Therefore Strategic Technology Services

Friday, 22 November 2013

The power of evolution & a picture that tells a story

We are firm believers that there are two ways of achieving anything – by evolution, or by revolution. The notion of evolution is of particular interest to the Therefore Team. In short, we believe that small tweaks can add up to a huge impact, if the tweaks are oriented towards a clear strategic vision. The trick is the strategic vision. Without it, the small tweaks are pretty much guaranteed to take you nowhere in particular. They will, however, keep you busy!

Before we started developing the Therefore Business Process Management Suite (BPMS) we spent a lot of time defining a clear strategic vision for the product. The initial release was undoubtedly revolutionary … but the real magic has been what we achieved after the initial release, through the power of evolution.

We have been taking market feedback for a period of some 10 years and using it to drive a continual cycle of refinement. Every week we make between 10 and 20 small refinements to the Therefore BPM Suite. In a year that amounts to about 780 refinements. The Therefore BPMS has been under continual refinement for the last 10 years, which translates into some 7,800 refinements. What would you expect if you refined something 7,800 times? Trust me, the impact is huge … but it requires commitment and a clear strategic vision.

The bottom line … when it comes to bringing life to your strategic vision, don’t forget to bring well oriented tweaks into the mix. Make the principle of “a well oriented tweak” a part of your strategic conversation and corporate culture. Not easy I know, but perhaps it starts with you!

Now for something slightly different, but stick with me … it will make sense.

Over the years there have been a myriad of questions regarding the Therefore logo and, true to form, we have been very cagey on giving away too much detail. Perhaps it’s time for a clue.



If you look at the Therefore logo, it implies a process of invention and refinement – a journey of discovery. You can almost see it come to life. The logo talks to our commitment to the belief that small refinements made within the context of a clear strategic vision unlock significant value.

We would like to accompany you on your journey of discovery. 

Updated: 30 Jan 2018

 

Tuesday, 12 November 2013

What’s in a name? Good, Cheap & Fast. Pick two.

Some time ago, I wrote a blog article that gave a small clue to why we called our business Therefore Strategic Technology Services (What's in a name?). At the time, the question was answered in the most cryptic of terms … and we are still not going to give the full secret away. None the less, provided below is the second clue to how the name Therefore was settled upon.

The Holy Triangle

Consider a triangle with three corners. Draw a dot on each corner … and you have the Therefore symbol, assuming that you have one dot at the top and two dots below it. Interestingly enough … turn the Therefore symbol on its head … and you get the symbol for Because.

Now, let’s give the dots names … Good, Cheap and Fast.



The rules of the game are simple. You can only ever touch two of the three points. So, if you select “Good” and “Cheap” … you can’t have “Fast”. Similarly, if you select “Cheap” and “Fast” … you have to give up on “Good”. Finally, “Good” and “Fast” are certainly not going to add up to “Cheap”.

This principle is referred to as the “Holy Triangle”. When creating a project charter, you need to consciously select two out of the three options, as dictated by the strategic position that the project plays in your environment. Sadly, you can't have it all.

The image below is often used to portray the “Holy Triangle”. Interestingly enough, you may be able to draw it … but it would be impossible to model it in the real world.



If you look at it carefully, there are three possible outcomes when you make your “Good”, “Cheap” and “Fast” selection.

You choose ... Good + Fast = Expensive

Your Team says ... Choose “Good” and “Fast” and we will postpone every other job, cancel all appointments and stay up 25 hours a day to get the job done. But, don't expect it to be cheap.

You choose ... Good + Cheap = Slow

Your Team says ... Choose “Good” and “Cheap” and we will do a great job for a great price, but you may need to find a bit of patience.

You choose ... Fast + Cheap = Inferior

Your Team says ... Choose “Fast” and “Cheap” and expect an inferior job delivered on time. The “Inferior” option is not a recommended position, and the Therefore Team are unfortunately not available to assist.

Now back to Therefore …

By now you would have guessed that the Therefore Team feel strongly about optimising your use of resource, both from the perspective of your financial and time resource … and we are aware that the world in which you operate has a scarcity of both. Quality can never be compromised.

The three points contained in the Therefore logo encapsulate this philosophy.

Thursday, 31 October 2013

Communicating strategy … pulling in the same direction

Strategy ... keep talking 
So, you have drafted your strategy. You have broken your strategic themes into a set of tactics. Your tactical layer has in turn been broken down into a series of projects and tasks, all of which have been allocated to those that are accountable for their execution. Now your focus needs to shift to making sure that everyone is on the same page.

This article is intended to provide some pointers to assist you in the development of a plan that will clearly communicate your strategy to your most valuable stakeholder, your employees.

The Importance of Communicating Business Strategy

One of the most common weaknesses plaguing businesses is a lack of a solid understanding by employees of their company’s strategy. Communicating your strategy to employees is vital to ensuring that each member of your staff is involved and understands the company goals, where your long-term plans will lead and how you intend to get there.

All employees, irrespective of their level within the organization need to be aware that their contribution matters. They need to know that they play a key role in your business’ plans for the future, and they need a clear understanding of what the future will look like so that they can contribute to making the shift. The benefits from a motivational standpoint are self-evident. Perhaps more subtle are the benefits that flow from everyone pulling in the same direction.

Irrespective of how carefully you have documented your strategies, tactics, projects and tasks … it is inevitable that your planning will have gaps in it. It is therefore critical that your strategy execution team has a clear understanding of your strategy to ensure they are able to plug any gaps that they come across in a manner that remains true to your strategic vision.

Building your strategy communication plan

What follows is a broad framework that you can use as a starting point when drafting your strategy communication plan. Please feel free to feed back to me if you have any ideas that you believe would add value.

By whom

In most organisations, the CEO is the owner of the strategy plan and keeps a keen eye on its execution. For this reason, it is advised that the CEO personally communicates the ins and outs of your strategy to the employees. If the CEO personally delivers the strategy feedback, it will be apparent to your employees that the issue of strategy is of key importance to the business, given that it is being led from the top.

Interest groups

There are in essence three interest groups when it comes to communicating strategy, those that will be directly involved its execution, general staff and new recruits.

Session types

For new staff, you should ensure that your new staff induction material carries content that details your long term strategy.

For existing staff, you should schedule three types of sessions … a kick off session, progress update sessions and a close out session. Given the differing content needs of the two interest groups, it is proposed that the three session types be run separately for each interest group.

Kick off session

The kick off session should provide detail of the strategic themes, the thinking that sits behind the strategy as well as your target dates for delivery. You may want to acknowledge the team that will be directly responsible for the execution of your strategy.

Progress update sessions

Leadership needs to set aside time to honestly evaluate strategy execution performance. The findings of these reviews need to form the basis for feedback given to the organization.

Progress updates should occur as frequently as practical, ideally monthly, and should detail progress made, team members whose performance has been exemplary, areas where difficulties are being experienced, refinements made to the strategy and performance relative to deadlines.

Close out session

The close out session is there to wrap up and provide detail of your successes, failures, to acknowledge exemplary performance and to detail “lessons learned” during the course of the strategy execution cycle. It is also important to provide detail of your plans for the next strategic cycle at the close out session.

Induction

Including detail of your strategy in your new staff induction process will ensure that your staff are immersed into your strategy from the onset. As previously stated, this will allow new employees to understand that their contribution is of value, irrespective of where they sit in your hierarchy.

The contents

The strategy execution team needs a thorough understanding of the strategy, given that they will need to execute against it. They will need sufficient depth of understanding to allow them to “fill any gaps” that come to light during the course of the execution cycle.

General staff will require a less detailed reading of your strategy. The general staff curriculum should emphasise the fact that each employee plays a key role in your business’ plans for the future, what the future looks like and should provide detail of any “change management” issues that are implicit in your strategy. For general staff communication, keep it real, succinct and understandable.

It is advisable to acknowledge your strategy execution stars as a component of your progress updates. There may even be some merit in establishing a reward structure to reinforce exemplary performance. It stands to reason that performance against the strategy plan should constitute a KPI for the staff that are in your strategy execution team. More detail regarding the strategic alignment of KPIs to follow in a subsequent article.

An item that warrants communication to the strategy execution team is that the CEO is available to the team should they wish to engage in discussion regarding the execution of the strategy. This will make the process of “filling in gaps” far easier for the team and will improve the quality of the finished product. There may well be merit in establishing a Steering Committee to provide a forum for the discussion of all things strategic.

It’s often advisable to give strategies or strategic initiatives names as they concretize the abstract, facilitate strategic conversation and give your team something that they can “hook into”.

The venue

Take the feedback to where your employees are. This will minimise disruption and lend the interaction a sense of honesty and sincerity.

Collateral

The collateral that you use is up to you, whether it be hand-outs, a PowerPoint presentation, or both, the key is that it needs to be appropriate to your audience.

The execution team should ideally have access to a detailed reference document that they can refer to for context as they execute against the strategy.

My thinking is that collateral on its own is insufficient. You can’t get away from the power of face to face interaction when it comes to putting a message across.

Walk the talk

It is critical that your leadership Team actively leads by example and is seen to be committed to the strategy by way of their actions. “Walking the talk” makes a very powerful statement about your commitment to the message that you have communicated.

Wednesday, 9 October 2013

The strategy execution burn points

The strategy execution tool
Let’s face it, failure to implement business strategy is common, and unimplemented strategy adds no value. Breakdowns in planning and execution mean that only 50 to 60% of the value in a strategy plan is ever realised.

The Therefore Team have been doing a little bit of digging around to identify the burn points that folks experience when trying to deliver against strategy plans. The Therefore StratIQ™ product has been fine-tuned accordingly. 

Below are the big ticket items that we have identified. Please drop me a note if there are any burn points that you think that we may have missed. 

The strategy never got out of the boardroom

The focus required to drive a strategy is often eroded by the day to day demands of running the business. The result … strategy plans are often destined to see out their days in a filing cabinet and ground covered is frequently coincidental.

A plan is not enough … it requires a framework for delivery

Success requires planning … and strategy is no exception. Strategy plans tend to be complex and, without an execution management tool, executive teams tend to lose focus, often leading to delivery failure.

If you can’t measure, you can’t manage

If strategy execution can’t be measured with ease, managing delivery becomes cumbersome and time consuming. The management of strategy execution requires a dashboard and easy access to purpose built reporting.

If everyone is accountable, no one is accountable

Clear lines of accountability are critical to the execution of strategy. Given the complex nature of a strategic plan and the sheer size of the team that is required for its execution, accountability often falls into a grey area, which stands against delivery.

Critical to the management of accountability is the management of deadlines for delivery, and the ability to track performance relative to these deadlines.

Delivering across functional silos

Silo mentality is often put forward as a key break point for strategy execution. In the absence of an execution tool that is capable of coordinating effort across functional areas, strategy delivery becomes failure-prone.

The ability to support cross functional delivery improves the effectiveness of strategy delivery, makes silos more porous by encouraging strategic conversation and consequently improves company morale.

Aligning strategic delivery to KPIs

Aligning the delivery of strategic initiatives to your team’s KPIs is often easier said than done. In the absence of a mechanism capable of tracking your staff’s performance relative to their strategic accountabilities, KPI alignment becomes near impossible.

Everyone needs to be on the same page

Communication is one of management’s perennial challenges, and nowhere is clean communication more critical than in the execution of strategy.

A strategy execution tool needs to provide a single source of strategy performance data, thereby allowing your team to work with “on the same page” clarity.

Execution only counts if its quality execution

When one compares the strategy execution performance of staff, relative to their colleagues, one typically finds that the quality of output is uneven, given differing levels of performance and strategic maturity.

To guard against substandard delivery it is imperative that a workable review mechanism is in place.

Spreadsheet trackers aren’t up to the task

Spreadsheet based strategy execution trackers may be cheap, but they have too many shortcomings to allow them to be and appropriate tool for measuring, managing and executing strategy.

Peter Lever
peter@therefore.co.za
+27 83 447 4883

Originally published: 09/10/2013
Updated: 01/08/2014

Tuesday, 1 October 2013

If everyone is accountable … no one is accountable

Disclaimer: - I am in no way responsible for the content of this article. Any errors, exaggerations or omissions are someone else’s fault. In fact … I deny having written it.

Now that I have your attention, let’s talk about accountability.


Since the early 90’s, the concept of taking responsibility for mistakes made at work has become somewhat out of vogue. Who remembers Enron, JPMorgan, Lehman Brothers and Goldman Sachs? There are plenty of examples that are closer to home - Health and Racquet, Fidentia Group, Regal Bank, Aurora Empowerment Systems and Wendy Machanik.

Politicians too seem to have an absolute allergy to assuming accountability. For the sake of neutrality and political expedience I will refrain from mentioning any names … but I am sure that an example or two springs to mind. The bottom line, give me an answer as to who is really accountable for the Nkandla and Gupta International debacles and I am buying the next round of beers. I suspect that it would be easier to distribute school textbooks in Limpopo than it would be to get an honest admission of guilt.

This aversion to accountability has literally trickled down from heads of state to the chap that runs the local fruit and veg shop. This fruit and veg may be a bit past it … but hey, that’s how I got it from the market. It’s always the next guy’s problem … and no one is ever accountable.

We teach our kids to own up when they've done something wrong, in part so we can trust them. So, it makes sense that the lack of accountability in the workplace has led to a breakdown in trust. I have been doing a bit of digging around regarding the issue of workplace trust and accountability, which I am not going to reference, because … after all, I am not accountable for anything. The long and short of it is that less than a third of employees believe that they can trust management and about a half of employees believe that their companies encourage them to openly admit to their mistakes.

If you think this is an issue not to be taken seriously, you're wrong. A lack of trust poisons a workplace, and any boss with a modicum of common sense will want employees to feel comfortable to admit to and take accountability for their mistakes.

For a workforce to develop a strong sense of accountability, it has to come from the top. Leaders need to speak openly about the importance of accountability and, above all else, hold themselves accountable for their own actions. The message that it’s “OK to make mistakes” must also be put out there.

Making mistakes is an important part of growth. For companies that are playing in the innovation space … each mistake is a step towards victory, because they typically arrive with lessons learned. I very much doubt that Thomas Edison’s first light bulb worked. Thankfully, he did not throw in the towel when the first attempt went up in flames. The bottom line … encourage responsible mistake making. After all, it’s easy not to make mistakes, simply don’t do anything. Now that’s an attitude that you don’t want taking root in your organisation. I have an inherent suspicion of anyone that doesn’t make mistakes, because it generally indicates that they are not trying hard enough to make a difference.

Why the tirade about accountability you may ask? Well, simply put, to ensure that delivery happens on a reliable basis, the folks that are responsible for that delivery need to be aware that they are accountable for making it happen. There needs to be clear consequences for non-delivery or, for that matter, poor delivery.

My special interest is in the space of strategy delivery. Strategy delivery tends to fall apart in environments where the prevailing culture sees staff not being held accountable for delivery. The trick with delivering on strategy, in any environment, is to break the strategy down into a series of tactics, projects and tasks and to allocate each of them to the party accountable for their delivery. Throw some appropriate measurement mechanisms into the mix, align strategy delivery performance to KPIs and you are more than half way home. The Therefore StratIQ™ tool has been designed to provide exactly this support to your strategy delivery drive.

The really good news is there’s a lot you can do about the accountability problem, it doesn't cost money and it feels good. It starts by making a commitment to the fact that ethics are in fact important … and that accountability is a core ethic. It then moves onto acknowledging that it’s OK to make mistakes, as long as they are not perverse or illegal, you learned from them and you were quick to raise your hand when things started going pear shaped. Oh … and don’t forget to share what you have learned from your mistakes.

Thursday, 26 September 2013

Breaking Silo Mentality

Ask CEOs what the number one innovation killer is and the odds are more than even that the answer will be “silo mentality”. Again, ask them what the biggest reason is for the failure to deliver on strategy and the phrase “silo mentality” is likely to turn up again.

Silo mentality is in essence an attitude problem. It emerges when companies corporatize. As companies grow it becomes necessary for them to introduce distinct functional areas to make control possible. In the absence of silo breaking leadership, departments are inclined to cease sharing and cooperating with each other. Enter silo mentality.

The long and the short of it … silo mentality reduces efficiency and can be a contributing factor to a failing corporate culture. Silos result in the duplication of cost and effort, cause functional areas within your business to work at cross purposes, destroy cross functional synergy, stem the flow of knowledge and work against economies of scale. The largest problem, however, is a lack of alignment with the overall company strategy.

Customer focus

Successful companies are Customer centric. They continually focus their efforts on optimising the value that they offer their Customers and thereby prosper. The Customer becomes the single point of focus around which all functional areas unite.

Unfortunately, silo mentality forces a shift in focus. The Customer is no longer centre stage. Customer centricity is, to a degree, replaced by a low key “turf war” between functional areas. If left unchecked, the lack of Customer centricity will erode the ability of the company to add value to the Customer, which will place it in a weaker position relative to its more Customer centric competitors.

Impact on Strategy execution

At its core … Strategy needs to be Customer centric for it to be of any value. Further, any material strategic initiative will require an effort that straddles more than one functional area. Silo mentality stands in the way of multiple functional areas cooperating to deliver on a strategic imperative.

Silo mentality catalysts

Silos originate as a result of many factors. Catalysts such as the following play a role in allowing a silo mentality to take root:
  1. Introduction of departments 
  2. Mergers and acquisitions 
  3. Emergence of pockets of knowledge that are not freely shared. 
  4. Job insecurity, resulting in staff competing with each other. 
  5. Divide and rule management cultures. 
  6. Development of inner circles within management structures. 
  7. Absence of a strong Marketing function capable of maintaining Customer centricity. 
  8. The introduction of ambitious and divisive managers.
Often a series of silo catalysts, such as those listed above, play together to make the organisation increasingly insular.

An “us and them” mentality can sometimes appear, particularly in organizations that are under performing. It’s common in the turnaround space to find departments pinning the root cause of their under performance on other functional areas.

It’s a cultural issue

At its root … silo mentality is a cultural problem.

Like most undesirable aspects of a corporate culture, silo mentality is typically fed from the top. It’s generally fair to say that it is senior management that allows silo mentality to take root and prosper. As a complicating factor, silo mentality creeps into the organization slowly, and it is more than probable that it taking root was something that was not initially apparent.

Lead from the top

The reality stands that silo mentality is typically introduced from the top. When staff stop sharing with colleagues in other functional areas, they are typically taking their lead from the departmental heads. As a consequence, an initiative to break down silo mentality requires senior management to make a conscious decision to cease acting in silos and to start cooperating and sharing information freely.

We have already had a look at silo catalysts. Let’s shift our focus to potential silo breakers. The silo breakers that you implement in your environment will be dependent on the peculiarities of your environment, so what follows are merely examples to stimulate thinking.
  1. Make a public, management led, pact to the organization to start breaking down silo mentality. 
  2. Add interdepartmental cooperation and knowledge sharing as a KPI. 
  3. Revisit and re-launch your corporate values. 
  4. Recognise staff that act as silo breakers publicly. 
  5. Promote only those that have the ability and willingness to cooperate and share, and make your position in this regard public. 
  6. Break barriers that divide your Executive Team. 
  7. Manage staff that are building or perpetuating silos out of the business. 
  8. Undertake projects that require cross functional cooperation. 
  9. Ensure that your annual bonus is in part broad based and does not actively encourage department performance at the expense of company performance. 
  10. Eliminate formality in the company and the need to go through endless chains of command before engaging leaders. 
  11. Establish common platforms and systems across the company and give people access to the same data and information. This discourages information hoarding. 
  12. Design comfortable space in each building or on each floor where cross functional teams can meet in a relaxed setting to brainstorm products / services, processes and work cross-functionally to create solutions. 
  13. Review your business process to make the flow of activity between functional areas cleaner and more information rich. 

In closing ...

The key to understanding silo mentality is to remember it is a human behaviour. There are only two ways of changing human behaviour. Punish adherence to the old behaviours … reward adherence to the new behaviours … in short, the carrot and the stick.

Silos are great if you're storing corn or grain … but not so great for organizations. In an organisation they stop innovation, stand in the way of strategic execution and quite simply make the workplace an unhappy one. Engage in honest conversation with your Team … get to the root of what your silo catalysts are … implement your silo breakers … and move forward.

Saturday, 21 September 2013

Putting the focus back on the Customer

Staying connected with how your Customers view your company, products and services is crucial to maintaining high levels of customer retention and growth. After all, the end point of the products and services that your business markets is the Customer. The most logical way of finding out how your Customer feels about your Company’s performance, is simply to ask them.

Surprisingly, companies are often reluctant to reach out to Customers and take honest feedback. I believe that the root of this phenomenon is twofold. Firstly, folks don’t want bad news … and human beings are inclined to avoid it like the plague. Years ago an outfit with which I was involved (details not provided for obvious reasons) held a Customer conference of sorts, with a view to taking Customer feedback. The take out from the event was that “Customers were ganging up on us … and we are providing them with a beating stick to do so!” All the great feedback that was received was simply brushed under the carpet. Nothing achieved. Rather bizarrely, the primary learning was never to have a repeat of the event. This introduces the second reason why companies may be disinclined to take feedback from Customers … very often, they simply are not confident that they have the capacity, staying power or political will to act on the input provided. If you ask your Customers what you could do better … and they give you the answer, they expect you to follow through. If you don’t, you lose face.

The long and the short of it … if you intend to canvas your Customer’s opinion … you need to be brave and you need to be committed to act on the feedback provided. If your organization has the maturity to want to work with Customer feedback, it is advisable to make “touching sides with your Customer” a component of your annual strategic planning cycle.

A great way for companies to make sure their whole organization stays informed about what is happening in their Customer’s world is to make use of Focus Groups. It is generally advised that Focus Groups are run by an independent professional, someone that has the necessary skill to steer the conversation such that you get the required feedback. You will need to brief the Focus Group Convener that you hire. The briefing that you put forward will be a key determinant of the quality of the feedback that you acquire. Some thoughts regarding the types of questions that you may want to put forward to the Convenor during the briefing session are presented below:
  1. How do you feel about our products and services?
  2. How do you feel about our company?
  3. What’s your typical buying process for this type of product or service?
  4. What criteria do you use to evaluate potential suppliers?
  5. What’s the decision making process and who’s involved?
  6. If you were looking for this type of product again, what would you do?
  7. What would you type into Google to find a business like ours?
  8. Is our website a helpful resource for you? What would improve it?
  9. Is it easy doing business with us? How can we make it easier?
  10. Where do you experience frustration when doing business with us?
  11. Who do you consider to be our competitors?
  12. What can we learn from our competitors?
  13. Where are we better than our competitors?
  14. What trends do you see in your market right now?
  15. How is the market in which you operate changing? What do we need to do to make sure that we remain relevant to your needs?
  16. If there was one thing we could do better, what would it be?
  17. How could we improve our products / services?
  18. What line extensions should we be looking into?
  19. What are our strongest selling points?
When selecting a Focus Group Convenor, it is suggested that you ask the following questions of the prospects:
  1. Is the session held in camera? Will we be given a copy of the footage?
  2. Is an audio recording taken of the session? Will we be given a copy?
  3. Will a written transcript of the proceedings be made available?
  4. Will the Convenor provide a report that details their independent assessment of the outcome?
  5. Will the Convenor present the above report to your Executive?
  6. What experience does the Convenor have that is relevant to your line of business?
The ideal candidate will respond to questions 1 to 5 in the affirmative and his or her response to question 6 will give you a sense of comfort.

Choosing a venue for the Focus Group is also important. It’s generally better that you don’t use your offices. Neutral ground is better … and it puts the participants at ease. There are some really great facilities available, so have a look around. The professional facilities typically have a one way mirror in place that will allow your Team to monitor proceedings without getting in the way. The Convenor will periodically interact with your Team and take guidance with respect to areas where you would like him or her to probe.

Typically, the Convenor would also play a role in selecting the Focus Group participants. Generally, you would provide the Convenor with your Customer database and he or she would randomly select prospects. A set of prospects that are willing to participate would be identified, a date set … and there you go! There is some degree of science to determining the appropriate sample size and selecting participants. You can rely on your Convenor to guide this process. A well constituted focus group should be representative of the dynamics of your Customer base. As a heads up, you can expect to have to compensate the participants for their time in some way or another. Your Convenor will guide you accordingly.

When you run a Focus Group, you may want the session to be company anonymous … i.e. you don’t tell the participants which company has initiated the session. Anonymous sessions generally provide better competitive context, whereas company specified sessions often give feedback that is better suited for deriving a Customer Service strategy. It’s a complex question. The route that you take will need to be informed by your objectives. I would suggest that you take guidance from the Convenor that you engage.

Once you have held your Focus Group, it is imperative that you develop an action plan to align your company to the observations made. The hard work then becomes prioritizing and taking actions on the feedback. It’s generally advisable to close the loop with the Customer. They have taken the time to give you feedback. You owe it to them to communicate back what you have done with it!

Over a period of time, businesses tend to become inwardly focused … and it’s often easy to forget that there is a Customer out there. Why not allow your staff to review the video footage of the proceedings … and ask them for their thinking? It’s an ideal opportunity to put your Customers back where they belong … centre stage.


Wednesday, 11 September 2013

Is poor service your Customer’s fault?

The Frustrated Customer
Some time ago a blog article caught my attention. The gist of the article was that if you are receiving poor Customer service, it may well be that you are simply a bad Customer. Initially I was a little irritated by the thought, but after thinking it through, I decided that aspects of the argument hold true.

Let’s step back a little. A few years back I was doing a project for a Client of mine, who for the sake of this article will be called Acme Incorporated. In short, Acme sells a fairly complex set of services to consumers. Acme had an ecommerce web site that had been underperforming their expectations and they wanted to know why their Customers were disinclined to use it. One evening, the Acme Team and I were sitting behind a one way mirror while a focus group of their Customers was being led through a discussion relating to the merits or otherwise of the Acme service offering, both relating to the website and the Acme service offering in general. One of the participants of the focus group was an elderly gentleman who was an absolute fan. The Acme Team loved the old chap. There were lots of comments like, “If only all our Customers were like that!”

For the sake of this article, let’s call the elderly gentleman Mr Smith. What made Mr Smith so different? In short, he was well versed in how to do business with Acme. He seemed to know all the “Rules of Engagement”. He also knew a couple of unpublicised “tricks” that he could use to make the process a little easier. Many of the other participants, particularly the ones that took the opportunity to vent, were clearly not well versed in the Rules of Engagement. Doing business with Acme was by all accounts hard work. The bottom line … the better versed the Customer is with respect to the Rules of Engagement, the easier it is for him or her to do business with you, and as a consequence the more profitable the relationship. Sadly, companies seldom place much emphasis on communicating the Rules of Engagement to their Customers.

Therefore has developed a product, Therefore Quantum™, which has been designed to allow for the efficient resolution of queries. One of the benefits of the Therefore Quantum™ offering is that it allows you to identify queries that occur repeatedly, which one would logically use as context for reengineering your business to make it less error prone. None the less, one of the typical observations that we have made over the years is that approximately 50 percent of queries are the consequence of errors made by Customers. Why would this be the case? Perhaps half of these Customer led errors are unavoidable. The balance of the Customer led errors are typically a consequence of the Customers not knowing the Rules of Engagement. The resolution of queries is an expensive exercise, albeit often difficult to quantify. The more your Customers know your Rules of Engagement, the less likely they will be to make errors in their dealings with you. Consequently, less of your resource will be tied up in query resolution. Perhaps more importantly, you will be saving your Customers a great deal of frustration, thereby making it more attractive to them to do business with you.

One of Therefore’s specialities is to assist companies that take product to market by means of Distributors, to change to a new Distributor in a low risk fashion, without disrupting the flow of product to market. A key component of these supply chain transition projects is the communication of the new Distributor’s Rules of Engagement to our Client’s Customer base. We have over the years developed a pretty slick recipe for this exercise. The interesting thing about supply chain transitions of this nature is that our Clients normally see a sustained turnover uptick, generally to the tune of between 10 and 15 percent. Logically, this can in part be put down to the new Distributor being more efficient than the old one. I believe that the bulk of the increase in turnover is attributable to the communication of the Rules of Engagement that occurs as a component of the transition project. Again, if your Customer base knows how to do business with you and the processes that they have to follow to do so is user friendly, they will be more inclined to transact with you.

In closing, some thoughts relating to the communication of Rules of Engagement to your Customer base follows:

  1. Marketers, particularly those that operate in a B2B space, are always looking for content. Surprisingly, they often overlook Rules of Engagement material as viable content … probably because they are that close to the subject that it gets overlooked. Similarly, the Rules of Engagement make great content for your Sales Representative Team … and it shows that you want to make the Customer’s lot easier, which reflects positively.
  2. New Customers need to be “on boarded” in much the same way that new staff are introduced to the organization. Ensure that the communication of the Rules of Engagement to new Customers is centre stage in your “new Customer on boarding” process. Surprisingly, I know many companies that in fact have no “new Customer on boarding” process. New Customers are left to figure things out on their own. This practice tends to result in relatively few “Mr Smiths” and a lot of Customer frustration.
  3. Don’t just accept the status quo. If your Customers don’t find your Rules of Engagement user friendly, it’s time to start doing some re-engineering. You may find the “Moments of Reality … and the development of Strategy” blog article to be a useful read in this regard.
  4. Communicating the Rules of Engagement is not a once off exercise. You need to continually be on the search for new mechanisms that you can use to make sure that your Rules of Engagement are communicated to your Customer. Customers are only human, they tend to forget.
  5. When Customers are in need of help regarding doing business with you, they tend to resort to a visit to your web site. It stands to reason that your web site must accurately and simply document your Rules of Engagement. Your social media strategy should likewise operate on the same basis.
  6. In business, change is often the only constant that we are in a position to predict. Your Change Management procedures need to be drafted in such a manner that any changes in the Rules of Engagement are clearly communicated to your Customer.
  7. The better your Customers understand your Rules of Engagement, the lower your exposure to queries that are the consequence of Customer error. This will have cost, service and ultimately profitability benefits.

Wednesday, 21 August 2013

What is Moore’s Law?

In 1965 Gordon Moore, the co-founder of Intel, observed that the number of transistors per square inch on integrated circuits had doubled every year since the integrated circuit was invented. Moore predicted that this trend would continue for the foreseeable future.

In subsequent years, the pace slowed down a bit, but data density has doubled approximately every 18 months, and this is the current definition of Moore's Law, which Moore himself has blessed. 

The simplified version of this law states that the overall processing powers of computers will double every 18 months.

If you were to look at processor speeds from the 1970’s to 2009 and then again in 2010, one may think that the law is nearing its limit. However, a careful look indicates otherwise. In the 1970’s processor speeds ranged from 740 KHz to 8MHz ... Moore's Law held true. At the face of it, from 2000 to 2009 there has not been much speed advancement. Processor speeds have ranged from 1.3 GHz to 2.8 GHz, barely doubling. The transistor count however tells a different story. In 2000 the number of transistors in a CPU numbered 37.5 million, while in 2009 the number went up to 904 million. The issue at hand is connected to the introduction of multi-core CPUs. The 2.8 GHz processor is a Quad Core while the 1.3 GHz processor is a Single Core. The actual power of the 2.8 GHz processor would be found if you multiply by four, which would give you a whopping 11.2 GHz, which is a far cry from 1.3 GHz.

Most experts, including Moore himself, expect Moore's Law to hold for at least another two decades. Fascinating times ahead indeed.

What is the practical take out from Moore’s Law? 

By inference, Moore’s Law could be read another way … your value for money from computer purchases made will double every 18 months. My thinking is that Moore’s Law tells us to use your existing computer hardware for as long as practically possible. Naturally, you need to ensure that you always have sufficient processing capacity to meet the needs of your business, so I am not in any way encouraging irresponsible behaviour here! The reality stands, the more that you delay the purchase, the more value for money you will be buying. Make those computing assets work. When the time does come that you make a purchase of computing equipment, go for the fastest kit that you can get your hands on. This will ensure that you extract maximum value from your IT expenditure.

Saturday, 17 August 2013

If the writing is on the wall … read it!

I have of late been reading the Neil Young autobiography - Waging Heavy Peace. As a heads up, if you are a Neil Young fan, it’s a thoroughly enjoyable read. In Waging Heavy Peace, Young raises the impact that the introduction of the MP3 format has had on the music industry. Coupled with the Internet as a distribution model, the MP3 format has seen the music industry literally fall off a cliff.

Playing different tunes

Generally speaking, the traditional players in the music industry have not kept pace with the shift in technology. New innovative entrants, such as iTunes, have filled the vacuum and redefined the industry, leaving the legacy players fighting for their very existence. The legacy players have literally found themselves being new entrants into their own market. New business models are being hastily introduced, with varying degrees of success. The relatively strong are buying the weak. We are seeing a whole series of poorly considered “knee jerk” reactions and bankruptcies. The music industry is currently at a cross roads … only the strong will survive, and the strong may well be the new market entrants.

The reality is that the music industry has always been subject to shift, typically introduced by new formats. Some landmarks along the way … the introduction of piano rolls (1896), 78 RPM records (1906), 33 1/3 RPM records (1928), the LP (1948), the 7” single (1951), the cassette (1964), the 8-track (1966), the compact disc (1978), MTV (1981), the MP3 (1990), streaming (1995), Napster (1999), Pandora (2000), iTunes (2003), YouTube (2005), and Spotify (2008). If some of these dates sound earlier than you expected, well, let that be a lesson to you. These formats did not storm the industry and decimate it overnight.

The big shift occurred with the introduction of MP3 … and from thereon out it was downhill. We are literally talking an industry that, at the face of it, is used to format changes … and should have been far more agile given its history. The writing was on the wall and the industry failed to respond.

More examples

History is littered with stories of companies that fell by the wayside overnight as a consequence of the emergence of a new technology.

Who remembers the slide rule? For those young enough not to know what I am talking about, the slide rule was a ruler of sorts with a shifting bar in the centre that was used for doing math. The slide rule became extinct overnight as a consequence of the introduction of the pocket calculator. Here today, gone tomorrow!

Another classic example of a product that did not survive a shift in technology is the telex. The telex was replaced virtually overnight by the fax machine. The fax machine itself is now bordering on extinction, thanks to the introduction of the email. Again, for the youngsters, the telex network was a switched network of “teleprinters” similar to a telephone network, for the purposes of sending text-based messages. The telex had a speed of approximately 66 words per minute.

Its happening right now

Satellite and Cable TV coupled with the introduction of PVR recorders have pretty much sounded the death knell for the corner video store. The cinema industry is likewise seeing a falling off.

The future of the printed book is also in the balance. Sales of eBooks are on the up … and their printed counterpart is on the way down. Many periodicals have ceased doing a print version … and are now only available in the electronic format.

What do we learn?

The long and short of it … companies that fail to innovate will eventually cease to exist … it’s simply a matter of time. Innovation is not a once off event … it’s a survival prerequisite. Innovation is not a strategy; it’s a way of life.

When the writing is on the wall, you are advised to read it!

Monday, 29 July 2013

Moments of Reality … and the development of Strategy

It is sobering to note that every time a Customer interacts with your business, they are provided with an opportunity to evaluate your company and pass judgement. Over the course of repeated interactions, Customers are inclined to form an opinion of your company, either positive or negative. The longer the time frame, the more interactions and the more entrenched these opinions will be. If a negative opinion is sustained for long enough, Customers are inclined to jump ship and move their business to your competitors.

Further, should a negative opinion be formed, Customers will engage in negative “Word of Mouth”, which will slowly erode your Customer base and profitability. Alternatively, should a positive opinion take root, you are likely to be on the receiving end of positive “Word of Mouth” publicity.

In keeping with recent articles relating to the development of Strategy, I have decided to provide a quick overview of a powerful strategic tool … Moments of Reality. The Moments of Reality methodology is ideally suited to guide the development of a tactical level Customer Services strategy.

Touch Points

The first step in doing a Moments of Reality review is to identify your Customer touch points.

A touch point is a point at which you interact with a Customer, even if it’s just in a small way. Touch points are in effect the points at which your Customers have an opportunity to form an opinion. If all of your touch points reflect positively, your Customers will develop a positive impression of your business and you are likely to hold onto them for longer, thereby enjoying a more profitable relationship. Holding onto the Customers that you have is a key ingredient in growing your Customer base … more to follow in a future article.

Provided below are some example touch points.
  1. A Customer visits your website
  2. A Customer visits your Facebook, Twitter or LinkedIn page
  3. A new Customer wants to open an account
  4. A Customer calls into your switchboard
  5. A Customer phones in to order goods
  6. A Customer takes delivery of your goods
  7. A Customer unpacks your goods
  8. A Customer signs your delivery note
  9. A Customer receives your invoice
  10. A Customer receives your statement
  11. A Customer phones in with a query
  12. A Customer has a problem with an invoice or a statement
  13. A Customer has quality problems with your goods
  14. A Customer requires technical detail regarding your goods
  15. A Sales Representative calls on a Customer
  16. A Customer calls in for a quotation
  17. A Customer wants to close an account
It is critical to dig deep when drafting a list of touch points. Even the smallest touch point provides an opportunity to form an opinion … so items should never be written off as trivial. Key to success is pulling together the right people to help in touch point identification. Typically, you would draw in your Customer Services Team, your Sales Team, senior staff, perhaps the Executive and their direct reports, as well as any “Thought Leaders” that exist within your business.

When identifying touch points, it is generally useful to consider the Customer Life Cycle. Customers go through a journey from the point in time that they initially start doing business with you through to the point in time that they leave you. Your objective is to make sure that the touch points identified cover each phase in the Customer life cycle. Provided below is a high level view of the Customer life cycle.
  1. Acquire – It is during this phase that a Customer is on-boarded. Common touch points include the Customer applying for an account, the Customer requesting a quotation, the communication of your Rules of Engagement to the Customer and the like. More to follow regarding Rules of Engagement in a subsequent article.
  2. Serve – It is during this phase that the needs of the Customer are serviced, either by the provision of goods or services. Common touch points are the receipt of goods, the receipt of invoices and statements, the processing of orders, the resolution of queries, the launch of new products, the extension of product ranges and the like.
  3. Grow – It is during this phase that you attempt to up-sell / cross-sell to the Customer to add additional value to the relationship and derive incremental revenue. Common touch points include Sales Representative visits, marketing campaigns, the provision of quotations and the like.
  4. Retain – It is during this phase that a Customer either becomes an advocate of your company, in which case you can expect to retain them, or becomes a detractor, in which case you will more than likely see them churn. Key to this phase is the provision of after sales service, the continual emphasis on adding value as well as relationship management.

Evaluating Performance

Once you have identified your touch points, it is imperative that you optimize them to ensure that your Customers will judge each touch point interaction positively.

By way of an example, let’s assume that the receipt of an invoice document is one of your key touch points. Do your Customers like your invoice? Is it easily read? Does it look professional? Does it provide the detail that they require? Is it easily processed by the Customer’s Accounts Department?

Perhaps your Customers phone in to place orders. Is the call answered within a reasonable time frame? Do you provide an order by email or fax service? Do your Customers want to fax or email orders? Are you able to give your Customers an order number while they are the phone? How do you provide Customers with their order number if they fax or email their orders? Are your Call Centre Agents polite, accurate and quick? Do your Call Centre Agents have the appropriate degree of product knowledge? If the Customer can’t recall his / her Account number, how friendly is the process to establish their authenticity and give them their account number? Are the operating hours of your Call Centre suited to the operating hours of your Customers? Is the voice quality of the telephone call acceptable to your Customer?

In short, all touch point failings are to be identified, a correction plan is developed and then implemented - it’s as simple as that. A Moments of Reality exercise results in a tactical / task level plan, so all that remains is for it to be managed to a close. The Therefore StratIQ™ application allows for the management of strategically focused tasks to a close in a controlled and transparent manner and may be worthy of evaluation, particularly if you operate in an environment of high complexity.

Ask your Customers

It stands to reason that your Customers themselves are best equipped to guide the “Evaluating Performance” step outlined above. If your budget allows, it is ideal that you interact directly with your Customers to get their input. A couple of options available for deriving Customer feedback follow:
  1. Sales Representatives / Customer Services Management personally call on key Customers and interview them regarding their touch point needs. Should you decide to go this route, it is advised that you clearly brief the Team that will be interacting with your Customers so that they have clarity as to what the objective of the exercise is and what is expected of them. Remember that Customer visits are touch points … make sure that they leave a positive impression.
  2. Surveys can be done, preferably by an independent third party. Your identified touch points should be used as a starting point for drafting the survey questionnaire. Independently run surveys provide an ideal opportunity to benchmark your performance relative to your competitors. Areas where you fall far short of your competitors would logically be worthy of prioritizing.
  3. Mystery shopping is an extremely useful tool. When last did you phone into your Call Centre? How long did the call take to be answered? For those in the retail trade, mystery shopping is critical to ensuring that service standards are both appropriately pitched and consistently met.
  4. Customer queries provide a low cost opportunity for evaluating touch point failures. To effectively use queries to drive the identification of touch point failure, it is critical that they are categorized so that error prone touch points can be identified. The Therefore Quantum® BPMS is worth evaluating as it allows for queries to be resolved and then reported on with a view to identifying areas where your performance tends to fall short of Customer expectations.
  5. Establish a Customer Forum which meets periodically and use the opportunity to take feedback regarding their requirements. It is advised that you only establish a Customer Forum at the point in time that you feel that you have pretty much got your touch points in order. Further, ensure that you are truly committed to listening to your Customers if you decide to establish a Customer Forum … as non-delivery will simply translate into a failed Moment of Reality!
  6. Should you be servicing the mass / consumer market, Focus Groups are an invaluable tool for identifying touch points and ensuring that your business is correctly managing them. It is advised that focus groups be run by independent / professional third parties so that they deliver their maximum value.

What do Customers want?

When aligning your touch points to the needs of the Customer, there are a number of questions that need to be answered in the affirmative as a sanity check before you implement your touch point refinements. Details follow:
  1. Have I simplified the process as much as possible?
  2. Have I cut out as much red tape as possible?
  3. Is the Customer being kept in the loop?
  4. Will it leave a positive impression?
  5. Am I minimizing Customer inconvenience?
  6. Am I maximizing Customer value?
  7. Is it Customer centric?
  8. Is this what the Customer expects from the touch point?
  9. Will the Customer intuitively understand the process?
In short, you want to ensure that you focus your attention on making it easy for Customers to do business with you.

It’s not a once off exercise

The competitive environment is continually shifting, as are the needs of your Customers. It is imperative that one performs a regular review of the effectiveness of your touch points to ensure that you continue to delight your Customers. It is proposed that touch points be in a state of continual refinement and that a formal review be done annually.

The “Black Box” issue

A Moments of Reality evaluation only focuses on Customer centric inputs and outputs. It is important to note that a Moments of Reality exercise is a “black box” affair and is not in any way cognoscente of the underlying processes required to achieve a positive outcome. It stands to reason that the corrective action taken when fine tuning your touch points must be cognoscente of process efficiency.

It’s a time game

It takes time for people to change their impressions. If you historically had Moments of Reality that were poorly aligned to the needs of your Customer, you can expect your Customer’s mind-set to shift far more slowly than you would hope for. Remember that the negative impression that your Customers have, was reinforced over a long period of time.
A Moments of Reality Strategy requires a long term vision … give it time, the end point is worth the application of patience. The sooner you start … the sooner you finish.

Stakeholders

As a closing thought, you can do a Moments of Reality exercise on any Stakeholder. This article has centred on the Customer, given their importance as the primary Stakeholder. Ideally, you should do a Moments of Reality exercise for all of your Stakeholders. Other Stakeholders that may be worthy of such treatment are Staff, Shareholders, the broader community and the Government.

As a further thought, a Moment of Reality exercise can also unlock value within your organisation. For example, what are the touch points that are in play when your staff members interact with internal departments such as Human Resources or Information Technology? Are these internal touch points experienced in a positive or negative manner? Departments such as Information Technology and Human Resources are often seen as “land locked” in that they don’t directly interact with the external Customer. The reality stands that they are critical in the delivery of service to the Customer, albeit indirectly. Optimizing touch points between your departments can positively impact on the overall efficiency of your organization.

Saturday, 13 July 2013

Strategy planning … discovering the Tactical

In a previous article mention was made of the importance of ensuring that your Strategy is translated into a tactical plan … something that your team can buy into. Developing a tactical plan is not as easy as it looks. The key question is, “How do you avoid the plan becoming a meaningless list of uneven tasks that are not fine-tuned to add real value?”

Let’s consider the process. You have created a great Strategy. At the high level you know that you are on the right path for making a huge difference to your business’s performance. The next step you followed was talking to the market and taking a few pointers. So far, things are looking great. Now you need to build the tactical plan … but where do you start?

Deriving a tactical plan is hard work. It requires strategic conversation between the right people … and it generally takes more time than you were expecting. The first trick is to select the Team that you want to draw into the debate. Typically, you would draw in your senior staff, perhaps the Executive and their direct reports. Drafting the Executive and their direct reports into the process makes sense, as it will be them that are accountable for the execution of the plan.

I would generally suggest that you also set about identifying “Thought Leaders” that exist within your business and drawing them into the process too. Thought Leaders can exist at any level of the organization and are probably your future leaders. Fundamentally, Thought Leaders are staff that demonstrate a surprising degree of business maturity, have an exceptional understanding of the market that you serve as well as the dynamics that exist within the organization. Most importantly, Thought Leaders have a bent to strategic conversation. Chances are, you have already identified them and have plans to fast-track their progress through the ranks.

To ensure that your Strategy gets unpacked from all functional points of view, it is critical that the Team that you assemble is cross functional. Each Team member must be allowed to contribute to the discussion, both as it relates to his or her function and as it relates to the functions of others.

Now that you have assembled your cross functional Team, the next step is to unpack each of your Strategies one at a time and determine each tactical item that needs to be undertaken to allow your Strategy to become a reality. The trick is to move quickly and to allow for all contributions to be put forward and debated, irrespective of their relative strength.

Once you have all of the proposed tactical items listed, the next step is to choose the ones that you wish to move forward with. Consider the following image.



The process to follow when sifting through proposed tactical items is a relatively simple one. As indicated by the image above, work with your Team to identify the relative “Ease of Implementation” (Difficult or Easy) and “Impact” (High or Low) of each item. You may want to introduce a basic spread sheet based model to allow for the classification to be done a little more objectively, the design of which I will leave up to you.

Some thoughts on the four quadrants follow.
  1. Bottom Left – These items are not easily done and carry little impact. Carefully review all items that fall into the bottom left hand quadrant. As a general rule, consider dropping them from your plan. You may well find that there are quite a few items in this quadrant. Excluding them will make the implementation of your strategy easier and reduce exposure to cost without materially taking away from the impact of your Strategy.
  2. Top Right - These items should typically be prioritized, as they are easy to do and will have a large impact. It is worth bearing in mind that, given the ease of their implementation, your competitors will catch up with you rapidly. It is therefore critical that you plan to derive benefit from these items in the short term prior to your competitors entering into the fray.
  3. Bottom Right - These items build capacity, which is critical for the medium to long term well being of your business. I have often seen business’ under invest in the infrastructural aspects of their Strategic planning, presumably because it doesn't generate immediate gratification. Should this attitude persist into the medium term, the available capacity will be sold into and the business will soon find itself in a position where it has insufficient capacity to support future growth. Turnaround Strategies often find a lot of traction in the grey quadrant.
  4. Top Left – This is where the true magic sits. "Strategic Wins" are typically hard to do, which makes it difficult for your competitors to emulate you. Given that they are hard to emulate, they inevitably provide you with a Sustainable Competitive Advantage.