Monday, January 25, 2016

Agility: It rhymes with stability
Companies can become more agile by designing their organizations both to drive speed and create stability.
December 2015 | byWouter Aghina, Aaron De Smet, and Kirsten Weerda

A great discussion on what it takes to be ambidextrous as we teach in our Org Growth class at Kellogg and is the underpinning of the MDG process.

Why do established companies struggle to become more agile? No small part of the difficulty comes from a false trade-off: the assumption by executives that they must choose between much-needed speed and flexibility, on the one hand, and the stability and scale inherent in fixed organizational structures and processes, on the other (the essence of being an ambidextrous company) …. 
…truly agile organizations, paradoxically, learn to be both stable (resilient, reliable, and efficient) and dynamic (fast, nimble, and adaptive). To master this paradox, companies must design structures, governance arrangements, and processes (remember the MDG SOP for Organic Growth) with a relatively unchanging set of core elements—a fixed backbone. At the same time, they must also create looser, more dynamic elements that can be adapted quickly to new challenges and opportunities (the difference in how one deals with Horizon 1 and Horizon 3 initiatives--processes, people skills, metrics, etc. differences)…. 
….One critical prerequisite for sustaining real change is putting in place the behavioral norms required for success. This is not about making cultural statements or listing company values; it is, rather, a matter of instilling the right kinds of behavior for “how we do things around here.”… 


Agile organizations deliberately choose which dimension of their organizational structure will be what we call their “primary” one. This choice will dictate where individual employees work—in other words, where they are likely to receive coaching and training and where the infrastructure around their jobs is located. .. 
…A global chemical manufacturer we know illustrates the benefits of this approach. Struggling to get traction on a new, increasingly international strategy, it changed its long-standing business-unit structure. Functions—that is, technical, sales, supply-chain, and customer-service resources—became the primary home for employees. At the same time, the company established a small product-line organization with P&L accountability, considerable decision-making authority, and a head who reports directly to the CEO. This “secondary” (product-line) organization holds the enterprise view for overall profitability and thus autonomously synthesizes product strategy, decides where and how the company should invest its resources, and drives collaboration across functions and geographies.
The idea behind agile governance is to establish both stable and dynamic elements in making decisions, which typically come in three types. 
  • We call big decisions where the stakes are high Type I; 
  • frequent decisions that require cross-unit dialogue and collaboration, Type II; and 
  • decisions that should be parsed into smaller ones and delegated as far down as possible, often to people with clear accountability, Type III.
It is Type II topics that most often hinder organizational agility. Companies that have successfully addressed this problem define which decisions are best made in committees and which can be delegated to direct reports and to people close to the day-to-day action. They also establish clear charters for committee participants and clarify their responsibilities—avoiding, in particular, overlapping roles. This is the stable backbone... 

…Much as agile companies underpin the new dynamism with a degree of stability in their structure and governance, they create a stable backbone for key processes. These are usually signature processes, which these companies excel at and can explicitly standardize (the MDG SOP for Org Growth) 
….. When everyone understands how  key tasks are performed, who does what, and how (in the case of new initiatives) stage gates drive the timetable for new investment, organizations can move more quickly by redeploying people and resources across units, countries, and businesses. In other words, everyone must speak the same standardized language.

Monday, January 18, 2016

Market Segmentation

A very simple summary

Market segmentation offers the following potential benefits to a business:

Better matching of customer needs: Customer needs differ. Creating separate products for each segment makes senseEnhanced profits for business: Customers have different disposable incomes and vary in how sensitive they are to price. By segmenting markets, businesses can raise average prices and subsequently enhance profitsBetter opportunities for growth: Market segmentation can build sales. For example, customers can be encouraged to "trade-up" after being sold an introductory, lower-priced productRetain more customers: By marketing products that appeal to customers at different stages of their life ("life-cycle"), a business can retain customers who might otherwise switch to competing products and brandsTarget marketing communications: Businesses need to deliver their marketing message to a relevant customer audience. By segmenting markets, the target customer can be reached more often and at lower costGain share of the market segment: Through careful segmentation and targeting, businesses can often achieve competitive production and marketing costs and become the preferred choice of customers and distributors
.There are various methods (or "bases") a business can use to segment a market. 


Monday, January 11, 2016

Delighting in the possible
In an unpredictable world, executives should stretch beyond managing the probable.
March 2015 | byZafer Achi and Jennifer Garvey Berger

An incredibly powerful article rich with examples:

It’s only natural to seek certainty, especially in the face of the unknown…. 
…Perhaps that’s because our approach to the hardest problems—and the anxiety those problems create—is fundamentally misdirected. When most of us face a challenge, we typically fall back on our standard operating procedures. Call this “managing the probable.” In much of our education, and in many of our formative experiences, we’ve learned that some simple problems have one right answer. For more complicated problems, accepted algorithms can help us work out the best answer from among available options. We respond to uncertainty with analysis or leave that analysis to the experienced hands of others. We look for leaders who know the way forward and offer some assurance of predictability. 
This way of approaching situations involves a whole suite of routines grounded in a mind-set of clarity if not outright certainty. To that end, they are characterized by sharp-edged questions intended to narrow our focus: What is the expected return on this investment? What is the three-year plan for this venture? At what cost are they willing to settle? But asking these kinds of questions, very often legitimate in business-as-usual settings, may constrain management teams in atypical, complex situations, such as responding to a quickly changing market or revitalizing a privatized utility’s culture.  Our tendency to place one perspective above all others—the proverbial “fact-based view” or “maximizing key stakeholders’ alignment”—can be dangerous. All too often, we operate with an excessively simple model in enormously messy circumstances. We fail to perceive how different pieces of reality interact and how to foster better outcomes.
Moving from “managing the probable” to “leading the possible” requires us to address challenges in a fundamentally different way. Rather than simply dis-aggregating complexities into pieces we find more tractable, we should also broaden our range of interventions by breaking out of familiar patterns and using a whole new approach that allows us to expand our options, experiment in low-risk ways, and realize potentially out sized payoffs.....

.....Ask different questionsThe questions we ask emerge from our typical patterns of thought. We focus on narrowing down a problem so that we can find a solution. But we often fail to notice that in doing so we constrain the solution and make it ordinary. Asking different questions helps slow down the process. We begin to take in the full range of data available to us and in consequence have a significantly wider set of possible options. Examples of such questions include the following: What do I expect not to find? How could I attune to the unexpected? What might I be discounting or explaining away a little too quickly? What would happen if I shifted one of my core assumptions on an issue, just as an experiment?

Tuesday, January 05, 2016

What it takes to deliver breakthrough customer experiences
To create distinctive customer experiences, large companies need to push the boundaries and adopt next-generation digital thinking and practices in key key areas.;postID=8836052173102774706

First let me apologize for “missing” December. I had a lot of stuff going on –all good- and time got away from me. Let’s start the New Year afresh

I strongly urge reading the article because it gives very rich examples

From measuring customer behavior to spending time with customers to truly understand them
Most companies conduct quantitative research on customers. Such data provide important insights, but to create distinctive customer journeys, companies must not only understand their customers’ behavior but also develop deep empathy. In particular, companies need to empathize with customers when they experience difficulties and obstacles
From designing the user interface to designing the complete customer experience
True customer-experience design involves crafting each interaction customers have with a company along the path that runs from the minute they consider a purchase through their entire relationship with the product or service.
From addressing issues in the customer journey to completely rethinking the customer experience
True reinvention requires taking a hard look at journeys from the customer’s perspective to find the pivotal insight around which a new journey should revolve. The focus is addressing customer needs, not improving a process
From developing software using agile to becoming an agile organization
Creating responsive and adaptive customer experiences requires the entire organization to be agile. Making that change begins with putting in place new governance standards and ways of working.
From delivering a product to constant iteration
But an article of faith among the start-up community in Silicon Valley is that a product is never done. These companies launch a minimum viable product with the express purpose of getting customer feedback and then iterating. Based on customer input, improved versions of the product are released quickly and continuously
From collaborating under the guidance of leaders to working together spontaneously
Companies need to push their people to move beyond traditional functional roles and work together to reinvent customer journeys. This is typically done by creating temporary project teams or task forces. But responding to a customer issue or improving a journey requires a culture where people from different functions work together spontaneously