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May 30, 2008


I finally got the boat in this week, early enough in the weekend to actually enjoy it for a few hours. It is truly amazing how many variables have to work out each boating season in order to have the vessel afloat rather than in dry dock.

There is the mooring that has to be inspected and then placed on the shore at low tide. Then there are the eleven dock sections that have to go onto the flatbed one at a time, in order, hauled to the launch, and motored into place – God willing and the tide is right. Next, the dinghy and its motor have to be put in working order, which was quite a to do this spring. Of course there is the boat itself – unwrapping the winter cover, chasing out the squirrels, getting things cleaned up. And up to this point we have not even started up the engine to see if it is going to cooperate one more year.

One of these items chooses not to cooperate and it becomes a set back that will ruin the goal of being out on the water for a sunny Sunday afternoon. It takes a lot of perseverance and faith that everything is going to fall into place and the plans one has made for guests out on the boat will be realized. But, to pull it off you have to go forward with confidence otherwise that sunny Sunday afternoon is going to happen without you. Each portion of the plan has to be attended to with the expectation and confidence that all the other elements will also pull through.

Snow Boat

Managing a CRM program requires this same confidence. You have to believe once your plan is in place and your gears are in motion that each of the elements will come together. You have to trust your process and you have to trust your team. You have to move everything forward.

He who hesitates is lost.

Being overly cautious to avoid a risk and causing a delay may prove more costly than moving forward with confidence and making an error, especially when consistently over cautious. Needing to get the messaging just right can make you miss a milestone. Getting absolutely everyone’s input can lead to a watered down product. Attempting to boil the ocean by including each and every requirement may lead to nothing accomplished.

Set out with a goal. Build your plan. Trust your process. Adjust with the feedback. Keep moving forward, the rewards are wonderful.

May 23, 2008

Customers In Middle Earth

Back in the last millennium I was introduced to JRR Tolkein in a literature class as a freshman in high school. The teacher wanted to give us an opportunity to learn a bit about the dynamics of change. The quest at the center of the Lord of the Rings saga was all about the transformation of Frodo as an individual and not so much about all the other stuff going on.

Fast forward a few decades and finally some decent cinema emerges with hobits, ents, wizards, and orks. It was magnificent. The whole thing came to life, but the story changed a bit. The version on the screen was about good versus evil and a messianic character with long greasy hair. The Shire, however, became real, along with Rivendale and Morder. It was fabulous.

Next, I find myself in London with time on my hands one evening and opportunities in the West End. The problem was that I couldn’t decide between Billy Elliot and Wicked. But, just when I had thought I made up my mind, there was a poster as I travelled up a particularly long escalator on the tube. It was a picture of a beautiful elf princess, looking a bit like the daughter of a 70’s rock star. The Lord of the Rings was playing at the Drury Lane – my plans were settled. – no Wicked Witch of the West.

This is where the story takes a turn. The stage version, which by the way was marvelous, is all about going through the process of change. My freshman literature teacher would have been so pleased. They got it right. There was an prevailing emphasis on what one has to give up in the process of achieving something important and worthwhile.

Naturally I immediately thought about CRM. You must all think that I am seriously nuts.

Middle Earth

So, give me some room with this. CRM is truly about taking on a quest. I don’t want to over dramatize this, but it is really true. To be successful, you have to give up certain things. You have to let go of some old stuff in order to have what is new in the CRM vision. For example, most of the time there is a certain amount of independence that may be lost with a CRM program – usually there is some new accountability or discipline involved. Much of the time you have to put in a little extra effort, and sometimes that effort is for the benefit of somebody else initially and does not return as a benefit to you until later in the cycle.

You cannot get to the CRM end point without giving up something. Just like Frodo. CRM is not about a battle of good versus evil. It is about figuring out what works well, and not doing things that don’t work well. Although that is a significant battle, however.

One thing that I have not completely figured out in the comparison between CRM and the Lord of The Rings is the fact that Frodo does not get to reap the rewards of his successful quest. He goes on to something else (something better we are expected to believe). Not sure what the message is here relative to those who lead successful CRM programs.

As a final note, I should state that it is a noble thing to attempt to portray thousands of pages of fantasy within a single production on a stage and the limitations of live performance. The critics have unfairly ravaged the production. As a result, the time is running out for seeing this extremely entertaining, mesmerizing, and ultimately true to the story line stage version of a classic piece of work. Gollum alone is worth the price of admission.

On the other hand, shortly after finally finishing the Trilogy back in the 70’s I had the opportunity to attend a poorly reviewed production of a musical about gangsters, also at the Drury Lane. Chicago came back two decades later as a block buster. If you can’t get to London before the end of July, perhaps you will have another chance to see this CRM metaphor on stage involving little people with hairy feet.

May 16, 2008


The sales guys certainly can make it appealing, but how do you know if renting a CRM package rather than buying it makes sense for you? Software as a Service (Saas) is gaining momentum within CRM and more and more companies I visit are asking if it makes sense for them. It might have been easier to answer this question in the past – smaller companies who did not want to make the investment in a sophisticated package could ease into CRM with a hosted solution without a lot of fuss. But the separation of whether or not it makes sense is getting narrower.

There are some factors to consider if you are looking into this form of CRM for your business:

I believe one of the strongest arguments for going hosted is if you plain and simply don’t have the bandwidth to manage the complexity of a CRM platform internally. Here it is obvious that smaller organizations are likely going to fit here. You may not want to invest in the CRM competency because you want to keep your investments more focused on the core of your business. That is logical.

However, small divisions and functions within large organizations can fit this mold as well. This is most true with those groups who have a different business model and customers than the rest of the enterprise. These folks have been dragged along by corporate IT to conform to the chosen standards, but CRM for everybody else does not fit for them. This is the perfect situation for a hosted solution, which the industry has now labeled hybrid CRM – some folks get on premise and some get a hosted package. This leads to a lot of happy customers for big IT functions.

Another fairly obvious consideration is the length of time a company expects to utilize a hosted CRM system. There has been some conventional wisdom accepted in the past that SaaS is particularly useful for an organization that wants to have a CRM system for the short term, prior to moving to a different system in the long term. There can be many reasons for this need, such as an impending business change or a preference for minimal expenditure. Under these circumstances, a large outlay of investment for a CRM system that will be changed does not make sense. The thinking has been that if you plan to keep the system for less than three years, hosted is the way to go. On the other hand, the cost of renting the software starts to add up after a while and it eventually will make sense to own rather than lease if you want a lower cost of usership. Again, this seems to be around the 3 year mark.

I find this 3-year price break perfectly logical. However, I have seen too many companies that first try out CRM and then change it radically, that they would have been better off renting for a while prior to jumping in the CRM deep end. If you really are uncertain what you want, but you know you want to have CRM quickly, I believe it is much more affordable to rent for a bit and then buy when you really know what you want.

A third factor that is gaining some ground is the notion of integration. Are you attempting to plug your CRM system into many data sources to have the best picture of your customer? If so, you may want to invest the needed integration effort in an on premise solution as the limitations of what you can do with a hosted package may impede your integration requirements. The vendor sales folks will surely argue the point, but we wary on this factor.

There is a fourth factor that seems to have resurfaced as a critical consideration and that is the notion of data security. I have had many clients who plain and simply were unwilling to store there confidential client data in a data condo complex side by side with others. This factor has some interesting dynamics going on in the market place at the moment. On the one hand the one leading vendor maintains their multi-tenant approach is completely secure. On the other hand, the other leading vendor has offered a single-tenant service to quell the concerns and now offer a more secure solution. Is this service being offered just to satisfy the perception of a potential security breach or is there a potential for a security breach? It is not entirely clear to me, but I raise it for your consideration.

The final factor that I raise for consideration is whether you are looking for a full suite of features to satisfy a broad range of requirements across the enterprise or whether you need a simple solution for a few set of common requirements. Certainly the hosted solutions started out simple, but they have evolved and are becoming quite sophisticated. The differences are narrowing in this case and you might not want to rule out SaaS just because you feel that you have a sophisticated set of demands. However, the one area that remains unsatisfied is a broad set of industry tailored solutions across the different vendors. Many of my clients have ultimately ruled out hosted CRM because they would spend more money than they preferred customizing packages to fit the look and feel of their business processes. The on premise options do hold an edge in this regard.

So, do your homework and don’t get overly influenced by a flashy demo touting the bells and whistles that you may or may not require. Determine the criteria that you need to satisfy and carefully compare the options before you buy (or rent).

Eye of Goat

May 09, 2008

The S Curve

Rocks NB2

I recently stumbled across an article by the CEO of a performance management firm that made a declaration, which caught my attention. Making a point centered on the basic premise of their business approach, the article proposed that you can achieve improved performance through one of only two approaches:
- increase output while keeping cost steady
- drop cost while keeping output steady
The CEO also conceded that there was a third approach formed essentially as a hybrid of the two above. This executive then went one step further to hint that the hybrid approach was preferred.

Perhaps it is a character flaw, but when I read an article that makes a strong statement about a certain way of doing things being the best, I tend to reflexively examine whether this is true and then look for reasons to support or refute the claim. I just can’t help myself. In this particular instance I came to the conclusion that the assertion made by this corporate leader was incorrect on at least two points.

First, I think there is a fourth option – increase output significantly by making changes that increase costs less significantly. And, I also reasoned that the better answer to which option is best is, like most things in business, it depends.

As a consultant it has been ingrained into my head through expansive training to answer, “It depends” to a myriad of business questions. Further, that training has often included as a chief illustrator of this answer the infamous S curve.

Picture if you will the ubiquitous business chart with investment on the horizontal axis and return on the vertical axis. Under many circumstances when we examine the relationship between investment and return a curve forms that takes the shape of the letter S. At first when you increase investment the return slowly rises. Eventually as you pour more investment you reach a critical threshold where the return rises more sharply. Then after yet more investment the rate of return drops and further additions cause diminishing returns. A classic S curve chart.

Chances are there are reasons why you will be able to improve throughput with some additional investment – but it completely depends on where you are on the S curve. When you are on the bottom half then this is the option for you. If you are on the top half, going after more output with extra investment may not give a favorable payback. Taking cost out seems like a more reasonable approach.

However, this increase-the-investment solution option is best when you have the ability to go after more market share. On the other hand, if there is no more market to go after, pulling cost out may be your best bet while maintaining output and share. This is a popular approach in a declining market (although it perpetuates the declining market when everyone does the same thing all at once.)

Now, if you find yourself on the bottom of the S curve but you can’t get any working capital from lenders, then that hybrid approach mentioned above starts to look attractive. Take some cost out, and then go after a little improvement in output by reinvesting the savings. Repeat as needed.

So, the bottom line in this case is that there are a number of options for improving performance should that be something you would like to have happen with your marketing, sales or service teams. How you go about achieving that performance should be contingent upon a number of factors best considered prior to embarking on that performance improvement initiative. Good luck and stay tuned for a lively discussion on another favorite, the O curve.

May 02, 2008

Decisions, Decisions

Sometimes when I am working with a client there comes a point in time when the organization gets stuck on a decision. This is one of the hazards of the consulting industry. The lack of progress can cause delay and it can be much worse if you are not there to help facilitate the process.

How do you get past a tough decision? I suggest that you follow a process that covers the following elements.

1. structure the process with criteria
2. include those who must be involved
3. have the information available
4. set a deadline and stick to it

Ultimately, I think the most important tool for get through the decision making process is to understand the criteria that ultimately separate a good decision from one that is less desirable. Starting this off with a look at the idea of using criteria, you might want to consider two types:
- Attributes
- Success Factors

Attributes are those aspects of the decision alternative that represent the basic appeal or the liability. For example, when deciding between two software packages, it is normal to compare what each package can or cannot do. One package may come out of the box with a more tailored look and feel for your industry, while the other package has more built-in features for customer service. Making a decision based on attributes is basically a beauty contest and relies on tabulating a catalog of pros & cons to determine which comes out looking best.

Success factors represent the ability for decision alternatives to satisfy the requirements of the business if chosen. In this case, the decision process examines what the decision alternative will produce as a result of being selected. For example, when choosing between structural options for a telesales function there could be a decision point for going with a product versus account / territory approach. So, the question is what are the important success factors? Product focus allows for deeper understanding of the product line and perhaps a greater ability to close the sale. An account or territory focus allows for better account relationship development and increases the reach rate for each dial. Which is best depends on the product you sell – a need for product knowledge or a need for reaching the buyer. Make the decision based on satisfying the need.

Which Way

Decision making based on success factors is more complicated than simply rting attributes. It takes more understanding of the ramifications of the different elements of decision alternatives. But, this is not to say that attributes are to be ignored. You have the ability to consider both. When creating a hybrid model, I do encourage a bit of weighting to be included. Attributes may not be as critical to satisfying business requirements as are success factors. Sometimes it can be helpful to give a hi/med/lo type of rating to the different criteria being used.

What about the other elements of the decision process listed above? Well, don’t go through all the work to uncover the decision criteria and then leave out a critical stakeholder. This will just serve to slow down the implementation of the decision. Have all the key people involved even if it adds a bit of time up front. It will pay off.

Information for decision making is frustrating when it is unavailable. Much of the time you learn that there is information you need at the time of making the decision, but you don’t have it. So, anticipate both – try to be proactive in gathering your information requirements, and also build your process so that you have time in between steps to augment the data needed to feel secure in your decisions.

Finally, if there is one tool that helps the decision process most efficiently it is a good deadline. Organic deadlines are best and are comprised of natural events that cause a decision to happen – board meetings, budget calendars, annual sales meetings. However, when these are not convenient, then just create one. Putting a psychological stake in the ground does work, especially if stick to your self-imposed deadlines. If you have a poor track record of this kind of thing, then look for a reason that is ancillary, but meaningful – before summer vacations impact scheduling, prior to the end of a quarter selling rush, before the end-of-year holiday down-time. Just pick a sensible deadline and justify it. Of course, you also have to stick to it.