Seeing your way to better strategy

Year after year, business seems to become less personal. Between the explosive growth of online shopping and the increasing application of artificial intelligence, technology has the potential to come between businesses and their customers. After all, we now live in a world where Amazon operates grocery stores.

While technology has its place in the business community, retailers, restaurants and the like have to ensure it doesn't compromise the customer experience. Small businesses have found generations of success by treating customers like family, regardless of the techy innovation making headlines at the time.

As the new year arrives, small businesses can still resolve to make 2019 the year of the customer. 

Perhaps the most obvious way to support your customers in 2019 is to put them first on your list of priorities. What does that entail? It could be as easy as sharing your passion with them.

In the age of online retail, shoppers continue to visit brick-and-mortar businesses to experience high-quality customer service, learn more about products and get expert advice.

Small businesses that prioritize customer service will welcome their customers into the store, share their expertise and be ready to respond to questions and requests. When planning for the New Year, consider scheduling regular customer service training and ensuring all team members have the expertise to assist customers. 

Consumer trust in businesses has been declining for at least a decade, with only 48 percent of Americans saying they trust U.S. businesses in 2018, according to the 2018 Edelman Trust Barometer.

With security breaches and personnel scandals dominating the headlines, this shouldn't come as a surprise, but it does present an opportunity for small businesses.

According to SCORE, 91 percent of consumers find small businesses to be trustworthy and to treat their customers fairly. In other words, there appears to be inherent trustworthiness of local and family-owned businesses. Build and maintain consumer trust this year by doing what small businesses do best: Engage with customers, give back to the community and celebrate your local connection. 

Many shoppers prefer small businesses for their unique product lineup. In other words, it may be time to reassess how your business competes with the big boxes, national chains or online retailers.

If you're focusing on offering the same products in a more convenient setting, that may not be enough in the era of same-day delivery. Instead, vary your inventory to catch consumers' attention in a new way.

By introducing them to a new product or service they can't find everywhere else, they'll have all the more reason to return. 

Millennials have become the largest generation and the largest consumer group in American history. Two diverging trends seem to define the millennial market: On the one hand, millennials have given rise to what's called the "experience economy," as they prefer to spend money on memorable experiences than on one-time purchases. On the other hand, millennials have also fueled the "homebody economy," as they prefer to stay in than go out. In other words, millennials like to stay in the comfort of their own homes, but when they do go out, it's usually for a memorable experience, rather than a traditional retail or restaurant stop.

Small businesses can succeed with these conflicted millennials by focusing on creating experiences to lure them out, such as how-to classes or pet-friendly gatherings, and by finding creative ways to connect with them at home, such as social media content and subscription boxes. 

Of course, no business can — or should — ignore the impact of technology. In many ways, technology has improved the customer experience by making goods, services and meals just a click away for busy Americans.

It's essential to invest in technology that truly can improve the experience for your customers. That means creating an omnichannel experience. The omnichannel experience allows customers to engage with your business in person, over the phone, online and perhaps even via an app. Omnichannel marketing has been the name of the game for several years, and many small businesses already have some level of omnichannel experience.

In 2019, revisit the omnichannel presence you've created for your business to make sure it still works for customers. It may be time to update your website, re-engage with social media audiences or add a new platform to the portfolio. 

Make 2019 the year of the customer! By focusing on the customer experience, small and local businesses can make a connection with new and returning customers that will serve them well in the New Year and beyond.

With all the performance troubles at GE over the past couple of years, one problem stands out: Corporate executives were regularly making promises to shareholders about revenue and profits that operating managers knew were impossible. According to The Wall Street Journal, GE had developed “a culture that disdained bad news [and] contributed to overoptimistic forecasts and botched strategies.” Billions of dollars of value destruction might have been avoided had management’s decisions been better informed by the insights and expectations of its employees closer to the ground.

That may sound like a tall order, especially for such a large organization, given the logistics of wrangling staffers at multiple levels, recording the numbers they expect from upcoming projects, consolidating their input, and then meeting (sometimes repeatedly) to align forecasts and inform planning. But when we had to evaluate a potential partnership at Trefis (where one of us, Manish, is the CEO, and the other, Ken, consults), the team hit upon a surprisingly manageable method for recording and analyzing individuals’ expectations that has improved decision-making and risk management, and has even informed the central offering to clients. Granted, most companies — Trefis included — are not the size of GE, but the process we’re talking about is fairly straightforward for teams to implement, and it can be scaled from there.

Here’s how we stumbled on it: We knew the partnership we were considering had great potential to expand our customer base. But as we updated our investors and directors, we began to realize that our expectations were widely divergent. We had several different versions of how much growth was possible and of how to get there — and, of course, our views changed as we exchanged contrasting scenarios. This made it hard to tackle decisions such as how to price our service to the partner’s customers and how many support people to deploy on the account.

After about six months, to improve alignment, we developed a basic spreadsheet to capture everyone’s individual volume, price, and revenue expectations for the partnership. We entered the historical data from the first two quarters of pilot projects and allocated space to record projections for the business we might do over the next five quarters. We converted that spreadsheet into an interactive dashboard and sent a hyperlink to our investors, directors, and top executives — and to employees involved in the partnership — so they could each enter their projections. Everyone could see the collective results and where the variances were, in graph form. It helped us quickly identify areas that needed further discussion before sound decisions could be made.

Now, any time we meet to discuss the partnership, we consult our dashboard. We can tinker with individual expectations and see how those adjustments would change the mean and the variance. That makes it easier to understand where the group stands. Perhaps more important, every stakeholder feels heard and better aware of others’ viewpoints.

For three reasons, we have since adopted this practice for a whole range of decisions, including pricing, sales and marketing resource deployment, new-product priorities, and broader strategic choices.

1. Decision alignment and quality improve when you record expectations. We shared our experience with more than 30 Fortune 500 and private equity executives to gain their views on the idea of systematically collecting expectations for important decisions. In those interviews, we heard one story over and over: Standard practice is to seek a consensus view with an upside and downside case. But it’s extremely rare that members of a decision-making group know and discuss their respective expectations. As a result, executives told us, it’s common to have the appearance of alignment on a decision, when just below the surface a slew of different and potentially informative views are bubbling away.

However, when individual expectations are recorded along with the key assumptions behind them, important differences become visible. One person might see 2+2 as the problem to solve, another might see 1+3, and another might think it’s 5-1. Even if you all arrive at the same answer, recording and then discussing the variety of paths that different stakeholders expect forces everyone to think in new ways. And often the team ends up concluding that 1+5 is the right starting place — and thus arriving at a different, unanticipated, and better decision altogether.

This was borne out by our experience with the decision we faced on a go-to-market partnership. Our product and sales teams disagreed on whether we should partner or go it alone. Creating expectations dashboards for each option put our discussions on firmer footing, and we came up with a third option that appealed to everyone: Go all in with the partner but negotiate for higher net pricing from the partner as certain milestones are reached.

2. Looking only at past outcomes is a flawed way to manage risk. Companies tend to measure the risks of pending decisions by looking at outcomes of past decisions because those results are known. Analysts pore over everything, including profit, margins, volume, price, and cost, and use those data points to assess the new decision’s prospects. This approach has two flaws. First, risk is context-dependent, and the current situation may present entirely different obstacles or constraints. Second, for a backward-looking assessment to be truly valuable, you need a big sample of outcomes from relevant decisions made in the past. It’s rare for a company to have a statistically significant number of those to draw on — and the bigger the decision in front of you, the more likely this is the case.

Gathering independent expectations from each stakeholder shifts everyone’s focus to the real point of interest: how the decision at hand is likely to play out in the future. Those expectations are still essentially guesses, but they’re tied to the appropriate context; they’re coming from informed parties; and they reflect a variety of perspectives, which helps to hedge against individual biases and groupthink.

By considering a range of expectations on key inputs, leaders and their teams can also better anticipate where surprises — both positive and negative — might alter a desired outcome. One private equity executive told us that before making deals, he wants to see what his team members expect for deal parameters such as exit multiples and follow-on acquisitions, as well as for metrics on sales expenditures and EBITDA growth. Only when he has that data can he really get a sense of whether and when to participate in a venture. In our decision-making, we collect expectations for different metrics but with a similar goal: getting the fullest possible picture of the risks we face.

3. Leaders and their teams grow as decision-makers when they record expectations. While a dashboard can simplify the process of recording and analyzing expectations, it cannot erase the human element. It cannot force people who fear constructive disagreement to volunteer their estimates. It cannot comfort someone whose expectations often vary widely from the rest of the team’s. Only leaders can address those issues — and to do so, they must recognize that decision-making is a skill. People need feedback to develop it. Having information on how the expectations behind your decisions panned out gives you that feedback.

Recording expectations and comparing them against actual results over time can reveal a leader’s or team’s habitual biases and blind spots. For example, executives at a global life sciences company based in Switzerland commissioned a comprehensive study comparing outcomes of decisions with the expectations that went into them. According to its corporate strategy executive, that assessment of decision quality across initiatives helped even the most intuitive leaders improve their “decision batting average.” The company is now planning to conduct a similar study every year.

Making better decisions takes practice. You may have to push to make recording expectations an accepted routine in your organization. Even though it’s not as taxing as we initially assumed, it still takes time, and there’s cultural work to do. To facilitate buy-in, we’ve found it’s important to clearly articulate the benefits and make it safe for individuals to lay their expectations bare. Positive leadership can help show employees how recording and analyzing data leads to more inclusive — and therefore better — decision-making.

By Cameron Herold, founder of COO Alliance and author of Double Double and Meetings Suck I launched the COO Alliance because I recognized the critical role that the chief operating officer (COO) position plays for the chief executive officer (CEO). A COO will produce a powerful and positive impact on your business. Entrepreneurs are visionaries,… Read more »

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Customer experience is inherently intertwined with retail, an industry only growing in complexity. That’s because shoppers are everywhere—in-store, online, and often both at once—and their expectations are at an all-time high regardless of where they are or how they’re purchasing. How did we get here?

Sourced through Scoop.it from: www.cmo.com

Growing tech trends and changing global culture mean it’s time to be innovative with your outreach if you want to stay ahead of the curve. The New Year is a great time for you to take charge of content creation, implement fresh branding updates, and ensure that everything looks cohesive.

Sourced through Scoop.it from: www.cmocouncil.org

Changes in consumer expectation and the rapid evolution of technology are changing the expectations of marketing. In this article, let’s explore why it is time for marketers to shift from building brand awareness to driving revenue, writes Jill Rowley, Chief Growth Advisor, Marketo.

Sourced through Scoop.it from: cmo.marketo.com

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Toys “R” Us is being resurrected for the holiday season. After filing for bankruptcy protection from creditors in September 2017, it closed all its stores in the United States and United Kingdom earlier this year. But on November 13, 2018, Judge Keith Phillips of the U.S. Bankruptcy Court in Richmond, Virginia, signed off on a bankruptcy plan that revealed that investors intended to use the company’s brands in various ways. An initial approach can be found inside 600 Kroger supermarkets, where there are pop-up toy stores called “Geoffrey’s Toy Box” after the company’s giraffe icon.

But the environment that caused the toy chain’s demise has not changed. It still must compete with Walmart, Target, and especially Amazon, a competition based on price and convenience that it could not win.

An HBR article that one of us (Joe) wrote a year ago made the case that retailers today face two choices: offer consumers time well saved or time well spent. Toys “R” Us failed at the former strategy in its first incarnation. In coming out of bankruptcy, the company must pursue a time-well-spent strategy, offering places where both parents and their kids enjoy great experiences. (The Kroger pop-up stores are not promising: They offer no experiences, just boxes of toys.)

Here’s what Toys “R” Us should do now that it is freed of the shackles of bankruptcy and has a blank slate:

The underlying issue that set up Toys “R” Us for its collapse into commoditization is that it lost sight of whom it served. Its efforts primarily centered on its vendor relationships and pushing more and more product onto the floors and shelves of its stores.

For the reborn company to have a chance, it must turn 180 degrees and embrace a parent- and kid-centric strategy. It must become a stager of toy-playing experiences — enticing consumers into its new places by offering experiences that both parents and kids value. (What child wants to go to a warehouse? What child doesn’t want to play?) It should strive to maximize the time consumers spend in its places, because the longer they are there, the more they will buy. This is the essence of a time-well-spent strategy.

Imagine venues designed not around stocking toy packages with never-ending red-tag sales but around toys themselves with never-ending play experiences — one with spots where children can play with LEGO sets and participate in gaming tournaments. Imagine a testing lab where vendors pay to have children play with their latest and greatest toys. Imagine a studio where kids can design and create toys. Imagine becoming THE place for children’s birthday parties. (Surely Toys “R” Us could stage a far better experience than, say, Chuck E. Cheese’s, an experience that actually involves parents rather than shunting them off to the side.) In such venues, the warehouse would be in the back, out of consumers’ sight.

The absolute best way of knowing you’re providing time well spent is to charge admission for gaining entry to at least parts of the store — as the old Toys “R” Us once did for the Ferris wheel in its former flagship store in Times Square in New York City. (The old company smartly didn’t just get consumers to pay for admission, it also got suppliers to pay for their brands to be painted on the Ferris wheel’s cars.

In addition, Toys “R” Us could create a toy club that parents would value so much they’d pay a membership fee. Not like Costco or Sam’s Club memberships that merely provide access to low prices and thereby teaches consumers to buy on price, price, price. Instead, it could be a club that helps parents assess their children’s styles of play, their proclivities for creativity, curiosity, socialization, and all the other factors that enable them to grow socially, mentally, and even physically. The club’s fees could include the ability to return toys past their useful life or age-appropriateness and upgrade them via customized recommendations based on each individual child. Imagine becoming partners with parents in enhancing their parenting skills, invested in the well-being of their customers’ children.

By changing its business model to offer — and charge for — time well spent, the new Toys “R” Us can carve out a lasting and valued role in the toy business for decades to come. It can become the enterprise where a kid can be a kid.

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It’s a weekday and Jeff, the director of technology at Economical Insurance, kisses his daughter and waves goodbye as she enters the doors of her public school. Then, he either turns the car around and returns home for a day of remote work, or he continues on to his office, where his hours are flexible — he just needs to keep his boss in the loop.

In 1871, when Economical was founded, Jeff’s employer might not have imagined this scenario. Today, HR policies like these are less of a progressive perk but more of a standard practice. Actually, a new study interviewed 18,000 employees across 96 international companies and found that 70% of employees are working remotely once a week and 53% are spending half the week away from the office.

Flexible and remote work policies are becoming increasingly popular with employees. A study focused on flexibility and its impact on performance for working parents confirmed that flexibility at work increased gratitude significantly. It also increased job satisfaction and decreased stress, particularly for parents with children at home.

Employees appreciate remote work and flexible hours because they offer tangible benefits. It’s not just the time saved on commuting — there are real financial upsides. A study that looked at data from job boards and the U.S. Bureau of Labor found that the average remote worker saved $444 on gas, and spent roughly 50% less on lunches. Most parents can also save on childcare costs if they can arrange their schedules to be at home when their children are out of school.

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As more employees want to take advantage of flex and remote work options, organizations are accepting that this is how today’s talent wants to work. The 2018 Future Workforce Report by Upwork claims 63% of U.S. employers are offering some form of flex option. For example, PwC came up with “All Roles Flex” in an effort to reduce the stigma of those who use it. In a recent interview, Dorothy Hisgrove, the partner and Chief People Officer at PwC Australia, told me: “At PwC, 82% of our people use some form of flexibility. They’re most successful when they have the everyday flexibility they need to meet the demands of their professional life and accomplish the things they identify as priorities outside of their career.”

As more workers work flexibly or remotely, companies will need to change the way they operate. “It forces structural and systemic change to accommodate different ways of working and different ways of being ‘available’ and productive,” says Hisgrove. Remote and flex work also present new challenges for managers.  In particular, I call your attention to two: burnout and loneliness.

Burnout

One risk, perhaps unexpectedly, is burnout. People using flex or remote policies often do feel more grateful to their employers. That feeling of indebtedness can lead some remote employees to keep their foot on the gas until they run out of fuel. A research paper titled “Doing More with Less? Flexible Working Practices and the Intensification of Work” examines this unanticipated consequence of adopting flexible working practices. Using social exchange theory, researchers suggest, “employees respond to the ability to work flexibly by exerting additional effort, in order to return benefit to their employer.” Some of the intensification happens at the employee level (choices they make to “return the favor”) but frequently, it’s the employer intensifying the workload with requests that can’t be accomplished within certain timeframes.

To ensure employees experience gratitude rather than indebted servitude, check in. Go beyond project updates and work-related conversations. Leaders need to know what is going on with their people beyond just their work. For example, be sensitive to employees who travel extensively. Rather than booking them into scores of meetings on their return, give them some time to reconnect with family and recharge.

Rethink which attributes constitute going “above and beyond.” Working longer hours, answering emails late at night, putting time in on the weekend, coming in sick, piling up vacation days, not sleeping — those attributes are way too often considered “high-performing” traits. However, all it does is increase and reward the behaviors of burn out. Instead, lead by example and encourage  your virtual staff to slow down (even when they don’t want to) by supporting mental-health breaks, taking vacations, and spending time with family.

Remember, remote employees are tougher to diagnose with burnout because you can’t see changes in their personality on a day-to-day basis. Ensure there is a process of checking in and being aware of the signs.

Loneliness  

According to the 2018 State of Remote Work, loneliness is the biggest struggle to working remotely. Although being alone is not the only cause of loneliness, it can be a significant contributor. It’s also a dangerous and growing epidemic that scientists are taking seriously.

At the 125th Annual Convention of the American Psychological Association, Dr. Julianne Holt-Lunstad from Brigham Young University presented the results of 148 studies with a total of 308,849 participants. The study laid out the connection between loneliness and premature mortality. “There is robust evidence that social isolation and loneliness significantly increase risk for premature mortality, and the magnitude of the risk exceeds that of many leading health indicators,” Holt-Lunstad shared.

What can managers do? One option would be to establish an “in-the-office” day, when remote employees are encouraged to come in. According to a Gallup poll of 9,917 employed U.S. adults, remote workers that come in to work at least once per week are the happiest. These “mostly” remote workers report a slightly higher rate of engagement, but more importantly, they were more likely than full-remote or full-office workers to say they had a best friend at work, and that their job included opportunities to learn and grow.

For further-flung members of the team who can’t come in weekly, make the investment to bring them to the office monthly or quarterly. Joe Granato, the Chief Supply Chain Officer at Mountain Equipment Co-op, told me that he believes it should be mandatory to find the budget to gather in person. “Face-to-face time builds quality relationships, thus enabling trust and speed in communications. Having opportunities to be together (in the same space, not virtually) is a quality investment.” Granato also advocates for a “working remotely code” to help level-set expectations and make everyone feel looped in to the strategy.

Today’s flexible and remote work arrangements are far more fluid than the rigid “flex plan” policies of yesteryear. Regardless of what HR policies may dictate, in a tight labor market, managers are going to do what keeps their people. Today, that likely includes more flexible work options, paired with a management style that helps remote workers flourish.

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