-->

Service Gives You A Competitive Advantage

 

Top technology and product companies are challenged to create growing revenue and profit streams from their business units. In fact, the revenue and profit impact from the service side of the business represent a significant financial success opportunity for all companies. Services represent tremendous additional value; often acting as the prime ongoing brand representation to the customers.

  • Are you leveraging your services as well as your product assets to maximize your financial results and customer success?
  • Are your operations optimized and aligned to gain you the strategic and financial advantage that you seek in your marketplace?
  • Are the Customer experience efforts you have invested in yielding the results that you expect?
  • Are you leveraging your customer assets to drive innovation, customer success and better financial results?

ServTrans can help you get improved results with your current business and show you how to leverage services and customer centered strategies to maximize overall success across your entire enterprise. We can show you how to create the best practices, and not just play “follow the leader” We have expertise and deep understanding of the services industry with hands on practical experience. Our experts have over 120 years of cumulative experience in all areas of services and service operations. We can help you improve and optimize business to business (B to B, and business to consumer (B to C) products and services with your customers. We succeed because we can show you how to focus on your customer’s success.

We help you become more customer centric and how to make strategic decisions that will maximize results for both shareholders and customers, without compromise. We help you optimize current and future service operations for maximum results, we help transform organizations to become more customer oriented and we help drive innovation that will help you surpass the competition. We understand the challenges of being able to identify, invest and implement solutions that result in measureable financial success in the near term. Our change process, methodology and expertise allows us to work with your organization to find those opportunities that get the results you expect from your investments in customer experience initiatives.

We can accurately assess an organization’s customer experience maturity and develop strategies and plans that result in a long term successful customer experience strategic roadmap that creates lasting results beyond just quarter to quarter financial performance.

The Change Experts at ServTrans are ready to serve you call us today +1.510.408.SERV (7378) or email at info.servtrans.com

What is Customer Success

 

Interview with David Hare, Advisory Partner for ServTrans LLC

We recently had the opportunity and privilege of interviewing our David Hare regarding a subject that he is quite passionate about; Customer Success. David is known expert and thought leader in the Services Industry and how Customer Success is becoming a critical function in technology companies. David is currently an Advisory Partner with ServTrans LLC (a services advisory firm). David has had over 35 years of experience growing and leading world class global services organizations. Most recently he was SVP of Customer Success and Ooyala.

ServTrans: Dave, let’s get straight to the obvious question. Since Customer Success is becoming the new buzz in business today, let’s frame our discussion by how YOU define the term?

 David Hare: Customer Success is what you do within your company to advocate for your customers in order to ensure they get the value of your product or service as quickly and effortlessly as possible. Every organization in the company plays or should play a role in this.

That said, I believe that there should be a person or organization that is not only responsible for driving that kind of culture but is also the focal point for ensuring the right actions, policies and programs exist in order grow an increasingly loyal and successful customer base.

For example, Customer Success Managers typically fill in the grey areas that exist in Cloud based offerings between Sales and all Post Sales Services by following up with existing customer to ensure they are using their products or services in the most productive manner. CSM’s have access to the full customer profile so they are able to make strategic, and informed decisions instead of just having to react to problems like Customer Support.

ServTrans: Why should companies care or invest in Customer Success as you have defined it? 

 David Hare: Remember, Customer Success is a corporate attitude not a department. What I defined above is the organization typically called Customer Success Management. They are solely focused on helping customers be successful with the purchase of your product or service. They are typically measured on Customer Satisfaction, Net Promoter score, renewals, upsells and referrals.

 ServTrans: What do you see as the measurements of success for the company’s investment in Customer Success?

David Hare: Measurements of Success include but are not limited to things like increased renewal rates and greater retention of customers. You should be able to reduce churn, increase upsell / cross-sells as well as increase Customer Satisfaction and Net Promoter Scores, referrals, and references. The answer is it is all dependent on the goals of the organization. For example not all companies task their CSM to upsell. At a bare minimum it should be retention and referrals.

Having a prominent Customer Success organization will also allow and facilitate a Customer Centric mentality to develop in all organizations with in the company.

ServTrans: What does a typical Customer Success organization look like?

 David Hare: While there is no “typical” organizational structure it should at a minimum include a tiered model. You typically have your most senior and experienced CSM’s on a 1-5 ratio of your most strategic customers, second tier would be a 5-15 ratio of customers and the next tier would have a 1 to many, maybe as much as 1 -40-50 or even a pool ( not named )of CSM’s that manage 100’s of customers

ServTrans: Where should the organization fit into in technology companies?

David Hare: I believe it should be part of the larger Services organization. Remember they fill the voids between, Customer Support, Professional Services, Educational Services, and Technical Account Managers. So having them in the same organization where each organization can learn from each other, share information and best practices makes sense. They make each other better teams which helps the customer immensely. Also the CSM team should report into as high up in the company, as close to the CEO as possible. This ensures they have the appropriate “say and influence” within the company and are properly funded.

 ServTrans: What skill sets do you look for in this organization?

 David Hare: I would want to make sure that they possess the disposition and skill set to help support a strong customer service environment is important. Skills can be taught but attitude and personality cannot. It’s a sad fact but not everyone should interact with customers.

When possible hire from within the industry you are serving to have the added skill of domain and industry best practices. (If you are selling into the marketing community hire from within them)

ServTrans: Since you say the Customer Success Managers often sit between and service, how are they typically compensated

David Hare: Difficult to answer as some companies place more emphasis on up-sell and cross selling and these companies should have some variable compensation based on the cross/up sell goals. Others companies place more importance and renewals these should have a higher base salary. Another thing to consider is how much ARR are they responsible for protecting. One company I am familiar with had their lowest paid employees, as an organization, as their CSM team. In my opinion that was a short sighted investment strategy. It sets a tone that perhaps the company is not as serious about customer success as they might claim.

ServTrans: What stage in the lifecycle of a company should Customer Success be implemented?

 David Hare: There is no real hard and fast answer for this one but it is never too early to be thinking about a customer retention strategy. The earlier in the life cycle in the company that you are thinking about developing the team the easier it will be to implement and have the entire company behind it.

ServTrans: In your opinion what kinds of companies or industries benefits the most from Customer Success?

David Hare: While all types of companies and industries can benefit, by far the SaaS based product companies benefit the most due to the ease of which customers can switch vendors.

ServTrans: One final question, what are the greatest challenges of customer success in your opinion? 

David Hare: The greatest challenge is not having the entire company behind the success of the Customer Success team. Let me give you an example, Legal says “I don’t play a role with the success of our customers”. As a customer Success manager you consistently hear from your customers that their contracts are too wordy and difficult to interpret so they are very unhappy with not just legal but with the difficulty in working with your company. The IT department says the same thing and then when you bring the customer into your facility for a demo WI-FI does not work and the projectors are down. What type of an impression does that leave on the customer?

One big problem is not investing appropriately in the CSM’s, giving them the tools they need and the access to other organizations and information to be successful. Think insight into marketing campaigns, new product introduction, implementation results and support ticket information.

One other challenge is having the CSM’s reporting to far down into the organization. The higher up they report the more significance the rest of the company place on them.

ServTrans: Thank you for sharing your insights and final thoughts?

 David Hare: Yes, Thank you. I have shared my experience here and am hoping others will chose to share their Customer Success stories and experience as well. We can learn by sharing.

All rights Reserved by ServTrans LLC.

ServTrans LLC is unique advisement firm founded 2008 to help companies create new value through a laser like focus on creating customer value and success. Our globally recognized experts and partners will help to innovate, transform and optimize companies to thrive in the services economy. For more information contact us info@servtrans.com

 

Change

ServTrans: Your Services Experts

Let’s talk about “change”. It is a simple word yet it has many meanings and many implications. Let’s look at Webster’s definition of Change as transitive verb: “a: to make different in some particular: ALTER b: to make radically different: TRANSFORM. It can be verb, a noun or variances of those. A simple word and yet people rate this as one of their top fears. People will adapt to snakes and spiders or other scary things faster than they can adapt to change.

To reduce the fear factor we may use synonyms like transform, alter or call things as evolutionary or revolutionary. These other words seem more positive to us like only good things will happen to us. Our experience seems to lead us to the fact that when change happens to us, the experience tends to be negative. Why? I think it is because people generally fear what they cannot or do not control. Change tends to happen to you and not by you.

I am certainly not a Psychologist but I do know that quite often the therapy to overcoming phobias is to approach the phobia or fear, knowing that you are in control. I have known pilots that are afraid of flying when they are not in the pilot’s seat. When they cannot control their destiny, in this case the plane, they are not comfortable. If we want to diminish the fear of change in the services economy, we must gain control over change and not just let it be forced on us.

The services industry has changed dramatically in the last 30-40 years. The services economy over took the manufacturing sector in terms of GDP in the last 10 years. Have we been in control of the changes? We would like to think so but in reality the customers have been the drivers of change. The change in customer values has evolved over time and companies, both big and small, have largely been slow to react. The customer value chains have tended to shift from the technology or products to the outcomes that the technology produces. Most often, services play a major role in the successful and useful outcome of the technology in its intended use but organizationally they are not given that level of strategic importance.

IBM is an example of a company that reacted to the market place, changing the services landscape back in the late 1980’s. The change was forced a result of dramatic overall business change. Rather than be afraid of the change, they set out a course to change from a manufacturer of IT systems to a service provider of information systems. Having been a part of that change I can say that few know or remember how revolutionary that cultural change truly was. IBM still sets the standard today in working to create a revolution in the services industry. Most recently they have provided AI as a service and platforms to support IoT and analytics of unstructured data..

The services economy is all about change. As we have seen in agriculture and manufacturing, change happened due to market forces driven by customers. The service economy is looking for the innovations that will transform the industry. If we want to control change, and not let it control us, we need to lead the innovation. Innovation will not be just about automation, knowledge management and driving out costs. To truly innovate we will need to rethink our business models and think about how we deliver technology in a services context. Software-as-a Service ( SaaS ) is a small example of this today. To be a change driver in this economy, companies will have to think more holistically. This means blending and aligning the traditional silos in an enterprise to focus externally on driving customer value. This means front office and back office functions start to blend with success measured in terms of the customer’s measure of their success, not yours. Should we fear reacting to the coming changes or take control? How can something that will benefit your customer and your own company be scary? What you should fear is that your competitors take control change faster than you do. One should never fear success or a simple word like CHANGE.

3 Key points to consider:

  1. Customers are the drivers of change. You need a tops down and bottoms up line of communication to monitor how your customer create value and apply your expertise to help them.
  2. Clayton Christiansen refers to the “innovators dilemma” where companies often fear change that may erode current revenues and are prevented from changing from what the “board” wants to what the customers need. (ask Kodak how that worked for them…) Change the conversations from “why we can’t” to what will it take to make customers successful and achieve long term financial benefit.
  3. Traditional organizations deliver traditional results. Company change is about changing people, process and enabling technologies in synchronized, symbiotic strategy. The Services economy requires a much more horizontal organizational alignment to customer needs than the vertical alignment taught under the Adam Smith school of management.

 

Author: Douglas Morse is currently Founder of ServTrans LLC, focused on driving a revolution in services through a laser-like focus on customer values through strategic business innovation and transformation. Doug Morse has spent over 35 years in the services industry with leading companies IBM and Oracle. He is currently writing, lecturing and consulting about “The Service Oriented Enterprise” as the future of the services industry.

Supercharge your Business

slider5

Being passionate about customer centricity and customer experience makes me either the best customer you ever had or the worst critic, as you might expect. With over 30 years of experience in customer experience and services there is not much that my partners and I have not seen in both B2C and B2B. When I am a customer of a business I am always looking beyond the core and immediate interaction to understand if this is a business that I want to help by giving them my money or not. If I do not think that the company cares about me and my success then I will chose to take my money elsewhere to people who get it. The good news is that I can have a bad experience with an individual or a transaction or two and not react to that alone. I can usually tell if an employee is just a bad actor in that play or if their behavior is driven by the culture, the measurement and or just bad policies. If I think that a company is worth saving I might find a place or a person to provide constructive criticism and even a little free advice. How they react to that feedback is also a determining factor in my continuing patronage. They have an opportunity to win my loyalty back or they have an opportunity to make me their worst enemy.

I have previously written about Delta airlines that while they want good customer experience Delta puts policies and practices in place that take the power away from their employees and that create very public customer nightmares. http://servtrans.com/delta-sends-its-11000-agents-to-charm-school/

I also wrote a blog about customer rage and the cost of recovery and about Sears Home Services that just did not care about customers. That one hit home (pardon the wording) with many readers who voiced similar stories. Let me give a few more examples and then the lessons to be learned.

First a negative example with a fabric / crafts store chain called JoAnn’s Fabrics. I had several interactions with them and I was initially favorably impressed when everything went right but hit a snag with the next few visits. The employees seemed to be very customer oriented but it became apparent they did not have enough employees especially in critical areas. For example they have 6 cash registers and one cashier with long slow moving lines. They are primarily a shop that sells cloth and accessories for various crafts. Central to the store is the place where cloth is cut, measured and priced and yet they typically only have one person staffing the area during the week. When they get overwhelmed with customers they talk into an in-store communication device asking for help, but none ever comes and the customer queues grow long and angry. Clearly the store manager is focusing on costs and not building customer loyalty and repeat business. If you ask 3 different employees a question about a process or store policy you will get more than 3 different answers. Because I wanted to like the store I took time to find a place to give constructive feedback. They made it difficult to give feedback which was strike two for me. The reaction that I got back was friendly but it continues to show me that they care about something other than my continued patronage, strike three and I am out…of there. This is a place where the CEO and C-Suite should secretly shop their own stores like an ‘Undercover Boss’, I do not think they would be proud of the results.

On the other side of the coin, I like to shop at Harbor Freight Tools. This is a chain dedicated to selling low priced tools that give you good value for the money. Typically companies that focus on selling lower cost items are not known for good customer experience. This is not Nordstrom’s and the employees may not be rocket scientists but they do know what they are doing. They can give you, or get you, the right answer to questions and their policies are very customer friendly. I feel like I am getting a deal every time I go in there. They are clearly aligned to their brand promise. Recently I received an email about changing store hours that included the following statement.

“At Harbor Freight Tools, one of our guiding values is “Doing the Right Thing” for our customers, our communities and our employees” Eric Smidt, Founder and President,Harbor Freight Tools

It is these kinds of values around “doing the right thing”, from strong leaders, that are so simple but make a huge difference in how companies act and what customers experience. Companies with strong founders often lead the way. Look at examples like Disney, Marriott, Zappos or Harbor Freight Tools and you will see that customers are important to them. Values are a driver of culture and when leaders continue to focus on those values the culture thrives in an organization and is reflected in the employees with whom you interact. Just as important is that this type of culture also reflects positively to the bottom line.

It is easy to talk about personal experiences that we have as consumers in the B2C world but those parables apply equally, if not more, to B2B and especially B2B2C. In our research we looked at 7 areas of focus that a company needs to get right to grow their customer equity and sustainability in their industry. The short version of the results is that the right culture is an imperative. However there is no magic culture pill or Kool- aid that makes it happen. It starts with the right leadership, listening to employees through proper engagement and aligning the organization to the right set of values.

Culture by itself will move the needle but to sustain the culture it must be embedded into the organization by ensuring the processes /policies, tools and technology, customer engagement and operations facilitate the outcomes and are designed around the core values and desired outcomes of success. If you do not do this then you have examples where the executives talk about the importance of customers but dictate policies focused on internal metrics only. This results in organizations like Delta whose people want to make customers happy but have inflexible policies that create viral social media disasters.

One of the common traits of great leaders in great business cultures is that they practice the art of “listening to understand”. Stephen Covey once coined in his 7 Secrets for Effective People; “seek first to understand before trying to be understood. Leading performance companies learn to listen to the customer AND to the employees, laggards tend to listen to themselves and ignore employees. They understand what the customer needs versus what they might ask for and they listen to employees as to how they could service the customer better if they had x, y or z. Empowering people to do things right will lead to better financial outcomes for all. Understanding customer needs will lead to greater innovation and market leadership. Both of these outcomes will supercharge your business.

That is my thought, what is yours?

 

 

 

 

Coach, Connect and Co-create value

ServiceSign_small

In the last few years the term “consultant” has seemingly become a negatively viewed job description. When one describes their job as a consultant it is generally viewed in one of two ways. Many people are now working in the so called ‘Gig Economy’ and call themselves a ‘consultant’ rather than an independent contractor. These are generally self-employed individuals either by choice or by circumstance. The second view is the older view of a professional consultant that now tends to be viewed as an expensive resource that many companies have chosen to cut out of budgets. They think of the large consulting firms who descend upon companies, take over projects, deliver fancy presentations and maximize billable hours with little value to show for it over time.

When I started my firm I wanted it to be different. First we focused on the services industry with the intent of promoting the value of customers. Second, our partners in the firm had years of direct hands on expertise with 25+ years of experience. This means they can roll up their sleeve and know how to make positive change happen and not just talk about it or research it to death. Third, we wanted to augment a firms resource not replace it. Our goal is to make sure that client firm gains the skills needed to be successful after we leave. Our value is that we can make improvements faster, cheaper and better than an organization that tries to make big changes happen by themselves. We save them money ultimately and help them make more money by creating a unique focus on customer success.

In this economy it is difficult for companies to engage outside resources because it is viewed as an expense rather than as an investment. On the other hand, companies often need a special skill but only for a short and defined timeframe. Most companies do not hire plumbers to be a full time employee just waiting for a leak. When that skill and expertise is needed they hire a plumber to do the work. They do not contract for a “plumbing consultant” (for more on this, read our blog “Rent n’ Exec” at www.servtrans.com/blog )

Today, when someone I do not know meets me and asks; “what do you do?” I simply respond that I coach, connect and co-create value for businesses. Our experts coach executives or employees on specific areas for improvement. We connect clients with the expert resources required to make improvements faster and we work side by side with clients to help create new value for their customers, shareholders and employees. This allows a client to purchase what they need, when they need it and can see more immediate value from the engagement.

So is, coaching, connecting and value co-creation a better definition or job description for consultants? Our team thinks so,what is your opinion?

The Power of Customers

Customer pays

Do you recognize the power of customers? Companies too often forget that their customers pay their bills and that any financial success they have or may achieve is from the simple fact that customers choose to buy from a firm or not. If you want to be a leader in your marketplace you need to understand the concept that customers vote with their dollars (Euro, Pound, Yuan, Yen etc.) It pays to have happy customers and it costs real money when you lose customers. In fact, unhappy customers cost a whole lot more than just their loss of business. They can damage your brand, your reputation and make the cost of acquiring customers or retaining customers go through roof. Research has shown that it costs 3-10x as much to acquire a new customer than it takes to retain a current one. That equals real money and real profit potential. Ultimately your Customer Equity declines which has direct correlation to the market cap of your company. It becomes a slippery slope that leads to business disaster.

Customer Rage Study

I would like to refer you to the latest data from the 2015 Customer Rage Study that was done by CCMC and ASU’s Center for Services Leadership. (http://www.customercaremc.com/2015-us-customer-rage-study/ )    While this study originated in 1976 and is in its seventh wave, the results are not improving and is in many cases seemingly in decline. Low customer satisfaction is costly but customer rage increases business costs and risk exponentially.

Companies go blindly on ignoring unhappy customers and slowly going out of business. The business declines and management is baffled as to why. Customer rage, especially in this day an age of social media and instant access to public opinion, can cripple a company quickly. Consider this; when I have a terrible experience with an organization I can walk away and they never know why. I can choose to give them feedback because I want them to get better or I can actively advocate against them depending on how I feel that they treated me.

Customer experience is very personal regardless if the experiences in a B2B or B2C environment and people react with very human emotions that must be understood in the context of your business. Sometimes just a simple, and sincere, apology is all that is needed to avoid a relationship disaster. Remember, we are talking about emotional experiences here so it is not just about providing some form of compensation or refund. It is about being accountable and giving assurance that the problem is recognized and will hopefully be prevented from happening again. I am sure you have seen bad experiences go quickly viral. For everyone that goes viral on social media, thousands of others are influencing other customers or potential customers.

The undercover boss

 

I like shows like “Undercover Boss” on TV. While it may be highly staged for TV it does show the power of getting out of the office and observing the business as others see it. Most Undercover Boss episodes deal with employees, good and bad. The undercover boss’ get to see the result of bad policies, lack of training, lack of empowerment and how that affects their customers. In watching the show you have ask yourself how could they not know it was this bad? Sadly, the drama on the television show is the reality in too many companies.

Companies often just focus on customer satisfaction and if the results are even slightly positive they tend to ignore the unsatisfied as outliers. Customer complaints should be treated like nuggets of gold and handled as such. If a customer gives you feedback, it means they care enough to take the time and energy to complain. They are hoping you will improve or otherwise they would just walk away and tell all their friends not to buy from you.

Several studies from both ASU’s Center for Services Leadership and Peppers and Rogers have also shown that positively recovering a customer from a bad experience can yield an even greater lifetime value from that customer. In fact one study showed that a customer that had a bad experience then had a good recovery experience actually increased the life time value over those customers that never had a problem.

One positive experience does not guarantee that a customer will be a customer for life either. Customers want to know that a company cares about them as much as those companies care about their own bottom line. Customers want a mutually beneficial relationship where both parties care about positive outcomes. When they have that kind of business relationship where they each have linkages to each other’s success, then that organization is what we refer to as a being powered by customers. It means they understand how to organize, align and innovate in a way that is beneficial to both customer and shareholders by having an embedded culture focused on customer success. Companies that are powered by customers greatly reduce the risk of customer rage.

In case study after case study we have seen where companies have had good profitable longevity it was not because they had the best product innovation processes but that they had the best customer relationships. In surveying 100’s of companies the number one attribute companies sought in services was relationship. They said that if they had a good relationship with a company or vendor and a problem occurred, they had more confidence that it would be worked out to their satisfaction. They felt that a good relationship meant that the vendor would know what made them successful and would help them achieve that success. When you treat customers as ‘transaction’ you ignore the relationship. When you ignore the relationship you will lose the power of the customer life time value.

Your next steps…

At ServTrans we can measure your level of maturity around customer success with our proprietary assessment. If you want to harness the power of customers contact the customer experts at ServTrans.

What makes the soft side so hard?

slider-align7

What makes the soft side so hard?

Why should you care?

Businesses and government organizations are facing rapidly changing environments and are faced with an ever increasing pace of change as a result of technology, environmental and economic shifts. Each year millions of dollars, Yen, Euro, Yuan etc. are invested in critical transformations and infrastructure changes for businesses and government organizations and yet the return on those investments seldom yields the desired results. You need to care because organizations are wasting time, money and resources without gaining the outcomes they desire.

Why does this happen?

Studies have shown that nearly 85% of these critical transformation projects fail. Businesses are inherently complex Socio-Technical Systems (see definition here in Wikipedia) https://en.wikipedia.org/wiki/Sociotechnical_system and any form of change has to be viewed via systems thinking methodologies. Systems thinking requires consideration of how people, processes and enabling technology interact to create value. As is often the case, if you only focus on the tasks to be performed or the technology tools used, then the human side of the equation suffers and the projects fail. The change process needed for the human (soft) side is perhaps the most difficult. As Peter Drucker once said “Culture eats strategy for breakfast”

Is there a better way?

There are three things that will improve your transformation results.

  • Go slow to go fast. This may sound odd but it is really about taking the time to ensure that the soft side and the hard side are aligned. Conditioning for the change is often the hard part especially if you do not understand the orders of change. If you get the soft side on board then resistance to change, organizational sabotage and other inhibitors will be diminished and you execute faster. On the hard side no amount of planning goes to waste. Let everyone know the expected results but do not force the process. Resistance will always slow the project down. Start slow, finish fast
  • Take a systems approach. This is about transforming people, processes and technology. For every shift in one of those dimensions there needs to be a change to the other two. Never underestimate the depth of change required. If you have a well laid out Enterprise Architecture or component business map of the current state, it is much easier to map changes to the desired future state.
  • Embrace the culture, don’t fight it. Dictate the results and desired outcomes and not the methods of getting there. Actively engage those affected by the change. The use of social media has created revolutions around the world. Use the right tools to socialize the change with your people and help create the revolution inside your organization. If you have the culture right, the end results will come faster, at less cost and with far better results.

How can ServTrans help with your transformation?

We are experts at understanding the socio-technical structures of organizations and how to innovate and transform them successfully. While we strongly believe that all strategy should develop from the customer lens, our methods and the key elements of successful strategic alignment remain the same regardless of your focus.

First, you need to understand general alignment around your strategy. You need to measure this alignment continuously along the path to change. Measure before, during and after the change process to ensure maximum results. We have tools to help you do this.

Second, you need to have the right leaders. Quite often change masters and masters of the status quo have very different skill sets. You also need leaders who are adaptable, able to collaborate and who can inspire others. Also, those running the business don’t have spare cycles to plan and execute large scale change. We can help with interim change masters and in building highly effective change teams.

Third, systems thinkers are needed at every level. These are people who are considered T-Shaped. They have depth of expertise in one or more domains but also have a breadth of experience and soft skills. We have the tools that will help determine the best team to execute against a given plan and to determine if they have the right set of experiences and type of personality needed to be successful.

We have the unique tools and expertise to measure and quantify your willingness and capability to successfully execute any form of transformation. Our experts have had direct hands on experience at making good things happen faster even in the most complex of environments. We give you the knowledge and tools to build the right competencies and structures for future projects.

Let ServTrans show you how to make the soft side a key strategic asset and accelerators of innovation and transformation.

ServTrans logo

“When Pigs fly….”

slider3

“When Pigs fly…” is the usual response when you try and get giant corporations to take on new business innovation. However, it now seems like winglets are developing on the swine. GM recently announced a new business venture call Maven. http://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2016/Jan/0121-maven.html

GM President Dan Ammann said while more customers than ever are buying vehicles, there is “an emerging group of customers who want to use cars and mobility in a very different way.” GM’s response is Maven, a service that began operating Wednesday in Ann Arbor, Mich., with plans to expand to an unspecified number of cities later this year. GM didn’t disclose its investment in Maven.”

So, why is this interesting? Our core motto at ServTrans around business innovation is: Ask a different question, and you get a different answer’. What we mean by this is that evolution happens as we continue to improve the status quo but revolution happens when we start to think about improving the outcomes of what we do in new ways. If you ask a company like GM, ‘What do you do?’, they would likely say that they manufacture automobiles. However if you ask them what are the reasons customers use cars and how could you make their life better, you might get a very different answer and create different solutions. Back in 2009 I had the chance to talk to several Detroit automakers, GM being one of them. We asked, ‘…what if you were a transportation services company?’, and ‘Would that change the way you thought about your business and the value you deliver to customers?’ We further specifically pointed out that with the technology already built into GM cars in terms of telematics and the ON-Star infrastructure they could dominate the car sharing marketplace while still building cars for direct ownership. We talked about “Cars As A Service” (CAAS ) and they talked about flying pigs… (See our blog back in 2009 http://servtrans.com/mobility-services-a-new-model-automobile-companies/ )

Fast forward to 2016 and GM announces MAVEN. Clearly they have started to ask the different questions. GM purchased Sidecar Technologies and is investing in Lyft Inc. so mobility services is in their plans. Julia Steyn, GM’s vice president for Urban Mobility Programs, said: “… the Maven program was not about maximizing the number of vehicles on the ground, but rather the number of customer interactions with those vehicles. She said the relevant metric would be GM’s share of overall miles driven.”

I am not trying to claim credit for the ‘Cars As A Service’ concept but it could, and should have, arrived much sooner at GM. It is interesting on how the value of customers is rising and is starting to create the ability for pigs to fly after all. Suddenly more companies are acting on what once seemed like farfetched ideas. Most important to the concept that we spoke about in 2009, and the Maven type concept, was exactly the ability for GM, et al, to be more involved in the direct consumer value streams via unique access to data. In the U.S., and most of the world, the car’s owner is a customer of the dealer that sold the car and not the manufacturer. Yet the manufacture, GM in this case, was getting all the consumer data directly from the end customer’s telematics and infotainment systems. The data was only being used for less than 10 % of its potential benefit in our opinion. In 2009 we referred to the new business innovation as the Service Oriented Enterprise and we have since revised the concept to being called ‘Powered by Customers’ because that is the potential that comes from close relationships with customers and the data that they can provide to drive future innovation.

Why does it take so long for the old economy companies to change their focus from just efficient manufacturing of widgets to that of making their customer’s lives better by focusing on customer outcomes? There is no short answer or even shortcuts to success. Even when companies like IBM figured out customers wanted business outcomes and not just computers, or John Deere figured out their value was about making farmers successful via greater crop yields or when Rolls Royce and GE jet engines figured out that the value of jet engines was only when they produced thrust to move planes, it still took years to change the people (culture) process and technology to make it viable financially to change what they did and how they did it. It is made even more difficult when investors and Wall Street strive to maximize quarterly profit goals and not long term returns. It requires new vision and different leadership to ask why CAN’T pigs be made to fly? You may never turn pigs into drones but asking the questions about why not, and what would be the value of doing so, might create a new innovation like having Amazon deliver a package to your door step via personal airborne deliveries.

On the opposite side, companies like Kodak, never asked why people wanted photos. Very simply, people took and developed photos to save and share memories. Kodak believed that they were in the imaging business and not the memory sharing business. If they had asked the different question about how to save and share memories better, faster and cheaper they might have leveraged their invention of digital cameras more and realized the power of social media instead of film media and still be dominate today. Cut into highly profitable film production? Only when pigs fly! That slogan must be etched on the walls of their many empty buildings of the now defunct business. The short sighted financial community helped push them right off the cliff and that did not fly well either.

So what’s the answer? Here is what my firm has seen in case after case. First, a number of the older companies that have successfully made the changes to a customer driven business innovation strategy vs. producing hard goods did so under financial duress. The incentive to create the ‘flying pig’ came only as result of near business death experiences. Only then did those companies start to ask different questions about what their real value might be moving forward even if it was contrary to traditional financial wisdom from investors. Call it innovation or survival, it did not come naturally. Based on our research, the real key was that the firms that survived did so because they had a great relationship with their customer base giving them unique market place knowledge about what could make their customers more successful. Once they understood their value from a customer perspective they figured out what unique resources or capabilities they had that would create new value for those customers and then they changed everything. They were willing and able to cut through old paradigms and organizational obstacles because if they did not change, they would be out of business. Using the unique customer lens helped to cut through the old ways of thinking.

We know how to make pigs fly, it is easy, just put them on an airplane. We also know how to make what is hard much easier like creating business innovation and driving the transformations required to maximize the value of that innovation. If GM had payed attention to us in 2009 it would not have taken them 6 years to announce Maven.

That is my observation, what is yours?

Rent ‘n’ Exec

ServTrans-VertLogo+tag-4CIf your plumbing backs up or leaks you call a plumber. When your electrical outlets stop working you call an electrician because those experts deal with these issues every day and have acquired specific expertise that likely you do not have. So why, when your business strategy is faltering, do you try and fix it yourself? Companies resist hiring consultants and when economic troubles hit, typically put a freeze on outside consultants. Somehow the idea of hiring “consultants” has been given a dirty name recently. Yet at times, you just need to “rent” the expertise and not own it.

Just because you are a highly paid business executive does not mean that you have the experience or knowledge to overcome certain obstacles. Just like you would not permanently hire a “Vice President of Plumbing” to fix an over flowing toilet you need not permanently hire expertise that will be needed for a short period or specific task.

Mergers and Acquisitions are good example. Unless you have a business strategy to become a serial acquirer then what you need are the experts who do it all the time and know how to make the end result successful. Successful mergers and acquisitions goes well beyond the bankers and financial experts who most consider the critical role. Once the deal is done the real hard work begins and that is one of integration of people, process and technology. These critical tasks of the integration can’t be handled by the existing operations staff alone. They had a full time job before this opportunity came along and come with organizational bias. You need expert guides and transformation expertise to augment your staff with specific skills and expertise. You need the equivalent of an “M&A plumber.”

There are 3 states of change. Current, transitional and future. You need expertise to help with the transition from current to the future state. The transition state is a different operating state requiring different competencies than the future state. The Native Americans say that you need to create a healing forest in order to make a change. You need to use positive resources (SME, etc.) to lead and manage the transition while the organization’s leadership learns and prepares for the future. Transformations of any kind need different skill sets than those people who know how to manage operations efficiently for an ongoing operation. Transformation consultants are expert change agents. Generally speaking you want them to come in, drive the change, create knowledge around the transformed business and then have them help you find the right person to RUN the new business model long term.

Today we are in a sharing (service) economy where we can have an ordinary citizen to share his/her ride or home with us on an as needed basis. We count on shared knowledge through communities of people with global experience and through online digital sources. You want access to that knowledge when you need it, you may want to retain some of it but if it is not core to you it is short lived. You may hire the plumber because of their knowledge and if you watch them work, then next time something simple happens you might be able to do resolve it yourself because you learned from an expert but you have no intention to be in the plumbing business. A good consultant augments your employee’s expertise and leaves them with new knowledge and skills.

So, don’t think of consultants as an expense that is not in the budget or a threat to your job because you do not have a certain expertise “in-house”. Think about it as “renting an executive” to augment your skills for a specific task or timeframe for the same reasons you might hire plumbers, use AirBnB or Uber. This specific core expertise is where boutique firms, outside of the big name firms excel and can save you time and money. If you need an army of MBAs to tell you where your financials went wrong, hire the big firms. If you need someone with practical experience in your industry for a short term or to lead transformation look for boutique firms who have partners with years of real world experience.

At ServTrans we help companies align and optimize their current resources and drive successful change through innovative, customer centered business models and then guide them through strategic transformations. Rent an expert from ServTrans . Want more information? info@servtrans.com or www.servtrans.com

slider-align7

Way too much B.S. in business today.

As I listen to the business news and even to my own clients talk about their business often all I can think about is calling it B.S. While what you are thinking right now might be appropriate in many cases what I mean by B.S. is BAD STRATEGY. This new B.S. is becoming an epidemic in business today.

Over all in today’s business world too little attention is spent on real and effective long term strategic planning. Companies worry more about next quarter’s results than if they will be around a year from now. Companies declare a set of goals, often focused on internally focused results versus value delivery. This declaration of goals is assumed to be their strategy. But without a plan on how those goals will be achieved and what it takes to achieve them the goals are really just intentions to achieve something and not a plan to do it. I can say I want to go Paris on vacation this year but unless I have plan to purchase tickets, book hotels, create an itinerary it is just an intention. To turn that intention into accomplishing something depends on my execution of tasks that will get me my Paris vacation. Without a plan to execute, it is all just B.S.

People confuse Mission and Vision statements and strategy. Mission and Vision are your intentions, the strategy is the roadmap on how to achieve them. Strategy requires aligning the resources of the organization in a way where the results match the intention or outcome. Failure to execute a strategy is quite often a result of B.S. Bad strategies lead to bad results. When I see a company mission statement says that customers are important and never once mentions customer metrics in their public reporting you just have to say B.S.

Here are some examples. Delta Airlines a few years ago stated they were sending all 11,000 of their customer facing people to “charm school” in reaction to numerous customer complaints and deteriorating customer satisfaction scores. Their intention was to retain and grow a loyal customer base. However, while teaching the front line how to smile and say please and thank you, they forgot about changing operating policies and personnel practices which were the real sources of customer frustration. Their people could become charming but not empowered to help customers and so it was like putting lip stick on the pig. It annoyed the pig and it was not any better looking. This was B.S. because they did not align their whole organization to achieve the real goal which was more loyal customers who were supposed to be delighted to fly Delta. News reports, viral videos and blogs galore showed that their intent was not matched by a strategic plan aligned to meet their goals.

Second example. A company declares how important customer experience is to their business. Every time the company touches a customer they want a magic moment. They want to make their brand special. At the same time someone in operations decides to outsource their call centers to an outside and often offshore vendor to save costs. While this is not B.S. per se, it becomes so when the vendor negotiations focuses on cost per call, time to resolution etc. without also making sure that the customer experience and value delivered to the customer represents the brand. Those outside service providers must be aligned to the same customer success goals as the marketing department or what the CEO may have declared as important. There is often a huge disconnect between the procurement people negotiating an outside sourcing deal and the intention of the organizations brand promise. It is B.S. if the vendor staff does not feel the same pride and project the brand values of the organizations they represent.

So, stop the B.S. by:

  • Linking intentions with effective execution and aligning resources
  • Looking ahead with a longer term plan where short term results can add to the long term success and not detract from it due to expediency
  • Get help from professionals who know strategy, let them guide your organization and coach them to become better executives focused on execution

 

Most of all without a focus on your most important assets, your customers, it will all be B.S. That is my opinion, what’s yours?