How to Scale Using Motivation and Accountability


Many organisations scale effectively by hiring promising people and then teaching and motivating them to do exceptional work.

The following example shows how important is to hiring and developing people.

Tamago-Ya is a Japanese company that produces fresh box lunches and sell them to Tokyo office employees. The typical order comes from a office that buys lunches every weekday. Each lunch box contains six or more items and customers have a fairly long list of options to choose from stir-fried beef with oyster sauce, boiled spinach, etc.

Beef-and-Asian-Greens-Stir-Fry-Wide

The company takes orders between 9am and 10:30am, prepares the food with fresh ingredients each day and assembles the lunches near Haneda Airport a 60 to 90 minutes drive from their customers in downtown Tokyo.

The lunches are delivered by 12 noon the same day, so there is little margin error in assemble or delivery. From the 70,000+ lunches Tamago-Ya delivers every day, late orders are very rare and fewer than 50 are wasted.

Without a doubt, the company needs to have a sophisticated procurement and forecast system, but his founder Isatsugu Sugahara explained that they are decidedly low-tech.

The company relies on market intelligence from van drivers, mostly high school dropouts many of whom were arrested in their youth.

These drivers interview and choose their customers in their territories, they also reject customers when it will be too difficult to deliver lunches on time, each driver own his or her route. The driver’s compensation depends on how many lunches their customers buy and weather they can keep waste low.

Boxed lunches are delivered in reusable containers that drivers collect about 2pm, this give them the chance to find out what customers like and didn’t like and to get an idea of what customers will order next day.

Every evening, each driver talks to the area manager who oversees his or her team. Forecasts from these conversations are sent to the central office so they can plan next day’s production.

Suppliers deliver raw materials by 5am, this order is an educated guess based on previous day report from the drivers. Tamago-Ya also relies on these estimates to start preparing food and loading vans even before orders start coming in at 9am.

Tamago-Ya founder knows that the methods his company uses to motivate and ensure accountability are the reason for the success of the business.

Tamago-Ya case illustrate how people make the place, the drivers reciprocate Sugahara’s faith in them by achieving superior performance, feel and act like owners because they choose customers and routes and at the same time they feel obliged to customers, peers, area manager and the CEO who gave them a chance to rebuild their lives.

Read more: Robert I. Sutton and Hayagreeva Rao Scaling up Excellence. Random House Business and Tamago-ya of Japan: Delivering Lunch Boxes to Your Work. Harvard Business Review Case Study.

What is Digital Disruption and How Companies can Embrace it?


Today the only source of competitive advantage and value delivering comes from seeing what customers need and delivering it.

Digital disruptors are changing complete industries, delivering value at a lower costs, with faster development times and with greater impact on customer experience.

Digital disruption

Digital disruption is simply a mindset that leads to a way of behaving; a mindset that bypasses traditional off-line obstacles, eliminating the gaps and boundaries that prevent people and companies from giving customers what they need in the moment that they want it.

Digital disruptors are obsessed with measuring results and rapid innovation cycles in which failure and mistakes are viewed as feedback.

Always evaluate your customer, benefits, business and product

  1. Customer: isolate the core target customers and make some smart guesses about what makes them tick. Ask yourself what your target customer really needs
  2. Benefits: what is the next thing that customer needs?, express the need in terms of what the customer will get out of the deal if you succeed.
  3. Business: what will we get out of it if we innovate?
  4. Product: the art of harmonising Customer, Benefits, Business and Product into a single approach

In other words, you need to focus on creating innovations that are most likely to give the consumers you want to reach the benefits they really desire while achieving strategic outcomes that are meaningful to the organisation.

How to deal with digital disruption inside a large company?

  • Create small innovation teams
  • Identify silos and break down the boundaries between them
  • Get senior executives to commit their support
  • Insist on short development time frames

Digital disruptors constantly seek for the adjacent possible:

  • Asking a simple question “what is the next thing my customer needs?
  • Iterating so quickly from one adjacent to the next
  • Giving the customer the next logical thing, or things

Digital disruptors keep the scope of their innovations small. Rather than creating a five-year innovation plan, digital disruptors proceed from adjacent possibility to adjacent possibility, occasionally failing, but failing so quickly and so cheaply that recovery can be nearly immediate.

Read more: James McQuivey. “Digital Disruption: Unleashing the Next Wave of Innovation“. Amazon Publishing.

Customer Experience Having the Customer at the Center of Your Business


Customer experience (also known as CX) is the single greatest predictor of whether customers will return or defect to a competitor to do business.

Customer Experience

What is customer experience? 

It is how your customers perceive their interactions with your organisation and how well the interaction:

  • helped them achieve their goals
  • how much effort they had to invest in the interaction
  • how much they enjoyed the interaction

Benefits of customer experience:

  • It is source of both decreased costs and increased revenue, for instance by having leaner and more efficient processes that affect customers (both external and internal) and by increasing recurring revenue
  • It correlates to loyalty

Customer experience and the business ecosystem:

Customer experience is not a program or a way to increase revenues, it is a lot more than that and it clearly reflects in every single functional department. Organisations need to create a customer experience that best aligns with the corporate vision the executive team has put envisage, the company’s target market, value proposition, unique strengths, financial objectives, and core values.

Customer Experience is “journey, not a project. It has a beginning but it doesn’t have an end

The company’s corporate objectives and brand attributes are the foundation of any customer experience strategy.

If you want to embark in this journey, you need to start with a complete picture of your clients, who they are and what they want from you.

6 Steps to Implement a Customer Experience Program:

  1. internalise the fact that you need your customers more than they need you
  2. examine the reason why your company exists in the first place
  3. spend time learning what it feels like to be your customer
  4. talk to your customers
  5. talk to your frontline employees
  6. try mapping a customer experience ecosystem for one of your company’s most important customer journeys

5 Steps to do a Customer Experience Mapping:

  1. pick an important target customer and think of a problematic journey for that customer
  2. write down the series of actions that the customer takes as part of that problematic journey
  3. write down all the people and groups that your customer interacts with at each step
  4. draw a horizontal line across the middle, below the notes you’ve placed on it so far. This is the “line of visibility.” Everything you’re about to put below the line is completely invisible to your customer
  5. put green dots on each part of your ecosystem that is working well from the perspective of the person who was touching it. Tag and define parts of the ecosystem that are making people unhappy with yellow dots, and parts of the ecosystem that are making people very unhappy with red dots

Rolling out the Customer Experience program

Systematically:

  • Measure customer experience
  • Identify the drivers of customer experience quality
  • Correlates customer experience quality with business results
  • Shares findings across the enterprise

You cannot afford to ignore the measurement discipline unless you want your efforts to run out of gas and die.

It drives interest in your programs by demonstrating results, and keeps people on track by connecting them to hard data about the effectiveness of what they’re doing.

Read more: Harley Manning, Kerry Bodine. Outside In: The Power of Putting Customers at the Center of Your Business“. Amazon Publishing.

What is a Program?


A program consists of a group of related projects and activities, managed in a coordinated way, in order to deliver outcomes and benefits related to the organisation’s strategic objectives that would not be available by managing each project individually.

Programs are the link between the business strategy and the individual projects that will implement the solutions required to deliver it.

Program Management

Programs usually span several years and therefore the scope, time and cost are likely to change during the life of a program.

Program management is not about managing the details of each individual project, but rather about managing the big picture, in order to achieve the strategic objectives and realise the benefits for which the program is designed.

Benefits of Program Management:

  1. Optimisation of human and other resources over multiple projects in the overall program
  2. Coordinated management and reduction of risks
  3. Consolidation and management of the benefits

Why a to create a Program?

  1. The program is too large to be treated as a project and the component projects are too interdependent to be treated as separate unrelated projects.
  1. To optimise the use of scarce resources by sharing them across several related projects in the program.
  1. To keep the projects aligned with strategic goals and benefits.

Phases of a Program

Program Definition: involves understanding the strategic value of the program, defining the program objectives, identifying the key stakeholders and decision makers, developing a high level business case for the program, obtaining approval for the program and appointing the program manager.

Benefits Delivery: represents the main ongoing program management activity and for each of the constituent projects this will entail planning, execution and benefits realisation. For the program as a whole it also involves managing the inter-project dependencies, risks and issues.

Program Closure: performs a controlled close down of the program, together with the shutdown of the program infrastructure and transition of benefits monitoring to an operational group.

How Leaders Create Conditions for Change


Leaders can not dictate the culture, but they can nurture it. they can create the right conditions for change, creativity and innovation. Leader can multiply the effect of a team. Liz Wiseman interviewed more than 150 leaders to research her book Multipliers: How the best leaders make everyone smarter.

Leading a team

Leaders who are multipliers can double the output of a team or a company and improve morale in the process, here is how you can become a multiplier:

  1. be a talent magnet, who attracts and retains the best people and help them to reach their highest potential
  2. find a worthy challenge or mission that motivate people to stretch their thinking
  3. encourage debate that allows different views to be expressed and considered
  4. give team members ownership of results

Basic group dynamics

  • great groups believe they are on a mission beyond mere financial success, they believe they will make the world a better place
  • they are more optimistic than realistic
  • they ship
  • belonging to a strong creative group can be one of the most rewarding aspects of working life

Personal Touch of Innovation


There are plenty of organisations that have fully embrace innovation as the essence of their business model. An example is 3M defines innovation as “New ideas plus action or implementation which results in an improvement, a gain or a profit“. It is not enough to have a good idea only when you act, implement and execute you really innovate.

People is the most important factor of innovation not only the idea or the execution, innovation not only happen, people make it happen. Innovation Network definition of innovation is a lot more complete: “People creating value trough the implementation of new ideas“.

Tom Kelley from IDEO defines 10 personas to give the personal touch of innovation:

1. The Anthropologist learns by observing other people, how they behave and interact physically and emotional with products, services and other people. They do not judge, they observe, they empathise.

2. The Experimenter prototypes new ideas by experimenting, learning, improving based on a process of trial and error. They are best in to take words to sketch, to model and new offering.

3. The Cross-Polinator brings experiences from other environments like organisations, industries, cultures, countries then translate those into innovative solutions. Organisations can hire lots of people with diverse background, cultures and geographies.

4. The Hurdler knows that the path of innovation is not only one step but a journey that takes time and resources, there will be obstacles that need to be need overcome, this persona understands the importance of perseverance and is willing the bend the rules. This person does more with less.

5. The Collaborator helps to bring cross functional teams together and get things done, he often leads from the middle. You can collaborate working not only within the organisation but with clients and customers

6.The Director brings people together, sparks their creative talent, guide them with a great destination postcard and motivate them. There is an old adage in Hollywood “Directing is 90% casting”, great directors build a team of people who need little direction and can lead by example.

7. The Experience Architect designs experiences that go beyond the functionality and act also the emotional part to connect deeper with people. When companies can copy products and services, the price is not the truly differentiator but the experience created around.

8. The Set Designer creates the environment where innovation is created, where teams can do their best. This environment is the physical space that influence behaviour and space.

9. The Caregiver anticipate customer needs and are ready to go to look after them. They always go beyond the mere basic service.

10. The Storyteller builds credibility, triggers emotional connections, good stories help make order out of chaos.

Read more: Tom, Kelley. “The Ten Faces of Innovation: Strategies for Heightening Creativity” Doubleday

Business and Poker


Tony Hsieh is one of the most important business leaders of our time, in his book Delivering Happiness he explain how Zappos is built on branding, culture and pipeline as the only competitive advantage that Zappos will have in the long run.

In the chapter 3 of the book, Tony clearly defines the lessons he learnt from playing poker and that can be applied to business:

Evaluating Market Opportunities

  • Table selection is the most important decision you can make
  • It’s okay to switch tables if you discover is too hard to win at you table
  • If there are too many competitors (some irrational or inexperienced), even if you are the best it’s a lot harder to win

Marketing and branding:

  • Act weak when strong, act strong when weak. Know when to bluff
  • Your “hand is important”
  • Help shape the stories that people are telling about you

Financial management

  • Always be prepared for the worst possible scenario
  • The guys who wins the most hands is not the guy who makes the most money in the long run
  • The guy who never losses a hand is not the guy who makes the most money in the long run
  • Go for positive expected value, not for what’s least risky
  • Make sure your bankroll is large enough for the game you are playing and the risks are you taking
  • Play only with what you can afford to lose
  • Remember that is a long-term game. you will win or lose individual hand or sessions, but is what happens in the long-term that matters

Strategy

  • Don’t play games that you do not understand, even if you see lots of people making money from them
  • Figure out the game when the stakes aren’t high
  • Don’t cheat. Cheaters never win in the long run
  • Stick to your principles
  • You need to adjust your style of play throughout the night as the dynamics of the game change. Be flexible.
  • Be patient and think in the long-term
  • The players with more stamina and focus usually win
  • Differentiate yourself. Do the opposite of what the rest of the table is doing.
  • Hope is not a good plan
  • Don’t let yourself go “on tilt”. It’s much more cost-effective to take a break, walk around or leave the game for the night

Continual learning

  • Educate yourself. Read books and learn from others that have done it before
  • Learn by doing. Theory is nice, but nothing replaces actual experience
  • Learn by surrounding yourself with talented players
  • Just because you win a hand doesn’t mean you are good and you do not have more learning to do. You might have just gotten lucky.
  • Don’t be afraid to ask for advise

Culture

  • You have to love the game. To become very good you need to live it and sleep it.
  • Don’t be cocky. Don’t be flashy. there is always someone better than you
  • Be nice and make friends. It’s a small community
  • Learn what you have learnt with others
  • Look for opportunities just beyond the game you sat down to play. You never know who you are going to meet, including friends for life or new business contacts
  • Have fun. The game is a lot more enjoyable when you are trying to do more than just make money

Read more, not only from business but happiness: Tony Hsieh. “Dilivering Happiness a path to profits, passion and purpose” Business Plus

Change Management Resources, Processes and Values


Reading about innovation and disruptive change, I found an important point:

Authors Christensen and Overdorf give an overview of how companies fail to meet disruptive change as they don’t make an assessment of the organisation’s capabilities and limitations. They give a framework that helps in such assessment and concluded that “three factors affect what an organisation can and cannot do: its resources, its processes and its values”.

(1)   Resources are the things that managers most instinctively identify when assessing whether their organisations can successfully implement changes. What are your key resources?, both tangible (people, equipment, technologies, cash) and intangible (product designs, information, brands, current relationships with suppliers, distributors and customers).

(2)   Processes include not just manufacturing processes, but those by which product development, procurement, market research, budgeting, planning, employee development and compensation, and resource allocation are accomplished. How do the people who we employ interact, coordinate, communicate and make decisions?

(3)   Values of an organisation are the criteria by which decisions about priorities are made. An organisation’s values are the standards by which employees make prioritisation decisions by which they judge whether an order is attractive or unattractive; whether a customer is more important or less important; whether an idea for a new product is attractive or marginal; and so on.

Read more: Christensen, Clayton M., and Michael Overdorf. “Meeting the Challenge of Disruptive Change.” Harvard Business Review

3 Business Areas to Start Digital Transformation


Organisations are embarking on Digital Transformation initiatives covering three key areas: customer experience, operations and business models.

ey areas of digital value proposition

Customer Experience:

Digital technologies allow organisations to understand and collaborate with customers across all channels and touch points, whether physical or digital. The dialogue between customers and organisations has become more and more interactive and focused. This also present challenges as customer relationships are more closer and personal so customer expectation are higher.

Operations:

The benefits go beyond improving efficiency and quality of production processes. For example, automation allow organisations to focus their teams on more strategic tasks. Transactional systems (e.g. CRM, ERP, Analytics, Business Intelligence, etc) give executives deeper insight into products, regions, and customers, allowing .them to make data decisions

Integration of data and processes is essential. Organisations often operate in silos, each with its own systems, data and business processes. Without a shared perspective on customers, products, and people, transformation or process optimisation cannot occur.

Business model:

Digital technologies give companies the tools to make the shift from multi-national to truly global operations. Digital technology can lead to new growth.

Further reading: Didier Bonnet, Patrich Ferraris, George Westerman, Andrew Mc Afee. Talking ‘bout a revolution findings on how companies are succeeding with digital transformations. MIT Center for Digital Business and Capgemini Consulting, 2012.

Digital Transformation and Change Management


The digital revolution is shaking things up, but long-established businesses like media, music, films, automotive and many more don’t like being shaking, particularly if their business models are fragile.

The true digital revolution has enhanced business processes, they have become cheaper, more reliable, faster, more convenient and more satisfying. Sometimes the digitally enhanced  process is a simple improvement on what already exists and sometimes is a replacement.

If you understand how digital skills, platforms and tools might be creatively used to support business priorities and these digital principles seems like no-barriers, how come there are still detractors at companies that need to digitally change in order to survive?.

The digital model is disruptive and it forces companies to embrace risks, so any move into digital based business invariable meets with resistance.

Working for some media companies that need to embrace change in order to survive, I have realised that the hardest resistance to overcome is locked into the mind-set of the management and staff. I also believe sometimes the people who need to change most are those at the top. I have met with different teams at a grass level and found out that they are frequently more aware of the necessary changes than the leaders of the organisation.

How to create a vision and do scenario planning

A common answer to change is “that’s not going to work, because…”, so in order to overcome this opposition the Change Manager must engage key stakeholders in a process of vision building and scenario development. Once this has been done, this process should be reiterated down into the organisation. This is not as easy and trivial as it sounds, particularly in large and established businesses, however is an essential step in managing change.

Communication and digital training

Once key personal are at the same page focusing on achieving the same end result, the next more important task is to communicate the vision to the company and one effective way to do it is by training. My experience also demonstrates that the biggest drag on progress is often a lack of understanding of the digital environment. This translates in uncertainty, hesitation about making decisions and a reluctance to move too far from the familiar.

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

Charles Darwing