Edge Perspectives with John Hagel: Unanswered Questions at Supernova 2007

Edge Perspectives with John Hagel: Unanswered Questions at Supernova 2007

In another great post from John Hagel, one can find some very deep questions in the intersection of business strategy and information technology. Willing to see the outcome of the Deloitte institute.

The areas I find most challenging as I have mentioned in my comment there, are the impacts on organizational design of non-equilibrium situations. If companies adopt a "wikipedia innovation model" that requires that products are launched half-baked, and letting others finish them, what are the implications for the firm?

Another area that I find very interesting is the role of companies as talent development machines. I think that companies will progressively become like hubs that attract talent because individuals can experiment with others that they won't be able to find in other places.

Finally, I find that the area dedicated to platform questions would be enriched if the need for Information Management was included. As I've written many times before, we're in our infancy in the way we measure the value of information both from the individual as well as the corporate perspective. SOA based architectures are fine from the technology perspective, but we need more. We also need means to normalize our information inside companies, but much more when interactions abound with external organizations and individuals.

Why customer service is the #1 priority and why it's so difficult to do it right

I found it very interesting that in IDC's CEO priority list, Customer care/service appears as #1. And it's the second year in a row that this is the case.

I've been discussing this with some senior executives lately and here's why I believe this is the case. I find it normal that customer care is seen as a priority, but the most interesting question for me is why it's so difficult to achieve.

Why customer care/service is the key priority? The answer is because bigger competition, means, bigger risk of loosing customers. As simple as that. Consequently, you better not give them reasons to leave. As we have all experienced in most cities around the globe, customer service in restaurants has been deteriorating for some time. Would you change your place for lunch if someone offered a better customer service? I would. Which means that, treating your customers well when there is competition and they do it better, is critical. Take the example to your interactions with your bank, telecoms operator,...And just see how the industries where there is no competition, are the ones where customer service is just poor.

But let's move into the second question. Why is it so difficult to excel on it, or why most companies fail at it? I have come to the conclusion that there are some crucial elements that help explain it:
1- Today, most industries are applying multi-channel strategies, i.e., you are interacting with your bank via web, phone or branch. What does this mean? That the bank has a big nightmare simply keeping track of all your interactions and reacting accordingly. Have you had a conversation explaining to the person in the call center that you already explained her colleague one week ago what you did over the web and the problem has not yet been solved? You get the point.
2- Customers today can know more about your products and those of the competition than your own employees. Again, do you invest time comparing competitive product offerings in the web before deciding for a mortgage or an investment fund? What exactly is the value you get from the bank employee?

What does this mean. That companies are much slower at adopting best practices to manage customer information wisely than their customers are at adopting the most convenient channel. And also, that employees' knowledge evolves slower than customer knowledge because obviously the second has a vested interest.

IDC eXchange » Blog Archive » CEO Agenda for 2007: Customer Care and Innovation On Top Again

IDC eXchange » Blog Archive » CEO Agenda for 2007: Customer Care and Innovation On Top Again

Just to reiterate the comments in my previous post, Innovation appears in this report from IDC as #2 in the CEO priority list in 2007.

After customer care/service that takes #1, product and service innovation takes #2: "The growing focus on greater (and faster) innovation in product and service offerings is directly tied to the growing competitive pressures of globalization"

This makes sense and is consistent with what we said before. The more an industry or a company is exposed to the pressures of globalization, the more it is going to need innovation to gain and maintain its competitive position.

The 2007 IBM Business Leadership Forum | AlwaysOn

The 2007 IBM Business Leadership Forum AlwaysOn

A very interesting post about the IBM Business Leadership Forum. In this event, like in others before (Software 2007) and like in the recent Business Week article, Innovation is the key word. There's also a great book and conversation going on about the myths of innovation.

But let's go step by step. In the first post I mention, I like the concepts presented by Sam Palmisano at the opening session. Looks like Globalization and Innovation are two ideas that are converging: The key forces causing the world to converge around the subject of innovation are the realities of globalization. And the three pillars of Globalization from economics to expertise and openness, very well define in my view the process we're living.

The process of globalization started by the economic driver, in search for lower costs, is now followed by the expertise globalization. The access to bigger talent pools that are starting to become much more accessible, due to two factors: mobility and remote working capabilities.

The third factor mentioned, openness, is a good way of defining the idea of inter-operability, not only applied to software, but also to governments.

All this is very good. But why exactly is Innovation the key pillar for everything and how does it in reality relate to globalization? Furthermore, as also identified in the BLF, why is "business model innovation the most important form of innovation"?

The simple answer could very well be a very natural phenomenon: in the world of economic and information flows, the more agents in the field, and the interactions happen amongst them, the more probabilities you have of experiencing change. If we combine the three mentioned factors, economics, expertise and openness, we can perceive that the industries in which not only economic flows but also talent flows can happen, the level of change is accelerating. And this forces the incumbent players to be alert and ready to change if alternative models appear. The truth of the matter is that the higher strategic risk is probably continue too long doing the things that were right in the past.

As usual, how technology is used and how technology companies adapt to the market, is a fantastic way of observing these trends. As the very good report from McKinsey and Sand Hill shows, Software Innovation is ranked as the top priority from software customers, in the form of new products. If customers are saying this, what you can conclude is that they are needing new products to support and maintain their own industrial and organizational innovations. Companies in every industry segments, exposed to the forces of globalization are being forced to innovate. And in this push, they are asking technology companies to provide them with new products to support this race.

In other words, Innovation is fundamental, it is here to stay and it is deeply grounded in the fundamental changes that we're seeing in globalization. The more globalization we have, the more innovation we're going to see because the more changes are going to happen to the structures and ways of doing business.