September 2010 Archives

In the previous entry we discussed solution development as a process and shed some light on the intricacies needed to create a winning portfolio. Now let's look at the design of the portfolio itself:

portfolio_chart.jpg

Think about the portfolio from a holistic point of view.  What are we offering that is truly important to the executives we need to have intimacy with (above the safety line), what offering can we bring to bear that directly pull through our products or outsourcing, and what large offerings can we bring to bear that give us critical mass in our business and in our accounts.   It is important to strive to be as complete as possible, and this effort might send you back to you market reality effort.  This point of view will drive much of the portfolio work you will do (think product R&D).  It is important to get it right because it is expensive to be wrong - in real money, market opportunity, and momentum of journey.  Also, remember you will not be creating all these True Solutions at the same time, so you do not need to hinder your broad thinking.  The mistakes made at this stage are slipping into wanting to do things that you like (because you're good at it) but do not meet the market reality or opportunities, or letting the organization (which often does not really understand a market from its needs point of view) deflate the True Solutions portfolio.

The portfolio strategy can now be validated with the market.  This includes discussing the importance of the True Solutions with key potential buyers.  This usually not only sharpens the portfolio and assists with prioritizing which True Solutions will be early offers, but also begins the process of creating meaningful messages that will be needed when the offers are taken to market.
The next activity is to prioritize which True Solutions will be created first.  This is an important decision.  It not only drives resource allocations (investment), but also drives the business model and financial plans.  You cannot go to market without something above the Safety Line, and you cannot go to market without something that pulls through products.  You must be able to put a meaningful group of True Solutions in the market at the same time (within a reasonable time of each other -weeks/months).  Further, as you look at the account life-cycles, you must decide which True Solutions you lead with and which ones are introduced as you have intimacy built with the client. 

Let's develop the solutions.  I have written some about Service Chains and the process of creating the solutions, so I will not add additional thoughts here, but would like to spend some time discussing market validation.  As soon as you have roughed out the service chain, know the implementation projects, laid out in detail the entry project and developed the messaging for Idea Selling - idea meetings and stakeholder meetings - it is time to take the messaging to some virgin accounts as a validation of both the messaging and the True Solution. It is important to quickly get in front of several potential buyers and walk through the Idea Selling process.  The messaging can be altered to elicit their views of the value of the idea and its importance (as opposed to actually selling the deal, although you will probably sell some deals in this process).  These meetings cannot be with lower level people currently known by the company, they must be the executives who can buy. They should not friends or friends of friends - that kind of data is always suspect.  There are approaches for getting these appointments that we will cover when we discuss Idea Selling in more detail. 

This data will immediately help in several ways - clarify messaging (very important) and continue the education for the go to market teams on how to have idea based executive conversations.  In addition, the True Solution itself will be validated or invalidated and better plans can be created from it.

Once the market validation is complete, the Service Chain for the True Solutioncan move forward into its next step of development and go to market. The initial portfolio can be hardened and leveraged both internally and externally.
solutionsdev.gif

The entry to the commercialization phase of the Customer Intimacy Journey requires a re-evaluation of your Market Participation Strategy.  This deals with which markets, which geographies, and which accounts we are trying to impact.  The answer, of course, will include several over time.  Remember, companies live in verticals, and understanding and expertise in those verticals is mandatory for success with them.  During the forming phase of the journey much that is learned about these verticals should to be applied to this evaluation.  The company may not be able to move as quickly as we first hoped, or markets that initially seemed important, now that we have some experience, seem less so.  Also, with some success under our belts, we may be able to go after more jugular markets that better impact the broader organization.   An example of one participation strategy (stated over simply for brevity's sake) could be - "we want to develop meaningful revenue in 100 accounts in Northern Europe that are currently non-accounts for us"  or  "for our top 100 accounts in North America in the construction vertical we want to increase our penetration by 32% and become the partner of choice for our vertical offerings."

As you can see, the participation strategy gives guidance to the effort, but would be unable to direct the HOW (outside of Intimacy Engine of course).  The HOW is developed as you create the portfolio to fulfill the strategy.  This effort is often minimized or overlooked entirely. 

Like all things, it is important to know where you are going.

The next effort is to determine the market opportunities.  We have introduced this topic before - it requires expertise in the market to truly complete this task.  Also, this quality of information is rarely gathered through traditional market focused efforts (mainly because asking customers what they want by definition limits their view of their business). So how is this accomplished? A three dimensional point of view of the market, what is driving it (what will drive it), what true issues are being faced (and will be faced) must be developed.  There is not space here to provide the output views that this effort creates, but I think we can discuss some of the sources of information.

- Interview the consulting firms that have meaningful sway in the market and glean from them their views of today and tomorrow.
- Visit universities that have centers dedicated to subsections of the market - gain insight into what they think and how it's being received.
- Conduct internet research on topics driving issues in the market
- Determine likely areas of interest, the experience you have gained, and find the experts in the businesses that work on those areas to gain an understanding of the business model drivers and cutting edge ideas being discussed.

Next, drive this information through a process of determining the following:

Create a solid document (more visual the better) of the business flows, its drivers, opportunities, and hurdles.  We call these the Market Reality.  It should be shopped and edited by taking it to the players in the market for validation and adding depth and reality.

Create some opinions as to who is best situated to take advantage of the Reality and build visuals comparing them, with support for why we think this.  We call this the competitive landscape.  This should not be shopped, but it will assist in how we target accounts.

Create the opportunities matrix.  This will include: above the safety line opportunities (Intimacy Only Opportunities), pull through opportunities, and opportunities that don't fit us, but that we need to be aware of.

Put the opportunities through the idea evaluation model we have discussed before.  This includes things like ability to deliver, fit in broader strategy, size of opportunities, etc.

Valuation of opportunities - we must be able to build a financial model of the opportunities, including intimacy impact (ability to pull through products) and absorption rates. 

Now stop and determine where you are.  Do you have a real understanding of the market? Do you have meaningful opportunities? Can you go forward and build a portfolio point of view?

If not yes to all, go back to the market understanding step and repeat until you have true opportunities and unique ideas that can differentiate your business.
I am always asked what puts the journey at risk - under investment is the answer. 

If you are going to make the journey be serious about it.  It is a fundamental change in the way your business runs. And, if you have been reading this blog you understand just how different it is from business as usual.  It will require: money, time, effort, attention, adjustment (things never work as planned), and most of all perseverance.   Something to always keep in mind - think about the transformation as pushing something through a brick wall - if you push just a little you still have the rest of the wall to go through. If you push fast you have less to go through.  Let me be clear it can move fast and you can have great success in the first year - but you would have to invest heavily in new offers, acquisitions, talent, talent development etc.  Also remember the longer it takes the more likely the company will lose interest and find reasons to stop.

I'm always surprised by the way companies look at the investing in the solution led/Intimacy Engine business.  Also, the time frames they attach to the transformation when investing little seem unreal.  Instead of viewing it as a business model change they seem to think of it as a cosmetic adjustment - a sales problem or adding a few consultants etc.  If they were bringing a product enhancement to market they would readily spend 100 million on it or a new product might coast 100s of millions and the attention a new product gets warrants the investment - this is no different.

Why is this?  I think it is because they do not view it as strategic - oh they very much want to do it but can't get their head around how important it really is.  The firms that move quickest have an unwavering dedication to the journey. The ones that move slowest - talk all the time about the expense and are second guessing the effort all the time.  I believe there are four key variables that can impact both the ability to get through the brick wall, time it takes to get thorough he brick wall, and success getting through the brick wall.

How do you invest funds?
This is important. Do you starve the business or are you investing like R&D.  The companies that move fastest through the first 2 stages of the journey invest heavily like a new product. Those that linger invest like they are hiring new sales reps.  I am not saying that you cannot get a return on the investment in year one, I am saying that you need to invest like you are going somewhere.

Adoption of the new model
This is one of the issues that slow down the journey the most.  How much do you work against the model? Do you fight each issue - we do not do it that way. We won't pay what consultants are paid, we won't hire/fire fast, we won't invest heavily in talent development, we won't spend the time/money to build True Solutions, etc.  I have seen this at some level in every company that has taken on the journey. We want to do this but we do not cut through the red tape to support it.  Believe me this is a killer.  To this day IBM keeps the staff organizations for their world class solution business separate from the rest of IBM.

How persistent are you?
Every transformation a company goes through will by definition have mistakes. You will pick some poor offers/solutions - you will believe your stuff is better than it is. You will make some mistakes at the customer; you will miss your financial projections.  Why - because you do not know how to do this yet, and the mistakes are necessary for your understanding and developing mastery of the new ways. Do these mistakes stop you - cause you to challenge the whole program.  It is important to adjust rapidly to these mistakes - don't spend months analyzing them make the changes and move on.  I have seen several firms want to stop at the first sign of trouble.

How much executive time is invested?
You must keep key executives aligned with the journey and make sure they are aware of what is working and what is not working.  If it's worth doing then it's worth the involvement. Do not make the mistake of packaging the news - give it to them raw and make them a part of the journey. Hay this is not easy and they need to know it.   Make sure you can tell them what road signs you have passed and what road signs are coming.

In summary, it is difficult for companies to take on these efforts and more difficult for them to invest appropriately and you can help them by stressing the four issues above.
 

About this Archive

This page is an archive of entries from September 2010 listed from newest to oldest.

August 2010 is the previous archive.

October 2010 is the next archive.

Find recent content on the main index or look in the archives to find all content.