspective and understanding journeys, gaps, pain points, and existing systems, workflows, and processes, I was able to build a successful business in a highly competitive industry.
And so that was, for me, really the spark—looking back and saying, what was it that drove that success? And it was the ability to look at the issues that customers were having through their eyes, and then figuring out how to use that in ways that allowed us to deliver products, services, and experiences that were different from and better than the existing solutions in the market.
Debi Potgieter 4:07
That's fantastic. And so there was the gap, and you have just filled it.
One of the many things that I love about this book is the clarity in which you define your Experience Operating System as the operating system built around human experience. And for me, what really landed well is that it is a practical framework in action—used for people and by people to genuinely improve the experiences they deliver and the ones that they live.
So Diane, for those who are watching or listening who may be hearing this for the first time: What is EXOS, and how does it fundamentally shift how businesses run?
Diane Magers 4:55
Well, anybody who is doing this work—the brave souls who know there's lots of opportunity for us to excel in this space—would tell you that part of the challenge is the way that organizations operate today. They talk about silos. They talk about a disconnect between strategy and what customers want. All of those things come together.
We have seen organizations be very successful when they have put an operating system in place, which allows you to really embed this experience-led approach into the daily rhythm of your organization. Whether that's embedding it into your decision-making, whether that's developing a new product and making sure that experience leads there—it’s how it really gets baked in.
So, the system is really about how all the pieces fit together and that it's embedded into the organization in a different way than we're doing it today. We always talk a little bit about how experience is often seen as the frosting on the cake—and we are baking it into the cake with the Experience Operating System.
Yeah, I love that.
Michael Hinshaw 6:08
And there's a lot of talk in the customer experience profession about destroying silos, knocking silos down, breaking silos. And the fact is that organizations are built the way they're built because it works for them. And so the language of destruction, I guess, is something that we're trying to move away from.
We’re saying, how do you bridge silos? How do you connect silos together? How do you leverage the people-first, human-first perspective to link across the entire organization in ways that each silo is working in harmony with the others, rather than, quote-unquote, knocking them down?
Debi Potgieter 6:50
That's a real challenge that we see every day in our corporate South Africa and even in small businesses. We see that there's some silo mentality as well. So we love the solution to that problem and bridging that gap.
Diane, I think one of the quotes in the book is that experience is the only sustainable competitive advantage. Now, that's a bold and a beautiful statement at the same time. Can you unpack what that means for leaders today?
Diane Magers 7:24
Yes. I would say that as products and services—and even the use of AI—you can use any example you want—become commoditized very quickly. But what truly makes a difference, if you think about your own experiences with brands, is the way that you remember them, the way that you feel when you're interacting with them, the value they provide to you. And so that's all around the experience.
If we can differentiate by that, it doesn’t matter what product or service we’re using—it’s how we build the experience around that. And that is why we call it the competitive advantage.
Michael Hinshaw 8:01
And if you think about, to Diane’s point, your competitors can copy everything. They can create the same products, they can create the same marketing messages, they can create the same visual brand or the connections. What they can't copy is exactly Diane's point—it’s the relationships that you have with your customers.
So if you're able to build relationships using experience as a tool to create those emotional connections, and use your understanding of customers to offer them things your competitors simply can't—because they don't know your customers as well as you do—you will be able to differentiate and compete more effectively.
Debi Potgieter 8:39
If you had to give one stab, Michael, at how EXOS can really help leaders activate in their organizations, what would be the biggest struggle they're facing today that your EXOS could fix?
Michael Hinshaw 8:58
Yeah, unfortunately, there's not a single-answer question. And the reason being is that different leaders, different organizations, come at the desire to be more customer-centric from different places. So all organizations—just like all people—are unique, and they are in different places.
For one organization, it may be lack of clarity on what the strategy and vision are around being customer-centric. The desire to be customer-centric is different than saying, “Here's the strategy we're going to undertake for doing it.”
For others, it might be a desire to be customer-centric, but they don't understand their customers. In that case, customer understanding and measurement is going to be more important for them.
So the short version—I think we're going to talk about this in a little bit—but the short version is that understanding where the organization is and where it wants to go is critical for helping any individual leader understand where they need to start.
You can start slow. You can start fast. You can start big. You can start small. But the biggest challenge is starting—and starting in a place that's right for you.
Diane Magers 10:07
And what makes a difference to the organization. I think that’s the other connection that we don’t see leaders especially making—that experience, as a differentiator to our point, is also how you generate more revenue and generate more growth.
So whatever your strategy is and your growth goals are, they are all dependent on the experiences you create. Because if you’re creating experiences that drive customers away, there are retention issues, right? There’s a loss.
If you're unproductive and your processes are broken and people are really struggling to provide service, that’s a cost factor. So the connection to us—of how wherever you are and the one thing that you do—is helping to really connect that financial outcome to the experiences that you're creating in service to, as Michael said, wherever you're starting. You all have goals. It’s how you look at those goals and say, “These are dependent on how well we provide experiences to customers as well as employees.”
Debi Potgieter 11:09
And then starting—that is the big thing. Often we aren’t sure where to start, and an intro into the best possible thing.
Shift gears into high speed—not only do you bring theory to life in your book through practical case studies and examples and through this model, but you've also built a tool. And I personally have gone onto your website and link and tried out the tool—a little mystery shopping—and it's easy lemon-squeezy.
I really must say that it follows so beautifully, and the questions are easy to answer, and the product that is provided afterwards is solid. It gives you something to really know: Where am I going to start? What's important to me and my business? Where can I start and what can I do? You know—what is my launch pad?
So, Diane, Michael, what is the Pulse app, and how does it show up differently to what is there in the market right now? And how can it help leaders really track their progress, identify gaps, and build experience fluency in real time?
Michael Hinshaw 12:26
Diane, you want me to take that?
Yeah, please.
Okay, so simplistically, we were talking earlier about where do you start—and that's the question the XMS Pulse is trying to answer. We hear this from organizations all the time. It's like, “Where do we need to go? What does that look like for us?”
And to your point, Debi, there are a lot of different models in the market today. And I’ll go ahead and quote Megan Burns, formerly of Forrester. She’s put out a theory—I’ll call it—but really there are many models out there, many maturity models and frameworks, most of which are very good. The question isn’t which one is better than all the others. You need to choose one that’s right for you. And we believe that the Experience Operating System is the right one because it is comprehensive.
But the bottom line is: if you choose one and use that to help track your growth, that’s what’s most important. It’s sticking with it—rather than jumping around and trying a bunch of different things. It’s finding something that feels right, gives you enough information behind it that you're confident in the steps you need to take going forward, and then tracking that over time.
Specifically, the XMS Pulse is a way for an organization—multiple people in an organization—to understand not only where they are today and where the gaps are. For example, Diane and I see this all the time: management says one thing about where they’re at, and the line staff says something very different. Digital says one thing. Marketing says something else.
Where are those seams in the business you can identify that can help you prioritize things you want to close? And also, the XMS Pulse as a tool is meant to help you understand how far you want to—and can—go. So if you want to increase your maturity from a one to a five in a one-year period of time, once you see it charted out, the reality is that’s probably not practical.
Understanding the things that are most important to do—first, second, third—is something that the Pulse is designed to provide input to. It is by no means, you know, fully comprehensive, “Check the list, do these nine things and everything is wonderful.” Getting experience right is hard. But getting it right without a playbook—without a structure, without a roadmap—isn’t just hard. It’s nearly impossible.
Debi Potgieter 14:53
And I’m sure there must be some examples or cases in point where you had a team that perhaps used the assets or the tools to shift their strategy and had a breakthrough moment. Do you perhaps have an example of a case like that?
Diane Magers 15:09
Yes. We had an organization that was using another model, and it was really focused on what the experience management team needed to do. Like, “Are you getting all your data from your customers?”—you know, all those things. So they had a plan, but really, the organization didn’t have a plan.
They were doing things, but they were doing them a little bit in a vacuum. When we moved them to the Pulse and they started taking it, they began to realize that we’re really talking about capabilities of the organization.
So the ability to bring their leadership on board, to bring other teams that were already working this way—the language made more sense to them. And they said, “You’re right, we don’t really do that.” So, while it was still based on building experience as a capability itself, it was more about how the organization is working—hence supporting the Experience Operating System.
If you don’t have everybody on the same page and know where they’re going, how are they going to understand what needs to happen, when, and in what order, and with who?
That was part of the ability for them to start to build the bridges—to Michael’s point—with: “We’re doing this,” “This part of the organization is doing that,” “We need to align and come together to make this go faster,” and “Let’s get that built so that we can go and do these next things.”
So it opened up, truly, a more dynamic conversation—and a much more holistic conversation—about what they could do. Not what they should be doing and the activities around experience management, but who they were as an organization and where they needed to go.
So that was an “aha” moment for them of shifting their thought around what experience really was, because they were kind of seeing it as surveys and Net Promoter Score, to be honest. And there was so much more to that.
The CX team there could not get leadership to start understanding it. And guess what? When they took the part on the business value piece, they’re like, “Oh yeah, we didn’t think about that.”
So it really helped them also to have the light bulbs, and they found a lot of structure in that. Now they have momentum behind what they’re doing. So it feels a lot better and different for them.
Michael Hinshaw 17:21
I mean, as an operating system, it provides a common language and a common framework that the entire organization can use to begin focusing on the areas that are most important to them—and have conversations around why and how.
Debi Potgieter 17:34
I love that. And it takes the fluff out of CX, because many executives say that CX is so fluffy—it’s emotion with no bones.
Yes—and you’ve got the skeleton, you’ve got the skin, and you’ve got some wonderful fashion going on there, because this tool is absolutely awesome and user-friendly.
I belong to our CX community forum here in South Africa, and we had a session earlier today. One of the biggest frustrations is that our members and our practitioners feel that they can’t get the executives and their senior leaders to think about CX in a way that can actually transform the business.
And so, this thing is a powerful tool to help them bridge that gap with their leaders—to say, “But look at these various different constructs across, and how we can then bridge our maturity to that.”
And this, of course, is founded on global best practice standards—and better than yourselves as CXPA pros, may I say.
So, moving on then to measurement. One of the key things, as a practitioner myself, is that metrics can become meaningless. You can define and decide any metric you want and what you want it to say.
The point is, though, we need measures that are actually powerfully connected to the action that we take. Yes?
So it cannot be something you can’t feel and touch, and you can’t put effort in today and see an outcome tomorrow or the day after. You have to be able to hang on to it.
What advice could you give leaders around KPI management—especially in siloed organizations like this—and how does your model help mature this thinking?
Michael Hinshaw 19:36
Yeah. So I’m going to quickly go back to something that you said just prior to this, around getting executives lined up about and excited around customer experience.
And I kind of hate to say this, but executives don’t care about customer experience. And frankly, they’re not rewarded or compensated for caring about customer experience.
What they are rewarded and compensated on is business performance. So, approaching metrics—approaching executives—through the lens of customer experience is really important.
The question that the metrics program should help answer—as well as your communication, storytelling, relationships with executives—should be around:
“If your business results are this, this, and this, these are the things that we are doing, can do, can measure, that will show how experience, by the way, is driving results.”
It’s not a matter of NPS or CSAT, although those are useful measures. But they don’t clearly link to business results.
So to your point, Debi—for CX leaders and CX practitioners—it’s answering the question:
“By taking this action, we increased acquisition by 14% in the last quarter, which resulted in increased lifetime customer value of X and business growth of Y percent.”
The flip side of that, of course, is retention—or, to Diane’s earlier point, reduction in operating costs. Because we were able to do this more efficiently, increase the efficiency of these processes, improve these workflows, eliminate processes and workflows that are non-virtuous.
Those all have financial impacts. And CX leaders should be able to build their metrics programs around defining how the actions that the organization takes affect how customers feel—which drives behaviors—which drives measurable business outcomes.
Debi Potgieter 21:40
Thanks, Michael. And is there anything you want to add there, particularly on how we can use these measures and the system to create that momentum around keeping ourselves honest and on the straight and narrow of those meaningful metrics?
Diane Magers 21:58
Oh, absolutely. And I agree with you and Michael on the measures. You have to talk that kind of dual talk track to leadership—Greg Tucker and I especially call it CX speak to C-suite speak—because we're not talking the language they talk in. We're not talking about revenue and cost and savings.
So I think one of the most important parts of this operating system is an example I use with value. If you think about the value you're trying to create, and you're working on a project, for example—if you're not thinking about the current experience and the financial impact it has to the organization as a result of that experience, and you're not using the value talk during your design… you're not talking about the value it's going to create as you begin to build the solution… you're not talking about the outcome it's going to have and the ROI of it—“We’re going to go spend this much money, and here’s what we’re going to get through the measures”—then by the time you get ready to launch a product or solution, it’s too late.
You need to be talking about that all the time and embedding it in how your product teams work, how your service improvements are working, your sales processes—because that value equation is about creating value for the customer and creating value for the organization.
And if you’re not thinking about those things all the time and making sure it’s cared for, it’s not going to happen. You’re going to end up talking about Net Promoter, and you’re competing against other parts of the organization that are coming with hard ROI numbers for things they're going to go do.
And to be honest with you, all they’re doing is really changing customer behavior as well. That’s really all we’re doing. We’re just doing it from an experience standpoint—not a new campaign. We're doing it as an experience. If we change that, we’re going to get different results.
Because, as Michael said, emotions lead to different behavior, which leads to business results. So it’s why we talk about embedding this in what you do. Because if you don’t get people to think that way, they’re not going to be able to build a case around the experience. They’ll keep talking about NPS and CSAT. And I agree with Michael—they have a place, but they should be side by side with the hard financial numbers of where you’re going.
Michael Hinshaw 24:07
Correct. That perception you talked about earlier—that it’s fuzzy and soft—that’s kind of a self-inflicted wound on the part of the CX profession.
And in fairness, NPS is linkable to business results. You can use NPS as a tool to say, “These promoters are driving this much additional revenue for the organization,” right? But that’s not how it’s typically used. It can be used that way.
And so, again—to Diane’s point and the things we’ve all just said—the inability to link to value is something that has, I think, caused significant issues for the CX profession. And it’s our job collectively to figure out: How do we communicate in a way that the C-suite understands and embraces what it is we’re doing—and the value we’re driving from it?
Debi Potgieter 25:01
We are taking back our power today—and you’ve given us the tool to do this.
Debi Potgieter 25:09
—it is so much more than that. And if we could just get these departments all to see what the combined value could look like…
I definitely think CEOs will be sitting up all through the night reading your book with their CFOs—comparing chapter points the next day.
We have a rugby captain—and we love rugby here in South Africa—Siya Kolisi. And when we went through this last championship, the theme was “Stronger Together.”
And really, organizations and CX communities—or however you look at it—are stronger together. And that’s bringing the best of all the components in a cohesive way that you’re able to then see those results.
Debi Potgieter 26:11
And I believe your system gives us a “Stronger Together” view on CX and empowers our practitioners. But of course, things are changing now. And there’s AI, and we need to adapt. And there’s this human-centric future.
So press fast forward into the future. We’re watching the rise of AI at a rapid pace—I can’t even keep up anymore. Well, I couldn’t keep up before, actually. We know how far behind I am.
But with AI, predictive analytics, automation—there’s a fear that the human is getting lost in all of this.
So Diane, how does EXOS evolve into the future? And how does it kind of raise or protect or define a human essence in systems increasingly used by machines? How does it blend the importance of all of these things together as well?
Diane Magers 27:05
I guess I would start with a way to think about it: When we say “AI,” we think about Artificial Intelligence. But I think about it as Assisted Intelligence—meaning that nothing can really happen without the human.
It’s always going to wind up with the human—what they’re trying to accomplish, what they want to do, how they feel about what they’re doing—all of that is going to be augmented by how we use those tools.
People are saying, “I’m going to lose my job to AI.” All it really means is that, as we enable AI to improve an experience, our role shifts.
I guess more broadly—from a societal standpoint—I don’t want to be Pollyanna-ish about it, but it’s going to elevate our ability to focus on the higher-order things.
If you think about any major shift in the industrial age or the way humans have evolved… all the things that we’ve created—cars, iPhones—have made us more efficient and effective. It’s allowed us to do things with our lives that are more meaningful—spending time with our families, working on new products or bodies of artwork. There’s all kinds of things that can happen.
So I don’t really see it as, “AI is going to take over.” I see it as, it’s really an augmentation to our lives—and we have to see it as such.
And for CX professionals—I’ll just let Michael leap off of this because he likes it when I make this statement—when you think about Artificial Intelligence, it’s not really about what you’re—
A lot of organizations are starting with AI. “AI is going to drive and we’re going to go do this thing.”
They’re not starting with thinking about the human experience they’re trying to create and enabling it with technology. That could include AI, machine learning, virtual reality.
What you really need to focus on—and what we as CX professionals need to stay in the mindset of—is: What are we trying to help the human do? And then we figure out how to enable that with technology—not the other way around.
Michael probably has a couple of great examples of where it hasn’t worked.
Michael Hinshaw 29:11
Yeah, well—I think we all have examples of how technology hasn’t worked, just as consumers and as users of business services.
I mean, the list of frustrations that I personally have with technology is exceedingly long. And organizations continue to use the new shiny object—AI is a big one, I grant you.
But exactly to Diane’s point: When organizations deploy tools like AI or predictive analytics to do things that help the company first—and don’t take into account what they’re trying to accomplish for customers—then you end up dissatisfying, and in some cases, really angering your customers.
Predictive analytics is a perfect example. AI makes predictive analytics much easier to do. But where’s the balance?
From the customer perspective, where they’re trying to accomplish something—what’s the line between being helpful and being creepy? It’s like, “Wait—you know all this? Wait, what are you telling me? How did you figure that out?”
Those are the kinds of things that—if you’re not taking that outside-in, customer-first, human-centered approach—you risk alienating customers even as you attempt to serve them better using tools like AI.
Debi Potgieter 30:27
This is my relationship with chatbots at the moment. I have a hard time settling into what I really, really need help with. And they seem to give me these answers that mean nothing and send me to places that go nowhere. But we're going to get there, because organizations are going to be reading and knowing that if they're not building and designing for the customer—and using the assisted intelligence to get them there—they're going to be struggling.
I would love—
Diane Magers 30:57
Employees—employees too. Let's not forget employees. We're doing a lot more things to them. They have to use things a certain way, or they need to go learn, but they’re not really being taught how to learn it.
You can learn the tactics, but how you apply it—and how you really think about, “What can it do for me in my life to make my life easier, to make what I’m producing better?” and “How do I respond to customers in a different way?”—that’s the key.
So I think we’re going down a path of AI for AI’s sake, and we need to harness it in the right way. We’re recommending we—
Michael Hinshaw 31:37
Talk about it from the outside-in customer perspective. Internally, we use the sales analogy—it’s like the WIIFM: “What’s in it for me?” How do you help each individual in the organization understand what’s in it for them when it comes to leveraging AI, rather than making it something that scares people?
“I’m going to lose my job.” No—how do you help, to Diane’s point, elevate people?
So they think, “Oh my gosh, this is something I can use to help customers and make my life easier.” That is the true promise of the appropriate application and utilization of AI. But getting that requires an operating system, in part.
Diane Magers 32:15
And Debi, I wanted to hark back to the whole thing with the chatbots.
So imagine—you’ve already got somebody who is in a quandary or a little angry even, with a problem they’re having. They want to go to support, and they get a chatbot. And the chatbot takes them in three circles, doesn’t allow them to get to where they need to, and can’t answer their questions.
Now I’m more ticked off than I was before. So I’ve now attached those negative feelings toward the brand, even though I might have had a great experience with the product and just needed a question answered—or I’m trying to get something done and can’t get it done.
It has that impact on exactly what we talk about: how people feel drives their behavior, and behavior drives business results.
I don’t go back. People are going to figure out chatbots. If they can’t figure it out and get me where I need to go—with other options—I’m on to the next one. And it’s happening.
We see organizations saying, “Our chatbot’s not working.”
Like, yep. You’re right.
Michael Hinshaw 33:18
They don’t know that unless they have systems in place to measure how well it’s working—and fix it.
Debi Potgieter 33:23
Stories!
So, I need to get on to rapid fire because I see our time is running out, and I am excited about the XM Gage rapid fire—and gut responses only.
And we are go.
Strategy or culture—what drives true transformation?
Michael Hinshaw 33:39
Culture.
If you’re looking for one-word answers, I can do that. If you’re looking for more, I can do that too.
Debi Potgieter 33:49
Maybe you can favor it just a little bit—why would culture stand out?
Michael Hinshaw 33:54
Yeah—well, you can have a strategy, but if the organization isn’t aligned around delivering it and doesn’t understand exactly what it means to them, then the strategy is just a piece of paper or a poster on a wall.
Debi Potgieter 34:03
Correct.
And then Diane, the most underrated component of EXOS?
Diane Magers 34:11
Well, I can leap right back onto the culture piece, because that applies. But I would also say value.
I think we haven’t done enough—even though Michael and I shout it from the top of the mountaintops—to help people see that this is a business you’re enabling. And the people and the humans that interact with that business you’re enabling—you’ve got to think about the value you’re creating for that whole ecosystem.
So two-word answer: culture and value.
Debi Potgieter 34:40
Lovely.
Michael, complete the sentence:
Experience leadership is the...
Michael Hinshaw 34:47
...ability to make decisions based on the needs of the humans that your company serves.
Debi Potgieter 34:53
Love, love, love, love.
Diane—one myth about CX you would love to bust for good. Over. And done.
Diane Mage35:01
It’s not fuzzy.
I mean—I started as a clinical psychologist, and anybody would tell you that we as human beings are fickle people. Lots of things are different about every human that you meet. But in the end, all of us want to have positive experiences—positive things in our life.
And the organizations that create those—like the Disneys, the Starbucks, anybody else—are winning.
So I don’t know… when they say it’s fuzzy, I don’t know what they don’t get. To me, it’s always a mystery.
Like—you have experiences every day, and you make decisions based on experiences you have. You don’t think our customers do the same thing?
So that’s the myth I’d love to bust. It is not fuzzy.
Debi Potgieter 35:49
Michael, what a rich and grounded conversation I had with the two of you. Thank you so much for your generosity and your wisdom—and for giving us the best tool ever.
I read here, right at the bottom:
“Whether you're an industry veteran or novice to experience management, Experience Rules is a catalyst for unlocking the potential of customer centricity and an invaluable companion for future-proofing your brand.”
Thank you so much.
And for our listeners out there: If you haven’t read Experience Rules, do yourself a favor—get your hands on it. They are going to sell out like hotcakes after this podcast.
Unknown Speaker 36:31
Systems drive—
Debi Potgieter 36:32
—behavior. And when that system is built on experience, you transform your business.
So until next time, I’m Debi Potgieter, and this is XM Gage—where every interaction counts.
Thank you.
Michael Hinshaw 36:48
Thank you so much, Debi.
Debi Potgieter 36:50
Thank you for tuning in to the XM Gage podcast.
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