Dec 14, 2010 | Leadership, Lean, Management, Operations
Measuring productivity involves a combination of hard and soft measures, the soft ones being both the critical ones and the ones that have most impact.
In 15 years of consulting across a range of businesses and industries, I have come to the conclusion that there are three factors that at a macro level positively influence the capacity of an enterprise to build productivity in a continuous manner.
- They are cross functional
- They are decentralised, with a loose/tight management culture
- They are connected to customers in a range of ways not associated with the immediacy of the next sale.
None of these are easy to achieve individually, but they seem to be mutually supporting, so setting out to support the evolution of all three over time pays dividends. To do so takes confident and inclusive leadership, and a long term view of the purpose of the organisation.
Dec 8, 2010 | Customers, Management, Sales
It is usually easier to find more business with existing customers that it is to find new ones, or to devote the resources to reducing customer churn. Nevertheless, most enterprises overspend their limited resources seeking new customers at the expense of their existing customers.
If you must chase new customers, there are 3 very simple questions to ask:
1. Do they have a problem you can solve?
2. Do they have the money and desire to take a risk with a new supplier?
3. Can you reach and communicate effectively with them?.
Three ticks, and you have some chance, two ticks and your time is better spent elsewhere, no ticks, wake up to yourself.
Nov 29, 2010 | Alliance management, Collaboration, Marketing, Social Media
It is pretty clear to most that the number of connections in a network grows more quickly than the number of people in the network. It is a mathematically consistent relationship captured by Metcalf’s Law, but in summary, you double the size of a network, you quadruple the number of potential connections.
This relationship between the nodes in a network, and the number of (potential) connections is the foundation of social media, as the increase of the potential connections comes at little or no cost.
This is in complete contrast to the past, where these added connections added cost at a consistent rate, each new potential connection required someone to spend the time to make the phone call, mail the brochure, meet, discover if there was a potential value in devoting the resources to nurturing the relationship. All this cost prevented the development of the relationships that creates a network.
The relationship maths is the same, but the transactions costs associated with the “old economy” ensured that many things that now can happen, simply could not because of the costs involved. Hugely successful sites like Flikr simply could not have evolved with the transaction costs of the past involved.
The new challenge is harnessing the potential energy in these connections, and leveraging it to benefit the individuals in these potential networks enabled by the removal of the transaction costs.
Nov 25, 2010 | Customers, Innovation, Leadership, Management
Innovation programs always throw up the word “adjacency” and it has lots of interpretations, depending on who is doing the talking. So here is my two bobs worth.
Measure each of the following parameters on a 1-5 scale, (or 1-10 for a more nuanced outcome) 1 being the same as current, 5 being completely different, requiring new processes and infrastructure. Have a debate about the scores, collect more data, seek council of those with a different perspective, as it is generally a qualitative score rather than one that can be easily quantified.
- Channels to market
- Current sales force knowledge and relationships in the adjacent market
- Behavior of potential customers, the factors that drive their business model
- Existing potential customer relationships and the barriers to entry/exit in the market
- The nature of the competitive environment. (A “Porter” type analysis often assists here)
- The strength of your value proposition
Nov 24, 2010 | Change, Communication, Management, Marketing, Social Media, Strategy
The power in commercial relationships has shifted dramatically since the net. It has removed the power previously held by companies and institutions and handed it to individuals who choose to use it.
No more can an enterprise afford to ignore or annoy an individual without cause, or even with cause, as the individual now has the capacity to publicly respond with twitter, facebook, linked-in, et al, and have an impact inconceivable just a few years ago.
This is not evolution, it is revolution, as the constraints on the ability to communicate and coalesce around an issue is unprecedented, and represents a fundamental re-ordering of the balance of power. The changes in the external environment are changing much, much quicker than the average organisation is able to change in anticipation, creating a significant short term risk for many of them.
Nov 22, 2010 | Change, Communication, Management, Social Media
Corporations default to functional silos, despite the efforts of most to recognise the horizontal cross functional nature of processes, the things that gets stuff done. This is because in the past, you required hands to move things around, make calls, stuff envelopes, travel, all adding to the cost of completion.
Individuals personal networks tend to also run in silos, the football group, the school friends, workmates, and so on, but the demarcation is a bit more blurred than at work.
Social networking tools have further blurred the demarcation , and networks can go way beyond the face to face relationships of old, and those networks can be leveraged across many tipping points and considerable social energy can be built, simply by harnessing the dynamics of the group.
Corporations are coming around to this self-evident (if you happen to be under 35)fact, but they are largely run by people not engaged with social networks so the evolution is far quicker outside corporations than inside them. Remember the huge embarrassment of Nestle a while ago, in relation to use of non sustainable sources of Palm oil, embarrassment that could have been easily mitigated had someone in a senior position watched their own facebook site, twitter, or even listened to someone who was.
The formation of groups around a question, issue, or cause is suddenly quite easy, and for corporations adds a huge risk to their intangible assets, and they usually are blissfully unaware in the boardroom.
The risk can be mitigated, but it requires individual with the organisational power to cede control of the details of “management” of the on line groups to individuals who are engaged in the processes, as the risks can emerge almost instantly, and requires instant response.
