Recycled Bullsh-IT

In the old days (choose your own reference point depending on age and senility), businesses worked to a rhythm.  We would prepare a five or ten year strategic plan that detailed what we were going to do in a slow and deliberate way that would ultimately crescendo in a climax of backslapping and champagne. Or not.  As people spotted that those who wrote the grand plan tended not to be around when it dribbled over the finish line, we moved to less staid three, and then one year plans.

The annual planning cycle now looks like this:

• July: List everything we want to do next year that we didn’t do this year
• September: Make up Craft business cases to give some semblance of reason to our current hobby horses
• October: Jockey our hobby horses through increasing senior levels of review until we hit the Becher’s Brook of finance. The survivors are sent away to revise their costs and benefits
• December: As the year’s results become clear there’s panic at the disco as everyone scrambles to cut costs/magic up revenues/polish their excuses/finger someone else
• January: After some sacking and reshuffling the remaining management dig out their plans for the year and see if they have the money or people to deliver them
• March: Budgets are finally agreed that are a decimal point to the left of what was requested, but revenue targets are moved a decimal point to the right
• June: it becomes clear that there is only enough money to firefight the current revenue shortfall/cost overrun challenges, and any serious change needs to wait until next year

As you may be experiencing, this approach to become more responsive to market shocks and increasingly fickle customers is nowhere near flexible enough to ensure survival, let alone grow the business.  The cycle of change is shortening, and I am seeing three timeboxes that are needed for a business to remain competitive:

Three Months: Strategic Change

This encompasses launching a new product or business service, or breaking into a new market.  If your business is not capable of achieving this, you will find more aggressive organisations eating you for breakfast.  To achieve this in three months the organisation needs to have a set of core integrated capabilities in place that streamline product development and deployment.  It is pointless designing a better mousetrap if you don’t have the flexibility and capacity in your organisation, supply chain and IT systems to deliver this.  I am no longer amazed, but frequently irritated, by Product Managers saying ‘it was a great idea, but IT couldn’t deliver before Christmas so we had to can it’.  A well-integrated Product Lifecycle Management setup will have included all the delivery functions in the design workshops to understand the art of the possible, along with identifying improvements in the supply chain to remove bottlenecks and cost.

One Day: Beat your Competition

Unless you are the sole provider of a product or service, there will be competitors who wake up every day plotting to steal your trade by offering a better or more attractive deal.  Price cuts, extra bundled features, a shiny new logo, etc., will tempt your frankly gullible customers to desert.  The ability to respond to these market threats (and conversely the opportunity to stiff your competitors) within 24 hours requires a combination of scenario planning as part of PLM, built-in flexibility on delivery to vary the price/features/packaging, and constant competitor tracking.  If you are in a monopoly, expect a disruptive entrant within three months.  There are no excuses for being surprised if someone replaces you in the market.

Near Real-time: Know Your Customer

I’m not talking about KYC compliance here; this is about really, really knowing what your customers think, behave and do before even they know.  Consider your customers as avians (bird-brained, flighty, fowl, etc), specifically a murmuration of starlings.  YouTube is full of astonishing videos of thousands of starlings whirling in the sky above our head in amazing, every-changing patterns as they twist and turn seemingly in unison.  Just like your customers.  Companies have spent billions collecting, cleaning and conforming data to understand their customer history, in a vain attempt to predict their future behaviour.  Devising cohorts and analysing and interpolating predictive future value and segments to pigeonhole offers or pricing has some merit for strategic (i.e. 3 month) planning, but is failing to address the opportunity and threat of knowing what your customer is going to do next.  That next could be next second, next minute or next hour.  And not only that customer, but the thousands of other customers and prospects who have interacted with you and your competitors who could be nudged into thinking/behaving/doing what you want them to do.

To develop these Doctor Strange level magical skills requires three competencies:

1. Track all your customer interactions in real-time. You are probably capturing most of this data already.  Some data will feed into long term trends and can continue on its journey to your Hadoop or Cassandra data lakes for more leisurely review.  However, for the real-time business this data needs to be analysed in real-time to identify and unlock its time dependent value. 
2. Select and analyse the real-time data. Depending on your business, certain attributes can have critical value to you.  If customers are exiting an online sale at a particular field, you need this flagged before you lose too many sales.  If a telematics feed passes a failure code, you need to either respond instantly to an incident or respond proactively to prevent an accident happening.  If search traffic has suddenly been diverted to a competitor’s site, you need to fix this pronto.  To do these things requires a dynamic or real-time analytics capability that can interrogate ALL data in real-time and select the data that has triggered an alert requiring action.  This selection will be based on specific rules you have formulated, or by machine-learning algorithms that can spot trends or connections it believes are of interest to the parameters you have set.
3. Real-time Next Best Actions. Turning these events or triggers into actual value requires the application of your scenario planning and optimisation assessments to determine what the next best action is for your customer(s), and the mechanism by which to enable this action or nudge the customer to complete the deal or upgrade themselves to your optimised product/package.  This could include: changing the customer journey for that individual, or all customers who exhibit the same behaviour; dropping pricing to track a competitive offering within modelled boundaries; triggering customer contact to allow an agent (or robot) to interact and assist the customer.

The technologies to deliver these competencies exist now and require some smarts to rig together (also known as an architecture), and avoid the hype surrounding most of them.  It is perfectly possible to get this working in a three-month window providing you get everyone lined up to do their own job properly in the overall context of what you are aiming for, and to work together with at least a fake smile.

John ‘Three is a Magic Number’ Moe