Rapid feedback improves processes. The longer it takes to gain feedback, the longer it takes to improve. Agile development uses this axiom to advantage. Additionally, faster to market usually offers a competitive advantage. Combining the two can raise the bar and achieve a competitive edge.
Recently in Forbes Bryan Stockton, the CEO of Mattel, was quoted as saying: “We go from ideas to cash in about 18 months.” Commendable and competitive. Well at least it was.
We have been working with a toy company (which does not directly compete with Mattel), which also went from ideas to cash in 18 months. However, their CEO felt that while this was competitive it did not give them an advantage. Faster to market would give his company more rapid feedback on their toys’ market acceptance and a competitive edge.
He asked the team to try to hit 90 days. Talk about raising the bar!
Using proven process improvement techniques, they are going to achieve it sooner than later. (Heck, even if they only hit six months, they would be three cycles faster than their competitors.)
Competitive advantage comes from doing valuable things better and faster than your competition. Faster can lead to better … if you use feedback properly.
I snapped this picture at O’Hare yesterday. It fascinated me. Here is a touted Chicago area recycling effort (note the big poster on the front of the bin). However, the bin is marked “clean paper” only on top. What the heck is clean paper? And if you know, do you think most people do?
Is the purpose of this bin is to increase recycling or reduce improper attempts at recycling?
Hard for me to say, and because it isn’t clear, I suspect it accomplishes neither.
I have been reminded a few times recently of the wide misconception people have of CRM and the reports available from these software tools. To effectively manage a process you need to measure not only the ultimate outcomes of the process, but also intermediate milestones within the process so you don’t have to wait until the end to make improvements.
Most standard CRM reports are about activities (ie. how many calls were made, how many appointments were completed, how many demos were provided, how many quotes were presented, etc.). All of these reports are about activities; and while knowing the activity level of a sales person or the entire sales team may be nice to know, it is almost impossible to effectively improve a sales process simply with activity reports.
Unfortunately, too many sales managers believe that measuring activity can improve sales results and/or are unaware how to produce process reports from their CRM tool. Given that good sales managers were effectively managing sales processes long before CRM software was created, it seems reasonable to believe that CRM should make doing this easier (ie. more efficient). It can, but not usually with the simple activity reports CRM tools produce without effort.
The same is true of Marketing Automation Tools. Recently published survey research suggests that Marketing execs are still held in low regard because they focus on the reports their tools offer, and not on determining if their efforts are supporting the desired business outcomes.
Measure and monitor what you need to improve performance, not what the folks at Salesforce.com (or any other CRM tool) make easy for you to report.
In several posts I have questioned what J.C. Penny is up to since firing their CEO and bringing back the prior CEO. Clearly they hired a new and transformational CEO as they felt the earlier strategy was not working. And yet, they brought back the previous CEO when the “transformation” did not produce quick results.
I have tried to figure out how that makes sense. Silly me. Today’s announcement by the old/new CEO explains it all: ” J.C. Penney Co Inc Chief Executive Myron Ullman told Wall Street on Thursday that the department store chain is emerging from what he called an abyss but warned he needs time to fix the issues of the retailer.”
Things were bad when he was the CEO, otherwise why hire a transformational CEO. However, as the transformation put the company into an “abyss,” now when they emerge worse than they were before Ullman left, it will seem like things are better.
If you get someone to lower the bar for you, it’s easier to look good when you clear it. Too bad for shareholders.
Spencer Stuart notes that CMO tenure has increased consistently since 2004 from an average of 23.6 to 45 months. Debate as to cause abounds. Since it’s been a steady rise each year, I postulate that it’s due to CMOs and their CEOs becoming more comfortable in their relationship and expectations.
The CMO position was a relatively new C-level job a decade ago. As the role has evolved and outcomes clarified, longevity has increased. Throwing the CMO “under the bus” when a sacrificial lamb is needed seems to have passed its peak as well.
Does this bode well for the CMO position? Of course, but from my perspective the real breakthrough will come when the CMO is not really just the Chief Marketing Communications Officer (CMCO). Virtually all CMOs have a very limited scope of responsibility focused on the back-end (Communications/Branding) aspect of Marketing.
As the front-end of Marketing (Strategy, Product/Service selection/development and positioning) have much more leverage than does the back-end (do you credit Apple’s success to its communications strategy or its outstanding products?), the metric that really matters is not so much longevity as scope of responsibility.
I thought of Gordon Bell the other day. Gordon was the architect of many Digital Equipment Corporation computers. In the late 80s he moved out to California to hook up with the venture capital community there. In a magazine article not long thereafter, the writer asked him “Are you just an old hardware guy?” To which Bell replied (I’m paraphrasing from a distant memory), “I guess I am…but you know that hardware advances are what make all software advances possible.”
That’s true, of course. But would you rather, today, be in the hardware business of the software business? The hardware business is paranoid competitive, requiring galactic investments and returning profits that can vanish overnight. It’s a scary business to be in. Yet it makes all the incredible software that we enjoy and our increased standard of living possible, to say nothing of the profits it can return.
In the information technology industry, hardware is the lever, software is what’s leveraged. Most industries have their own version of the two.
Now, when we strategize, we are well advised to look at our business from many valid strategic paradigms: investment or cash cow (yes, this old view is still valid!), first-to-market or late follower, SWOT, life-cycle, and so on. Another view might be whether or not we are in a business that is a lever or is leveraged. If the former, we may want to hedge our bets by investing in some of the latter.