Big Data, Small Attention

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The challenges of collecting and managing vast amounts of data have been discussed in great detail and everyone is in agreement that it will happen. We don’t know how companies and their partners will do it, but they will do it. However, are we overlooking a key facet of using data for marketing and governance purposes that is quite literally staring us in the face?

Let’s take a scenario of big data in a Corporate looking after business customers, B2B for simplicity sake. Now let’s consider that we know the human side of the equation really well. We have the customers profile, associations, historical patterns, opinions, shoe size, favourite colour and an array of metadata that says “we know you better than you know yourself”. So, we get to work on the Human to Human communication and are prepared for the psychographic discussion that allows us to provide the ‘answer’. Social Media will play its role in getting the message to the DNA, sorry the Client, and we are in married bliss in a Client Relationship, ding-dong, ding-dong!

Big Data will also bring even more communicators and innovation will bring us more applications, so the use of human-to-human (H2H) data will proliferate. This is where we get to the challenge…how will the Human absorb volumes of data? Email, Tweets, IM’s, App bulletins and every other ping-type announcement that will flash before the user with more data and more links than ever before. Will we have to take the retrospective step to simple browser search queries for the Human to be able to cope?

My thoughts are that we need to focus on the day in the life of a Human, a modern Human, to assess how they meet their social and work needs using data and how we make it easy for them. If the Human solution is too difficult, we will not have advanced Big Data other than proving that we can collect, store and correlate massive points or data. If we succeed the step forward could be as dramatic as the use of steam in industry.

Growth by Acquisition…doing the math

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As your company works out its growth strategy and assesses the options for inorganic growth through acquisition, the headline expectation of benefit may not be as assured as the simple math that you may see. Let’s take a simplistic view of an Acquisition or a Merger and try to answer the question chalked in the panel.

Talk of acquisition creates a special atmosphere in the buying company, sometimes both companies. Initially through the Executive Management team close to the deal, word spreads to Middle Managers and Employees.  It’s not always a good thing for Employees as you start to look towards synergies, but for now let’s take a pure and positive corporate view of this.

Whether you are going for Horizontal acquisition (Market Share) or Vertical acquisition (Value Chain), there is always due diligence, there are always lots of advisors, but the target Company should add something to your alchemy. What Executives are looking for in most cases is a simple Venn diagram for (a) the overlap, (b) the differentiated access to revenue and profit and (c) the cross selling opportunities of the non-overlapping areas.

So an expectation is set, established and the business case agreed. Sale! (Gavel banged, deal!). The expectation?…look towards the simple sum… ’1+1 = ?

The optimist may add up all the benefits and get to an answer of ‘2 + x‘. Value Add thinking. This is how we should be thinking, especially when trying to get out of a recession.

The pragmatist may say that it’s a simple investment, so ‘what have we bought?’ The answer is ‘2‘.  They have a model, we have a model, we are both continuing to looking after our own customers and the Value will be that we are a bigger player in the market and we may have more control of the value chain.

Then there is a pessimistic view. Your overlap causes confusion in your portfolios, customer dissent and you end up with a compete operating model with complexity. It will cost you revenue, profit, market share and your Talent will leave you. Therefore the answer in this case, simply stated is ‘2 – x‘.

In each case x can represent the integration benefit (+) or risk (-)

So what is the real difference between optimism and pessimism in the Acquisition world? Here are my thoughts on what can happen even though everyone is trying to maximize a result.

As the scouting is conducted, there are ‘Plays’ that are considered of the value of acquiring another company. The Plays get valued on a set of assumptions. The assumptions are tested again in the due diligence. The results give the Executive Team and Shareholders the confidence that this is the ‘strategic fit’ for the investment. We can ignore Acquisitions that are made for turnaround purposes at this stage, as they would not necessarily be looking at long-term growth, but pure investor value. However the principles that follows may still apply to these cases.

The purchase is made, the champagne is opened, the PR announcements are broadcast and the expectation is set by the CEO to the employees that this is a “critical investment for our future” and we will be in a “period of transition” to merge the companies activities.

If both Companies have done their homework, the first week after the purchase should see Post-Acquisition Integration teams, fuelled with your best Talent (not necessarily Senior, but empowered people who understand how both Companies work) starting a series of planned activities. They should be looking to work out how you bring capability together, what you keep apart and what programmes are required to drive the synergies. Each functional area should have a Play for what is the optimum solution to meet the investment and corporate strategic aims. Nepotism and Stovepipes should be highlighted and removed and a series of Integration Metrics agreed quickly of what ‘Good’ looks like. So on a route like this…1+1 = 2 + x is a possibility.

Let’s take a look now at what can also happen to get a reduced return.

We start with post-Acquisition Integration. You agree the merger principles, but leave the room without a plan and an end state. No plan means that you have limited ownership and you may not have executive sponsorship. The two companies continue to perform to the expectations of what they are today, with probably a little more load to Middle Management day jobs. At best you get to 1+1 = 2

The worst scenario is that you have a low intensity and low immediacy in your integration plans and the organisations start to compete. Employees and Managers get caught in the battle for delivering their own objectives and invariably, some of these Managers will fail. The lengthening process of Integration creates a noise for Managers and the finger of blame is used to defend shortfall. This is the CEO’s worst position. Unless you have an agreed play to rationalise the two organisations to a smaller but sustainable model, the payback to the Shareholder has been diluted.

What started as a Honeymoon Period could end in ‘Acrimony’. What you need is for the relationship to end in ‘Alchemy’.

So how do we keep the investment to the original strategic intent and how do we Make It Happen…Do the detail!  If you would like to know how Dugdale Consulting could help you with acquisition integration contact us.

In summary, the original ‘Sum’ was a multiple-choice question, but the real answer is in your choice for the plan you effect to determine the desired outcome.

If you find this article of value, please share it with your colleagues. Or need some advice, contact at enquiry@dugdaleconsulting.com

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‘Business’ inclusion in Social Problems

Today’s post is to support comments back to Michael E. Porter who presented a TED lecture on the topic ‘Why business can be good at solving social problems’.  You can see the Lecture at http://www.ted.com/talks/michael_porter_why_business_can_be_good_at_solving_social_problems.html

This was an excellent positioning of the role that Business needs to play in the solution to global social problems.

My response to Michael Porter on Twitter was too short so I wanted to get my Business feelings out on the subject for comment.

After viewing the Lecture you will I am sure be impassioned by Michael’s build to a point of view that Businesses are the solution to fix the world social and geographic problems.  My comments are much to do about the other enabling considerations to make this happen.

There are a great number of CSR programmes across the Small to Large corporations who try hard to involve themselves in the known social effects that the world suffers and there is also a huge amount of funding and volunteering programmes where Companies support NGO’s in making things happen. However, most of these would be regarded as events, activities and programmes, that at some point have an end to them.  Put to one side the carbon emissions controls that large companies are investing in, the charitable programmes do have an end.  They may be end-on-end, but they are not continuous. So aid and support to la Local or Global concern gets there now but in the turn of events at a Company it could be lessened or re-focussed.

The challenge for Business, following on from Michael’s key points, is that we need to find ways in which Companies take an active role in the end to end delivery of its products throughout the value chain and to play both an economic and a social role as this is happening. We need to ensure that all parts that flow into the gradual increase in ‘value’ also receive back from it in a ‘social value’ way so that we can all live with the basic standards, health, wealth and freedom.

Government’s do play their role but we need to raise the level of governance away from wasteful and irrelevant in-flighting, such that we have seen with the USA Shutdown, to a more productive coordinator of efforts around the world with Business being the sponsor.

Businesses also have the Talent that can help people at the far reaches of a supply chain to sustain a living or work through problems with knowledge which is taken for granted in the Corporate Boardroom, but would be life-changing in other parts of society.

Maybe one way to consider CSR would be to treat it as a COST OF SALE rather than SG&A, so it gets considered as a marginal cost of doing business?

The lecture really was a different angle to CSR and hopefully the start of a new regime of Change.  Thank you Michael.

 

 

Whatever it takes…grow the business!

Is this a phrase that you have ever heard from a Manager to express urgency?

For me this approach lines up with some of the other Business Strategy word-plays (let’s call them ‘BS Words’ for short) that are just thrown out as JDI directions to make results happen. In their correct place and in the context that the original creative author intended, they can add the drama needed to create an immediacy in the call to action. In the wrong context, they are a signal for failure. Let me explain using the Growth mandate in the headline as an example.

I am an advocate of the statement ‘Not all business is good business’. Unless you have a clear Strategy, a balanced Plan and have thought through the aspects of Change required to grow, expanding your business could have a catastrophic effect on the stability of your existing base. Taking the simple model of selling Existing Products or New Products to Existing Customers. The opportunity for predatory price competition without value creation disrupts the market. Your Competitors react and elements in all market propositions begin to fail. Customer Service becomes a costly overhead and your Cash Flow heads south. You probably don’t get what you need, neither do your Competitors but importantly nor do your Customers.

So, how should it be?

You do have to create urgency about the need for Change. In the case above it would be Profitable Growth, but whatever your transformation requires it should be based on a simple and repeatable ‘Story’, your Company’s Story, that explains the Big Picture. It should contain the reality of where you have come from, the challenges and issues you face, the critical aspects of the required Change and what strategic imperatives everyone needs to consider as they deliver, together, to make it happen. This is a leader-led and an employee-engaged way to satisfy your Plan and ultimately execute on your Business Strategy.

Of course there are a number of other pieces that come into the preparation such as Delivery and Control of your plan, but taking a little time to develop your Story and bringing your employees and senior managers with you will return more predictable and sustainable results.

Now, how would you tell your Story?

Elephant Stampede in the room!

Working in a large Corporate is a great experience.  You have security, you can test a few more things that you wouldn’t be able to in a small company but you also have…voluntary blindness.  Well, if I started with Elephants, I guess that allows me to use my endless vocabulary of analogies.  So what am I talking about?

Hierarchies and Organisational design breeds loyalty to a topic, loyalty to a person, loyalty to a concept.  Meeting after meeting, audio after audio, you listen, you agree or disagree, but the tendency for the Middle Manager is to not stray away from the base agenda and to nod when you are expected to nod.  You know that there is something fundamentally wrong with a plan; timing, expectation, mis-aligned metrics, outcome scepticism or just that you know that when you leave the room a sub-optimal solution will be found.  These are the Elephants in the room.  The motivation and good intent of a programme team wasted on not paying due regard to the things that matter to tackle the issues.  This is a Strategy, Planning and Change execution problem.  The Sponsor gets their update and the Stakeholders see the design metrics, so everyone’s happy…if for a while.  Management teams change frequently, programme teams reconvene and they avoid the big things that will stop results happening.

So why is this?  It can be as simple as you are unable to specify the detail of the ‘Elephant’ or are too shy to speak across the Chair to say that there really is a Stampede of Elephants in the room that everyone is missing, especially when it’s not your subject area.  It is behavioural and it’s cultural.  Top Down trumps Bottom Up, fact.  A junior manager doesn’t have the right to question a middle manager’s subject.  A programme leader doesn’t want to call ‘time-out’ to re-think the solution as it is seen as a delay to the sponsor.

Now with the problems there has to be a solution and there is, but you need to change the motivation of the individual players and create a team environment.  I am not suggesting you hand over the keys to the company strategy box to the new Graduate, but to create a sandbox in which employees know what is expected of them and that they have a right to speak up and propose solutions that might work.  Most great market inventions come from someone thinking of using the object differently to the inventor.  You also need to have discussions in meetings that take an end-to-end approach and have material sign offs to support and deliver aspects of projects that get taken for granted.  And also be careful with selecting programme metrics.  And if someone shouts out that a crack is appearing, hear the case early on, qualify it and then determine if you can continue with the plan in that shape.  Thank the contributor whatever the outcome and let it be a learning experience for all employees. And, And And…

Programme Audits are a good place to start.

I’ll leave it there for this post.  If you see an Elephant, call it out early, even if you end up being the 50th person to make the claim.  If you are the 50th person, follow up your observation with a question…”Are we doing anything to remove it?”

The Big Picture

A clear Strategy takes time to develop, but from it the rest of your business plan and go-to-market plans will form, quicker and more consistently.

An electronics company I visited years ago, shocked me with the quick production of a Vision and Values ‘business card’, which succinctly told a short story of where the company was going and how the processes and employees needed react to make it happen.  The disappointment was when I was told that it was for ‘management’ only!  I’m a big fan of engaging everyone in the company and where possible your suppliers to the direction you have chosen and the role that everyone plays, day to day.

The Big Picture of what you are doing, where you are going needs to be an ‘involve everyone’ programme.  There will of course be a pecking order for engagement and support for the story, but eventually the same Managers need to take it to their staff and be the role models that the Strategy and Plan expects.  There are some really effective methods for getting everyone aligned, but there is also the resource and performance processes that need to marry.  All in all your organisation, what you are trying to do in the market, competitive advantage/disadvantage, your processes, your investments and your people are all part of the ‘Big Picture’.

A simple way to start your Big Picture is to see if you can tell the story of what your company is trying to do just to yourself in 10 minutes.  Do you have a start, a middle and an action ending.  To me a Strategic Big Picture is akin to a Star Wars movie, in theory there is no final and definitive end to the story, but with each edition you can link and leverage from what you have said in the past with a fresh story for the future and engage everyone in the company within it.  It is also a great tool for talking to Shareholders if they are not close to your company.

Engaging in Change

Change is inevitable, so park the debate and move on with your plans.  Right?, well… No, it isn’t as easy as just being dismissive.

There are so many examples of Ludite thinking that stalls Change in a business, but the one thing is for sure, if members of your Executive Team don’t support it and your Employees don’t understand it, then Change is unlikely to happen.

To take the emotion out of Change you have to consider that it is an integrated business process, like budgeting, business planning, selling and service.  If employees challenge you with a “Why Change?” and they do not know its context and their role, then the Change process has been isolated from the operational side of your business and will not work to the desire outcome.

The starting place to get this moving is the Boardroom, then through your senior managers and then onto the employees.

You need to have a clearly defined Strategy of what you want your company to be and how you expect it to sustain this position.  A good well worded and pictorially presented Strategy should be something that gets dusted off once a year to keep it fresh, but you need to avoid the temptation of having a fluid strategy which can be damaging for stakeholders and definitely unsettling for customers and employees.

A clear Change Story and a Change Programme plan is important.  Employees need to see what the end goal is and how they can work to make change happen.  Early engagement with staff will provide for stronger solutions and get some employees thinking of solutions themselves.

The final and critical part is about execution and measuring your results.  Don’t be disappointed when only 80% of your plans are built and you are struggling to finish them off.  Launch your Change actions and derive early benefit.  It is better to be directionally correct and get traction, than wait for the perfect ‘wave’.

In summary, People are the most important investment in any Change Programme, make sure they are engaged in Change.

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