The Random Thought Generator (RTG)

We've been following the whole Apple "Antennagate" story today, mostly for fun (since we got the new iPhone 4 the first day, thankyouverymuch) and partly because we recently wrote about Apple being a company that espouses the Outside→In™ approach in its development" href="http://www.elaconsultinggroup.com/blog/bid/34033/Apple-Succeeds-with-Outside-In-Development-Approach" target="_self">espouses the Outside→In™ approach in its development.

Today's press conference about the situation and Apple's response to the problems of the antenna was part of the company's strategic management of its user base. It does beg the question (for us, at least): Is Apple Outside→In™ when it comes to customer service?

[Click here for the whole press conference as it was live blogged on www.engadget.com.]

First, we believe that, like the iPad, the iPhone 4 is the result of Apple's Outside→In™ approach to development and the market. It has features that answer our needs in a smartphone and more. Is it the best smartphone? After certain specific benchmarks, that title is subjective, and, the "best in technology" title only stands until the next leading edge product comes out. It seems that antennas are part of a design flaw in smartphones in general and something that everyone is working on. "Less dropped calls" is every cell phone company's marketing line, which indicates that there are some to begin with. Anyone that says that the Blackberry has no dropped calls is lying, whether your service is AT&T, Verizon or any of the other carriers.

For some people, Jobs' response was not enough of an apology and more of a reluctant, and arrogant, admittance to the problem. Let's get some perspective on this, Apple's faulty cell phone antenna is not akin to Toyota's sticking gas pedal or BP's gushing well. Those faulty designs require continued apologies. No one is dying due to a dropped call (we hope). 

From our perspective, Jobs was the mouthpiece for a large group of engineers who seem to be dedicated to their own mission of providing a well-developed product by listening to their customers. If they didn't listen, there wouldn't have been a press conference today.

Now, how do we get that free bumper case?

Today, Erik Sherman writes about Apple's success with the iPad on BNET.com and we think it's a perfect example of the Outside→In™ approach in action:

 Apple's iPad Is Wildly Successful Because... Apple Actually Thinks About Users

Though Mr. Sherman is referring to product development, Apple's combination of development and marketing translates to an enormous rate of sales for the company. He lists some of the reasons for Apple's home run with the iPad:

"Apple succeeds because it delivered the following:

• an easy interface
• uncomplicated operation
• relatively light weight
• long battery life"

It's not the first time Apple has struck a chord with consumers. (How many iPods do you have in your home? At last count, there are 5 in mine.) It's amazing what can happen when you listen to your customers--in this case, an entire marketplace--and act accordingly. Eventually, we will all be working on Pads, whether they carry the Apple logo or not.

By Jim Horan

It must be something about my background or upbringing. When I hear “supervision” and “accountability,” I go to the negatives. When I think of supervision, I think of hall monitors, playground supervisors and prison guards. When I think of accountability, I think of disappointment, warnings, bruised egos, reprimands, enforcement, retribution and big brother.

If you find yourself obsessed with accountability and supervision, I question five things:

1. Did you hire the right people?
2. Do your managers know how to lead?
3. Are you focusing on the right things?
4. Does everyone in your business understand who the customer is and what benefit the customer is expecting from your products and services?
5. Does everyone in your organization understand his or her role, responsibilities and outcomes?

These are big questions. Few of us, if pushed to answer honestly, would be able to give a resounding yes to all of them. So the question is, do you have processes to assess these issues, and action plans for continuous improvement? If not, are you just hoping the problems will go away?

So how do we manage a sales force we don’t see eight hours a day? What is the proper role of supervision and accountability in this 21st century?

My philosophy is simple: Help people be the best they can be and find the right work! I believe when people find the right work, in the right environment, properly encouraged and supported, they need little supervision. They manage themselves and hold themselves accountable to a much higher standard than you or I ever would. Your top producers do this; you just wish everyone did.

This type of relationship, in my opinion, starts with ensuring the people you select truly understand the nature of the work they are going to do and know it’s a good fit for them. How do you do that? Explain the job, the role, the work. Explicitly describe who your business serves and what your clients expect. Be very clear about the outcomes and results you expect, and share stories about people who have been successful and why.

Now here is a radical suggestion! When you think you have found the right person and you’re ready to make an offer, ask him or her to write a business plan — concise and to the point — for the new job. Buy a day’s worth of his or her time at market rates, and don’t be cheap.

Here is what you will learn from this process. The individual will either embrace this process or not. That alone will tell you a lot. When you read the plan, you will learn if he or she heard, understood, agreed and knew how to pursue the opportunity. You will also learn a lot about how he or she thinks and plans to act. You will be able to make a much more informed decision about whether this person is a good fit for your company. And you will have a much better idea of how much energy you will have to spend supervising and holding this individual accountable.

Enforcement is a drag; leave it to the police! Encouraging, supporting and watching your people grow and prosper is the ultimate work. Make better hires, and maybe “supervision” and “accountability” will drop from your vocabulary.

Jim Horan is the president and CEO of The One Page Business Plan Company.

Organizational silos. Every company - even relatively small ones - have them. And they can be insidiously destructive, resulting in behaviors or results that are inconsistent with the overall goals of the company, and almost certainly not aligned with delivering maximum value to customers. 

A simple example is the all-too-common customer "tell your entire life story again" experience when being transferred from the customer service center (set up to handle sales level issues) to the technical support organization.

You know the drill. You just finished plowing through the bewildering choices in the automated telephone system, supplying a myriad of product numbers, contact info, etc., and after all your efforts, you finally get transferred to the tech support team. The person who answers is very cordial and sounds genuinely interested in solving your problem, but quickly states, "Before we get started, can I get a few basic pieces of information?" Naturally, the questions she poses to you are the same ones you just supplied to the automated system. Sound familiar? Ah, the power of silos.

If such obvious hand-off issues are so prevalent, what causes them, and, more importantly, how can they be fixed? 

One of the biggest enablers of corporate silos is the relentless drive for measureable results, which drives management teams to set clearly defined metrics fully owned by a single executive or department. The trouble is, most interactions with customers cannot be handled by a single department, and that is when the silos begin to rear their ugly head in front of the customer.

The simple solution?  Walk a mile in your customer's shoes! 

This is easier said than done, however, since each functional organization is typically ‘maxed out' already, doing their best to perform against their own silo metrics.  And, to make matters worse, it is rare to find a single organization or manager that owns the entire customer experience until you get to the CEO, which is clearly too late.

Let's look at how one Global 100 computer manufacturer successfully broke though its own silo problem and set industry-wide advances in motion. A major business unit of this company produced desktop computer systems aimed at fairly technical customers such as research labs, testing facilities and scientific universities. Given the technical background of the target audience, little attention was paid to "ease of use," and a typical system would arrive at the customer site spread across seven separate boxes, with more than a dozen user manuals. The customer was expected to assemble all the components correctly to make the entire system work. Not too surprisingly, the company began to see a drop-off in market share as users began to share their customer experience frustrations on the company's technical forum website.

Immediate attempts were initially made to "fix" the problems, but a traditional (silo) approach was used, holding each functional executive accountable for fixing his or her specific piece of the puzzle. No appreciable progress was made on turning around the sagging sales until the business unit executive in charge of the P&L for the overall system made a bold move.

The executive presented each of his senior managers a personal challenge. He instructed the executives to place an order for a system, just like a customer would, have the system delivered to their homes, and then assemble the system without any external help. Out of a staff of 11 senior managers only 2 were successful in getting the system up and running at their homes. Many encountered errors in original order configuration, resulting in the delivery of a system that was missing critical components. Others had more luck, and all the right pieces did arrive. However, that is when the organizational silo effects became apparent. Out of the seven boxes that arrived, there was no box or manual marked "Open Me First." In addition, each component came with multiple cables, but no overarching picture showing where each cable was supposed to go. In short, a frustrating experience for even the most technically inclined customer.

As a result of this eye-opening exercise, each unit leader was able to witness first-hand the negative impact of optimizing business processes by silo. Implemented changes included using "Read Me First" shipping documents, plus the now ubiquitous color coded cabling and connectors. Within six months, market share not only recovered to previous levels, but grew by 2 percentage points.

The moral of the story?  Take a walk in your customer's shoes every once in a while if you want to quickly identify where to apply your energy.

In sales, leads are everything. Who can forget the fighting over the leads in the cult sales film Glengarry Glen Ross? Everyboday wants leads.

But what makes a lead a lead? Most define leads as potential buyers and part of the first step in the sales process. With the proliferation of virtual sales, I think the high expectations of online sales have diluted the definition of a lead. A marketing lead is not a sales lead. It could evolve into a definite prospect, but it takes a few steps to do that.

Someone who visits your Web site is not necessarily a lead. In a brick and mortar world, when people walk into a store, just wanting to look, it doesn't mean they are sales leads. Sure, it's one step above window shopping, but they may not be ready or even interested in buying then. I consider this the early stage of SHOP in the four phases of customer buying.

It works the same in the virtual world. Think of how many times you've wandered through a Web site, just to check out the site. Are you a lead? Not necessarily. Depending on your intentions, it's the next few interactions that qualify you as a lead. Downloading a free paper, adding yourself to the mailing list, interacting on the site and responding to any calls to action, those are moves that move you along the lead continuum.

Unless you are just checking out the competition (and who hasn't downloaded the competition's latest intellectual property (IP)?, if you are that interested in the product or services, you are now a sales lead. You can expect to get a call from a sales person or, at the very least, an email discreetly probing about your intentions, moving you further along in the SHOP phase of the customer cycle and then into BUY.

Setting up a Business Architecture helps solve unwanted mysteries

How well an organization performs in and across locations or departments can be a mystery to many. Business leaders have to assume that each person is doing their job well and that local leaders will course correct when that is not the case. However, there is a nagging awareness that something important - something slithering in the dark spaces beween the departments - could raise its ugly head and cause corporate misery. Rather than hope an antidote will be available when needed, you can dig deep inside the organization before a crisis hits and take positive action to prevent these kinds of unfortunate surprises. 

Using the following checklist is the first step in creating a Business Architecture that will help identify hidden issues and immediately improve system-wide best practices. 

Do you know the answers?

1. Aim for the future:  What’s changing and how does that impact your business?
2. Identify the big changes:  What do we have to do to be successful in the future & how is that different than today?
3. Pinpoint focus:  What are the few key things we have to do to move to our future state?
4. Prioritize actions:  What are we working on today and how does that relate to what we will need to do?
5. Measure effect:  How will we know if we are making progress to our desired state? What can we measure?
6. Repeat:  Change is the only constant. Repeat the five steps to make sure you are adaptive to the inevitable changes.    
   

Once you've tackled these questions, assign a dollar value for each answer or situation. How much does your organization stand to lose or gain if the worst or best were to happen? 

Set up a structure using Business Architecture

The first way to put your arms around these issues is to map your business and create an architectural plan. Business architecture explains the structure of an organization in terms of its capabilities, governance structure, business processes, and business information. The business capability is what the organization does; the business processes are how the organization executes its capabilities. The business architecture takes into account all of an enterprise's external stakeholders (including customers, suppliers and regulators) and captures all pertinent and critical data and information.

A business architecture helps you understand the impact that change has on the business environment. Ensuring harmony between goals and objectives, programs and initiatives, and the underlying information systems and processes enables managers to adapt to dynamic - and inevitable - business change.

Example: Preventing micro-managment after a merger

Organizational leaders often micro-manage, not because of character flaws, but because they don't know what's going on. An incoherent structure, misaligned processes, and poor reporting systems try even the best managers.

In a post-merger environment, these problems are magnified. Very often, the goals for the newly combined organization are stated before the path to reaching them is built. The leaders of the acquiring company manage without knowing exactly what the workers from acquired company do. New managers don't know what the new reports are doing - and the new reports don't want to tell the new managers what they are doing! Both sides are afraid for their jobs. 

Creating a post-merger business architecture provides managers with a deep current understanding of the business - the "as-is" state, and tools to visualize and create the path towards "to-be" state: what the teams do, the processes they use, how current workflow affects other areas of the business, the results produced by the work processes, and how processes and people are managed. 

With a deeper understanding of the business and how it runs, leaders and managers can make rational decisions without having to micro-manage. 

Business mysteries are dangerous and certainly unwanted. With a business architecture in place, leaders can know what is happening throughout the business, how managers and workers are addressing challenges, and how to create successful solutions.

• Across geography and time zones
• Across business functions
• Across cultures, both societal and business
• Across hierarchies
• Across technologies

• What specific benefits does your organization expect to get from collaboration?
• Does everyone know about those expectations?
• Is there an incentive for collaboration?
• What projects, content or knowledge development do you expect people to collaborate on?
• Do your people know how to collaborate?  Do they know how to disseminate and find powerful information?
• Are your collaboration tools/technologies tuned to enable the benefits you expect?

By Elisabeth Watson

“Your hold time will be approximately 87 minutes.”

Who likes to hear that? Certainly not your customers.

We spend so much time (or we should) on training customer service people or sales reps or both. We study our potential customers’ responses to every possible method of engaging with them. We tweet, we follow, we friend, we call, we don’t call, we do whatever we think is possible to convert a prospect to a customer.

And then we put them on hold.  Or process their return in 4-6 weeks. Or refer their questions to someone who has no understanding of the product or how they use it.  After the romance of the sales cycle, that is more than a little abrupt.

We’ve done the hard part, convincing someone to buy from us, but then we often drop the ball. Revenues, especially new revenues, are the Holy Grail and it’s easy to forget that the cheapest and the easiest sales come from our existing customers.  And no matter how relevant our collateral or how effective our message, referrals are our most credible sales resource. It’s vital that we make it easy for our customers to pass along those referrals, long after they’ve signed the contract and committed to our products and services.

So how do we ensure that our customers have a great experience throughout the lifecycle?  By applying that old management adage, what gets measured gets done.  We need to evaluate each aspect of the customers’ experience from their perspective and look at how it impacts the customer experience—from that first call through every interaction.  We forget that our cost centers touch the customer, too. As Nigel Blair-Johns, Operations Manager at HP often reminds me, “Paying the bill is part of the customer experience.”  If our invoices are inaccurate or not timely, paying us can cost the customer money, not to mention frustration.

I know, I know, you can’t spend money and time on those cost centers. You need to focus on revenue. This economy is brutal.  I understand.  But.  Yes, but.  You can start with something as simple as your attitude.  Look at each of your processes from your customer’s perspective.  Just for a minute, stop channeling your accountant and consider ALL of your organization’s customer touch points.  Are any of those customer experiences less than great?  If so, that experience is hurting your customer retention, not to mention your brand.

Are you thinking that good service costs more than bad service?  Maybe, maybe not.  A customer-focused invoicing process, supported by reasonable technology, might mean fewer interactions, electronic funds transfers, and improved DSO (Days Sales Outstanding). That translates into lower costs and faster access to cash, which will enable you to return to channeling your accountant.

Reviewing, analyzing, and updating your processes, in the context of your customer experience, could not only improve your top line, but will help your bottom line as well.  What if you cut your fulfillment and invoicing costs by 20%?  What if accounts receivable process made your cash available 3 days sooner?  What if you cut an FTE from your invoice processing staff?  Or redeployed that FTE from problem resolution to reporting or fulfillment?  What if you could cut your accounting error management by 5%? That would be good news, but what’s even better?  Lots of pleasant encounters with—and, maybe even a few referrals from—those people you worked so hard to sell, your customers.

During economic meltdowns like the one we are currently experiencing, it is tempting for organizations to turn all attention to tactical execution, dropping any activities that are not expected to specifically generate short-term revenues.  Take strategic planning, for example. Even during “good times,” many managers view strategy development with a high degree of suspicion . . . and for good reason, I might add! 

I can recall many instances in my own experience where, after being instructed to spend quality time crafting a strategic direction and setting stretch goals to grow my division’s business, I ended up receiving what felt like a predetermined budget that totally ignored all the energy my team had put into analyzing the market and articulating a specific strategic plan of attack. So, it is not surprising that when the economy is at a generational low point, many managers are even less inclined to spend any cycles thinking strategically.

However, this is precisely when strategic planning is most critical, because only by preparing for an uncertain future will organizations be positioned to successfully ride the next set of waves that are not yet visible on the horizon.

Am I advocating that managers take their eye off the ball of running the current business and just “go think big thoughts” instead?  Certainly not!  Planning is not an either/or proposition and does not have to be an arduous and long process. But, it does require some concerted energy. The good news is that the slower pace of today’s marketplace provides a perfect opportunity to carve out some time to look beyond the daily grind of making a quick buck.  

To keep the process of planning from mushrooming into an all-consuming exercise, here are a few key principles I have found to lead to successful planning outcomes:

• Simplicity.  Although setting strategy in the 21st century depends on an increasingly complex set of variables, it is still possible (and desirable) to complete the planning cycle in a short period of time, so that more of the organization’s energy is spent on executing the plan, not just thinking about it.
  

• Focus.  In my experience working inside leading Global 100 high tech companies, this seems to be the hardest rule to follow.  It is so tempting to fall into the trap of thinking, “We have the best and brightest executive team, thus our company can successfully execute on all 28 of our breakthrough objectives.”  Yeah, right. That may sound good when it is spun to a group of market analysts, but just try to find an employee or channel partner who can remember that many “critical” objectives, much less act upon them! Winning organizations articulate a crystal clear vision of the desired future, and then a handful of critical objectives to get them there.
  

• Agility.  This was the mantra of the last decade, yet most companies still have no process to accommodate a change of strategy mid-stream.  If you want to test the agility of your company, just ask the following question, “What is the process to reallocate significant resources to a new strategic priority after budgets have been distributed for the fiscal year?”
  

• Alignment.  This principle takes the most effort, but can also result in the biggest payback. Alignment starts with being absolutely in tune with your target customers, understanding their critical business problems, and how you help your customers solve them. (Somehow, you knew I would get around to my baseline mantra of being focused Outside->In™, didn’t you?) Once each organization is aligned with its set of customers, the next step is to drive alignment within the company, across the silos. This is where the real magic occurs. By driving alignment around a focused set of objectives across disparate functional organizations, you put all the wood behind the arrow, which can differentiate your organization from the rest.
  

There are several effective approaches to building a strategic plan, so my recommendation is to find a methodology that includes many of the attributes discussed above, and that is compatible with your company culture and decision making process.  But whatever you do, make sure you don’t miss the opportunity to use planning as a strategic weapon to lead your organization out of the recession at the front of the pack!

If you have discovered a planning process that you found particularly useful, I would love to hear from you.  Just post a comment.

For readers in the Bay Area, I would like to alert you to a great opportunity to learn more about planning and innovation from thought leader and best-selling author Geoffrey Moore*, on Tuesday evening, January 26, 2010, in Menlo Park, CA. Hosted by the Association for Strategic Planning (ASP), this interactive discussion will include Mr. Moore’s latest thinking on strategic alignment and the dialog that needs to take place at every level of an organization for success in the current economic environment.  Don’t miss this rare opportunity to spend time with Geoffrey Moore in an intimate setting.

Register here.

*Best-selling author of:
Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution,
Crossing the Chasm,
Inside the Tornado,
The Gorilla Game,
Living on the Fault Line 

There is no doubt that at this stage of the economic cycle, smart investments in sales effectiveness can pay excellent dividends. Let's start with the premise that your board of directors has given the green light to discrete, strategic spending for 2010. The CEO has come to you or your boss and asked for a business plan on growing sales so that he or she can determine the payback if some of that strategic budget is sent your way.

What is your plan?

Before the recession started, you may have spent dearly on sales training, CRM and other productivity tools, but the combination of economic panic and resulting market pressures have conspired against your making real headway. Meanwhile, you believe that your products and services can deliver excellent value for your customers - right now, in this economy. So how do you set up an environment where your salespeople can get a big bump in sales before your competitors get the jump on you?

First, answer these three questions:

1. How much new revenue did the last sales training class deliver?
2. How much new revenue has your CRM delivered in the last 18 months?
3. How much new revenue did "non-selling" departments in your organization deliver in the last year?

If the answers to any of these three questions, or others you may have thought of, are underwhelming, perhaps the problem isn't a specific training, technology or process issue, but how these things integrate and work together. Study after study bears out that the best training in the world is worthless if your organization can't support it with reinforcement, process change, and peer-to-peer knowledge exchange. A great CRM system doesn't help close deals if people can't figure out how to access all the great stuff it contains. At the end of the day, were dashboards and forecasts what you were really after? And, if all of your "non-selling" departments aren't actively participating in creating value for new (and current) customers, it's unlikely your salespeople can carry your company to success on their shoulders alone. These are just three elements out of a multitude that affect sales organizations.

What should you do to to get the most out of discrete investments? Here are three tips:

1. Leverage. Unless you're very lucky, you don't have a blank check. Instead of searching for yet another magic bullet, think about how can you integrate your people, work processes and technology through a knowlege management system so the end result is an environment that makes it easier for salespeople to sell. After all, it's the ability to close deals, not create forecast data that matters most right now.
2. Plan. Keep your scorecard balanced. Your customers, people, finances and processes all matter. Limit your objectives to the critical few and within a time scope that is relevant to this economy - very few people know where we're actually headed yet. Make sure that your accompanying strategies and action plans address only these critical few objectives.
3. Communicate. A beautifully articulated plan does nothing if it sits in a file on your desktop. Engage and enroll your team in the process, let them know where you're headed, and let them help you create the ROI your CEO has asked for.