All businesses must manage competing priorities and limited resources when determining how to develop and deploy new solutions to remain relevant in the market. As businesses grow and build out new offers, it’s imperative to formalize a process to evaluate, consolidate, and align new topics to the organizational strategy. This blog walks through the Growth Initiative Cycle, a deliberate process to facilitate decision-making and help organizations ensure they are investing resources in areas where they will make the greatest impact.

 

 

Step 1: Idea Identification:
The first step of the process is to bring some ideas to the table.

Ideas should flow from different levels of the organization on two timeframes.

1. Ideas can be presented on a regular cadence (e.g., quarterly) to create a predictable structure for continuous growth and improvement.
2. Ideas can be presented opportunistically, based on the demands and circumstances of the market. If a great idea for a new offer pops up, it can be entered into the Growth Initiative Cycle ad hoc so the organization doesn’t miss the window of opportunity.

Step 2: Idea Preparation and Analysis:

Idea sponsors present a business case around each idea, detailing the financial and strategic implications of investing in the solution.

Once an Idea is initially vetted, the Sponsor of the idea (either the individual who proposed it or a leader representing the individual’s Idea) builds a business case for it, detailing the:

• ROI – what’s the NPV of the opportunity?
• Strategic Importance Estimation – how strategically important is this Idea to the business’s portfolio?
• Time to Market Impact – how long will it take to get the solution up and running?
• Difficulty Estimation – how much effort is required to take the solution from conception to execution?

Step 3: Idea Evaluation and Prioritization

In the Idea Evaluation and Prioritization phase, the Growth Board vets the solutions and weighs them against one another to determine which ones will progress to development.

Once Ideas are formalized and analyzed through the business case, they are vetted and reviewed by the Growth Board. The role of the Growth Board is to weigh each solution for approval/investment after a formal presentation and discussion. The Growth Board prioritizes which solutions should be pursued by comparing them across a handful of criteria including: risk, speed to impact, strategic role (offensive vs. defensive), alignment to strategic direction, etc.  These criteria should be agreed upon in advance and weighted based on their relative importance to each other – for example, if limiting risk is part of the corporate culture, something with a low investment risk may win-out over all other options.

Step 4: Solution Development and Execution  

Solution development is planned and the requirements and detailed timeline are defined.

At this stage, the development for the approved solutions requires planning and enablement. This starts with high-level phased planning, including stages of operationalization and funding.

This phase entails building an Enablement and Execution Plan, which typically includes the following:

• Detailed timeline of activities
• Ownership of each activity and who will be involved at each level
• Talent requirements
• Steps to acquire or move talent internally
• Capability requirements
• Steps to acquire or move capabilities to needed areas in the business
• Training requirements
• Determining gaps and pressure testing the plan
• Sales models and GTM models for the Solution
• Budgeting for each activity
• KPIs and tracking metrics

With the development plans in place, the organization can move into the final step of the process.

Step 5: Progress Monitoring & Reevaluation

Solution reviews are implemented to ensure that solution development and roll-out are on-track.

Finally, each solution should be tracked to determine the success relative to the expectations determined during the previous phases.  Incorporating review checkpoints into the cycle is critical to serve as both 1) “off-ramps” if an investment is not living up to expectations and there are opportunities to change paths or “get out”, and 2) input into refining the evaluation process moving forward.  The progress of each ongoing initiative should be openly discussed with the Growth Board and other key stakeholders on a regular basis. A way to manage this is through quarterly reviews with the Growth Board and monthly reviews with the business units and leaders responsible for implementation.

This continuous Growth Initiative Cycle protects the business’s time, energy, and resources for the initiatives that matter most. Successful implementation leads to meaningful solutions that respond to market needs and are aligned with the organizational strategy and portfolio.

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Written by: Sarah Cushman

About the Author:

Sarah Cushman is a Senior Consultant with McMann & Ransford and has experience working with Fortune 500 companies to solve complex challenges, drive differentiation, and create long-term value.

Part 2 – Feedback Unlocks Understanding

In our previous blog in this series, we explored how any negative messages the talent market hears from your employees can damage your employer brand, resulting in difficulty attracting new talent. Developing an accurate understanding of your employees’ experience and addressing any issues is crucial for aligning your “true” reputation with your branding. This ultimately supports recruiting activity, as well as helps you retain the quality talent you already have.

There are many ways to develop an understanding of your employees’ experience. The approach that we have seen to be the most successful includes providing employees with the opportunity to provide feedback and using that feedback to make improvements. The benefit of collecting feedback from your employees is two-fold: 1) it provides insights into areas to focus on for improvement, and 2) it shows your team members that you value their opinion and, therefore, can actually help improve employee satisfaction.

The following methods can be used to elicit the perspectives of your team members:
• Surveys – An organization-wide Employee Feedback Survey is proven method for quickly gauging employee satisfaction and gathering data points on specific areas of opportunity. That said, response rates are often lower than desired, and feedback is typically only surface level. One thing you can do to improve the quality and quantity of responses is to allow participants to remain anonymous.

• Focus Groups – Creating focus groups with diverse participants that include representation from all the different business functions, levels, and backgrounds enables you to dig deeper into your employees’ experience. With this method, it is crucial to create an atmosphere of transparency, honestly, and impartiality as focus group members will only be truly honest about their experience if they feel safe. In addition, because participants only represent a sample size of your talent, it is important to pair focus groups with at least one other method.

• 360 Reviews – Although commonly used in many organizations for individual development, 360 Reviews are rarely utilized in aggregate to identify trends. By finding a way to keep the feedback anonymous and analyzing the collective data, you can unlock the pain points employees are confronted by within your organization.

• Team Meetings – Regularly scheduled in-person team meetings are a great opportunity to seek feedback from employees. Allocate just 15 minutes at least one a month to allow employees to speak about any roadblocks or issues they are having throughout day-to-day operations.

• Suggestion Boxes – Physical suggestion boxes have become a thing of the past, but organizations can leverage electronic means of gathering the same information. The most common method is to set up an email account that employees can use to send suggestions, which will be taken under consideration by the leadership team.

Although the methods above are immensely helpful in developing a better understanding of your employee’s experience, the key to making any of them successful is developing a feedback culture and instilling an open-door policy. In addition, to truly get an accurate picture, it helps to have an impartial party lead or support this effort to ease employees’ feelings of discomfort about sharing negative feedback upwards in their organization. That said, the most vital part of ensuring a continuous loop of quality feedback is to show your employees that they are heard by actually doing something with the feedback and making necessary changes – we will discuss this more in our next blog in this series.

In addition to collecting employee feedback, you should also be conducting research on stories in the market. This includes regularly checking online reviews posted on websites like Glassdoor and Indeed. Furthermore, keep an ear to the ground and communicate with the talent market about what candidates may be hearing about your organization and its work environment. In this case, no news is not necessarily good news and ignorance is certainly not bliss – you want to hear the positive stories about you as an employer because, if they are reaching your ears, they are reaching your potential candidates’ ears as well.

Having a baseline understanding of your reputation and your employees’ experience tells you whether your employees confirm your employer brand marketing. It also helps you pinpoint areas that may be misaligned. In our next blog in this series, we will discuss the ways to address these areas and improve employee satisfaction – therefore, allowing you to align your reputation with your branding and enhance your ability to recruit – and retain – quality talent.

 

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Written by: Jackie McMann

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About the Author: Jackie McMann is a Manager at McMann & Ransford with extensive experience working with Fortune 500 clients to transform their business models, develop differentiated portfolios, and inject best practices into professional services.

Often the road to building a new, more consultative offer or capability in a captive PS business is a significant stretch for the current business processes, methods, and frankly, the talent. Also, sometimes building a captive PS business from scratch – at least one that is to accomplish more than implementations – is a similar challenge. This blog, and those to follow, explore the idea of co-sourcing to develop a consultative business from scratch or develop consultative capabilities in a captive PS business.

What is the difference between the typical captive PS businesses and a more consultative business?

A consultative business usually solves issues more aligned with executive issues. As a result, the activities are more varied than implementation offers and managing client executives through the process is different. This requires a different set of skills and business processes.

Let me first say that this is by no means a statement or belief that the current PS people cannot perform in a more consultative business; the challenge, and the benefits of co-sourcing are about time-to-success and getting all the mechanisms in place for continued success.

What do we mean by co-sourcing?

Co-souring (in this case) means having a Partner that has the experience in building captive consultative businesses – and therefore can help build the business. Most companies aim to fully take the consulting business over at a specified time or when certain criteria have been achieved, but a few companies have the Partner continue to manage the business indefinitely.
We have found that co-sourcing in a captive PS business is a new thought, and it was originally proposed to us by an executive that hired us in four different companies helping them build the PS business. This executive came to believe it would just be faster with less trouble to have us manage the business through the build-to-success phase. Through that process we learned that there are many requirements for the more consultative business or offer, including the ability to:
1. Build Service-Chains,
2. Build Account Pathways or Journeys,
3. Hire, train, and coach consultative type resources,
4. Launch operating mechanisms,
5. Develop and stand up training programs, etc.

There are instances when developing a properly operating consultative PS offer, practice, of business calls for a faster, more predictable program than building it organically, and less risky than acquiring an existing capability. In these cases, co-sourcing (having an experienced group build, manage, staff, sell, deliver the new business, practice or offer) is an interesting and viable alternative.

A few examples of this are:
1. PS wants to add an outcome offer to its portfolio but has several challenges in becoming successful quickly enough to meet business objectives. These challenging decisions/actions could include:
a. How to build outcome-based offers,
b. Which offers should built,
c. How to price the offers, and most important
d. How to sell, deliver, and manage the client through the delivery of the offer.

2. PS is currently a hodgepodge of talent and offers and the company wants to quickly move to a best practice business.

How is co-sourcing financially managed – how does the contract work?

The pricing for this type of relationship is usually based around covering direct cost with risk sharing success payments. Risk sharing lowers upfront investment and both parties on same side of financial models. But, for any risk sharing partnership to work both organizations financial incentives must be aligned and paying success fees should be celebrated not treated like the black-death. In following blogs, I will dive into this idea more detail. You will find it takes many of the concepts we have discussed in other topics but from the point of view of having a Partner do the heavy lifting.

 

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Written by: Dean McMann

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About the Author: Dean McMann is a Founding Partner at McMann & Ransford with 35+ years of experience in consulting and professional services.  He is a sought-after expert and speaker on topics of: B2B differentiation, professional services best practices, and overcoming commoditization.  In addition to his extensive experience in the Professional Services space, Dean also serves on the board of various non-profit organizations.

Part 1 – Reputation Overrides Branding

There is no disputing the fact that an organization’s employees are key to the success of any company, regardless of the industry.  This means that attracting quality talent and branding yourself as a great employer are always high priorities.  For the majority of organizations, employer branding is looked at from a marketing perspective.  The focus is on injecting the talent market with messages and mission statements that promote your organization and its values.  This is an important part of recruiting desired talent – but if your employer branding misaligns with the story the market hears from your current and past employees, the market is inclined to believe the latter.

The unfortunate truth is that the market has become deaf to your employer branding and marketing.  Most organizations, including your competitors, are spending resources to promote themselves positively as an employer; therefore, the candidate market is so saturated with similar mission statements, organizational values, and positive messaging that candidates are inclined to seek other information to gauge whether you are the right fit for them.  In future blogs in this series, we will discuss ways to differentiate your messaging to help you stand out from the pack but, for now, let’s explore how your potential candidates may come across alternative sources of information about your organization and how those sources can convolute your employer brand.

Talent communities can often be tight-knit groups and candidates have the opportunity to learn more about you, as an employeer, in a multitude of ways, including: word of mouth, online reviews (such as Glassdoor), workplace interactions, etc.  Ultimately, it is your current and past employees’ experience that shape your employer reputation.  For example:  The demand for physicians is currently exceeding the supply, therefore health systems and hospitals are in high competition with one another to recruit quality physicians into their organizations.  Because of this, candidates are known to reach out to currently employed physicians to better understand the work environment before making a decision or accepting a job offer.  This includes anything from community networking to messaging via social media to requesting the opportunity to meet a potential peer during the recruiting process.

So, what happens when the story candidates hear from your current (or past) employees misaligns with your employer branding messages?  Well, logic tells us that when told two conflicting stories, we should believe the source that doesn’t appear to have any motive to misrepresent the reality.  Organizations do – and should – care about the public’s perception of them as an employer, therefore they do have a clear motive behind the messages they put out into the market.  Employees, on the other hand, are generally speaking from experience and are unlikely to have an ulterior motive.  Of course, there are always outliers, such as disgruntled past employees who may misrepresent their experience out of spite, but candidates may not know how to distinguish between fact and fiction.

Ultimately, it is important to keep in mind that every organization is putting out positive employer branding messages, but the top employers’ have a talent base that echoes the same sentiment.  This is exactly why employee experience needs to be viewed as key pillar of employer branding.  In future blogs in this series, we will elaborate further on the techniques to differentiate yourselves, as well as ways to better understand and improve your employees’ experience to ensure that your reputation aligns with your employer branding.

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Written by: Jackie McMann

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About the Author: Jackie McMann is a Manager at McMann & Ransford with extensive experience working with Fortune 500 clients to transform their business models, develop differentiated portfolios, and inject best practices into professional services.

As we have discussed in other blogs, Solutions are a critical element in winning in a market segment by addressing the challenges and opportunities for clients in that segment.  Building and taking solutions to market is one of the most impactful business activities – therefore, it requires a deliberate and thoughtful process to maintain momentum, utilize learning along the way, and codify the solution.

This blog introduces our five-step Solution Development process:

1. Frame the Market Idea: At this point, you have identified a challenge or opportunity in the market and have done some initial vetting internally. After receiving the green light from the Growth Board, the Idea moves into the first stage of Solution Development, where you confirm the topic’s significance in the market and conduct a high-level economic analysis of the Solution – What is the investment? What is the ROI? If agreed that the Solution is worth pursuing, it moves to the next stage…
2. Develop Solution: Developing the solution involves providing some solution detail and understanding of the investments necessary if the market buys this solution. Key outcome of this phase is to determine whether the solution is achievable (i.e. do we have capacity and capability?), impactful (i.e. are business outcomes material to both the market and our organization? Is this worth it?), and actionable (i.e. can we sell and deliver?). Additionally, it involves digging further into the financials to determine the type of investments – besides capacity – that are required if the market buys the Solution.
3. Validate Market Interest: Now, it’s time to interact with the market to validate whether buyers are willing to spend money on this Solution. You’re also testing positioning and messaging at this point to secure and close initial projects at 2-3 pilot accounts.
4. Validate Solution Applicability: Once you have accounts to work with, you can begin to deliver the “vision” of the Solution. This phase is about validating the Solution economics while ensuring that the Solution IP (new or existing) is impactful. Additionally, you are identifying the skills and capabilities necessary to be successful in the account.
5. Determine Requirements to Scale: The final phase of solution development is about validating the capability to scale and launch the solution. At this point, a decision has been made that this is a viable Solution and that the business should move forward in making it a Solution in the Portfolio and may even end up as a new line of business for you. Therefore, it’s time to assign accountability for building the business, determine how to scale the Solution, and officially launch the new Solution.

These 5 steps come together to give a holistic picture of the Solution – from a market & customer and internal & company point of view.  The coming blogs in this series will walk through the details of each of the steps to help you develop an approach to determine whether the solution is worth it, and if it is, what it will cost and the benefits it will bring.

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Written by: Sarah Cushman

About the Author:

Sarah Cushman is a Senior Consultant with McMann & Ransford and has experience working with Fortune 500 companies to solve complex challenges, drive differentiation, and create long-term value.

Anyone considering the move to Hardware as a Service (HaaS) understands the necessary transition period where they are exchanging product revenue – usually recognized immediately – to longer contract revenue – recognized over the life of the agreement. While in future blogs, we will discuss the changes that must accompany the selling and delivery of HaaS, this blog will explain how advisory services can help businesses overcome the challenge of the Fish.

Implications of the “Fish of HaaS”

Legacy companies must “swallow” the financial fish¹ as they transition to the XaaS business model. Top-line revenue shrinks as revenue from large, pay-up-front deals are replaced with incremental payment plans. Additionally, costs rise in the near-term due to the investment in new capabilities. Over time, however, top-line growth occurs, as does cost reduction due to a rise in efficiency and scale.

Overcoming the Challenge: Organizational Focus and Market Support

There is some good news for companies that feel truly dedicated to the transformation – once all the preliminary work is done – solidifying the offer, structuring to sell, and delivering on the promise of real impact for the customer – the market is very supportive of the strategy. As long as progress is being made and the company is transitioning accounts into the HaaS model, the market usually supports the effort.  Developing and maintaining this market support requires clear, ongoing communication. Additionally, the organization’s unrelenting dedication must be maintained to transition the business to the new model; if there is any wavering, the house-of-cards will come crashing down.

What can be done to improve the overall financials during this period? 

A strong critical mass Advisory (Professional Services) business focused on customer issues can drive significant revenue.  Let me be clear that this is not always the case.  If your product is very expensive, and it is the big wheel driving your financials, then leveraging advisory as the financial powerhouse is more challenging. However, in situations where services around the product are the big wheel driving the financials, advisory services can be used effectively to boost revenue and improve the financials during the transition period.

Example 1: Metals business

For example, let’s say you are a metals business and you sell to mid-stream businesses that take your raw products to created finished products that are put into cars, oil, and gas tanks.  In this case, it’d be a strong financial decision to move into a situation where you assume a greater part of your customers’ business. This might entail becoming a partner who works on the customer site and drives improved manufacturing through your economic power or your more sophisticated metal technology.  A company could leverage advisory services to transform the customer to be able to leverage the new offer. This would increase upfront investment by the customer and drive better and faster outcomes for both companies.

Example 2: Train engine manufacturer

In another example, you sell train engines, and most of your value is derived from long-term service contracts.   Your goal could be to move to contracts that pay you based on your impact on the metrics that matter to the railroads – average speed and downtime.  That aside, it would be a major undertaking for the railroad companies to embrace and leverage the new HaaS contracts.  Large Advisory contracts could be undertaken to make this a reality.

Example 3: Drug distributor/ medical device manufacturer

A final example is in Hospital industry. The product company might provide a product that gets implanted in the patient or this example applies to a drug distributor.  In both cases, much can be done to improve the efficacy of product usage. In drugs -assuring the selection of the right drug – price and efficacy can be overtaken by a vendor and in the case of hip, knee or shoulder replacements, the seller could greatly impact the diagnosis, speed to repair, and speed of recovery. In both cases, Advisory would greatly assist the Hospital in making the necessary transition to the improved new way of doing medicine.

Obviously, customers’ real issues and opportunities must be understood to make HaaS real and impactful.  But, the addition of Advisory services helps both the product company in increasing upfront revenue and the buyer in making the transition meaningful faster with less risk.

1. B. Wood and Thomas E. Lah, Technology-as-a-Service Playbook, https://www.amazon.com/Technology-as-Service-Playbook-Profitable-Subscription-ebook/dp/B01FG3TDA8.

 

 

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Written by: Dean McMann

More from this Author

About the Author: Dean McMann is a Founding Partner at McMann & Ransford with 35+ years of experience in consulting and professional services.  He is a sought-after expert and speaker on topics of: B2B differentiation, professional services best practices, and overcoming commoditization.  In addition to his extensive experience in the Professional Services space, Dean also serves on the board of various non-profit organizations.