Friday June 2, 2017 0 comments
By Bill Van Eron
System Thinking to Matter in the New Economy
Headwaters Marketing & Innovation
If you paid any attention to the low rates of success most companies have in applying innovation, there are many reasons why they fail: a closed internal focused culture, poor alignment across functions, short termism, holding on to outdated methods, top down commitment and more.
One key reason many fail is a false fixation on idea generation -- both by companies and consultants -- versus methods we use that generate a deeper sense of the customer experience, sense of value, impact trends, and emerging or unmet needs.
This approach provides a better base to success and higher quality ideas versus the high crib death rate most ideas experience today. Ideas that seem random or unattached to known needs are also devalued as erratic or ungrounded despite the need for all of us to strive to fly higher.
For decades, managers were taught to pinpoint problems with the belief they could be isolated and fixed at a lower cost in time and money.
In the past and as it remains a management action today, the value in that approach has diminished, as few problems -- once properly understood -- can be isolated to an easy fix.
The growing requirements on all organizations to earn regard internally, externally and across all stakeholders, clearly illustrates the need for an approach that recognizes them and their influencers, requirements, and motivations as a connected system, thus the validation of an evolved system thinking approach.
If you want to affect anything, you must respect and invest to understand how all touched by a solution define ‘extraordinary’ as just being ‘good’ falls well short of most measures of success.
Analytics, are almost approaching cell phone addiction levels, but its root value is still anal when research is used as a proxy for real customer validation and observation.
Steve Jobs was recently credited as one who did not value research as much as real observation. His powers of observation led to far higher impact strategies, products, and market regard. Some companies even refer to sales pattern reports when they say, “we know our customer.”
With the growth of customer transparency, they see if you’re authentic regarding promises made, innovation, relevancy, social footprint and even how you treat employees.
Where else is this short-sighted thinking evident?
- CEOs, polled yearly by leading research firms to assess their view of challenges and priorities say:
- Decades ago through today, Innovation Management dominated boardroom discussions yet still today, mid to large companies fall short in applying innovation in any manner of success, especially as a natural human-enabled system that it really should be, despite its clear vitality to any future.
- Last year’s top CEO priority through now is “inclusion.” The 2016 Gallup report that showed a 77% level of employee emotional detachment from work, certainly flagged that all ships leaking employee trust and engagement would sink, helped make it a priority. But now, a full year later that level is still at 70% so not enough of a risk reduction, and certainly a failing grade for CEO’s that say they tried but may have fallen short of being genuine about it.
- Deloitte recently reported CEO’s mandating CMO’s and marketing -- certainly a function that must rise to the task -- to account for revenue growth. Yet for many, that mandate short-sighted the system that needed to be in place for this to yield fruit. Other functional departments only situationally supported the notion, versus committing to it as vital. Even CMO’s and their teams failed at a rate between 80 and 86%. They failed to define, clarify, and apply a new model for marketing. They held on to historic definitions that put greater emphasis on advertising campaign management and budget planning than reinventing the core of their time around a changed marketplace demanding substance, credibility, purpose, and value over mere engagement.
- Customer experience also rose to a top-level priority and while in general, more companies are doing decent things to help create a decent experience, great is far and few between. I have found a consistent pattern of game changing opportunities in looking at the employee and stakeholder experiences. Doing so, had a profound impact on efforts that otherwise would have yielded modest ROI and revenue growth.
- All the above are measurable in the form of failure to produce the desired or mandated outcomes. But what about all the factors within a business ecosystem that prevent it from seeing and understanding the very market ecosystem it yearns to be accepted by?
Markets see you far more objectively and clearly than most businesses see them, and they know that. So, you have an idea “you feel” deserves a “what” response but it gets a “so what” treatment.
The criticality and opportunity to close that gap is higher than ever. But traditional sources are less likely to close those gaps between revenue growth and the system you really need to understand and apply to matter.
Why is that? I see way too many “innovation management’ companies touting they help generate more ideas faster. Many complicate this very human artisan skilled process to something akin to a NYC subway map, though I have not gotten lost in a NYC subway.
Friend and author Greg Satell (HBR, Forbes and Digital Tonto) posted a blog suggesting people should forget about ideas and focus on problems instead. I have long agreed with and applied this approach.
To restate his point: problems were easier to qualify and rank so solutions that solve significant challenges are prone to higher yield and approval than ideas that start out detached from prioritized needs.
I understand why many leaders struggle with this but their biggest personal challenge is opening to welcome more objective and honest outsider insight, especially where it may reveal treatable weaknesses in your business ecosystem so you can enliven your brand by ongoing value connections to market ecosystems, as leaders realize the wins are so much greater than any risks.
You will soon hear more about Value Creation. First off, while it sounds obvious and simple, it offers far greater strategic innovation, revenue growth, employee inclusion and a stream of qualifiable needs that revitalize your brand. If you are a matrix organization, too big to manage effectively, and spread out globally, applying CVM – Customer Value Management – also enables employees and customers to enjoy more productive relationships.
The ideas that come from this approach are attached and prioritized to real customer and stakeholder needs. This enables the best part of your business -- it’s humanity -- to take center stage.
Natural systems, just as in nature, have a way to adapt and thrive if you open yourself to enabling those forces. Besides, as you master this as an internal competency, whether as a leader or conscious champion anywhere in your organization, about qualifying needs, leading or collaborating solutions, and seeing the very real impact it offers to your organization, team, market, and yourself, you will see why revenue growth and innovation are the outcomes of a more naturally connected business and market ecosystem.
Your ingenuity will likely hold off the robots from replacing you.