Category Archives: Business Development

“How do I become a business strategist?”

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I was recently asked for some career advice, specifically on how to move from a technical role to a more business strategy role, within a corporate environment. Like a lot of the questions I receive regarding career development (especially on LinkedIn….), the initial question was quite broad, a little bit vague, so I needed to frame it before responding.

At the outset, I should stress that I am neither a qualified career counselor (although I have done some related coaching work), nor an organisational behaviorist/industrial psychologist (but I have some formal experience of using personality profiling tools, and trained as a counselor very early in my career). Plus I have had a varied career path and some in-depth corporate experience to draw on!

I have never worked in a full-time Business Strategy role – rather, Business Strategy has been integral to the whole of my corporate and consulting career, whether I have been working in product management, market expansion, business development or start-up roles. So while Business Strategy can be defined (and practiced) as a specific discipline, from my experience it’s just another management component or business tool everyone needs to understand and apply, especially on a practical level.

First, my exposure to business strategy really began when I was in a product management role. So I it was part technical (requiring some formal qualification and subject matter expertise), part production (understanding the design and manufacturing processes), part strategic (managing the commercial, financial and market dynamics). That framework continues to inform my approach to business strategy, even in my consulting work – and helps in understanding my clients’ business.

Second, business and management tools come and go; some are mere passing fads, others are the result of changing technology or market conditions – so there is little point in trying to grapple with each and every one, or whatever happens to be in current fashion. Rather, I believe that we should each identify some core models and frameworks that work for us, which can also be adapted to different situations either organically or by analogy. For example, even the over-used Johari window and SWOT analysis can be useful techniques for mapping out markets, customer segments, or growth options. And having some basic accounting, legal and risk management ability is really useful!

Third, a key personal skill is being curious, and remaining open to possibilities. Simply asking the right questions (Q “Why do we do it this way?” A “Because we’ve always done it this way”) can uncover opportunities for improvement or alternative solutions. Without being a perpetual rebel, it is possible to constructively challenge the status quo, to find ways to do things better, more efficiently, more ethically, more environmentally friendly etc.

Fourth, if there was one thing I had understood better before entering the corporate world and management roles, it is the function of teams, the role of team dynamics, and the importance of open communications, pro-active stakeholder engagement, and bringing people on the journey with you. Never underestimate how stubborn, stupid, wilful or malicious some people can be – but often, they are acting out of a position of fear, ignorance or weakness. It’s rarely personal (it’s just business, right?), but it can feel that way. So, whether you are managing up, down or sideways, be prepared to overcome objections, present solutions (not just problems), and get buy-in early on. Making the team collectively and individually responsible for decisions means that they are personally invested in the outcomes. It’s also a way of empowering people.

Fifth, this leads me to the whole issue of decision-making. Companies will always make some poor decisions – but worse is sub-optimal decision-making. Partly this comes from not having appropriate systems and oversight (proper matrix processes, clearly delegated authorities, well-defined mandates, strong governance frameworks, transparent and accessible policies, and documented audit trails, etc). Partly this is a lack of cognitive skills (empathy, self-awareness, communication). And partly it is an absence of informed decision-making (e.g., understanding any inter-dependencies), and the misalignment of goals and incentives.

As a follow-up question, I was asked about some of the tools I have found useful for being successful in my strategy roles. Personally, I think the jury is still out on the value of an MBA vs gaining hands-on experience, or learning as you grow into a role. MBAs have their place, but they are not the Be all and End all of a corporate career.

I’ve also been dipping into a few of the “leading” business text books of their day, that were recommended to me over the past 15-20 years or so (Blue Ocean Strategy, the Long Tail of markets, defining Metanational companies, etc.). While they all provide some insights, and even some practical examples, they feel very dated in terms of current technology, business models, and market environment. Hence my comment above on passing fads…

Even though I worked for major multinationals for over 20 years, I think I’ve learned a lot more from working with and for startups and entrepreneurs over the past 10 years – and to me, that’s where a lot of the more interesting stuff is happening, notwithstanding the challenges of founding a new business. But I realize it’s not for everyone as a career choice.

Finally, no doubt there will be huge lessons for business and corporate strategy as we come out of lock down and it’s how we apply those lessons that will determine the next generation of success stories.

Next week: “There’s a gap in the market, but is there a market in the gap?”

 

Gigster is coming to town….

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Melbourne’s Work Club recently hosted Gigster Senior Project Engineer, Catherine Waggoner, in conversation with Venture-Store’s George Tomeski. Part of Startup Victoria‘s Fireside Chats, it likely herald’s Gigster opening an office in Melbourne, to service local clients and to tap into the local developer community.

gigsterFor the uninitiated, Gigster describes itself as the “world’s engineering firm”, that helps clients scope, design and build software, apps and digital products. Using an established product development methodology, and drawing on the resources of a 1,000 strong network of freelance designers, developers and product managers, Gigster is taking much of the pain out of the costing and requirements process for new projects, as well as building a growing client base of enterprise customers.

Not mincing her words, Ms Waggoner opened her remarks by commenting, “The software development industry model is f*#$ed”, because:

  • Requirements are poorly defined
  • Scoping is laborious
  • Development costs blow out, and
  • The whole process is not very transparent and not very accessible.

As a case in point, she mentioned the significant cost disparity between what some digital design agencies or app studios might quote for building an iOS product compared to what Gigster would estimate. By: breaking projects down into the distinct stages of scoping, design and pre- and post-MVP; only engaging the “best of the best talent”; using proprietary tools both to estimate fixed rate costs (rather than billable hours) and to define and source solutions; and re-using content from a library of “Community Software” resources, Gigster is able to deliver quality projects in shorter time, and on more modest budgets. For example, based on the large number of projects that they have fulfilled, their “Gigulator” estimating tool incorporates 5,000 possible features.

From an investor perspective, Mr Tomeski mentioned that the “VC inflexion point is getting much earlier” in tech startups. Meaning, with lower development costs (and potentially, reduced valuation multiples), investors are looking to get in sooner, with lower exposure, but still generate reasonable returns on exit, thanks to cheaper establishment costs.

Of course, Gigster sits at the heart of the gig economy, a huge issue when it comes to discussing the Future of Work. Interestingly, many of Gigster’s contractors are themselves startup founders, who freelance while building their own businesses. But such is the strength of the network, something like 35%–40% of their contractors work full-time for Gigster – they like the flexibility combined with the continuity. Many of the contractors are referrals from existing team members, and a number of teams (known at Gigster as “houses” – presumably a frat thing?) have bonded to such an extent that they get allocated specific projects to work on together, even though they themselves may be working in different locations, based on previous projects.

Working for Gigster is probably a career choice for some contractors, because there is a variety of projects to work on, and the opportunity to be involved from start to finish. Which may be the opposite if working in a more corporate or enterprise environment, where work may be routine, repetitive and reasonably narrow in scope.

If Gigster does decide to set up shop in Melbourne (with encouragement from
InvestVictoria) they will be joining the likes of Slack, Stripe and Square, tempted by financial and other incentives. Such a move may challenge a number of local digital agencies, who will face even more competition for talent and customers.

According to Ms Waggoner, enterprise clients represent 40% of the business, and should comprise 60%-80% very soon. Not only that, but the average deal was initially $15k, now it’s more like $100k. However, enterprise clients have a much longer sales cycle. Plus, many innovation teams within enterprises are more like loosely formed groups of niche experts, so they need training on how to think like a startup. When you consider the greater dependency on legacy software by corporate clients (where it may make financial sense to retire some assets and build afresh, but the emotional disruption can be huge…), combined with the greater emphasis placed on after-sales service, Gigster has had to adapt its business model accordingly.

But Gigster must be doing something right. They’ve stopped outbound marketing and prospecting, relying on in-bound leads, repeat business and client referrals. There has been a shift from a sales focus to a customer focus, complete with a dedicated customer success team.

A number of audience questions related to getting VCs interested in your idea: What do they look for? How do they assess opportunities? How far should you go in building a product before you can attract funding? What’s the best way to validate an idea? etc. Much of this is about product/market fit, building the right team, getting customer traction, and executing on your strategy (aka Product Development 101.) As part of her closing comments, Ms Waggoner noted that unlike some of the high-profile VC funds (e.g, Y-Combinator, Techstars and 500 Startups) many VCs are becoming more sector specific, because they prefer to invest in what they know and understand.

Next week: Building a Global/Local Platform with Etsy

Why The Service Sector Lacks Self-Awareness

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If you did a root cause analysis of companies that rate poorly for customer service, I predict it would reveal one or more of the following:

  • Outdated processes
  • Inadequate staff training
  • Poor product knowledge
  • Operational silos

What it usually comes down to is a chronic lack of self-awareness. (This is not helped if there is a failure of leadership, or a toxic culture within the organisation.) Despite all the customer feedback forms, platitudes such as “your call is important to us”, and the regular customer advocacy reports, unless service providers can truly put themselves in the shoes of their customers, they will never have sufficient knowledge or self-awareness with which to fully evaluate the “customer experience”.

Image: Customer Feedback Device (Source: Smarte Carte)

Image: Customer Feedback Device (Source: Smarte Carte)

Today’s customers are more knowledgable (because they have access to more information, they can shop around, and in some cases, they have more choice). Today’s customers are also actively encouraged to engage with corporate social media (by following, liking and sharing, and by becoming surrogate brand advocates). However, the increased levels of expectation that this “engagement” creates are not always matched by the post-sales customer experience.

I have written before about how companies can improve their customer service, using a practical 7-point scheme. I would challenge any organisation that rates itself highly for customer service, to assess its performance against those criteria, as well using the ubiquitous customer satisfaction scores (CSAT, NPS®, CES, etc.).

Nearly every time I have an interaction with a telco, utility, bank or other service provider, I receive an immediate follow-up customer feedback request. Once upon a time, I would have been quite willing to provide constructive feedback, as I used to believe that it was important for the voice of the customer to be heard. Nowadays, I am more hesitant, because I don’t believe this feedback is ever properly acknowledged, analyzed or acted upon.

So many of these feedback request forms are self-serving, because the person you dealt with is in effect soliciting personal feedback on their individual performance. And while that is important, it is rarely done in the specific context of the customer’s own experience, and is more concerned with the company’s internal policies and procedures.

I am also increasingly sceptical about feedback processes that are ostensibly used for staff training. First, time is valuable, so it would be nice if companies could reward their customers for making the effort to engage. Second, on the rare occasions where a company has contacted me in response to a complaint submitted online or via a feedback form, I never learn what specific steps the company is taking to rectify problems caused by operational or policy failings. Thirdly, why should I be responsible for telling you how to train your staff or improve your service – surely that’s your job!

In many cases, it is not the performance of an individual customer service representative that is the problem. More likely, it’s poor customer service training, inadequate product knowledge or a myopic perspective, reinforced by silo operations. When even the most pleasant and competent service rep tells me, “I’m sorry, but it’s the way the system is designed…”, they probably don’t realize what a disservice they are doing: a “system” is only as good as the people who design it, and the people who implement it. So, they are in effect criticising their own colleagues, and the organisation they work for.

This lack of self-awareness by customer service staff is reinforced by the limited discretion in trying to resolve customer problems. Along with the use of internal jargon and bewildering acronyms, there is nothing worse than having to complain long or loud enough in order to escalate a problem. It would be wonderful if companies could empower their staff by giving them (well-defined) individual discretion on problem solving, and incentivize them for taking responsibility for the end-to-end resolution process.

In addition, it’s really infuriating being handed from one specialist, team or department to another, especially due to labyrinthine help line service menus. Telco on-boarding processes are particularly notorious for having complex operational procedures, multiple hand-offs and ring-fenced communications. I recall one large service provider who told me that in-bound call-centre staff were unable to speak directly to their own web support teams, and even if they communicated via internal e-mail, they could not guarantee a response.

If I am beginning to sound a bit like a broken record, it’s because recent experiences only reinforce my belief that many companies still don’t understand what it’s like to be one of their customers. But there’s a huge paradox here: on the one hand, companies are trying to reduce customer churn, increase “stickiness”, and improve the share of wallet or lifetime customer value; on the other, the cost of new customer acquisition appears to be cheaper (thanks to social media tools and web analytics), so it doesn’t matter if they lose a few customers, because it’s not that difficult or expensive to find new ones.

If it’s no longer true that “the customer is always right”, because profit margins are being squeezed and companies are being told to “stop delighting your customers”, then service providers have to do a much better job of managing customer expectations. They also need to demonstrate genuine empathy and concern if things go wrong (which is difficult if they don’t have sufficient self-awareness). And if things do go wrong, they need to ask the customer “what could we have done differently to provide you with better customer service?”.

In my professional experience of product management and business development, understanding customer needs and identifying ways to improve service delivery (along with customer-centric perspectives rather than product-led processes), are genuine sources of competitive advantage. But it takes considerable self-awareness to engage customers beyond the level of a single transaction, to develop genuine rapport, and to build sustainable long-term relationships. If your organisation is challenged by poor customer service, and if you recognise this is in part due to a lack of self-awareness, please get in touch – I’d be very interested to understand your problem.

Next week: Idea over Form – Gehry vs Ando

Getting Stuck – and how to deal with it

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We’ve all witnessed (or even experienced) those moments when a speaker or presenter gets stuck. They stumble over their material, they offer an inappropriate response to a tricky question, or they simply go off topic and stray into verbal quicksand. And although they realise they are in difficulty, they carry on regardless, only to wade deeper and deeper into the mire. Some of our current political leaders know exactly how that feels…

Photo by Mark Roy - Licensed under Creative Commons

Photo by Mark Roy – Licensed under Creative Commons

In my experience, many small business owners do the same thing when they get stuck. They carry on doing the same as they’ve always done, even though they know they need to change course, take another approach, or try a different tactic. Which is where someone like me comes to the rescue. As a consultant, I can bring an objective, external and independent perspective that can help clients navigate away from the problem, and steer them back onto the right track.

The Inflexion Point

The typical scenario is that the business is faltering. Most often it’s about sales and business development – either not enough new customers, or too few of the “right” customers (and too many of the “wrong” ones). Sometimes it’s about an aspect of their strategy that isn’t working. It could be a problem with their operations, such as workflow, resourcing or IT systems. Or it might be that they have lost their way and are facing some sort of external challenge. Or maybe there is a disconnect between the products and services that they offer, and what their customers actually need. Or it could be a need to recast their financial information to get a better idea of how the business is really tracking.

Whatever the issue, the common feature is a point of inflexion – the business is either stuck, has hit a plateau, or come to a fork in the road.

So, how do they get help?

The 3-Step Recovery Program

First, the client has to realise that doing the same thing won’t work, doing nothing is not an option, and they have to be open to the idea of change. They recognise that bringing in some external help will relieve the log jam (even though at this stage, they don’t know what form that help will take, or where it will come from).

Second, they do some basic research, or get a referral from their networks, on where they can get help. Much of my work comes via word-of-mouth and personal contacts, and in large part this is due to the need for trust in any consulting relationship. Sometimes, a prospective client has liked something they read in my blog, or heard something in our conversation that has clicked with their own needs. There has to be a connection or match with what the business needs, and what someone like me can offer. It’s a bit like finding a GP, financial planner or personal trainer – there has to be a fit.

Third, they are able to define a specific problem that needs addressing, or at least prioritize the issues. This requires some reflection, self-awareness, and willingness to have their assumptions challenged. There is a need for honesty, and even vulnerability, if the intervention is going to succeed.

Helping clients get back on track

I will say upfront that my services are not suited to everyone. If your business is running like a well-oiled machine, I probably can’t add much value, unless you are looking to improve an area of your operations, or embark on a new initiative where you need help in getting it off the ground. Alternatively, I may be able to help if you simply want to tap into some external perspectives to challenge your current thinking, or if you require some specific expertise that draws on my knowledge and experience. Otherwise, my role is to help clients get free of what is bogging them down.

One of my clients recently said that working with me felt like “keyhole” surgery, rather than undergoing open heart surgery. I think I know what he means, and that he meant it as a compliment….. In my experience tackling “the whole” is not always practical. Rather, zooming in on a particular aspect of the business allows for incremental change, that if applied appropriately, can have a multiplier effect. Such an approach is hopefully less disruptive, and therefore less threatening, to the existing business.

As part of my consulting work, I tend to break the business down into its component parts, look at the business model, review the revenue streams, and analyse the workflow, both internal operations and customer-facing services. For example, clients often have a slightly misplaced perception of where/how they add customer value – so, if they spend a lot of time on a particular task or activity, they naturally assume that this should form the greater part of what their customers pay for. Whereas in reality, the customers may value something else the business does, but the business has not realised that value.

It’s always important to encourage clients to develop an action plan, with specific goals, responsibilities and timelines. I’m not talking about a 50-page business plan, but a more manageable working document for the next 6, 12 or 18 months (depending on their circumstances). A key outcome of this is a list of priorities, plus agreement on which activities to wind-down or discontinue. Despite limited resources, businesses often make the mistake of trying to continue doing everything they’ve always done, plus all the new stuff – the law of physics suggests that something has to give, so they need to stop doing things that are no longer relevant, or are no longer working.

Making a Difference

When it comes to more direct business coaching, I know from the client feedback I receive that the insights I offer and the way I reframe their situation are as valuable as a re-engineered business plan. By analysing the problem, taking it apart and putting it back together again, it allows me to share my observations and offer fresh thinking – which is sometimes all the client may need to get back on track.

If you feel your own business could use some external assistance in getting back on track, or if you think you may be stuck as to what to do next, please get in touch via this blog.

Next week: The David and Goliath of #Startup #Pitching