Posts on Sep 2020

The One Year, Thirty Minute Challenge :: Week 39 :: Strategic Planning :: Annual Plan

Strategic Plans fail at an alarming rate. According to The Balanced Scorecard, 90% of businesses fail to execute their strategies successfully. According to onstrategyhq.com, 95% of employees don’t understand their organization’s strategic plan and 60% of companies don’t link strategy to budget. If those are the stats, why even engage in the Strategic Planning process at all?

First, there’s value in the process. General, and later President, Dwight Eisenhower said, “In preparing for battle, I have always found that plans are useless, but planning is indispensable.” Every plan, whether it’s for a military campaign or for running a donut shop, is built on informed theory and assumptions. But the minute those plans are implemented, they become vulnerable to forces outside our control. The enemy has more artillery than we anticipated. The muffin shop down the street lowers their prices. Does that mean it’s time to abandon our plan? That all our planning effort was wasted? No, it means just the opposite. If we exercised the discipline to plan thoroughly, we contemplated multiple actions and the anticipated outcomes for each. We chose one, or possibly a couple, of those actions and assembled the resources to execute it. But the real value in planning was that we analyzed all of the possible actions, all of the possible outcomes and all of the resources necessary to execute those actions. Now this knowledge is at our disposal. So, when reality collides with our plan and our initial choices don’t seem so wise, we already have a wealth of accumulated thought on how to readjust and redeploy our resources to still achieve our original objective.

Second, there’s value in the discipline. It is very easy to be caught in the tyranny of the urgent. Crises with employees, customers, vendors, equipment, and money can consume every waking work minute. Dedicating time for deliberate planning gets us off the hamster wheel of constant busyness. The discipline of –

  • thoughtfully examining our human resources – the people we have now and the people we’ll need in the future
  • carefully evaluating our value creation activities – supply chain, transformation activities, vendor performance
  • revisiting our financial management – liquidity, cash management, return on invested capital
  • carefully considering our market – customer problems we are solving, messaging, competitors
  • taking the temperature of our organization – culture, metrics

helps us see things clearly and truthfully with fresh eyes and more accurately plot a new course that moves us closer to our vision for the organization.

Finally, the biggest reason that Strategic Plans fail is lack of execution. Execution must be baked into the plan from the beginning and pursued fanatically through the entire organization as the plan is rolled out. A good Strategic Planning methodology leans heavily to the implementation side.

Let’s jump into this week’s One Year, Thirty Minute Challenge. Clearly you won’t finish your thirty-minute exercise with a strategic plan, but that’s not the goal. The goal for this week’s challenge is to identify the people who will be involved, set up a time and decide on a process.

  • Good strategic plans require input from up and down the food chain. The larger the organization, the more difficult this becomes. As organizations grow, people at the top necessarily move away from important value creation activities and customer interactions. But it’s just those activities and interactions that must inform future strategic plans. The first order of business is making sure that all the information you need to get an accurate picture of the current state of your organization is in the room. Gathering that information and involving people in the strategic planning process who can accurately interpret and advocate for the stakeholder interests represented by that information is crucial.
  • Put in on the calendar and don’t let anything displace it. Find a time and make it happen. Depending on the size of your organization and how solidly your mission, vision and core values are defined, it might take a day, or it might take a week. If you’ve spent time to carefully define your mission and vision and are solid on your core values, you can jump straight into your strategic planning exercise. If those things are new to you, you’ll want to spend time on those first. For a frame of reference, when I’m doing this with a client ($2 – $20 million in revenue), we go at least 3 full days or 6 half days or a bit more depending on what we find as we define the current state of the organization. Once you’ve put it on the calendar make sure you protect the time both for yourself and for those working with you on the plan.
  • Decide on a process. There are a number of good strategic planning processes and tools out there. They range from the one-page variety to more complete and detailed frameworks. Remember, much of the value is in the discipline of the exercise, so no matter the framework, utilize fully, think deeply and create deliberately. Here are the things you want to look for in whatever framework you use.
    • Get an accurate picture of the current state of your organization. One of the most prevalent and most damaging mistakes in a strategic planning exercise is failing to get an accurate picture of where you are now as an organization. You spend a lot of time on where you want to go but not nearly enough on where you are now. How can you make a map from here to there unless know your current location? Find a tool with powerful assessment tools.
    • Create several fully-loaded future scenarios. With your knowledge of the current state of your organization, your assessment of your place in the external environment (with customers, competitors, regulators) and the efficacy of your products or services to successfully solve problems for current and potential customers, craft a number of strategic alternatives. These alternatives might solve a personnel problem, correct an operational deficiency, exploit a market opportunity, recreate an existing product or service or tech-enable your customer experience. Some alternatives might play well with others. Some might be bold and very different from what you’re doing now.
    • Evaluate and choose the best opportunities. Your framework should give you tools to evaluate your alternatives in the light of financial return on investment (measuring the impact on shareholders in the long-term and in the short-term). You should also evaluate your alternatives considering employee experience, customer experience, regulatory compliance and, of course, in how much the alternative will push your organization closer to your vision. This part of the exercise should yield three, or at the most four, initiatives that you’ll be implementing over the next 12-18 months.
    • Execute like crazy. Employ an implementation framework that lets you rollout the why and the what for the selected initiatives to every person in the organization. This framework must enable every team member to connect the dots between their job and the new initiatives. It must include accountability mechanisms and a scoring framework so that everyone knows how the organization is progressing toward its strategic initiatives.

If you want to safeguard the long-term health and viability of your organization, you need to do a regular Strategic Planning exercise. The discipline of critically evaluating your organization and making measured course corrections is the best insurance I know to keep you out of the trash heap of irrelevant, failed enterprises.

If you want more information on the strategic planning framework I use, contact me at mchirveno@clearvision.consulting.

The One Year, Thirty Minute Challenge :: Week 38 :: Operations :: Customer Onboarding

There’s nothing more critical to a great customer experience than onboarding. Many times, we limit “onboarding” to something we do with a new employee, but every stakeholder in the organization should have an onboarding experience. Onboarding sets expectations, defines responsibilities and describes “winning”.

In this week’s One Year, Thirty Minute Challenge, we’re focusing on customer onboarding, but many of the outcomes and methodologies can be applied to other stakeholder groups.

Here’s why onboarding is so important. Have you ever received a movie recommendation from a trusted friend and, after watching the movie, realized you’d never get those two wasted hours of your life back (or in the case of Dances with Wolves, 4 hours)? It’s pretty disappointing. But why is it disappointing? Because the friend’s glowing recommendation created high expectations. In the absence of that recommendation, you might have still hated the movie, but you would have just added it to the list of movies you’ll never watch again. But now, you’re presented with confusion. You’ve had reliable recommendations from that friend in the past. What did you miss in the movie that your friend loved? How are you going to explain your disappointment to your friend? Will you ever be able to trust their recommendations in the future?

That all stemmed from faulty expectations created at the beginning of the interaction. We can have the same problem when we begin a relationship with a new customer. If we don’t successfully create correct expectations at the beginning of a relationship, the customer will create their own. Those will come from experience (the last time I hired a plumber, it took them an hour to replace my kitchen faucet), from hope (I would love it if the plumber spread a tarp in front of the sink before they began working on the drain) and from people who influence them (my friend hired a plumber and it cost them $300 to get their sink unclogged).

Let’s jump into this week’s exercise. We want to finish with a rock-solid customer onboarding framework. Depending on your product or service, this could be very simple or a bit complex. You can do this one solo or invite some trusted team members who are familiar with the flow of work from initial customer contact to delivery. We’re going to focus our attention on three things – expectations, responsibilities and metrics.

Before I jump into the steps below, let me quickly say that I’m aware we’re talking about a mix of communication, some before the sale and some after the sale. I realize that in some pre-sale messaging, you’re selling a feeling or experience (someone buying insurance is buying peace of mind in the midst of an unfortunate circumstance, not a policy). The bulk of the ideas below are to create clarity of expectation, responsibility and metrics. You decide where to deliver them in your messaging based on your product, service and desired delivery experience.

 

Expectations

  • Succinctly describe what product or service the customer is buying (A great meal at a great price, the most sophisticated timepiece you’ll ever own, you’ll never know your car was wrecked).
  • Give clear direction to the first step in the discovery or purchase process (Visit our showroom at 123 Main Street, contact one of our friendly customer service representatives at 555-555-5555, click here to schedule an initial appointment).
  • Explain the steps in which you create value for the customer (It all starts with a free health assessment, we’ll email you the results of the assessment along with our recommendations, in three days we’ll contact you and get your decision on which weight loss program is best for you, we’ll kick off your exercise and diet plan, and by week 4, you’ll be down 10 pounds).
  • Explain what interactions will look like (you’ll never be stuck in voicemail jail – a real person will always answer the phone, you’ll be able to manage your account from anywhere on our award-winning mobile app, you’ll have unlimited support via email with a 4 hour guaranteed response time).
  • If your product or service has inherent uncertainty, explain the path from uncertainty to certainty (When our technician arrives to examine your appliance, you’ll get a full explanation of the problem and a complete estimate of what it will cost to fix it. We’ll get your OK before we proceed with any repair. And when it’s fixed, the parts and labor are guaranteed for one year).
  • Explain the customer’s financial responsibility ($99/month for the first six months, then $129/month for 33 months, there’s a $400 administrative fee on top of the price of the car). If you want to make customers extremely unhappy, bury some previously undisclosed cost in the fine print.
  • Explain what will happen if something goes wrong (our workmanship is guaranteed for 10 years – if your roof leaks, we’ll fix it at no charge to you, if this isn’t the best snow-cone you’ve ever eaten – your money back, if you don’t like the like the paint color you’ve chosen with our patented color match system, we’ll repaint your room for free).

 

Responsibilities

One of the key parts of customer onboarding is explaining the customer’s role in the delivery of your product or service.

  • Define deadlines (For your policy to be in effect by 10/11/2020, we need your driver’s license number and the VIN from your car by 9/30/2020, to terminate your lease please notify us 180 days before the renewal date).
  • Explain their involvement. The number of used treadmills, ellipticals and Chuck Norris Total Gyms on Craigslist owned by people who are still overweight are a testament to the number of customers who don’t embrace their responsibility during onboarding. Customers buy, what appear to be, solutions to a problem they are experiencing. Clearly lay out the steps they must take for that problem to be resolved. And explain the how, not just the what.
  • Provide engagement tools. Think about the number of companion apps you have for the products or services you consume. I can lower my thermostat, manage my robot vacuum, change the payment method for my car insurance, and get a reminder when my Home Depot credit card bill is due on my phone. Each time you make it easier to interact with your product or service, you help the customer derive more value from the product or service, make it easier for the customer to fulfill his or her responsibilities, and ultimately solve their problem. Engagement tools don’t have to be as sophisticated as a mobile app. I recently got a bid from a roofing company to replace my roof. Part of their proposal was a checklist for me to follow before they began work on my home. The checklist explained not only what I needed to do, but why it would aid them in quickly solving my problem (getting a new roof on my house in the minimum amount of time and with the least amount of expense).
  • Give examples of customers who have successfully engaged the product or service and achieved the desired results. These examples inspire, inform, and help customers connect the dots between what the product does and what they must do.

 

Metrics

Everyone wants to “win” with their purchase. In the onboarding experience, we need to accurately identify winning for them.

  • Help customers measure leading indicators, not just trailing indicators. If they buy exercise equipment, “winning” is working out 20 minutes a day and cutting their caloric intake, not losing 20 pounds. If they do the former, they will get the latter.
  • Help customers attach greater meaning to their purchases. The financial planner’s 1% annual management fee isn’t a cost, it’s an investment in someone who devotes their professional life to helping clients secure their financial future and the financial future of the client’s family.
  • Help customers attach greater reach to their purchases. The business coaching purchased by the CEO doesn’t just benefit the executive. All who work for that executive benefit as he or she becomes a more effective leader and pushes what he or she learns down through the organization. And, by increasing the organization’s effectiveness and efficiency, shareholders benefit.

 

When expectations, responsibilities, and metrics are clearly defined for a new customer, everyone involved in the equation knows how to behave. If the company fails to deliver on the expectations, they can quickly make it right. If the customer fails to live up to their obligations, the company can jump in with a bit of accountability and encouragement to get the relationship back on track. When both parties agree on what “winning” looks like, they can track it with reporting and reinforce it with messaging.

The One Year, Thirty Minute Challenge :: Week 37 :: Strategic Planning :: Bullets Then Cannonballs

In his 2011 book, Great by Choice, Jim Collins introduced the concept of “Fire Bullets, Then Cannonballs”. Create a low-cost, low-risk product or service launch (a bullet) and measure its success. If the bullet came close to the target (good consumer appeal, more profitable, potential to capture more share), recalibrate (refine the offering, improve the delivery, hone the messaging) and fire again. In the course of this iterative process, when the bullet hits the bullseye (confirmed by data), invest in the proven offering and craft a fully developed product or service paired with a strong launch (a cannonball).

It’s easy for a person or an organization to become enamored with an unproven “cannonball” that’s going to propel the organization to the front of their industry (or create a new industry) and cause their revenue and profits to soar. We love the idea and our ego convinces us that we’ve found a unicorn. To be sure, those cannonballs are out there, but, compared to the number of companies and product launches, those products or services are, as they say, scarcer than hen’s teeth. Plenty of companies have lost money (and investor’s money) by shooting unproven cannonballs from the beginning without any evidence they would find the bullseye. For most of us mortals, the path to sustained competitive advantage is bullets first, then cannonballs.

In this week’s One Year, Thirty Minute Challenge, I want you to spend your exercise identifying opportunities in your organization where you can craft some bullets. Take these six “bullet starters”, get your team together and take a virtual walk through your organization. See how many bullet opportunities you can identify.

Create a Pilot Product from Scratch – Over the last few years, software companies have taught us the value of creating a Minimum Viable Product (MVP). For example, early versions of Gmail, Evernote and Google Docs had only a fraction of the features they have now. That’s because the purpose of the early versions was to gauge interest and commercial viability. When it became clear that the products had potential, only then was more development effort expended to make a full-featured product (and the development goes on today). Can you create a minimum viable product to explore a new market or a new segment within an existing market?

Change the Customer Experience – Could you increase conversion rates for new customers, increase retention rates for existing customers or streamline internal operations by changing the customer experience? Maybe you could deliver food to tables instead of calling a number or change the automated call routing on your phone system, making it easier for a customer to talk to a live person. Make small, measurable changes and survey customers to get their feedback, plus track the financial impact. If customers respond favorably continue to tweak the customer experience until customers experience function, form and feeling when interacting with your organization.

Create a Stripped-Down Version of an Existing Product – One of the things we hopefully learned from the coronavirus was the ability to pivot. If our successful, three-day, onsite training program wasn’t an option, what do we do to make money? Strip out one of the topics from one of the days and create a webinar. It sells for a fraction of the price and customers can consume it from their home. Look for the opportunity to deconstruct an existing product or service and sell a stripped-down or fractional version. You might find that smaller micro-offerings are more profitable and have the added advantage of opening the door for larger sales later.

Create Another Product from an Existing Product – Many years ago, back when I had a corporate job, one of the smartest things I ever saw my former employer do was take something worthless and make it into something valuable. In their heyday, newspapers accumulated thousands of pictures each year. Only a small fraction of those ever made it into the newspaper. So, what do you do with all those unused pictures? My former employer made them into coffee table books. They identified several themes – architecture, sports, signs – just to name a few, and, combing through decades of pictures, put together fascinating collections of photos in very cool coffee table books. So, what assets do you have that you could recompile into a new product or service?

Develop a Strategic Partnership – If you run a service company – let’s say an exterminator, could you begin to offer wildlife removal services to your customers by partnering with an existing wildlife removal service? This type of relationship allows you to “stick your toe in the water” with very little downside risk. If the test goes well, you might consider a merger or acquisition, or you might add that expertise to your staff and expand your service offerings?

Tap the Collective Genius of your Team – For years, 3M operated with the “30% Rule” – 30% of revenue had to come from products created in the last 4 years. To fuel that initiative, 3M authorized 15% time – 15% of your work week can be devoted to projects that are interesting to you, not mandated by your boss. Post-It Notes and light-recycling lens (a $100 million product) came from 15% time. Google, for a while, crafted their own version (in their case 20% time). Gmail, AdSense, Google Maps and Google Talk were born from 20% time. I’m not saying you need to give employees a day a week to do what is interesting to them, but I am saying there are ideas ruminating in the minds of your employees. You need to create a mechanism to get them out. Fund some pilot projects that come from employees. You might find a future cannonball.

Here’s a quick bullet primer as you begin your exercise –

  • Use speed as a differentiator – Make a product variation where the price is cheaper but delivery is slower or make a product variation where the price is higher and delivery is faster.
  • Use geography – Limit the reach of your bullet. If you’re going to start delivery, do it in a small radius. If you’re going to introduce a new product, only offer it in one of your locations.
  • Remove risk – Use a freemium/premium model – a stripped down version for free, a version with more features for a fee.
  • Build testing into the bullet launch – Take advantage of A/B testing. You can keep an existing product or customer experience for a control group, then offer your “bullet” offering in another group. Or you can make a couple of similar bullet products (or messaging options) and launch them together. Track them side-by-side. If your bullet offering is sold online, there are dozens of tools that will facilitate this.

 

Select two or three bullet opportunities from your list, recruit a project sponsor from your team for each of the bullet opportunities, create the bullets and launch them. Measure demand and solicit feedback. Be brave enough to kill the bullets that are too far from the bullseye, then be relentless iteratively honing and relaunching those that show promise – eventually crafting cannonballs.

The One Year, Thirty Minute Challenge :: Week 36 :: Technology :: Big Data

According to Statista, in 2010, the total of amount of data collected worldwide was 2 zettabytes – or to use a unit of measurement you might be more familiar with, that’s 2 trillion gigabytes. In 2024, that number is projected to hit 149 zettabytes. All that data isn’t kept, so IDC predicts that by 2025, the world’s accumulated datastore will be 175 zettabytes. According to Forbes, we (collectively) generate 1.7 megabytes of new data per person, per second. And here’s maybe the most interesting fact of all, according to IDC, less than 5% of that data will be analyzed.

So, why is any of that important in the world of the One Year, Thirty Minute Challenge? Companies who capitalize on the data available to their organization by –

  • Identifying what parts of that data directly impact their financial performance
  • Making meaning of that data with expert analysis
  • Turning that analysis into actionable insights
  • Changing organizational behavior based on those insights
  • Measuring the financial impact of those changes
  • Making additional changes based on those measurements

are seeing results. Here are a few examples from Tech Republic.

  • Supply chain safety and theft detection enables companies, with help of item-placed sensors and business intelligence, to reduce in-transit theft rates of supplies from 50% to 4% and to detect when the environmentals or seals on shipment containers have been compromised.
  • Logistics tracking and routing using business intelligence and machine-based data/sensors optimize delivery routes and driver habits creating fuel savings and better service.
  • Collections work at companies is avoided by learning more about customers who are behind on their payments through big data aggregation and business intelligence that can predict who in good faith can pay their debts with a little help–and then helping these customers keep their purchases and keeping companies from having to write off defaults.
  • Buying habits and preferences of consumers are better understood and lead to increased sales.
  • Predictive maintenance enables urban tram systems to stay online, reroute traffic where necessary, and flash adviser alerts to customers over their mobile phones while repair crews are dispatched to replace faulty components before the components actually fail.

Big Data doesn’t just refer to just the volume of data available today, it encompasses the “4 Vs” of Big Data –

  • Volume – Certainly volume is an important part of the equation. We have internal data from our CRM and ERP systems that tell us about vendor performance, product performance, customer behavior, employee performance and a host of other things. We have external data from social networks, online review sites and more. Because of the Internet of Things (IoT), we have data that originates not just from the actions of our employees or customers, but from inanimate devices connected to the internet. So, we can know the number of times a door opens and for who, the temperature inside a shipping container and when a client’s copier is low on toner.
  • Variety – This data comes at us in multiple ways. Structured data from internal systems where we’ve controlled what is collected and how and unstructured data from external sources. We might get a text from a customer with a video of the dishwasher we just fixed showing us that it’s still doing what it was doing before we “fixed” it, a Google review, a Twitter DM, a reading from a sensor on our delivery van alerting us to a tire pressure problem and the list goes on.
  • Velocity – If the previous two aren’t enough, maybe the most daunting is the speed at which it comes at us. Last minute’s data reporting that all is well, is superseded by this minute’s data reporting a problem on the factory floor or a customer unhappy with your product or service. Multiply those by the number of inputs (customers, employees, vendors, sensors) and it can seem overwhelming.
  • Value – In actuality, this is the one that matters most. Of all the data collected by your organization, what really impacts financial performance, customer experience and employee wellbeing (ability to do their job effectively and efficiently)?

One more thing before we jump into this week’s exercise. Big Data requires different skills and tools than the traditional reporting you’ve pulled from your internal systems. First, because of the mix of structured and unstructured data, you’ll need a data management infrastructure that can manage both. Second, you need someone who can help you navigate this new world. You can hire a data scientist or you might opt for outsourcing this part of your work to a vendor specializing in Big Data Analysis. The most rudimentary Big Data analyses are looking for trends (each month for the past six months, distributors of our product in the Southeast have reported a stock out. Each month, it’s been earlier in the month than the month before), patterns (customers whose first purchase from us is product X never make another purchase, but customers whose first purchase is product Y have an 80% chance of being a repeat customer), and correlations (in the Fall, the first time the temperature dips below 50 degrees canned soup sales double and stay at that level until the first time the temperature hits 60 degrees in the Spring). A Data Scientist can help you start thinking in this vein. Third, in addition to the infrastructure tools to do the heavy lifting, you need visualization tools that help you easily see what this large amount of data is telling you. Even if the data scientist tells you everything you need to know, you want to roll this information out to everyone in the organization who can benefit from it. Good visualization tools will allow them to consume large amounts of information (and make sense of it) more easily.

For this week’s exercise, I want you to identify some problems or opportunities in the organization where Big Data-generated insights might make a difference. Here are some thought starters –

  • More callbacks on service calls – Is it the same technician? Are they working on the same brand of equipment? Are replacement parts from the same vendor failing at a high rate?
  • Inventory management is more challenging than it should be – Can you get access into distributor data so you can see when distributors are most likely to place a reorder? Is a single vendor slowing production with late or defective products?
  • Customers seem uninterested in a new product or service – What is the factory defect rate on this product vs the defect rate on its predecessor? Have customers who purchased the product commented on social media regarding the product? Is it especially unpopular among your customers who purchase another product from you?
  • We have too many employees during some shifts and not enough during others – Can you examine sales by hour for the same day of the week last week or the same week last year? Can you examine the nature of sales during each shift – selling a hand-dipped ice cream cone is more labor intensive than selling a bottled soft drink?

Take your list and contact a Big Data company for a consultation. See if it makes sense to do a pilot project.

Big Data is the foundation for technologies like Machine Learning – the improvement of computer algorithms through experience (people who bought this book also bought this book, powering your Amazon recommendations) and Artificial Intelligence – when a system “perceives its environment and takes actions that maximize its chance of successfully achieving its goals” (think Big Blue playing chess against a Grand Master, examining the chess board and making the optimal chess move).

Of all the technology assets in your company, data is the most important. It catalogs the past behavior of your employees and customers. And the best predictor of future behavior is past behavior. Don’t neglect the power of this asset to solve problems that have puzzled you for a long time.