Here, you will find Wendy’s thoughts on and experiences with strategy, marketing, customer engagement, the energy industry, the PhD research she is occupied with, or any other topics that might interest you.
A few blogs ago (in this blog, to be exact), I mentioned the importance of training yourself and everyone in your organization to constantly interpret information. Here, I already discussed what sources you could use to do a quick market analysis. However interesting and necessary it is to look at external information, there is a lot to gain from looking at information available with your own customers, employees, in your processes and about your products and services. Let’s take a quick look at some information that you might find worthwhile having:
- Customers: when did they become customers? Have they looked at alternative suppliers? Why (not)? What made you stand out for them? Do your customers still think you stand out compared with other alternatives? How often, about what and through which channels do they contact you? How do they respond to your direct marketing campaigns? How many products or services do they buy with you? Have they recommended you to other people? How many customers choose not to stay with you and do you know why? Can you see if something happened before they left you?
- Employees: when did they become employees? What are the jobs/roles/tasks they have performed so far? What are they good at and is this used well enough at work? What makes them happy and is that provided for? If relevant: what is your customers’ opinion on and experience with your employees? Are they satisfied? Have they promoted your company to other potential employees or customers? How many employees have entered and left your organization? Do you know why employees leave your organization?
- Processes: have you improved your processes in terms of handling time, quality of output, et cetera? How many employees are involved in one process chain? Do all employees know who are involved in the steps before and after them? Do all employees know why this process is important and what the costs and benefits are? What does the output of this process contribute to? Does that align with your business goals? Does it benefit your customers or employees?
- Products/services: what value do customers attach to each product or service? How does it help them achieve their goals? What does each individual product/service cost to deliver? What are the product/service’s benefits in terms of contribution to your goals? How do your customers evaluate your products and services? What is your product/service’s delivery time and quality? Have there been major changes to your portfolio and why (not)? How are your customers and employees involved in your product and service design, creation and delivery?
In the past few weeks, I watched two movies that I’d really like to bring to your attention, in case you have not seen them yet. First, I attended a screening at Nyenrode Business University of the documentary ‘Normal is Over’ by Renée Scheltema. See: www.normalisoverthemovie.com. Second, at ADE Green I watched the movie ‘How to Let Go of the World and Love All The Things Climate Can't Change’ by Josh Fox and listened to his keynote speech. You can find more information on the movie here: www.howtoletgomovie.com. With respect to this latter movie: yes, the first half could be experienced as depressing and even somewhat overwhelming. But do tag along for the second half, there’s hope! The reason I’d like to bring both these movies to your attention is that they are –although entirely different in nature- both very personal movies about climate change. Moreover, both show that climate change is intertwined with our current economic systems that have driven us to a point where it sometimes seems hard to take a step back and see what impact our actions have on the world around us. They also show that climate change does not stop at our borders, but affects all of us on this planet. In fact, many of the poorer people more than anyone else. Shoud you ever need to convince colleagues, friends or anyone else of the impact of climate change and the need to take action, these movies might do the trick.
In my previous blog, I stated that it is important to train yourself and everyone in your organization to constantly interpret information. Today, I’d like to share with you some of the sources that I tend to use when I am asked to do a quick market analysis. Of course, this starts with you having defined your mission and vision, after which you would like to increase your insights into market developments and players. The first information source that I would use is: YOU (and your colleagues, of course). Truth of the matter is, you have meaningful insight into your own business. You often see at least part of the developments that and players who are or will be important in your industry. I can hear you think: duh! No news here. Simple as it is, even though you probably have information, you are not always poised to do something with it. Too busy dealing with today’s or tomorrow’s issues, you might miss the time to think the information over or write things down. Resulting in a lack of sense making of the information at hand. After having interviewed a number of people (often the manager or director, as well as e.g. a controller, someone from marketing and sales, someone from customer service), I at least use the following external sources of information:
- Industry reports: written by e.g. industry associations, financial institutions, large consultancies, government institutions
- Research institutions’ reports: TNO, ECN, CE Delft as well as different universities have written numerous reports on different industries
- Competition and/or partners’ websites: sections on business innovations, investments, R&D are always interesting reading material, as are press releases
- Industry websites: specialized blogs or websites that show an overview of important developments, news and industry facts
- Chamber of Commerce (CoC): if I am interested in specific organizations, I look at the information provided by the CoC or parties who use CoC information, such as Companyinfo in the Netherlands
- Twitter/Facebook/LinkedIn, and other social media: often, there are specialized groups around topics (including customer complaints about your competitors or your own company, which can be highly informative). You might be surprised by the information you can find here!
Although many things have changed since I started working some 22+ years ago, I still come across organizations in which annual planning cycles are used. In those organizations, October is usually 'that time of year again', in which two planning cycles coincide. People are working hard to achieve all of the goals set for this year, have to think about strategic goals for the next 3-5 years and to-do’s for next year, and find themselves faced with only a little over 2 months left to the actual deadlines. Which made me wonder: do annual planning cycles still make sense? Trust me, I like writing business plans. As a means to an end, not as an end in itself. Now let’s be honest: with all of the dynamics in technology, politics, financial markets and more, we can be pretty certain that whatever scenario we think will happen in 3 to 5 years time will NOT happen. Unless we are fortune tellers there is no way that our exact scenarios will come into play. So should we give up on planning at all? In my humble opinion: NO. Not only because I personally like planning and structuring (the good news is: I also like rescheduling when it makes sense). Even though we cannot predict exact scenarios, we can spot major market developments and trends. We might not be able to predict the exact timing or impact, but I am pretty confident that for your market, you know what developments and market players to monitor. I’d say it makes perfect sense to
- Make certain your mission and vision are clear, appealing and known to all employees and partners, so they can be used as corner stones for everyone you and they do
- Regularly discuss which developments, market players and trends are important to track for your organization and make certain these are shared with everyone
- Jointly define goals for next year, make sure you leave room to manoeuvre
- Most importantly: monitor and track throughout the year
- Redefine when necessary and do so when it makes sense. Don't wait until next year! Use rolling forecasts if you like.
Zappos and holacracy apparently were top of mind for a number of people that sent me newsletters in the past few months, as they featured in several articles. While reading those, I could not help thinking about the relation with flexible workforce. Why? Zappos Zappos is a highly successful online retailer with a culture that according to its CEO Tony Hsieh evolves around delivering happiness. In fact, Mr. Hsieh received so many requests to share his keys to success that he decided to share these via Zappos Insights. Interesting as the company’s story may be (see e.g. this article in Fast Company), this is only part of the puzzle that emerged in my brain. Holacracy See, Zappos is one of the companies that use holacracy as an organising principle. To find out more about holacracy go to www.holacracy.org. For now, let me share Wikipedia’s definition: ‘Holacracy is a social technology or system of organizational governance in which authority and decision-making are distributed throughout a holarchy of self-organizing teams rather than being vested at the top of a hierarchy’. When looking more closely the concept seems to be a blend of best practices of democracy, lean, agile software development and engagement. It seems to result in highly innovative, responsive companies run by engaged employees who enjoy high levels of autonomy, yet share responsibility. Sounds good, right? Knowledge exchange Not only did this sound good to me, it also reminded me of how consultants work and what someone I recently interviewed said about working with consultants. He said: ‘One of the reasons I like working with consultants, is that they work in different places and can apply in our company what they learnt elsewhere’. One of the key principles of a holacracy is that people work in circles that are organized around particular topics. People are part of different circles and hence share their knowledge with different colleagues all the time. Flexible workforce This exchange of knowledge among colleagues is important as it might help increase your organization's performance and agility. But how do your temporary colleagues or flexible workforce fit into this picture? Chances are that you work with consultants or other flexible workers in your organization, as having a flexible workforce pool is part of many companies’ strategies. Assuming you would like your organization to be as successful as Zappos or similar companies –be it through using holacracy or not- it is important to continuously use the talents, skills and attitudes of all people in your company. Whether they are working there as employees, or as consultants and part of your flexible workforce. So what do you do to facilitate this knowledge exchange in your company? PS: In case you are interested in sceptical views on holacracy and Zappos’ organizational transformation, you might want to read the article in HR Review and another one in Forbes.
The power of words in strategy formulation While I was at a management conference earlier this week, I noticed that one of the speakers, who was clearly referring to his own personal experience and the experiences of his team members continuously made his point by using the second-person personal pronoun ‘you’. For example: ‘You have to do something when you are in a situation like that. Obviously, you cannot manage on your own, so you have to cooperate with others’. This made me wonder. Why would he do this? Is it modesty? Is it lack of engagement? Is it objectivity? Or is it something completely different? Even though I am clearly intrigued by the question why people refer to themselves as ‘you’ (and if you are, too, there is plenty of information on this topic out there ), this led me to another point: the importance of language, and more precisely: the importance of language in strategic planning. Language and strategic planning Part of what I do is to help my customers formulate their strategic plans. What I often find, is that in their first attempt at formulating their goals, many people have a natural tendency to use words such as ‘the company’, ‘the organization’, ‘intends’, ‘will try’, ‘might’, ‘may’, et cetera. This results in sentences such as ‘The organization intends to increase customer’s net promotor score to 85% within the next 3 years’. If you think this is a SMART goal formulation, think again. Who is the organization? Who is the person, or who are the team members who will take responsibility for achieving this goal? And what does ‘intends’ mean? With this type of goal formulation, the team members increase the risk of not achieving their goals, simply because the words they use are not personal nor action-driven. This is not something I have researched, although other people probably have done so.
Knowledge exchange; do consultants add value? Globalization, high-speed internet and mobile connections have increased the amount of information available for personal and work use, the speed at which this is available, and the frequency with which it is updated. Although information is readily available, it is only valuable in the right context, where it is converted into knowledge. Every market party will try to be faster, better or more innovative than its competitors and try to surprise its customers with new features or services. This leads to continuous pressure to change that is part of their efforts to try and maintain a sustainable competitive advantage (Løwendahl and Revang, 1998). In order to maintain this competitive advantage, companies need to learn. This is where knowledge exchange plays an important role: exchange of knowledge leads to mutual learning and learning is key to sustainable competitive advantage (Glazer, 1991; Arnold and Nguyng, 2006). So what does this have to do with consultants? In the past few decades, the use of consultants had increased substantially and they have become part of everyday organizational life (Werr and Premer, 2007). Regardless of the reason for hiring, it can be interesting to see whether or not consultants contribute to the ongoing information system that Glazer says is required for maintaining sustainable competitive advantage and thus added value. One could argue that external consultants add value to companies by ‘shuffling knowledge around’, in other words: by applying knowledge gained in one assignment in the next assignment (Smedlund and Toivonen, 2007).