Tuesday, June 12, 2018

Personalization and Marketing Strategy


Image result for personalization in marketing

Extraordinary changes have occurred in the customer experience landscape over the last few decades. The notion of standardized products and services for in inter-connected world has given way to the imperative for personalization as the key driver for marketing success.

The Problem:

Customers expect to be recognized on every channel.

Customers assume that any experience they initiate on one channel or device can be picked up right where they left off when they switch to another channel or device.

Customers expect to be able to interact with a company 24/7 – whenever and wherever it is most convenient for them.

The Challenge:

Organizations find it exponentially difficult to execute a personalized marketing strategy across channels and devices, because of the increasing number of technologies and the resulting complexity.

The Solution:

Organizations need to learn (and learn fast) how to declutter the marketing technology stack (please see BCG’s illustration below).

 Image result for marketing technology stack bcg

Speed-breakers along the journey to personalization:

The amount of data available to personalize customer experience has exploded – demographics, transaction data, interaction history, behavior, location, and preferences – to name just a few. Prioritizing the data by value creation is critical but difficult.
Managing channel interactions requires specialized tools – tools to manage communications, tools to personalize web pages, tools to manage social media content, tools to support customer service, tools for delivering personalized experiences across channels – the list is daunting.

Most of the available tools have no capabilities to interact with each other.

Communicating across channels requires multiple levels and layers of content – a task that can be particularly challenging to small and medium enterprises.

Measuring and interpreting the interactions across channels is incredibly complex and optimization may look like an impossible goal.

Consider this:

Even a small organization may end up using over 20 tools in its marketing function

Steps in Decluttering the Stack:

Identify the key use cases that the technology must support. Marketing technologies lend themselves well to agile development, and the embedded iterative nature of the task provides constant scope for improvement.

Develop an end-to-end marketing technology map.

Organizations must look at the personalization ecosystem they’re trying to create in its entirety, from data management to advanced analytics to customer engagement, all the way through to measurement and optimization. In general, marketing resources are organized by specific skills and tend to be siloed. Thus, synergy is lost.

Choose a building approach to suit the organization’s needs. Two approaches are in vogue: 

Select the best-in-class tool for every individual function. Advantage: Provides the best functionality to each element. Disadvantage: Sub-optimal integration.

Implement an integrated marketing cloud suite. Advantage: Integration across different elements. Disadvantage: Compromises functionality in certain areas. 

Create a blueprint and pick core vendors. Organizations would do well to build the stack incrementally rather than trying to build everything at once. Bear in mind that switching costs tend to be very high and the lack of interoperability may result in crippling bottlenecks. 

Going beyond technology:

It is worth noting that failures are usually the result of applying old habits to a new technology. Technology is just one of several enablers that include data, people, process, skills, and culture. SaaS cloud-based solutions, that support an agile approach, are becoming the standard for most parts of the stack.

Many organizations anchor their marketing stack on a main cloud suite and augment it (via buy or build) with additional components to support specific functions based on business context and priorities. While there are many marketing automation, content management, and channel delivery options available that perform well when configured correctly, one of the most difficult decisions is how to set up the analytics engine. Given the value of optimizing the “brain” of the marketing tech stack, instead of opting for a “black box” engine that can be quickly deployed but is more difficult to optimize, large organizations find it worthwhile to build or buy a set of solutions that gives them control over the inputs to the analytics engine. This does not mean that they must invent the algorithm frameworks from scratch (open-source libraries for most of these frameworks are readily available), but it does mean that they must design the analytics engine, so they can customize the algorithms, data features, and business rules. 


Concept Courtesy: The Boston Consulting Group


Monday, June 11, 2018

Genius ≠ Great Leadership?


Image result for why genius and great leadership don't go together


Intelligence Quotient (IQ) is one of the most hyped characteristics while determining the potential effectiveness of an individual. Fanciful figures of 175 or more are associated with certain categories of people – Nobel laureates, chess prodigies, and corporate titans – among others.

The truth is quite different. The “average” IQ is supposed to be 100 and a score of 120 is considered adequate for success in any field. Strangely, there is a consensus among experts that beyond a certain level, IQ by itself means nothing although the level is not fixed.
Now, Emotional Intelligence (EI) guru Daniel Goleman argues that while there is a correlation between intelligence and leadership performance for leaders up to an IQ of around 120, there is none for an IQ above 120 – what is more, there is a negative impact on leadership effectiveness for an IQ above 128!

This surprising research finding from the University of Lausanne surmises that the super-high-IQ leaders may not know how to tune into how other people think about a given issue or challenge. For example, they couch what remarks they think are motivating in ways that people cannot understand, let alone find resonating.

Consider this example:

Jimmy Cayne, the CEO of Bear Stearns when it imploded in 2008 triggering the financial crisis, is a genius. Yet, when the company was falling apart, he was incommunicado – playing at a bridge tournament. How do you explain this? Even more baffling is his reaction to the New York Fed’s refusal to give him a new line of credit (since I cannot reproduce the language used here, please read William Cohan’s verbatim account in the book House of Cards).

Consider why Kodak, the pioneer in photography, could not make the transition to digital in time?

Consider Sears, Blackberry, Nokia, and Kmart – companies that at one time were trailblazers and still managed to fail spectacularly. 

Goleman calls the missing skill set adaptability. Organizations need the ambidexterity to explore new opportunities while exploiting what is already working for them

Why do “geniusleaders fail this test?

The answer can be found in cognitive neuroscience – the brain’s super highway between the prefrontal cortex and the amygdala – the interaction between the executive center and the emotional circuitry for rising to an emergency. To the brain’s danger radar, any change appears to be a threat, and the circuitry propels us into a state of action, anger, panic, or over-reaction.

Neuroscience defines “resilience” as the time it takes to recover from the emergency arousal to a state of calm and clarity. When we are in high alert, our responses are rigid. As we recover, we can be more flexible in our thinking. All of which is exactly what makes adaptability so critical in dealing with today’s state of perpetual change. 

At a meeting of 100 CEOs from different sectors, the sole point of consensus was that the issue was a people problem

We need leaders who can embrace change, not resist it

The next time you think a brilliant leader is what you need, think again.

Look for someone who can adapt – quickly.

As Goleman observes, genius and great leadership may not be compatible after all.

Sunday, June 10, 2018

Complicatedness and Firm Performance

Image result for Complicatedness and firm performance Boston Consulting Group

Nobel laureate Paul Krugman wrote in The Age of Diminished Expectations that “a country’s ability to improve its standard of living depends almost entirely on its ability to raise its output per worker.”

At the peak of its economic prosperity, Japan had the highest human productivity in the world. Today it is in the 7th position – even though the average Japanese works 80 hours a week and 100 hours a week is not uncommon. Japan ranks at the bottom among countries on the vacation dimension. Unfortunately, there is no relationship between hours worked and performance. In a desperate attempt to encourage people to spend a little time away from work, Japan introduced a “Friday Premium” program under which employees were required to leave their workplace at 3 PM on the last Friday of every month. The result? Nothing. In a culture that places the welfare of the group far ahead of the individual, no one wanted to be the first to leave. 

Contrast this with countries that literally force people to work no more than 30 – 35 hours a week. Has anything changed in these countries? Nothing, again.

If you are wondering why we see so much of chaos and confusion around us today (despite Professor Steven Pinker’s argument to the contrary) the answer appears to be “complicatedness” – a term coined by the Boston Consulting Group. Complicatedness refers to the increase in organizational structures, processes, decision rights, metrics, score cards, and committees that organizations impose to manage the escalating complexity of their external business environment.

Most organizations react to the complexity in the external environment by increasing the complexity within the organization. A simple product quality problem can easily be morphed into the addition of a separate quality function, more rules, standardization, and governance mechanisms that ensure no decision is ever made on time.

The reality is of course that simplicity invariably wins. The “less complicated” organizations achieve revenue growth and profit margins that are above industry average and far above their “complicated peers.” Complicatedness hampers growth by slowing innovation and the deployment of new products and services. Complicatedness also cuts margins by injecting inefficiency and costs into operations.

Complicatedness Characteristics:

1.    Company size has no relationship with complicatedness. The smallest companies can be as complex as large organizations if the systems, cultures, and processes come in the way of agility and flexibility.

2.    Complicatedness varies with industry. Highly regulated industries (health care) tend to be more complicated than less regulated industries (technology).

3.    Most surprisingly, the perception of complicatedness is directly related to the level of managerial responsibility. Employees with no managerial responsibility have a 70% higher score on complicatedness than that of the board of directors. 

Image result for Complicatedness and firm performance Boston Consulting Group

I urge you to allow that last strand to sink in for a moment. What the research is pointing out is that leadership and complicatedness go hand in hand. Leaders typically don’t need to live by the many rules and procedures they create and instead can work outside the systems that apply to their employees. Many leaders believe they are very good at reducing complicatedness. 

Simplify:

The obvious answer to reducing complicatedness and improving firm performance is to simplify all processes at all levels. A four-step solution is suggested:

1   Identify perceptions of complicatedness at all levels through a fair and transparent process.

2   Diagnose the root causes of complicatedness and unproductive behavior.

3    Design pilot solutions that simplify processes and are perceived to be simpler and better by employees.

4.    Implement the solution throughout the organization.

Remember: “Progress is our ability to complicate the simple. Genius is our ability to simplify the complex.”

For more on complicatedness and to take the complicatedness survey, please visit the Boston Consulting Group’s Website and read the latest “perspectives” column.