CEO

Your Digital Resolution for 2017

Is your company ready to absorb what you're going to throw at it this year - more customers, higher sales, lofty revenue targets, and elevated customer service expectations?

Embracing a "digital" mindset will not only help through the tools it brings - better analytics, big data, mobile, and cX (customer experience) tools - but can transform an entire company's culture to be more customer-centric and better able to execute quickly and accurately.

Middle market companies want to understand how to evolve into this new paradigm and avoid the cost, disruption, and risk of jumping in all at once. To that end, here are three simple things you can do in 2017 to get your team ready for digital transformation:

1. Focus on creating a culture of execution

Why

A organisational culture that is not built for speed or set up for continuous improvement will impede the successful delivery of digital projects,
— Kapil Bagga, GROW-Strategy.com

Digital is all about execution - constantly improving how you serve your external and internal customers and constantly innovating, implementing, and iterating. Achieving small execution victories will build a culture that prioritizes action and will serve as an example for long-time employees about the value this mindset brings.

Just as importantly, an execution culture knows how to fail small and move on. This is difficult for historically risk-averse environments and takes strong leadership to change.

How

  • Execute a project in Q1. Pick a project, a small project. Assign it to someone. Ask them to create a plan. Assign a team. Meet for status weekly. Make sure it's adopted by the business. Simple!
  • Do at least one technology project. No matter what industry you are in, software will be a major driver of your capacity to execute over the long-haul. Bring in the right people to help decide on the project, choose how to do it, and manage it through to execution.
    • Simpler projects can include reorganizing your inventory, improving how people are quoting, or rolling out a new sales tool to your staff.
    • If the business is ready, extend yourselves by touching a large system and more people - inventory control, time and expense tracking, order management, or even a full-blown ERP or CRM project.
  • The goal should be to get someone in your company to plan and execute a project, to improve one very specific area or solve a specific problem, and to prove to your people that not only can changes make things better for them, they can be done with little disruption and be led by people you have.

2. Start a mentoring program

Why

Digital requires collaboration towards the goal of total company achievement. Succeed together on small things that mean something big for the company. This means everyone in your organization needs to support each other and be vested in one another's success. Mentoring relationships send a strong message about how you intend to grow people internally, allow them to develop over time, and how your most experienced people need to invest in the next generation. The best encourage open and honest dialogue without fear of retribution. They also serve as arguably the strongest way to retain and grow young talent.

(C) 2016 Ronan Consulting Group, LLC

How

  • Start small - assign one or two junior staff members to experienced staff who have the mentality of a mentor
  • Create a simple list of topics you expect them to work on (avoid developing a complex framework of expectations). Examples could include career counseling, identifying key skills to develop, helping them network within the company, or exposing them to more of the marketplace. They could even include 360-degree elements with the younger staff member expected to teach the experienced staff member something specific.
  • Set aside budget for them to go to lunch occasionally 
  • Meet with both every 6 months to see how it's going. Don't ask for a formal report - just make sure they are talking about important topics for both the company and the junior staff personally. Contrary to popular theory, I do NOT advocate measuring the program off the bat. Evaluate it qualitatively first, then move towards a more structured program later on.

3. Start planning your digital IT function

Why

Effective digital tools require a number of foundational capabilities - a strong ERP/CRM and enterprise systems platform; a level of consistency with your business processes, and baseline technology skills throughout the organization. The odds are, you have some deferred maintenance in these areas. You may not be able to dive in right now, but you can plan the specific steps to prepare your organization to get there over the next 12-18 months.

For example, a central piece of your analytics strategy will be analytics. In their 2016 Tech Trends report, Deloitte called out "information acquisition and curation" and "information delivery" as two key elements of an analytics program. These items require strong underlying enterprise systems, disciplined processes, and well-established integration between your systems. These are all items you can work on now before you make the investment to dive into the latest and greatest analytics tools.

How

  • Create a roadmap to get to the digital future you want. The right consultant will ensure the roadmap is aligned with your overall strategy and contains the foundational elements required to quickly evolve into a digital model.
  • In the little projects we discussed in point 1, make your people accountable not just for implementing, but for monitoring success and improving the systems once they are being used by the business; and second, focus on agile development - constantly rolling out small improvements that add up to something substantial over time
  • Start vetting vendors who may offer long-term relationships to help build your digital capabilities. Make sure they are selected in a way that aligns with your roadmap long-term 

Even if you are just starting to think about digital, that's still a huge step in the right direction. Commit to spending the next year setting the stage for digital and beginning to evolve the organization in that direction.

Tolerate small failures, learn as a team, and generate lots of new ideas. Learn the digital marketplace - webinars, conferences, vendor demos are all great, easy ways to do this.

And have fun. Digital capabilities are exciting - enjoy the journey!

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Three ways to think differently in 2015, Part 1 of 3: Strategic Reactions

Happy new year and welcome to our first blog entry!

This week I will look at three new ways of thinking about something you will undoubtedly spend time and money on this year: technology.

  1. Strategic reactions: Exception handling as a means of driving strategy – 1/6/15
  2. “Enabling” vs. “Driving”: The issue with treating technology as an “enabler” – 1/8/15
  3. Technology and talent: Improving the experience of work through every technology project – 1/9/15

Strategic reactions: Exception handling as a means of driving strategy

The way the discourse around technology operations unfolds is always similar: you can either spend money reacting to problems (IT Operator) or growing the business (Strategic Driver). The problem with this reductive conversation is it understates three realities:

  • Even if you're driving strategy, you will still need to react to issues;
  • Technology will probably drive the implementation of your strategy whether it's incidental or intentional; and
  • Most businesses do not bifurcate responsibility for technology operations and technology strategy.

It is unlikely you have the luxury of technology that runs itself without any exceptions and therefore be allowed to fanatically pursue all your strategic goals. On the other side, you will necessarily need to engage in a technology project over the next 12 months to either keep up or to "enable"/“drive” strategic business improvements (more on this on Thursday). The question is how do you do execute the latter while managing the former?

Framework: Visualizing Reactions and Strategy

A more constructive conversation, in my mind, is one of tradeoffs that recognizes the strategic potential of any solution. Consultants sometimes use "process maturity" analysis to help executives understand where on the scale of reactive to strategic their technology decisions fall. This approach is that it implies a binary relationship between solving problems and driving strategy. This does not reflect the reality of how technology, which is now pervasive in every direction of your business, needs to work. You will have more issues to deal with in the next 12 months than you will have projects to drive: this is a guarantee. Great executives will make this work for their strategy. 

I am a proponent of speaking in terms of gradients rather than discrete scales. There are necessary tradeoffs you will need to make, sometimes prioritizing strategy and sometimes prioritizing operations. That’s ok. Is it possible to make some of those operating decisions also drive strategy, either in the short or the long term? Frequently you will find they can.

So rather than a straight-line or x/y axis maturity matrix, I prefer this visual: 

  • Dark blue represents basic operations, or “running the trains on time.” This makes your business work pretty well without substantially improving underlying functions 
  • Light blue represents incremental improvements that will either add up to something significant when combined with future improvements or will make it easier to do something big in the future. This can include adding functionality or reducing complexity.
  • Orange changes the game. This represents fixing a problem in a manner that transforms another function and allows you to achieve a strategic imperative.
Blog 1.6.15 Reaction Strategy Gradient.png

Example

As an example, let’s take a seemingly minor problem that may arise for many companies this year: 

Your accounts receivable (AR) department receives a payment from a customer but it’s missing an invoice number. They go to apply the payment against an invoice and find there are two records for similarly named customers, each with open invoices. What should they do?

For simplicity’s sake, let’s say there are five issues this raises (in reality there are more):

a)    Immediate functional problem: cannot apply the cash
b)    Future functional problem: this will happen again in AR if the customer record issue is not resolved
c)    Operational problem: the operational efficiency of all processes associated with duplicate customer data will suffer inefficiency and potentially ineffectiveness
d)    Cross-functional problem: if these records exist in other systems (e.g. CRM, order management, etc.) then upstream processes will be affected
e)    Strategic problem: Meaningful customer analytics are severely compromised or not possible

First, you will need to figure out which invoice to apply the payment to, solving problem (a). This will probably require the AR department to contact the customer and do a little research. This is simple operations for them now. They’re going to do this anyway, regardless of our conversation. But now the question is how to address (b), (c), (d) and (e).

Pure dark blue: Combine the customer records into one, consolidate the invoices to that single customer, and resolve any data conflicts that arise (e.g. duplicate invoices, multiple shipping sites, missing DUNS numbers, etc.). This addresses (b).

Dark blue moving to light blue: Consolidate the master records for this customer and then, thinking this may be an issue for other customers as well, run reports and figure out if there were other records this applied to. This address (b) more thoroughly, begins to address (c), and makes solving (d) easier and, therefore, more realistic.

Purer light blue: Look at other systems that use that data like your CRM systems to see if the same issue needs to be resolved there. This will address (c) and make it possible to address the rest of (d).

Light Blue moving to orange: Create a customer data management responsibility where someone in the business is responsible for proactively monitoring customer data, resolving issues, and over time working with a technology partner to automate duplicate identification, merges, etc. This address (b) and (c) completely and may substantially address (d) although this will also introduce some new process complexity that will need to be analyzed.

Orange: Implement a data management solution that can manage the customer data across all functions. This will improve the sales team’s ability to accurately identify and track leads, allow integration between social media and customer transactions, provide efficient lead-to-order-to-invoice-to-cash conversion, and serve as the foundation for great customer-based analytics. Odds are, customer-based marketing and spending analytics are on your strategic radar. This will address (e) and, in doing so, drive new ways of thinking, analysis and decision into all customer-related business operations. 

As you can tell, there are unlimited variations of each of these approaches and they all have different complexity, levels of effort, costs, and time horizons. But as an executive you need to make sure the business operates at all, operates at least reasonably efficiently and reasonably well, all while furthering your strategic goals. Maybe you do all of the dark blue things now because they are low effort and low cost, but begin the process of planning and prioritizing a project to address the orange potential.

The main point is, you’re reacting to an issue in a manner that furthers your strategy and demonstrating to the business, through step-wise improvements, that bigger investments in previously ignored, seemingly commoditized areas can result in game-changing improvement.

You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before.

Up Thursday: Moving from an “enabler” mindset to a “driver” mindset for technology decisions. A.k.a. Making Technology Investments Matter.

 

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