The destiny of the world is determined less by the battles that are lost and won than by the stories it loves and believes in. —Harold Goddard

Storytelling is an art. It is powerful, expressive, and perhaps the quickest path to building deep connections. When you are in the presence of a good storyteller, words take you beyond their meanings where you are presented to the world of possibilities. Its like living Sheherazade and hearing her stories from One Thousand and One Nights. I had the pleasure of working for a General Manager that had an amazing storytelling ability. Stories of our customers, competitors, market changes, hopes and dreams were his way of expressing his experiences, his vision and exploring how we could jointly create a new shared reality. For a startup within a large company, these stories are crucial for building a common future and a culture that would sustain itself when the going gets tough.

I can go on and on about the importance of storytelling for the innovation process and the leadership. However, Steve Denning summarizes the power of storytelling quite eloquently in his blog: The Secret Language of Leadership. You can read his summary here.

If you don’t know the trees you may be lost in the forest, but if you don’t know the stories you may be lost in life. —Siberian Elder

We are our stories. We tell ourselves stories about what we can and can’t do, how our world operates, and we use these stories to internalize what we experience daily through our clouded filters. If you like to know more about how our stories shapes our lives, take a look at Jim Loehr’s book The Power of Story: Rewrite Your Destiny in Business and in Life, and be ready to explore your own story.

I hope you can see the power of stories, their influence and impact in the innovation process as they shape and form our views of the world. I also hope that you recognize the importance of grounding ourselves when it comes to our stories, so that we are seeing them for what they really are. Before you read the rest of the post, take a moment and think about some of your own stories. Then, see if any of the ideas below can help ground them, so that they are more real.

Stories are a form of assumptions. However, before you take apart the whole plot piece by piece, step back and understand the overall theme, the key characters and the point of view needed for success. Evaluate each, and determine which ones need to be treated as assumptions and which ones are just flashbacks in your story that adds flavor and spice. Record each of these assumptions and start your validation and tracking process. Just as an example, an in depth understanding of your ecosystem is mandatory for a story that evolves around making your technology platform pervasive across the board. Some of those players within your ecosystem will be gatekeepers needing to be infiltrated, while others are accessory providers adding sugar and spice and something nice to your product. Make sure you are focusing on the right problems.

Get to know your storyteller. In the real world, our storytellers are a part of the human machinery that operates the thing called the corporate bureaucracy. The story might be great, and might even be true. But, if it doesn’t fit within the decision making structure of this bigger machine, it will never be a legend. So, get to know your storytellers, the structure and the decision making process they operate in. It will give you the opportunity to evolve your story, if it wasn’t quite right to begin with. Things such as, your firm’s hurdle rate, markets you operate in, revenue projections, type of customers you serve, resource and funding requirements will all play into your story somehow.

Everyone loves a good ending. So, understand your key metrics that you need to measure and track. Lets say that your story is referring to a target market size. Recognize that, it is actually talking about the addressable target market of your product, and put actions in place to grow that size overtime. Or, maybe your success truly depends on your customer connection. Then start building your customer relationship model and your brand where the customer is the keystone of your story from day one.

Every story has a point of view and a perspective that changes depending on the person involved. It is great to have different perspectives, angles and takeaways which will improve your creativity and innovativeness. However, you need common vocabulary, understanding and acknowledgement in order to execute “Ready all…Row” command properly. Take your customer knowledge as an example. Good analysis and understanding of your customer data is priceless. Yet, extracting this data unbiasedly, interpreting it appropriately and creating the right actions are your challenge. For more on this, check out How to Hear the Voice of Your Customers: Hone First-Person Intelligence From All Forms of Feedback by David Bean at MarketingProfs (registration might be required to access). So, use your stories well, and create the language and the vocabulary that your culture will understand and embrace.

Your stories have a structure (exposition, rising action, climax, falling action, resolution), and so should your innovation process. Milestones, stage-gate process, iterations, … are great way to ground yourself in the story while it evolves. Whatever process you use, make sure you have frequent checkpoints along the path to keep you honest and accountable.

Finally, share your stories with others and allow them to make it their own. Otherwise, when story is over everyone just goes home. Yes, a meaningful story can be inspiring. But for it to ignite the change you are hoping, individuals will need to believe in the story and make it their own for it to be real. In other words, when you pass the baton, someone is there to take and continue from where you left off, because they believe.

And remember: “The answer is always in the entire story, not a piece of it.” (Jim Harrison)

Technorati Tags: stories, storytelling, grounding yourself

It was the best of times… It was the worst of times… No worries, not when we have strategic agility.

Just as strategy’s roots come from the military with Sun Tzu, the foundations of strategic agility are thanks to Napoleon. By incorporating mobility and flexibility (corps d’armée system) combined with strong communication channels (communication backbone of marshals), Napoleon revolutionized the war strategies of his time. He recognized time as the key strategic element for his success, and gained a competitive advantage by identifying ways to dynamically organize and structure his attacks based on the latest information from the battlefront: a classic example of marrying strategic planning with strategic agility.

I don’t need to point out that our business environment has changed. For some, it might even feel a bit like a battlefront. Every day it is increasingly competitive, with an abundance of information available instantly to everyone, where constantly evolving technologies accelerate the commoditization cycle, not to mention we may be at the brink of an economic depression. With that, every strategic plan has the opportunity to become obsolete overnight, along with what was once your competitive advantage and differentiation. As they say, never a dull moment.

How well and how fast you predict, foresee, adjust, adapt and exploit opportunities in this ever changing environment defines your strategic agility quotient. With that, strategic agility is not just a nice to have. It should be embedded into your culture, your business processes and organization, and you should make it a key core competency and capability to enable continuous value creation for your company.

To foster strategic agility, you need to invest in many facets of your organization.

• Management by Objective (MBO): Originally rooted in HP’s management philosophy, MBOs are a great way to align your workforce to the ever-changing needs of your organization.
• Change management: Your efficiency and effectiveness at mastering change initiatives and handling uncertainty will improve your speed of execution and the flexibility of your organization.
• Communication backbone: Everyone in your organization needs to understand your business and the context for its success. Through this, they can understand the key triggers to watch, to act upon and more importantly their role for making it happen.
• Organizational learning: Your culture not only needs to embrace new and different, but also learn from past experiences.
• Organizational processes and structure: Without a well understood set of processes, new information and knowledge will be lost within the organization. Without an organizational structure that can effectively act on new information and knowledge (prioritization of projects, resources, …), one would be left wishing that the information was never observed.
• Organizational talent: With your HR team, you need to grow and recruit the needed talent and experience to execute for the future.
• Environmental scanning: Build in habits and provide tools for your organization to look for future trends. But don’t stop there; encourage communication and incorporation of your findings into future plans and activities.
• Ecosystem capabilities: You need to extend beyond your organization, to your ecosystem, and build capabilities and a communication backbone for faster response: customer relationship management, supply chain, distribution chain, manufacturing, IT, …
• Maintain a healthy balance: As with everything, you need to maintain a balanced view between adaptiveness, responsiveness, speed, cost, quality, functionality, brand and customer care.

Though strategic agility is a 2-word phrase, building the capability and skills to be strategically agile is more complex. Think of it as a pyramid of capabilities that build on each other, extending beyond your organization’s boundaries. You can utilize this framework to assess your strategic agility. Does your organization and your ecosystem have the intent, the focus towards scanning the horizon and beyond, and to what degree and depth? Do you have the right behaviors to support the intention: avoidance of analysis paralysis, creative analysis, systems thinking, the curiosity to explore and understand? Does your organization and ecosystem extend beyond now to understand new patterns formulating on the horizon, and work collectively to decode the hidden messages? Does your culture welcome new ideas and thoughts at every level? Do you have the processes and structures to make the necessary adjustments and strategic course corrections efficiently and effectively?

Strategic agility is not for everyone, at least not to the same degree. But, recognize that globalization and the speed of change is requiring every industry to embed some aspect of strategic agility into its core in order to survive, even if your sole differentiation is based on operational excellence. So, get to know thyself. Analyze your risk profile, communicate your key boundaries for decision making (hurdle rate, % of customers impacted, resources impacted, ..) and define your key change triggers that your organization must be aware of (new technology, new entrant, shifts in the economy, customer trends, …). Whatever your solution, make sure you are not the frog slowly being brought to a boil…

Technorati Tags: strategic agility, fostering strategic agility

Our world is full of slogans, so why not use them for our customer-focused initiatives? Unfortunately, slogans are just words and they do not provide the essence of what is needed to build a customer-focused organization. Frankly, just saying something doesn’t make it so.

Every business wants happy customers and strives to turn them into best customers: ones that provide repeat business and becomes your biggest advocate. They work to ensure that the correct employees are in customer-facing positions, put in place reward systems to drive their customer-focused strategy and share customer feedback and stories with the organization.

In-depth customer knowledge is also a key requirement for innovation, commercialization and business success. It boils down to how you are contributing to the success and growth of your existing customers, and how you are positioning yourself for the success and growth of your new customers. So, what you share with your employees about your customers is crucial to your customer-focus strategy. Next time, spice up your team meetings with discussions on the following items.

Define your ‘value’ from the perspective of your customer

Businesses exist because they deliver value to customers through their products and services. Your customers do not buy your product; they buy what your product and firm offers them: a solution to a problem, improvement from their current solution, better performance and quality, feeling of comfort, security, image and overall value. The price premium that your brand commands and your competitive advantage is what your customers value and are willing to pay extra for. How are you incorporating that value into your product development process, your firms services and offerings?

Lifetime value of your customers

We are all human, and our natural tendency is to relate, personally and socially, and build lasting relationships. Your customers are not interested in one-time transactions: they want to know that they can trust you, that you will treat them fairly and that there is a mutual respect. At the same time, with globalization and the Internet, they also know that they have choices.

Lets say a new customer walked through your doors. Do you know the average lifetime value of that customer to your business? How about the cost of acquiring that new customer? Think about it, how many new customers has your business lost over few dollars, bad customer service experience, unintuitive website or misrepresentation of your product capabilities? More importantly, how do you share that knowledge with your employees?

Go beyond requirements

It is all too familiar: marketing requirements, functional requirements, architectural requirements, … But customers don’t buy requirements, they buy products and services to get a job done. They measure the benefits of your product and service against how well, how fast, how cheaply, how profitably and how reliably that job is done.

In What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services, Anthony W. Ulwick outlines that for an innovation process to be successful, firms must understand what jobs/activities/tasks are the customers’ pain point, what outcome they are wanting to achieve and the potential constraints that stop the customer from using your product and service. Aligning this knowledge with your firm’s brand value is the foundation for creating loyal customers. To obtain this intimate knowledge, one needs to go beyond the ‘voice of the customer’ and actually walk a mile in your customers’ shoes.

Know how your customers judge your value

Your development team needs to know your product and service’s performance measures to design and test the product against. Your customers may not be able to articulate this beyond some standard measures: Megapixels? I dunno, just want to take quality pictures with an easy to use camera. But, how do you define and measure image quality or ease of use?

I enjoy working with customers throughout the development process. Alpha and beta tests are also great way to collect and understand what customers value, how they use and interact with your product. However, they are late in the development cycle and can be a challenge on schedules. With that, how you incorporate and learn from your customer research is even more important for your learning organization.

Know all your customers

Do you know all your customers? How well do you understand their jobs, pain points and what keeps them up at night? Just think back to the last time you were at Staples looking at purchasing a printer. Even though those products are targeted to consumers, the distribution channel partner is also a customer. The lack of readily available information about these products in the store is amazing, considering how much this literature will help make a sale. Yet, the store should be concerned about making quick sales and providing good customer service without increases in staff or training costs.

The distribution channel partner is an obvious example. Your customers may vary between obvious, unobvious and opportunistic ones. Examples could include the kids that are buying products for their elderly parents or companies that want to utilize your services for their promotional needs, such as advertisement placements on buses. Think about all customers of your products and services, and address and balance their needs and pain points.

Grow with your customers

Life is about change. Stay connected with your customers and continue to deliver value as their needs, desires, values and tasks change and evolve. If you don’t, your competitors will.

Technorati Tags: customer knowledge, innovation

Lets say that your Product Marketing manager stopped by for a quick chat, and as she is leaving she drops a bomb: “Lets implement CIP4’s JDF in the next product release.” Thankfully, you have enough self-control and can resist the urge to let numerous four-letter-words fly out of your mouth… Instead you nod your head and respond, “That’s an interesting idea. Let’s make time to talk about it more.”

Throughout my career, I had opportunities to interact with standards at varying degrees: leading the definition, and implementation or usage in my products. Though each one was fun, challenging and unique on its own way, my JDF experience definitely makes to my top 3. You see, JDF is an immense 850-page (about 3” thick) standard that covers anything and everything that relates to digital printing and the graphics art industry. So, when it gets dropped on your lap, you do take it seriously for various reasons, one of which is to keep your engineers from fainting (or quitting) on the spot.

Standards seem to trigger a love-hate relationship between marketing and engineering. This is mainly true for standards that are defined and sanctioned by a standards organization body vs. de facto industry standards. This tension can be better understood by looking at the benefits and challenges of implementing standards.

Benefits of standards:

• Standards enable interoperability among diverse and often competing products and services. Even though fax machines existed in the mid-to-late 19th century, it wasn’t until implementation of related standards (as well as reduction of cost of technology components) that they became popular in the 1970s.
• Interoperability helps encourage and build an ecosystem of complementary products and services. In many ways, it can also lead to the success of an industry. The examples span from AC outlets in your home, to the Bluetooth headset for your phone, to the USB connection on your printer.
• Customers value open standards. From their perspective, proprietary standards (or lack of standards) lock them into a product, service and/or a vendor combination. Their entire investment could be at risk if a product is discontinued, or as their needs change they may not be able to grow with the same vendor.
• Standards allow firms to focus their resources on what really counts and what differentiates them from the rest of the pack.
• Standards can drive commodization, which enable off-the-shelf availability of these technologies, tools and services. By leveraging this, you can reduce your time to market, improve overall quality and reduce your costs, such as in the case of first IBM-PC.
• Firms’ strategic direction and competitive differentiation can be built on standards, such as in the case of QualComm. Standards can help you drive your partnership approach to building an ecosystem of complementary products to enrich your technology and products.

Challenges of standards:

• Standards organizations are often comprised of competing firms, and as such the result can be viewed as just good enough, where it is built on the lowest common denominator of ideas and approaches.
• As it is a standard, it is difficult for a vendor to differentiate just on the standard alone. After all, standards are meant to level the playing field. The implementation may be limited by the standard, and lack the ability to incorporate innovations or to improve in any one performance vector. If a firm decides to add these performance vectors, such as using custom extensions, often they will break the standard, as in the case of Microsoft with Internet Explorer.
• Standards and the certification required to get your logo can be expensive. Often there are proprietary technologies that can accomplish the same task without this extra cost. It can be less costly to go with a generic RF transmission system than to be certified to the Bluetooth standard.
• The fact that a standard exist doesn’t mean it is useful or correct. Not all standards organizations take interoperability and the validation process very seriously. This does contribute to a reduction in the overall usefulness of the standard, and reduces the chances of follow on versions.
• Too often a standard is nothing more than a line item on a product data sheet. As a result, it consumes precious resources from the engineering department while not adding to the overall product competitiveness or functionality.

I personally appreciate standards as they contribute to solution ecosystem that can enrich my customers’ businesses. Here are some ways that I have learned to improve the overall standards implementation experience for the businesses that I worked in.

• Take time to educate your organization. Make sure every functional group understands what the standard means, how it enhances your product and service, what are the benefits that can be derived from the standard (benefit) as well as what it would take to implement it (cost). Too often the cost of implementation is underestimated while the benefit is over-exaggerated. So, use the education process to set appropriate expectations and align the organization.
• Analyze how the standard can be best incorporated into your product line. While the interoperability and automation may be your core competency, specific technology implementation may not be. Leverage existing resources and partners to improve time to market and overall quality of your implementation.
• Recognize that a given standard has a specific version, interoperability conformance specification and potentially other related implementation rules and guidelines. One of my pet-peeves is developing to a standard that is half implemented. Imagine putting on your product sheet “Supports standard abc version xyz, except for the following sub-sections: …..” If parts of the spec doesn’t make sense or are not useful, take it up with the standards body and improve it.
• In many cases, a given standard can open up opportunities for the overall business that didn’t exist before. In those cases where it can become a strategic differentiation for your business, such as building partnerships and alliances to enrich your overall product offering, push your organization to take advantage of it. You can also utilize these partnerships to validate the interoperability of your implementation. Talk about killing two birds with one stone.
• Decide what your overall position will be in regards to this standard activity. Is it yet another line item, potential participation in the committee, active involvement in the definition of the standard or an opportunity to lead the standard’s definition. This decision can be especially important where you have a competing proprietary solution: do you compete against the standard with your proprietary technology, do you maintain both technologies in your product line, or do you incorporate your proprietary functionality into the standard and discontinue yours at some point in the future.

In summary, though standards can be an irritation for your organization, they also can represent a strategic opportunity for your technology, your products and your firm. As a technology manager you get paid the big bucks to determine how best to take advantage of standards and incorporate them into your technology and product roadmaps. Enjoy the ride.

Technorati Tags: standards, requirements, logo compliance, interoperability, ecosystems, standard vs. proprietary, level playing field, standards as strategy

Whether we you call it a knowledge-based, idea-based or innovation-driven economy, our firms’ value is more and more driven by our intangible assets. Dr. Robert Shapiro captures this quite eloquently in NDN’s Globalization report, “The Idea-Based Economy and Globalization: The Real Foundations of American Prosperity in the 21st Century.”

This shift is evident in the way U.S. and international investors value America’s public companies. In 1984, the market value of the physical assets of the top 150 U.S. public companies – their “book value” – accounted for 75 percent of the total value of their stocks. A firm was worth nearly what its plant, equipment and real estate could be sold for. By 2004, the book value of the top 150 U.S. corporations accounted for 36 percent of the total value of their shares. Nearly two-thirds of the value of large companies now comes from what they know and the ideas and relationships they own.

Intangible assets include things that are created through time and effort: trade secrets, copyrights, patents, trademarks, source code, know-how, organizational competencies (technologies, databases, culture, capacity for innovation), business processes , company brand, customer loyalty, and not to forget your skilled and trained workforce, i.e. human capital, all contribute to your intangible asset portfolio. Though these are not physical assets that you can see and touch, they can positively effect your bottom-line and the valuation of your firm. Here are some examples:

• Famous brands: Lexus, McDonalds, …
• Coco-Cola’s formula: Merchandise 7X
• Famous logos: Apple, Google, BMW, Nike, …
• Amazon’s customer review database, Google’s search database
• Trademarks: Kleenex, iPod, Trinitron, …
• IBM’s patent database

As important as these assets are, in most cases, management of them are an afterthought. Just like anything else, intangible assets require active management to support, to build and to grow in order to maximize their value while keeping the overall cost down. At the same time, for a variety of reasons, it is difficult to properly manage these valuable intangibles.

• Challenges of putting together an effective measurement system to track the performance of the intangible assets.
• Not spending adequate time to understand your core business, its key performance drivers and how they are linked to your intangible assets. But don’t stop there: learn to how to legally protect them.
• Only focusing on your intellectual property, and not properly analyzing/including your source code, know-how, business processes, workforce skills/expertise, …
• Neglecting to put together a risk management plan for your intangible asset portfolio to defend as well as advance your leadership position.
• Solely focusing on defensive moves while forgetting to find ways to nurture and grow your intangibles.
• Intangible assets may not have direct tangible impact, and very likely complement other intangible assets, such as the case with workforce training in software quality that eventually improves revenues through increased customer satisfaction.
• Treating your intangible asset analysis as a one time activity, and not managing them as part of your strategic business cycle.

To manage your intangible assets, start with identifying them and determining how they are linked to the success of your strategy and your competitiveness. Perhaps tools such as the cause-and-effect diagram can help narrow down the field while keeping it meaningful, relevant and long-term focused. Balanced Score Card performance metrics can also help to incorporate your intangible assets with your strategy.

Next, put in place a tracking and measurement system to monitor the progress of your intangible assets. Since it can be challenging to put together an effective system, keep it simple and start small. As I mentioned before, make sure your metrics are clear, actionable, support business objectives, and based on data and facts. Finally, build internal awareness for your most valuable intangible assets.

Technorati Tags: intangible assets

TV pilots, especially the successful ones, are a great analogy for how to conduct product concept demos. At least, that is the insight I gained as I was watching the pilot episode of House M.D. You see, I am working with an early stage startup who’s getting ready for their demo to secure more funding. So, my goal is to get some creative juices flowing and get connected with my muses for more creative powers… So, lets take a look at how to build a successful product demo by dissecting a pilot episode.

First, you gotta start with a compelling concept. This does not mean you spend the next 20 minutes lecturing someone in the coolness of your technology. But, it is about focusing on the problem that you are solving, and succinctly explaining how your product solves it and why people will buy it. The key is to highlight your unique differentiation, your original angle, so it captures interest and makes people curious.

Once you got the interest, next is your story line. As you are putting your story together, keep the focus on what makes you and your product unique, as well as what its key selling points are. Remember, it is not about showing every single feature of your product, but more about incorporating your purpose and your compelling concept into your demo. If you say everything, you end up saying noting at all… So, build a story line around what matters, such as your users, and make it fantastic.

You also need to build in drama and diversity. Remember, to make it stick, you gotta make it simple, concrete, credible, emotional and bring unexpectedness with each story (Made to Stick: Why Some Ideas Survive and Others Die.) What will make the show catchy so people will tune in week after week, season after season? So, talk about the state of the industry, where things are heading, who are your competitors, why they can’t copy you and how you plan to sustain your competitive advantage. Make it exciting as you talk about the commercialization potentials of your product, what you will leverage and how. Most importantly, make it stick!

What about the special effects? Certainly who you are, the brand and the image of your company and product, needs to come through loud and clear during the presentation. However, have you ever seen a pilot episode having a better special effects than even the first season release? Make the quality of your presentation (images, graphs, …) as great as possible, but don’t forget about what really matters the most.

Lets not forget your cast and crew. After all, chemistry and ability to work together on and off the set is just as important as the artistic credibility of the individuals. So, highlight your team and their background. Especially if you have exceptional skills and experiences in the team. Remember, you gotta be credible! Not to forget truthful and passionate about what your are doing. You can’t tell it; you have to show it and mean it!

Lastly, don’t forget to study your audience before the presentation. Think about it, pitching The Man Show to Lifetime Movie Network makes as much sense as Chewbacca living on the planet Endor. So, research the backgrounds of the individuals you are meeting with and tailor your presentation to deliver to their requirements. Be confident and comfortable with your audience.

This covers the key elements of building your demo. Now, your script also needs to deal with your business model. The amount of time you need to spend on it during your demo will mainly depend on two factors: 1) how far along you are in your business; and 2) your audience. For early stage startups, many investors look at the business model as a moving target. So, with that, your story, the problem you are solving, how you are solving it and what you have prototyped is far more important than any 5-year projections.

However, that doesn’t let you off the hook. You need to have a clear understanding of your business and be able to sell them on your elevator pitch. So be ready with an executive summary of your business plan that not only they can walk away with, but also compels them to take action. In a way, this is the rolled up summary of your presentation that is clear, to the point and exciting. And, not to forget realistic.

With that… Lights, camera, action!

Technorati Tags: business pitch, product demo, chewbacca

Here are few articles that you might find valuable. Note, registration may be required to access content.

• (updated)From strategy + business: Booz Allen Hamilton’s Global Innovation 1000 study — the Global Innovation study started in 2005. Each year a different, yet related, hypothesis is tested by Booz Allen. Previously, their research showed that there is no statically significant linkage between R&D spending and corporate success. And that, you can be a highly efficient innovator without a heavy spending in R&D, i.e. high-leverage innovation (2006 study). 2007 focus was on innovation strategies and customer involvement in the innovation process. You can read about their findings and classifications of innovation strategies (Need Seekers, Market Readers and Technology Drivers) here.
• From Harvard Business Review’s January 2008 edition: “Five Competitive Forces That Shape Strategy” — revisit the Porter’s five forces.
• From strategy + business: “Blue Print for Strategic Leadership” — change is inevitable. This article highlights the critical elements that are required to build a company’s capacity for change: the commitment to the company’s purpose; the makeup of the top management team; the capabilities and motivation of people throughout the organization; and a sequence of focused, well-chosen strategic initiatives that can take the company forward.
• From The McKinsey Quarterly: “Corporate Transformation Without A Crisis” — it is one thing to lead a change under crisis, but how about when there is none? This article discusses the key principles of transformation: everyone is both actor and observer, each individual crosses a threshold of conviction and of experience, the process balances redundancy and control. The authors also highlight how to build your own transformation story.

I recently had the pleasure of experiencing Apple’s customer service. Think about it, what percentage of the population would actually use pleasure and customer service in the same sentence?

For their customer support and service, Apple has created multiple venues. One of which is their Genius Bar at an Apple Store. Ok, referring to something as ‘genius’ is a little presumptuous, but what are the other options, “Geek Squad?” My experience at the Genius Bar for diagnosing/acknowledging my MacBook issue was straightforward. First, you make an appointment online. Second, as soon as you walk in the door, they check you in to your appointment. At the Bar, they have large flat-screen monitors that regularly shows the names and the schedules of customers waiting for service. And if that’s not enough, someone will shout out your name when you get to the top of the list. So, I was in-and-out of the store within 30 minutes.

Since they weren’t able to resolve my issue at the Apple Store (lack of parts), I opted for Apple’s Mail-In Service. What an amazing experience! Less than 24 hours after calling Apple, DHL dropped off my Mail-In Service Box. Over the weekend, I packaged my laptop and called DHL for a pick-up, which went out Monday mid-afternoon. Tuesday morning, I received two emails. First one was the notification that they received my laptop. The second email, which came late in the evening, indicated that my laptop was fixed, shipped and that I should receive it in 2 workdays. Next morning, Wednesday, FedEx dropped off my laptop at 10:30am. In another words, within 2 days of leaving my house, my laptop arrived back at home.

Unfortunately such customer delight stories are rare in the industry. Yet, there are so many opportunities and touch points that are available to create value and competitive differentiation for the firm. Value in this sense refers to the amount the customers are willing to pay for what a firm provides them. A firm/product is profitable if the value it delivers exceeds the cost of developing and delivering the product.

Lets take a look at some of the generic models for examining various touch points for exploiting value for a firm. For a firm that revolves around delivering value to its customers, they will find innovative ways to create value in all aspects of these models.

Porter’s Generic Value Chain

Michael Porter introduced the concept of generic value chain model that describes a sequence of activities that are common to a wide range of firms. As shown in the figure, a value chain includes all the activities a product goes through, which also adds value to the product.

Note that each of the activities in the value chain is also linked. High quality assurance processes during technology development reduces the support/service costs in the field. This is also true from the perspective of procurement, where high quality assurance processes eliminate faulty parts, reducing the costs associated with debugging and maintenance later in the value cycle.

Note that no two firms, even in the same industry, making the same products, have identical value chains. So, how well a firm manages its value chain and its linkages determines the value they deliver and competitive advantage they gain in the industry.

Value Delivery System

Porter’s value chain concept can be extended beyond just an organization to describe the value systems. A value system includes the value chains of all the ecosystem players that collaborates to deliver value to the customers.

Think about the challenges of working with other internal groups in your company, and project it to your ecosystem of partners, suppliers, alliances and all. Don’t forget to factor in the cultural and value differences as well as conflicting priorities and goals. However, a firm’s position in this value delivery system will again differentiate it from the rest of the pack.

Customer Life Cycle

Customer life cycle describes the steps a customer goes through when selecting, purchasing, using, and all the way through disposing of a product or a service. As simple as it sounds, getting a potential customer’s attention in these days is quite a challenge. Given the availability of competing options and transparency of product information/reviews, firms need to pay extra attention to capturing the potential customers and turning them into paying and loyal customers.

Recently my husband discovered that Office Depot offers pre-paid electronics recycling boxes. You buy an empty box at the store (small, medium or large), fill it with old electronic devices, then bring it back to the store for environmentally friendly disposal. This service is certainly unusual, but for an eco-friendly person with too many old electronic gadgets and gizmos, it is certainly something worthy of TWO 40-minute drives.

Technorati Tags: value creation, Porter’s value chain, customer life cycle

Stop, don’t dismiss or shrug away that little nagging, semi-irritating feeling you get after an interaction with someone in your organization. Ask yourself, “is this a common occurrence?” If the answer is yes, it is time to look at your organization and its culture.

What, how and why your organization does the things it does and how it behaves is a reflection of your organization’s culture. It is all about how you as a collective see the world, interact with the world and what rules you instinctively follow.

Take a step back and think about your organization’s culture. You might use one or more of the following characteristics to define it. Note some are more positive than others.

• innovative and high risk tolerance
• good attention to details
• focuses on results
• values people and team work
• aggressive with take no prisoners attitude
• creative and out-of-the-box thinking
• tolerance for ambiguity
• entrepreneurship focused
• customer centric
• collaborative, open and values trust
• empowered, self-managed, adaptive and agile
• quality work is a given and not an after thought
• need to know basis only; i.e. limited knowledge sharing
• does enough, but reluctant to go further
• ownership and accountability
• not invented here
• penny wise, pound foolish or otherwise known as frugal
• do first, think later or otherwise known as just do it
• …

Yes, the list can go on and on and on… And here is why should you care.

• Your organizational culture is linked to your firms success: Various studies and surveys indicating the link between organizational culture and firm’s success. Denison Consulting’ 2006 study links high performance in key areas of the organizational culture (adaptability, consistency, mission and involvement) to long-term financial performance and short-term sales growth.

  What do you think? Can you establish cause-and-effect links between your culture and other performance indicators such as your current customer satisfaction or employee motivation scores?

• Your culture can attract and retain talent: Individuals differ in what motivates them, what degree of social and community connections they need at work, amount of pay and benefits, as well as level of innovation, entrepreneurship, empowerment and risk taking in the company. Great companies not only create excitement and camaraderie for their purpose, but also build a culture that attracts the type of individuals that they need.

  Think about it… Are you attracting the type of talent you need to be successful in your business? What is preventing you from creating a company culture where you attract best of the best?

• Your strategy and culture are joined at the hip: Lets face it, your culture has a big influence on how your company does things. This influence certainly extends to your strategy. Just think about different generic strategies: cost leadership, differentiation, fast follower, … Each of these require a different set of cultural characteristics to be successful. Along the same lines, for any change in your strategy, you will need to identify the cultural behaviors that need to be changed and managed.
• Your culture can deliver 1+1=3: When you have a high performing organization, you can truly achieve 1+1=3! By focusing on ownership, accountability, action and results you improve your product and services using the same or fewer resources. By relying on their values and leaders, successful companies can decentralize authority to succeed in times where there is a high degree of ambiguity.

  As leaders, our every action sends a message to our people: dusty action item lists, reoccurring discussions with no specific decisions or owners, late start to meetings, runaway meetings, … Just a reminder, the buck stops with us.

• Your culture defines your ethical behavior: The world is transparent and becoming more transparent everyday. Honesty, integrity and ethical behavior is no longer a nice to have, but a must to demonstrate. Sure, you can put in place as many controls, checkpoints and policies as you want to ensure ethical behavior. But, to be successful, this ethics DNA must be embedded into your culture.

  The real test comes when doing the right thing is extremely hard: schedule slippage, customers’ personal data is compromised, lower than expected revenue results, … When that happens, and they will, how do you work as an organization: conduct open, yet difficult communications, take ownership for the responsibility, ensure joint accountability, …?

Finally, here are some of the signs that hints your culture needs work:

• second guessing/revising of decisions;
• execution issues and problems achieving results;
• inability to deal with or tolerate ambiguity;
• excessive workforce turnover;
• living in the past rather than facing to the present;
• loss of confidence in the leadership, direction and purpose;
• excessive politics and bureaucracy;
• firefighting mentality that rewards heroics;
• inability to innovate and risk adverse behavior;
• difficulty attracting and retaining talent;
• lack of respect;

Technorati Tags: organizational culture, why organizational culture important

In a previous blog, I discussed the various barriers to innovation that you might have experienced or will experience at one time or another. Although the roadmapping process will not address cultural or organizational issues, it is a flexible approach that when combined with other strategic planning tools will help drive focus, alignment and understanding for your innovation portfolio.

A firm’s strategic intent is its vision of what is possible and what it plans to achieve in the long term. As Porter stated, essence of strategy “is not doing something better than your competitors but doing something different - choosing a unique and reliable position that is rooted in systems of activity that are difficult for others to match.”

Roadmapping provides a structured framework for exploring and defining potential paths and gaps that will aid in achieving the future state the firm desires. If the strategic vision is the general direction with a destination in mind, roadmapping is a process that aids in a step-by-step plan that shows how to get there, with the roadmap as the output. Basically, roadmapping is a strategic planning process that:

• aligns and communicates the business need: know-why;
• outlines actionable steps and interdependencies between the steps: know-what;
• drives an understanding of the alternate routes and tradeoffs to optimize resources and risks: know-how;

Roadmapping is a flexible process that integrates various views of a business (product, technology, market, capabilities, …) as a multi-layer time-based presentation. It was first used in the semiconductor industry in the 1970s to align technology, market and product directions. Today it is used quite widely in industry as it delivers many direct and indirect benefits to the organization. In summary, roadmapping and roadmaps:

• Organizes and integrates cross-functional views (market, industry, customer, R&D, …) as well as business and technical issues;
• Documents complex decisions and dependencies in an easy to digest form;
• Gives a long term direction by combining different planning horizons (product, market, technology, operations, processes, …);
• Requires multi-disciplinary, cross-functional effort which can result in better teamwork, shared ownership and communication, thereby generating alignment and engagement across sites;
• Establishes clear understanding of what needs to be done, by which order, and forces to firm to prioritize investments and make the needed tradeoffs;
• Helps identify gaps and competencies that need to be developed to be successful in the future;
• Offers an effective communication tool to be used with customers, suppliers and partners to gather reactions, and establish synergies;
• Provides continuity in strategic planning process by integrating planning and vision phases;
• Enables the firm understand and fund the capabilities and assets needed tomorrow to be successful today;

Roadmapping is an effective process that will help identify key synergies, dependencies and gaps within a strategic plan. It also aids in effective decision making and enables better communication and alignment, especially across disparate teams and organizational boundaries. This is a process where the journey, i.e. roadmapping process, is just as important as the output: roadmap.

As roadmapping is a flexible process, it comes in many different forms: market, technology, product, service, capability, science/research, product/technology, … You can represent your roadmap in whatever form best meet your needs, as long as you keep in mind to show the integration of key pieces of information in a multi-layer format with a time-line. Following Porter’s guidelines on strategy, your roadmap should answer the questions to: how your firm will compete, how your firm will deliver a unique value, and how your firm will maintain that unique position in the market.

You can get a glimpse of a firm’s roadmap, even when it is not explicit. Basically start with the firm’s vision/mission statement and strategic intent, and analyze its past and present product, service and technology offerings. This will give you a good idea where the firm is today and where it will most likely explore tomorrow. Here is a quick look at Motorola, Dell and Google, as examples.

Motorola is one of the pioneers in utilizing technology/product roadmaps. Given that, it is baffling to see how they got caught without a 3G phone, and didn’t recognize the changes in their end-customer tastes and desires. I previously blogged on Motorola’s product line, and what looks like a single minded focus on their innovations. An accurate, non-biased roadmapping process should have clearly highlighted these risks and shifts in the marketplace. However, based on a recent WSJ article (you’ll need a subscription), in-fighting might be the reason behind their problems. Motorola also indicated the challenges of achieving bottom line growth as they mainly focused on new product development, without focusing on the process or operational improvements. Again, the roadmapping process can help integrate and align market, product, technology and process activities and investments across the firm’s innovation portfolio.

Dell’s mission “is to be the most successful computer company in the world at delivering the best customer experience in markets we serve”. Their 2006 strategic corporate initiatives are: “driving Global Growth, achieving Product Leadership, enhancing the Customer Experience and developing our Winning Culture“. Given this, coupled with challenges of the direct sales model in emerging markets, it is no wonder to hear the rumors that Dell is considering channel sales. However, Dell will need to do more than just another cheaper PC, or Linux bundled laptops, or more customized/personalized color options on their systems to yet again achieve the most successful computer company in the world. What do you think will be the next business model innovation in the computer industry?

Google’s mission is to organize the world’s information and make it universally accessible and useful. With that, Google’s Office Suite (Google Docs and Spreadsheets, and now Google Presentations), and other collaborative products seems out of place, as they are about collaborative content creation. However, looking at the fact that Google is mainly known for its global presence, collaborative tools could provide the leverage Google is looking to create virtual groups, and organizing information along that vector. Although today, these tools work only online, given the growth in emerging markets, and customer desire for maintaining local data, it is quite likely to see a future architecture that would combine the local data with online content, perhaps building on top of Google Desktop. On another tangent, one of the biggest challenges for Google is the low switching costs associated with search engine. With that, integration of analytics, better and more targeted search technologies, and APIs increases the switching costs for customers, so I would expect to see more targeted and personalized search results, as well as additional products along the lines of analytics and SEO in the future. At the same time, there is a growing concern towards Google for knowing and collecting too much information about anyone and anything. Given that, what are potential products, customer services or business models Google might bring up in the future to combat that concern?

Next time, I plan to dive into building roadmaps, specifically in the context of technology/product roadmapping process.

Technorati Tags: roadmapping, strategic planning process, roadmaps