Monday, June 16, 2008

Innovation Checklist – 10 Questions for a 15 minute checkup

  1. Have you mapped your IP portfolio to your business strategy and direction?
  2. What does your brand say about your ability to deliver innovation?
  3. What are the conversations that you are not having?
  4. What is the collaboration model between marketing and engineering in your organization?
  5. Who is empowered to say NO or NOT YET?
  6. Are you managing your innovation portfolio like a Venture Capitalist?
  7. What is your vetting process for new lines of business, products, and programs?
  8. Are you delivering experiences or merely products and services?
  9. Do new ideas compete for resources with established businesses?
  10. Do you have an innovation scorecard?

AND probably the most important question of all... Do all of your personnel answer these questions that same? How about senior management? Is there consistency between thought at the top and action in the execution level trenches?

Saturday, June 7, 2008

Back to Basics – Getting Businesses to Flourish

Ingredients Required - 3 funnels, delight, and a bit of cash

Ok – you’re a senior executive, perhaps a student or maybe an eyes wide open entrepreneur. Perhaps you’re an investor that hit a 100 banger in your portfolio and you now know everything. Whatever the case, you have some business that you’re involved in and your looking to take it to another level. Here is a simplified way to look at your business and an exercise to get others engaged in a meaningful discussion about getting the business to flourish.

BOLD Statement #1. Business always has and always will be about 1) Satisfying customers better than the competition in the long run and 2) not running out of cash in the short run. If you can do those 2 basic things, you will have a business that continues to operate. An operating, perhaps barely sputtering along business is not why we are in business. That is not very satisfying. We all want to make a bigger impact that the sputter along business. Add 3 basic funnels to the model and you have a recipe that allows to diagnose potential sputter spots and identify areas of breakthrough performance. You don’t need a team of MBAs or business consultants to do this for you. Whatever team you have at your disposal is quite capable given the model and a healthy dose of authentic dialogue and commitment to excellence in execution.

Funnel 1 – Exposure


The exposure funnel is all about exposing prospective customers to your product or service. Creating awareness, generating demand, etc. You have barriers in doing this, least of all budget and human resources e.g. you simply cannot talk to everybody on the planet nor do you have enough advertising budget to reach everybody, everywhere. There are other barriers as well and you must have a strategy and credible plan to overcome those barriers.

Funnel 2 - Conversion

Conversion is more than turning prospective customers into customers. Getting money from customers is necessary but not sufficient. You want to make sure that your customers are actually using your product or consuming your service. You have barriers in doing this. You must also have a strategy to overcome those barriers.


Funnel 3 - Retention

Retention is oft overlooked but equally critical to your long term success. Retention is about retaining customers for the long term. Happy repeat customers that refer you to other prospective customers and whom return to buy or consume your next offering. Note: exposure become less expensive when you are exposing customers whom you already retain. Again you have barriers to retention which again require you have strategies to overcome.

Summary

There you have it – a model for your business today or even a business that you’ve yet to start or invest in. Now with the model in hand you are able to ask basic questions of yourself and other stakeholders. Ignore one of these funnels and unless your business is really really, lucky, your business will sputter or worse. Pay attention to the funnels, thinking critically about the barriers to each, then crafting and implanting strategies to overcome those barriers, will reward your business. For example, say you have no problem with exposure, many prospective customers are exposed and a healthy percentage of these prospects purchase, becoming customers. Returns and complaints are low, you don’t seem to be gaining any customer testimonials or suggestions for improvement. Is there a problem? Uh – yeah dummy. Chances are your customers have purchased but they have not fully adopted the product. If they are not actually using the product you will not receive product feedback and customer testimonials. Your ability to improve your products and services will diminish. Worse, these customers are unlikely to refer you to other customers OR purchase future products and services from your business.

STORY
Problem
A Fortune 50 software giant was expanding its technology platform in attempt to sell related server software into large enterprise accounts. Account executives and technical teams were successful with customers in getting pilot projects started based upon this technology platform. Many of the customers completed the pilots and even purchased the requisite server software. Things looked great on the surface. However, when personnel in other parts of the organization became involved in trying to gain customer testimonials or develop case studies, problems emerged. It turns out that much of the software purchased was never deployed; projects were abandoned at the proof of concept stage. Answers received from customers varied but all had the same basic message, “We never deployed that software”. Weird huh, people buying software that they never deployed. WHY? It turns out that the account executives were compensated at the point the pilot completed and the server software was purchased. They simply moved on to the next opportunity, checking out of the process leaving the delicate handholding and account management details up to the technical personnel, partners, and customer. Without the glue to pull it together it was left to chance. Further complicating matters was the fact that partners that would be necessary for deployment were different than the partners and personnel involved in the proof of concept pilot. Deployment stage partners never even had the opportunities on their radar. They didn’t have a chance to be successful. Luckily, smart people in the software giant saw what was going on and set out to make some changes.

Solution
Here is what we did...
We put programs in programs in place to track the progress of pilot projects all the way to deployment. We changed the compensation structure, providing an incentive for account managers to stick around and become the point person in the account for all time not just up until the sale. We also rearchitected the CRM system so that the workflow reinforced the business objectives. We put programs in place and funded them to ensure that partners were brought in at the appropriate stages and that there were clearly defined handoffs between complimentary partners, all facilitated by the account team lead by the account executive.

Results
The software giant looks like one company in the eyes of the customer, revenues are up, numerous case studies have been developed to give the company more credibility in the enterprise space. Account executive productivity and retention have increased. Partner satisfaction and productivity are also up. All good stuff and it wasn’t too hard once we were looking at the right stuff and having relevant conversations.

Exercise - Give your senior management team a blank piece of paper and ask them how the business works. Tape these to the wall and relate the drawings to the model outlined here with the 3 funnels. Have some dialogue about what barriers are impeding your ability to expose, convert, and retain customers. Discuss strategies to overcome these barriers. Repeat the process at different levels of the company with cross functional teams. Put it all together in a framework, reinforce it with meaningful measures that your personnel can wrap their minds around. Have fun. Prosper.

Sunday, June 1, 2008

Killing the Gilded Goose – Knowing when to Quit or …

So you have a team that's been working on the next big thing – this could be your golden goose, providing golden eggs for all stakeholders, for eternity. Sounds splendid. The opportunity is enormous. You've all drank the Kool-Aid and bought into the projections. "Things" have been developing. The technology is maturing. You have some early prototypes that prospective customers have seen; these customers have provided positive feedback. Your sales and biz dev people are wetting the appetites of past and prospective customers, and courting interested partners. Your CEO is pitching investors and other stakeholders.

Then BLAM - out of nowhere comes a competitor you didn’t see because YourCo was focused internally on maturing your baby. SO WHAT DO YOU DO? The ordinary organization will continue on doing the same things they were already doing albeit with increased nervousness, oft dampened spirits, and questions that go unanswered.

The Extraordinary organization will rally the troops, draw new battle plans (exuse the war analogies) and put in place new strategies and execution tactics. After all, the war theatre has now changed.

The Extraordinary organization knows it is time for Authentic Dialogue AND effective Leadership AND Followership.

Authentic Dialogue – get the right people to the table for discussion without hidden, personal agendas. This is open dialogue without the fear of reprisal. It is time for critical thinking, active listening and a shared purpose. Think Apollo 13 & saving astronauts. See related post – Saving Apollo 13 Astronauts and YourCo.

Leadership – this is the time for leadership to be informed, report progress and make the vision and execution path clear and credible. This is a time for positive, truthful, encouraging words, as well as CEO action that backs those words up. This is not a time for FAITH BASED EXECUTION.

Remember “Words Alone are not an Investment”


Followership
– this is the concept of the wood behind one arrow. When the CEO or other leadership charts the direction it is time to get in line and execute along the communicated path. No deviant paths, etc. If your path was better, you would have mentioned it in the Authentic Dialogue, correct? If you understand the new direction better than your colleagues, help them to get on board. Carry the message. Communicate the vision. Make it easier for others to adopt.

A wise board member once said "People don't dislike change - they dislike ambiguity"


YourCo might not be in this situation right now. But – if you have a broad enough innovation portfolio that is relevant to real customers, chances are you will light up the competition and you will face tough choices. So, when do you know it is time to kill the “golden goose” whose time has not yet come? When is it time to shift resources, direction, garner new alliances, sell out, acquire technology, etc.

Chances are you cannot answer this alone, nor can your CEO so you better get to the table and start talking.

IDEA! Have a mix of leading and lagging indicators coupled with operating mechanisms that tell you where YourCo is with respect to (wrt) the competition, the opportunity, etc.
Exercise: have some authentic dialogue around this with your team.