Businesses are stressed enough during difficult times, that they don’t need to add to that stress with radical change. Yet positive, productive change need not be transformational in nature, rather it can be evolutional.

When a challenge such as the current economic climate hits, businesses either panic, or they find a way to take advantage of it.
Many businesses are doing just that. It is quite obvious that many large manufacturing businesses are actually using the downturn as an ‘excuse’ or shroud to cover up their admissions of dysfunctional bureaucratic status and downsize without public scandal or blame.

Smarter businesses recognize that they don’t need to change everything in order to succeed. Instead they repurpose their current capabilities:

• Change your strategic focus from growth or diversification to core business
• Change what you make with the same plant and technology
• Change the use for your IP into solving different problems in different industries
• Change what your people do, but keep them working
• Change your markets, but retain market share
• Change the way you market the same products
• Change your customer focus; sell more to your current customers instead of seeking new ones
• Change what you sell the same customers
• Change your financial focus from revenue to profit
• Change your mission and key objectives, but keep your business

We saw what happened to those in the music industry who didn’t embrace change when music went digital and the retail market imploded. You too now have the choice – change and stay in the market, or ’stick to your guns’ and watch your competitors stay in the market.

And it’s not just businesses that have to embrace this change, employees also have to recognise that the current situation is nothing new – it has happened before, it will happen again. There is not time for all the political mothering that many HR and employment advocates claim is essential for personal change. Change is not some unusual, unexpected event.   It is an everyday part of business that must be expected and accepted. It is not your bosses responsibility to ensure you develop your personal and business skills, albeit good bosses encourage you to do so.  But it is up to you, the individual to take up the challenge. You either accept responsiblity to constantly reinvent yourself to retain your value to your employer, or you too will get lost in the shuffle.

Personally, I am watching with interest to see what, and who will walk out of the cloud. There are two great proverbs that apply at the moment: “necessity is the mother of invention”, and “when things get tough the tough get going”.

BI Now Regarded as Urgent For Many Companies If businesses were in doubt before as to whether they could justify the cost and implementation schedule of business intelligence solutions, the recession is certainly making them wish they had taken the jump earlier.

There are many comments as to how the rate of change in business has increased, yet little focus is given to the magnitude of change. When we look at the recession, it was evident four years ago that financial services practices were going to cause major market problems a few years down the track. Early in 2008, banks in NZ were already changing policies to strengthen their capital base, but when the force really hit in September the downfall was strong and spectacular, and worldwide.

This was no longer a ripple effect, it was a rip apart effect with major structural fractures appearing in all sectors of the market.

The impact of media cannot be underestimated and I personally have to wonder how much of the backlash is real, and how much of it is in response to the predictable market hysteria that can bring a market to its knees in quick time through any negative trigger.

Regardless of the cause or the degree of damage, businesses need strong leadership to determine what to do next. And the cost of taking the wrong action could be devastating. Thus decisions must not be based on assumptions or false confidence built on past experiences. They must be based on hard facts, and future scenarios analysed fully to determine outcomes and knock on impact throughout the business.

The other factor that is also highlighted at this time is the complexity of relationships in the market today. The interrelationships and the speed at which these can be forged and broken due to Web 2.0 is another significant factor in the game play.

No human could possible gather all the required intelligence, assimilate it, determine the interactions and configure it to develop likely outcomes of different decision scenarios.
It is no wonder in spite of IT budgets being slashed, financial support for BI is being wrung out of Opex budgets to ensure it is on the agenda as soon as possible.

No longer is BI capability a desirable investment – it is an absolute necessity

Be careful not to focus all your energy on where the market is at present. My ex husband was a national champion clay bird shooter and as anyone familiar with this sport will tell you – it is no good shooting at where the target is now. You need to be able to anticipate where the target will be by the time your shot reaches it.

With limited budgets for marketing and new products at present, the focus should still remain at the point in the future at which you want your message to coincide with a ready buyer. This may seem basic marketing 101, and it is. But my point is, that is can be easy to aim at the wrong part of the curve when the forces seem so compelling.

Retention strategies are important right now, but growth strategies must be worked around how the consumer is going to recover from the current downturn, what their needs will be, what their thought processes will be, what buying decisions will take priority etc. Think forward, and move your resources to where the consumer will be when they have budget to invest again.

The latest Gartner 2009 CIO Agenda survey of 1500 CIO’s has revealed some surprising and not so surprising results.

Firstly, the not so surprising is that BI has been voted as the top technology for 2009, with the focus of its application on improving business processes. This supports the maturation of business intelligence into the market, past the era of reporting and analytics, into operational BIOBI.

The top exectations, strategies and technologies included:

Expectations

• Reducing enterprise costs
• Improving enterprise workforce effectiveness
• Attracting and retaining new customers [#2 in 2008]
• Creating new products or services [#3 in 2008], however innovation is forecast to move up the ladder to top spot by 2012.

 Strategies

• Tighter link between business and IT strategies
• Reducing the cost of IT [#10 in 2008]
• Delivering projects that enable growth
• Attracting, developing and retaining IT personnel

 Technologies

• Business intelligence [BI] [ since 2006]
• Enterprise applications such as CRM or ERP
• Servers and storage technologies.

The survey results overall are not surprising. As the current market is hardly conducive to growth strategies for most businesses, it is an ideal time to refocus on core business and get better at the basics. BI is known for its ability to improve productivity whilst reducing costs.

In spite of lacking BI technology, poor implementation and low adoption, BI has taken huge leaps in the past couple of years. BI tools today are much more business oriented and the knowledge base of implementation best practice has crafted far better BI program practices of today. The only missing link going forward is the level of education the business receive, not in using BI but in why they should be using it, and exactly how it improves a business from single user self performance management all the way up to the boardroom strategy.

Whilst virtualisation, cloud computing and software-as-a-service [SaaS] were also acknowledged as cost reducing strategies, it was still felt by many IT managers of large corporates that these future focused technolgies still fail to deliver around availability, security, and functionality. Such technologies are gaining favor with mid to small enterprises that may not have the full IT capabilities of larger corporates.

But overall, the ‘killer app’ is ‘Leadership’. It seems companies don’t want consultants giving them a set of options – they want strong leadership paths to drive their businesses through the current downturn and still come out having advanced in some way. It may not be with customer growth and revenue growth, but I expect we will see leaner and meaner businesses forging ahead with renewed vigor and tighter focus.

Survey base: N=1500 CIOs worldwide, Duration= 3 months to Dec 15, 2008. Average company size = 400, average IT budget = $90 million.

When organizations first start with BI, there tends to be a focus on the visual excitement of the dashboard. At this point, there is a danger that the focus of the group will be on the results, and not the action to drives these results. This is where deconstructing corporate objective KPI’ down to a level for each part of the process that contributes to the overall result is so critical. It gives each person or team that contributes to the overall results their own personal dashboards that measure the success of actions that collectively create the desired outcomes.

Remember – the higher the level of results being visualised, the more latency between the activities undertaken at the start of the process and the KPI. As the performance indicators for each level in the value chain roll up the results of those levels below it, insight into what is contributing to the target can easily be lost and undervalued. Keeping a view of the entire process is what really makes a difference, and this is where operational BI differs substantially in impact, than just BI at a strategic level.

The main message here is – rather than have BI just for managers, get everyone involved in BI, with personal dashboards for each individual to manage their own performance. This not only stimulates productivity and the individual level, but also reduces the amount of time managers need to spend on identifying the performance of each of their team members.

BI is for everyone!

Following on from a previous blog on my The Logical Organization blog about keeping close to your customers [Keep Your Suppliers Close and Your Customers Closer] – studies show that customers are more impressed by the relevance of offers presented to them than just innovation of your product or service.

According to Fortune ranked Northwestern Mutual, “staying relevant to customers means watching the right dashboard gauges, including the one that shows “persistency”—the percentage of customers who stay with the company year after year”. Webmasters refer to this as “stickiness”.

The best innovation is that which improves the value to customers – not has one more feature than your competitors offering.
The only way to know whether you are maintaining relevance is to MEASURE it. This may be by:

• Results – if you are delivering good service, your customer satisfaction score will be high
• Knowing your customer – customer analytics is the only way to be sure that you are delivering the right product and offering for each customer. Customer surveys are not that reliable and past experience is pretty much irrelevant. What matters is what the customer thinks NOW, not last year.
• Your mission statement – If your business mission is truly customer focused, then so too should your corporate strategy. If your strategy is not deployed using some sort of CPM scorecard – then frankly, you don’t know whether you are delivering customer value across the company. It’s not just about todays product. The pricing of your product, the development of new features and your service delivery all depend upon cross-organizational processes.
• Internal Focus – Too many companies focus too much on what the competition is doing – you may appear to be gaining ground on your competition, but if each company has a different strategy, gross sales or customer numbers can be deceptive. Focus on improving your own performance to corporate objectives.
• Listening to Touchpoints – Make sure that you are listening to your customer touch points – sales channel staff, online analytics, customer support reps etc. These are the people that can provide real insight as to WHY certain performance numbers are what they are.
• Persistence – Be persistent in your measurement – measure – change – test – measure. It’s a continuous ongoing cycle.
• Honesty – Own your mistakes. If you make a mistake, own it. Customers will recognize you are human and cut you some slack – but if you withhold the truth, or lie to them, or cover up a mistake that has potential customer impact – you only have yourself to blame when you see your customers marching straight to your competitors.
• Long Term Focus - If your customer strategy is not focused on long term [40 to 50 years] relationships, then you need to revisit. It’s not just about today’s sale – it’s about lifetime value for both you and the customer. BI helps businesses know what their customers will most likely do next in their lives than most customers do. Keeping one step ahead and providing what the customer needs next at the most timely opportunity is where BI really comes to the fore.

Business Intelligence acts as a foil against customer irrationality. A recent study by McKinsey group identified that customers do not act as rational as businesses expect them to. This has been highlighted in the recent mortgage industry collapse, where banks incorrectly assumed that home owners would be rational in managing their debt. And it wasn’t just the sub-prime market that behaved this way.

Behavioural economists have long recognised that peoples choices, the effect of incentives and information do NOT make people make rational decisions. Advertisers depend on it!

And to make it worse, people often make the same mistake, over and over. As these mistakes aggregate and compound upon each other in the market, the danger of the market mechanisms currently being put in place being misused in the same way again is a real threat.

This is where corporate responsibility must lead the market. Using business intelligence, businesses can in many cases know more about an individual customer than the customer is aware of themselves. And BI doesn’t fool itself into believing that all will be well. For instance, in most cases, banks tell customers how much they CAN borrow, not how much they SHOULD borrow. Maybe this is one correction banks can make now. The same should apply to consumer loan agencies that finance furniture, home appliances, cars, boats etc.

BI provides a transparency to the truth that cannot be shielded by smart advertising copy. With the governments of most countries intervening to kick smart the economy again, the temptation for corporations to use this to help bail themselves out of their own credit crisis is obvious.

I urge businesses to take a longer term approach and care for their customers MORE than their businesses – after all, customers ARE your business!

Wow – Just as I am espousing the ‘Love thy Customer’ theme I had the link to this inspiring video sent to me. I just had to share it right away.

HEALTH WARNING: This video contains highly emotional content which may bring even the hardened manager to tears.

An Inspirational Customer Service Experience

With many articles having been written about the cause and expected course of the current recession, it is time to look past the theory and focus on real tools and strategies needed to survive the current downturn. Yet, such times represent a powerful opportunity to:

1. Evaluate the core strengths of the business
2. Reduce non-essential costs
3. Boost sales and marketing performance

Change the company operational structure and culture into one more agile for the future

In my most recent article ‘Business Success in Tough Times’ I outline the critical questions to ask and how the most commonly adopted strategies work against the business instead of helping it. For those companies smart enough to fully understand where to cut costs and where to invest more, the economic downturn will prove a valuable opportunity to restructure their thinking and their business. Rather than melt away in financial gloom, such companies are capable of propelling themselves through their industries competitive rankings, not only surviving, but succeeding because of the downturn.

The article covers:

1. Critical Assessment Questions
2. Cost Reduction Strategies
3. Sales Strategies
4. Support Strategies

And the one critical capability that will, if correctly implemented, deployed and used will ensure they will come out on top.

Read the full article: Business Success During Tough Times

I have just done a round up of some of the big technology companies and things are more than a little down in the motivation stakes.

On top of many sales motivational and reward events being cancelled, there is a growing element of distrust of corporate executives. This is not only from the market, but also from within the organizations. It certainly isn’t helped when the business withdrawls such incentive events but still expects sales teams to hit previously set targets. There is not a whole lot of thought that has gone into that tactic!!

Looking at a few USA statistics from Reputation Garage, the following caught my attention:

• Only 13% of all Americans place their trust in big business
• Only 39% of employees in a Watson Wyatt survey said they trusted senior leadership.
• 75% of US consumers don’t trust that companies tell the truth in advertising.
• 75% of employees in big companies have personally observed violations of the law or company standards in a 12-month period. What does that say about trust within the corporate walls?

And now of course, many executives are proclaiming that “if we work together we can ride through the tough times”

There are many things a business can do to strengthen the culture and core business…this would be a really good time!!!!