The discussion of Bain Capital provides an interesting backdrop to the first topic for this course. Bain Capital (2012) began in 1984 as the investment arm of management consulting firm Bain & Company. In 1984, I completed my MBA studies at Rutgers University’s Graduate School of Management and joined a management consulting firm to help that firm, not Bain, transition from their traditional expertise of scientific management and productivity improvement to process and quality improvement based on the principles of Deming, Juran, and numerous disciples. Consulting firms and their clients interested in improving operational and financial performance had one primary tool in their toolkit, productivity improvement leading to staff layoffs of, typically, 20-30%.
It seems easy to complain about companies buying companies or parts of companies and then reducing costs, often through labor reductions, in order to realize a profit on their investments. Investment firms have an obligation to their investors to produce a positive return on their investments. For many of the firms that Bain and others purchased, the alternative was closure; companies like Bain may not have been able to save every job but some organizations were able to survive as the result of significant changes in operations. In some cases, however, the seller to the investment firm made out much better than the investment firm or the purchased company’s employees.
The Context
The client was, and is, a major global telecommunications company who had recently received a new strategic plan from a major global strategic planning consulting firm.
The Problem
Internal efforts to implement a new organizational structure and strategy failed. Adoption by dozens of domestic field offices had no traction and did not produce the increased focus on acquisition and retention of customers. The fundamental strategy called for the client to shift from a geographical orientation to a customer-centered focus, resulting in acceleration of new account acquisition (‘new logos’) and retention and growth within established accounts. Improving customer service relied on changing mindsets of the sales organization and the field service team with enhanced alignment of the sales and service elements in each branch.
Simply having a new strategy did not yield increased sales productivity and revenue or service level gains desired by the client and anticipated by the strategy consulting firm.
The Solution
The consulting team used representative locations to identify existing technology, sales and service processes and organizaation, and management techniques. The team developed consensus on best practice business processes among the representative locations, created and implemented new management techniques and reward andrecognition tools, and developed training materials to support standardized processes and terminology and the new business model.
The Results
Across two years following the initiation of the strategic plan implementation, the client reported the following results:
- Initial meetings with prospective new accounts, 36% increase;
eProcesses Consulting helps clients implement strategic change. Since my start as a consultant in 1983, and full time since 1985, I have seen a range of approaches used by consulting firms to begin a client relationship. I have seen firms that basically had one tool or solution set and sold that tool as the appropriate solution for a client, even when it was not. As a Certified Management Consultant (CMC), I comply with the Code of Ethics of the Institute of Management Consultants (USA), which states that I will only recommend solutions appropriate to the needs of my clients. So, how does eProcesses Consulting determine a client’s needs?
The simple way for eProcesses Consulting to determine a client’s needs is for the client to tell us. Client disclosure has risks and benefits. The benefit is the saving of time and the client has emotional ownership of the scope of a potential consulting project. The risk is that the client’s perceived need may not address the root problems and opportunities.
Generically, an eProcesses consulting relationship, strategic change implementation, begins with what many firms call the analysis, assessment, or discovery phase. Having participated in many of these, the deliverable most firms leave with the client is a list of findings with a proposal to fix some of the identified deficiencies. The eProcesses approach is different from most. Because eProcesses wants to leave the client with something of enduring value that, candidly, we hope will set the stage for a longer term client relationship, we call the initial phase the Preparation phase and we expect to leave you with three valuable deliverables beyond a “to do” list and a proposal.
It was not too long ago that the sales force had the information advantage over the customer or prospect. In today’s marketplace, business or consumer, the information advantage has largely disappeared. Fueled by the explosion of the Internet, today’s information-affluent would-be customers demand ready answers. They expect your sales professional to have answers to ever-more-detailed questions. And they have access to information prior to, after, and even during the sales call to verify many of the answers they receive.
Today’s customer is increasingly expecting today’s sales professional to have done their homework to a degree that allows the sales professional to have some increasingly specific reasons for the sales call. And, if your sales professionals haven’t done their homework, their counterparts with the competition have.
Competitors are invading every market from every angle. Technology has made starting a company to compete with yours a virtual overnight reality. Bricks and mortar and inventory are no longer required to enter your marketplace. As a result, the face of your marketplace is changing quickly, dramatically for competitors as well as customers. Increasingly, your sales professional needs ready access to information, about your products and your customers to meet the needs, the demands of the marketplace.
Customers and competitors are not the only forces putting increased pressure on your sales force. Investors have growth expectations that are also conditioned by the boom in technology and the near instantaneous access to information about how your organization compares to others in the marketplace.
An ongoing study of leadership roles, practices, and behaviors explores distinctions between individuals who disclose that they personally or their companies were financially harmed in the recent economic downturn and those who indicate that they or their companies experienced no financial harm. The responses vary by country.
Economic harm seems more likely among residents of Europe and North America than in Africa, Asia, Australia, or South America. Respondents from North America to date see 70% of 280 reporting financial harm while residents of Europe to date see 58% of 36 reporting a negative financial impact from the economic downturn. Africa, Asia, Australia, and South America reported 43%, 47%, 42%, and 71% respectively. If leading during economic recovery is different from leading at other times, and residents of Europe and the Americas are more likely to have experienced economic trauma than residents in the rest of the world, then we might expect leadership in Europe and the Americas to look differently than leadership elsewhere as the economic recovery proceeds.
Two somewhat universal themes emerge from research and experience. The first theme is that leaders rise to the surface. People display leadership that is disconnected to the position that they hold. When looking for leaders in organizations, we should not limit our search to people in somewhat traditional positions of leadership. It may be that future holders of positions of leadership come out of the ranks of leaders whose leadership is unrelated to their position. At the moment, these leaders have followers and these followers, rather than organizations or communities, give them power or authority based on the value that they bring.
Goals and Barriers – An Overview
A critical first step in achievement of superior organizational and individual performance is the determination of short-term organization-wide goals. This is a matter of defining the macro level expectations of the organization. Once the necessary direction for the organization has been determined, that direction can be translated down through the organization so that all departments and individuals are committed to working toward achievement of the overall goals. In order to do this, each department must have its own set of goals that support the goals of each piece of the company above it in the organizational structure.
In the process of “translating” organization-wide goals to departments and individuals, barriers will surface. These barriers become not an excuse but a roadmap by which the organization can achieve its goals.
The key to using identified barriers to reach organizational goals is to create prioritized action plans for the removal of those barriers. This avoids the phenomenon of employees feeling that they are removing barriers for the sake of removing barriers. The motivation is clear when there is a logical connection established between the barrier and an acknowledged organization-wide goal.
Organizational Alignment eProcesses begins to understand the level of organizational alignment with respect to a set of goals during the Initial Evaluation stage. During this stage, eProcesses starts with identification of the organization-wide set of goals. Our efforts toward improved alignment continue throughout the relationship between client and consultant.
Companies give a wide range of reasons for investing in technology: improve quality, reduce costs, shorten lead times, improve consistency, and improve communication are a few common ones.
Each of these reasons, and most of the other reasons that could be offered, have an explicit or implicit basis for the technology purchase decision. And, behind each of these decisions, is explicit and implicit integration of the new technology with the company’s people and processes.
This integration does not happen spontaneously. Quite to the contrary, effective integration of technology, processes, and people requires implementation experience, focus, and support at the highest levels of the company. High level support is required because the introduction of new technology changes processes and behaviors. Behavioral change does not come easily. It often meets with significant resistance. The nature of many organizations is such that resistance to change often receives high-level support itself. Without top-level support for the change initiative, the required behavioral change may not happen.
The most frequent process-related challenge is the failure to consider the impact of the new technology on specific processes. Sometimes this failure occurs because some processes are overlooked in the implementation planning process. The more common scenario, however, is that companies, even successful ones, don’t take the time to understand their processes.
ROI, Not a Model, a Process At eProcesses we see most Cost Justifications and or Return on Investment documents for technology investments following the normal Rate of Return, Payback Period, Net Present Value, etc. model. Though sound from a financial point of view, there are underlying elements that are overlooked when it comes to new technology.
The chart represents a process where Corporate Strategies/Goals are the starting point for financial analysis. The process then moves to the departments/business units that are going to be involved in the new technology. The departments define their ‘Functional Objectives’ with the new technology and, therefore, capture the motivation for the investment and the business objectives that are to be achieved. These objectives and motives have value and provide direction for the ensuing project. It is up to the project team to quantify the value and include it in the ROI calculation. All of this is then moved to initial starting point of the technology project.
Integration of Business Processes and Human Behaviors with Technology To truly achieve the full benefit of your technology investment, eProcesses suggests there is another element to consider. eProcesses observes that companies usually invest in technology to achieve greater value from their Human Resources. But we rarely encounter companies who make the other investment that is required to realize the benefits, the real integration of the new technology into the processes and behaviors of the organization. The ROI that convinced you to invest in hardware or software throughout the company had an underlying assumption that you would change the way you do business. At eProcesses we help you change the way you do business. We help you realize the ROI you initially expected when you invested in the technology.
Technical vs. Process vs. People Integration Integration is a term that is commonly used, frequently without agreement as to definition. A dictionary definition of “integration” would say “the act of forming, coordinating, or blending into a functioning or unified whole.” It is commonly used, especially in association with technology, purely from the perspective of systems integration. In practice, however, even systems integration involves much more than integrating systems.
At eProcesses, when we speak of integration we speak of technical or systems integration but extend systems to include not only technology but business processes and people and their behavior. We believe that a company cannot realize the full value of its investment in technology, in business processes, or in people unless all three are integrated into a effective, efficient, well-tuned whole.
Technical Integration and ECR New technology is a common path that companies take to improve organizational performance. Rarely will a company make an investment in technology without the expectation of an appropriate return on investment. Companies understand that new tools or technologies may be required to improve the capabilities of their workforces and to improve the capacity of the organization. Technology is seen as a way to improve the efficiency of the workforce or the throughput of a plant or the service level that can be provided.
I encourage leaders and people who think about what it means to be a leader during the current challenging times to complete the following survey. It is long; it may, however, provide useful insight into the roles, pracitces, and behaviors of leaders as we begin the second decade of the 21st century.
Thank you in advance for your participation in this current research of mine.
- Bain Capital and 1980s-vintage Management Consulting John Bryan
- Telecommunications Sales Force Reorganization John Bryan
- What and What if? The start of a typical eProcesses client relationship John Bryan
- Selling in Business Markets and Sales Force Improvement John Bryan
- Leading in the Economic Recovery John Bryan
