Enabling global organisational alignment: A Methodology

Posted on : 30-09-2013 | By : jo.rose | In : General News

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Globalisation versus localisation:  it’s not a new topic of discussion at Board level, but with the increasing complexity in the market, ease of access to information, and an ever-more crowded market, it is more and more important to have a clear strategy on how to attract and retain clients.

So, whatever the appropriate strategy, it is critical to get the balance right, between offering a scalable global product, and a tailored customer experience.  There are big gains to be had for those who get it right:  Deloitte Consulting estimates that the globalisation of assets, investment opportunities and information can bring efficiency gains of between 5 and 30 percent for providers of financial services that are able to build scale and efficiency into their operating model.

Identifying and implementing the appropriate solution is much more all-encompassing than building a technology platform and encouraging people to work better together.  It’s about defining and embedding a permanent behaviour change.  Put another way, it is about aligning the entire organisation to service the customer.  In other words, it’s really about the most unquantifiable of concepts:  ‘culture change’!

So what is the secret to defining and embedding a customer culture?  Over the coming months we’ll be covering these in detail. Here is a brief introduction to our methodology:

 

Step 1:  Build the team, purpose and philosophy

Any commitment to aligning the organisation must be led by the CEO, and must have the engagement, buy in and involvement of the key Executives in the organisation.  That team must decide on what the Purpose of the organisation is.  An effective Purpose is not ‘to make money’ – that is a by-product.  The most effective Purpose will be around servicing the customer. Until they are clear on what they are trying to achieve, it will be impossible to align the organisation.

Step 2:  Create a customer strategy

Once the Executive team are aligned around servicing the customer, they next step is to establish the growth strategy.  Broadly there are three options:

  • Sell more to existing clients
  • Develop and sell new products to existing clients
  • Sell existing products to new clients

How should the team decide what to focus on?  The only way to do it is to develop an in depth understanding of the (existing and potential) customers’ needs

Once clear on the customer strategy, the team must devise a way to articulate that strategy internally, to engage and inspire the entire organisation. 

Step 3:  Organisation design

Clarity on the customer needs will bring clarity to the appropriate organisation structure to service the client effectively:  How many people are required to service each segment?  How should they work together?  Who should they report to?  Should teams be product-centric, geography-centric or customer-centric?  These are critical questions to answer.

Step 4:  Consistent and aligned metrics and incentives

What is the most effective and appropriate data to deliver the customer strategy and align and incentivise employees?  What metrics should be provided, and how should those metrics be balanced between ‘lag’ and ‘lead’, and financial’ and ‘non-financial data.

 Step 5:  Aligned systems and processes

Only at this stage should the team tackle the question of what systems and processes are required, what reporting tools are required and how the systems and processes underpin and enable the teams to deliver the customer strategy.  The technology infrastructure is a critical enabler to embed a change in ways of working, and are central to the change process, but must be implemented as part of a bigger customer strategy.

Step 6:  Training and follow up

For employees that have worked in a certain way for their entire career, the challenge of changing behaviours and ways of working must not be underestimated.  Key considerations are:

  • What is the ‘story’ that is being sold to the employees?  How is that story engaging and compelling?
  • How is the training delivered and embedded to make it stick?
  • How do we ensure each level of the organisation buys into and embeds the change?

Step 7:  Performance Management

To embed the change, a long term shift in the approach to performance management is required.  How can you use information and performance data to measure people against the appropriate behaviours, as well as results?

The ‘culture’ of an organisation is the aggregation of the behaviours of all employees.  Changing, and aligning those behaviours requires a comprehensive, and all-encompassing change programme.  Technology is the enabler at the heart of that programme, each one of these phases is critical to the success of a process to create global alignment.  Those companies that jump in to one or two of the stages, thinking that’s ‘job done’ will soon find the changes are not embedded and the ‘change process’ has been a costly failure.

Piers Robinson, biography

Piers has a passion for creating high performance business environments.  His philosophy of aligning the entire organisation to service the customer is founded upon his unique combination of blue chip sales management experience with PepsiCo and Diageo, alongside his strategic HR experience as the Global HR Director of Fitness First and organisational change consulting with a range of blue chip clients.  Piers has also developed his leadership skills as a Commonwealth Gold medal winning rowing coach and as a Visiting Fellow at Imperial College Business School.

The aggregation of marginal gains – what can we learn from the sport of cycling?

Posted on : 30-09-2013 | By : richard.gale | In : General News

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Sir David Brailsford is the major driver behind a revolution in the fortunes of British Cycling. The UK is now one of the most successful cycling nations with two successive Tour de France winners from Team Sky, a team that was put together barely 4 years ago. Fifteen years ago British cycling was languishing in the lower divisions, now it is riding high in the world rankings.

One of the most interesting techniques Brailsford has applied to cycle coaching is the “aggregation of marginal gains” the sum of analysing & making many small changes to an environment or training plan.  Many examples have been quoted such as heating bib shorts before use to keep the muscles warm, wiping tyres down with alcohol before the start of races to clean grit off and employing a chef to provide optimised meals for the riders.

One specific example of this is the Team Sky Bus. Every competitor has a bus but, before Brailsford and his team, none had thought about in the same way. Team Sky started from scratch and built it out to provide the perfect environment to support the riders on the tours. Every part of the rider’s routine was analysed and an environment was then designed to meet their needs perfectly. Riders need lots of clean, dry kit, the need lots of nutritious interesting food, they need somewhere private to discuss the days’ events and plan for the next one. So the bus included washing machines (muffled of course), meeting rooms, kitchen & sleeping areas customised for the riders.

The attention to detail (and an almost unlimited budget) showed through when two brand new Volvo coaches were torn apart and then 9000 man hours of kitting out took place. This process involved the coaches, riders and other staff with continuous feedback which refined the result into an additional pair of team members. Initially the rival teams dismissed the buses nicknamed “Death Stars” as just another bus (abet – expensive they ended up costing around £750k each)but as Sky’s daily results on the tours jumped up the leader boards they came to learn and respect the thought processes involved.

So what lessons can we learn on the Sky approach? Well the techniques they are using have been borrowed from business ideas but it is the consistent application of them which is making them work so well.

GB cycling & the Sky team have a similar philosophy based on the following core principles:

Setting ambitious goals

From a standing start in 2010 Brailsford said Team Sky would win the Tour de France within five years. This was seen as ludicrous by the cycling establishment. He disrupted conventional thinking by applying scientific methods to the sport and, with Bradley Wiggins victory in 2012, it actually took them three years.

We think this ‘shooting for the stars’ ambition can work for business just as well. Aiming for what could be done not what is being done changes the way people think within companies and, given the right environment, support, drive and that ambition does create winning organisations.

Focus on the end result

What is important? All around there is noise, interference and distractions so keeping the ‘blinkers’ on to aim for the end-game is critical. Saying that, blindly ignoring feedback or responses around you can be fatal too so ensuring you are aiming for the right end result is also critical.

Teamwork & Ensuring the whole team has one vision

All organisations have teams. Team GB & Sky have ensured the right mix of individuals form a team with a common, shared goal. This is something which is part directed, part in built and always reinforced. Everyone understands the obligations and rewards of having the single winning vision.

Analyse everything

Data is everything and unlocking its hidden value is another key to the team’s success. Everyone in the team understands the value of capturing as much information as possible and that data is analysed and replayed in as near time as possible. The Sky team sometimes forgo the glory of the ‘hands free’ roll over the finishing line to punch in the completion message on their bike computers.

Control & Discipline

There is a poster on the entrance to the team bus with the Team rules re-emphasises the importance of the vision and goals of the team. It does not spell out the penalties for infringement but a number of people have left the team after breaching rules either during or before their stint with Sky.

Grow the person

This is the aim of most businesses but both GB and Sky aim to get inside their team members’ heads to understand their motivations, desires and ambitions. This energy is then focussed in such a way to build and improve the team whilst maximising the personal objectives of the person.

Plan and plan flexibility

Team GB & Sky management and riders spend a large amount of their time planning for every eventuality including differing weather conditions, team strengths, rivals changing strategies and  any other factors that can influence the race. They then produce the strategic plan of the race, the day, the hour or the hill. The important piece is that any changing circumstances are fed into the plan to modify or indeed create a new plan as it is required. It is strong enough to hold up and work but flexible enough change and still be a success.

 

All these attributes can be applied to most business areas and it is the ability to plan and refine every detail which has provided British cycling and Sky with their continued success. Small continuous improvements bring marginal gains to both Sport and also Business teams.

What is also critical is that the strategy or ‘big picture’ is going in the right direction. There is no point bringing the right pillow if the bus is parked in the wrong town.

 

 

Innovation drives outdoor digital advertising

Posted on : 30-09-2013 | By : john.vincent | In : Innovation

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One of our current clients is in the media space and recently I took the time to visit their digital playground, where they showcased new innovations for their own clients. It was really interesting to see how new technology will change the way that we currently behave and interact in the “space between the boxes” (meaning the journey from home to work location).

Prior to visiting I, like I’m sure many people, hadn’t really though much about how I use my travelling time outside of catching up on emails, preparing for meetings and generally keeping up with events. I certainly hadn’t thought about interacting with the “digital environment”.

Traditionally, companies such as CBS, Clear Channel and JCDecaux have provided an outdoor advertising offering through street furniture, billboards and screens in with a static physical or digital display. We’ve all seen the transition from the standard posters to screens that display adverts using business intelligence to target consumers based on location, time of day, footfall etc…

As companies look to re-balance the percentage of revenue to a larger digital portfolio they are also looking at new techniques and innovation to increase business.

Firstly, in terms of the “legacy” estate, there is an opportunity to increase the mobile digital experience via smartphones through the use of NFC and QR codes with campaigns. For example, by placing these at a standard place on the outdoor furniture, advertisers can create a visual direction to it with standard posters from which customers can interact, access more content, order products, integrate with social media etc…

A recent example of this is the announcement of the partnership between Clear Channel and Metro where consumers can tap or scan the interactive tags on 10,000 of the bus shelters to access free content from the Metro site. This is a great example of the marriage of new and old technology to create a new customer experience. 

On the existing digital displays, the possibilities go further as the screen content can be changed dynamically based on interaction with the user or other variables. For example, screens can display live feed information such as events and news pushed directly from content servers. An example of this is where the latest job adverts are displayed real time from agencies, countdowns to an event launch or messages from the public through twitter #hastags responding to questions posed by companies (carefully vetted of course…).

Another example of this interaction is allowing the smartphone to display tailored content from the advertiser by scanning the a QR code and then receiving an additional user experience (basically experiencing the advert on their own terms …). There is still some way to go though, with a recent survey from CBS Outdoor  stating that only 11% of European consumers have scanned an outdoor enabled QR code.

However, the real innovations are coming through actually enabling and tailoring a direct, often multi-sensory, connection between the advertisement and the consumer. Already companies have been trialing the touchscreen and motion sensitive screens, allowing consumers to navigate as they do on tablets and smartphones, play games, select product options, take pictures of themselves to upload into adverts etc… Going forwards there needed  we expect technology to develop further to simplify the interaction between the consumer and the advert, limiting the amount of manual or prompted intervention.

What is really interesting is where technology is now emerging to accurately measure in real time the type and volume of people that see ads in any given location and at any time of the day. An example of this is with Amscreen using Quividi technology to assess who is looking at the screen, for how long, age and sex to provide accurate information from which campaigns can be tailored. Combine this with the interactive aspects, which are now including other sensory experiences such as sound or smell along with motion, and the possibilities are really interesting.

Of course, there’s a fine line in interactive advertising…if not considered carefully it can be seen as impinging on a consumer’s personal space or breaching data privacy boundaries. Whilst innovative for the provider, many consumers will still want the traditional channels of print, television and radio with which they feel more comfortable (and in control).

That said, over the coming years expect to see a  much enhanced outdoor consumer advertising experience (seems Ridley Scott was not far off with Blade Runner…). If you don’t want to partake then you may need to keep your eyes either shut or firmly on the “old fashioned” e-book reader…

 

From a single view of a customer to a global view of an individual – bespoke banking for the mass market

Posted on : 02-09-2013 | By : richard.gale | In : Innovation

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Customer interaction with banks can be complex. Historically this has resulted in lost opportunities for both institutions and their clients with neither obtaining full value from the relationship. Forward looking banks are addressing this through changes in thinking and technology.

Banks have many touch points with their existing & potential clients;

  • Accounts –  such as current, saving, loan, share trading, business/personal, mortgages
  • Products – such as life insurance, pensions or advisory services
  • Channels – face-to-face, telephone, ATM, web application, mobile, social media and a multitudes of formats in advertising and marketing
  • History – banks have bought and absorbed many different, divergent firms and may not have fully integrated across people, process & systems

The complexity potential of this interaction combined with the sometimes disjointed nature of these organisations mean that connections are not made and so opportunities can be lost, customers can feel undervalued whilst increasing the potential for fraud.

Change – Cultural & organisational integration

Most banks are huge organisations with thousands of staff based around the globe. To scale the organisation, roles have become more specialised and most people have deep skills in relatively narrow fields of the banks overall capability.

This has worked well and has enabled the global growth of the organisation but opportunities are being missed to further grow customers and clients through the consolidation of information and consistency of customer experience.

That additional value can be enabled by a cultural shift towards a ‘one bank’ philosophy, most banks have these programmes in place and seem to work at the infrastructure level but a different way of thinking that gives an incentive to think about other areas that could help their customer.

To enable this to work there would need to be a supporting framework in place;

  1. Knowledge of the other areas/business units/geography – a simple view of a complex environment is critical
  2. Open & effective communication channels – the mechanism is less important than the knowledge that it is available and there are people listening and willing to help
  3. Communication needs to be valued and seen to be valued by all levels with the business

Improve – Customer Relations

Timely, accurate & complete customer intelligence  is critical. Who, what where are your customers? What do they do, what do they like & dislike and what are their dreams? Gaining this insight into your customer’s mind and tailoring communications & solutions to match this will make them want to do more business with you.

A major factor in achieving this will be to collate & analyse all possible information and so having a single point (such as customer relationship team)  accountable for ensuring its accuracy & completeness will help this process.

Having a more complete set of information in regard to your customer will help understand their needs and, with a consistent approach to communication, also help avoid alienating them through providing inaccurate or inappropriate information or advice.

As important to consistency & completeness is the longevity  of the relationship. Customers in the past have generally stayed with the same bank for a considerable time, this ‘stickiness’ is now being eroded through;

  • Improved knowledge – of other options available
  • Legislation – forcing switching of accounts to me made easier
  • Changing attitudes – people are commoditising purchasing and usage based on value and quality ahead buying from a single company
  • Technology – information from many sources & companies are available on a phone or tablet

The relationship between a customer and a bank is similar to any long term partnership, it’s based on a set of core features; trust, openness, well-being. equality amongst others.

Thinking about these principles when engaging with a customer will only help the relationship endure.

Integrate – Infrastructure, systems & applications

Large scale, standardised technology has been the norm for banks interacting with their customers. This works and has been the only real way to handle the millions of transactions from thousands of customers in the past.

That same core technology still underpins the banking world but with the advances in capability & speed and parallel reduction in cost there is an opportunity to build a view of the individual and then start providing bespoke services on a manufacturing scale.

The move to more customer centric technology should enable the standard bank account holder to experience a ‘Saville Row’ world for a Marks & Spencer price.

An impact of this may be that the Private banking and Wealth management divisions of banks will have to raise their level of service to differentiate from the ‘norm’.

The use of data analytics to search through the volumes of data and analyse and extract insight and value from it are essential tools to achieve the bespoke solution.

Big Data databases and tool-kits can help provide the framework but knowledgeable teams of people with both the understanding of the customers and technology will be required to provide answers and the next set of questions to achieve an even greater level of customer satisfaction, retention and growth.

Smartphone Wars – Android firmly in front

Posted on : 02-09-2013 | By : jo.rose | In : Innovation

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At the beginning of 2013 we published our 10 predictions for the year. At numbers 9 and 10 they included:

  • Samsung/Android gain more ground over Apple – “we already have seen the Apple dominance, specifically in relation to the Appstore, being eroded and this will continue as the potential of a more open platform becomes apparent to both developers and users of technology”.
  • The death knell sounds for RIM/Blackberry – “not much more to say. Most likely they will be acquired by one of the big new technology companies to gain access to the remaining smart phone users”.

Not everyone agreed (surprising in our view regarding Blackberry…) – but we thought that with the recent media focus now was a good time just to cast a few further thoughts.

A few weeks ago IDC published their worldwide phone tracker stats including the smartphone OS shipments (see below)

 

So, it looks like the Android is unstoppable at the moment with a 73.5% increase in the year to 2Q13, now commanding some 79.3% of the market. Whilst “technically” they were outperformed by Windows phone with 77.6% increase, the volumes pale in comparison.

On the mobile handset side, Samsung was the largest vendor in the world by a huge margin according to IDC’s data. The South Korea-based giant shipped an estimated 113.4 million cell phones worldwide in the second quarter to take 26.2% of the global market, up from 23.9% in the same quarter last year (Nokia retained the No.2 spot, but it handset shipments dropped 27% to 61.1 million units).

Apple sold 31.2 million iPhones last quarter which according to IDC represents 7.2% of the mobile handset market in Q2 (up from Apple’s 6.4% market share in Q2 2012).

It is rapidly becoming a two horse race, with Android representing more units in the last quarter than the entire smartphone market in the same quarter in 2012!.

Can IOS keep pace? On the current evidence it seems not. They are, however, still a long way ahead of the pack of which Windows phone seems the only credible each way bet.

So, on to Blackberry. BB10 hasn’t been the success that they desperately needed and will give the Windows Phone platform a boost. Indeed, as I write this article the rumour doing the rounds is that T-Mobile are stopping sales of Blackberry 10 devices in store and will offer online only…another blow.

Bert Nordberg, ex Sony Ericsson CEO and now on the board at Blackberry, is helping to shape the strategy going forwards, which includes operating as a more “niche maker of mobile hardware” and selling off certain assets. He recently told The Wall Street Journal “BlackBerry has cash and it has no debt, so I’m sure that we’ll piece something together”.

Not the most resounding endorsement or encouragement for Blackberry employees. The For Sale sign is firmly up…but the question is who will buy?

How should banks target technology innovation?

Posted on : 02-09-2013 | By : john.vincent | In : Finance

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We have written a lot about the pressures on financial service companies and how they are responding differently in order to adapt to these challenges (such as are the banks Too Big to Succeed?, how to manage Technical Debt and are they Missing an Opportunity with Bank Accounts). What we see is one common theme emerging – the need for banks, wherever they are, to continue to innovate in order to protect existing markets, build share in emerging ones and service their clients in a new more agile way.

“Innovation” and “Agility” are words too often scattered liberally in corporate life through mission statements and strategic objectives…a strap line or comfort blanket for C-Level communities. Box ticked.

However, do we really consider the practicality of applying these in today’s environment? Do we modify and target based on situation? Important questions. Let’s consider further.

If we look at the mature financial markets there are a number of external pressures which influence and inform our ability to drive technology innovation. Here we see Risk and Regulation forming a large part of the technology discretionary spend, up to 60% some estimate. This naturally has a big impact on the investment portfolio and how much can be targeted for projects in the innovation category. Indeed, the impact is often disproportionate as resources in the compliance area, such as contractors and consultants, are often sourced from the premium end of the market, thus further eroding what remains. This is something that needs to be addressed, quickly.

Another factor affecting the mature markets is the continued pressure on costs and internal resource burden. Even if funding for nurturing innovation exists, the staff that understand the business AND underpinning technology often cannot be freed up from the day to day fight for survival (an example of where this is being addressed is at Aviva with the creation of their “Digital Unit”).

Contrast this with the start-up communities located close to the key financial hubs…here funding exists to focus solely on the new future technology innovations, such as mobile payments, big data analytics and data science.

In response to this, the larger banks are engaging with the start-up community to drive new technology, such as through the Fintech Innovation Lab – a 12 week programme running through to March 2014. Shaygan Keradpir, CTO at Barclays, said “The increasing role of technology in financial services is accelerating the pace and breadth of innovation and driving the kind of cutting-edge services which our customers and clients demand.”

By engaging in this way banks are more likely to have an agile approach to innovation to combat both their market challenges and not insignificant legacy infrastructure (indeed, only recently Barclays lost their key mobile guru behind PingIt to real-time mobile payments start-up, Zapp).

Switching to emerging markets, a different approach to how technology innovation is approached needs to be considered. Here growth is a priority…in South Africa 67% of the population do not have bank accounts. This represents a huge opportunity to both on-board and drive innovative solutions in a different way. Indeed, Standard Bank has implemented a system with local stores acting as “access agents” to provide South African clients access to bank accounts for deposits, withdrawals and money transfers. They are currently opening at a rate of 5000 accounts every day.

Again in Africa, it is predicted that countries such as Nigeria, Kenya and Tanzania will be at the forefront of mobile banking and payments. In fact, whilst they have been under developed from a banking infrastructure and telecommunications perspective, this is expected be a benefit as competition enters the continent and drives mobile platform innovation without the burden of legacy investments.

It is interesting to watch how technology innovation differs from market to market and country to country. Awareness of this, targeting the innovation portfolio and truly understanding agility are key.