Tuesday May 2, 2017 0 comments
By Bill Van Eron
Systems Thinking to Matter in the New Economy
Headwaters Marketing & Innovation
Some say you can’t teach animal magnetism or beat a dead horse to run faster. But with more organizations at risk of becoming dead horses, it’s time to evaluate how you ride and your destination.
This resistance to shed historic patterns of comfort, control, process, and short-termism has played a key role in a widespread failure of many organizations inability to create and sustain business models that inspire the best in all of us and a torrent of regard in a world gone mobile, viral, and openly transparent. Closed culture companies (still in abundance) are by-products of a weakened commitment to keep the customer at the center of organizational planning, vision, purpose, method, & brand value. Knowledge organizations (i.e., engineers, medical) may struggle the most as they fail to think beyond the product to enable marketing to do what they need.
I often heard “touchy feely” or “artsy fartsy” descriptors from less conscious leaders – still today - when marketing seeks to lead a true customer focus. Thankfully, my work and some greatly inspired teams, were based in the realities of now and the payoff far exceeded the product alone.
I say La La Land with a dual meaning:
1. All this bottom-line thinking dismisses soft skills that are increasingly vital.
2. Work must be more fun, inclusive, open. Investments in inclusion are higher than ever yet scores show all-time lows.
What are some of the values and priorities CEOs have owned up to of late?
They are mostly expressed and itemized as parts of a puzzle without recognition of the whole:
1. Innovation has long been a high, often unrealized priority. Sans insight to the system vital to making it work.
2. Inclusion has been high of late. Again, the questions of how, where and who remain prominent.
3. Astute leaders profess agility as the time to see and act on market opportunities. Still challenged to do so.
4. Providing great customer experiences. Most stop at good, failing to win over customer influence ecosystems.
5. Analytic and insight-driven decisions. This proxy approach falls short in true observation and empathy.
6. Being market-focused. Most fall short of a 70%+ recommended time to external factors versus internal.
What are some of the actions most organizations have yet to evolve to understand and apply?
That we are shifting from decades of now overwhelming specialization to a time when integrated thinking and knowledge from a broad base can be on tap so change and effectiveness can be applied at the speed of market opportunity. Specialization then follows a clearer value context and tuned delivery when needed.
That marketing, while in the best position to shape value from external and internal input, needs complete organizational support so as not to experience the 86% Deloitte reported failure rate when mandated to grow revenues and an outstanding customer experience. Marketing staff need to understand this new model and champion its application. Marketing is at a distinct fork in the road: fail faster or shape a higher value.
That business, leadership, internal alignment & inclusion, market regard, revenue growth and customer experience are all connected. There is no way to cheat the requirements of your business and market ecosystems. Once both are healthy, all else works so much better – sales, marketing, R&D, and culture.
That what you stand for is more important than what you make. One has to think hard to find organizations that stand for purposes that create an almost insurgent passion internally and externally.
That innovation and revenue growth are the by-product of a healthy business ecosystem versus by mandate without real support. Enabling leadership and top-down hierarchical dictatorship are polar opposites.
That this unique time we are in defies traditional bottomline views of success yet meeting market requirements offers almost unprecedented growth potential. How you see and act on those requirements requires objectivity, an open culture, agility and a passion for credibility and value creation.
Where are we seeing evidence of positive change among well regarded leaders?
Amazon CEO, Jeff Bezos recently sent a letter to shareholders outlining his priorities to prevent Amazon’s demise: https://www.recode.net/2017/4/12/15274220/jeff-bezos-amazon-shareholders-letter-day-2-disagree- and-commit
Who da thunk it? Yes, as large as Amazon is, and as reputable a leader as Bezos has proven to be, the concerns he shares and areas of focus are vital and universal to all or most organizations that hope to stay relevant today. That begs the question: why many lag in understanding this or acting on it in ways that produce the desired outcomes. In Jeff’s letter, he explains how he thinks about preventing Amazon from slipping into “stasis,” “irrelevance” or “painful decline ... followed by death.” I witnessed both day 1 and day 2 stages in Hewlett-Packard and acutely understand how the patterns herein either flag it or cure it.
Bezos states the following principles to indicate how:
A. He offers skepticism about using market research as a proxy for real customers. This is interesting as Steve Jobs claimed he used little research but had a gift of observation to spot what mattered to customers.
B. Jeff offers an “always in Day 1” mindset which feels like an effort to stay entrepreneurial versus falling into a state of stasis, followed by irrelevance, then excruciating painful decline, followed by death. He notes that this may happen in slow motion but the result would still come. Today’s rapid rate of change and viral influence greatly speeds up that death spiral as markets recognize when a company is not genuine.
When asked how he expects to stay in a Day 1 mindset, he responded with these 4 principles:
1. True Customer Obsession
Bezos highlights many ways to center a business: competitor focused, product focused, technology focused, business model focused, (most proven as unsuccessful). In his view, and my own direct experience - obsessive customer focus is by far the most protective of Day 1 vitality. Why? There are many advantages to a customer-centric approach, but here’s the big one: customers are always wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your enabled desire to delight customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but they wanted it. Staying in Day 1 requires you to experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight.
As one who earned regard as HP’s highest impact customer champion, I should add that creating a culture to spot, enable and groom customer champions is important. The people managing departments are less likely to be as change knowledgeable and invested as that champion will become. A customer-obsessed culture best creates the conditions where all that can happen. I must add that even Jeff’s words may not sound different than what perceptive CEO’s say. But it dies on a rhetorical vine when not backed with real customer observation skills where one’s corporate view limits do not skew a holistic view of those needs. Power the need for inclusion through a mindset of value creation and champions that craft value bridges back to your brand assure brand relevancy.
2. Resist Proxies
As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2. A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right. It’s not rare to hear a junior leader defend a bad outcome with something like, “Well, we followed the process.”
A more experienced leader will use it as an opportunity to investigate and improve the process. The process is not the thing. It’s always worth asking, do we own the process or does the process own us?
In a Day 2 company, it’s likely the second. I have heard CEOs state they know their customer yet
they were referring to sales status reports. Another example: market research & customer surveys become proxies for customers – something that’s especially dangerous if you’re inventing and designing products. “Fifty-five percent of beta testers report being satisfied with this feature. That is up from 47% in the first survey.” That’s hard to interpret and could unintentionally mislead. Good inventors and designers deeply understand their customer. They spend tremendous energy developing that informed intuition. They study and understand many anecdotes versus only the averages you’ll find in surveys. They live with the design. I’m not against beta testing or surveys. But you, the product or service owner, must understand the customer, have a vision, and love the offering. Then, beta testing and research can help you find your blind spots. A remarkable customer experience starts with heart, intuition, curiosity, play, guts, taste. You won’t find any of it in a survey.
Side note: When I left my creative marketing job in HP to join HP’s sales force, they commonly referred to factory marketing and R&D staff as “factory pukes.” Looking at customer- facing marketing, I saw ample paths to enrich sales and reseller relationships, value, and effectiveness by investing real time in customer and channel needs that never would have garnered attention in traditional corporate environments, but that was the difference maker for billions in revenues.
3. Embrace External Trends
The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly. If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind.
These big trends are not that hard to spot (they get talked and written about a lot), but they can be strangely hard for large organizations to embrace. We’re in the middle of an obvious one right now: machine learning and artificial intelligence. Over the past decade’s computers have broadly automated tasks that programmers could describe with clear rules and algorithms. Modern machine learning techniques now allow us to do the same for tasks where describing the precise rules is much harder.
As I write this, I am reading a forecast that with middle and lower management ineffectiveness, AI offers a chance for real alignment between company goals and champions. Hang in there and remember the future is what we make it when we align conscious actions to market values.