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ICYMM: Communities Are What You Need – Trust Me!

ICYMM: In Case You Missed Me - things with me or about me elsewhere in the internetz.

I have been saying for a very, very long time (back in 2001 I wrote a research note for Gartner, and in 2003 Michael Maoz and I spoke about this already at the conferences… and, oh yeah – in the late 1980s when I was moderating Compuserve forums I gave an interview for PCWeek about them – and I am sure there’s more, but you are bored of hearing me say how awesome I am — even though I am) that communities are the end goal for business.

The real power of the social networks is not the ability to share kitten pictures or news or baby pictures with people we loathed in high school but love now.  The power is the power of aggregating people of kin minds into communities.

Moving communities from offline to online is the greatest trick ever pulled by the internet.  We moved from an average of 12 communities participation per person in 2002 (just 4 online) to 48 communities participation per person (26 online).

The aggregation of power and knowledge (the reason for communities to exist) go back to the caves of Altamira and the fires that gathered people around to share stories (thanks Fred Studer for that image, well done).

I recently had a google hangout interview / webinar / something-else-you-want-to-call-it with my friend Sheridan Gaenger of Helpshift to talk about communities and how they are changing businesses.  We talked for a while, and it was one of the greatest conversations about communities I recall from recent years.

Pay a listen to it, or read the blog post that Sheridan wrote about it.  If you are interested in communities you will not be disappointed.

When  you are done, come back and talk to me about your thoughts please.  I’d love to know what you are doing and thinking in regards to communities.

disclosure: Helpshift was a client once some time ago.  I also sit in the board of advisers and own equity in the company as a result of this relationship (and, no, did not get paid to do this).  The interesting thing though, HelpShift does not sell community software, nor do they benefit if you implement or use communities.  Its part of the power of communities: spark conversations that broaden the topics you are interested in, watch what happens.  Inbound.  Funny...

Salesforce Buyout: My Speculation

If you are reading this you don’t need to be directed to an article explaining what happened: Bloomberg said that (somehow) it leaked that Salesforce had retained investment bankers to help them evaluate a potential acquisition or buyout.

Of course, this meant it was open season for everyone to add fuel to the fire, blood to the feeding frenzy, or — whatever else you add to something else to make it more intense.

Of course, these are all speculations – so I decided to add my 0.0015 drachmas to the affair and add my speculation.

Caveat: unlikely I can add a name to this that has not been mentioned (and that has a chance to happen).  

Caveat2: I am not privileged to any information that is not public – so take it for what it is… pure speculation.

Caveat3: you still reading?  Good… here we go.

Scenario 1: The PR Confabulation

It would be unfair or illogical to assume that SFDC has not had its fair share of M&A over the years – both before and after going public.  It would also be unfair to Marc Benioff and its board to say that any of those attempts had more than a passable chance at becoming reality.

Why mention the M&A attempt and the search for advisers this time around?

Some people out there are speculating that is part of a PR effort to shore up the value of SFDC and to promote Marc Benioff’s name before a commitment to start a career in politics.  Some people infer that this time is the right price / contender combination to make it a sizable event that must be reported before it leaks (you know how fast things leak in SF and Silicon Valley – see Yammer/MSFT for reference).

While there is a certain, minor, potential for this to be true I cannot see a PR campaign being made out of this.  True, Mr. Benioff has been more cozy in taking political positions lately and the remarkable coverage of all the philanthropic efforts he takes part of is growing – but I don’t think he needs this to shore up his name – or his company name.

As I discussed yesterday with a well-known CEO of a competitor – everybody in the known world either has or is considering having an instance of SFDC software in their company.  They are well known.

Chance of this scenario being the one: less than 5 percent (there are some crazy PR people out there, after all)

Scenario 2: All’s Well That Ends Well

With due apologies to Murphy Brown writers (look it up,  trust me) nothing will happen at the end.

As I said before, many talks have happened and many offers have been made – and this may be the most logical, or (as some say) predicted one, or closest to the mark, or even the only one that the board would seriously consider… but that means it means to be made public to minimize the carnage at a later time for someone’s stock or private cash stash.

Independently of that, nothing’s going to happen – but its a significant possibility that must be advertised or leaked or whatever was done to it.

Chance of this scenario being the one: less than 10 percent 

Scenario 3: Everybody Needs Somebody (sing it!)

There is a not-zero possibility that an acquisition is going to happen (and given SFDC’s inability to keep a secret in its history – trust me on this) and they will be acquired.

But whom?

Plenty of speculation has already happened in the Internetz and the Twitterz – will let you find it.  My take? Glad you asked.

Three potential suitors (and some not-so-potential) in order of likelihood:

IBM – yes, those guys.

Their businesses has been shrinking and they need a way to get into the cloud.  Bad.  In spite of whatever magic mushrooms they consume to say their cloud businesses are near $15BB – they are not a player in cloud.  This will give them “cloud creed” and an incredible entry point into enterprise software.  It will also allow them to take a $5-6BB business and easily double it over the next couple of years by letting their consulting and outsourcing LOB go at it.

There is the question that emerges quickly here, given their recent relationship, what about SugarCRM?

When the relationship between them was first announced I had the chance to talk to an IBM executive about that potential.  He said, paraphrasing, that IBM does not make acquisitions that yield less than  billion dollars in return – and they could not see SugarCRM getting to that level.

Should I remark that Salesforce is already there?  And then many times over?

There is a lot of upside for IBM to enter this market with this acquisition… only downfall? they would need to cut through the many layers of bureaucracy to make the right people agree.  And any IBMer would agree that is not a small task (the smart joke would be that they wanted to acquire SFDC when they turned $1BB in revenues but just now they were able to get the right approvals; hehehe – I am not smart humor).

Oracle – Yes, Benioff’s former boss and fist investor (well, not the company but the chairman) and a vendor with a desperate need for “cloud creed”.

In spite of their marketing prowess, Oracle has nothing that resembles a modern cloud product.  They bought old, outdated, and (pardon the french) crappy software and never really updated or improved it.  The customer attrition rate at some of the properties the acquired has crossed the 50% range (meaning that more than half the customers at the time of the acquisitions are already gone) and the revenues they expected are nowhere near what they should’ve been.

OMG could they use some cloud creed.  Quickly being left behind and without even a simple sleight-of-hand like HANA is for SAP they need to make a statement.

The rumor / conspiracy theory states that when Benioff left Oracle Larry made a pact that he would acquire SFDC at a later time for Marc to come back as CEO.  If true, and the likelihood is minuscule, what a master plan (as someone said earlier on twitter)! To plan to lay low for 15 years like a Enterprise Software Disruption Sleeper Cell and pounce at the right moment (when Larry wants to retire).  Incredible and very, very difficult to pull off.

If you seriously consider this to be possible you have short term memory (or lapses in memory).  Oracle has, by any count, a sizable command of the CRM market.  Remember: they acquired PeopleSoft, JD Edwards, and (fanfare here) Siebel – the King of CRM.  By magic and marketing they lost very few Siebel customers over the years and they have done a good marketing effort at keeping them past two years.

The part where your memory may not work well – the FTC investigated (and I do mean investigated) that deal in detail and barely, barely concluded there was no collusion or monopoly at that time.  At that time.

With the changes in market share and the sizable command SFDC has of the market? Highly unlikely that would happen.  Then again, I am not the FTC (although for the record, when everyone said it would not be allowed last time I said it would – and won some sizable bets in the process :)).

Microsoft – The partner.

With the recent partnership still fresh in some minds, there is a likelihood (and by market cap, a better suitor than the past two) but they are very gun-shy following their Yammer debacle (although there is some value in this deal – not so much on that one) and the ill-fit into the “one-Microsoft owning the world” strategy (unless they want to compete with Zoho.com – which frankly, I don’t see it) makes it hard to visualize.

Stranger things have happened, I did mention the Yammer acquisition – right?, but even then – unlikely that it is worth their time.

Then there is the issue of technical fit — we are not going there as far as integration of SFDC technology into MSFT technology.  Let’s leave that dog alone…

Others – Many

Cisco, Hewlett Packard, EMC, BMC, CA, Amazon (really?), Google (really??), and Apple (really??????????) and some others I can’t remember.

Yes, everyone needs to get into the cloud – and everyone needs to do this now (we can have the discussion about the obscene dollar amount allocated by organizations to “buy cloud” in the next two years in a separate post).

However, most of these people don’t have the capacity to absorb and grow the potential of SFDC.

Will not speculate more than that.

Your turn – what / who / why / when / and how do you think this ends?

 

 

Getting To Know You, Getting To Know More About You

The year was 2009 – eons ago in today’s fast paced world.  A then great vendor called Attensity hired me to write some thought leadership into the budding world of Analytics (budding as in people noticing, not as in just emerging as you well know).  They wanted a series of blog posts that talked to the issues about Analytics that most people were not thinking about – or even considering.  

Some of those posts did not survive the time (like the one comparing the Sodabowl and the Brandbowl approaches during SuperBowl 2010) and some of them are timeless and well worth the re-read.  These are the questions that organizations and vendors are asking today about Analytics.  

I’d like to use them to kick off the series again – and update it.

I won’t tell you if it’s a republished one or not – you can figure that out I hope, but I can tell you for sure this is what you need to be thinking about as we embark, again, into the world of analytics.

Let’s start with the idea of getting to know your customers better.

Back in the stone-age of computers, circa 1980s, we did not know much about our customers. We kept contact information and some account information but we did not use it often. The fact that over 30% of data out there is outdated, incorrect, or even not real (most organizations have at least one Mickey Mouse and one Donald Duck among their customers) tells the tale of businesses that didn’t spend too much time caring for their data. Once we realized that data was valuable we set to create profiles of customers, collecting as much demographic information as we could.

We later added transactional data to these databases, and we thought we knew our customers. We knew who they were, where they lived, what car they drove, what credit cards they carried, where they shopped. In some cases, we kept personalized information about their habits and likes-and-dislikes by “analyzing” their use data.

Later, we began to accumulate transactional data from CRM and similar systems, and we sought to learn about our customers by using analytical CRM in all this transactional data. If a single, 36-year-old, male customer who lives in Milwaukee and drives a Cadillac buys our product surely somebody else with the same profile will do it as well – right?

There is a lot more intricate behavior to segment customers than their demographics; what we called attitudinal (what they are going to do) and behavioral (what they are doing) information appeared from using surveys and was aggregated with existing information inside Enterprise Feedback Management (EFM) systems.

Finally, getting back to this day and age, we found out that customers aren’t truthful in their answers to surveys. The reliance on biased information yielded bad analysis; depending on wrong conclusions to make decisions is never a good idea.

Can we really get to know our customers’ needs and wants?

Enter Customer Familiarity.

We are accumulating massive amounts of data on our customers, their transactions, behaviors, likes-and-dislikes – but we are not using it. Stored data is very similar to fresh fish: after a few hours, not so fresh anymore. After a few days, well – you know. Using this data is where analytical engines come in and they make sense of it, provide value, and actually drive actionable insights. And, as the title for this article explains, where we can get to know more about customers.

Why should you get to know your customers better? Glad you asked…

Better Segmentation, Better Returns – One of the tenets of success in managing relationships with customers is proper segmentation. Once the customer base is segmented, organizations can assign the necessary resources to the segments they want to retain to maximize the returns. The problem with segmentation is that it is usually done by the number of dollars spent, not by a metric that can be managed (customer purchase decisions, with very few exceptions, can only be influenced – not managed) and tracked back to KPIs (Key Performance Indicators). There are more clever segmentation techniques that create smaller, more profitable groups – but they cannot be applied without the proper data and the right analysis. Knowing not only who the customers are, or how much money they spent but also what they want and need provides need-based segmentation, making it easier to properly apply marketing, sales, and even service interactions and to optimize the relationships eventually leading to met expectations, higher satisfaction, and eventually emotional loyalty.

Expectation, Satisfaction, Loyalty –There is a simple path to loyalty: get to know customers’ expectations, meet and exceed them over time to create long-term satisfaction, turn that long-term satisfaction and habit of over-delivery into emotional loyalty. The problem that most organizations have in this equation is the first variable: getting to know their customers’ expectations. Thankfully we collected all this data about their attitudes, behaviors, needs and wants – even opinions on different matters. The massive amounts of data we collected until now (Yahoo, Google, and Sears routinely process databases in excess of a petabyte) can actually be used.   Most organizations can use this data to learn about customers’ expectations, but they do not because we are not paying attention to the right thing. They use reports and “analytics” to see if customer satisfaction is up or down, or if loyalty can be built – but not to familiarize themselves with their customers. They seldom take the time to apply he right resources to the right place.

Resource Allocation – All organizations have very limited people, time and even budget to invest in improving relationships with their customers. It should also come as no surprise that some relationships are worth investing in, where others are not so worth it. Using analytics to get to know better what customers want ensures that the allocation of resources is perfected. As Bruce Temkin, Forrester analyst specialized in Customer Experience, said in his Six Laws of Customer Experience:

CxP Law #3: Customer Familiarity Breeds Alignment

Given that most people want their company to better serve customers, a clear view of what customers need, want, and dislike can align decisions and actions. If everyone shared a vivid view of the target customers and had visibility into customer feedback, then there would be less disagreement about what to do for them. While it may be difficult to agree on overall priorities and strategies, it’s much easier to agree on the best way to treat customers.

Have I convinced you to start looking at ways to use your data better? What are you doing to learn what you customers want and need? Are you seeing the results of your initiatives? Let me know…

Personal: My Daughter Made Me Do This (But I’m Very Proud)

TL;DR –  My daughter is seeking retribution from me using her as example / stories in my blogs and presentations.  Her term is going to globals and is fundraising.  Link at bottom.

If you want to know how this works out…

I have two adorable kids: Gabby (nee Gabriela and AKA Gigi) and Coco (nee Carolina).  They are 12 and 9 respectively and its likely you know this somehow.

I use my kids in presentations and blogs here and there.  I told you once how I had to use I’d’ve in a  blog to show Gigi/Gabby/Gabriela/Oldest that its possible; told you about their Twitter and Snapchat and Facebook (yuck) habits.  Told many stories about her and her friends using Twitter, texting each other in the same room, and their obsession with screens and Minecraft (still don’t get that one).  I often refer to them when debating generational differences.

As she told me last weekend – It’s payback time.

She has been participating in Destination Imagination competitions for the past four years quite successfully.  I used to be their team manager and am still surprised at the level of dedication and work these kids put into it.  Destination Imagination is a global competition where kids from all over the world have 2-3 months to design, build, and implement a “something” using STEM and arts principles.  Beyond the learning about science, physics, chemistry, arts, and more they get self-confidence.  And they learn that winning a medal or trophy requires work, not just showing up (sorry, ranting…)

Her team under my expert tutelage (rather in spite of it) won passage to state for the past three years (competitions are quite interesting, its amazing what 3rd-5th grade kids can do when motivated).  This year they also went to state where they competed against 18 teams from all over California and won the right to compete at Globals in Knoxville TN.  They came in second by 4 points and honestly – kicked ass.  These kids are good and creative and committed.

In DI circles this is big.  Very big.  To give you a perspective: those 18 teams came from 9 regions and approximately 120 initial teams.  They placed 2nd in state by 4 points.  They worked their little fingers to the bones and were hyper creative to get there.  I’m very proud of those kids.  They are competing against the 100 best teams in the country and some 80+ teams from other countries in six different themes.

And now, the dreaded fundraising.

Costs almost $20,000 to take the entire team and materials to Knoxville.  There is no contribution from anyone other than the parents for this (they have written and signed letters to local foundations and business, gone knocking door to door, asked their school mates to contribute, and have other activities planned as well) and just three-four weeks to get as much as possible.  They are working hard to make this happen.

I promised I’d help, so here is my chance to pay her back for suffering my ribbing and exposing her secrets over the years.

Because Internet.  They setup a YouCaring site to collect money.  You want to encourage them to continue working hard and seeing results in exchange for that (and have some pocket change to spare)?

Link: http://www.youcaring.com/tuition-fundraiser/help-ridgeview-elementary-6th-grade-di-team-get-to-globals/337156

Gabby, my daughter (used to be Gigi – but kids grow and nicknames are not cute anymore daddy… yeah, kid… just wait until you start dating and you’ll see how Gigi was cute compared to the ones I have saved…) thanks you.  The Jazzy Snazzy Kitty Cats thank you (I don’t make the names, this is better than some others, trust me).

As I said – she made me do it… but I am also very proud.

disclaimer: seriously, you have no need or obligation to do this and of course no donation will change the course of the world or make me be nicer to you or your product.  If it did I am sure I’d get a sizable donation from Oracle (not a client) :-).  As much as I never ask for anything and this is only my second personal blog ever (first one celebrated Paul Greenberg’s 60th Birthday) I do apologize if you are offended or otherwise miffed.  Thanks for supporting me all these years and will go back to regular rantings on improper use of technology and whatnot next week (I’m deepening coverage of Analytics and Machine Learning – which are not the same y’all).

update: their team and others from the school district was also featured in the local news.

GetSatisfaction: The Controversy Cannot Hide The Facts

If you follow the news you know that GetSatisfaction was acquired by Sprinklr last week (link to press coverage).

Almost immediately the press and analysts went into congratulatory overdrive on a great step for both of them.  Slowly trickled out, and why I try to wait for a few days before publishing reviews, were the not-so-happy postings on the transaction – including this piece on Business Insider today (grain of salt: its business insider – the yellow press of business journalism) where one of the founders complain.

It is not, as you likely know by now, my place to take sides on fights that don’t involve me.  Ask my daughters – broken bones (sticking out) and blood are the only two reasons I get involved (thankfully never got to that).  Let the parties figure out the reasons for the fight and better yet – the reasons not to.

There are two issues though, that bear analyzing:

  1. the role of communities in marketplaces and workplaces
  2. the proper way to fund and support a startup

I’ll make it easy – I cannot contribute something worthwhile to the second one in a blog post; it is a very customized-personalized thing that changes from one to the next and whoever says different is just selling you a — well, their services.

I will gladly contribute to the first one – because i’ve been saying this for far longer than i remember: Michael Maoz (of Gartner fame and a good friend and former colleague while I was there) and I talked about this in 2002-2004 and then had to give it up since no one cared.

I wrote plenty about it before, including a difference between the many ways communities are shaping up to be.  Still, no one cared.

Now, y’all do.  Sort of – at least starting to.

Communities are (should’ve been) the only reason we started social networks and why social matters to organizations.  And they are the (renewable) power source for business transformation going forward.  Communities is something you, Mr/s. business person, should care about deeply – and yet, more than 85% of “youz” don’t.

I don’t have sufficient visibility into the dealings behind the acquisition, but I can tell you one thing: this is not the last.  If you look at the “communities providers” vendors they are all in the same: working through the resistance of 85% of the market that doesn’t get what communities are and what they do – and using the other 15% to propel them forward.

We will see more acquisitions like this very soon, in the next few months.  We will see more vendors with great technologies being folded into more complete social and even CRM suites.  We will see more dreams shattered (likely) and some realized.  We will see the beginning of the rise of communities to become mainstream (rule of thumb: 30% adoption in the marketplace) and to realize their potential.

One more thing: I am not talking about community managers and purposefully built communities.  That’s training wheels stuff when it comes to communities.

I am talking about the model that GetSatisfaction embraced and was unable to sustain in the market: ad-hoc, open, freely moldable and shapeable communities where people come to share power and knowledge – and no one controls or brands.

If you are interested in forums and structured communities you still don’t get the concept of communities for business.  This is not your grandpa communities – that was just more “training wheels” stuff.  This is about providing an infrastructure and let interested parties build and power communities.  Very different model than what you are thinking (and I know this because i talked to many of “you” every week).

What do you think? (comments below, use them)

The Customer Process: The Five Thing You Need To Know Now

Today is a rare event in that I have a guest post.  I almost never do this, I actually have only 3 guest posts total in my entire blogging career, since this blog is — well, about me.

However, once in a while I find smart people that take concepts or terms I have been working with and take them in a different direction and they are extensions of my work.  I like to feature those.

I am not sure why Mike Boysen wanted to put his post in my blog – his is far better than mine… but here it is.  He makes some very interesting points (not that I agree with everything – of course) and has a great approach combining SDL, JTBD, and a bunch of other different ideas.  So different from the customer journey mapping malarkey that everyone is writing about (still not sold on mapping anything, but at least this approach is more dynamic).

Mike is very smart and I like what he says and his writing – else he wouldn’t be here.

Recently, Esteban Kolsky, Brian Vellmure and Krissy Espindola were summarized in a white paper from NICE based on their roundtable discussion on The Customer Journey: The Five Things You Need To Know Now. No, I’m not planning to dismantle it. But, what I’d like to do is put my twist (and expand) on this topic in order to more completely address (in my opinion) the challenges of companies that want to become customer-centric; but default to mental models that don’t really separate them from the pack. It’s one thing to be really good at what you do, it’s altogether another thing to do the right thing; even if you don’t do it all that well at first. This is more about service innovation, and not surprisingly, I have a slightly different take on the world.

As a quick recap of my thinking, customer journeys take a look at your current service and the experiences that your customers have as they execute the journey. We can find places where they are unhappy, discouraged, super excited, etc. This is worthwhile work if you know, I mean really know, that the service you are offering is the best option in the market. Even then, you might be looking for ways to add cost to a service (make it premium) whose features already overserve the vast majority of the market (especially non-consumers of your service).

For instance, if you serve commuters with a train service, you must believe that incremental improvements in the train experience will provide the best experience options, at the right price, for morning commuters; for example. Another example might be the horse buggy business; but I’ve already buggy-whipped that one to death.

Journey map inputs you receive are in the context of your service, and the odd chance that you will collect an indicator of an emerging threat are lagging indicators at best; and non-repeatable very likely. In order to be truly customer-centric, while also holding a strategic market advantage, you need indicators that are forward-looking. By this I mean that if updated over time, they will clearly depict where perceived value is shifting to in the value chain. Customer journeys simply don’t get you there; nor does traditional VOC (Voice of the Customer). When attempting to grow the business (almost always) companies are faced with disrupting themselves, or being disrupted by others, and neither of these realities are well received.

So, let me attempt to evaluate the Customer Process across five similar categories (in no way am I suggesting five is the right number, or the wrong number).

The Customer Process is a Macro/Micro Concept

In the world of outside-in process, you will often hear how to look at a company’s process from the outside-in. We start at the point of the final transaction and we work our way back through the process asking how steps add value to the customer along dimensions like speed and quality. I have problems with this because it focuses on existing processes, much like a customer journey focuses on specific services. The other big problem is the goods-dominant logic built-in to this approach. We are assuming that value is transacted at an exchange event (the end-point of the company’s process).

MB-1

Using the lens of Service Dominant Logic, we understand that products are actually services, and that value is co-created between company and customer during the use of the service. Just as importantly, we understand that a customer is trying to get a job done when they hire a service. When this job (which is a solution agnostic process) is deconstructed into steps, we understand that they have multiple needs at each step which they evaluate relative to importance and satisfaction (Net Promoter Score not required).

So, each step is a chance to co-create value through resources that enable the customer, or through resources which can be integrated with other resources (by the customer, or you the company can help there too). However, you need to understand one more thing: value will not be optimized until the customer gets the entire job done; whether you can see the steps or not (green steps). Visualizing those invisible touch points (including that last step) in a quantifiable fashion is critical; and these steps are clear opportunities for a company to find new ways to co-create value with a customer, and thereby enhance the overall experience.

Mapping the customer process (before designing solutions) is critical in order to understand quantifiable value at a granular level, as well as at a high level. It must start from the ground up in order to have the sort of actionable message themes from the customer you need to make strategic bets before anyone else. Understand what your customer is trying to accomplish first, using this approach, to make sure you are providing the right service; and then use the same approach to measure how well your service is being consumed (and you can also use it to monitor the consumption of competing services).

A Map is Important for any Job

In the world of customer journeys, each journey may very well be different. This is the beauty of job mapping: we are looking at a solution agnostic process of what steps are required to get a job done; not the process of using a specific service. In order to do this we need to make some distinctions:

  1. Getting to work in the morning: this is a job that a customer is trying to get done. They may opt to take the train, they may drive, walk, or ride a bike. Context is important; such as what options are available, and what constraints (budget, time, etc.) a particular customer might have. Taking a train to work as a journey, is only partly helpful.
  2. Purchasing a ticket; e.g., for a commuter train: this is one of many consumption jobs. There are steps a customer will go through to determine what options are available during this job (maybe comparing bus to train) and understanding this will help a company with their job of selling the ticket.

It’s highly unlikely that a single map will get your job done any more that a single number will tell you how awesome you’re doing; or what specific strategies must be employed if you’re not so awesome. You may need to deconstruct each step as a separate job and create metrics for them as well. While marketing will greatly benefit from this process, this is not a marketing job.

MB-2

Once again, optimization is great if you are already doing the right thing. The problem is that the right thing changes over time; because while customers continue to get to work in the morning, and they will define the perfect execution of that job the same way over time (the underlying customer metrics), the weight they give these metrics will change as their perception of value will change as new solutions emerge over time – and features ultimately overserve a market whose needs have shifted across the value chain. It would benefit companies to see this early (in a repeatable process), so they can get ahead of the game (they might not be in the train industry anymore). Look at what Tesla is doing; they may not be in the car industry much longer if a larger growth market appears (and that might be happening with batteries – we’ll see). The key is their willingness to find new growth markets and not show blind devotion to their core business. Will journey mapping a train ride make any sense when we get Star Trek transporter technology? Oh, perhaps for some.

Feedback Comes in Many Forms

Oh, this is so true, but what customers are not saying could be the biggest miss of all. The proper form of feedback must be created in order to bring predictability and usability to the forefront.  As Tony Ulwick puts it, the problem with VOC (Voice of the Customer) is that there is no agreement on what a need is. This is both true across functional areas of a business (R&D, Marketing, Sales, etc.) as well as across businesses and industries. He states:

  • Companies do not know what inputs to capture
  • Customers do not know what inputs are needed
  • Customers offer “requirements” in a language that is convenient to them
  • Many firms try to translate the inputs into something useful
  • A mix of input types results
  • Inconsistency in structure, content and format is common
  • Success is not always achieved

As a result, companies determine that customers don’t know what they want, or that their requirements change too rapidly over time. In fact, the most important feedback we can capture is related to what our customers need. Therefore, what companies need is a more systematic method of structuring and measuring what customers need.

Customers purchase services (and products) to help them get functional, emotional and social jobs done. Each step of a deconstructed job is where customers (even though they may not know it) use forward-looking metrics which define exactly what the successful execution of the job should look like. In the terminology of outcome-based logic, these metrics are called desired outcomes; and are each equivalent to a specific customer need, at a specific step in the process.

There can be scores of these metrics for any particular job. And keep in mind that you will want to look at related jobs and consumption jobs as well; so it can be a bit more work than we’re accustomed to. In a nutshell, there is only one form of feedback that is forward-looking, consistent in value, and repeatable; and it can be used in a variety of ways.

Keep it Easy and Consistent

There are a number of dimensions through which customers evaluate a service (or product).

  • Speed: while not all jobs have to be done quickly, they do need to operate within contextual time constraints. A customer might wish to minimize the time it takes to accomplish something; but they might also want to increase the likelihood that they can accomplish something within time constraints (e.g., obtain as much rest as possible before morning)
  • Stability: This relates closely to consistency, where it’s important the inputs into a process, or outputs from the process are more predictable.
  • Output: A customer may wish to scale, and volume could be constrained by waste and inefficiency. Therefore finding ways to eliminate obstacles is a key category for customer metrics.

Surveys around effort are nice, but they completely lack context. Some jobs simply can’t be “easy” today. Take, for example, understanding customer needs. I wouldn’t say the process I’m describing is easy, but it’s far more stable and provides better output than other options available. It’s also faster to target new opportunities to co-create value in current and emerging markets. Another common assumption is cost which is also contextual; just ask the owner of Ferrari.

If you understand customer needs (functional, emotional, and social) at each step where value is co-created between the company and the customer, you will be creating the experience with hard data that can be updated fairly easily over time. This will feed back into your product/service innovation, marketing, sales, and support processes (etc.).

Flexibility is not Optional

Once you have built an effective targeting system for perceived value in getting jobs done, you need to determine what the current level of capabilities within your organization and/or the market are. The underlying article talked about obsolescence, and the need to make sure you aren’t investing in service models that will completely change in five years. A suggestion was to “build an infrastructure that enables customers to get what they want.” This deserves further exploration…

One thought leader I follow is Simon Wardley from CSC’s Leading Edge Forum. He has developed an interesting way to understand the dynamics of the value chain called Strategy Mapping (although it appears he has recently renamed this to “Value Chain” Mapping). Essentially, new services (or products) begin in the genesis category where everything is custom and expensive. Eventually, over time it moves toward commodity as components standardize, and possibly even to utility.

I would agree that placing huge bets on building infrastructure that has already (or will soon) become a service makes far less sense than building a genesis service on top of a platform; which is likely built on a set of technology standards that used to be in the genesis category individually. However, someone has to make those initial genesis bets and generally, the timeline for disruption is far longer than 5 years. As Simon corrected me, the length of these cycles is still decades.

I think what we will all agree with is that investing in custom solutions to interface with customers in a multi-channel way, when you can subscribe to a multi-channel capable service, makes little sense. However, if you are in the business of providing a service to customers, you may very well be building custom solutions that are expensive because it is new, highly profitable, and there are few competitors. In that case, obsolescence will likely not occur in 5 years (unless you really don’t know what you’re doing!).

Summing it Up

Visualization is important. However, we need to make certain we are not looking backwards (existing solutions) when striving for customer-centricity, and we need to be certain that we can put a number to the experience at each step of the way. I’ve probably expanded well beyond the scope of the round table discussion; but I get to do that! As usual, the comment box is below. Go for it J

Further reading

Giving Customers a Fair Hearing

The Customer-centered Innovation Map

Turn Customer Input into Innovation

Simon Wardley’s Blog

 

On Electrical Grids, Cloud, And What We Are Doing Wrong

If you read my “stuff” you know I am a very big proponent of cloud computing.

I wrote a small e-book on how to be a cloud purist (which talks about and describes the proper way to — well, cloud).

I have engaged in numerous battles and debates (both online and offline) that were lengthy and passion-filled about this topic and have always tried to approach them as a way to explain why cloud computing should be the way organizations approach their computing.

There is so much potential and value in adopting cloud computing that it is almost impossible to understand how the bastardized concepts of private-cloud and hybrid-cloud even became a reality (don’t worry, Sameer Patel – no rant about that here… fodder for another post).

In keeping with the role of “thought leader” and “visionary” often assigned to me I wanted to find a way to explain why we are not approaching cloud the right way.  Then the other day came to me in the middle of a run.  Electricity.

We take electricity for granted in this country (well, in most places around the world where a comprehensive solution exists).  We expect it to be plentiful, available, and low-cost.  We use it to power our lives, businesses, and just about everything else (including cars lately).  The true test for anything in this world is to compare it to electricity: you flip a switch and it’s there; you flip it again and it’s gone.

If you bear with me for a few minutes I can explain how we can make cloud work as electricity.

The entire US is covered by an electrical grid.  This is what makes electricity always available (or shortly after it goes out in most cases).  The grid’s purpose is to ensure easy sharing of electricity that is generated in any one region with many other regions.  It also ensures that disruptions that occur in one location don’t affect a larger area and they can be easily and fast overcome.

In the old days, before the grid existed, each town and or region needed to have their own power-generation.  A town that generated too much electricity could not “sell it” to a neighboring town (unless they laid out a cable between them – and another for every other city or region they wanted to sell it to) and would often end up being wasted (it is not possible, counter to popular sayings, to store electricity in a bottle for a long-term).

The grid that is laid out around the entire country (and parts of Canada) is used to backup power failures and ameliorate peak load usage.  It also makes it far more efficient and cheaper to operate.  It was established in the 1920s (and evolved many times since) on the same principles that made telephony and telegraphy work: sharing common infrastructure costs reduce costs and improve efficiency among the suppliers and providers.

The concept of cloud computing, based on models of distributed computing established around the same times as the electrical grid – even before computers, should work the same way.  A public network connects myriad resources (storage, computing power, services, etc.) that should be shared.  By providing a centralized set of security, management, and allocation rules enables anyone connected to that public network to use those resources.

Before the internet was the public network we could barely do cloud computing: it was a dream (if you remember, CORBA, COM/DCOM were early versions of distributed computing that failed due to the lack of a public network – think of them as “private network” technologies).  The introduction of the ubiquitous and cheap network made it possible.

And this is where the story differs.

Software vendors decided, as the electricity and telephone providers did before them, that controlling their customers (and retaining them in their own private networks somehow) was more important than building a computing grid similar to electricity.  Today, we are still undergoing that same problem.

The question that always kills me is when I hear someone ask “how many clouds do you have?”.

When we talk about cloud as if it was a storage location for files, or when we discuss how each vendor offers their own cloud (or even clouds – hybrid, private, government-only, etc.), or when we say that anyone that offers a product or service via a browser is “in the cloud” we are missing the big picture.

The public network, is not the cloud – it is the equivalent of the power lines that transverse the world (and having lived in Argentina and Roseville, CA I know power lines – trust me).

Delivering an application via a browser is not the cloud –  it is the equivalent of selling someone an electrical generator.

Hosting your own “cloud” is not the cloud – it is the equivalent of selling someone a transformer.

A cloud requires infrastructure built by each participant and common standards to support the connections between those components.  If you want to operate a power plant you better make sure you connect to the appropriate grid to take advantage of all the benefits of operating within it.  While building your own power plant for your own purposes may work for some situations not every homeowner will benefit from doing so.  Even if you have solar or wind energy in your house – you still need to connect to the grid to both sell excess production or power your house when there is no sufficient production.

The cloud is the grid that distributes all those resources so that anyone who needs them can use them with the assurance that their solution will not be “hacked”, changed, altered, or stolen.  Just like you don’t expect an electrical appliance you plug into the electrical grid to be corrupted or blown away (as long as it complies with basic standards), you expect any application you plug into the cloud to be secure and perform as expected.

That is the model we need to strive for.  Not owning electrical transformers, generators, or power lines.

Let’s build a cloud computing grid.