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Are You Going Too Fast?

So you found yourself at a cocktail party over the holidays and you ran into somebody who spoke about how great their new analytics system is working. You got jealous. Maybe it was campaign sophistication, or maybe even bragging about how great their call center is.

I have a lot of clients who wish they had more customer facing capabilities than they do. Every once in a while they get the budget to do something about it. The first thing that happens is they send somebody off to go research the software – what is the latest and greatest set of bells and whistles that will help keep pace with those proverbial Joneses next door in the corporate business complex.

Leatherback Smile

So, the way the process goes is that there is a belief that implementing some great software and developing a few key processes will lead to some improved customer outcomes. In theory this seems reasonable. These good folks are not looking for a silver bullet. They want to improve some business capabilities, expect to do some hard work with the implementation of the software, and recognize that they will need to change or update some business processes.

Where the process goes wrong is with regard to expectations about how much or how fast they can change When a business gets a bit behind with its capabilities, such as sales effectiveness or marketing, and then gets the budget to improve things, it has a tendency to leapfrog forward as many steps as possible. This often leads to poor results. We tend to see this in the analytics realm often. A company wants to go from no capability to cutting edge overnight. This is where that walk before running axiom is applicable.

So, it is fair to ask why the leapfrogging thing is such a bad idea. After all, who knows when the budget will be available again? I tend to see two things that can go awry. The obvious problem is the attempt to accomplish more change than the organization can handle at once. I have seen quite a few organizations take too large of bites and then choke. This is primarily a function of having too many moving parts and not enough ability to pay attention to the changes.

However, there is also a less obvious reason why moving too fast can be difficult. Take, for example, someone who buys an old Mustang and wants to convert it into a souped-up sportster. In order to accomplish this you need to convert a number of things. First is the engine and horsepower. Second would be the transmission and then would come the suspension and tires. Finally you might also give it a sexy paint job with maybe some flames or racing stripes. Each of these modifications represents a dimension of the conversion from regular car to sports car.

Similarly, companies wanting to improve their business performance can make improvements along a number of CRM dimensions. These might include sales effectiveness, marketing sophistication, call center capability, and business intelligence. But, when you convert a car, you don’t just buy some expensive wheels and big tires and expect it to go faster. Without a similar improvement in horsepower not much is going to change. Adding racing strips will not make you handle the curves better. The overall performance of the car improves at the rate of the least improved item. Horsepower may improve speed, but without improved handling from the new suspension and the tires, the car remains restricted.

Again, improving salesforce effectiveness greatly, without a commensurate improvement in marketing will typcially lead to a limited overall improvement. However, many times when I work with an organization that wants to do some leapfrogging, they want to spend a whole bunch of money on really great wheels, but not raise the horsepower to keep pace. Once again, this is happening often with regard to analytics. It is easy to fall into the trap of wanting to make a lot of improvement in BI since it is the hot item in the CRM market. But, if you don’t improve a number of other elements of your CRM system to be at the same level, the BI investment will be limited.

I like to refer to this concept as CRM Maturity. Developing maturity in one dimension without keeping the other dimensions at a similar level limits overall CRM effectiveness. Likewise, having one dimension lag behind the others that are at par with each other can hold back the entire organization. CRM can be viewed as having 5 dimensions that each can mature at a different pace. These include 1) CRM business strategy, 2) customer interaction capabilities (like campaign management or account management), 3) enabling technology, 4) measurement systems (including analytics), and 5) business transformation competency (such as the ability to manage large programs and organizational change).

To become a world class organization you need to move along this maturity curve for each of the 5 dimensions, keeping pace evenly across each. Moving each at one step at a time is probably the best path to that world class status.

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