Core Processes -- A Misnomer

as a business person today you live in a world of intense competition encased in a wrapper of many variables, all constantly moving and shifting. business is difficult today and the customer is more fickle than i have ever experienced in my recorded history. so how do we excel today?  how do we win in this competitive, ever-changing market space -- no matter which market space in which you chose to compete?

traditionally we fall back on the things we know, the things which are familiar to us and which have provided us some measure of success in the past; products, services, and processes.  all those are still necessary today, but when taken collectively they are insufficient.

today the leading edge companies compete upon core capabilities; collections of skills, knowledge, processes, and delivery channels knitted together to fulfill a critical client need.  core capabilities begin with and end with the customer or client.  the capability forms a closed loop, customer understanding, product/service need, through to delivery and integration into the customer's environment.

think of threading pearls on a string to make a necklace.  the clasp is the client.  the pearls (skills, knowledge, processes, and delivery channels) form a full circle that both begins and ends with the client.  processes are unique to you, your customers, and the way you and your company conducts business today.  core competencies are capabilities that are not by definition unique to the way your company does business or to any specific client. once created they can be used across customers/clients, market segments, and even industries. they allow you to rapidly respond to customer preference and market changes; they allow you to rapidly innovate and become an adaptive company.

the medical services providers are a great example of a market space where core capabilities are becoming critical to survival.  the industry is in turmoil;  many general hospitals are becoming financially and operationally inviable due to complexity and operating costs (20,000+ known diseases, 5 races of people, 2 sexes and 8 decades of life all with their own variables), general practitioners are running for cover into hospitals, specialists are leaving hospitals and setting up specialty clinics to achieve better revenue and a better life, and the new healthcare laws remain opaque.  the only security that a medical practitioner has is what is in her/his mind and the core competencies of their organization.

become an continuously adaptive company built around core capabilities and you will be a winner.

Your Brand Has Two Faces

in a prior miscellaneous rambling i discussed your brand and its customer experience component.  no matter how much you spend on branding and marketing, it doesn't take many customer screw ups to significantly devalue your brand.

the other way to materially devalue a brand is to fail to address the company internal image of the brand.  almost every customer interaction, even if it occurs electronically, is in some way dependent upon the actions of your professionals and staff.  if they don't understand and internalize the mission, vision, brand, and strategy, i can assure you that the brand value will get damaged.

so one face of your brand is external and usually receives lots of attention from you and your management team, while the other face is internal and is often ignored.  a deadly mistake.

every one of your management team, professionals, and staff needs to understand and internalize your "service excellence value chain". they need to live the mission, vision, brand and strategy on a daily basis.

so how do you accomplish that understanding and commitment.   ideally professionals would experience the mission, vision, brand and strategy through company actions on a daily basis and participate in the development of the business strategy, so they feel ownership, not pressure from the top.  continuous education on business critical new and emerging skills and technologies is also imperative.  professional and staff culture building and education is a foundation investment and living adventure.

Meet Anyone and Everyone

early on when i was a young, status conscious partner of Booz Allen Hamilton Inc., i flew into Columbus, Ohio to give a talk on future technology with an emphasis on solid state circuits.  i believed a leading edge talk for the time.

it was cold and i arrived early.  rather then walk around to see part of the city , i went into the auditorium and sat on the floor to go over my talk.  while there a janitor came into the room to change a light bulb in the ceiling lights.  after a few minutes of silence, he asked me who i was and if i was the keynote speaker for the event.  i said yes and returned to my solitude, basically dismissing him as someone who could possibly have any interest or knowledge in the content of my talk.

again there was a few minutes of silence and then he said that he had set up the projection computer and that he had seen my slides.  i asked him if they were clear and readable from the audience; a question that i assumed was a fit within his skills.  he said that they were colorful and clear, but that i had an error on page 11 with respect to parasitic capacitance. in shock i went on the defensive and said that his issue was nonsense and rapidly dismissed his idea.  he persisted and after a brief conversation i realized that he was right.  he was a self taught physicist and clearly knew more than i did in this area.

when i gave the talk, i called out the error and cited him as the source of the corrective insight.  after the talk we spent an hour over a beer and i was his student.  he was a mentor and an inflection point (inflection points, a later conversation) in my life.  i am grateful to him to this very day.

meet anyone and everyone from all education backgrounds and all walks of life for you can learn from everyone that you meet if you are open to listen and really hear.

The Cloud

every information technology company that i meet with brings up "the cloud" (internet based program/service execution and data/information storage that resides outside of the physical boundaries of a particular business site) within the first few minutes of conversation.  they all seem have or have access to at least one and most see that as a defining asset.  many have it in a prominent position on their business cards and company brochures.

lets get this straight now.  a cloud is no longer an asset; it may be necessary, but it is just another tool in your customer service toolbox.  it is not defining and certainly not differentiating in the crowded I/T supplier/support market.  at this time clouds are like noses, everyone has one.

as far as security goes, a cloud (any cloud) is not impervious nor totally secure.  there is no security in today's world. the cloud (your cloud/any cloud) can be hacked just as surely as any other data repository in the world.

see the cloud for what it is; a tool, not a magic wand.

Brand = Experience

new or growing businesses today need a brand which will resonate with their targeted market segments and individual customers.  this brand if well thought out and professionally implemented can provide some measure of competitive differentiation, at least for a period of time.

i say "for a period of time" since although brands are not necessarily as volatile as products, services, competition, or market spaces, they are subject to deterioration over time.  take the Volvo car brand for example. years ago it was the "safe" choice for commuting with your children.  it was the box that was claimed to withstand the threats of the driving world and it was the choice for many young mothers.  however over time, the competition caught up in the safety arena (new cars often have 25+ safety features) and all cars have begun to look similar due to fuel efficiency aerodynamics.  the homely safety car's brand identity was and is significantly challenged.

but back to brands and experience.  most of us will hire a professional to envision, design and shape out brand.  there are many professionals in the field who can provide excellent assistance and guidance while working with your leadership team.  when they are finished, you have a brand; or do you?

yes you do have one piece of a brand, the market facing fancy colored graphic and possibly a catch phrase, but you don't yet have the soul of your brand.  the soul of the brand is based upon customer experience, those minute by minute and hour by hour customer transactions which occur, often without thought, throughout the business day. every one of those transactions forms an image of your company in the mind of the customer.  collectively those customer thoughts and experiences form the soul of your brand which is communicated and discussed 24 hours a day on the social media networks throughout the world.

brand is not just a graphic and a message, it is also the "collective community thought" based based upon the one or thousands of transactions your business conducts each and every day.  each transaction, each customer interface or assignment must be treated as if it is a piece of your brand -- because it is.

A Look Into the Future

when i was a young consultant, back when we had to dodge dinosaurs, we developed many Fortune 500 business strategies by working jointly with our clients.  usually we would initially develop a business strategy, sometimes projecting out for 7 to 10 years.  then we would develop a supporting technology strategy, at least for the initial five years.  life was good.  great confidence in the client's market space and and in our ability to "predict" the future.  no i wasn't delusional, just immature.

by the time i was in mid-career, the Model T was the hot choice and we developed 5 year business and technology strategies (co-dependent, but not merged) with great confidence (or great arrogance based upon personal opinion).

my how the world has changed.  today we live in a world where every market space has many variables, often all moving at once and where problems no longer exist.  problems have a right or wrong answer, such as the answer to 2+2.  many colleges still teach this way, even some of our ivy league contributors. however, the truth is that problems with their clear precise answers no longer exist.  we now live in a world of dilemmas. dilemmas have no precise right or wrong answers, they only have gray-scale, imperfect answers where right or wrong always remains obscure.

so in a world of variables and dilemmas what do we do for business strategy.  the answer is that we don't develop precise strategies for long periods, but we clarify the vision and mission, then develop directional frameworks which contain some (and oftentimes many) decisional checkpoints. a very long strategic view today is 2 to 3 years and even that time frame cannot be employed in some market spaces.

so what happened to the information technology strategy?  well i can think of no significant business today that is not structurally dependent upon technology; even our dog groomer uses mobile technology.  without technology the business immediately dies.  so the technology strategy no longer exists as an independent entity; it exists only as a structural part of the business strategy framework.  business and technology are one, a single entity; married for life even if it is a short one.

strategies today are living entities which must be fed (reviewed and enhanced) at least every 6 months or so.  there is no rest for the business owner today.

Adapt or Die

Since 1980 the volatility of business operating margins has more than doubled, as has the size of the gap between the winners and losers (Source: Boston Consulting Group).  if you want to survive today within any market space, current success may be one of the biggest threats to your future.  success breeds contentment and stability, along with more of the same as customers want what they have today only bigger and better. yet customers are often tunnel visioned, only seeing their unique businesses, not the overall market and its many changing players and offerings.

we live in a world where change is the norm.  adaptability is the name of the game for business and must become a core competency for any emerging or growing business.  virtually nothing is stable for long.  from business strategy to core processes, if it isn't innovating it's dying.

the only thing we have to grab on to is our brand, since it must come from the market opportunity and our soul.  brand will change over time, but on a much longer scale.

change is the norm, adapt or die.  adaptation is a core competency.

Market Spaces

in the old days (actually just a few years ago) every business operated within a industry; e.g. pharmaceuticals, manufacturing, music, information technology, etc.  starting up a new company, just pick your industry and you automatically know who your competitors are.

not today; today industry walls have been obliterated.  there are no more industries, just market spaces where you must operate within a field of very mixed and differentiated competition. take the music industry for example; an industry that used to be dominated by record companies and music producers.  now the music industry is complex and varied with competitors of many different types and focuses.  the following exhibit provides a graphic example.

                                                          Music Industry Market Space
                                                         

the picture is the same in almost any industry that you examine.  this change is material and impacts you whether you are a start-up entrepreneur or an established business owner. adaptation to this change is critical to the young entrepreneur, who might have recognized this picture early on, and also (and possible more critically) to the existing business owner who is trying to grow while becoming the brand in demand.

take the information technology (I/T) support industry for example.  yesterday you would contract with a company to provide their I/T infrastructure and you would use your resident geeks like me to install and fine tune the infrastructure.  other than minor repairs and tweaks, the contract support then became a profit machine.

not today; when clients contract for I/T business support they want and need a "business partner" or an "on-demand chief information officer".  the technical support by geeks is necessary, but insufficient. today the I/T support contractor must be a renaissance team of vast intermixed skills and capabilities.  someone who can bring the power of technology not as an isolated infrastructure, but as a value added core capability of the business to power business strategy, core competency and market differentiation.  the opportunity and the role of the I/T business support contractor today is demanding and complex.  refer to the following graphic.

                                      Expanded Market Space Role of the I/T Support Contractor

want to grow your company and become the brand in demand within the I/T support contractor market space (or virtually any other company/market space), better rethink your business, hiring/staffing, training, and approach to customer service.

believe it or not, this same trend also applies to our colleges and universities.  many colleges and universities today are still teaching in vertical silos; economics 101, 201; physics 101, 201; etc. yet students today learn by topic or interest area across silos, which is exactly what a Google search provides.  colleges and universities must change or continue to lose opportunities and students to on-line, for-profit, or trade institutions.

want to be a global player, the same trend has already appeared.  there is no where to hide.

                                                             View of Global Market Space

industries are dead, long live market spaces.

                                                       

Vision+Strategy Does Not Replace Will

i meet with many business service companies (technology, health care, facilities, etc.) who have the desire to be the best in their field, the first choice, the brand in demand.  they talk a good story, say all the right words, and then just continue along their habitual path toward mediocrity.  they just don't have the will or commitment to do the work necessary to win within their current or any other marketplace; such as developing an understanding of the client's business and strategy or paying attention to the details of management, even for small projects.  therefore they just don't have the right to win.

for these service providers any business strategy no matter how well crafted and designed, is of little use. think of this the next time you interview for a leadership or contract position, or contemplate partnering with or advising a company.  there is a difference in a company that is committed verses involved in their business, their customer's businesses, and your professional future. winning takes focus, extraordinary drive, and a commitment to excellence.  nothing else will do.

the chicken is involved in the egg, but the pig is committed to bacon.  you and i want to side with the pig.

Time is the Enemy

business strategy development is a time sensitive process.  strategy development work is intellectually demanding, tiring, detail oriented, yet rewarding.  due to its demanding nature, strategy development is also time sensitive.  in my experience strategy efforts that take over 3 to 4 months to produce at least an initial viable product, often die of their own weight.

if your effort is likely to take longer than 3 to 4 months either rethink the goals or segment it and consider rotating some of the team members prior to subsequent phases of the effort.  that rotation will even introduce new thinking and fresh perspectives to the team.

Strategy or Wish List

i had a chance this week to meet with two non-profit institutions to discuss their business strategies.  what i found is that both had recently completed long and arduous strategy efforts (in one case almost a year) and both were proud of their results.  yet, both "strategies" were inviable by definition;

• one was simply a list of over 100  "things to be done" with no priority, implementation assessment, nor funding sources
• the other was simply a listing of 7 high level topics, omitting any critical thinking below this top level

non-profits are a business and they must be as rigorous in their strategy process and thinking as any Fortune 500 company.  strategies require focused thinking based upon vision, goals, corporate personality, corporate capabilities and a number of other factors.  any strategy that presents as its results more than 5 to 7 primary initiatives is inviable by definition. any strategy that fails to perform critical thinking below the top level of direction setting, (e.g. use technology to improve medical outreach), is inviable by definition.

non profits who continue to treat business strategy as a social and publicity exercise should be called "non-budgets", since that is where they will end up.