Previously

Good management strategy and practice supported by intelligent modern systems

Lernaean Hydra, your time is up.

Give big data the heave-ho for now and get a birds-eye view of your business without a single nosql database.

Here’s how we approached the solution

Naturally I can’t publish the whole thing if only for sheer volume, let alone sensitivity of information from some of the underlying cases, but I will pick a few areas just to demonstrate the approach and hopefully let readers see how. At this stage we have a high level description of goals we need to achieve, but before we get to the point where we have plans with timescales, budgets, resources, success criteria and all the other important things, we need to know a little more about what is involved in each solution, whether we have the capability to do it successfully, what order they need to be done in and what impacts positive or negative each solution might have. We also need to produce business cases to establish that the investment in the solution is at a level that provides an acceptable return taking into account any risks and opportunity costs and finally we need to establish measurement means and metrics in order to track benefits. Before thinking about delivery of something like this you have to first analyse the receiving organisation and understand the dynamics into which you are introducing solutions. Everything that is wrong is as it is for a reason and sometimes that reason is a force that is still in place and waiting to thwart your best efforts. Using models can sometimes be overkill, especially when used by enthusiasts rather than pragmatists. In reality if box doesn’t need ticking don’t tick it, but the time it took to decide that was a very small amount of time well spent in the interest of thoroughness.   Already, the small section of this picture we picked upon has exhibited a complex web of problems that impact each other in many ways and we have as yet not even attempted to find solutions. The identification of solutions and selection of the best approach to each is the next important step. Once we have this in place we then need to start thinking about how these solutions will be delivered successfully within this specific organisation.   In order to demonstrate the method, lets take some examples that are not too complex or too simple. I will select thre problems to address but later I will focus on just one of these in order to keep this readable. 1. Poor packaging. 2.       Poor help and support.  3. Low skilled staff. Having again used the “ask why 5 times” approach we came to the conclusion that: 1). Staff were not trained because we had no written materials with which to train them. Even the offshore staff could be trained if we had the materials. The reason for no materials is that we bought the hardware in Asia and the little black and grey manuals in 6pt txt were unreadable and unfathomable, but we just accepted this as par for the course in our business. We accepted it because nobody had veer suggested any other potential solution and there was a assumption that had we ever considered doing it, it was probably very expensive. The main reason though was that we felt we had already paid for this and were not willing to do it again. On top of this, there was no role in the hierarchy with accountability for the customer experience. 2). Help and support was poor because support staff had no idea how to help them and were only there to listen and to deal with total failures demanding returns. 3). The packaging was poor because we accepted the Asian packaging aimed at a different market, language, culture and price-point and never took responsibility for this, nor did we ever appreciate the importance of packaging in the user experience.  Visit diagram 1 in the last episode for a reminder of the user journey A simple dependency chart revealed the order of attack and we had a plan.

dependency
Dependency chart

There are a few headings you need to use when considering an organisation in this context: Here is an example of a very simple and fairly abstract table used for this purpose.

Goals Create legible training and help material Design attractive packaging and instructions Train the support staff
Participants   New people need to be hired or reallocated for this New people need to be hired or reallocated for this The people who develop the material are ideally placed to train as well
Social structure This activity has never been built into the structure and currently there is neither budget nor accountability in place. The knowledge Is with suppliers and in another language. . This activity has never been built into the structure and currently there is neither budget nor accountability in place Purchasing are money focused not customer focused and they buy this stuff in Asia very cheaply. This activity has never been built into the structure and currently there is neither budget nor accountability in place Sales staff walk away when the deal is signed leaving nobody responsible. Customer service is seen as a cost base
Environment This stuff is purchased by “Commercial”. They are a law unto themselves and seem to have gained almost untouchable status. Ideally they should be considering this type of issue when selecting a supplier. Sales won’t touch this.  It needs a place of importance in the structure This stuff is purchased by “Commercial”. They are a law unto themselves and seem to have gained almost untouchable status. Ideally they should be considering this type of issue when selecting a supplier. Sales won’t touch this.  It needs a place of importance in the structure No consideration has ever been given to training Recently we outsourced most of it and this has made matters even worse. Nobody seems to have much contact with the offshore call centres and it is a very hot potato just now
Processes The process currently involves receiving batches, spot checking goods and then checking them into the stock control system. QC happens again just before dispatch but it is poor and often there is an acceptance that support will have to carry the can. Sales have sold and dispatch have dispatched. The process currently involves receiving batches, spot checking goods and then checking them into the stock control system. QC has no interest in packaging they only consider the hardware items Nobody questions the quality of packaging, support or other peripherals. People ask the guy next door when stuck and they tell customers to read the manual, or they are if in doubt, to  send it back

Before you can attempt to drive these changes through, you need to understand the way decisions get made in this organisation. Remember we are not doing this with the intention of changing or fixing any of these behaviours, our only goal is to make the most of what we have in order to deliver our changes. There are three fundamental lenses we use to look at decision making in organisations, and in the interest of remaining jargon-free, lets call them Rational, Political and Garbage can. There is usually an element of all three but generally there is a strong leaning in certain functions such as in this case programme management. In this organisation it looked something like this: There are a few headings you need to use when considering an organisation in this context: Here is an example of a very simple and fairly abstract table used for this purpose.

Goals Create legible training and help material Design attractive packaging and instructions Train the support staff
Participants   New people need to be hired or reallocated for this New people need to be hired or reallocated for this The people who develop the material are ideally placed to train as well
Social structure This activity has never been built into the structure and currently there is neither budget nor accountability in place. The knowledge Is with suppliers and in another language. . This activity has never been built into the structure and currently there is neither budget nor accountability in place Purchasing are money focused not customer focused and they buy this stuff in Asia very cheaply. This activity has never been built into the structure and currently there is neither budget nor accountability in place Sales staff walk away when the deal is signed leaving nobody responsible. Customer service is seen as a cost base
Environment This stuff is purchased by “Commercial”. They are a law unto themselves and seem to have gained almost untouchable status. Ideally they should be considering this type of issue when selecting a supplier. Sales won’t touch this.  It needs a place of importance in the structure This stuff is purchased by “Commercial”. They are a law unto themselves and seem to have gained almost untouchable status. Ideally they should be considering this type of issue when selecting a supplier. Sales won’t touch this.  It needs a place of importance in the structure No consideration has ever been given to training Recently we outsourced most of it and this has made matters even worse. Nobody seems to have much contact with the offshore call centres and it is a very hot potato just now
Processes The process currently involves receiving batches, spot checking goods and then checking them into the stock control system. QC happens again just before dispatch but it is poor and often there is an acceptance that support will have to carry the can. Sales have sold and dispatch have dispatched. The process currently involves receiving batches, spot checking goods and then checking them into the stock control system. QC has no interest in packaging they only consider the hardware items Nobody questions the quality of packaging, support or other peripherals. People ask the guy next door when stuck and they tell customers to read the manual, or they are if in doubt, to  send it back
Programmes Commercial Sales Operations
Rational behaviour   Logic and rules above all else, including sometimes common sense Programmes insist on business cases and examine the rationale when a project or programme is ready to begin All decisions are made on a cost basis and calculated don to small fractions of percents Most decision are driven by pound and pence targets Ops is mostly rational and processes are driven largely by systems
Political behaviour   Worrying about impacts on self ahead of all other concerns There is a Program Office that insists on following certain procedures and everyone in this is very careful to be seen to follow he rules regardless of the outcomes of their chosen behaviour. There is some political thinking in terms of correct behaviour when dealing with vendors but apart from this it is not a prevalent force. If anything the odd corner is cut when maybe it should not. Lip service is paid to the rules but they are broken as and when it can be done without too much risk. The outcome is everything even at the expense of negative impacts The rules are more important than the outcomes in Ops, nobody gets sacked for following the rules
Garbage can   Jostling to get own pet projects ahead regardless of what is  best for the business Deciding which project gets started and funded is almost entirely about jostling for space and funds with others. When it is politically favourable then old campaigners will quickly suggest their solutions to the problem of the day ad grab some budget. For all the process, it is mostly organised anarchy No real evidence of this behaviour mode This months target is more important than anything including the long term good of the business Little evidence of this behaviour

Who are the key stakeholders and what is their interest? Now lets diagram the key stakeholders who can impact delivery of our project.

stakeholder proximity chart
stakeholder proximity chart

Above you see a representation of the various groups involved and the distance apart represents their level of interest and involvement.  The ones outlined in Orange are the ones directly impacting the customer experience though as you can see some could scarcely be more remote and detached from it. Others such as finance and Purchasing are key drivers if not always actors in the state of customer experience, though mostly unaware and disinterested. Clearly there is work to be done to rally these stakeholders sufficiently to deliver a result.       Here is another view from a communications viewpoint communications matrix

  1. Clearly we need to convince finance to release some capital. Finance are mostly outcome driven, though they also like to stick to process so  until we present a strong business case correctly presented, we will not achieve much.
  2. We need Operations and Customer services both to adapt new ways and this will stir up certain rivalries that need to be handled by HR.
  3. We need HR onside for process changes, but also because we are recommending a Head of Customer Focus to champion the customer experience and have jurisdiction across channels and across departments form the proposition right through marketing and sales and support and who above all else, will be accountable for customer experience. We need a well defined and supported plan with clear structures and accountabilities for any changes and enlist HR in refining this, debugging it and implementing it. We can then get their moral support.

 

  1. We need Purchasing to get much more involved with the customer experience aspect so they understand the total cost, not just the hardware when making their decisions and we need to communicate better with external and offshore customer service people. This will be a substantial change for purchasing and will need to be carefully planned with HR to ensure there is sufficient incentive. .

Finally we will need to take a closer look at the technical situation to see what is possible and how big a job any changes might be.   The technical solution was twofold.

  1. We needed to purchase a  Knowledge Management System to keep track of the training materials and make it available to the website, the trainers and the customer service staff as well as to the SME and author teams who would keep it up to date.  There are many good COTS versions available and this is a straightforward technical solution.
  2. We needed an ESB solution to hold a single copy of each piece of critical information in SAP so that we could access it quickly in high volume and without putting any strain on the SAP installation. This we would need no scaling of SAP and no high cost integrations for each new web page or system. A standard ESB would provide simple APIs, web services and publish subscribe PUBSUB approaches for our dev teams.

Before   before integration architecture or as-is     After Integration target architecture   The programme plan     Let’s now create a first draft of the programme for this one chosen problem of high customer support  costs and low customer satisfaction. Do remember that we are not trying to document an entire programme in a blog and there will be major omissions, but do feel free to bring this up in the comments section. Below are the key headings

  1. The vision and benefits. Important changes in any organisation or even in an individual rely on beginning with a clear vision of the future and why you want to get there. This vision should motivate you along the way and provide guidance in times of ambiguity. The benefits should form a solid business case and stand up to close scrutiny.
  2. The journey Every vision entails a journey and it is made up of a beginning, a middle and an end. The middle will develop fully later when we get into project planning, but for now the” where we are”, “where we want to be” and a high level understanding of “how we will get there” is what is needed to get off the ground. The important thing about the middle is that we include the business and IT changes required to drive benefits along with technology.
  3. Knowing when we have arrived. Benefits measurement strategy and progress monitoring are both part of this.

We must have a measurable outcome to focus on even if the measurement metrics seem vague to some, we also need a way of knowing how we are doing while still on the journey to the first deliverable. Remember that there are usually deliverables in the sense of process, or technology to come first and quickly followed by business change and benefits realisation. Before the process or technology changes are made there is no opportunity usually to begin on delivering and measuring benefits. I am not about to blog an entire Programme plan so I will leave you t imagne the remainder.

Give big data the heave-ho for now and get a birds-eye view of your business without a single nosql database.  

Previuosly

Good management strategy and practice supported by intelligent modern systems

Lernaean Hydra, your time is up.

Two question must be answered up front :
1. What value does your business delivers best?

2. What do your customers think of it?

Let me explain. One enduring rule of business is “find a hungry mob and feed them” and the other one is “stick to what you do best”.  You’ve probably spotted the potential for a mismatch here. I am assuming that when you find that hungry mob you are very good at feeding them. We are just talking about things like menu, ambiance, pricing and how you operate in the kitchen and waiting departments here. We are also very aware that value is in the eye of the beholder, that is why we are asking the second question.  The answers to these questions are deeper than you may have thought and understanding the cause and effect relationships within the business requires an organised approach, yet you’ll be surprised how simple it can all be made.

 

Lets begin with; what value do you deliver and where it comes from.

Perhaps you believe you know the answer to this; We provide widgets

For the sake of argument: You are a Gas supplier and you are relatively successful but you have known for some time that you are at risk from bigger chains and you need to differentiate and to up your game. Your profit margins are less than they might be.

Lets take the Porter view. ( “Competitive Advantage” Michael Porter ) First we break the activities of the business into Primary and secondary activities. Primary activities are engaged in providing value to the customer e.g.  Receiving and distributing internally -> Making stuff-> Delivering -> marketing and sales -> After Sales Service. This is the coal face. Each step, even Marketing and sales adds some value for the customer and your business is able to capture this in profit after paying for the cost of delivering it.

Secondary activities are engaged in helping run the business, e.g. HR, IT, Finance, etc. Trimming and improving secondary services can improve bottom line, but it will have minimal impact on the core of a business according to the theory, but when you are able to see the direct links between supporting services and the value or lack of it that you deliver to the customer and your costs incurred, then you may look at some of these secondary activities in a new light.

Furthermore, it is clear that since Porter’s book “IT has moved to straddle the two categories and then onwards to dominate the Primary classification for an increasing number of businesses. (Successful ones)

 

Porters strategy firm “Monitor” went out of business in 2012 unable to pay it’s debts. To quote Steve Denning in Forbes it was “killed by the dominant force: the customer“ The model below is focused primarily on the customer.

1. Each primary step in the customer journey needs to be understood in terms of the actual activities that deliver value for the customer and in this way you will be able to quickly see what adds value and what is letting you and your customer down. Value for a customer is seen in terms of what the customer is doing and what that customer is thinking, feeling and experiencing while in the process.  Remember, that experience is very important or even crucial part of the value proposition with both positive and negative propensity.
2.  It can be remarkably enlightening to see the customer journey alongside of the disconnected systems, functions, departments and cultures within your business.

3. No solutions of any value can be outlined until the true impacts and interrelations of actions are understood

 

Below is a combination of examples from actual projects I completed in various sectors, but I have changed some of the details and left out a lot to hide the client identity, only including enough data to demonstrate the principal.

For arguments sake let’s assume the client was a Telco and the product area was domestic mobile phone packages in the UK with the usual blends of calls, texts, internet and hardware. In the background to this small piece of customer focused work, there was a backroom battleground involving the shut down of call centres resulting in the resignation of a C level executive, firing of a senior manager and outsourcing of remaining call centres to India in an attempt to reduce the cost of customer service. There was a hot potato being bounced back and forth and where it fell it was felt.

 

For the sake of argument let’s say the customer lifetime was 4 years and the cost of customer acquisition was £240.00. Average revenue per customer was £600 a year. Immediately you can see that customer acquisition cost 10% of revenue.
-Each year a customer remains the annual profit margin on that customer increases.
-Another way to look at this is: every time a customer needs help and ca’nt get it there is a 25% chance they will leave and the cost of replacing her will be £240.

That means £240 * 25% = £60.00 down the pan for each frustrated customer.

Bear in mind now that reducing costs in order to declare increased earnings was the main goal of the business at this point in time. Perhaps you already see an anomaly here?
Some research done with a small number of focus groups and some with customer services people

demonstrated very clearly that:

a) Customers shopped around as their current contract came to an end and were mainly driven by the best handset they could get and often focused on the current most popular handset.

b) Many customers were on mailing lists of competitors who knew when the contract would end and mailed them with offers ahead of this date. Good offers.

c) Customers who had received unexpectedly large bills recently (last three months) were much more likely to leave, they hated surprises even more than they disliked the nuisance of changing supplier.

I proceeded to map some of this information in context as per example below.

Customer Stage  Forward planning Researching online and stores Purchasing Organising for receipt of product Getting familiar Dealing with issues Renewing Changing package Leaving
Doing Talking to friends/ keeping abreast Browsing shop windows/ websites Looking for best deal, least hassle, warm feeling Waiting for delivery Struggling to learn new interface and get all songs and contacts across Getting help with complexsettings Responding to offer of a replacement handset Calling to get help changing Demanding a PUK code
Thinking I always like to have a phone I can be proud of in my peer group I wonder if I could be doing better I don’t want to find next week that my friends are paying less or getting more I hope everything arrives as planned so I am home to receive it I must get used to the core stuff quickly so I don’t get in trouble. Well soon find out if that annoying advert was a lie, I bet they cant be bothered to answer the phone even -I should be shopping around but the others are probably just as bad and anyhow -I don’t have time right now,I cant wait to get out
Feeling I need to always  carry the right status symbols Insecure Nervous and unsure, in need of reassurance excited I love opening an attractive package that’s presented well Disappointed with the level of support, but not really surprised.I’m frustrated with the difficulty of finding what I need on this website.I don’t have time for this.Angry about a huge bill with no explanation and confusing bill – Resigned to being let down, or- Determined to leave at any costFeeling of power and sometimes an appetitive for revenge Confused, by packages, apprehensive
Experience Mildly amusing 

 

Interesting but sometimes overwhelming A nerve wrecking experience for most Positive Frustrating for some, annoying for many,Very negative if no help can be had Generally a negative experience, sometimes very negative Positive mostly especially when they are a new customer having just left another supplier balanced Positive and expecting better things with new supplier
Business function and location Web services- LondonRetail-  North East Web services- LondonRetail- North EastDirect marketing- London Local ShopOnline 

 

Payment provider

Courier -LondonDispatch -North east 

Shop- Local

Manual – ChinaOnline support – Outsourced India  Manual – ChinaCall centre –IndiaShop- Local Call centre-LondonShop- local Call centre-LondonShop- local Call centre –Indiaand 

Call centre-

London

 

 

Systems eCommerceERP(Two separate systems) eCommerceERPCRM

 

Web stats

 

(Little or no integration between these three.

We don’t know if it is the same customer!)

eCommerceERPCloud service

(Payment system is totally external and data cant be accessed)

Cloud courier apiERP{(No integration available, ERP nows nothing about courier progress) (Little or no communication happens here.
Call centre handles own training from the manual.All a bit up n the air.)
Inbound CRM is separate to central CRM and there is no knowledge of these inbound calls in other parts of the business for the most part The local call centre is trained to retain customers when a call is sent to them. Their conversations go in the CRM and others are aware of it The local call centre is trained to retain customers when a call is sent to them. Their conversations go in the CRM and others are aware of it Calls are transferred to retention team who try to bribe them. No analysis of this ever happens afterwards

Table 1

 

 

We decided that we needed more detail in some key areas to support our goals and help us solve issues we had identified through the web stats, the CRM and the eCommerce data.

First we looked more closely at the purchasing cycle and here is a representation of what we found.
Purchasing

 

  1. We have different personas who differ somewhat in their behaviour, but a safe catch all is to say that our customers never stop shopping around for alternatives. Within hours of getting the product they are telling friends and getting comparisons.
    Often they find that they could have done better elsewhere, sometimes via our own channels. When this occurs there is major loss of trust by an existing customer, but when others do it, it drives potential customers to us.
  2. The desire to change product, upgrade, or move may also begin when a new must-have feature hits the market and the customer’s friends are getting it. This can sometimes happen within days.
  3. Loyalty to the actual product brand is strong but loyalty to our brand is weak, we have no kudos like a product maker has. They can have the next version of their favourite cult phone, but still find a new provider.
  4. It was difficult to find any real logic behind most purchases, fundamentally the customer fell in love with a handset and then needed evidence to justify this purchase and the price they would pay. The fear was hidden costs, surprise bills, or looking foolish when their friends got a better value deal.
  5. The channels were confusing them, they saw deals online, but when they went to our shop, either it was not there, or it cost more, or sometimes less. They couldn’t understand this. Once we were losing heavily to an online competitor who undercut us by just £1 a month, wile we had a better deal hidden away in many of our shops. Nobody could explain that.

 

Here is the journey simplified

 

  1. In contract but keeping abreast of new stuff and new deals
  2. Close to time for a new deal and really researching online and asking friends and social media connections ( 20% will call or to cancel )
  3. Nearing decision time, has a strong preference that she can’t really afford and a second preference and shopping around for the best possible deal
  4. Decision time and now in a blind panic. What if it is cheaper next week?, Should I go for the cheaper of the two or indulge myself?
  5. Trying to place the order and the quirky ecommerce system keeps complaining and asking her to re-enter stuff. (38% leave at this point according to our records –in fact we know the precise page and we have found out why)
  6. Order placed and still wondering if she should cancel before it arrives (Another 12% will cancel)
  7. Package arrives and enjoying the quality of the packaging and the beauty of the new phone. Upset by the dreadful manual and having to learn a whole new set of menus etc. ( 30% end up calling in for support and waiting up to 15 minutes before spending a further 40 minutes on the phone)
  8. Nervously transferring data and hoping not to lose anything ( Only 5% now lose data and support can usually help them)
  9. Ok happy customer. Along the way we lost 70% of those who started and made ourselves very unpopular with about 20% of the remainder i.e. 6% overall.

 

Causes of Churn

In simple terms, although there are several problems identified, we found three causes of people calling in to end a contract.
i. The 6% we annoyed by giving a poor experience when they received the last product.

ii. Receiving unexpectedly high bills that left them suddenly short of cash at the end of the month. This caused particular and lasting annoyance, especially when the bill was incomprehensible.

iii. The 18% who called customer services and had very poor experiences ranging from incompetency, to occasional lack of sympathy to confusing IVR and unacceptable delay times.

In addition, although we couldn’t quantify the affect, we found those who had bad experiences talked about it publicly in social media while the others were silent and the overall appearance was of a lot of unhappy customers. This was very imbalanced and clearly damaging.

To keep this simple and get the most holistic view, we used two problem solving techniques to get to the bottom of things and prioritise our actions.

 

Problems  don’t happen in isolation, nor do solutions act in isolation, therefore a holistic view is a critical starting point. Below, I recount two simple techniques I frequently use when solving systemic problems like those we discussed last week <<Click here to open last weeks instalment in a new window>>

 

We identified problems and sub problems:
The technique is simple; ask why and to the answer ask why again. Do this five times before you accept the explanation. At this point you will have a new insight and abetter understanding
Propositions struggling to compete and losing grounds.

 

Caused by:

Positioning on price point + struggling to compete on cost

High cost per customer = low margins

i.e. We could accept low service, or we could lose in the battle on price

margins

We drew an affinity diagram to track the interconnections between these problems and sub problems.

Pretty early on it became evident that the quality of the customer experience was core to the customer churn which in turn had impacts not just on customer numbers, but subsequently on our ability to offer a competitively priced proposition. A classic vicious circle.

diagram1

Diagram 1

 

To focus on the key aspects and explore the causal route a little more we took the key causes out of the affinity diagram and used them to build a cause and effect illustration.

As you will probably notice this helps remove some of the noise and focus in on more critical factors.

The relative  importance of the various factors was tested with high level business cases that demonstrated in very clear terms what the financial implications of each issue and potential negative impacts where relevant.

 

The result looked like this;

diagram2

 

 

Diagram 2

 

The figures demonstrated clearly that improving the product and delivery especially at Moments of truth and   becoming customer focused would reduce the traffic to the call centre sufficiently to counter balance the cost of a decent service and still improve the margins enough to give us the option of being more competitive.

Problem 1  High costs
What our research also told us was that with an improved service and happier customers we would be under far less pressure to compete with the cheapest competitors,

Problem two dwindling sales

 

The second primary cause of High customer acquisition costs and dwindling sales was weak marketing

Our research into the causes of weak marketing highlighted a systems issue. In simple language, marketers had insufficient access to key customer data and live systems like ecommerce and “myaccount” lacked the information needed to offer the right help to customers at the time they needed it i.e. when they were on our site seeking it.

 

The underlying causes was totally technical. The entire business had been migrated to run on SAP at a cost of obscene numbers of millions and reputations were at stake so no hint of deference could be entertained. Frankly it didn’t work and this was mainly down to being implemented without full understanding of the business need.

Within a year of implementation it became clear that accessing SAP to get basic information about a customer for another system such as an eCommerce site cost an unbelievable 1million plus per interface.
Not only that, but the levels of traffic to SAP from a busy eCommerce site would have driven a further investment in licenses and hosting beyond most people’s imaginations.

On top of this round trips to SAP in its current implementation was slow even when available.

We could have a website and customer services with no customer knowledge or fork out millions on upgrading an already obscenely expensive piece of technology.

We needed a way access key  data that was in SAP about our customers in high volume and with very fast trip time in order to answer questions on the customer service desk and to serve intelligent web pages on our sites

Good management strategy and practice supported by intelligent modern systems

Let’s begin with the strategy and management practices before we start talking about systems.

In the last instalment, we talked about schizophrenic businesses. Businesses with confused outlooks, confused processes and naturally enough, confused systems, confused workforce, resigned customers, despairing shareholders.

The five cardinal sins that create schizophrenic organisations:

  1. You have a business made up of a number of recent acquisitions and you were always too busy to complete the business change aspects, so now you have one logo and 17 brains, in other words semi-organised anarchy.   This is painful and confusing for everyone and often a difficult environment to work in if you need to deliver things to a quality standard and meet targets. This can’t be fixed with technology alone, in fact often the technology is the one thing that got fixed, at least sufficiently to manage the finances.
  2. You bought the best systems straight off the Gartner list and now there is only one way to run the business; the Oracle, Salesforce, SAP, Microsoft way. Tough! It has it’s advantages, but the price is a very high one and the road out of this is expensive, but achievable by the very bravest and most resilient and worth the money.
  3. Your CIO needs to be the first with every new fad. He gives powerful presentations and gets his own way, then yet another expensive toy sits on the racks generating heat and costs. This is a very common situation and seems to have become worse right through the recession when one might have expected common sense to prevail. Fixing this needs engagement and dogged adherence to the principal of “so what?”
  4. You have had six years of cost cutting to keep the earnings figures appearing to rise. Every trick that could seep past auditors has been exasperated and now you have only the skeleton and one ear of the monster still switched on while the magic machine generates one more great interim report. This beast could be in trouble and making the changes you need will demand capital and commitment
  5. You follow the right methods with systems, but you have a confused collection of people in incoherent departments with conflicting goals and your entire business is a collection of silos that resembles an over busy cluster chart.  This is even harder to put right because unlike 1, it is culture rather than circumstance and technology can’t fix this alone.

Who are we listening to? The staff? The shareholder? Customer? Society? Anyone?

I take a simplistic view of business. In my view it serves three groups of people in society and though this it justifies it’s existence. When it ceases to serve any one of these groups it is on the slippery slope.

1. It returns income to investors in some form. These investors are often the very same people that pop up in other stakeholder groups such as customers and employees except these stakeholders are typically saving for their retirement and relying on the business to keep their nest egg safe. The business has a legal and moral duty to these stakeholders.

2. Employees make lifelong commitments to businesses and rely for their income, security and even their physical and mental well-being on the environment where they work, the remuneration they receive and the opportunities and stimulation it provides. In fact when you take away the employees there is no business left but a piece of paper. Again there are substantial legal commitments here as well as moral duties.

3. In a free market, the customer is the only reason the business is able to exist. If it fails to satisfy the customer, she will walk and the business will close down with loss of capital and jobs for the other stakeholders. When customers stop buying whole economies close down This is why the customer is number one. In theory at least.

4. The business can not ignore its duty to society. The peaceful stable environment, the transport infrastructure and the healthy educated workforce all are provided by the host society and must be paid for. Business exists for society and not the other way around, though most no longer are anchored in any specific  nation let alone society.
In practice today, the most powerful stakeholder in the business is senior management in whatever form. Modern market driven business cycles give little time to deliver and rarely allow for forward thinking. Horizons can be very short term and stakeholders can be forced into poor decisions to satisfy very short term demands.
Next in the order of power is the investor. The investor will take her capital elsewhere unless she receives a dividend or perceives a promise of capital appreciation  through whatever means.
Typical financial tricks to keep her happy include: misreporting earnings, misappropriating funds, cutting costs though reducing service to the customer, inflation . . .
Most capital is managed by institutions and they have short term very selfish goals that don’t often reflect the actual investor they represent.

Right at the bottom of the power list comes the customer. This is not the forum for a discussion on modern free markets and the growth of the big brand, but we all buy the same stuff from the same, or similar companies and we all know that you can go through hell to cancel your broadband, mobile, gas, current account etc only to be faced with an almost identical, if not worse service when the new one finally kicks in and the price, if significantly better won’t be better for long. The majority of non cyclical sectors are tied up in oligarchy (at best) and the opportunities for start-ups continue to decline as more of the local high street or Mall is gobbled up by multinationals the ancestral home of Lernaean Hydra.

The typical budget each of these suppliers have set aside for convincing us  that they love us even more than the opposition do and will be our best friend forever, is in most cases many, many times greater than the cost of booting out all the misconceived cost cutting measures and just giving us a great service.

Worst of all, most of the service calls are a result of; bad product, bad documentation, bad service, mis-selling, or untrained, demotivated, underpaid staff and there is a  much more effective solution if anyone was interested.
Does my broadband provider really think I want to get up in the morning and spend a few hours on the phone to their staff? Of course I don’t, I just want a service that does what it promised and to be charged as per the agreement for it. Apart from emergencies I don’t want to hear from them.

Don’t get me wrong, I have seen empirical studies proving via brain scans that consumers received substantially more pleasure from Coke when they knew the brand and consumed it from familiar branding despite the fact that preferred Pepsi when it was presented in incognito taste tests. Yes branding, when done well, not just creates illusions, but it creates real value. I do however refuse to believe that even if the monster had only one head and a very pretty one at that, I could ever be brought to feel pleasure at switching on my lights because the electricity was supplied by Gobblydegook PLC, or look forward to the next blackout so I could call them.
Dig out that business case for your “close the call centre project” and verify it a little. Now ask yourself how much you really saved net. Then ask yourself how much you will have to spend to replace the customers who left in exasperation and to counteract the low murmur of dissent on Facebook and Twitter.

Now collate a years worth of marketing communication for about a dozen customers who represent customers at different points in the customer journey (you do have one?), e.g. new customer, changing product, etc etc. Tally up the total cost of this including all the calls handled as a result and minus any new business generated from this activity and this will give you an indicator to use in your revised business case. Prepare for a shock.

Put yourself in the shoes of this customer and ask yourself; what did all this noise actually say to that customer about our business? Are you seeing 19 headed monsters again?

I have been though this exercise a few times and I could write about this all day, but you have to do it yourself to learn anything and you have to be interested enough to want to know, or this whole discussion is of no value to you. When you finally get to the point where you are ready to understand where these problems are coming from, there are tools you can use that throw light on this in remarkable ways and I will be introducing them in a later instalment.

Finally do remember, there is a time for taking the investor and the employee into account, after all, there is no point in serving a customer well if it is not profitable, and the days are gone when we are justified in enslaving people to expand the family pile, but when you are thinking customer, keep the others at bay and just focus on customer experience. Don’t have the guy who wants some branding experience on his CV decide what the customer would like to experience any more than you’d let the customer decide what final dividend to pay.

Tune in to the next instalment to see a very neat way of getting a 360 degree birds eye view of the relationship with your customer and 20:20 vision of how to bridge that gap.

Lernaean Hydra, your time is up.

Give big data the heave-ho for now and get a birds-eye view of your business without a single nosql database.