901 Blogs: March 2012

Friday, March 30, 2012

Appreciative Inquiry Introduction

This is a transcription of the Business901 Podcast, Accentuate the Positive, Eliminate the Negative with Sara Orem, co-author of Appreciative Coaching: A Positive Process for Change (Jossey-Bass Business & Management).

Sara L.Orem, Ph.D. has twenty years of management experience and fifteen years management consulting in and to major financial services companies in the U. S., Britain and Australia. Her current focus is on the development and use of positive methods including Appreciative Inquiry in coaching and group processes. Appreciative Coaching describes in detail the method Sara has developed for her coaching practice which serves women and men looking at self-started transitions.

Thursday, March 29, 2012

Kanban Evolution with Anderson

David J. Anderson, author of the defining book on Kanban: Successful Evolutionary Change for Your Technology Business appeared on my program back in October 2011 and this is a transcription of the Business901 Podcast, Evolutionary Change thru Kanban. David is the host of the Lean Software & Systems Conference.

LSSC 2012 Boston is bringing three premiere events to one centralized location to facilitate the next wave of ideas in methods, process and organization for software & systems engineering development. Boston is the premiere place to be for those innovating in the Lean community.

David is credited with the first implementation of a process for software development, in 2005. David leads a management consulting firm focused on improving performance of technology companies. He has been in software development nearly 30 years and has managed teams on agile software development projects at Sprint, Motorola, Microsoft, and Corbis.

David’s first book, Agile Management for Software Engineering: Applying the Theory of Constraints for Business Results, published in 2003 by Prentice Hall, and introduced many ideas from Lean and Theory of Constraints into software engineering. David can be found at AgileManagement.net

Thursday, March 22, 2012

Traditional vs. Emerging Thoughts on Pricing

In the 1990s, we were led by the process methodologies of Lean, Theory of Constraints and Six Sigma. Better, Faster, Cheaper was the mantra. The goal was to gain a disproportionate advantage by leveraging internal resources to their fullest advantage. Many of us are finding that faster, better, cheaper is not the game changer that it once was. Not only do we have to improve, but we have to improve at a faster rate than our competition. Ref: Is Lean and Six Sigma a waste of time?

Typical pricing is based on research, focus groups, surveys, statistical modeling, and other techniques to get a better understanding of customers identifying trends, costumer preferences, and evaluate the relative strength of competitors' positions. Organizations also organize consumers into segments that enable them to efficiently address consumer needs. The further you can define your segments, the more it is perceived as a competitive advantage. However, organizations can no longer feed products to customers, Kill the Sales and Marketing Funnel. Customers have the ability to access resources and information comparable to their suppliers and choose suppliers by their own definition of value and how that value should be created.

A focus on control and ownership of pricing is giving way to the importance of shared outcomes with customers and suppliers. Ownership is not as important as the way you influence resource allocation within the network. “The goal of the emerging company is not to own all the resources but to influence how resources are allocated by providing intellectual leadership for the entire network. The co-creation process also challenges the assumption that only the firm's aspirations matter. Every participant in the network collaborates in value creation and competes in value” (1).

Traditional (T) versus Emerging (E) thought:

Unit of Analysis: (T) Organization vs. (E) Collaborative Network
Basis for Value: (T) Products/Services & Features/Benefits vs. (E) Co-created experiences and Value in Use (SD Logic)
Interaction: (T) Transactional based and goal to deliver faster, better, cheaper vs. (E) Series of experiences and goal to keep the game evolving
Infrastructure: (T) Limited by physical, financial and internal knowledge vs. (E) Access to resources through external knowledge and networks
Boundaries: (T) Limited by features and benefits offered vs. (E) Progressing through knowledge sharing

As we have moved into the Customer Experience Economy and as many feel we are at the threshold of the User Experience Economy. As a result, we have seen the rapid expansion of Design Thinking, Service Design and Lean Agile type methodologies gain traction. Service Design in my thinking being firmly rooted in Service Dominant Logic (SD-Logic) is the most applicable to the area of Sales and Marketing.

SD-Logic use of co-creation of value pushes the perspective on all areas of business to include pricing. Why should pricing be limited to what is available within the organization and their supplier network? Could your pricing structure access your customer communities as well? Organizing to access pricing from an extended network of suppliers, partners and customers to include knowledge, infrastructure, and financial capacity—can significantly expand the notion of available pricing structures.

If we view pricing as an outcome and value from the use of our product or service (SD Logic), should value not be based on the price of the service that the customer receives and our level of participation? Should Net 30 terms be replaced by a co-created funding process that allows for shared risks and greater rewards over the lifetime of the product? Can we co-create pricing with a customer? Are customers already doing it for us?

P.S. Would that not force product/services to strip away all features and benefits that don’t deliver on the needs of the customer? We now receive a “basic” smart phone and only add apps as needed. Realistically, would your life be simpler without every product you own being intelligent?

Book Resources for this blog:
The Future of Competition: Co-Creating Unique Value With Customers
The Service-Dominant Logic of Marketing

Tuesday, March 20, 2012

People & Process Drive Profit Podcast

Vivian Hairston Blade, Founder, President & CEO of Experts in Growth Leadership Consulting, LLC (EiGL Consulting, LLC) based in Louisville, KY was my podcast guest. Vivian is a recognized expert, keynote speaker, trainer and executive coach in the principles of Customer Experience, Lean Six Sigma and Leadership Development. With a 20+ year career in Fortune 100 companies, General Electric and Humana, Inc., Vivian has extensive experience in successfully leading the development and execution of customer centered, quality-based, growth business strategies.

Through EiGL Consulting, Vivian has helped clients achieve direct cost savings and productivity by more than 10%, implement customer loyalty and customer service programs, and has coached and trained hundreds of professionals in customer experience implementation and leadership skill development. Her articles have been published in many professional, industry and business publications.

Podcast Powered By Podbean

Download Podcast: Click and choose options: Download Here or go to the Business901 iTunes Store.

EiGL Consulting is WBENC, TSMSDC and SBA-WOSB certified, accredited by the Better Business Bureau, and is a member of Greater Louisville, Inc. Vivian's website is: http://eiglconsulting.com/

Friday, March 16, 2012

The Other Half of the Lean and Sales Marketing Summit

I am honored to be included on the same agenda with noted author, speaker, and lean pioneer Bill Waddell. On April 17th, Bill will be presenting Aligning the Entire Organization to Achieve the Sales Strategy.

In most traditionally managed companies Sales and Marketing are treated as an independent entity tasked with increasing sales volume – building the ‘top line’ – while production is apart and tasked with fulfilling whatever is sold and deriving ways to reduce costs. Accounting is apart, disengaged with either, and acts as the scorekeeper. Sales levels go up and down, buffeted by the winds of the economy, the success or failure of new products, and reacting to the actions of local and global competitors. Production pursues lean efforts that typically sound a lot more effective in terms of bottom line impact than they actually are, invest in computer based solutions that actually solve very little, and focus on labor efficiency maximization. Accounting sits off to the side tracking variances, recommending price increases, headcount reductions and outsourcing – ideas of little practical value.

See Bill in this short video, a great preview of what you will see:

The host of this event is Lean Frontiers. They provide high-quality, laser-focused events aimed at integrating organizational silos in support of the lean enterprise. These focused events provide an ideal venue for like-minded professionals to explore the common issues they face in supporting lean. Upcoming Workshops will held in Fishers, IN (Indianapolis Suburb).

The next day, I will be presenting Using Lean to Create Repeatable and Scalable Sales and Marketing Systems: A Customer Centric Approach Through Lean. This workshop will be two-thirds presentation and one-third interactive exercises. If you buy my book series before the event and attend, I will refund the purchase. Marketing with Lean Series – 4 Pack.

Hope to see you there!

Wednesday, March 14, 2012

Critical and Creative Thinking benefits the Problem Solver

Below is a presentation that I gave recently to the Plantmix Asphalt Industry of Kentucky. It was during the winter training school and focused on using both Critical and Creative Thinking benefits the Problem Solver. It also included how to prevent the failures of most decision processes. This an hour long presentation. What are your thoughts? Any improvement ideas?

Problem Diagnostics - Q & A

View more presentations from Business901

Saturday, March 10, 2012

A Service Design Thinking Primer

My blog and podcast for next few months will focus on Business Strategists, Design Thinkers, Appreciative Inquiry Coaches, Architects and of course Lean Thinkers. I could not think of a better way to start this series than having a podcast with co-author Marc Stickdorn of This is Service Design Thinking. This is a transcription of the podcast.

Open publication

Rather Listen? Service Design Thinking Podcast with Marc Stickdorn

About: Marc Stickdorn graduated in Strategic Management and Marketing and worked in various tourism projects throughout Europe. Since 2008 Marc is full-time staff at the MCI – Management Center Innsbruck in Austria, where he lectures service design and service innovation. His main areas of interest are service design and strategic marketing management particularly in a tourism context. This involves research such as the development of a mobile ethnography application for mobile phones, the Customer Journey Canvas and various publications and presentations. Marc is co-founder and consultant of “Destinable – service design for tourism” and guest lecturer at different business and design schools. His Websites: http://thisisservicedesignthinking.com/, http://www.servicedesignresearch.com.

Friday, March 9, 2012

Should you Organization start Thinking like an Architect?

We accept that Architects have an ability to design pleasing structures. I feel another part of their repertoire is equally as important; It is the ability to visualize the change needed between current and the future state and to successfully chart the path for evolving to it. You may believe that these traits are common in organizations through engineering, project management and operations but Architects do it a different way. They do it through the lens of design.

How do Architects think? A study, Thinking like an Architect. by Kyle Gabhart explores the subject of architects and how they view and ultimately solve problems.

The overwhelming indication here is that building-style toys (LEGOs, blocks, Lincoln Logs, etc.) were a favorite toy of those individuals that eventually grew up to become architects. Could it be that the abstract thinking and pattern-recognition that is inherent in building-style toys was already being developed and enhanced at such an early age? The second contender is board games, which has a strong component of rules sets and also pattern-recognition. Here again, the impressionable mind of the future architect may already be creating mental categories, placeholders, and thought patterns for future architecture activities.

LEGOs is not that surprising but another part of the survey listed these results:

53.08% of respondents studied / trained with a musical instrument
36.97% pursued mathematics studies beyond the basics required by a degree program
22.27% engaged in formal singing activities, including music theory and sight-reading

What does that tell us? A background in music may mean a great deal of regimented practice and the ability to take instruction. In combination with LEGOs it shows the ability to build on an existing process and achieve future results. It may also say a lot about teamwork, since many that play music in high school participate in the band.

Architects offer traditional core services but they also balance human, technical and business factors as well, managing these factors to achieve their outcomes. Architects build and coordinate teams from a variety of services. Just doing this within our own organizations seems insurmountable at times. Think about outsourcing your entire business?

Our products/services are increasingly become more strategic. We must enable the use of our product/service to serve clients more effectively and to increase customer engagement. Architects add a great deal of value to this thought process. They have always started with customer engagement in their design practice. Design is not an afterthought, it is the reason for engagement. There is no such thing as features and benefits at this point. That only comes through a definition of the needs of the clients. Interesting?

Tomorrows podcast is with Zachary Evans, an architect and partner at Kelty Tappy Design, Inc., a Fort Wayne architecture, planning, and urban design firm.

My Engagement Strategy – Appreciative Inquiry

Most people want ideas and applications that I would propose before we start working together. I equate that to starting on the right side of the A3 (with the answers in layman terms). So recently I have developed a structure that makes more sense. I leave the customer determine the price and budget for the encounter.

I believe in creating a Lean Marketing system. You can't write and teach Lean Sales and Marketing. It is a Learn by doing approach. What I do is provide you a platform for co-creation through joint experiences and incorporate feedback as we put them into practice. The steps of Lean Sales and Marketing are first you go and create a current state. Second, you form a working vision from the user (customer) experience, an ideal situation of where the user wants to go. Third, you visualize the user's process. If you do that, it's more obvious to see what your next reaction should be and when to trigger it.

Many people respond to the latest fad or solicit the cleverest idea to implement some sort of solution, thinking it will make them better. What makes your marketing better is understanding the user or customer experience and their processes. Then with hard work, take the time to figure out how to engage with them. It's this process, that empowers you and which leads you to create better and more performing processes. Using this approach, a Lean system will outperform any other approach in engaging the customers you need, maintaining customers and working with people you like and who will be loyal to you and refer others to you forever.

This is the initial sequence of steps we use to create a Lean Marketing System in an organization. It ensures we carefully think through what outcomes we want to create, what supports and barriers we need to plan for, and who we have to involve within your organization to guarantee success. Our starting point:

(Definition) What are you presently doing and how do your clients and organization feel about them?
(Discovery) What is your present value proposition for retaining customers? What is your present value proposition for acquiring customers?
(Dream)What are your targets? How will we measure success?
(Design) Do you understand your customer’s decision making process? For each product/market segment?
(Destiny) What’s your investment strategy – not only in media, but in time and events?

What I ask for is simply a marketing budget for me to manage. We allocate a percentage of the budget for fees, creative and production, with the balance going to media, materials, internet presence and other out of pocket expenses. At the beginning it is slanted towards the fee side and overtime shifts as we don’t need to recreate materials and programs from scratch. It can be very cost effective if I am able to use my own resources and fold you into existing processes. I host and manage websites, post products to Amazon, handle news releases, create interview opportunities, host guest blog posts and podcasts, orchestrate events, create info product and manage shopping carts at little if any additional costs. There is little time spent by the client except for telephone interviews and final review of materials.

P.S. What I will not do is masquerade as your persona in social media. I believe that this typically backfires both in creditability and expected results.

Unbeknownst to me what I described in the starting points is the outline for Appreciative Inquiry. In parenthesis above; Definition, Discovery, Dream, Design and Destiny is the AI Process, which I detail below:

Definition: What frames our inquiry?
Discovery: What gives life?
Dream: What might be?
Design: What should be?
Destiny: What will be?

Never knew I was an Appreciative Inquiry guy!

The Difference In Lean Problem Solving for Sales and Marketing

The transformation of Lean into Sales and Marketing has a few subtleties and one of them is the way you go about solving problems. The typical Lean Thinker goes about solving a problem very systematically using a variety of processes such as A3s, PDCA, 8D or DMAIC, etc. They are all based on the scientific method and the steps are:

Define a Problem
Do Background Research
Construct a Hypothesis
Test Your Hypothesis by Doing an Experiment
Analyze Your Data and Draw a Conclusion
Communicate Your Results

In contrast, Sales and Marketing people have a tendency to make an initial exploration which I phrase EDCA or Explore-Do-Check-Act versus the scientific method of PDCA or Plan-Do-Check-Act. I prefer to use the word Adjust over Act. This initial step seems relatively the same but the real difference comes in the framing of the context. The engineer or scientist views it as a problem-solve analysis. Sales and Marketing solve from a solution-focused synthesis.

Paraphrased from Nigel Cross’s book, Engineering Design Methods: Strategies for Product Design:

Designers tend to use conjectures about solution concepts as the means of developing their understanding of the problem. Designers impose a primary generator and generate early solution concepts. This is used to base a tightly restricted set of constraints or solution possibilities. The problem cannot be fully understood in isolation from the solution, so solution conjectures should be used as a means to understand and explore the problem formulation. As the architect, Richard MacCormac has said, “What you need to know about the problem only becomes apparent as you’re trying to solve it.”

Solution-focused strategies are perhaps the best way of tackling sales and marketing problems which are by nature ill-defined problems. The major hindrance to this type of thinking is found in becoming fixated on a particular early solution concept and an unwillingness to discard the concept. Instead the make minor improvements rather than discard the work and stat with a fresh idea. Another problem is going too much in depth versus staying at a minimum level to continue the process. You should look to having a “reflective conversation with the situation,” so wonderfully said by Schon.

Cross added these steps for the solution focused process:

Clarify requirements by asking sets of related questions which focus on problem structure.
Actively searched for information and critically check given requirements.
Summarize information on the problem formulation into requirement and partially prioritize them.
Do not suppress first solution ideas, hold on to them and return to them to clarify the problem rather than pursuing them in depth.
Detach themselves during conceptual design stages from fixation on early solution concepts.
Produce variants but limited the production and overview periodically assessing and evaluating in order to reduce the number of possible variants.

Another part of the process, especially used by designers and architects is the act of sketching. They have a tendency through sketching to handle different levels of detail shifting from overall concept to detailed aspect practically simultaneously. Sketching permits tentative solutions to be explored and investigated and the typical hierarchy steps of problem-solving analysis are prevented.

In marketing, think of exploring a customer journey map allowing for multiple paths to be explored. For example think of a user scenario that might help you identify multiple paths. A few ideas on constructing one:

Practice being a user. A good exercise is to use de Bono’s Six Thinking Hats and apply that thinking taking different user points of views.
Observe users in action. Insure you are watching both novices and experience people.
Question users about their experience. You can use a variety of methods that are formal, unstructured and even focused groups.
Create user personas and scenarios. A persona is about a well-defined but hypothetical user and a scenario is a storyline about the use of a product or service.

In Sales and Marketing evolving to an answer though customer interaction is one of the best methods of problem solving. You may have to accept a solution that may not be the best in your mind. But an idea that can be implemented is much better than one that cannot be.

Improving Human-Centered Design: Achieving Resonance

My podcast, An Inquiry into the Meaning of Making this week was with Seung Chan Lim, nicknamed Slim. We discussed his journey and finally his project, Realizing Empathy. Realizing Empathy is a project that asks what it means to make something, how it works as a process, and why it matters to our lives. Slim believe that making is a process that is shared across cultures and disciplines.

Slim’s Overview: Human-Centered Design is good, but it can be better. Design isn't just about fulfilling people's needs, it's also about helping each other get to the heart of who we are as human beings. To do that, design needs to strive for a clear and coherent expression of honesty, of integrity, of dignity in all dimensions. It's time we look at the entire design process as a multi-dimensional conversation. whose goal is to empathize with all the participants in the process, to achieve a sense of profound resonance.

You can help him launch his project by pledging at kck.st/x2GC4I

If you find what Slim says intriguing, please take a look at his websites;
Website: http://realizingempathy.com/

Thursday, March 8, 2012

Accentuate the Positive, Eliminate the Negative

“Man, they said we better Accentuate the positive Eliminate the negative Latch on to the affirmative Don't mess with Mister In-Between No, do not mess with Mister In-Between Do you hear me, hmm? The music was written by Harold Arlen and the lyrics by Johnny Mercer, and it was published in 1944.

You wonder why it has taken organizations this long to start considering this approach. My podcast guest, Sara Orem, co-author of Appreciative Coaching: A Positive Process for Change (Jossey-Bass Business & Management) expanded on this in the podcast:

Lions and tigers and bears. We lived in caves and there were wild animals and there were maybe not an ever present danger but there was an often present danger so we were wired to look for danger. The worrier in us will look for danger in the fact that we didn't get a raise or we'll look for danger in the fact that our significant other didn't say good morning to us. We are negative beings and to some degree that's also genetic.

Is that why problem solving is revered? And the feel good approach is not?

Download Podcast: Click and choose options: Download Here or go to the Business901 iTunes Store.

P.S. My favorite rendition of the song mentioned above is a Bette Midler & Bing Crosby rendition. Don’t miss this! This is my feel good strategy part of the post!

Appreciative Inquiry (sometimes shortened to "AI") is primarily an organizational development method which seeks to engage all levels of an organization by taking an "asset-based approach." It starts with the belief that every organization, and every person in that organization, has positive aspects that can be built upon. It asks questions like “What’s working well?”, “What’s good about what you are currently doing?” David Cooperrider is generally credited with coining the term ‘Appreciative Inquiry’.

Monday, March 5, 2012

Do You Know the Right Job For Your Products?

From Innosight and authored by Clayton M. Christensen, Scott D. Anthony, Gerald Berstell, Denise Nitterhouse

The market segmentation scheme that a company chooses to adopt is a decision of vast consequence. It determines what that company decides to produce, how it will take those products to market, who it believes its competitors to be and how large it believes its market opportunities to be. Yet many managers give little thought to whether their segmentation of the market is leading their marketing efforts in the right direction. Most companies segment along lines defined by the characteristics of their products (category or price) or customers (age, gender, marital status and income level). Some business-to-business companies slice their markets by industry; others by size of business. The problem with such segmentation schemes is that they are static. Customers' buying behaviors change far more often than their demographics, psychographics or attitudes. Demographic data cannot explain why a man takes a date to a movie on one night but orders in pizza to watch a DVD from Netflix Inc. the next.

Product and customer characteristics are poor indicators of customer behavior, because from the customer's perspective that is not how markets are structured. Customers' purchase decisions don’t necessarily conform to those of the "average" customer in their demographic; nor do they confine the search for solutions within a product category. Rather, customers just find themselves needing to get things done. When customers find that they need to get a job done, they "hire" products or services to do the job. This means that marketers need to understand the jobs that arise in customers' lives for which their products might be hired. Most of the "home runs" of marketing history were hit by marketers who saw the world this way. The "strike outs" of marketing history, in contrast, generally have been the result of focusing on developing products with better features and functions or of attempting to decipher what the average customer in a demographic wants.

In a discussion, I had with Alex Osterwalder this week he spent a great deal time talking about this concept and how it relates to Customer Value. Alex is the author of the Business Model Generation and next weeks podcast guest.

This is a similar concept to Service Design via Service-Dominant Logic where the foundational belief is that value is derived through the use of your product/service. Your product/service is only an enabler of value. Utilizing this concept, can your product/service be given away for free and as a result be paid for through the use of it? Let's say Xerox gives a printer and services the printer for free and gets paid on the use of it. Zipcar is another example - you only pay when you use it. There may be a minor membership fee but the real cost would be associated with the use of the product.

Does anyone have other examples where the value in use concept is used?

Is highlighting 'value in use" an effective marketing tactic?

Can you segment markets through how you use a product?

Do you have other question that this concept raises?

Join the conversation on this subject at the Lean Marketing Lab.

Thursday, March 1, 2012

How to Design like an Architect

Doug Patt of How to Architect created this video, How to Design like an Architect which is a great intro to this weeks podcast, Design from an Architects Perspective. I encourage you to visit Doug’s site. It is well constructed and very impressive from both a visual and ease of use perspective. Doug has a new book coming out and could it be named anything else: How to Architect.

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