Avoiding the Failure Chasm: Gaining The Most Value Possible From Digital Transformation

Whether you are a CEO, a CIO, a CTO, a CMO or the head of Customer Experience, Customer Service or Digital Transformation, you know software can be an amazing invention. It can be part of the key to digitally transforming your businesses in so many ways. In fact, here’s just a few of the ways digital transformations can take shape…

Digital Transformation and Software can help in the area of human capital by:

  • Increasing employee engagement, creating a passionate culture, increasing productivity and motivation
  • Attracting the top talent, making your organization the sought after place to work and an awesome culture to be envied
  • Reducing attrition of talent you want to keep to make sure you are able to produce the best possible business results.

Digital Transformation and software can help business generate revenue by:

  • Developing incremental innovation of products or services from receiving feedback from employees and customers
  • Co-creating new products with input from customers and employees
  • Developing new business models by creating new products and services that didn’t exist in the company’s line of business
  • Generating new applications and uses for existing technology, products & services, i.e., moving them from the core business and finding adjacent/new markets
  • Increasing the customer lifetime value, i.e., increasing the amount and frequency of purchases per customer over the lifetime of a customer
  • Increasing customer acquisition by increasing market awareness of the company, it’s products and services by engaging customers and brand ambassadors through delivering content at the top, the middle and the end of the funnel through two-way texting, email, digital ads, banners, digital and social media… and
  • Increasing the brand’s equity, reputation and preventing a PR crisis and brand intervention projects and so much more…

Digital Transformation and software can help business reduce costs by:

  • Creating new products and services with more agile processes (vs. waterfall processes)
  • Improving an exiting process or eliminating redundant processes / steps
  • Reducing the cost of products or services that fail in the marketplace because now they have feedback from customers and employees way before the product hits the market
  • Reducing the cost of bugs or flaws in the product or service because of using more agile processes and outcome-based thinking
  • Reduction in contact center costs by increasing first contact resolution (FCR) by using the most innovative ways to engage customers and
  • Reduce customer churn by increasing customer satisfaction by better customer experiences and hence increasing customer retention….

Why Do Company’s Fail At Digital Transformation?

So just from that short list it’s clear there are so many ways software can enable a business to function at it’s very best. However, there is something that can get in the way of the effectiveness and efficiency of the actual software’s ability to deliver on the promise. What might that be? If the software is good, then it’s not the software. So what is it? How can you realize your company’s vision through digital transformation when over 80% of digital transformations fail. Nobody wants to spend the time, the money and the effort getting a project approved, implementing it only to find a year or five later that it didn’t produce the results it was supposed to. But surprisingly, this still does happen. Some of those reasons include:

  • The absence of a clear plan to achieve digital transformation
  • Lack of alignment between business and IT
  • Legacy systems
  • Siloed data
  • Gaps in talent and skills
  • Cultural resistance to change and
  • Group think (seeing the problem from the same perspective.)

How Smart Companies Are Avoiding the Digital Transformation Failure Chasm

Smart leaders need all the efforts of all their employees, as well as, feedback from their customers so they don’t fall into the digital transformation failure chasm. However, often times they are so busy doing what they have always done, they they might not see a new way of looking at things. That’s where another pair of eyes or hands or even a team can help. You’ve experienced this probably yourself. You are trying to solve something. You feel you’ve looked at it hundred different ways and nothing really new comes about. You might even show a friend or a team mate and they are stuck, too. Why does this happen? You are not alone. In fact, it’s quite common.

1962, Abraham Kaplan, then a Professor of Philosophy, was giving a speech to scientists in which he urged scientists to carefully consider their methods for their research. He emphasized that – just because certain methods happen to be handy, or one has been trained to use a specific method or trained to look at a problem from a certain perspective -it doesn’t mean that that method will produce the best outcomes. Sometimes people formulate problems that reach solutions by using those techniques they are especially skilled in. In other words, we tend to formulate our problems in ways that make it seem the solutions to those problems demand precisely what we already happen to have at hand. In Abraham Maslow’s The Psychology of Science, published in 1966,  stated, “If all you have is a hammer, everything looks like a nail.” The issue is the reliance or over-reliance on the familiar or the habit of using the same perspective.

Taking this concept into software development and implementation, José M. Gilgado, wrote a law  that is still relevant and highly applicable in 21st century. He observed, often times software developers and implementors, “tend to use the same known tools to do a completely new and different project with new constraints.” Why? They blamed it on what he calls the comfort zone, a state where we don’t want to change anything to avoid risk. What’s the problem with using the same tools every time? We get good at those tools and we like using what we are good at, right? The issue can become that you don’t have enough diversity when discussing the problem (because you are using the same perspective you’ve always used) so the exchange of diverging or opposite views is limited and the choices to look at the problem from different points of view are limited because there’s nothing new to compare it to. What would be better if is… to look for the best possible choice with varying perspectives, even if we aren’t very familiar with them. But we rarely do that. Rather, we fall into group-think.

There’s some very interesting research by a professor at the University of Michigan, Scott E. Page who studies complexity theory. In his book, The Difference, he shows how the power of diversity creates better groups, firms and business outcomes. We all differ in how we see and interpret the world. How we code things is our “perspective.”  Scholars from a variety of disciplines have studied how people and groups make breakthroughs. The bottom-line? Encouraging and working with diverse perspectives. For example, do you know how pins came to be manufactured? Adam Smith ran one of the first brush factories. Someone saw that the bristles could be cut off and made into pins. That’s what I mean about seeing things differently. Most people would have looked at a brush factory and saw a brush factory. But the first pin factory was imagined by seeing that diverse perspective – seeing the world differently – seeing the world as a forest of pins – provided the seeds of innovation.

What does your team need? You’ll want to engage and partner with a new set of diverse senior advisors and specialists who are dedicated to your success, who use unrivaled expertise, processes and methods to make your business more agile. You’ll want to make sure they are the kind of people who thrive on guiding your team so your team learns the key principles to create and sustain change. And you’ll want to choose the most powerful technology platform to be the basis to fuel your transformation for today and far into the future. With all of that, and a collaborative team culture you can:

  • Align key leaders around a digital transformation strategy
  • Implement the right framework to move forward
  • Create the agility needed in today’s digital environment and
  • Adopt new technologies faster to keep pace with change.

Often it is –outside, diverse points of view– that are just what is required to steer you clear of the failure chasm, and instead have an immersive engagement based on a proven approach that combines people, expertise, culture, and technology. You want to be working with people who are uniquely able to help a business realize their visions and co-create the future by:

  • Exploring the art of the possible by
    • Leading with out-comes based thinking (OBT begins with defining a desired outcome, no matter how bold or provocative. It’s fundamentally different from problem solving, which looks at the current state and attempts to improve it)
    • Inspiring design-led thinking (instead of solving a problem, your team becomes solution-focused and action-oriented towards creating a preferred future)
    • Testing new strategies (vs. setting a plan and sticking to it for a year and then realizing they’ve wasted a year or more on something that isn’t going to work; maybe even trying a little experimentation to see if something could even work)
    • Sparking agility throughout the organization, igniting the whole culture’s motivation in whole new ways, giving them a renewed sense of purpose and outlook on the future and feeling they have the dream job and a reason for showing up other than a paycheck!
  • Building your digital capabilities by
    • Improving your operating model (and maybe even shifting the revenue model to something you’ve never considered, but it was the innovation that was needed to grow the company exponentially)
    • Growing the competitive advantage; as the Blue Ocean Author’s would say, you’ll want to create new, uncontested market spaces making the competition irrelevant
    • Stimulating breakthrough ideas that transform business as usual and
  • Creating sustainable transformation by
    • Creating a customer-first culture
    • Managing complex changes and
    • Continuing the processes required to innovate, iterate, pivot and grow.

How do you find such a group? Look at their DNA. Is it digital? Are they a natively global, mobile, social, cloud, community-oriented company? Are they trusted advisors who put the customer first and teach them to fish? Do they experiment, try new things, iterate and pivot quickly when it doesn’t work and tweak things till they hum? Do other companies desire to be like them and wonder what technology they use to be so innovative and wonder how is it, they do what they do? Are they super customer focused? As my friend and colleague, Peter Coffee would say, “Do they create a sense of urgency, hope and glory? Or conviction, belief and desire in your team? Are they all about (and seriously about this, it’s not just some words on a website or a brochure) connection, collaboration and innovation?” If you want to learn more about how one group guides business through digital transformation, here’s more info on that!

Until next time, here’s to realizing your vision and the best possible future for your company, your employees, your stakeholders and the planet. It’s all of our jobs to make the world a better place. And what better place to do that than starting with businesses? That’s where people spend a great deal of their time! So make it a fabulous experience for employees and the customers will feel the love. You will be their go to source for all your customer’s products and services. Don’t give them reasons to leave you, Give them reasons they can’t possibly give you up. Because… at the end of the day, that is what drives customer lifetime value. No customers, no business. It’s really that simple.

@DrNatalie Petouhoff

VP, Program Executive, Innovation and Transformation Center, Salesforce.com

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What’s the Number One Number Thing Today’s CEO’s Must Do? Do the OODA Loop Faster and More Innovatively

What’s the Newest Requirement for a CEO? Do the OODA Loop Faster and Better!

You would think it would to generate revenue, profits and reduce costs. Think again. It’s all about iterating and pivoting like a start-up. And who better than a former fighter pilot to teach CEO’s a thing or two about making quick. So I want you to meet John Boyd, who was among many things, a military strategist, colonel and fighter pilot whose theories are highly influential in the military, sports and business.

So why bring up Colonel Boyd in the context of CEO’s and their need to be nimble? Because investors and boards have transitioned from desiring quarterly profits (something that has driven Wall Street and corporations for many years) to searching for leaders to those who have the ability to disrupt their industry or die. What did the fighter pilot, Colonel Boyd used to make those decisions to do something out of the ordinary? He created a framework known as the OODA Loop:

  • Observe (M—ake the best use of the information and other intelligence resources available right now)
  • Orient (Quickly put the new observations into a context with the old)
  • Decide (Make quick decisions and take the “next actions” based on a combination of observations, current knowledge and intuition), and then
  • Act on those decisions to carry out the selected action(s), ideally— while the competitor is still observing your last action so you beat them to the punch!

OODA Loop

                                         Photo Source: Larry Paul

Above is a video from Ralph Mroz on the OODA Loop as applied to business if you want more information!

Observe, Orient, Decide and Act Is Known as John Boyd’s OODA Loop

As a fighter pilot, John had to make decisions in nano-seconds. With this framework of observe, orient, decide and act he way able to describe a way to iterate and pivot, very quickly, and decide if the object in front of them is friend or foe. Not doing so could mean life or death. It could also mean the end to a critical mission.  What does the OODA Loop mean to a CEO? Iterating and pivoting is also mission critical. Just ask the CEO of Ford Motor Company, Chief Executive Mark Fields. He was a 28 year old veteran of the business and was replaced by someone the business thought would be able to disrupt the automotive industry very quickly!

The Message is Simple: Do the OODA Loop Faster or Die

While Mr. Field’s did what most board’s used to expect of a CEO’s, i.e., he returned consistent profits, he did’t make enough changes fast enough. His OODA loop was too slow. But he didn’t know what he didn’t know. He, as many other CEO’s don’t realize that the winds of change are changing all around us. Like in most any industry, the car market has entered into the era of transportation.

It’s no longer just about building and selling a car. It’s about car-as-a-service. Think: ride-sharing (think Lyft, Tesla and ReachNow (by BMW.) It’s also about taking the traditional gasoline engine and transforming it’s power source to be an electric vehicle. And it doesn’t stop there. Some companies are disrupting the industry by experimenting with self-driving technology, making investments in connected cities (think BMW and Santa Monica, CA.) And at the same time Ford’s stock sank. 

How Fast Does Your CEO do The OODA Loop?

How fast do decisions get made? How fast can the ship be turned? Today, with the need to act quickly, the message is simple. We are in an age of rapid disruption by the software and tech industries. A leader of any company has to pick up the tempo and make riskier bets sooner… or die. While it was Mr. Field’s intention to set Ford on a path to be part of the new, emerging auto industry, he just didn’t do it fast enough.

Since Mr. Field’s took over three years ago, the share price of Ford is down 40%. As a CEO, as yourself, “Are you disrupting yourself, your company and your products fast enough? Are you really changing anything or are you just doing the old stuff just faster?” These are not easy questions, but ones that we all need to contend with. Consider you are one company and your are disrupting yourself faster than your competitor. What happens to the competitor?

ooda loop faster to drive innovation @drnatalie

                                                             Photo Source: Larry Paul

As a CEO, Are You On Track?

In military operations, OODA loops takes place in nano-seconds. In corporations, its decisions are often slower. In the old days, strategy was rigidly followed till next years’ planning cycle. But today, that’s no longer an acceptable mindset. And it’s critical to validate we’re on track and if not, correct it. Using a model like the OODA Loop, along with design-thinking which requires to you go and talk to your customers, your employees, customer’s of your competitors, to industries that are similar to your and industries that have nothing to do with yours.

It’s where the kernel of the seeds of innovation are hatched, born and grown into a full idea. The results of your actions become the observations to re-orient you to make your next decision. Quickly repeating the OODA loop equals success. And as you are doing this, you want to make sure you are making real-time changes that are just changes to make changes, but change to create a “Blue Ocean Strategy.” As defined by the author’s of the book, Blue Ocean Strategy, CEO’s need to quickly create an uncontested marketplace, where the competition is irrelevant.

Who’s Slow to the OODA Loop?

According to the article by Christopher Mims of the Wall Street JournalRonald Boire of Barnes & Noble, GNC Holdings’ Mike Archbold and top executives at three of the six major Hollywood studios making changes faster is very important. Where to look for inspiration? According to Mr. Mims, unlike large corporations, startups don’t need decades to make the changes the businesses need to succeed in the new world. They are nimble, they are always iterating, pivoting, changing, trying new things, not being afraid of conflict…

What does this mean for established companies? They will need to take drastic measures to do the OODA loop faster. What kind of drastic measures? According to the article, these CEO’s must be willing to tell their stakeholders they may have to lose money and cannibalize existing products and services, while scaling up new technologies and methods. Not the same old dog chow most CEO’s having been dishing out.

How Can a CEO Get On Track?

It used to be that you could acquire the start-up that was trying to put you out of business. But in today’s market it takes more than that. Companies that are disrupting the marketplace are growing so quickly, capturing so much market share, they don’t want or need to be acquired. And they can become too valuable to buy or are unwilling to sell. So the questions for you, as a CEO, “Is do you have systems to monitor/measure what employees know, think & feel about what is going on in the business?”

They are often the ones on the front line that really know what is going on and what needs to be done, or at least what isn’t working. “Do you really know what your customers know, think & feel? Or do you have a cordial relationship where the “real deal” is not really discussed?” Honest, conscious conversation is where it all starts. Many people have made careers by learning how to manage-up well. That’s not a bad thing, except when you aren’t telling the CEO the truth about what the troops think, feel and know. But there has to be a cultural environment that always you to be able to safely say the things. That’s not always the case.

And, as a CEO, “Do you take that information that you have gathered from your employees, your customers, all kinds of sources and integrate it into your company?” One of the best ways to stay on top of the game is to monitor social and digital media. If you have a digital / social media command center, where all the top news and information is brought into one central place, you can begin to digest a new picture of the quickly changing landscape very easily. You’ll also want to keep your ear closely attuned to what is happening in the start-up world, regardless of whether it is Silicon Valley or Silicon Beach or Silicon Edge or…

The More Things Change, The More They Stay The Same

To me, all of this sounds like something very familiar to those of us who came from the voice of the customer or quality. Remember Deming, the father of Quality who was pushed out of the American Auto Industry? And then only to be invited to Japan and make their automative industry soar? What was his secret sauce? To listen to their customers and the employees. To make really changes to their products and services based on that feedback!

Start Incubating Innovation

Today, companies must incubate disruptive ideas within their own corporate cultures. And this is not easy, because often it means supporting them as they grow into something truly disruptive. The company might have to absorb their losses. For example, for its first 20 years Amazon made almost no profit. But iterating, pivoting and incubating is not enough. A CEO must maintain the existing business at the same time as they innovate. This is a new and rare skill.

So where best to learn how to think like an OODA Loop CEO? Find a group that help take you through thinking differently, through a design-thinking process where you never know what will come out of it, but it always spurs innovation. You have to cross the chasm, from how you normally do things, to how things have never been done before. That’s a lot of change, so it’s also important to develop those ideas and new innovations in the culture where change and honestly is accepted and appreciated.

@drnatalie

VP, Program Executive, in the Innovation and Transformation Center 
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Digital Transformation Projects Have an 84% Chance of Failure; Are You Ready to Failure or Succeed?

Would You Invest If You Knew the Investment Had a High Likelihood of Failure?

If I were to tell you that I had an investment opportunity for you and the probability of you making money was 16% or less, how likely would you be to invest in it? But if I told you that the investment opportunity had a 90% chance of returning your investment, might you be more likely to want to invest?

What’s interesting is that digital transformation is all around us. We can’t help but be impacted in our person lives, from smart phones, smart TVs, apps (think taxi’s vs. Lyft), Siri, Alexa and Google Home. In business, it’s clear that customers want to engage with business in digital and mobile channels. Businesses need to make the transition to be competitive and survive. Yet according to Consultancy.uk* and Bruce Rogers** who wrote Profitable Brilliance: How Professional Service Firms Become Thought Leaders, 84% of businesses undergoing digital transformation are likely to fail. 

The More Things Change, The More They Stay The Same

Having been at this game for a while, the statistics reminded me of stats from nearly 20 years ago when the topic was CRM and ERP. Though they are not exactly the same, they have many of the same elements. Digital transformation, innovation and CRM and ERP implementations are IT implementation of people, process and technology. What they have in common is the use of technology to make scalable processes that were once manual. The advantages among many, were higher productivity (cost savings) but also providing better customer-facing experiences (revenue generating.) Going back through my old papers about CRM and ERP failure rates,*** I saw many of the same type of stats predicting similar failure rates for digital transformation projects are being predicted today**** (and by many prominent groups, including IDC, Gartner Group and Forrester Research.)

Things that make you go hmmmm. The more things change, the more they stay the same.

When Will Organizational Change Management and Culture Change Be Taken Seriously?

The stats show since the late 1990’s – early 2000’s until now, when Culture Change (CC), Organizational Change Management (OCM) and Behavioral Change (BC) is missing from a project, there are issues, yet it’s still not “fashionable.” Perhaps the lack of fashionability is from an old paradigm stemming from the command and control type leadership that doesn’t deem people as an important aspect of the business transformation, whether its CRM, ERP or Digital Transformation. Perhaps it stems from leadership that doesn’t know there’s a whole science and set of CC and OCM methodologies that go along with IT implementations. Perhaps they have never been shown the value of that OCM and CC can bring, so they still don’t think it’s important enough to invest in. Perhaps it’s a matter of showing people that it works and makes a difference!

The Time for Change is Now

The 4th industrial revolution challenges most of our existing mental models. What this means is that cultural change is essential to enable and execute successfully, any business / organizational / digital transformation. The key is having a plan, as well as, having developed tools and process for culture change and organizational change management which includes, but is not limited to having a:

  1. Communication plan and regular communication cadence
  2. Leadership and stakeholder involvement and engagement
  3. Training and skill development for the future state of the business and
  4. Organizational readiness and adoption on a continuing basis of the ongoing changes.

And of course, underneath each of these very simplistic groupings is a deep set of assumptions, tools, methodology and business-driven outcomes. So digital transformation isn’t uniquely about technology. It is about having the right digital strategy to ultimately transform a business to achieve higher objectives. This type of digital transformation must be built along with the human capital component, including skill sets, as well as, a cultural adoption of changing the way we do business. So what it boils down to is evolving behaviors within the organization, both from a leadership point of view as well as middle level managers to all employees.

Being Stuck in the OCM Adoption Chasm Will Cause Digital Transformation Failure

What is seems like, referencing one of my favorite people and author’s is Geoffrey Moore. It’s seems that perhaps we are, after twenty or more years of having OCM and CC at our finger tips, we are stuck in the adoption chasm. What we are headed for is the digital transformation iceberg of failure. We know what the iceberg did to the Titanic. We don’t want to be on a sinking ship. So what does an organization need to do? More on all of this in a future post.

@drnatalie

Natalie Petouhoff

VP, Program Executive, ITC | Salesforce.com

References

* Consultancy.uk. “Two Thirds of Digital Transformation Projects Fail” Consultancy.UK. N.p., 28 Sept. 2015. Web. 28 July 2016

**Rogers, Bruce. “Why 84% Of Companies Fail At Digital Transformation.” Forbes. Forbes Magazine, 7 Jan. 2016. Web

*** http://sloanreview.mit.edu/article/the-end-of-corporate-culture-as-we-know-it/

*** http://www.cio.com/article/2440386/supply-chain-management/supply-chain—hershey-s-bittersweet-lesson.html

*** http://customerthink.com/failed_crm_implementation_finally_costs_hp_465_million_in_damages/

*** http://www.destinationcrm.com/Articles/Columns-Departments/The-Tipping-Point/The-Scientific-Reason-for-CRM-Failure-Part-1-42510.aspx

*** http://www.destinationcrm.com/Articles/Columns-Departments/The-Tipping-Point/The-Scientific-Reason-for-CRM-Failure-Part-2-42655.asp

*** http://media.techtarget.com/searchCRM/downloads/CRMUnpluggedch2.pdf

*** http://www.zdnet.com/article/crm-failure-rates-2001-2009/

*** https://hbr.org/2002/02/avoid-the-four-perils-of-crm

*** http://www.infoworld.com/article/2648303/applications/waste-management-sues-sap-over-erp-implementation.html

*** http://www.computerworld.com/article/2517917/enterprise-applications/sap–waste-management-settle-lawsuit.html

*** https://www.google.com/#q=hershey+crm+failure&*

*** http://www.crmsearch.com/crm-failures.php

*** http://www.destinationcrm.com/Articles/Columns-Departments/Insight/A-Succession-of-Failures-70822.aspx

**** https://www.idc.com/getdoc.jsp?containerId=US40550115 ; http://www.gartner.com/newsroom/id/3337617 ; https://www.cmo.com.au/article/545992/will_your_business_digital_predator_prey_/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Video Advertising: Key to Getting Customers Attention As Ad Blocking is Increasing

Searches for Influencer Marketing have grown 5x in 2015 according to a study from Google Trends from January 2016. Nearly 40% of Millennials are using ad block applications and their use is growing fast according to a study by PageFair & Adobe. So how does a company get their target customer’s attention? And with content marketing a #1 priority for most CMOs as more and more sales are decided upon before even talking to a sales person. And sometimes a salesperson is never contacted, so getting the customer’s undivided attention has never been so important. Perhaps the answer is video marketing. Video consumption has exploded across all devices and is one of the fastest growing advertising category.

Adobe, a the leader in video content creation and delivery, announced it’s acquisition of TubeMogul which will enable brands to capitalize on the huge shift to online video. The acquisition of TubeMogul  strengthens Adobe’s leadership in digital marketing and advertising technology. The addition of TubeMogul will enable Adobe’s customers to maximize their video advertising investments across desktop, mobile, streaming devices and TV. TubeMogul’s video advertising platform. In addition, this allows their customers to build upon their capabilities in search, display and social advertising planning and delivery using Adobe Media Optimizer with Adobe Marketing Cloud. This combination will give customers access to first-party data and measurement capabilities from Adobe Audience Manager (Adobe’s data management platform) and by using Adobe Analytics.

Why is video advertising so important? Brad Rencher, executive vice president and general manager, digital marketing, Adobe gave this statement, “Whether it’s episodic TV, indie films or Hollywood blockbusters, video consumption is exploding across every device and brands are following those eyeballs.” Adobe feels the acquisition of TubeMogul, will give customers a ‘one-stop shop’ for video advertising, providing even more strategic value for the use of the Adobe Marketing Cloud.

TubeMogul is a video demand-side platform (DSP) leader. Brett Wilson, CEO and co-founder, TubeMogul said, “The combination of Adobe Marketing Cloud with TubeMogul’s software creates a uniquely comprehensive platform that will help marketers always know what’s working — and act on it.” And what’s key is measurement – to know what is working and not working, and obviously do more of what is getting a result.

There are so many choices for Marketers today, as far as software and it is only getting more confusing with all the choices. When a software company can show you how to get results, you know you are going in the right direction. Education and learning to use all the features and functions of what the various software platforms provide is of growing concern for most companies to obtain the highest ROI possible for the investment they have made.

It’s key that Marketers are clear on what their strategy, goals, objectives and tactics are and have a strong measurement program to be able to show that the software purchase enhanced the brands ability to drive more awareness, increase customer acquisition and turn more leads into sales. And with ad blocking increasing, there’s got to be another way to get customer’s attention. Video seems to be a prime candidate. This is just one example of how early adopters and innovators are taking hold of the market place and making their competition irrelevant. And like the BlueOcean authors said, that’s the key to financial success in today’s marketplace. Cross the chasm, join the digital transformation and digital disruption evolution or expect to be disrupted. Disrupt or be disrupted. Those are the choices to being innovative leaders and using design thinking to transform your business revenue model.

@DrNatalie, VP and Principal Analyst, www.ConstellationResearch.com

Covering Customer-facing Applications to Create Great Customer Experiences

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DX is the New CX- Why Customer Experience Isn’t Up to Snuff

Having been a long-term customer experience advocate and studied the field, I as many others, have noticed that while companies are saying that customer experience is a key differentiator, that it’s at the top of their priority list of business initiatives, that they are spending more on it but when customers are asked, they don’t think it’s better. So how could that be?

I know many customer experience professionals who spend a lot of time mapping out their various customer journey’s for different personas or customer profiles, they have purchased and implemented some of the top omni-channel software, are conducting social media / digital media monitoring so they know what their customers are saying… So it’s not that customer experience professionals aren’t doing what they need to do. But if they are doing all that, why do customer still report, in large part, that their experience of most brands is not up to snuff?

What I discovered is that there are two groups of people that think about customer / digital experience, but in very different ways. One group of people tends to be the typical customer experience professional who has done all of the things I mentioned above and done them well. And then there’s another group of people, often in IT, that worry about digital performance management (DPM.) They look at the technology stack that is underneath the omni-channel customer experience technology and optimize it. They worry about things like page load speed, do shopping carts get hung up, etc…

And I found that often the two groups either don’t know they exist or they tend not to work together. And if that is so, the digital customer experience can suffer. Some brands have optimized both the customer experience, omni-channel technology as well as the technology stack underneath omni-channel technology. When that is done, the customer experience is truly optimized from both the DPM and DX perspective and the CX perspective.

If you’d like to learn more about this, please join me on Wednesday, Sept 28th at Sept 28, 2016 @ 10am PT/1pm ET for a Live Webinar and we will look at this topic in-depth! The topic? What the smartest brands know about CX and what they still may not be doing about it! And here’s a link to the research I just completed on https://www.constellationr.com/research/business-imperative-optimizing-digital-customer-experience. And here’s all the professionals who spend their days work making the customer experience the best it can be with customer experience professionals collaborating with IT professionals. If content is king, DPM is the ACE!

@DrNatalie Petouhoff

VP and Principal Analyst, Constellation Research

Covering Customer-Facing Applications that Create Amazing Customer Experiences

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#OOW16 – #IOT Is Really Asking Your Business What Outcomes Are You Looking For?

Many companies approach the internet of things by starting with a device, make it connectable and then are in search of a business use case. This is a typical process that happens when there is a new area of technology area. If a company uses that as a strategy, it can be the long road to #IoT innovation. What businesses need to ask themselves are, “What business outcomes are they looking for and what innovations could be possible to shift their business model?”

We heard from the @OracleIOT group several business scenarios:

  • Break / Fix it – which drives a predictive prescriptive business process
  • Static Analytics – which drives the use of real-time, big-data analytics
  • Ownership – which drives as-a-service business models and
  • Central Service– which drives self-service as well as self-guided service.

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What they are finding is that there are various phases a business often goes through when deploying IOT. It can start with the devices or assets (trucks, phones, factories, etc…) which are then connected to a platform which are connected to a network. For a business to actually make use of IOT, the first phase, Phase 1 can be about Connecting Assets for situations like remote monitoring and asset tracking. Phase 2 is can be using Predictive Analytics which means designing predictive algorithms to transform decisions into proactive instead of reactive decisions and improving products and processes. Phase 3 can be about Service Excellence. This is where the customer or employee experience is affected. It is where IOT is being used to transform business processes by blending IOT into enterprise applications like ERP, SCM, Customer Support, CRM, HCM…

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Some of Oracle’s IOT applications are in the areas of:

  • Asset monitoring for the utilization, availability and data from connected sensors
  • Production monitoring and prognostics of the equipment on the manufacturing factory floor
  • Fleet Management for business who have fleets of trucks, buses, delivery and maintenance vehicles
  • Connected worker for the tracking of employees, for instance in the mining, engineering construction industries.oracle-iot-application-to-business

Here are some examples of clients applying IOT to their businesses:

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VINCI is building the next generation sensor-driven building automation to reduce the number of “truck rolls” which has a huge ROI. They are doing this with the integration or Oracle Service Cloud and SAP. Lochbridge is creating connected fleets where IOT and big data is being used for predictive maintenance in monitoring fleet / cargo to reduce the response time. GEMU is using real-time filtering and processing of valve events and proactive parts replacement with the integration of CRM, IOT and a service ticketing system. And SoftBank is using IOT to deliver mobility-as-a-service where they are monitoring vehicle location for billing and geo-fencing.

As the world of IOT expands and more and more companies start to see the value in connecting enterprise applications, with devices, and networks, we will see the transformation of workers, employees and customer experiences. When those experiences are transformed, the real value and ROI of the connected enterprise will come to life.

@DrNatalie Petouhoff, VP and Principal Analyst

Constellation Research, Covering Customer Facing Applications and IOT

 

 

 

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What You Don’t Know About Millennials Will Hurt Your Bottom-line

This research that I just completed is about how to use customer experience to turn Millennials into brand advocates. Why does it matter? They are different than other generations that have come before then. If you are in the Boomer Generation and are running a contact center there are some changes on the horizon that are key to know about and start preparing for now.

Let’s look at some of the stats. There are >2 billion people in the world. Two billion are active on social media and 1 in 3 consumers prefer social to phones for service. Who’s leading the way? Those that were born into the world with nearly a device in their hand, well almost. And while this post is about customer service, we can’t really separate marketing, customer service and other disciplines. We’ll see why in a minute.

Millennials are the largest, most diverse, educated & influential shoppers on the planet. They are positioned to be the wealthiest generation to date and have influence over their Baby Boomer parent’s choices & will inherent their money / real estate. In fact, by 2018 in US, projected income = $3.4 Trillion/year & surpassing Baby Boomer income.

They are different than The Boomer Generation in that social networks & technology are their LIVES! Here’s some stats:

  • 75% created a profile on a social networking site
  • 55% visit those sites once/day
  • 60% connect to the Internet wirelessly when they are away from work or home
  • 88% text each other
  • 74% new technology makes their life easier
  • 50% use it to be closer to their friends
  • 65% are disconnected one hour or less a day

And millennials take online action all the time!

  • 70% recommend their favorite brands to family & friends
  • 47% write about good online experiences
  • 40% have criticized a brand on a social network
  • 70% would create a video and post it online or write a review about their experience with a company

This post is about customer service, but the initial engagement of Millennials is typically through efforts that tend to fall into marketing – though can also be done in customer service. You want to asknormal-customer-text yourself are you really ready for the Millennials generation? Do you understand how different theunder-20-customer-texty are?

 

 

 

 

 

So if you are wondering where to start here’s some tips:

Map Your Generational Customer Journeys. This is Maya. She is 22 and social is her life. She may do some research using google and find your website. They she may decide to buy something from  Facebook ad, then one the she’s using the product and finds it not up to her standards, she complains on twitter and then leaves critical feed back you your website.

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Learn Why Millennials Trust Your Company Enough to Buy from Them

While 55% said “price” was most important reason, however, price is the least important in building their trust

  • 30% cared more about product quality & quick service
  • 20% cared more about the range of products offered
  • Brand switching is common (least loyal of all generations)

Learn How Do Millennials Decide To Buy From You

A company’s reputation can matter as much as the performance of its products

  • 34% bought from a brand because of the social or political values of the company
  • 89% intentionally visit showroom to see product; then price compare & buy online at best price
  • 90% tell their family & friends NOT to purchase the company’s products when they lose trust or respect for a brand

Engage Millennials Around Life Events

  • They care about things that affect their life
  • Graduating, getting married, buying a house, having children, getting a job, getting divorce, dating…
  • That’s the type of content they are looking for from you – help them with their life events and they will reward you with their loyalty

But Know As You Engage Millennials, Don’t Separate Marketing and Customer Service!

Millennials don’t see the company from separate silos. They see the company as one large department and they expect that you know them and that you treat them the same in all channels, on all devices and from all interaction aspects – from marketing, to service to…. If a Millennial has a problem with a company, instead of calling customer service… 

  • They text 5 friends & share frustration on Facebook
  • Friends share the story with peer groups
  • Result: Friends comment on the incident & share their own stories of disappointment
  • A single event can spread like wildfire
  • When seeking customer service <1% will call customer!

Empower WORD-OF-MOUTH Millennial From All Departments and Share Data About Customers Across All Departments

Know what Marketing said to the customer about a product and service. Know what the brand promise was and make sure the product lives up to it. And that customer service knows what that promised was so they can help transform a bad situation into a good one. Millennials want to trust your brand.

  • Millennials are looking for great products and brands to share with their friends
  • Focus on making an excellent product
  • If you do, then your marketing efforts can be authentic
  • As a result, WOM marketing will be done by Millennials.

So here’s some take aways and look forward to a new report with much more details soon! I am speaking at OpenWorld on Tuesday Sept 20 at 11 AM in Moscone West. Come say hi! I want to hear your stories!

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@DrNatalie Petouhoff, VP and Principal Analyst

Constellation Research Covering All Customer Facing Applications to Create Great Customer Experiences!

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*Sources: Pew Research,  Javelin Strategy & Research Study  &  IRI study

 

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The Need for Customer Experience is Based on Science Not Myth

The need for customer experience to improve is not a myth. In fact, here’s why. Noted psychology researcher and writer Mihaly Csíkszentmihályi observed in 1998 that people who perform seamless, sequence-based activities on a regular basis are happier than people who don’t[i]. He coined the term “flow” to describe this behavior. With the advent of CoIT, we’ve actually imposed a new set of demands on our customer’s brains. But instead of offering a series of smoothly sequential flows, websites and mobile applications are characterized by lag, downtime, and restarts. And at the same time customer’s flow-oriented brains simply aren’t wired to deal with poor digital experience interactions. Science has shown the business need for great customer experiences is a fact, not a myth.

And it can be tempting to label customers picky and impatient. But there’s a wealth of research on what happens to customers at a neurological level when they are forced to deal with slow or interrupted processes.[i] Their impatience is an indelible part of their human circuitry. Brands must recognize that customers’ hardwiring of the brain’s and their neurological desire for flow and easy of use as part of the cost of doing business. Companies must come to terms with the economic imperative of the customer experience or drive customers to their competitors because of their poor focus on customer experiences.

Fast websites and mobile experience create happier users. Those happier users are more likely to follow “calls to action” to register, download, subscribe, request information, or purchase. Unhappy users, which could include those who experience a mere two-second slowdown in how a web page loads, make almost two percent fewer queries, three point seven-five percent click less often, and report being significantly less satisfied with their overall experience[i]. Worse, they tell their friends about their negative experience. With the word-of-mouth social networks provide, brands need to heed the seriousness of differentiating their brand’s customer experience or be left in the dust.

Response Times have been consistent for 45 years. Based on neuroscience, the facts about human perception and response times have been consistent for more than forty-five years[i]. In fact, these numbers are hard-wired in human brains. And they are consistent regardless of the type of device, application, or connection a customer is using. In fact, that’s key to where customer expectations come from thus important to capitalize on. And what’s critical is determining where a brand’ web / mobile sites compare to customer expectations as well as benchmarking against CoIT applications or competitors or even non-competitors who have a great customer experience.

Response Time Has Not changed Much. In Robert B. Miller’s 1968 paper, “Response Time in Man-Computer Conversational Transactions[ii]“, found people have always been most comfortable, most efficient and most productive with response times of less than two seconds. Since 2006, what has changed slightly is the average online shopper expects pages to load in four seconds or less. Today, forty-nine percent expect page load times of two seconds or less, and eighteen percent expect pages to load instantly[iii]. And while optimizing every aspect of a brand’s digital assets to meet an “instant” expectation is a laudable goal, organizations simply may not have initially budgeted the resources to achieve these goals. Digital experience maturity, however, provides teams the ability to identify the interaction points in the digital customer journey most sensitive to improvement so they can maximize return on performance investment and include this in the budget and resource planning activities. Here’s the results of the Walmart study on page load times and conversion rates:

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Businesses can keep arguing that customer experience doesn’t matter, it’s a touchy-feely construct or get it directly affects the bottom-line and start by designing and measuring customer experience performance management. For more on this see my report, here.

@drnatalie petouhoff, VP and Principal Analyst

Covering Customer-Facing Applications

[i] http://www.webperformancetoday.com/2014/07/16/eight-tricks-improve-perceived-web-performance/

[ii]Robert B. Miller’s 1968 paper, “Response Time in Man-Computer Conversational Transactions, https://www.computer.org/csdl/proceedings/afips/1968/5072/00/50720267.pdf

[iii]http://insights.wired.com/profiles/blogs/47-of-consumers-expect-a-web-page-to-load-in-2-seconds-or-less#axzz498kHSokj

[i] http://www.webperformancetoday.com/2010/06/15/everything-you-wanted-to-know-about-web-performance/.

[i]Dual-task interference in simple tasks: Data and theory. Pashler, Harold Psychological Bulletin, Vol. 116(2), Sep 1994, 220-244. http://dx.doi.org/10.1037/0033-2909.116.2.220

[i] The Concept of Flow: Handbook of Positive Psychology, Nakamura, J. and Csikszentmihayi, M. 2002.

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Implementing Customer Experience, Cloud, IOT or Any Technology Project? Why Will it Fail?

Obviously no one plans on implementing a project that will fail. However, statistics show that over the past 20 years a very large percentage of technology projects do fail to result in the business outcomes that they were expected to meet. The real issue is that leading change (implementing new technology, whether it be CX, transitioning to the cloud, IoT, etc…) is different than the role of leading in general. But this point is often overlooked or some leaders don’t realize how big a difference there is in leading change compared to their every day leadership job.

The reasons projects often fail and the need for orchestrating customer experience projects using organizational change management range from:

  1. Projects ran over budget, were late, or never completed.
  2. Projects were attempted more than once because initial efforts failed.
  3. Only a small part of the organization adopted the new processes or systems.
  4. When the project went live, critical business systems halted, causing loss of revenue, increased costs, dissatisfied customers and frustrated employees.
  5. Parts of the business (or possibly the entire organization) eventually reverted to the old way of doing things.
  6. The return on investment (ROI) and/or stated benefits were never realized.
  7. The project cost the business more money than it saved or generated.

 

Our research shows that there are seven steps for leaders of change leaders can use to be more successful.

Practice #1 – Understand the Business Case for Change

Practice #2 – Start with the Executive Team: Move It from Involved to Engaged

Practice #3 – Engage All Leaders and Prepare Them for the Journey

Practice #4 – Build a Broad Understanding of the Change Process

Practice #5 – Evaluate and Tailor the Change Effort

Practice #6 – Develop Adaptive Leadership Skills in Change Leaders

Practice #7 – Create Change Leadership Plans

Don’t become one of the statistics of failed projects. There are best practices that work.

@DrNatalie Petouhoff, VP and Principal Analyst, Constellation Research

Covering Customer-Facing Applications to Create Awesome Customer Experiences

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Guest Post: Operational Information to Include in Your Business Plan

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Benjamin Franklin said that failing to prepare is preparing to fail. This is especially true when business planning. A business plan will be the road map that you follow as you create and grow your business. Central to the plan is the operational information that will link all of the parts together and transform your idea into a viable business.

Components of a Business Plan

Before focusing on one part of the business plan, it is important to understand all of the pieces that make up a good plan because they are all interrelated. According to the U.S. Small Business Administration, a typical business plan will have an executive summary, company description, market analysis and marketing methodology, management, services or product, and a financial projection. Each of these parts is dependent on information from other parts. For example, financial projections will influence the speed of manufacturing and vice versa. If you can only make 10 items a day, you either need to have a high price point or a low financial projection.

Start With the Market

There are several theories for developing a price structure, but the easiest is to set your price comparable to that of the industry average. Once you have your unit prices for products or services, you will multiply this by the number that you can make in a month to get your monthly revenue. Conversely, if you know how much you want to make per month, you can divide this by your unit cost to get the number for production in the month. Since all of your financial analysis comes from revenue and revenue comes from service or product delivery, this is the first important piece of operational information that you will need.

Know the Competition

Your competition will be one of your primary operational drivers. Do not look at them as an enemy. Instead, see competitors as businesses that have already achieved a market share and use them as a model of success. Most successful manufacturing companies have their pertinent information online. For example, Apple Rubber has material guides for its o-rings posted on its site. Assimilate this data into your operational plans instead of trying to reinvent the wheel.

Develop Flowcharts

There are a lot of moving parts to any business. It is one of the reasons that you want to plan it out. To truly understand the minutia of your operations, use a flowchart and plan out every element of the process from concept to delivery of products. Since one of the reasons for a business plan is to prove competency to an investor, the operations flowchart should be done with extreme detail. The ordering of supplies, quality assurance and distribution all need to make an appearance. If this is for a sole employee business, then the flowchart needs to show all of your activities, including marketing, accounting and service delivery.

The Cost of Space

The space needed to run your operation is directly influenced by the business structure, type of business and number of employees. This information also flows into your financial analysis as the purchase of a building will change the structure of your assets. Decide whether to purchase or lease and do not forget to include various fees associated with real estate. Weave all of this information throughout your plan so that it gives the most guidance possible for you and your business.

 

About the Author:

Paul Reyes-Fournier has served as the chief financial officer for social service organizations, churches and schools. He created his ownmarketing firm, RF Media. Paul holds a BS in physics and an MBA.

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