Aarni's Blog

I just devoured Find Your Next by Andrea Kates. What a timely book! She addresses the very questions that many companies are struggling with. The business environment has changed enormously in the last ten or even five years, and companies need new ways of thinking in order to prosper. This book offers tools for just that.

The next great thing in your business can begin when someone in your organization has an idea or a hunch. Kates writes that until now, the journey to follow that idea would have started with dissection; measuring strengths, evaluating past results, and scrutinizing industry peers. The existing silos of thinking would define the options for an analysis. But she insists that the new way of thinking is not to tweak each element individually. The way to go is to create something bigger and all-inclusive, and then create a game plan how to get there

Find Your Next taps into new patterns that have been proven to drive business growth. These patterns draw inspiration from genomics. Scientists have been able to identify, map, and learn from patterns of DNA. In the same way, you can break down the core DNA of your company into basic elements. 

Kates presents a framework of six key elements of business DNA that define the success of a company. The six elements of the business genome are:

1. Product and service innovation
2. Customer impact
3. Process design
4. Talent and leadership
5. Secret sauce
6. Trendability

A company that wants to "find its next" can use the framework as a system to sort through ideas and use them to create a new, integrated combination. Kates underlines that business genomics combines art and science; identification of business opportunities is part intuition, part analysis. "The last era was about models and forecasting. Today's era is about foresight."

The sections detailing the use of the six elements of the business genome contain great ideas and tools for business developers. Kates also introduces a four-step process to use the framework. The process starts with simple questions:

• Are you at risk of becoming obsolete? Are you facing a shift in your market?
• Are you off-trend?
• Do you have a hunch that there's a new direction you should be pursuing?

One of the best ideas I got from the book is to use other industries as a source of new perspective. Often the signs of your future already exist in related and even unrelated industries. Influences from other industries are shaping customer requirements and that is happening at a faster pace than ever before.

Kates refers many times to the new role of the customer. The product and service discussion belongs to the customer now and it is often global. Manipulating customers to tell us what we want to hear does not translate into market leadership. Brands are defined by customers not by the companies that own them.

Companies face challenges internally as well. “Old school” leaders have learned that new generations have values, modes of communication, and beliefs that are foreign to them. Diversity is on the rise and employee motivation is not based on money alone. 

"The age of innovation is here to stay, and the bar for inventiveness will only continue to get higher," Kates claims. However, she draws attention to a disturbing fact. Leaders might want their organizations to be more innovative, but often fill their top positions with non-innovators.

The book presents great case studies of the way genome thinking works. Most examples are from B2C companies, but many of the ideas are applicable to B2B. In fact, the book encourages cross-disciplinary thinking. "Don't think industry-specific, think focus-specific," she advises.

I second Seth Godin's praise for the book: "Every great strategic thinker uses the ideas in this book...but it took Andrea Kates to write them down for the rest of us."  I'm certainly going to recommend Find Your Next to my clients!

Find Your Next: Using the Business Genome Approach to Find Your Company’s Next Competitive Edge, at amazon.com

A company has two basic kinds of project: external and internal. External projects have a paying customer; they make money, but internal projects waste it. At least that seems to be the sentiment in many firms. People think that internal projects are less valuable and less critical.

The truth is that internal projects require the same level of attention and dedication as external projects. They use cash generated from customer projects to strive for business results: competitive advantage, cost savings or increased revenues.

As a management consultant I’ve helped clients in the planning and execution of internal development projects. Time after time the same issues seem to hamper initiatives. Here are some of the most typical, and my ideas on how managers could avoid them. 

Plan steps that deliver results fast

A long change program with results expected far in the future is not going to create a feeling of urgency and commitment. Break down a large project into manageable bits that deliver visible results fast. The more concrete and measurable the results are, the better.

Give employees time for the project

Few employees are lucky enough to get a full time post working on an internal project. Most workers have to take care of everyday business first; only when this is completed can they use what little time is left for the project. They cannot give their best when their minds are constantly struggling with other issues.

You should give the employee a whole day in a week, or a week in a month when he or she can concentrate solely on the project. Offer a replacement to cover their usual role for that period, and communicate the arrangement to the employee’s colleagues and managers. Make sure to support the employee in situations when the requirements of the project and their “normal” work collide.

Share a simple project model

Companies have great models for customer project deliveries. Still, many companies lack basic project methodologies and practices internally.

Practically all personnel should undertake basic project training. A company must have a simple, generic project management model and manual. Those who are going to be named project managers should receive training or mentoring before the project kicks off.

Communicate

The managers who initiate a project have certain goals in mind. They know why the project is necessary and why it is beneficial. Unfortunately, others can see the project as one more distraction with little or no results.

People are more accepting of change when they understand why it is necessary and what’s in it for them. It may sound like a cliché, but bi-directional communication is a key to project success. Showing an example is a great way to communicate.

Give credit

A successful customer project not only brings in money, but also gets attention. The project team receives an extra bonus or other rewards. Sometimes a project is noted in the media. How often are people involved in internal initiatives awarded due credit?

Make internal projects known in the company and reward success. That way you’ll ensure you have an even more motivated project team next time around.

Follow up

It is amazing to hear from time to time that companies don’t measure the effect of a project. It is no wonder people think that nothing has changed and that internal projects are a waste of time.

Plan how to follow up on the results after the project is completed. Making these results public and discussing them is an effective way to learn and improve project performance in the future.

Photo: iStockphoto

How do you align development ideas and projects with your company's strategy? Portfolio management is a methodology for managing value, resources, and risks strategically.

The model that our clients have found useful is comprised of three types of portfolios: Ideas, Project, and Assets portfolios.

An Ideas Portfolio is an internal market for development ideas that are the seeds for possible development projects. If the idea gets enough interest, its presenter will be allowed to suggest it to the project portfolio.

A Project Portfolio is a top-down view of proposed, on-going and completed projects.It is in a way a presentation of the company's strategy. It answers the question "are we doing the right projects?" Steering groups at different levels of the organization use project portfolios for decision making and project reviews.

Finalized projects create strategic assets; processes, knowledge, customer relationships, technical systems, and so on. An Assets Portfolio presents the existing operational reality of the company. It shows how well the implemented strategy is performing.

Assets require renewal and improvement in order to serve the company's strategic and customer requirements. These development needs inspire people to present new ideas. The same feedback loop is between ideas and project portfolios.

Our product, Thinking Portfolio®, is a simple tool for implementing the portfolio management model that I've presented here. If you want to know more about it, please contact me.

Geoffrey James is a brilliant business writer. He wrote about The 5 Dumbest Management Concepts of All Time. His readers challenged him to take an opposite view: what are the five management concepts that really work? I recommend you read them from his blog, but here's a summary:

1. Treat Business as a Series of Relationships

Don't treat your business as a battlefield. Rather than trying to get people to fight some imaginary enemy, try to bring the individuals and organizations into alignment so that they’re working towards a common purpose.

Don't think of your company as a vast machine because it reduces employees into faceless cogs where everybody is as replaceable as a spare part. By contrast, see your organizations as communities of individuals, all of whom have individual hopes and dreams. Begin to find ways to connected those hopes and dreams to the organization’s purpose.

If you see management as a control function you create an organization that can’t adapt to new conditions. When managers are seen as coaches, being “in service”, decision-making more naturally moves down to the lowest appropriate level of the company.

If you see employees as immature children who are not to be assigned real authority, they'll end up acting that way. They don't want to take responsibility and are afraid of getting blamed if something goes wrong. If you treat employees as adults and peers, they'll act as adults, take responsibility, and use their expertise to the fullest.

The more the technology becomes a tool of control, the more it’s used to automate processes, casting them in concrete. Give up the idea of technology as a means for centralized control. Use it as a tool for freeing people from repetitive and boring work, giving time for creativity, relationship building and meaningful conversation. James even says that the more light-handed a company is in its use of technology, the more productive it becomes. “iPhones for everyone” rather than “corporate standards for ERP”

Photo: iStockphoto

The formula for change provides a simple model to assess the expected success of organizational change programs. Richard Beckhard and David Gleicher devised the model in the 1960s.

The formula states that change happens when three factors multiplied end up being more than the resistance against the change:

D x V x F > R

The factors are:

D = Dissatisfaction with how things are now

V = Vision of what is possible

F = First, concrete steps that can be taken towards the vision.

R = Resistance. Some documentation also refers to the resistance to change as the cost of change. It is further divided into the monetary cost and the "psychological cost".

How to use this formula in b2b service development? The formula can help you define the critical success factors for your offering and marketing. Ask the following questions:

D: Who are the dissatisfied? How does the dissatisfaction manifest itself in the organization?

V: How committed is the management, do they have a clear vision and strategy? How committed are the employees to move on?

F: What could be the first steps to take? How could you make them easy to take?

R: How should you communicate the business benefits of your offering? What is your cost-benefit analysis? How do you build trust and manage risks?

Marie McCormick writes in an article in Flawless Consulting about the three ways organizations attempt change.

Scenario 1: Leadership by Mandate

The CEO and the top management lock themselves in a meeting room or go to an off-site location. There they document a vision and mandate the changes that they think are required.

Scenario 2: Leadership by Representation

The CEO selects the best and the brightest from around the firm and creates a cross-functional expert team. The team interviews and devises a version of what is best, and then sell/mandate the vision and changes to the rest of the organization.

Scenario 3: Leadership by Engagement

The leaders create the opportunity for people from throughout the organization to come together to discuss issues, opportunities, and interconnections in the business. The participants create an ideal future that all can agree on and action plans to accomplish that vision.

McCormick says that most leaders use "leadership by mandate" or at best "leadership by representation". That, according to McCormick, mostly leads to failure. If change or work is mandated, people become unhappy worker bees. If transformations are driven by representation, representatives become charged up change agents and the rest of the organization remain hapless worker bees.

The best-sustained business results come from "leadership by engagement". If change is by engagement, everyone in the system knows how the work is done, and feels valued for contributions. This leads to better-informed solutions and to better bottom-line results.

Photo by Johan Lange

Years ago I and my colleague visited the offices of a high tech company. I noticed that their premises looked a bit shabby. They had, for example, used duct tape to seal leaking windows.

The CEO of the company greeted us warmly. He told that he usually had customer meetings somewhere else. He joked about asking the employees how they would like to improve their workplace. "Buy more duct tape," they had suggested.

Many companies have a similar approach to problems. They make a quick fix to get the problem out of the way. Unfortunately the quick fix often sticks around for years, sending the wrong message to customers and employees. The management has not realized the real price of the problem, and does nothing.

The CEO we met had made his mind. He decided to move his company to a location where they could host guests without excuses.

Image: woodley wonderworks