Book – Team of Teams

team.pngThe book is an excellent explanation of changes in our environment and why organizations will be more successful with a new approach to management.

The most interesting point is the parallel between business and military organizations.  The current change is not limited to a specific industry or military branch; it is a societal change every organization will face.  We have to choose between efficiency and adaptability.  Adaptability we need to succeed in our complex environment reduces efficiency, what is difficult to accept.

“High-level success depends on low-level inefficiency.”

Silo-based organizations with internal competition have been successful in the past.  However, as our environment shifted to the high level of complexity (and high level of unpredictability), silos-based efficiency is insufficient.  This type of organizations have limited access to information and internal resources to solve problems spanning across different work groups.

Example: GMs separate ignition and airbag teams could not solve an ignition issue affecting airbags for several years.  Nobody in the organization had access to all needed information and incentive to take any actions interfering with the organizational objective of cost reduction.

To become more effective (at the expense of efficiency), the organization need to encourage the free flow of information and introduce “system thinking” across levels and departments.   “A person can not understand a part of the system without an at least rudimentary understanding of the whole.”

The solution is to share the information and empower people on all levels to make decisions based on this information.  In complex and unpredictable environments leadership role changes from “chess” to “gardening.” Instead of attempting to orchestrate and control every organizational move, the leader needs to concentrate on the high-level picture and provide an environment for fast decision making across the organization in the context or each situation.

However, information without empowerment would be frustrating, and empowerment without information would not generate success – both components need to be present in the organization to generate results.

To prevent natural mistrust beyond members of an immediate team, a military organization started to “embed” representatives of other functions into the team’s environment.  Team members learned to trust a person representing different function and become more open to cooperation with the same function in the future.  This approach created a “team of teams” ready to work together on overarching organizational goals.

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Book – The Ultimate Question 2.0

question.PNGI thought I knew what NPS was.  A few years ago I worked for a company, which had a survey with one NPS question on its website.  Other companies discussed NPS, and I also read an extensive article criticizing the approach for generating the score, but not explaining the “why” behind it.  In the reality, I had no idea what NPS was, how it should be used, and why it makes business sense.  Most likely, I was not alone 🙂

The general calculation of NPS is simple to understand and it is a well-known concept.

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The rest of the book became a wonderful discovery for me.

Interestingly, the specific question was selected based on rigorous research, and it was not the question researchers themselves expected to “win.”  This was the question, which correlated the most with business success of the company.

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“In certain business-to-business settings, a question such as “How likely is it that you will continue to purchase products or services from Company X?” or “How likely is it that you would recommend that we do more of our business with Company X?” may work better.”

Calculating NPS (% of promoters – % of detractors) rather than just concentrating on the % of promoters “… worth the trouble, because it ensures that a company will pay attention to both groups and because NPS correlates with growth rates more closely than does the number of promoters alone.” 

The question generating the score should be “called penultimate question since it always needs to be followed up by one additional question: why?”

Companies with higher scores enjoy clear business benefits compared to their counterparts in the same market.  Interesting: average scores in different markets can vary widely; it is important for the company to become a loyalty leader in its particular industry and geographical location rather than reach a particular score.

Multinational businesses with multiple product lines won’t be able to compare their absolute scores across the company.  “To manage their business portfolios, these companies allocate resources toward growth opportunities in business units that enjoy NPS leadership [in their markets], and then to unit managers who develop compelling business cases that should enable them to drive NPS past the current leaders [in their markets].”

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Concepts and points from the book:

  • “NPS merely measures the quality of a company’s relationships with its current customers, and high-quality relationships are a necessary but not a sufficient condition for profitable growth.”
  • Does it make sense to worry about NPS in regulated monopoly markets?  “…No monopoly lasts forever.  New technologies emerge.  Regulations change.  Building good customer relationships prepares a company for the possibility of increased competition.  What’s more, superior NPS boosts a company’s growth potential by enabling it to expand into adjacent service areas.
  • An inability of the accounting system to distinguish between “good profits” based on the creation of value for customers and “bad profits” can be overcome by NPS.  “Did that $10 million in incremental profits come from new hidden surcharges, or did it come from loyal customers’ repeat purchases?”
  • Should companies measure NPS in all customer segments and categories?  This question can be addressed by “…two distinct processes that are best managed separately.  Companies that must serve a wide variety of customers in addition to their targeted core – retailers, banks, airlines, and so on – need to minimize detractors among noncore customers, since these customers’ negative word of mouth is just as destructive as anybody’s.  But investing to delight customers other than those in the core may yield little economic return.”
  • NPS-1.pngOverall: “The more metrics you track, the less relevant each one becomes.  Each manager will choose to focus on the number that makes his decision look good.”
  • Additional potential question: “What is the most important improvement that would make you more likely to recommend us?”
  • Product management team at Logitech is expected to project the release date, the retail price, and the target NPS for every new product they propose.
  • TurboTax ads another question based on the initial NPS answer.  Detractors are asked for the reasons for their score, passives are asked what would take for them to rate TurboTax a ten, promoters are asked what, specifically, they would tell someone to get them to try TurboTax.  Promoters responses could be incorporated into future marketing messages. “One final benefit of asking promoters to express what they would tell a friend is that once they articulate the answer, they are more likely to relay it to a friend just because it’s on the tip of their tongue and the top of their mind.”
  • The amount of work, planning, and follow-up required to achieve the full benefits of NPS came as a surprise to many of the companies.”
  • The authors encourage companies implementing NPS to be careful about linking the score to compensation.
    • It creates the focus on the score itself, rather than an improvement of customer satisfaction
    • It creates pressure on the team responsible for the measurement process
    • It encourages gaming and manipulation
  • A lesson from companies who implemented NPS: “I wish we had known to budget more support from our IT department up front.”

Another interesting aspect of Net Promoter System is a measurement of employee advocacy and the emphasis on employee satisfaction as a starting point for the creation of happy customers.

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  • The question: “On a scale of zero to ten, how likely is it you would recommend this company as a place to work?”
  • “With anonymous employee surveys, it makes sense to gather a little more information about possible root causes on the survey itself.”
  • “Apple Retail began its Net Promoter for People process using quarterly surveys.  But it found that store teams didn’t have sufficient time to diagnose root causes, implement solutions, and achieve measurable improvements before the subsequent survey.  So Apple shifter to a four-month cycle.”

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Book – Experiences: The 7th Era of Marketing

experiences.pngExcellent book!  The authors suggest a somewhat different view on content marketing – an experience-based approach.  A concentration on the experience itself as the “product” is the 7th era of marketing.  The content marketing in this era should become an additional experience for the customer, independent from the product or service the company provides.

As experiences, in general, become more and more important for new generations, entrepreneurs take notice.  An interesting example of a pure “experiences” business: https://www.ifonly.com/

The business “sells” experiences and generates donations to different causes at the same time.  The business is a typical platform, which connects “experience producers” with “experience consumers” and does not own any “experiences inventory” itself.

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The future: share of voice and share of wallet will change to the “share of experience.”

Brands can pay for rising above the noise, but they can not pay for showing experiential value for the customer – this value needs to be carefully designed.

Instead of four Ps of marketing, the authors suggest a new approach: SAVE

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  • There is no correlation between a number of interactions a brand has with the customer and depth of relationships.
  • IT systems: consider them systems of engagement rather than systems of record. If a business can invest into systems of engagement, IT becomes a point of differentiation in the marketplace.
  • Practical approach to creation of experiences in the organization; ask for forgiveness rather than permission 😉
    • Content marketing center of excellence success: “it was important for us to position our content center of excellence and our team as nearly an extension of processes we already had in place”
    • “…they did not go to management to organize the group – they created a function and went to management to formalize it.”
    • Skunks Works issue – the team might fight for their project’s survival, which might be difficult to incorporate the project into the overall business.
  • Important – evaluate experiences instead of teams; encourage cooperation in the organization and inclusiveness.

How to allocate investment into content? 

  • content.PNGExpensive – low-risk content; inexpensive – high-risk content
  • Coca-Cola uses 70-20-10 approach:
    • 70% of efforts are allocated to the content, which has to be produced
    • 20% – slightly “out of the box”
    • 10% – high-risk creative content (this part is not as expensive as marketers think, but it takes more creative time to come up with the content)

Story mapping:

  • why.PNGWhy (content mission) – value we deliver to the audience; who will receive the value and why would they care; how this initiative aligns with the larger story of the brand; how this experience will be different from what is available in the marketplace of ideas
  • What (what does the success look like and when is it going to be achieved) – differentiate the success of the initiative and the mission of the business – how the initiative will integrate with other parts of the business
  • How (proposed map) – how do we approach the initiative over time

Interesting CMO requirement to achieve alignment: when pitching an idea, the team is required to explain how the initiative will be cross-functional.  This requirement assures cross-functional buy-in in advance.

Four layers of customer experience focus:

  1. Awareness and introduction – lightweight tech, almost disposable – marketers will need to move fast and CIO should care less about this layer. (Flexible, portable, and disposable).
  2. Engagement and relationships  – as visitors become leads and opportunities, more data is needed to provide delightful experiences down the road.  Unified customer experience management solution is critical. (Engagement management – needs to interface with everything above and below)
  3. Intelligence and insight – after leads become customers, it is important to understand how needs of customers evolve.  The ultimate goal is to create brand evangelists.  Integration is the key.  CIO must work with CMO to understand which data is needed.  (Core data management – closely adheres to standards).
  4. Shared values and exceeded expectations

New marketing technology is “built to change.” 

Analytics: marketers often use metrics unrelated to business objectives.

  • More traffic – great!  …even if it happened because a negative comment went viral?
  • More time on site – great!  …even if a prospect cannot find the next step and conversions are down?
  • More likes on Facebook – great!  …even if liking the page is needed before customers can post comments how much they hate the company?

Analytics layers:

  • Primary indicators, goals (Example: increase MQLs by 10% in 6 months with only 5% budget increase – includes Objective > Timeframe > Constraint)
  • Secondary indicators – KPIs – progress toward primary goal – what helps us to improve the possibility of achieving goals (Example: unqualified leads, cost per lead, downloads, seminar attendees, etc.)
  • User indicators – data points we collect on daily basis, which help us to improve secondary indicators (Twitter followers, page views, etc.)

This approach does not require reporting secondary indicators; this can allow teams to concentrate on reaching goals through initiatives, which might reduce site traffic, for example.

An important objective is to de-silo the measurement so different groups do not compete with one another for audience attention.  Example: an insurance company team launched a blog and asked a website team to place a prominent button on the home page of the company site.  Website team said “no” as blog traffic won’t be counted as site traffic, and web team was measured on site activity.  The blog team asked social media team to promote the blog; the social team also said “no.”  Social media team was measured on engagement, and cute pictures of cats were receiving over 1,000 likes, while insurance articles could generate less than 10.

  • A “channel” team should be responsible for an “audience development” instead of a channel.
  • Content-driven experiences are not measured separately – they are part of marketing strategy.
  • You don’t measure channel – you don’t measure how many leads telephone produced…  it is just a part of the whole program called “sales.”  Content is the part of the entire program.  But – you should examine content contribution.”
  • “The objective of a blog can be the traffic to website – everything does not have to produce sales directly.”

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3 skill sets are common in companies succeeding in content marketing:

  • orchestrating events, not guiding journeys
  • meaning-driven, not data-driven
  • organizing for agility, not speed

Book – Winning Them Over

Winning.pngThe book compares management style of the past with current, more collaborative approach.  As we live (and work) in the era of persuasion, the book introduces persuasion techniques and gives insightful examples of the time (published 1998).

Interesting: the same techniques could be very helpful now as persuasion is the only technique available in cross-functional team environment.

Examples in the book are similar in spirit to other examples in business literature: very simple and clear messages, emotional appeal, and direct connection to “what is in it for me.”  Pictures (verbal and literal) and analogies are more effective than data in persuasion, though data is also needed for support.

 

Book – Think Simple: How Smart Leaders Defeat Complexity

simple.pngMany people think that they have a more complex business than they have.  More times than not, they actually create complexity in their mind.

JCPenney: though we remember the outcry of disappointed customers when discounts and coupons were cut, this story is not quite complete.  The company planned to re-create stores and provide a different, simplified and more engaging experience.  This experience would replace existing stores and coupons.  Unfortunately, the “old” value was removed before the “new” value became available.  JCPenney’s customers might have reacted differently if the entire plan was rolled out as designed.  This was, definitely, not that simple…

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Blue Men Group: understanding the need for  simplification (and communication).  The group conducted an interesting research: what do people new to Blue Men expect from the show?  The results were baffling: guesses were very inaccurate, and often strange.  After the first show the same audience claimed that they were surprised by the experience, as the show was significantly different from expectations.   Blue Men Group realized that show promotions need to be clarified.

DirectTV Latin America: simplification of brand and simplification of reporting structure.

Reporting structure: functional heads in each country reported to a manager based in Florida. For example, heads of marketing of Peru, Chile, and Colombia were reporting to a head of marketing in Florida. It created significant overhead in Florida and constant flow of communication.

To tell you how messed up this arrangement could be, I visited Florida shortly after I started this job.  Everyone of those functional heads swore to me that their part of the company was making money.  But when you added it up, they were actually in bankruptcy.  It became convoluted and financial reporting was designed to reflect convoluted structure.  Somehow, they all convinced themselves that they were making money.

Solution: eliminate the entire organization in Florida and empower management in each country to be responsible for its own business.  Each country became its own PNL, and the entire organization became more entrepreneurial and less complicated.

What causes this complexity?  Mostly ego and a desire to control.

Employees in big companies are typically eager to change and quick to embrace the idea of simplification.  It is complexity that sets people running in the opposite direction.

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Book – Reinvention

reinvention.pngJust before our professional association meeting at the company office, we realized that the previous group was still occupying the room.  As a representative of both professional association and the company, I found myself encouraging previous group to leave and cleaning the tables.  A couple of books were left in the auditorium…

A free book on business reinvention?  Absolutely irresistible!

The book has quite interesting approach: a combination of organizational and personal (professional) change in one process, as authors thought that personal and organizational change processes were so similar, that two separate books were not needed.

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The most profound statement of the book is the comparison of the degree of change – external and internal for both an organization and an individual.

To be successful, you and your organization must have the ability to reinvent, pivot, and morph faster than the speed of the external environment that you operate within.  Possessing the ability to not only survive disruption but also accelerate results during turbulent and challenging times is a skill that must be mastered.

A cute video explains “six deadly blindfolds” and an approach to handle inevitable disruptions.

Do you or your organization have “buoys” in place so that you are rarely surprised when powerful shock-waves begin pounding on your shore?  Great organizations and highly adaptive professionals seem to be better at predicting and understanding incoming changes than others.

Elements needed for the reinvention effort to be successful:

  • Dissatisfaction (feeling a need for change)
  • Focus (well-articulated future state)
  • Alignment (available infrastructure, including tools, processes, finances, etc.)
  • Execution (comprehensive game plan with clear milestones)
  • Leadership 
  • Cost of Change (reinvention costs: financial, social, physical, mental, etc.)

(D x F x A x E)L > C

A general manager of a major division announced a plan of the division redesign, while the division was still producing better results than other parts of the company.  A push-back from the executive team was overcome by the requirement to conduct an environmental scan.  60 days later, humbled executives reported that they were actually #5 in market share, down from #2 and dropping fast. “They discovered new strategies of the competition.  And customers gave them an earful.  The executive team was now ready for a redesign.”

SweetmanCragun Group offers a collection of templates related to the reinvention steps mentioned in the book.

An interesting (and very relevant quote) from Catherine Fake, a co-founder of Flickr:

work.PNGSo often people are working hard at the wrong thing.  Working on the right thing is probably more important than working hard.

 

Book – HBR Guide to Managing Up and Across

HBR.pngThe guide is a collection of helpful tips on how to include remote colleagues into projects more effectively, navigate complicated matrix organization, and build helpful networks.  A fantastic resource with very relevant questions to ponder and ideas to explore, which might remind about an issues from a last week meeting or a phone call planned for tomorrow afternoon.

One of the most interesting perspectives of the book is a network analysis.

…high performers have strong ties to

1. network.PNGpeople who offer them new information or expertise, including internal or external clients, who increase their market awareness; peers in other functions, divisions, or geographies, who share best practices; and contacts in other industries, who inspire innovation;

2. formally powerful people, who provide mentoring, sense-making, political support, and resources; and informally powerful people, who offer influence, help coordinating projects, and support among the rank and file; and

3. people who give them developmental feedback, challenge their decisions, and push them to be better. At an early career stage, an employee might get this from a boss or customers; later, it tends to come from coaches, trusted colleagues, or a spouse.

A network can be imbalanced and have unexpected redundancies; active approach to building a network is the most beneficial:

Write down three business results you hope to achieve in the next year, and then list people who could help you with them.

A thought provoking article Make Your Enemies Your Allies, recommends three steps to handle unfortunate situations in the office: redirection, reciprocity, and rationality.  The article provides a couple of successful examples of the approach, including an example of initially unpopular idea, which was eventually supported by an organization.

The book also suggested an interesting approach to relationship with management: your boss can be considered as a brand, and your boss’s boss the ultimate customer.