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The butterfly-effect is real. One change impact all.
The fun graphic above is not unusual for many organisational designs where it depicts people, roles, structure, information flows, technology, processes and systems.
Employee number 26103 must ideally know what it all means.
Process often takes precedence over purpose. This places a company at a competitive disadvantage against rivals with new technology and no pre-conceptions.
In my experience change in companies is anecdotal, not strategic, meaning that new capabilities are added in the areas of technology and people, without recognising that a company is an open system.
Three facts:
- Almost all companies are siloed, there is no seamless set of connections, information and data that flow organically.
- Technology is bought without its touchpoints with other technologies, systems, people and roles understood and managed.
- People are appointed that cannot deal with the change required today. Many old jobs will have tech solutions, humans need to adapt. Some specialists again will never understand business.
A customer deals with one living organism when they interface with our business. Any breakdown is a breakdown of our business.
Systems thinking is an old concept yet is more apt now than ever
With so much talk about customer centricity can older companies change?
Companies are forced to adapt, appoint new people in new roles, buy new technology, yet research from credible sources tell us CEOs are not happy with tech implementation. Most staff are left in the dark.
In my view, it is because we focus upon tech, not upon the business, its structures and people.
A company is an organism – life a human body, it needs to run efficiently, or it fails.
This organism has one purpose, to serve its customers so they remain for life, to serve them fast, cheaply, yet in the best way, to optimise the company return on the measures used.
In an age of customer-centricity, our understanding of our customers, must inform our organisational design, to best serve its purpose effectively and efficiently.
I see it as sets of overlays that form a multi-layered structure, where we can clearly note all impact zones, deficiencies, and plan them right. That way, we do not have to appoint consultants to tell us how we can be more productive, where we can cut costs, people or technology. Moreover, if our own people are all part of this process, we will produce an efficient machine with the informed buy-in from all.
Inspiring to staff!
We really need to step-outside of ourselves and look outside-in. Ask new questions and demand new answers.
Note what makes new business models work, regardless of “industry” – then ask, what can we learn from that?
The comparison below is simplistic, but it makes the point.
We all know or use Uber. Uber is a business with the intent of making money… elusive…
Uber has workers, leave for them, insurance for drivers and passengers, drivers can rent cars, they have customers, driver training, live satisfaction measures, payment systems, different compliance and regulatory issues across markets, different operating licences, reports of bad drivers, quoting rates/ km and time, supply and demand surge pricing, fare-sharing, ridesharing, vehicle type, new competitors daily, enough cars/ area (complex).
It is indeed a much simpler business model than a bank and they work with no legacy.
Yet, many banks still do not have a single view of a customer. Thirty years after CRM systems were first introduced.
What Uber does, is that its customer interface is replicated by its people and technology interface. It has no less or more components than that. They mirror one another. And iterative measures are in-built.
A customer now uses their best experience in one area as the measure for any other experience. So yes, customers now ask why Uber can do something, yet their bank cannot? Maybe unfair, but real.
Bank Zero is a bank, yet a different kind of bank.
How short can we make the line between customer and solution?
Technology per se is not a silver bullet. Using it uniquely is
It is about how technology will simplify, amplify and compliment the experience of customers. Added together, create greater customer lifetime value. Add uniqueness. This often enables better prices.
Inhibitors of advantage
- Silos. Probably the single biggest issue for companies.
- Do not make ad hoc tech decisions out of fear or pressure.
- Technology experts may not understand the whole of the business or where the customer fits in. Some other executives don’t believe they need to talk to tech.
- Not enough insight into customers and what they need. Demand a total understanding across all of technology, interfaces, information flow and the right control mechanisms to measure and monitor what matters. Make it iterative.
- Consider how company functions, strategies, people and thinking need to adjust as new technology is implemented.
- Many staff do not know how what they do drive customer lifetime value.
- Make all that is done inter-connect towards one goal.
We know that technology has sufficient machine learning capabilities. This means how they integrate into the business has changed and will self-resolve interface issues at some point.
The major shift was from process automation and company information systems to customer centric technology. Data-connectivity enables seamless connections that will make it all simpler.
Yet we cannot leave our people behind.
There are many a CEO out there that is indeed customer-centric, yet many inherited factors make their companies fragmented and complex.
It is time to look from the outside in.
Process became purpose
In my second job – at a bank, I needed to establish a Call Centre. Daily I received the reasons why we lost customers on that day. Most were lost for reasons of credit.
Many discussions ensued. I then talked to branch staff and discovered that from when a customer applied for credit, the staff had to perform 41 separate tasks.
The process was so over-engineered that it put 99% of the importance on risk to the bank and 1% of the importance on the customer.
Tesla is an electric car, yet the real benefit is its systems. They do not need to connect 300+ disparate IT systems like most other cars for everything to work. This simplicity is the success. Also, hard to copy.
We hire the wrong people
We cannot only hire because of a skill; we must hire for agility, aptitude and attitude. And yes, then they must be able to do the real job. (The best people will learn fast anyway.)
In an MIT Sloan School of Management Survey in the fall of 2020, they asked managers to choose three criteria from a list of 10 that most influenced promotion decisions, they asked 8 812 executives across 363 companies.
The survey tells us “Doing more of the same” and political connections are better than having ambitious goals.
Technology can perform mundane tasks better than humans, we need to change, not technology.
See the results below,
This way, we institutionalise mediocrity.
For more information click here.
Read also: The competitive advantage of being stupid and looking at our companies that way
