Monday, March 28, 2016

Making collaboration across functions a reality
By Ruben Schaubroeck, Felicita Holsztejn Tarczewski, and Rob Theunissen

Great, great insight on overcoming silos
Companies have long struggled to break down silos and boost cross-functional collaboration—but the challenge is getting more acute. The speed of market change requires a more rapid adaptation of products and services, while customers increasingly expect an organization to present them with a single face. Even well-established multinationals routinely fail to manage operations end to end.The result: interactions with customers are sluggish; complex, customized products are hard to create on time and on budget; and blocked lines of communication make new sales and distribution channels difficult to navigate. 
The basic principles for improving performance—imposing stretch targets from the center, empowering cross-functional teams, standardizing processes, tightening up execution—are mostly familiar. But making these things happen is a different matter. In many companies, ownership of processes and information is fragmented and zealously guarded, roles are designed around parochial requirements, and the resulting internal complexity hinders sorely needed cross-business collaboration. What’s more, in our experience, companies that apply traditional solutions (such as lean and business-process reengineering) either exhaust their managers with efforts to rework every process across business units or, by contrast, focus too narrowly within functions... 
..a top- down op-down redesign of the company’s operating model is proposed to overcome silos:

Friday, March 25, 2016

How Technology Is Destroying Jobs

Automation is reducing the need for people in many jobs. Are we facing a future of stagnant income and worsening inequality?

by David Rotman

June 12, 2013

As you know, this blog is about organic growth through innovation so this posting is a bit out of character.

I would like to make what might appear to be a political statement about the U.S. Presidential campaign but it is strongly related to the growth of the U.S. and therefore the world. This is POLITICALLY NEUTRAL.

Both “extreme” sides of the Presidential debate chose different scapegoats to explain the demise of the U.S. middle class, the major driver of aggregate demand for the largest economy in the world:
The RIGHT claims that illegal immigration is the principle reason (scapegoat) for this demise
The LEFT claims the top 1% (scapegoat) are conspiring against the middle class
BOTH believe trade is the major culprit.

Of the above, trade has cost U.S. jobs but the rest just is not true (doesn’t mean that there are not real issues associated with the  LEFT and RIGHT issues but they are not the underpinning of the middle-class decline as portrayed by the respective candidates). Since 2000, the real culprit for U.S. job loss is technology. I have read that as much as ~60% of the job loss since 2000 is technology driven.

The following excerpts are from an MIT article that is a couple of years old but right on-point. I strongly urge you to read in its entirety.

That robots, automation, and software can replace people might seem obvious to anyone who’s worked in automotive manufacturing or as a travel agent. But Brynjolfsson and McAfee’s claim is more troubling and controversial. They believe that rapid technological change has been destroying jobs faster than it is creating them, contributing to the stagnation of median income and the growth of inequality in the United States. And, they suspect, something similar is happening in other technologically advanced countries. 
Perhaps the most damning piece of evidence, according to Brynjolfsson, is a chart that only an economist could love. In economics, productivity—the amount of economic value created for a given unit of input, such as an hour of labor—is a crucial indicator of growth and wealth creation. It is a measure of progress. On the chart Brynjolfsson likes to show, separate lines represent productivity and total employment in the United States. For years after World War II, the two lines closely tracked each other, with increases in jobs corresponding to increases in productivity. The pattern is clear: as businesses generated more value from their workers, the country as a whole became richer, which fueled more economic activity and created even more jobs. Then, beginning in 2000, the lines diverge; productivity continues to rise robustly, but employment suddenly wilts. By 2011, a significant gap appears between the two lines, showing economic growth with no parallel increase in job creation. Brynjolfsson and McAfee call it the “great decoupling.” And Brynjolfsson says he is confident that technology is behind both the healthy growth in productivity and the weak growth in jobs.

Monday, March 21, 2016

Deals That Win
Capable Dealmaker

Twelve years of data shows that mergers and acquisitions that apply or enhance capabilities produce superior returns.
by J. Neely, John Jullens, and Joerg Krings

Great article that affords insight that M&A can enhance organic growth when it is capability driven, wither leveraging your current capability platform or adding on to it.

Danaher’s success in M&A stems from the fact that it knows its area of greatest strength — an approach to continuous operational improvement known as the Danaher Business System — and concentrates on targets that can benefit from it. Put another way, Danaher is acapabilities-driven acquirer that leverages its capabilities across its many acquisitions. And as it turns out, focusing on targets that leverage one’s capabilities provides the greatest chance of M&A success, not just for Danaher but for any big company at just about any point in time…. 
…This is the main lesson that emerges from Strategy&’s most recent study on the role of capabilities in M&A success. When we examined 540 major global deals in nine industries announced between 2001 and 2012, we found that deals that leveraged the buyer’s key capabilities or helped it acquire new ones produced significantly better results, on average, than local stock market indexes in the two years following the deal… 
…In our schema of M&A, deals fall into three categories: leverage, enhancement, and limited fit. Leverage deals are situations in which acquirers buy companies that they know or believe will be a good fit for their current capabilities system; for instance, a big pharma company buys a smaller competitor in order to extend its marketing capabilities in a therapeutic area both companies serve. Enhancement deals are designed to bring the acquirer capabilities it doesn’t yet have and that will allow it to intensify its own capabilities system. Limited-fit deals occur when the acquirer largely ignores capabilities; the transaction doesn't improve upon or apply the acquiring company's capabilities system in any major way.

Thursday, March 17, 2016

Linking the customer experience to value
By Joel Maynes and Alex Rawson

Great article

Many customer-experience transformations stall because leaders can’t show how these efforts create value. Patiently building a business case can fund them, secure buy-in, and build momentum. 
The road to failed customer-experience programs is paved with good intentions. Executives are quick to see the end-game benefits of a customer-centric strategy: more satisfied customers, increased loyalty, a lower cost to serve, and more engaged employees. But they often fail to understand clearly what a superior customer experience is worth and exactly how it will generate value.  
Building an explicit link to value: Companies investing to improve the customer experience must be clearer about what it is actually worth and exactly how the improvements will generate value
  • Develop a hypothesis about customer outcomes that matter. Start by identifying the specific customer behavior and outcomes that underpin value in your industry.
  • Link what customers say to what they do. The next step is to link what customers say in satisfaction surveys with their behavior over time
  • Analyze the historical performance of real customer cohorts. Using customer data linked to survey respondents, analyze customers you designate as satisfied, neutral, or dissatisfied over a period of one to two years
  • Look at the trend to take a forward-looking view. Successful customer-experience programs look forward, not backward, in assessing the link to value.
  • Track outcomes. In our experience, the best approach to quantify the value of the customer experience is to track outcomes over time for each customer segment that matters.
What matters to customers: To do this well, a company must create a model of what matters to customers, a graded short list of customer pain points to eliminate or fix, and a view of opportunities to innovate as seen from the customer’s perspective. A number of actions can be taken.
  • Focus on customer-satisfaction issues with the highest payouts. Customer-experience break points are not standard across industries.
  • Build a model around what matters to customers. End-to-end customer journeys, not individual touch-points, are the unit to measure when setting priorities for your customer-experience investments.
  • Within journeys that matter, size and set priorities for key areas to improve .Once you know the journeys to focus on, assemble a cross-functional team to dig into possible initiatives to improve your performance
  • Identify opportunities to innovate and disrupt in competitive white spaces. While eliminating pain points for customers is important, it is equally critical to identify areas where you can differentiate your company from competitors as customer expectations change