Author: RWS Consulting

Marketing & Customer Intimacy

In the simplest sense, marketing has a direct role in market strategy, participation strategy, and enabling the success. Because of their unique role and perspective on the business, marketing owns or is heavily involved in the strategy of the business, and often drives the decision-making process of how to address commoditization issues.

In the simplest sense, marketing has a direct role in market strategy, participation strategy, and enabling the success. Because of their unique role and perspective on the business, marketing owns or is heavily involved in the strategy of the business, and often drives the decision-making process of how to address commoditization issues.

These include:
•    Expanding product lines to leverage current channels
•    Acquiring market share and thereby eliminating competitors
•    Moving to a platform offering
•    Moving to a suite of products that can be sold in a bundle format
•    Moving to the True Intimacy™ model.

All of these and other strategies make sense at different times and for different reasons and many times they need to be combined in order to deliver the transformation required. We believe that the Intimacy Engine™ should always be considered as a mechanism to change the paradigm of a business that is experiencing or will be experiencing the crushing cycle of innovation that does not yield the long term price differential needed to support the growth and profit margins of a sustainable business.

Marketing is key in assisting the organization in gaining an understanding of what’s at stake. Marketing has a future view of the business and therefore brings that to the discussion – often line executives must be immersed in the day to day do not have the time or maybe the information to question what can be different and what direction to go.

All significant product portfolio changes including the adoption of the Intimacy Engine™ require significant investment, process changes, leading new buyers, creating new messages, but the Intimacy Engine™ takes advantage of what we have today and what markets we’re in. It moves up the organization to executive buyers and provides a portfolio of things they are interested in. Furthermore, it allows the pull through of the existing products and services.

We have seen several marketing executives take the lead in getting their organizations head around the power and journey of the Intimacy Engine™.

Below are the steps used by one of our clients as they lead their company’s business model transformation.

•    Market Participation strategy
Use these questions as inputs to the process:

– Which Markets/segments must you win in to continue your growth and margin requirements?
– What markets/segments do you do you need to move into, whether to take from competitors or to leverage your product strategy
– What capabilities do you have that can be leveraged in a True Solution™?

Often, your customers think of themselves as part of a vertical business segment – pharma, food and beverage, energy etc. It is important when discussion an Intimacy Engine™ business that this perspective is used as the overriding structure.

•    Business Model development
A model can be developed to explain the investment and return rate including timing should be developed for the organization. This will most likely include a lengthy discussion of the True Intimacy business model, its components, benefits, and other unique attributes. Also, where to pilot the model should be identified and reasoning provided.

•    Socialization Effort
The Marketing Executive is the perfect executive to take the lead in getting the broader management team on board. This often requires intellectual material, and an event set aside for the team to gather and go through and develops an understanding of the power and impact the Intimacy Engine™ can provide.

•    Pilot Implementation
This by definition is a combined, collaborative effort between a line executive and marketing to assure that appropriate resources are allocated – often new hires are required, for example. But, it is important that the broader executive team stay deeply evolved in the pilot’s progress – this will provide support for the inevitable challenges that occur, and the broadest understanding of the power of the model to be understood.

Obviously, there are significant efforts made during the pilot on offer development, market messaging and go to market messaging. Although these are quite different than traditional offers and messaging they follow the same process and must be properly enabled for success.

Innovating Past the Customer: The Limits of Innovation

In our line of work, we often see companies which innovate past the point that customers need or will pay for. 

We have seen this phenomenon in almost every B2B product group.

The cause?  A mistaken belief or assumption that companies can compete only through continuous innovation which is translated as continuous product differentiation.  At a certain point this leads to product over-engineering – too many features, product bloat, unnecessary complexity, and product extensions which customers dislike.  Technology replaces common sense.

In our line of work, we often see companies which innovate past the point that customers need or will pay for. 

We have seen this phenomenon in almost every B2B product group.

The cause?  A mistaken belief or assumption that companies can compete only through continuous innovation which is translated as continuous product differentiation.  At a certain point this leads to product over-engineering – too many features, product bloat, unnecessary complexity, and product extensions which customers dislike.  Technology replaces common sense.

We must have empathy for the company stuck in this mindset. They view themselves as product innovators and they always move their product forward in an effort to stay ahead of the competition. Furthermore, two powerful groups within the company – product development and sales – both push for continued expansion of features and functions. The product development group is always clamoring for more money to keep ahead of the Joneses, and sales must account for tougher market conditions. Thus, we hear a refrain: “the customer wants x and y and z!”

One example from the world of consumer electronics comes to mind. Although not a B2B example,  it fits this category and we can all relate to it: the heralded release of 3D TVs!   Just think how tough it is for TV companies to get us all to replace our cool flat screen TVs with the next big thing! perfect If they don’t get us all to continue buying – we all know what that will mean!

In the B2B world, we see the same dilemma in medical devices where the technology is only needed in rare cases and is sold for much higher prices than current technology in use (which works for 99% of the cases).

We also see it in office machines – where the optimistic projections of an optimistic sales force hopes that the new color options will drastically improve the sales rate of a product under considerable pressure.

Sound familiar?

We see it all the time.  The relentless pressure to outdo the competition (if only for a few months) with products that just aren’t needed.

So, what can you do?

First and foremost we must accept that innovation of current products has a limited life cycle and at some point drastically diminishing return on investment opportunities. Challenge the mindset, the assumptions, the myth of endless innovation.

Second, we must decide what portion of our markets/segments we must win to continue growth and profitability. Then we must look at those markets critically and determine where we are in the product innovation curve and admit that we might need a more dramatic impact than a product that no one really needs and won’t pay a premium for.

Third, examine what alternatives truly exist:

•    Eliminate competitors through acquisition – consolidate the market
•    Expand our product lines – hopefully to a new innovation curve.
•    Bundle our products into larger deals where we can provide greater price flexibility and still remain profitable, and/or
•    Add the Customer Intimacy Engine™ business model to those areas that you must protect, or acquire from competitors, or improve product margins.

By adding the Customer Intimacy Engine™ to your strategy options (yes, it is a different business model with its own challenges) you have a viable alternative to the “innovate at all costs” mindset. Re-directing R&D money to a portfolio of True Solutions™ (ones that your customers executive truly need and want) you can add years of life to your product lines and focus on delivering what the customer truly needs and will pay for.  Sometimes it’s not a bad idea to become a fast follower of proven new features instead of the company that has to get there first.

I’ve been amazed at the ability of companies to maintain the useful life of a product or products by owning the executive suite of their key customers and driving intellectual thought-leadership in their marketspace.
 
Granted it is not easy to begin to solve your customer’s true problems or help them take advantage of big opportunities. It requires a new kind of offer set to be added to your product portfolio, different market and customer messaging and different account management techniques and often different talent and talent development efforts.

But, compared to spending millions – sometimes hundreds of millions – on product that will inevitably fail, it is a bargain and well worth the effort of learning a new business model.

P.S. – We may be wrong about the 3D TVs but I would not want to be betting my career or significant $$$ on products that are well past the sweet spot of a market.

Developing True Solutions – Not Product Development

Typically in the Form phase of the Customer Intimacy Journey, you will develop the initial True Solutions™ sets and take them to market. Like product development, a framework and process exists to define, develop and take your Solutions to market in a deliberate and defined manner. This building block is key to your Intimacy Engine™ success, so it is important to recognize early on what is different about developing True Solutions™ compared to typical product development.

So what is different?

Typically in the Form phase of the Customer Intimacy Journey, you will develop the initial True Solutions™ sets and take them to market. Like product development, a framework and process exists to define, develop and take your Solutions to market in a deliberate and defined manner. This building block is key to your Intimacy Engine™ success, so it is important to recognize early on what is different about developing True Solutions™ compared to typical product development.

So what is different?

Let’s answer this from two points of view: The Market, or external view and the Company, or internal view.

Buyers of True Solutions™ progress through a series of business decisions before deciding and committing to spend large sums of money to implement significant change to their business. I call this the customer journey and it is your job to provide everything they need along the way. Therefore, from the Market/Customer Point of View, solution development is driven by the following actions:
 

  1. Interacting with the market (customers) quickly and spending less time defining it up front. In other words, define and validate the Customer Journey early in the process. To me, this is often the most difficult brick wall to break through for those companies in the Form Phase.
  2. Understanding that your customer’s Solution inspection is on the significance of the problem or opportunity, not what the product will or will not do (i.e. feature and functionality).
  3. Designing Solution components to be modular to meet the needs of your customer’s specific and unique problem/situation.
  4. Designing Solution components to help your company understand the customer environment to better scope, design and cost the solution implementation and manage customer expectations.

Solution development process phases and activities are the same and repeatable, but the final output and who builds it is different per solution. Therefore, from the Internal/Company View – Solution development is driven by:
 

  1. Cross functional teams that possess customer, industry, product, business management, and marketing/sales expertise. The intensity of resource involvement varies throughout different phases of development.
  2. Piloting Solutions prior to a broader launch is the norm. The speed to pilot must be fast to get to market quickly to learn and make changes. Note that you might even “kill” the effort at this point, which takes discipline but is crucial so you are not wasting scarce, valuable resources.
  3. Launch activities are primarily focused on training and coaching the specific solution aspects (e.g. who is the target buyer and what/how we communicate the specific Idea) to sales and delivery resources. Note this is not a “check the box” process of completing documents then throwing the book over the fence to sales.
  4. True Solutions™ typically include products and services, but both are not always required.

In summary, a well crafted and defined solution development process allows for continuous improvement, incorporating both inward facing and market based criteria to ensure alignment with the target customer’s buying decision process, your customer engagement model and solution delivery. It is repeatable and has objective toll gates along the way.

Lastly, speed and momentum matter – the window of opportunity for both you and your customers only stays open for so long. It’s critical to instill a sense of urgency in the teams involved.

Why Solution Selling Isn’t Enough

Most B2B companies strive to build an intimate and trusted relationship with their customers, at least that’s what they say they want. They expend a lot of energy educating their sales professionals to work in that space thinking that this is the area most in need of help. After dedicating considerable resources and time on sales training, most find that it’s unfortunately not the panacea they hoped it would be.

Customer Intimacy is a business model change, not simply a series of training session for customer-facing employees.

Most B2B companies strive to build an intimate and trusted relationship with their customers, at least that’s what they say they want. They expend a lot of energy educating their sales professionals to work in that space thinking that this is the area most in need of help. After dedicating considerable resources and time on sales training, most find that it’s unfortunately not the panacea they hoped it would be.

Customer Intimacy is a business model change, not simply a series of training session for customer-facing employees.

As the diagram shows us, customer intimacy business model re-invention is more than just a sales approach. It is literally a new way of thinking and executing work.  Let’s save that discussion for another post.  For now, I’d like us to examine the plight of the sales organization.

How does your sales organization meet the challenge? How does your customer relationship become an intimate one?

Often, we find that a major stumbling block is that the “solutions” the sales organization take into customer discussions arein fact little more than a bundling of products – which tend to emanate from a single product family, business unit, or process.

True, they may make a larger sales – but the customer does not engage in a meaningful way.

At other times, we see companies selling the “solution pricing” premise, that is, “buy this bundle of stuff and get better pricing.” Finally, we sometimes see an effort to refocus the discussion around the products as a driver of savings – this approach will be of some interest to the customer, but it does not differentiate your offerings from the competition. In fact, it can spiral into destructive price warfare.

All these and many other approaches are tried every day and then foisted upon the sales organization with little more than sales training, which, let’s face it, does not change the central problem – are you really solving your customer’s most strategic problems?

Your customer executive still does not engage, and your solution pitch is still viewed as just another sales pitch.

After literally over a thousand discussions with key executives, I can state that they are tired of this approach and don’t want to solve your problem: finding out what’s important to them so you can pitch your products to that issue or topic.

So what does work? Equipping your sales talent with True Solutions – that is to say, accept that you must create and offer things that create a true partnership. 

You must develop a portfolio of intimacy driving things that the executive truly cares about – for example, hospital executives are more interested in patient safety than the name on the MRI; food and beverage companies are more interested in getting new product ideas and out in the market, then what copier is used.  This does not mean that your current products don’t need to be sold. But, if you want an executive to sit up and take notice, you must equip them with the right True Solutions™.

I know this sounds impossible (you ask: how can we have anything to offer that would fit the bill?) and its sounds impractical (how does this sell my products?).  In answer to both questions, I hope you have been reading this blog and are gaining an understanding of the power of the True Intimacy Model™.  But let’s be logical for a second; if the customer executive wants to meet more often with your team because they are truly helping they will be more sympathetic to your products and services.  Also, many times a section of the portfolio can directly pull through products and build intimacy.  My empathy is always with the people on the front lines – those actually helping your customers.

We need to accept that it is asking a lot of sales people alone to carry the weight of building those key relationships. In addition to the right solutions they need a support organization that can come into an account with the type of vertical expertise and specific solution knowledge to convince the customer that your are for real and can/will implement appropriately.  Building the right kind of expert consultancy internally is crucial.  That is no easy task, but it can and must be done.  These experts will have experience talking “straight” to executives and holding their own when tough information must be delivered.

Finally, “solution selling” by itself is not enough to equip the sales talent to be successful in this new and different landscape.  We must equip them to leverage the power of Ideas and consultative help available through team selling. This is a large conceptual change but once they are doing it – almost all can become proficient in this type of leverage – they can go to any executive with confidence that they will be well received and well thought of.

In summary, the notion that solution sales training will get us into an intimate executive relationship where we are providing that proverbial “trusted-advisor” impact is just not true.

We need to equip ourselves in a much more serious manner – and it’s worth it because owning the customer’s mind share always leads to wallet share. 

These include:

  • True Solutions – ones that meet the executives needs not yours,
  • Consultative Support – people that can dominate the intellectual issues of the industry and the solution in a “doctor-patient” relationship
  • Training on how to master idea-driven relationships, and
  • Leveraging a team selling environment.

Customer Intimacy: Linking Service Delivery to Value Creation

Eighty-eight percent of all CEOs say getting closer to the customer is the most important dimension to realize their strategy in the next five years.  According to an IBM study, “The most successful organizations co-create products and services with customers, and integrate customers into core processes. They are adopting new channels to engage and stay in tune with customers. By drawing more insight from the available data, successful CEOs make customer intimacy their number-one priority.”

Eighty-eight percent of all CEOs say getting closer to the customer is the most important dimension to realize their strategy in the next five years.  According to an IBM study, “The most successful organizations co-create products and services with customers, and integrate customers into core processes. They are adopting new channels to engage and stay in tune with customers. By drawing more insight from the available data, successful CEOs make customer intimacy their number-one priority.”

This is not news for anyone who views Customer Intimacy as a business model and not just a sales technique. One of the key tenets of a superior customer intimacy practice is to constantly maintain a tight linkage between service delivery and value creation.  In fact, by definition, you can’t have real customer intimacy if you’re not solving your customer’s most strategic issues.
 

The diagram above makes the following point: there must exist an optimal balance between your promise and your delivery, i.e., you gotta walk the talk.  Further, the value proposition you bring to your client must impact your customer’s value drivers in a perceptible way.  Once you have convinced the customer that your idea will in fact deliver value (Idea Selling), then you must in fact deliver what you promised.  In our case, we say that you must offer True Solutions and be an intimate partner in solving problems and bringing new ideas to your clients. Of course, you also have to keep in mind that your ideas or propositions must be screened to ensure they meet your criteria for fostering Customer Intimacy.

If your solutions don’t deliver on your value proposition, you’re guilty of marketing hype.  This can be a fatal mistake.  Far too many companies believe their own marketing propaganda, and don’t know how to deliver on their marketing promises.  90% of the time, this is why Customer Intimacy gets a bad rap.

Now, a few words about customer value drivers. We’re all indebted to the academician Jag Sheth‘s theoretical model that explains the five values that drive customer choice:

  1. Functional value: the perceived utility that derives from a product’s physical, utilitarian, or functional attributes.
  2. Social value: derived from an alternatives association with an identified demographic, socioeconomic, cultural, or ethnic group.
  3. Emotional value: derived from the ability of an alternative to arouse an emotional or affective state.
  4. Epistemic value: acquired by an alternative as the result of its ability to arouse curiosity, provide novelty, and/or satisfy a desire for knowledge.
  5. Conditional value: derived from the specific situation or context of the purchase decision. 

At McMann & Ransford, we help our clients build True Solutions that meet all five customer values.  Unfortunately, far too many companies are focused on functional value alone, a classic symptom of the product-driven company. 

The CEO and Customer Intimacy

In senior executive circles, the idea that True Customer Intimacy is a business model transformation initiative is often greeted with knowing smiles and nods, but little understanding of what’s truly required. More often than not, the CEO expresses great interest in theCustomer Intimacy model but then wants to implement it along with 20 other initiatives, assign it to some low level committee, and hopes to be done in a year.

In senior executive circles, the idea that True Customer Intimacy is a business model transformation initiative is often greeted with knowing smiles and nods, but little understanding of what’s truly required. More often than not, the CEO expresses great interest in the Customer Intimacy model but then wants to implement it along with 20 other initiatives, assign it to some low level committee, and hopes to be done in a year.

I can tell you from many years of experience, it won’t work and you will waste whatever time and money you put into it.

Company after company will tell me that “customer intimacy” is one of the most important challenges for them to solve and that they’re willing to spend significant funds on the issue but, in the same conversation belittle the effort and attention required to move the dial.

Transforming your business model in any significant way requires significant senior executive involvement and the dedication to make it the way you do business. Just look back at the historical change programs at GE under Jack Welch’s tenure.  There was little doubt that he, Welch, was in charge of the transformation of GE.

Executive involvement and dedication means defining the success criteria and milestones appropriately, aligning organizational incentives, assigning and holding accountable a seasoned senior executive to lead the transformation and continually inspecting progress.  In other words, it should be a top priority topic on every executive leadership team meeting agenda until it becomes the way your company does business naturally.

The Customer Intimacy Journey™ is a much larger transformation than a Six-Sigma initiative; it literally impacts every function in the business across all boundaries. I’ve seen companies embark on the transformation effort, only to see their staff functions fight each decision and action along the way.  They cut off their noses to spite their faces, cheering that they were able to stop the journey.

We know from 27 years of experience that it is very difficult to change a major enterprise – look how long the car companies have been trying to change – and we know it takes top executive involvement and commitment to make the Intimacy Engine™  journey a success.

I understand that there is limited time for the leaders of a company to involve themselves in new things and it is difficult to know what’s most important.  Furthermore, without knowing a company’s situation in detail, I cannot speak to how important the move to the True Intimacy™ model might be for them, but if it is strategically important, then the level of complexity of the journey must be well understood so that the entire senior executive team can see that their personal and passionate involvement is crucial to success.

It’s all about priorities – better to pick the most critical initiative and execute it well, than to try to do too many things – all of them half-heartedly. I understand the pressure is to deliver instant results. But, can these results be sustained?  And can you keep the momentum going?

Beyond Solution Selling: Customer Intimacy as a Path to True Solutions

During the first stage of the Customer Intimacy Journey it is important to create and deliver solutions that have a visible impact with your clients. 

 As you know, terms like “solutions” and “customer intimacy” are overused in the management consulting industry, and I believe often mean too little.  In this blog, we’ll try to distinguish our thoughts with not-so-clever use of the terms True Solutions™ and Intimacy Engine™.  I want to talk about what True Solutions™ are and how it is crucial to the building of the Intimacy Engine™ business model.

During the first stage of the Customer Intimacy Journey it is important to create and deliver solutions that have a visible impact with your clients. 

As you know, terms like “solutions” and “customer intimacy” are overused in the management consulting industry, and I believe often mean too little.  In this blog, we’ll try to distinguish our thoughts with not-so-clever use of the terms True Solutions™ and Intimacy Engine™.  I want to talk about what True Solutions™ are and how it is crucial to the building of the Intimacy Engine™ business model.

As you can see by the chart as you move up and to the right you are both making a greater impact on your client and requiring greater intimacy ability to get them to buy and implement solutions.

True Solutions™ – represented on this chart as business solutions – must address a true important business opportunity or correct a business problem for your client.

It is not the bundling of your product and services, it is not adding professional services to implement your service or even assist in product selection (although all these are valuable and will be part of your portfolio).   Further, a True Solution™ should be focused above the Line of Safety in the clients business:

The problem or opportunity that the True Solution™ addresses must add something that is crucial to someone (hopefully more than one) above this line.  Also, you’ll require their support and purchasing power to engage you on the problem.  Fall below the line of safety and you’re easily replaced – by technology, price, or salesmanship. Stand above the line of safety and competitors will find it difficult to dislodge you.
 
This means developing True Solutions™ requires deep understanding of the business sector your clients occupy, and profound knowledge of the unique issues in that sector – not how they use your product! 

Over the last decade we have spoken to literally hundreds of senior executives on behalf of our clients, from all industries: Food and Beverage, Retail, Pharma, Insurance, Healthcare, Financial Services, Heavy Manufacturing, etc. – and the common requirement from this broad group is that they want to partner with experts in their industry who bring them new ideas and the staff to help them through the realization of the benefits of those ideas.
 
Too many companies think they understand their clients’ business but in reality their investments tell the story. They are heavily invested in product-driven R&D, and their interactions are far too shallow to uncover real value. They invest in product focus groups, product user meetings, and low-level interactions with transactional salespeople.  The few executive interactions ave mainly “dog-and-pony shows” to show support and get feedback about what is irritating customers.   I’m not saying these are not important, but I am saying that this sort of engagement does not build a deep understanding of your customers’ business – or the drivers, challenges and methods to solve key business issues. 

A case in point: I was once meeting with the CEO of one of the largest companies in the world and he stated that he had intimacy with his customers – he could meet with any of them for dinner at any time – it was just that others would not follow up on the promises he made.  This statement told me everything; he was not intimate at all; rather, they were being polite and leveraging the meeting for concessions.  Intimacy means actual daily presence in the trenches, solving real client problems.
 
Think through your own experience: who is your trusted advisor to you? Who do you reach out to for advice and help? Usually it is someone that understands your problems and issues and has proved themselves by providing impactful solutions in the past.  Remember, our goal is to become an extension of our clients’ organization – to be treated as part of the body with no anti-bodies seeking us out and trying to exterminate us.

Let me tell you about a personal experience which illustrates my point:
 

I live outside of Houston, Texas and have large tract of land. I was building a house on the land and wanted to add some flower beds – nothing unusual.  I contacted three companies to come out and talk to me about it.
 

  • The first company spoke to me for about 30 minutes and focused on where you want the beds and how they were the best buy in town.
  • The second company came out and showed me some pictures of other work they had done and suggested different plants that would look good and a little work qualifying my willingness to invest.
  • The third company sent two people – one a land architect and one water architect and they brought a custom layout with pictures and video of what my land should be.  They took the approach that I had an opportunity to make this into something to be proud of and that it was important for me to understand and be educated about the many options and what they would say about me and my view of the land. They encouraged me to think of the native positives of the land and how the acres of trees need to be brought work in harmony with new meadows.  They encouraged me to build a natural looking acre pond for birds, etc.

The three companies saw the problem differently – I met with someone trying to solve a cost problem, someone trying to solve a color problem, and someone trying to get me to take advantage of an opportunity.  I chose the third company and have had a long (expensive) but rewarding relationship with them.  But, I must add, had they not used the proper approach to educating me and bringing me along, it could have appeared that I was being manipulated. I call that putting the client first: they genuinely wanted to show me what was possible for my family and were passionate about it.

You’ve been hearing for years that your organization must be client-focused – but the Intimacy Engine™ is the business model that actually makes that possible.  A common reaction from many of our clients goes like this: “We get the concept, they say, “but we do not have the ability to deliver these True Solutions™, even if we could identify them.” They often want to start where they are and slowly move towards solving the more important issues.  There is truth in these statements.  As stated earlier in the blog, getting and maintaining support for the revolution is paramount and never ending.  But, there are multiple truths here:

1) as solution provider, we must find the key ideas that impact the client above the safety line, and, 2) we should take into account what results are achievable today. 

Under Investment: The Biggest Threat to Customer Intimacy Transformation

What puts the Customer Intimacy journey at risk? Under investment is the answer. 

It will require: money, time, effort, attention, adjustment (things never work as planned), and most of all perseverance.   Something to always keep in mind – think about the transformation as pushing something through a brick wall – if you push just a little you still have the rest of the wall to go through. If you push fast you have less to go through.  Let me be clear it can move fast and you can have great success in the first year – but you would have to invest heavily in new offers, acquisitions, talent, talent development etc.  Also remember the longer it takes the more likely the company will lose interest and find reasons to stop.

I am always asked what puts the journey at risk – under investment is the answer. 

If you are going to make the journey be serious about it.  It is a fundamental change in the way your business runs. And, if you have been reading this blog you understand just how different it is from business as usual.  It will require: money, time, effort, attention, adjustment (things never work as planned), and most of all perseverance.   Something to always keep in mind – think about the transformation as pushing something through a brick wall – if you push just a little you still have the rest of the wall to go through. If you push fast you have less to go through.  Let me be clear it can move fast and you can have great success in the first year – but you would have to invest heavily in new offers, acquisitions, talent, talent development etc.  Also remember the longer it takes the more likely the company will lose interest and find reasons to stop.

I’m always surprised by the way companies look at the investing in the solution led/Intimacy Engine business.  Also, the time frames they attach to the transformation when investing little seem unreal.  Instead of viewing it as a business model change they seem to think of it as a cosmetic adjustment – a sales problem or adding a few consultants etc.  If they were bringing a product enhancement to market they would readily spend 100 million on it or a new product might coast 100s of millions and the attention a new product gets warrants the investment – this is no different.

Why is this?  I think it is because they do not view it as strategic – oh they very much want to do it but can’t get their head around how important it really is.  The firms that move quickest have an unwavering dedication to the journey. The ones that move slowest – talk all the time about the expense and are second guessing the effort all the time.  I believe there are four key variables that can impact both the ability to get through the brick wall, time it takes to get thorough he brick wall, and success getting through the brick wall.

How do you invest funds?

This is important. Do you starve the business or are you investing like R&D.  The companies that move fastest through the first 2 stages of the journey invest heavily like a new product. Those that linger invest like they are hiring new sales reps.  I am not saying that you cannot get a return on the investment in year one, I am saying that you need to invest like you are going somewhere.

Adoption of the new model

This is one of the issues that slow down the journey the most.  How much do you work against the model? Do you fight each issue – we do not do it that way. We won’t pay what consultants are paid, we won’t hire/fire fast, we won’t invest heavily in talent development, we won’t spend the time/money to build True Solutions, etc.  I have seen this at some level in every company that has taken on the journey. We want to do this but we do not cut through the red tape to support it.  Believe me this is a killer.  To this day IBM keeps the staff organizations for their world class solution business separate from the rest of IBM.

How persistent are you?

Every transformation a company goes through will by definition have mistakes. You will pick some poor offers/solutions – you will believe your stuff is better than it is. You will make some mistakes at the customer; you will miss your financial projections.  Why – because you do not know how to do this yet, and the mistakes are necessary for your understanding and developing mastery of the new ways. Do these mistakes stop you – cause you to challenge the whole program.  It is important to adjust rapidly to these mistakes – don’t spend months analyzing them make the changes and move on.  I have seen several firms want to stop at the first sign of trouble.

How much executive time is invested?

You must keep key executives aligned with the journey and make sure they are aware of what is working and what is not working.  If it’s worth doing then it’s worth the involvement. Do not make the mistake of packaging the news – give it to them raw and make them a part of the journey. Hay this is not easy and they need to know it.   Make sure you can tell them what road signs you have passed and what road signs are coming.

In summary, it is difficult for companies to take on these efforts and more difficult for them to invest appropriately and you can help them by stressing the four issues above.

Keeping Momentum: The Customer Intimacy Transformation Challenge

Anything worth doing is, by definition, challenging and requires fortitude. How do you keep the organization focused and maintain the momentum?  

Let’s keep in mind that companies have difficulty focusing for long periods of time and (like children) want immediate gratification. Therefore you and those who are like minded must be responsible for getting them on the journey and keeping them on the path.  

Taking a company through an enterprise-wide business model transformation to the Customer Intimacy Engine will remind you of that celebrated Beatles song – The Long and Winding Road. 

Anything worth doing is, by definition, challenging and requires fortitude. How do you keep the organization focused and maintain the momentum?  

Let’s keep in mind that companies have difficulty focusing for long periods of time and (like children) want immediate gratification. Therefore you and those who are like minded must be responsible for getting them on the journey and keeping them on the path.  

Because firms under invest in most new things, your effort may not be different. The journey is like building a skyscraper – lots of time spent building the foundation to support growth before significant financial outcomes are realized.

As you know, the true impact of the solutions-led Customer Intimacy Engine™ business model is pulling through the other products of the company. Therefore until critical mass is created and significant dollars are pulled through the business will not be viewed as significant – even a hundred million of new intimacy services will not be material for most large firms.

Add to these factors the truth that you are going to make some mistakes. You are going to select some solutions that don’t work – particularly as you learn the business model.  Further, you’ll hire some expensive talent that won’t work out. 

Finally, you will screw up an account or two. 

So you find yourself with an undeniable truth – if your company does not become successful in theCustomer Intimacy™ business model there will be troubled waters ahead. And, the challenge of keeping the company moving forward when you are underfunded and many don’t believe is daunting.  A way forward must be found. 

Let me provide some ideas:

  • In the year one plan – provide trade-offs for approval – fast growth big investment – slow growth smaller investment.  Always, remember to explain much of the investment is in what would be considered R&D for a new product.
  • Develop specific road signs for each step of the program – this will focus them on the steps toward success:

      – Hiring consultants that provide expertise in the vertical area in question
      – Developing the first solution – a Service Chain™
      – Taking the solution to market and validating its applicability
      – Getting the first sale

  • Force 90 day critical reviews with broad leadership audience focused on what is and what is not working – do not fall into trap of selling them all the time on how great you are doing.  This is a difficult and critical journey, and it is silly – not to mention fatal –  to put all the risk on those assigned to make the transformation work.
  • Develop a newsletter of the journey to tell everyone about the current successes and next steps
  • Budget into the organization education time to go around company and evangelize through education on business model, value to organization, current steps, challenges, successes and what’s next.  
  • Be quick to make corrections – one of the things several of our clients have had difficulty with is adjusting organization charts, compensation plans, key offers, etc. as needed.  Large corporations of very structured around the annual planning process.  The Intimacy Engine™ model in the beginning must be flexible and agile.  You will be forced to make many changes throughout the year in the early stages.  This is going to frustrate the larger corporation, but make sure you continue to educate about the reasons for changing in mid-stream and why you will fail if you cannot adjust to new information.
  • Don’t fight city hall – every company has things that must be done to be a good citizen – whenever possible do the right thing
  • Die on the right hills – as you know (if you have been reading this blog) there are several things that must happen in order for the journey to be successful and those can’t be compromised.

On a positive note, I have witnessed several executives make their careers fighting for this journey but each time they had to keep the organization moving with them.  Each of them become both experts in the model (could speak to anyone – internally and externally – on why it is important and how it works) and were aggressive, in-the-trenches leaders – they went to see customers and assisted their teams in understanding how things work and what to do in different situations.

Issues Building New Practices in a Customer Intimacy Business

We work with many new practices that include: people from our clients’ legacy businesses; consultants with vertical expertise that are recent hires; and other new hires that might sell solutions.  While they each have been successful in their own careers and think they know how to build customer intimacy, in practice it is often a challenge to get the group to work together effectively.

We work with many new practices that include: people from our clients’ legacy businesses; consultants with vertical expertise that are recent hires; and other new hires that might sell solutions.  While they each have been successful in their own careers and think they know how to build customer intimacy, in practice it is often a challenge to get the group to work together effectively.

This can be especially challenging for consultants hired into the practices – they have done billable work before, sold consulting deals, and managed clients and they don’t readily see the difference between selling services and customer intimacy.

The effort of getting everyone performing in a fast-growth, repeatable, Customer Intimacy-Based Business Model™ can be very frustrating for our clients and they often find this part of the journey the most surprising.

I wanted to walk through the steps we believe are best practices and what effect they have during this part of the journey.  Please keep in mind that each time you move to a new practice area you will experience many of the same issues, so the ability to get this right and do it again and again becomes a key skill in taking you company into and being successful on the journey.

Complete Integrated Training Program

This seems to be an area that most major companies have trouble adapting as necessary.  You need to know you are building an entire business model that works differently.  You must know what skills and competencies are needed for each job category, and you must be able to deliver the skills transformation and be able to hold your people accountable. (We’ll take up this topic in detail in a future entry.)

I will say that we have been doing this for 23 years and the amount of IP and transformational education materials required are immense.

On-boarding begins During the Interview

From the first time an internal or external person is introduced to the business – they should begin the education on the business model and how the role they are considering fits in – some use extensive materials even video vignettes.  This opens a question I often here – sharing methods – I am asked why we openly share on our blog and elsewhere how to make the journey.  I like to use the Toyota story – Toyota has always opened their miracle of manufacturing for inspection by other car companies. They are asked why they do that – my understanding of their answer is – it is not knowing what can be done but having the discipline, fortitude and guidance to do it.  That is the way we feel – we want companies to make the journey and if sharing helps them get going great – but we know that it requires more than a cursory knowledge to make it through the journey.  Anyway, every discussion with a candidate should reinforce and question their understanding of the model and role.  This also helps determine who should join the business.

The First Six Months

We think of this as the time members of the business go through a personal understanding and skills transformation.  It includes a great deal of training and role playing – only by doing do they begin to see the differences. Also as the business grows you can have your own clients come in and play their roles in this effort.  Further, each newbie gets a coach that rates their adaptation to the new skills – intellectual, emotional, and demonstrable – this can go directly into their review.  Further, they need to do fail-first learning (harsh, perhaps, but effective) they must be pushed into client situations – this will begin to dispel the false idea that “I can do this my own way.”

On-Going Learning

Usually the members of the organization are now hungry for the continued learning aspect of the roles and the roles they aspire to.  They embrace the training/role playing activities they will experience over the coming years.  Please remember this is like the army: the action is on the ground not at headquarters – people must know what to do in client situations and feel free to take action. They cannot take problems back to senior management or cut prices to make things work. 

Teams

The final support for the new members of the practice is that everything works like a project and they are always on teams – although the teams are different.  On a close knit team, day-to-day coaching and feedback become the norm.  Think of a family – you don’t wait till the end of a review period to tell your kid that they did something wrong or great.