Pathways to Scale

Why planning your innovation expedition helps avoid a lot of trouble on the journey…

GUEST POST from John Bessant

When I was a child a big feature of the social landscape was the annual visit to my uncle’s house on Christmas Eve. My dad came from a big family and they’d gather at his brother’s place to celebrate; my kid brother would already be asleep but I would sit in the small room next to the place they were all gathered, drinking, talking, occasionally singing. It was warm there; a small electric fire in the grate and a blanket to wrap myself in if I felt the cold.

Which was just as well since I invariably spent the evening with my nose in a book. Not just any book; as soon as we arrived I’d make a beeline for the bookshelf and haul out John Hunt’s account of the ascent of Everest. And I’d spend the evening while the ice crawled up the windows outside the room I’d imagine hearing the wind howling against the flimsy side of my tent as we shivered over a primus stove, trying to warm ourselves and get some rest before tomorrow’s big day. The last painful yards towards the summit…..

I was fascinated by the scale of the thing; a huge expedition, involving over 400 people (362 of them porters helping carry the 5000-plus kilograms of equipment) and relying on the intimate knowledge of the mother mountain held by the 20 Sherpas in the team. Those Nepalese guides had grown up in the shadow of the peak and knew to fear and respect it. The months of planning in smoky rooms in London clubs, the assembly and trek towards the base camp and the allocation of roles to help lay the foundations for what would certainly not be a simple walk in the park.

The extended discussions around which paths to take, the weighing up of different challenges along the prospective routes. Obstacles reckoned into the equation and balanced with the specialist skills and equipment needed to tackle them. A whole new language of cols and crevasses, of pitons and crampons to be learned, a crash-course in high altitude physiology and technology to be mastered.

And that was all before they even took their first tentative steps up the slopes.

It was engrossing, exciting and scary; for an 8-year-old kid whose experience of mountaineering extended to scrambling over the South Downs during our annual trip to see Grandma this was heady stuff. And as the evening wore on and we approached the summit, so it became a race against time. For the climbers, whittled down to Hilary and Tenzing, struggling up the last stage, their oxygen and energy running low and storms looming.

And for me hearing the chatter from next door rise to the climax which portended the taking of farewells, the wrapping of my kid brother in a blanket to continue his pre-Santa sleep in the car and me being bundled into a coat. Would I get to the summit in time — or have to wait until next year to continue the journey, abandoning mine at the eleventh hour?

I took a couple of lessons from that book, the first being that I’m not cut out for mountain climbing. There have to be easier and still thrilling ways to get your kicks and ‘because it is there’ isn’t a good enough reason for me to devote my energies to that particular kind of madness.

But the other is a healthy respect for people who scale mountains successfully. It takes a lot of planning, great team work and an approach to uncertainty which is all about agility and pivoting, adapting and improvising your way upwards.

Pretty much the key ingredients for successful innovation — and certainly relevant to another kind of scaling journey, enabling great innovations to have impact.

Because taking an innovation from a small-sized success story to something which delivers value at scale is not an easy one. The Holy Grail of impact has a lot in common with that elusive quest pursued by King Arthur’s knights, taking them along strange paths, meeting with dragons and disasters and lasting a long time. Similar odds of success too.

Having spent a long time focused on the challenges facing start-ups the innovation spotlight is now moving to the question of scaling — and there’s a helpfully growing body of knowledge and codified experience around this theme. Including the important decision about which route to take for the journey to scale.

One thing about mountain climbing which I remember thinking about when reading my Everest book was how they chose which route to take. Faced with 29,000 feet of sheer white walls with the occasional dangerous looking black rock poking its jagged edge through the snow like a knife through a curtain, how do you decide which path to take? It’s not as if there are well-worn tracks and clear signposts which you can follow — all you have is a lot of very unfriendly and treacherous ground on which to try to make your way.

It’s the same with scaling your innovation. Choosing your preferred pathway to scale is a key first stage on the journey; fortunately — like today’s Everest climbers — there’s a wealth of experience available from previous attempts and some important lessons on which we can build.

In particular we need to see the choices available as lying on a spectrum where we trade off additional external involvement with giving up a degree of control.

It’s a strategic decision, trying to balance the resource commitments you’ll need to make with the amount of control you want to retain. And with deciding what parts of your innovation knowledge are core, what parts are modular and can be adapted and customized with others in mind and what parts are you prepared to let others engage with, ‘hacking’ their own version of your ideas. Scale stories give us valuable clues about possible options, which include not doing it!

Some innovations aren’t really about a scaling journey. They work for a particular problem in a particular context; what’s needed for impact over the long-term is sustainability, being able to continue to deliver over an extended period of time and becoming something which is used and relied upon.

But if you are going to aim for scale then your choices include:

· Parachute — develop the venture, then try to get acquired, a classic start-up exit strategy. Let someone with the experience and the resources buy your solution, let it go. Easy on paper but you give up all your control and can only watch from the side-lines as your venture develops, and hope it’s in safe hands…

· Go it alone — keep on adding staff and spreading your solution across different geographies, gradually paint the world (or your chosen part of it) in your colors. There are plenty of advantages to doing this — mostly you keep control and you can directly manage quality, message, brand, etc. But the downside is you’ll need a lot of people and resources and you’ll pretty soon reach the point where you need to rethink your structure. The old tight-knit start-up team has to give way to a structured organization, complete with policies, procedures and a slowing down of the decision-making process. Plus you’ll need to adapt your solution to different local conditions — compatibility. And cost management will be important, finding ways to grow without bloating.

In reality this organic growth kind of approach can’t be a solo act — there will be things you need to outsource like legal services, manufacturing, distribution or maintenance. And it can also take time to build your own networks.

· Replicate — maybe your solution idea is one you think will work simply by replicating, placing the same offer in different geographies with only minor tweaks to help it fit. If your solution is something which can be ‘packaged’ and exported — a plug’n’play option — then this can work. It can either be a ‘grow your own’ approach, repeating the pattern by putting down your footprints on an increasingly broad geography. That’s the kind of route followed by IKEA and many other retailers, embodying their innovation solution in something which can be replicated.

Or you can franchise, allow others to take on the task and replicate on your behalf, sharing the revenues and building on your original innovative efforts. That’s the route which McDonalds has followed, exporting its original innovative fast-food format to over 39,000 locations around the world. But as Ray Croc, their scale architect realized, there’s a critical need to make sure the rules are clearly codified and then control via the franchise agreement so your proxies don’t damage the brand, compromise quality or change the core product. It’s a kind of remote control based on a clear constitution….

· ‘Relay replication’ — another version which involves another organization adopting and using your solution. Like franchising it requires protocols, training, standardization of core elements and processes but it also allows the adopting unit to continue to adapt and innovate within agreed parameters. A classic model here might be the diffusion of chemical plants like oil refineries; the core technology is transferred and the user learns to operate. It needs more than simple delivery, not plug n play — it involves a shared extended handover process until the user can make ‘product in a bottle’ with its own staff operating the equipment.

The advantages here are that you learn every time as you coach different organizations in the use of your innovation, plus there’s the chance that their downstream learning feeds back to you and allows you to improve your innovation. But it takes time and resources to ensure a successful handover, with key knowledge being shared through training, manuals and protocols and a long-term commitment to support.

· Licensing is another variation on the replication theme where other players can take on and (depending on the terms of the license) do things ranging from simply selling the core package through to adapting and extending it to suit local conditions. The big advantage is that other players are putting their shoulder to the wheel, helping spread the innovation, plus there’s a direct financial return to the original innovator. But once again it does involve letting go of control.

· Open source/open licensing — much commercial innovation is about finding ways to appropriate the benefits. So there’s pressure to keep a tight rein on what’s shared and how. But if you want to spread something, especially a novel approach, you might want to open up more to accelerate diffusion and seek your returns from being a first mover, growing with the market. There’s plenty of examples — Philips wanted to change the way we consumed recorded music in 1993 when they launched the Compact Cassette and so licensed it for free to others like Sony and Matsushita. It makes sense — if you are trying to establish a new ‘dominant design’ and move the world away from the current incumbent then recruiting others via open licensing is a good road to take.

And in the world of social innovation this has particular relevance; innovators who want to change the world for the better face the same challenge and recruiting others to the cause offers one way of doing so.

There are several advantages to such an open approach, not least it recruits many innovators who may help improve on your ideas. Communities of practice and using the crowd have become powerful innovation engines through this approach of free sharing; Linux is a good example.

Lego’s approach to the hackers who started to modify the original ‘Mindstorms’ product is interesting here; they were presented with a different option to the traditional lawsuit which they might have been expecting. They were invited to Denmark to add their innovative ideas to those of the core design team!

But the downside, of course, in such open approaches is the loss of control and the risk that the innovation may be hijacked or developed in directions which do not match those of the original authors or reflect their social values.

· Strategic partnerships make sense where there is a clear need for ‘complementary assets’ of knowledge or other key resources and where win-win arrangements and contracts can be put in place. Christopher Sholes and colleagues had developed a great solution to the typewriter opportunity back in the 1850s but it took their strategic partnership with Remington and their accompanying mass-manufacturing and marketing to scale their innovation.

· Multi-player consortia may be needed when the range of complementary assets needed goes beyond a single partner. Sears and Roebuck pioneered the remote retailing model with their mail order catalogue approach but they needed to bring together many other players into the model to make it work — finance houses, logistics and distribution and a wide range of different suppliers. Boeing and Airbus do the same today, orchestrating extensive networks of players and partners to deliver their aerospace solutions at scale.

Such consortia bring real power to the scaling challenge but also require careful integration around a core mission. Managing such ‘strategic networks’ is well-known for its high transaction costs and co-ordination challenges.

· Value network and ecosystems — today’s innovation language extends this multi-player game, recognizing that there is a need for multiple players to work together to create value at scale. The challenge is that not all of these players have the same goals or aspirations so balancing their needs with the overall ‘mission’ becomes a tricky balancing act. It’s also important to recognize that such ecosystems don’t just have shared value creators in the mix like our strategic partnerships; they may also involve other players who affect the journey to scale by shaping the ways in which the value creation game is played. Examples of such shapers include government regulators, trade unions and standards organizations.

Once again this has particular relevance for scaling social innovation where system change which delivers real impact may depend on finding ways to bring many diverse players, like government agencies or regional authorities onside. As an influential IDB report puts it, such collaborations require ‘…different actors to coalesce around a shared set of priorities and best practices’.

· Platforms — we’re also now seeing the rise of platform businesses which enable scaling through linking innovators and markets more effectively. The Taobao market approach pioneered in China mimics in many ways the ecosystems around Apple’s developer platform or much of the Amazon operation. For small start-up innovators such platforms become a powerful alternative route to scale, but at the cost not only of accessing the platform but also in letting go some degree of control.

For any innovator climbing Mount Scale remains a key challenge. Meandering around the foothills may be a pleasant way to pass the time but if you want your innovation to have real impact then that peak has got to be climbed. Which means putting together and planning your expedition with the kind of care and attention John Hunt brought to his Everest team. And my guess is that his reflections probably have relevance in the world of innovation. Working out the most appropriate route up those slopes is something best done in the comfort of base camp rather than halfway up the mountain with the wind howling and the snow lashing at your face as you realise that the other path might have been a better one to take….

This blog is based on our forthcoming book ‘The Scaling Value Playbook’ — click here for more details and to pre-order

You can find my podcast here and my videos here

And if you’d like to learn with me take a look at my online course here

Image credits: Dall-E via Bing, John Bessant

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Creating an Innovation Mantra

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Creating an Innovation Mantra

GUEST POST from Mike Shipulski

We have an immense distaste for uncertainty. And, as a result, we create for ourselves a radical and unskillful overestimation of our ability to control things. Our distaste of uncertainty is really a manifestation of our fear of death. When we experience and acknowledge uncertainty, it’s an oblique reminder that we will die. And that’s why talk ourselves into the belief we can control thing we really cannot. It’s a defense mechanism that creates distance between ourselves and from feeling our fear of death. And it’s the obliquity that makes it easier to overestimate our ability to control our environment. Without the obliquity, it’s clear we can’t control our environment, the very thing we wake up to every morning, and it’s clear we can’t control much. And if we can’t control much, we can’t control our aging and our ultimate end. And this is why we reject uncertainty at all costs.

Predictable, controllable, repeatable, measurable – overt rejections of uncertainty. Six Sigma – Measure, Analyze, Improve, Control – overt rejection of uncertainty. Standard work – rejection of uncertainty. Don’t change the business model – a rejection of uncertainty. A rejection of novelty is a rejection of uncertainty. And that’s why we don’t like novelty. It scares us deeply. And it scares us because it reminds us that everything changes, including our skin, joints, and hairline. And that’s why it’s so challenging to do innovation.

Innovation reminds us of our death and that’s why it’s difficult? Really? Yes.

Six Sigma is comforting because its programmatic illusion of control lets us forget about our death? Yes.

The aging business model reminds us of our death and that’s why we won’t let it go? Yes.

That’s crazy! Yes, but at the deepest level, I think it’s true.

I understand if you disagree with my rationale. And I understand if you think my thinking is morbid. If that’s the case, I suggest you write down why you think it’s so incredibly difficult to create a new business model, to do novel work, or to obsolete your best work. I’ll stop for a minute to give you time to grab a pen and paper. Okay, now put your pen to paper and write down why doing innovation (doing novel work) is so difficult. Now, ask yourself why that is. And do that three more times. Where did you end up? What’s the fundamental reason why doing new work (and the uncertainty that comes with it) is so difficult to do?

To be clear, I’m not advocating that you tell everyone that innovation is difficult because it reminds them that they’ll die. I explained my rationale to give you an idea of the magnitude of the level of fear around uncertainty so that, when someone is scared to death of novelty, you might help them navigate their fear.

Trying something new doesn’t invalidate what you did over the last decade to grow your business, nor will it replace it immediately, if it all. Maybe the new work will add to what you’ve done over the last decade. Maybe the new work will amplify what’s made you successful. Maybe the new work will slowly and effectively migrate your business to greener pastures. And maybe it won’t work at all. Or, maybe your customers will make it work and bury you and your business.

With innovation, start small. That way the threat is smaller. Run small experiments and share the results, especially the bad results. That way you demonstrate that unanticipated results don’t kill you and, when you share them, you demonstrate that you’re not afraid of uncertainty. Try many things in parallel to demonstrate that it’s okay that everything doesn’t turn out well and you’re okay with it. And when someone asks what you’ll do next, tell them “I don’t know because it depends on how the next experiment turns out.”

When you’re asked when you’ll be done with an innovation project, tell them “I don’t know because the work has never been done before.” And if they say you must give them a completion date, tell them “If you must have a completion date, you do the project.”

When you’re running multiple experiments in parallel and you’re asked what you’ll do next, tell them you’ll do “more of what works and less of what doesn’t.” And if they say “that’s not acceptable”, then tell them “Well, then you run the project.”

We don’t have nearly as much control as our minds want to us believe, but that’s okay as long as we behave like we know it’s true. Uncertainty is uncomfortable, but that’s not a bad thing. In fact, I think it’s a good thing.

If people aren’t afraid, there can be no uncertainty. And if there’s no uncertainty, there can be no novelty. And if there’s no novelty, there can be no innovation. If people aren’t afraid, you’re doing it wrong.

As a leader, tell them you’re afraid but you’re going to do it anyway.

As a leader, tell your team that it’s natural to be afraid and their fear is a leading indicator of innovation.

As a leader, tell them there’s one thing you’re certain about – that innovation is uncertain.

And when things get difficult, repeat the Innovation Mantra: Be afraid and do it anyway.

Image credit: Pixabay

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Win Customers Not Arguments

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Win Customers Not Arguments

GUEST POST from Shep Hyken

In a confrontation with a customer, you have a goal: win the customer, not the argument. I’ve written about this before, and it’s worth coming back to this topic from another angle with a different example.

First, an interaction with a customer should never result in an argument. The best people in customer service, sales, or any front-line customer-facing job avoid escalating a confrontation to the level of a dispute. Instead, the best people de-escalate a confrontation to a mutually agreeable solution.

Here’s what I witnessed this week. I was on a plane and noticed that the flight attendant greeting passengers was more interested in telling passengers the rules than offering a warm, friendly greeting as people boarded the plane. There was a woman with a small pack strapped to her belt. It was maybe an inch thick and barely larger than a cell phone. It probably held her phone and maybe her wallet, but it wasn’t big enough for anything else.

Rather than the flight attendant saying, “Welcome aboard,” he pointed at her belt and said, “That’s going to have to go in the overhead or under the seat.”

The passenger said, “I’ve been flying with this for 15 years, and nobody has ever asked me to remove it from my belt.”

The flight attendant replied, “I’ve been flying for 20 years, and I know the rules.”

Shep Hyken Win the Customer Cartoon

So much for trying to win the customer. As I watched this, it was hard for me not to go to the flight attendant to introduce myself and suggest an alternative response that might have been friendlier and helped him convey his message. First, he could have extended a warm greeting. Then, he could have worded his statement as a friendly request rather than an order.

How is this different from what I’ve written about in the past? First, the customer (or passenger) didn’t walk on the plane with a bad attitude. She wasn’t coming into the conversation upset or angry. She didn’t have a complaint that eventually could turn into an argument. The opposite was happening. The flight attendant started it. Even if he was right and had to enforce a rule, he could have approached his request in a friendly manner that included an attitude of diplomacy and an explanation. Instead, he started the confrontation with an aggressive tone and a command that put the customer on the defensive and made the passengers around her uncomfortable.

There’s no good ending to this story. The passenger complied, but the employee never made things right. His angry and militant attitude continued throughout the flight.

It’s not about who’s right and who’s wrong. It’s not about blame. It’s about a customer-focused, friendly approach that doesn’t taint the experience.

Image Credits: Shep Hyken, Pexels

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What is Digital Transformation anyway?

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Digital Transformation is the third wave of digital evolution.

What is Digital Transformation anyway?

GUEST POST from Howard Tiersky

The first wave was brochureware. Enterprises created websites that communicated their story. As simple as this idea is, it was revolutionary. The business value of providing instant sales and marketing material at the click of a mouse is hugely valuable.

The second wave was eCommerce. Enterprises connected customer-facing digital front-ends to their back-end systems, so that customers could engage in transactions directly via their browser or mobile device. This wave generated much more value than brochureware, because it reduced the cost of customer interaction, and removed friction from the user experience. Businesses who have mastered eCommerce have been able to trump former market leaders. In today’s world, if you can’t provide elegant digital options for the customer throughout their entire journey, you’re toast.

Now we find ourselves in the third wave: Digital Transformation. eCommerce added new pathways for pre-existing offerings, but companies going through digital transformation need to reinvent themselves for a digital age. Netflix made the transition from being a mail-order company to a streaming company. Though they still focus on their core value proposition of providing extended choices and increased convenience, their entire solution offering had to shift, along with their customer experience, pricing, contracts with suppliers, marketing, and more. Furthermore, given new methods of interacting with the consumer, it became practical for them to focus serious resources on content creation, as well. While the Netflix DVD-by-mail service was definitely eCommerce enabled (i.e. you could order DVDs via their web site), their digitally transformed value proposition is fundamentally impossible without digital.

Uber is doing the same thing for transportation. While plenty of taxi and limousine companies have apps that allow you to order their vehicles, Uber created a business model that was completely digitally focused. This meant that they didn’t need to own any vehicles or hire any drivers to become the largest ground transportation company in the world. It’s worth noting that Uber didn’t really go through a digital transformation, it was born digital. Digital Transformation is what pre-digital companies must undertake to compete in the newest wave of the digital age.

But even those companies that are “born digital” will need to focus on ongoing transformation. There are multiple examples of early digital successes, companies like Yahoo and MySpace, that failed to continue to transform.

Digital Transformation also requires a different mindset around where digital “lives” within the organization. You can visualize the way digital transformation works in the enterprises like this:

Wave 1 – Brochureware: Digital was part of marketing.
Wave 2 – eCommerce: Digital is a support service, creating digital pathways to pre-existing services like ordering, customer support, and billing.
Wave 3 – Digital Transformation: Digital reimagines the entire value proposition and business model of the company.

The goal of Digital in Wave 2 is to support the strategy and operations of the company by augmenting non-digital channels with more efficient and elegant digital alternatives. But in Wave 3, digital is driving the bus. The entire company — its value proposition and business model — is reimagined with digital at the center. This requires some substantial shifts in organizational structure, roles, and mindset; these shifts make companies hesitant to move towards true digital transformation. They engage in what is sometimes called Digital Decoration, that makes them seem progressive while protecting the “integrity” of their legacy business structures.

This is a losing strategy. There’s a long history of companies who decided to protect their existing models over supporting new ones. Kodak suffocated its early digital camera products; Blockbuster resisted focusing on digital delivery of entertainment. Western Union scoffed at the telephone.

In fact, here’s an example of an internal memo sent at Western Union:

“Why would any person want to use this ungainly and impractical device [a telephone] when he can send a messenger to the telegraph office and have a clear written message sent to any large city in the United States?”

Western Union opted out of the “digital transformation” of its era and I predict the same outcome for pre-digital companies who take a similar approach.

This article originally appeared on the Howard Tiersky blog
Image Credit: Pexels

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Customer Journeys and the Technology Adoption Lifecycle

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Customer Journeys and the Technology Adoption Lifecycle

GUEST POST from Geoffrey A. Moore

Like everything else in this Darwinian world of ours, customer journeys evolve with changes in the environment. Ever since the advent of the semiconductor, a compelling source of such changes has been disruptive digital technology. Although we are all eager to embrace its benefits, markets must first work through their adoption life cycles, during which different buying personas come to the fore at different stages, with each one on a very different kind of journey.

So, if you plan to catch the next wave and sell the next big thing, you’re going to need to adjust your customer journey playbook as you go along. Here’s a recap of what is in store for you.

Customer Journeys in the Early Market

The early market buying personas are the visionary and the technology enthusiast, the former eager to leverage disruption to gain first-mover competitive advantage, the latter excited to participate in the latest and greatest thing. Both are on a journey of discovery.

Technology enthusiasts need to get as close to the product as possible, seeing demos and alpha-testing prototypes as soon as they are released. They are not looking to be sold (for one thing, they have no money)—they are looking to educate themselves in order to be a reliable advisor to their visionary colleague. The key is to garner them privileged access to the technical whizzes in your own enterprise and, once under NDA, to share with them the wondrous roadmap you have in mind.

Visionaries are on a different path. They want to get as clear an understanding as possible of what makes the disruptive technology so different, to see whether such a difference could be a game changer in their circumstances. This is an exercise in imagineering. It will involve discussing hypothetical use cases, and applying first principles, which means you need to bring the smartest people in your company to the table, people who can not only communicate the magic of what you have but who can also keep up with the visionary’s vision as well.

Once this journey is started, you need to guide it toward a project, not a product sale. It is simply too early to make any kind of product promise that you can reliably keep. Not only is the paint not yet dry on your own offer, but also the partner ecosystem is as yet non-existent, so the only way a whole product can be delivered is via a dedicated project team. To up the stakes even further, visionaries aren’t interested in any normal productivity improvements, they are looking to leapfrog the competition with something astounding, so a huge amount of custom work will be required. This is all well and good provided you have a project-centric contract that doesn’t leave you on the hook for all the extra labor involved.

Customer Journeys to Cross the Chasm

The buying personas on the other side of the chasm are neither visionaries nor technology enthusiasts. Rather, they are pragmatists, and to be really specific, they are pragmatists in pain. Unlike early market customers, they are not trying to get ahead, they are trying to get themselves out of a jam. In such a state, they could care less about your product, and they do not want to meet your engineers or engage in any pie-in-the-sky discussions of what the future may hold. All they want to do is find a way out of their pain.

This is a journey of diagnosis and prescription. They have a problem which, given conventional remedies, is not really solvable. They are making do with patchwork solutions, but the overall situation is deteriorating, and they know they need help. Sadly, their incumbent vendors are not able to provide it, so despite their normal pragmatist hesitation about committing to a vendor they don’t know and a solution that has yet to be proven, they are willing to take a chance—provided, that is, that:

you demonstrate that you understand their problem in sufficient depth to be credible as a solution provider, and
that you commit to bringing the entire solution to the table, even when it involves orchestrating with partners to do so.

To do so, your first job is to engage with the owner of the problem process in a dialog about what is going on. During these conversations, you demonstrate your credibility by anticipating the prospective customer’s issues and referencing other customers who have faced similar challenges. Once prospects have assured themselves that you appreciate the magnitude of their problem and that you have expertise to address its challenges, then (and only then) will they want to hear about your products and services.

As the vendor, therefore, you are differentiating on experience and domain expertise, ideally by bringing someone to the table who has worked in the target market segment and walked in your prospective customer’s shoes. Once you have established credibility by so doing, then you must show how you have positioned the full force of your disruptive product to address the very problem that besets your target market. Of course, you know that your product is far more capable than this, and you also know you have promised your investors global domination, not a niche market solution. But for right now, to cross the chasm, you forsake all that and become laser-focused on demolishing the problem at hand. Do that for the first customer, and they will tell others. Do that for the next, and they will tell more. By the time you have done this four or five times, your phone will start ringing. But to get to this point, you need to be customer-led, not product-led.

Customer Journeys Inside the Tornado.

The tornado is that point in the technology adoption life cycle when the pragmatist community shifts from fear of going too soon to fear of missing out. As a consequence, they all rush to catch up. Even without a compelling first use case, they commit resources to the new category. Thus, for the first time in the history of the category, prospective customers have budget allocated before the salesperson calls. (In the early market, there was no budget at all—the visionary had to create it. In the chasm-crossing scenario, there is budget, but it is being spent on patchwork fixes with legacy solutions and needs to get reallocated before a deal can be closed.)
Budget is allocated to the department that will purchase and support the new offer, not the ones who will actually use it (although they will no doubt get chargebacks at some point). That means for IT offerings the target customer is the technical buyer and the CIO, the former who will make the product decision, the latter who will make the vendor decision. Ideally, the two will coincide, but when they don’t, the vendor choice usually prevails.

Now, one thing we know about budgets is that once they have been allocated they will get spent. These customers are on a buying mission journey. They produce RFPs to let them compare products and vet companies, and they don’t want any vendor to get too close to them during the process. Sales cycles are super-competitive, and product bake-offs are not uncommon. This means you need to bring your best systems engineers to the table, armed with killer demos, supported by sales teams, armed with battle cards that highlight competitor strengths and weaknesses and how to cope with the former and exploit the latter. There is no customer intimacy involved.

What is at stake, instead, is simply winning the deal. Here account mapping can make a big difference. Who is the decision maker really? Who are the influencers? Who has the inside track? You need a champion on the inside who can give you the real scoop. And at the end of the sales cycle, you can expect a major objection to your proposal, a real potential showstopper, where you will have to find some very creative way to close the deal and get it off the table. That is how market share battles are won.

Customer Journeys on Main Street

On Main Street, you are either the incumbent or a challenger. If the latter, your best bet is to follow a variation on the chasm-crossing playbook, searching out a use case where the incumbent is not well positioned and the process owner is getting frustrated—as discussed above. For incumbents, on the other hand, it is a completely different playbook.

The persona that matters most on Main Street is the end user, regardless of whether they have budget or buying authority. Increasing their productivity is what creates the ROI that justifies any additional purchases, not to mention retaining the current subscription. This calls for a journey of continuous improvement.

Such a journey rewards two value disciplines on the vendor’s part—customer intimacy and operational excellence. The first is much aided by the advent of telemetry which can track product usage by user and identify opportunities for improvement. Telemetric data can feed a customer health score which allows the support team to see where additional attention is most needed. Supplying the attention requires operational excellence, and once again technology innovation is changing the game, this time through product-led prompts, now amplified by generative AI commentary. Finally, sitting atop such infrastructure is the increasingly powerful customer success function whose role is to connect with the middle management in charge, discuss with them current health score issues and their remediation, and explore opportunities for adding users, incorporating product extensions, and automating adjacent use cases.

Summing up

The whole point of customer journeys done right is to start with the customer, not with the sales plan. That said, where the customer is in their adoption life cycle defines the kind of journey they are most likely to be on. One size does not fit all, so it behooves the account team to place its bets as best it can and then course correct from there.
That’s what I think. What do you think?

Image Credit: Pixabay

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Big Companies Should Not Try to Act Like Startups

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Big Companies Should Not Try to Act Like Startups

GUEST POST from Greg Satell

In 2009, Jeffrey Immelt set out on a journey to transform his company, General Electric, into a 124 year old startup. Although it was one of the largest private organizations in the world, with 300,000 employees, he sought to become agile and nimble enough to compete with high-flying Silicon Valley firms.

It didn’t end well. In 2017, problems in the firm’s power division led to massive layoffs. Immelt was forced to step down as CEO and GE was kicked off the Dow after 110 years. The company, which was once famous for its sound management, saw its stock tank. Much like most startups, the effort had failed.

Somewhere along the line we got it into our heads that large firms can’t innovate and should strive to act like startups. The truth is that they are very different types of organizations and need to innovate differently. While large firms can’t move as fast as startups, they have other advantages. Rather than try to act like startups, they need to leverage what they have.

Driving Innovation At Scale

The aviation industry is dominated by big companies. With a typical airliner costing tens of millions of dollars, there’s not much room for rapid prototyping. It takes years to develop a new product and the industry, perhaps not surprisingly, moves slowly. Planes today look pretty much the same as ones made decades ago.

Looks, however, can be deceiving. To understand how the aviation industry innovates, consider the case of Boeing’s 787 Dreamliner. Although it may look like any other airplane, Boeing redesigned the materials within it. So a 787 is 20 percent lighter and 20 percent more efficient than similar models. That’s a significant achievement.

Developing advanced materials is not for the faint of heart. You can’t do it in a garage. You need deep scientific expertise, state-of-the-art facilities and the resources to work for years—and sometimes decades— to discover something useful. Only large enterprises can do that,

None of this means that startups don’t have a role to play. In fact one small company, Citrine Informatics, is applying artificial intelligence to materials discovery and revolutionizing the field. Still, to take on big projects that have the potential to make huge global impacts, you usually need a large enterprise.

Powering Startups

All too often, we see large enterprises and startups as opposite sides of the coin, with big companies representing the old guard and entrepreneurs representing the new wave, but that’s largely a myth. The truth is that innovation often works best when large firms and small firms are able to collaborate.

Scott Lenet, President of Touchdown Ventures, sees this first-hand every day. His company is somewhat unique in that, unlike most venture capital firms, it manages internal funds for large corporations. He’s found that large corporations are often seen as value added investors because of everything they bring to the table.

“For example,” he told me, “one of our corporate partners is Kellogg’s and they have enormous resources in technical expertise, distribution relationships and marketing acumen. The company has been in business for over 100 years and it’s learned quite a bit about the food business in that time. So that’s an enormous asset for a startup to draw on.”

He also points out that, while large firms tend to know how to do things well, they can’t match the entrepreneurial energy of someone striving to build their own business. “Startups thrive on new ideas,” Lenet says “and big firms know how to scale and improve those ideas. We’ve seen some of our investments really blossom based on that kind of partnership.”

Creating New Markets

Another role that large firms play is creating and scaling new markets. While small firms are often more agile, large companies have the clout and resources to scale and drive impact. That often also creates opportunities for entrepreneurs as well.

Consider the case of personal computers. By 1980, startups like Apple and Commodore had already been marketing personal computers for years, but it was mostly a cottage industry. When IBM launched the PC in 1981, however, the market exploded. Businesses could now buy a computer from a supplier that they knew and trusted.

It also created fantastic opportunities for companies like Microsoft, Intel and a whole range of entrepreneurs who flocked to create software and auxiliary devices for PCs. Later startups like Compaq and Dell created PC clones that were compatible with IBM products. The world was never the same after that.

Today, large enterprises like IBM, Google and Amazon dominate the market for artificial intelligence, but once again they are also creating fantastic opportunities for entrepreneurs. By accessing the tools that the tech giants have created through APIs, small firms can create amazing applications for their customers.

Innovation Needs Exploration

Clearly, large firms have significant advantages when it comes to innovation. They have resources, customer relationships and deep expertise to not only invent new things, but to scale businesses and bring products to market. Still, many fail to innovate effectively, which is why the average lifespan of companies on the S&P 500 continues to decline.

There’s no reason why that has to be true. The problem is that most large organizations spend so much time and effort fine-tuning their operations to meet earnings targets that they fail to look beyond their present business model. That’s not due to any inherent lack of capability, it’s due to a lack of imagination.

Make no mistake, if you don’t explore, you won’t discover. If you don’t discover you won’t invent and if you don’t invent you will be disrupted. So while you need to focus on the business at hand, you also need to leave some resources un-optimized so that you can identify and develop the next great opportunity.

A good rule of thumb to follow is 70-20-10. Focus 70% of your resources on developing your present business, 20% of your resources on opportunities adjacent to your current business, such as new markets and technologies and 10% on developing things that are completely new. That’s how you innovate for the long term.

— Article courtesy of the Digital Tonto blog and previously appeared on Inc.com
— Image credit: Pixabay

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Are You Testing Your Intuitions?

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Are You Testing Your Intuitions?

GUEST POST from Dennis Stauffer

Do you trust your intuitions? When you have a hunch, do you go with it or hold back? There’s been a long-running debate about which is the better strategy.

Some have claimed that top executives are at their best when they “go with their gut” or “follow their instincts.” They can give examples of when that’s turned out well for them. But what we don’t know is how often other intuitions may have turned out badly.

Trusting your intuitions can sometimes keep you safe. Some research has found that firefighters are well-served by their intuitions, because it helps them avoid danger. Women who are uneasy walking alone at night are advised to follow their intuitions.

That makes sense when you’re crossing a dark parking lot or at the scene of a fire. Being cautious when there might be no threat is better than being careless when there might be one. But that doesn’t mean those intuitions are accurate.

Innovators also have intuitions—and need to. Hunches about the value of an idea, or a sense of how customers will react. For an innovator, asking whether you should trust your intuitions is the wrong question. What needs to be asked instead is: How can I test my intuitions? What can I do to find out whether those feelings are reliable?

That’s one reasons innovators have a bias for action. Because acting on their ideas—in ways that will test them—is how they find out whether those ideas will work. That’s not only a more prudent approach than just following hunches; it’s excellent practice at evaluating the merits of your ideas. So over time, you become better at forming those hunches. Because you know how well it worked in the past, and maybe where you might have biases.

If you want to enhance your intuitions—and your innovativeness—don’t trust them or distrust them.

Test them.

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The Dark Underbelly of Success

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The Dark Underbelly of Success

GUEST POST from Mike Shipulski

Best practice – a tired recipe you recycle because you think the world is static.

Emergent practice – a new way to work created from whole cloth because the context is new.

Worst practice – a best practice applied to a world that has changed around you.

Novel practice– work that recognizes the world is a different place but is dismissed out-of-hand because everyone wants to live in the comfortable past.

Continuous improvement – when you try to put a shine on a tired, old process that worked ten years ago.

Discontinuous improvement – work that is disrespectful to the Status Quo and hurts people’s feelings.

Grow the core – when you do what you did in 2010 because you don’t know what else to do.

Obsolete your best work – when you do work that makes it clear to your customers that they should not have purchased your most successful product.

Reduce operating expense – what you do when you don’t know how to grow the top line and want to eliminate the flexibility to respond to an uncertain future.

Grow the top line – when you launch a new product that causes your customers to happily throw away the product they just bought from you.

A PowerPoint slide deck that defines your strategic plan – an electronic work product that distracts you from the reality of an ever-changing future.

A new product that is radically better than your last one – what you should create instead of a PowerPoint slide deck that defines your strategic plan.

MBA – a university degree that gives you a pedigree so companies hire you.

Ph.D. – a university degree that teaches you to learn, but takes too long.

Return On Investment (ROI) – a calculation that scuttles new work that would reinvent your business.

Imagination – thinking that will help you navigate an uncertain future, but is knee-capped by the ROI calculation.

Standard work – a process you used last time and will use next time because, again, you think the world is static.

Judgment – thinking that creates a whole new business trajectory to address an uncertain future but can get you fired if you use it.

A sustainable competitive advantage – a relic of a slow-moving world.

Continual change – the only way to deal with an ever-accelerating future.

Success – profits from work done by people who retired from your company some time ago.

Success – the thing that blocks you from working on the unproven.

Success – what pays the bills.

Success – what jeopardizes your ability to pay the bills in five years.

Success – why people think old practices are best practices.

Success – why new work is so difficult to do.

Success – why continuous improvement carries the day.

Success – why discontinuous improvement threatens.

Success – the mother of complacency.

Image credit: Pexels

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How Sales and Customer Experience Connect

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How Sales and Customer Experience Connect

GUEST POST from Shep Hyken

Customer service and customer experience (CX) are more than what happens after the sale. It’s not just a department to call when there is a problem. It actually begins long before a customer ever makes a purchase. Then, there’s the experience during the sales process and what happens after the sale, which could include a typical customer support call and more. Every interaction the customer has with us, from learning about our company, our marketing messages, the sales experience and then anything after the sale, is all part of the customer experience.

I’m often asked to be the keynote speaker at sales meetings. Most of the audience expects to learn a new sales technique or tactic; instead, I teach customer service and experience techniques and tactics. I refer to this as Selling with Service. I share how to create the experience that makes customers want to do business with the company, not just buy the product. That’s also the experience that gets customers to say, “I’ll be back!”

Customer Experience Department Cartoon by Shep Hyken

So, today, I have three tips for anyone who interacts with customers (not just salespeople) that will help you create an amazing customer experience.

Respond Fast – I love to talk about the Jimmy John’s experience. For those outside of the United States or those in the U.S. who aren’t fortunate enough to live near a Jimmy John’s, it is a chain of delicious fast-food restaurants known for its super speedy service. Whether you are ordering your sandwich in the store or having your meal delivered, you will experience what Jimmy John’s calls “freaky fast!” So, be “freaky fast” in responding to your customers’ calls or emails – or any other way customers reach out to you.
Always Do What You Say and More – One way to blow credibility is to not do what you promise. So, this is simple: Just do what you say you’ll do. The “and more” of this tip falls under the strategy of “UPOD,” which stands for the old saying, under-promise and over-deliver. If you say you’ll get back to a customer by the end of the day, get back to them a few hours earlier. By the way, if you create an expectation you plan to exceed, ensure the customer will still be happy if all you do is meet that expectation.
Be Prepared – If you want to frustrate your customers, be unprepared. Even if you’re not unprepared, you may exhibit behaviors that make you appear to be so. Being unprepared is a sign of disrespect toward your customers, and I don’t know any customer who enjoys doing business with someone who doesn’t respect them.

The commonality between sales and customer service/CX is not just about getting customers but keeping customers. These three tips I’ve shared are just the beginning. Over the years, I’ve shared hundreds of tips just like these. Regardless of what department or role you have with the company, your goals should be to create the experience that customers want and crave and to be so good they wouldn’t even think about taking a chance doing business anywhere else.

Image Credits: Shep Hyken, Unsplash

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Human-Centered Change and Innovation

Innovation, change and transformation thought leadership, lovingly curated by Braden Kelley

Pathways to Scale

Creating an Innovation Mantra

Win Customers Not Arguments

What is Digital Transformation anyway?

Digital Transformation is the third wave of digital evolution.

Customer Journeys and the Technology Adoption Lifecycle

Customer Journeys in the Early Market

Customer Journeys to Cross the Chasm

Customer Journeys Inside the Tornado.

Customer Journeys on Main Street

Summing up

Big Companies Should Not Try to Act Like Startups

Driving Innovation At Scale

Powering Startups

Creating New Markets

Innovation Needs Exploration

Are You Testing Your Intuitions?

Top 100 Innovation and Transformation Articles of 2023

The Dark Underbelly of Success

How Sales and Customer Experience Connect