[TMA] When "Closer to the Customer" Means Knowing Them Less

Last week I spoke to a UX leader who shared this familiar pattern: their UX/Design organization is being decentralized, eliminating the VP role, and having Directors report into business unit leaders. The rationale includes:

• business units better understand their customers
• flattening the org streamlines decision making
• the business unit leaders who own the P&L should control the resources that serve their business

But here's the thing: each element of this rationale is flawed.

Understanding customers

Business units do not understand their customers better than a centralized UX/Design and Insights organization. For example, a health care company may be internally organized by pharmacy, retail, insurance, clinics. But it's the same customer who is refilling their prescription, scheduling a vaccination in a clinic, and checking their insurance coverage, sometimes in the same day, maybe even the same single session. A customer's experience spans business units, but each unit understands only the sliver that engages with them.

In this complex ecosystem of customer engagement, a centralized UX/Design and Insights organization that tracks across customers' holistic journeys will have a way better appreciation of the customer, and could, in fact, use that knowledge to help each silo improve their performance.

"Streamlining decision making" is code for "retaining power"

While "streamlining decision making" sounds good on its face, it begs the question, "by whom and how are those decisions being made?" Unpacking that reveals the dynamic that's truly at heart here: retaining power.

Within many legacy enterprises (including where this UX leader worked), UX/Design is within a "Digital" function or channel. And, historically, Digital was seen in service of, rather than a partner to, the business.

But, as software continues to eat the world, Digital accounts for a greater and greater share of the business. It's seen as the engine of future opportunity: digital transformation, delivery over web and mobile, the promise of AI.

Additionally, their centralized and horizontal perspective provides a viewpoint from which they can identify opportunities that the business units do not see.

But Digital hasn't yet achieved real authority, and those business unit leaders see its elevation as a threat to their power. So while they still have the upper hand, these business unit leaders advocate for decentralization, because if it's so important, then these Digital folks should be "closer to the work."

The Problem with P&L

It's easy to blame these business unit leaders for being short sighted and territorial. But their behavior has been engineered by the system within which they operate.

We now get to the crux of the matter. Long ago, I realized that the root cause of why most companies deliver bad-to-mediocre experiences is not because they have poor designers, poor process, inadequate strategy, low maturity, or whatever. Those issues are real, but they are symptoms of a deeper issue.

The root cause is that they are fundamentally organized in ways that are hostile to user and customer experience. Each business unit is treated as a kind of mini-company, with an independent P&L, meant to encourage financial clarity, business autonomy and behavioral agility.

And the business unit leaders believe that because they have P&L accountability, they should control the resources that drive their business. And that makes sense—their incentives are tied to their specific business unit's success.

But this fractured P&L directly leads to a fractured experience, where the customer sees only the one brand, but their interactions across it are a disjointed mess.

These business unit leaders think of their unit as 'their business,' but the reality is their business unit is bound up with these other units. In the health care example above, it's the same customer using pharmacy, insurance, and clinic offerings. These offerings could (and should) reinforce one another in creating a more robust whole.

The company that most famously gets this is Apple. This massive company, among the most valuable on the planet, operates as a single P&L. They are many reasons, but core is that it enables the company to best serve the customer by shifting resources as needed, not getting bogged down in divisional silos.

All this has happened before... but this time feels a little different

The pendulum swing where companies shift from centralized to decentralized and back again is a well-known organizational phenomenon. And it's usually treated as an almost natural cycle, a way to provide balance or equilibrium within the company.

But, to me, the decentralized push we're seeing right now feels different. I think it's less about control (oversight of all the resources that enable my business), and more about fear, on the part of business unit leaders, recognizing their decreasing stature in a digital world.

The very nature of digital delivery inclines toward the "horizontal"—networked and connected, taking advantage of a business' various offerings and making integrating them such that the whole can be greater than the sum of the parts.

As I stated in an earlier post, UX/Design is the function uniquely suited within the enterprise to weave and orchestrate a company's offerings and demonstrate true "customer obsession."

This threatens those who currently wield greater power atop 'vertical' divisions, and and they are using what's left of that power to maintain their position, and subjugate UX/Design.

Which means that UX/Design leaders have a particularly difficult row to hoe if they want their organizations to realize their full potential. Not only do they need to do the essential work of leadership and management, shaping teams and processes to deliver high value work, but they also need to play some politics where their initial position is typically inferior.

This puts me in mind of what Katrina Alcorn said about design leaders on our Finding Our Way over three years ago: "We’re change agents because all of us doing this are still part of a movement to kind of change how businesses work, how they run."

If you're a UX/Design leader, you may not have realized you'd been conscripted into such a broad and bold movement. But this is the work to be done. Are you ready for it?

Thought Partnership Coaching for UX/Design Leaders

I believe that the work of UX/Design Leadership is more difficult than other forms of leadership, in part because of the kinds of organizational obstructions shared above.

This is why I offer Thought Partnership Coaching for UX/Design Leaders. Drawing from my own time as a design executive, as well as work supporting UX/Design leaders in pretty much every shape and size of company (including Chase Bank, Starbucks, IKEA, Anthropic, Mozilla, and 1Password), I bring to bear an uncommonly broad range of experience in addressing the variety of challenges that these leaders face, including organization design, quality frameworks, business cases, communication strategy, and relationship management.

I have availability through 2026 to work with more clients, so if you'd like to learn more about it, don't hesitate to reach out, and we can find a time to talk.