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    "It is of great use to the sailor to know the length of his line, though he cannot with it fathom all the depths of the ocean." - John Locke, Philosopher

    Friday
    05Mar2010

    “Animal Farm” by George Orwell (1945)

    A MUST READ - You may be wondering what I’m smoking recommending a must read for a book published before our parents were born …

    Well, I did not hear about this book till a couple of years ago when my mentor made comment to me – “Navin, with your attitude towards work; you may end up like the horse on the Animal Farm” – I, obviously, did not understand his comment and so I probed further. He, then, mentioned about the horse in this classic. I read the book immediately and became a huge fan.

    You can read the book for free at - http://www.george-orwell.org/Animal_Farm/index.html ... Its a small book and you may be able to finish it quickly …

    Basically, the book is a satire on a communist or any other totalitarian regime. During those days (1040s that is) the book was very well received since it fit the political upheaval in Soviet Union so well.

    The book is about a bunch of barn animals taking over the farm from the "opressive humans" only to find that themselves more opressed by their own chosen animal-leaders. Its about grab of power by the 'power hungry pig" from the pig with the vision. Its about use of squealer to smear reality and implanting false stories. Its about all the dumb animals gettings a raw deal no matter who is in-charge. For example, the horse, who worked so hard to make the windmill is sent to the pound when he gets disabled.

    In my mind, what gives this book such timeless validation is my own assessment of the way some of the regimes in the political arena or in the work forces play out. And those who are currently a part of the work force, would realize that, once in a while, you end up working for a company run by some of the totalitarian regimes …Lehman Brother’s, for example … This book will give you a great feel of how the assortment of human behaviors pans out due to that and how they react to the dictum of the power! It explains how the power grab games are played? Who helps perpetuate the fear? How simple minded “animals” end up in the pound once their useful life is over?

    Read it and you would know what I’m talking about.

     

    Sunday
    28Feb2010

    The Connected Customer

    Is it just me or have you also noticed that majority of the mobile apps and services being pushed out are either focused on providing entertainment or providing routine weather, stocks, news, interest rate, etc. information. The former category is being pushed by young, upcoming start-ups and entrepreneurs while the latter category is being pushed by established players (who already own the content). While all of these apps do have some utility, the true, game-changing opportunity will be the ones where companies start to connect their customer with services, partners, tools, suppliers, people, etc. that will increase the utility/value of the product and decrease its TCO (Total Cost of Ownership).

    What I am trying to draw your attention to is the “Connected Customer” phenomenon. Social media and smart phones are changing the way we consume information. Apps are helping people connect, collaborate, and create things in ways that were not possible even a year ago. However, large consumer and industrial goods retailers have been very slow with regard to catching up and internalizing the potential offered by these channels and the underlying technology platforms. The analogy that comes to mind is that of the dot-com revolution, when the large organizations struggled to comprehend the web innovation. The current social-mobile revolution is no different in that regard, as it is making companies scratch their brain on how to use its potential and how not to get left behind. Typical marketing teams tend to believe that they have all of the CRM initiatives in place to keep the customer connected and informed on their brand of products. But just pushing routine content, promotions, newsletters, surveys, or campaigns at your target audience, without having understood the complete context in which your product is consumed by the customer, amounts to sheer ignorance and waste of precious company dollars. 

    If you look at the demographics, the average smart device owner is 20-30 something in age, in the top 35 percentile of their peer group in terms of earnings, and has travelled internationally at least once. Although this is a macro-level data, the conclusion I can draw from it is that this audience definitely cares about how and where they spend their precious time when it comes to professional as well as personal activities. Majority of this audience is striving to find ways of improving their productivity, potential, quality of life, awareness, relationships, and earnings. That was the precise reason why I’m guessing they bought the smart device in the first place. Now if you are going to peddle to them these one-hit, 5-minute, use-and-throw wonders, you are wasting a huge opportunity and risk alienating/boring the customer away from your brand. Let me give you a couple of examples of these low-utility apps – the Coke app that wants you to spin the bottle, the Audi app that wants you to race the car, the Budweiser app that wants you to pretend that you are pouring beer – you get the idea. Once again, neat apps but when it comes to utility, slim to none.

    The companies that I just mentioned above are hi-tech, sophisticated, global brands. They are leaders in their category. They can do better than pushing simplistic, adolescent apps. They, and others, ought to start thinking about the complete picture, anything and everything that comes to play and stands to influence how their brand gets consumed over its useful life. You need to place the customer in the center, understand the ecosystem, build the context diagram, and finally connect your customer across all the touchpoints. Use the app or service to enable such a model. This will require some amount of imagination but once you do this, you will start to make a genuine, positive difference in your customer’s life. So what’s in it for me you ask? Increased product utility and life will result in increased loyalty, buzz, recall, differentiation, and value of your brand, for which you can charge a small premium. 

    A connected customer is a more productive customer. Improved productivity leads to an improvement in the customer’s professional and personal potential. This further leads to an improvement in their personal bottom line. And if you’ve played a hand in improving your customer’s bottom line, I am pretty sure they will help improve yours!

     

    Tuesday
    16Feb2010

    Toyota's Future

    Wow, what a mess! I doubt if anybody would want to be in Toyota’s shoes today. Regardless, the important questions to ask are – Where does Toyota go from here? What does Toyota’s future look like? Are they going to lose all the trust and goodwill, generated over the past 30 years, in the American market? How long, realistically, will it take them to bounce back? How do they define “bounce back”?

    For years, they have been the darling of the markets and the envy of their competition. Toyota set the standards and raised them at a steady pace, and eventually became the #1 car company of the world. The world of manufacturing and process engineering has reaped huge dividends thanks to Toyota’s business revolutionizing concepts like Lean Manufacturing, TPS (Toyota Production Systems), Kaizen, Kanban, Poka-Yoke, etc. They have been one of the most admired companies in the world and other companies, both inside and outside of the auto vertical, have benchmarked their execution and performance against those of Toyota. You do not just become the market leader by fluke – it takes time, effort, money, planning, persistence, and performance. 

    Will all of the above gains just get washed away due to their current recall crisis? Will their loyal customers start switching over to other brands? Will Toyota have to compromise on the price premium (anywhere from $1000 to $1,500) for the quality and residual-value advantage? The list of questions is indeed a very long one. The answer, in my opinion, is relatively simple and straightforward. I predict that Toyota will bounce back and we all will get to see an even bigger, better, and stronger global organization. You see, they are the Japanese. They are process freaks and they work their butts off. It’s in their DNA to fight back. They may come across as calm, quite, and composed but inside, there is a fire burning within. So they screwed up this time. I guess the timing was bad, given the economic situation and the plight of the auto industry. And they screwed up in the largest global auto market of all – USA. Yes, they couldn’t have timed this more poorly. 

    Based on latest sales numbers, their sales have dropped about 15% in the US market. They’ve always been behind GM in the US market but now they will probably fall behind a few others as well. Globally, they may lose their #1 position to the Volkswagen group. Although Toyota initial response to the gas-pedal recall issues was late and lacking, they now have clearly understood the gravity of the situation and have poured in people and dollars like you won’t believe. When it’s all said and done, this crisis will probably cost them about $2.5B - $3B ($1.5B towards fixing the problem, $0.5B in incentives to boost revive demand, and another $0.5B - $1B to fix internal processes) and that would be money well spent. There may be rumblings of quality issues coming from other parts of the world as well but Toyota will focus on fixing the US issues, perception, and trust. US still is the #1 auto market, although China will likely surpass it in the near future. There are plenty of examples of such corporate PR crisis that Toyota can learn from and take consolation in the fact that all of them went away with planning and time. 

    When it comes to competitive advantage, nobody stacks up like Toyota – be it there hybrid technology, manufacturing processes, distribution network, and consumer insights. They understand these critical business functions as well, if not better than their competition. So while the American big-3 auto manufacturers can extract some temporary joy from Toyota’s sorrow, rest assured that Toyota will be back. And BTW, I read somewhere that you are 10 times more likely to get struck by lightening than getting into an accident due to the gas-pedal issue. 

    I would like to take a quick poll and see what the Kazira audience thinks about Toyota’s future. Please take 15 seconds to answer the 3 questions on the top-left side of this article.

     

    Tuesday
    02Feb2010

    US Airlines Losing It

    I just don’t get the growth strategies the US based airlines are trying to pursue. Regardless of what I think, it should be very obvious and clear to everybody that their strategy has nothing to do with improving customer service or experience.  

    On one hand we have the rest of the world moving towards a service centric and customer focused value model, which improves the customer’s flying experience and provides meaningful amenities for which there is adequate customer-willingness-to-pay. On the other hand, we have the US based airlines that do not give a rat’s ass about customer service or comfort, and would rather take the cheap route of disaggregating the ticket fare and charging for every interaction with the customer. Now I do get that airlines are struggling and need to find new, innovative means to getting back to profitability. But come on, enough with the constant baggage fee hikes! First it was 1 bag for a certain fee, now it’s every bag for a lot bigger share of your wallet. First they blamed the increasing fuel prices, then the increasing security measures and TSA regulations, and now it’s the economy. Next thing you know, you will be required to carry quarters on flight so that you can use their toilets! 

    My most recent travel experience was flying to India and back (via Europe). As an economy class traveler, I noticed one distinct trend. The farther East you travel, the more pleasant your travel experience is likely to be and the more value you are likely to get for your money. The moment you enter a US airport, you are bound to feel the stress-effect. Be it the agent at the check-in counter, the people manning the security lines, the agents checking your boarding passes, and the most feared of them all, the attendants in your flight. Every one of them will try their best to give you that unwelcome feeling. Try asking them for information and they will give you that look that says “Have you never been on an airplane before?”. The check-in agents want you to use the kiosk and not disturb them while they are having that all important chat with their fellow agents. The security agents will come down upon you as if you have broken some serious laws by forgetting to pack lotions in a zip-lock. The gate agents once again have that “Don’t even think about it!” look on their face. Finally, you step in the plane to experience the worst part of the ordeal. Yeah you have those call-attendant buttons on your armrest but if you did not know this already, they are not meant to be used. Because, if you do dare to press it, chances are that the attendant will not show up. If they show up, it will feel like it’s been an eternity. And then, you will get that look again. And finally when you put in your request, it will be another eternity before your request is serviced. 

    All of the above improves drastically as you move further east. The European airlines pay a lot more attention to serving their customers with a smile and the Asian airlines are the best of them all. At the Amsterdam airport, when the check-in agent noticed that we were travelling with our 2-yr and 5-yr old, she immediately asked us to step ahead of the line and made a proactive effort to get us bulkhead seats so that there would be extra room for the kids to walk around. Expecting that from a US based airline staff would be out of the question. The European and Asian airline staff are a lot more courteous and accommodating, and they do not make it sound like they are doing you a favor every time they serve you. 

    From an airline operations point of view, you do want minimal customer interaction with your staff and agents. You want to be running a lean setup and as such, customer interactions with human agents are significant cost drivers. You want your customers to be using all of the online and airport portals and kiosks, before they pick up the phone or approach an onsite agent. I do not have a problem with that as that is right way to approach customer operations. But it should never get to a point where you foster, directly or indirectly, a culture which tells your staff that it is ok to be cold or offhanded to customers. That kind of behavior, attitude, and environment is a recipe for doom, and your customer ratings will decline at a steady clip. The right approach is to look at these human interactions as opportunities to wow the customer, just like you are trying diligently to do with your process and technology innovations. Customers will rate you on the overall, end-to-end experience and lapse on your part at any stage of this experience will hurt you. This is the Holy Grail when it comes to things like customer loyalty and customer retention.

    Unfortunately, just like the US economy has taken a dive, so has the US airlines approach to customer service. Consumer spending on services represents a nice chunk of the annual GDP estimates and the airline sector certainly is not helping the economy in that regard. Instead of using it as a key lever for brand differentiation and long term growth, US airlines continue to look at customer interaction as profitability dilution. If the rail network within the US was a lot more established and mature, it could provide the much needed competition to air travel, which would then lead to the kind of travel business transformation the the EU and Asian markets have witnessed.

     

    Monday
    25Jan2010

    Automotive Sales | Strategy Map

    A while back I had proposed a Strategy Map for the CIO's organization (Making IT Matter). My flavor of a strategy map goes well beyond the traditional ones when it comes to the level of detail provided. Remember, strategy maps are a mash-up of your strategic roadmap and a BSC (Balanced Scorecard), and their intent is to help you set/get a clear path for planning, execution, and performance measurement. To make these maps effective, my goal is to focus on activities that are actionable, measurable, and more than anything else, meaningful. And yes, who doesn't like pictures? This type of visual encapsulates it all! A picture is worth a thousand words.

    What I am proposing in this blog posting is a "Sales" strategy map for an automotive manufacturer.  The purpose of this particular map can be summed up as follows -

    "To set forth a strategic framework that captures how the different parts of an auto sales organization come together, collaborate,  and contribute towards the overall brand goals and objectives." 

     

    Here is the Top-10 list for how you could use such a map -

    1. Articulate and communicate the organization’s “big picture”, internally as well as externally
    2. Determine whether the functional organization is designed for long term success and achievement of strategic goals
    3. Evaluate and re-align organizational goals and objectives
    4. Determine critical performance areas that require tighter controls and monitoring
    5. Rationalize the “strategic fit” of new IT initiatives/projects vis-à-vis the organizational strategy
    6. Determine weak links or areas (i.e. vulnerabilities) that need more emphasis than others
    7. Utilize for understanding how investments in soft areas (like culture, teamwork,, etc.) translate into business outcomes
    8. Rationalize the spread of people across various functions and evaluate opportunities for resource re-alignment
    9. Utilize for assessing the breadth and depth of business performance analytics coverage
    10. Use as a basis for having operations strategy discussions and determining how macro conditions may impact the map

    As always, write to me if you need a soft copy of this map or would like to discuss it or would like me develop one for your organization. Also, make a few seconds to leave your comments on this blog posting.