Musings on Big Data, Customer Analytics, and Data Driven Business

On LinkedIn, Don Peppers is sharing his perspective on making better decisions with data.  This got me thinking and I want to share with you what showed up for me. Why listen to my speaking?  I do have a scientific background (BSc Applied Physics).  I qualified as a chartered accountant and was involved in producing all kinds of reports for managers and saw what they did or did not do with them. More recently, I was the head of a data mining and predictive analytics practice. Let’s start.

Data and data driven decision-making tools are not enough

Yes, there is a data deluge, and this deluge is becoming down faster and faster. Big enough and fast enough to be given the catchy name Big Data.  What is forgotten is the effort that it takes to get this data fit for the purpose of modelling.  This is no easy-cheap task. Yet, it can be done if you throw enough resources at it.

Yes, there are all kinds of tools for finding patterns in this data. And in the hands of the right people (statistically trained-minded, business savvy) these tools can be used to turn data into valuable (actionable) insight.  This is not as easy as it sounds. Why?  Because there is  shortage of these statistically trained and minded people: amateurs will not do, experts are necessary to distinguish between gold and fools gold – given enough data you can find just about any pattern.  It statistical savvy is not enough you have to couple it with business savvy. Nonetheless, let’s assume that we can overcome this constraint.

The real challenge in generating data driven decision-making in businesses is the cultural practices.  We do not have the cultural practices that create the space for data driven decision-making to show up and flourish.  A thinker much smarter-wiser than me has already shared his wisdom, I invite you to listen:

On the whole, scientific methods are at least as important as any other research: for it is upon the insight into the method that the scientific spirit depends: and if these methods are lost, then all the results of science could not prevent a renewed triumph of superstition and nonsense.

Clever people may learn as much as they wish of the results of science – still one will always notice in their conversation, and especially in their hypotheses, that they lack the scientific spirit; they do not have the distinctive mistrust of the aberrations of thought which through long training are deeply rooted in the soul of every scientific person.  They are content to find any hypothesis at all concerning some matter; then they are all fire and for it and think that is enough …….. If something is unexplained, the grow hot over the first notion that comes into their heads and looks like an explanation ….

– Nietzsche (Human, All Too Human)

It occurs to me that the scientific method never took route in organisational life. Put aside the rationalist ideology and take a good look at what goes in business including how decisions are made. I say you will find that Nietzsche penetrating insight into the human condition as true today as when he spoke it. The practice of making decisions in every organisation that I have ever come in contact with is not scientific: it does not follow the scientific method. On the contrary, managers make decisions that are in alignment with their intuition, their prejudices, and their self-interest.  It is so rare to come across a manager (and organisation) that makes decisions using the scientific method that when this does occur I am stopped in my tracks. It is the same kind of unexpectedness as seeing a female streaker running across the football pitch in a league match.

What are the challenges in putting data driven decision-making practices into place in organisations?

Technologists have a gift. What gift? The gift of not understanding, deeply enough, the being of human beings. Lacking this understanding they can and do (confidently) stand up and preach the virtues-benefits of technology.  If life were that simple.

Truth shows up as attractive to those of us who do not have to face the consequences of truth.  Data driven decision-making sounds great for those of us selling (making a living and hoping to get rich) data driven tools and services.

The challenge of putting in place data driven decision-making practices is that it disturbs the status quo. When you disturb the status quo you go up against the powerful who benefit from that status quo.  Remember Socrates:

The very nature of what Socrates did made him a disruptive and subversive influence. He was teaching people to question everything, and he was exposing the ignorance of individuals in power and authority. He became much loved but also much hated …. In the end the authorities arrested him for …., and not believing in the gods of the city. He was tried and condemned to die …

– Bryan Magee, Professor

Beware of being successful in putting in place a culture of data driven decision making!

With sufficient commitment and investment you can put in place a data driven decision making culture. Like the folks at Tesco did.  And by making decisions through harnessing the data on your customers, your stores, your products, you can outdo all of your competitors, grow like crazy and make bumper profits.  Again, again, and again.  Then the day of reckoning comes – when you come face to face with the flaws of making decisions solely on the basis of data.

Tesco is not doing so great.  It has not been doing so great for several years – including issuing its first ever profits alert in 2012.  What is the latest situation?  Tesco has reported a 23.5% drop in profits in the first half of this year.   What has Tesco been doing to deal with the situation? This is what the article says:

Last year, Tesco announced it would be spending £1bn on improving its stores in the UK, investing in shop upgrades, product ranges, more staff, as well as its online offering.

There are a number of flaws on data driven decision making. For one data driven decision making assumes that the future will be a continuation of the past.  Which is rather like saying all the swans that we have come across are white, so we should plan for white swans.  And then, one day you find that the black swan shows up!  The recession and the shift in consumer behaviour that resulted from this recession was the black swan for Tesco.

Furthermore, I hazard a guess that in their adoration at the pulpit of data driven decision making the folks at Tesco forgot the dimensions that matter but were not fed into the data and the predictive models. What dimensions? Like the customer’s experience of shopping at Tesco stores: not enough staff, unhappy staff, stores looking more and more dated by the day, the quality of their products ……

It looks like the folks at Tesco did not heed the sage words of one of my idols:

Not everything that counts can be counted, and not everything that can be counted counts.

– Einstein

Is customer experience and the voice of the customer the CMO’s salvation?

The Economist Intelligence Unit has recently published a report titled ‘Outside looking in: The CMO struggles to get in sync with the C-suite’, sponsored by SAS.  This report has showed up as rather interesting for me and I want to share with you that which has caught my interest.

CMO’s face a number of big problems

The fundamental problem is that CMOs don’t get much respect from the rest of the C-suite.  CMOs say that they are doing a difficult job well: making a contribution/delivering significant value to product development, sales and customer service.  The problem is that the rest of the C-suite don’t agree – they question the value/contribution that CMOs are making.  And it doesn’t look like they listen to CMOs with much respect.  Here is how the EIU report puts it:

“CMOs believe they are constrained because the rest of the organisation does not consider marketing to be strategic; the C-suite believes marketing has not earned the right to be more strategic because it is ineffective at demonstrating value of its investments.”

Here are the other big problems that CMOs face:

1. Many organisations have trouble defining, clearly/exactly, the CMO’s role and responsibilities. Which could explain why it is that there is no agreement on what business objective the CMO (and the marketing function) should focus upon and be held accountable for.  Worse still there is a fundamental disagreement between what CMOs see as marketing’s priorities and the priorities that the other members of the C-suite assign to the marketing function.  Which makes me wonder if members of the C-suite actually talk with each other, share and agree what they expect of one another.  Doesn’t look like it. The EIU report says “..their greatest challenge: getting everyone to agree on marketing’s priorities.”

2. The  marketing function is not coping with the challenge that comes with the territory that falls under the market umbrella: advertising, brand, market research, communications, customer analytics, social media, mobile and so forth.  Why?  First, the marketing function lacks people with the necessary skills and expertise to cope/deal with this broad/dynamic challenge.  Second, members of the C-suite do not feel the CMO’s pain – they are not approving the necessary marketing investments.

So whilst it looks like CMOs are in a difficult position, there is no need to despair.  The EIU reports offers a route to influence, credibility, impact and respect from the C-suite.

What can CMOs do to make an impact and amass influence/respect in the C-suite?

The EIU report advises CMOs to focus on the customer experience and the voice of the customer. The authors pin their hopes on the following quote from Steve Cannon, CEO, Mercedes Benz USA:

“Every single customer experience is a brand moment of truth. If we create an aspiration through our advertising, and a customer walks into a store and does not deliver on that promise that reflects on marketing.” 

Any intelligent person could drive a coach and horses through this assertion.  And for the the time being lets just accept and go with this assertion.

OK, if Customer Experience is the unifying theme and the rallying call for the organisation then how exactly can the CMO contribute to this play given that the CMO is not the CEO and does not control all the touchpoints, which as a whole, generate the Customer Experience?

Focus on the voice of the customer:

Chief marketing officers (CMOs) stand a better chance of increasing their internal influence – and changing lingering doubts about marketing’s strategic contribution to the business – if marketing can consistently deliver insights and tools that benefit others across the organisation, from salespeople to call centre agents to merchandising teams.”

How feasible is this ‘success route’ being put forward by the EIU?

I say that there is a big difference between a poor strategist and a good strategist.  A good strategist takes into account feasibility.  Specifically, he asks this question: what is the likelihood that my client can execute this strategy?  And the good strategist keeps on going until he comes up with a strategy that the client has a good chance of being able to execute successfully.

So let’s ask this question, how likely is it that marketing can:

a) marshal the voice of the customer from all the disparate sources and turn this into a comprehensive view – single view of the customer;

b) generate actionable insight into customers, how they interact with the business as a whole, the jobs that they hire the business to do for them, and their experience of using the product and dealing with the company?”; and

c) inspire the various members of the C-suite to act – to make changes in their priorities, policies and practices – so as to improve the customer experience?

I’ll let you decide for yourself.  For my part I could not help noticing the following hurdles identified in the same EIU report:

1. Single customer view.  “The airline [BA] has spent the better part of the last decade integrating its systems to support the effort; data warehouse not stores 200 separate data sources from different parts of the business to provide a more granular view of the customer, based on information they have volunteered.”

2. Converting data into actionable insight. “For all the talk about data-driven customer insight, marketers are just starting to understand how they should be using the growing repository of information they are collecting through digital media and other channels.”

What do I say?

I say that if you and your organisation are serious about building your competitive position and commercial success on the Customer Experience then follow the example of Steve Cannon the CEO of Mercedes Benz USA.  Why?

Because, the role and this responsibility or organising the business around the Customer Experience is a huge change full of organisational politics. And as such it is beyond the remit and the capacity of the CMO and the marketing function.  This role/challenge – that of aligning the organisation around the customer experience requires marshalling resources, reassigning resources, engendering and dealing with organisational conflict – belongs to the CEO.

Here is what Steve Cannon did in the words of the EIU report:

“..aligning the organisation around a superior customer experience has been the focus of Steve Cannon since he took over as CEO in January 2012…. Investments in customer experience programmes have been large – such as the formation of a dedicated customer experience team – and small – like providing Mercedes Benz dealers with iPads equipped with custom apps and videos.” 

As regards what Steve Cannon is doing at Mercedes Benz USA I draw your attention to the following:

1. Steven Cannon was the CMO before he came the CEO.  When he was the CMO he did not take charge of “aligning the organisation around a superior customer experience” No, he did it when he became the CEO.  I say he is a smart man who has a sound grasp of reality.

2. If the CMO had come up with the clever idea of buying hundreds of iPads for dealers it is highly likely that he would have reinforced the C-suite’s already always listening of the marketing function as the “department of coloured pencils” (how one CEO described the marketing function) and s/he would not have got the budget approved by the CEO/CFO.

What do you say?

Customer Insight & Analytics Exchange: highlights from Day 2

If your read my last post you will know that I have been participating in the Customer Insight & Analytics Exchange that took place on the 10th and 11th July in London.  In this post I want to share with you what caught my attention from Day 2.

KBC Bank: getting marketers to make good use of analytics is not that easy

This is what I took away from listening to Patrick Glenison, Head of Customer Analytics and Market Research at KBC Bank:

Marketers and marketers are not analytically oriented.   Propensity models created by the analytics team were not used by the marketers.  Furthermore, marketers and the marketing function is not analytically oriented and as such the marketing function has under invested in business intelligence tools.

The open comments, in the customer surveys, are a rich source of customer insight.  I took this to mean that the quantitative questions whilst allowing a scorecard to be put together  are not helpful in working out what is not working for customers and what changes need to be made.

The challenge is to get the various parts of the organisation – product, marketing, sales, call-centre – to play together so that there is a noticeable impact on the customer’s experience of the bank.

Westminster City Council: use insight to engage the public and manage expectations

Neil Wholey, the Head of Research and Customer Insight for Westminster left me with the following:

Benchmarking is not necessarily useful.  If your organisation does better than the average then everyone in the organisation is content and put their feet up.  If your organisation is average then just about everyone in the organisation is satisfied with that.  On the other hand, if your organisation does worse than the average then the stance is that the survey is wrong!

You can increase the satisfaction of your customers even if you cannot cut the price (taxes), cannot increase quality of services, and may have to cut services.  How? By entering into a conversation with your customers so that get a better appreciation of what you are doing and why – including the constraints that you are operating under.

An effective use of customer insight is to open up new avenues for people within the organisation to undertake operational and marketing campaigns to do new stuff or do things differently so that this impacts your customer positively and they think more of your organisation.  He gave an example: saving money by recycling.

How about engaging customers, genuinely, around stuff that matters to them like decisions around services – which should be kept, which should be cut etc?   Engagement itself is valued by customers and thus positively affects their perceptions of your organisation.  Engagement also means closing the loop: letting your customers know what you have done with their input.

Metro Bank: “Lots of people talk about customer experience, few do it”

My favourite session of the day was listening to Anthony Thomson the co-founder and Chairman of Metro Bank.  Why?  Because he illustrated that competing on the ‘customer experience’ is a business model issue.  And it involves a specific business philosophy that is embodied through a distinct set of practices.   Here are other highlights:

Metro Bank is competing on the basis of the customer experience and that means competing on convenience and service.  This convenience and service has to be paid for in some way by the customer.  And so the bargain made with the customer is that the customer gets lower rates of interest.

Convenience means being there for the customer when the customer wants you to be there.  So, Metro Bank is open when the other banks are not open – it’s opening hours are designed to suit the lives/needs of its customers. Metro Bank is open 7 days a week: from 8am to 8pm from Monday to Friday; on Saturday it is open from 8am to 6pm; and on Sunday it is open from 11am to 5pm.  More accounts are opened and business transacted when other banks are closed than when they are open!

Transparency matters.  Metro Bank does not engage in the misleading/manipulative marketing practices that the UK banks practice day in day out like offering attractive headline rates of interest and taking them away through the small print.

Metro Bank is channel agnostic.  The focus is on allowing the customer to use the channels that work best for him or her.  And to provide a great experience across any/all channels – the stores, the internet, the call-centre.

A customer can walk and open an account within 20 minutes and that includes issuing the customer with a debit card to operate the account.  For some customers this is too much, they do not believe it is possible and so they go and use it at a non Metro bank ATM to make sure that it works.  This shock is understandable because it can take up to four weeks for other banks to open an account and issue that debit card.

Great attention is given to hiring people who are a good fit with the business philosophy of Metro Bank.  People who want to and are good at generating a great customer experience.  At start-up Metro Bank interviewed 3,500 people for 60 posts.

Getting the Metro Bank customer facing staff to get that they are empowered to do what it takes to generate a great customer experience requires the Tops showing/modeling what that means.   It is not enough simply to tell them that they are empowered to deliver a great customer experience.  If that customer has clocked up a £8 parking charge as she has been in the branch for three hours what is the right course of action?  Should the teller contribute anything towards that cost?  If so then how much?  In this case the teller thought he should contribute 50% toward that parking charge.  And Anthony had to show the teller that £8 is only £8 and that the right thing was to pay for it all.

Saying no to prospective customers is part of the process – not all customers are right for Metro Bank.  Where Metro Bank is different is that the customer gets told “No” rapidly and delicately as opposed to being made to go through many loops and finding out after four weeks that the decision is no.

Members of staff are awarded £10 every time they identify a ‘stupid bank rule’.  Why?  The commitment of Metro Banks is ‘no stupid bank rules’.

And finally

I noticed several times that many (if not all) of the participants are firmly gripped by two notions:

  • that customers will take advantage of and exploit any generosity, any humanity, put forth by the enterprise; and
  • being customer-centric and doing what is right is in conflict with making money (revenues, profits, margins)

And I sense that this is the heart of the issue when it comes to the chasm between the talk and the reality.   ‘Business as usual’ means managing companies to make profit and everything else is secondary.   Whatever will help make the numbers gets done, what doesn’t gets cut.  Whereas in a genuinely customer-centric business the profit is a byproduct of everyone, including the Tops, being focussed on doing something well/great for the customer.  Think Apple, think Amazon, think John Lewis…….


Customer Insight & Analytics Exchange: highlights from the first day

Today I wish to share with you the key points that I took away from my participation in Day1 of the Customer Insight & Analytics Exchange conference taking place in London.

Are you measuring the Customer Effort Score?

Moira Clark of the Henley Management Centre for Customer Management made the case for measuring the effort that the customer has to make in doing business with your company.  She argued that the Customer Effort Score (CES) is more predictive of repeat business and higher spend than NPS or CSAT.  This clearly suggests that customers favour those companies that take the effort out of doing business with them.

If you want to grapple with getting a handle on and reducing the amount of customer effort then Moira suggested mapping the customer journey.  The objective being to identify what level of effort is experienced at the various stages of the customer journey.  And to figure out where to intervene to reduce the customer effort.

Which dimensions of effort should one consider? Cognitive, Emotional, Time and Physical.

Customer Journey Mapping: what does it bring to the table?

The panelists (from Orange, Aviva, RSA) agreed that customer journey mapping is an effective way of generating insight.  It can give people access to what the customer goes through; the customer’s perception of the experience; which touchpoint matter to customers; where touchpoints/interactions/processes are broken; how much money the company is ‘losing’ as a result of service failures and lost customers……

A danger that was highlighted is that of confusion of customer journey mapping with business process mapping.  That is to say that it is all too easy to take an inside-out approach (focussing on what matters to the company as opposed to the customer) whilst thinking that you are taking an outside-in approach.  For customer journey mapping even to cross the threshold and enter into the margins of the outside-in orientation it is necessary to get access to/involve customers in the mapping and evaluation of the customer journey.

What are you doing about engaging your employees?

Derek Brown of Vovici made three great points.  First, employees do have valuable feedback on what matters to customers and how the customer experience can be improved.  Second, ultimately any insight has to operationalised and that involves the employees – especially those that serve/interact with customers.   Third, there is value in connecting feedback from customers and feedback from employees. It was interesting to note that only about half of the participants said that their companies sought to gain feedback from their employees.

Analytics: does the real power lie in business model disruption? 

Chris Roche of Greenplum (EMC) made the point that the real power of data mining/predictive analytics might just lie in business model disruption.  For example, by harnessing breakthrough in human genome mapping and the power of predictive analytics it is possible to identify who is at the risk of which disease.  Which in turn allows a complete transformation of the the NHS (National Health Service) in the UK: from treating acute disease to encouraging/enabling wellness.    Another example is insurance companies.  They can put a device in the customer’s car, record/analyse driving behaviour, come up with a personalised risk profile and thus provide a premium tailored to the risk profile of each individual customer.

What is the future likely to look like?  According to Chris the incumbents are likely to use analytics to make incremental improvements.  And so the task of business model disruption will fall to new entrants who do not have an installed base / revenue stream at risk.

Does the ‘age of the customer’ require a learning organisation?

Suresh Vittal of Forrester made the case that we are in the ‘age of the customer’ and that means customer obsession in term of generating customer insight (‘customer truths’) and taking effective rapid action on these truths.  How many companies are at this point right now?  About 12%.   What kind of organisation is best suited for generating and operationalising customer insight rapidly/effectively?  The learning organisation.  Which group of people are the main obstacle to putting in place a learning organisation?  According to Suresh, it is the Tops.

Which is better for generating customer insight: quantitative or qualitative?

The panelists (from Whitbread, HSBC, JustGiving, Forester) agreed that this is no longer a useful way of thinking about insight.  Customer insight is more useful if both quantitative and qualitative techniques and insights are used.  For example, if you are looking to optimise the customer experience on the website you would start with quantitative to know what is happening on the site and then follow this up with qualitative research (surveys, focus groups, user experience labs) to work out the why.  And with this level of understanding you can take action.  On the other hand it is possible that qualitative research will throw up some customer insights which will need to be validated/quantified through quantitative research in order to decide on whether it is worth acting on the customer insight.

My take on the day

It occurs to me that the customer insight community is grappling with the same kind of issues that it was some ten years ago:

  • How can we get the business to act on the insight we generate?
  • How to make sense of the information from disparate sources to get at genuine customer insights that make a difference?
  • How to convert data into actionable insight?
  • What should we be measuring: CSAT, NPS, something else?
  • How do we integrate the quantitative side (analytics) with the qualitative side to generate rounded insight?

The second ‘truth’ that hit me is that there is huge gulf between the theoreticians and the practitioners.  The theoreticians – analyst, technology vendors – make even the most complex sound so easy.  The practitioners are finding it difficult to get even the simpler stuff done.   One practitioner summed it up nicely when she stated that whilst it sounds easy, it is anything but easy to generate useful actionable insight and get this acted upon effectively and rapidly by the various players in the organisation who have their own agendas/priorities. 

IBM’s CEO 2012 study: is technology really the number1 priority of CEOs?

In the second half of 2012, IBM issued its fifth biennial Global CEO Study titled Leading Through Connection.  IBM says this study is based on face-to-face conversations with more than 1,700 CEOs in 64 countries.  I have been reading it and want to share with you what I make of it.

Social – concerned, fearful, skeptical, uncertain?

It appears that CEOs are increasingly accustomed to volatility and expect unpredictability.   The same cannot be said for social. 

My reading of the study suggests that CEOs are concerned and fearful about social, in particular, its role in enabling customers to exercise power over organisations.  Second, most of them are skeptical of the value of social media – I suspect in driving revenues and profits. Even those who do see value in getting into social, are uncertain as to how to go about it.  Given that so few of them have dived into social media this does not surprise me.  How does one get comfortable with riding a bike?  By riding a bike – you get on the bike, you ride, you fall off, you pick yourself up, you get back on the bike and soon you are riding the bike.  Is social any different?

Are CEO’s customer obsessed and what is their take on customer analytics?

According to the study, CEO’s told IBM that three leadership traits, in particular, are the most critical for navigating through this disruptive era:  ‘customer obsession’, ‘inspirational leadership’ and ‘leadership teaming across the C-suite’.  I’ll come back to the latter two, let’s take a look at ‘customer obsession’.

When the world is unpredictable and the power continues to shift to customers it makes sense that ‘customer obsession’ is seen as the critical leadership trait.  Yet I wonder what this means?   Does this mean that CEOs will get out of their offices and get deeply involved with customers?  Spending time with them face to face like Lou Gerstner did when he took charge of IBM.  Or undertaking the kind of experience showcased in Undercover Boss.

According to the study, CEOs are investing in analytical capabilities that promise to yield customer insights.  More than 70% of CEOs say that they are looking to get a better grasp of customer needs and generate improved organisational responsiveness to customer insights. So, I suspect that ‘customer obsession’ entails spending money on technology in the hope that this will yield insights into customers that enable the enterprise to stay one step ahead of customers.  This is great news for the organisations selling analytics technologies (SAS, IBM….).  Whilst I see the value of analytics I remain doubtful of the impact this will make until and unless the CEO gets out and actually walks in the shoes of the customer and experiences the experience of the front line workers.

What does IBM advise?  IBM recommends that CEOs orient their organisations to get insight into and engage customers as individuals rather than aggregates (segments, markets).  The earlier IBM CMO study suggested that marketers are stuck on traditional research methods that look at and provide insight into these aggregates and not individual customers.  Where can organisations get insight at the level of the individual customer?  Through harvesting and mining ‘Big Data’ according to IBM.

What are the roadblocks on this ‘data based, insight driven nirvana’?

In its study IBM refers to come organisations as ‘outperformers’ (they are doing better financially than their peers) and ‘underperformers’ (doing financially worse than their peers).  What are the three key differences between these ‘outperfomers’ and ‘underperformers’ according to IBM?

  • ‘translate insights into action’ – 84% better than industry peers;
  • ‘excel at managing change’ – 73% better than peers;
  • moving into adjacent industries – 48% better.

So here we see the two major obstacles in the way of ‘data enabled, insight driven nirvana of business performance’.   Ability to act on insight.  And, in particular, act in such a way as to effect organisational change with efficacy: to make changes in the business (based on the insight) and to get the people in the organisation to go along with and internalise these changes.  And to do so quickly before the window of opportunity closes.  Clearly some organisations are better at this than others – those that excel at this are in the minority.  Interestingly, this issue of taking action/effecting change based on insight has been surfaced by VoC vendors like Mindshare.

Are CEO’s aware of the scale of the challenge?

It appears that CEO’s are aware of the scale of the challenge that is facing them.  How do I come to this conclusion? Leadership traits that are of importance to CEOs and what traits CEO’s are looking for in employees.  Let’s consider the leadership traits first and what they can tell us.

When it comes to critical leadership traits, ‘customer obsession’, ‘inspirational leadership’ and ‘leadership teaming across C-suite’ were almost equal in importance.  Statistically speaking, I suspect there is no significant difference between the three of them.   It kind of suggests, to me, that these are inter-related.  Let’s take a look at the latter two and what they can tell us.

‘Leadership teaming across C-suite’ suggests that CEO’s get that the default state of organisation – the silo structure and silo metrics – is that of optimisation of the parts and suboptimisation of the whole.  It also indicates that CEOs are aware that genuine collaboration and teamwork starts at the very top – if the C-suite does not work well together then it is highly unlikely that the lower ranks will work well together.  I also read into this an implicit acknowledgement that many C-suites do not work well as one team – personal interests and functional agendas compete against the well being of the whole.  This explains why ‘inspirational leadership’ is seen as a critical leadership trait: CEOs get that they have to inspire (to bring forth) the best of their people (starting with the C-suite) including working as one team for the collective benefit.  Is it possible I am concocting a story that appeals to me and is not in the study?  I leave you to decide for yourself.

IBM claims that CEOs are creating more open and collaborative cultures.  That does not strike me as being an accurate description of what is so based on my travels.  And I get that I have only experienced a small number or organisations.  What is more interesting is the claim that collaboration is the primary trait that CEOs are looking for in employees: 75% of CEOs label this trait as critical.  Why?  According to IBM, CEO’s see technology as an enabler of collaboration and relationships and are focussed on changes in how people engage with the organisation and with one another in order to fuel responsiveness, creativity and innovation.

And finally

It is interesting to note that CEO’s put ‘human capital’ as the most important source of economic value closely followed by ‘customer relationships’, with ‘product/services innovation’ being in third place.  If ‘human capital’ is that important then the value placed on collaboration and open-cultures is understandable.  If ‘customer relationships’ and ‘product/services innovation’ are this important then the investments in analytics and collaboration technologies make sense.  What does not make sense, to me, is the attitude around social: customer can be a great source of innovation.

Only 33% of CEOs consider business model innovation as key source of economic value.  This puzzles me given that one of the key issues that organisations have to grapple with is that of coming up with fresh business models that make the most of the opportunities and deal effectively with the disruptions caused by ‘social’ technologies and customer behaviour.   Perhaps many CEOs have not fully awakened to the scale of the challenge/disruption/opportunity facing them.  What do you think?

I doubt that technology is the no1 priority of CEOs.  Why?  Because ‘technology’ got 71% of the votes, closely followed by ‘people skills’ at 69% and ‘market factor’ at 68%.  It occurs to me that there is nothing in it – that all three of these factors are as important as each other.

Three reasons why converting data into valuable business results is no picnic!

Nancy Porte knows what she is talking about

I have been reading a PR release on the latest Verint-Vovici voice of the customer survey.   The key finding is “organizations hailing from a wide range of industries and company sizes are catching on to the value of the Voice of the Customer”.   And the conclusion is “research shows that as long as companies aim to enhance the customer experience, improve customer loyalty and increase profitability, the VoC will always fill a mission-critical role”.   It is good to see that an ex-employer, The Peppers & Rogers Group, has been involved in this study.  Let’s move on to the part of the press release that did catch my attention:

“People are amazing at collecting data, but they’re often less skilled at creating insights out of it and spreading them throughout the whole organization,” adds Vovici’s Porte. “Data is great, but it rarely means anything unless you’ve figured out exactly what that data is saying and what you’re going to do about it.”

What happens when you give a budding Alexander the Great a fleet of stealth bombers?

Imagine that you turn up at the residence of a budding third world ‘Alexander the Great’ – a dictator with dreams of empire.  You offer him a fleet of stealth bombers with all the associated armaments.  You are excited, the dictator is excited – you see yourself as rich and the dictators sees the world at his knees.  What you have both forgotten is that it takes highly skilled pilots to fly these stealth bombers.  And you need to put in place a whole ‘infrastructure’ (hangars, airstrips, fuel, missiles, technicians) to enable highly skilled pilots to make use of these stealth bombers.  You might be wondering what this has to do with VoC and Customer Analytics.  Everything.

There are plenty of vendors offering analytics stealth bombers (advanced data mining and analytics platforms, packages and ‘solutions’).  Before you embrace your dreams of ‘world domination through analytics’ you might want to consider and prepare for the following:

  • The fuel (data) that powers analytics is typically missing, insufficient and/or ‘dirty’;
  • The pilots (statisticians) that need to fly the stealth bombers (the analytics packages) are in short supply – there simply are not enough of them to go around to fulfill the dream that is being aggressively communicated;
  • The infrastructure (leadership, mindset, culture, practices, processes….) that is required to ‘make use of the skills of the pilots’ and ‘exploit the potential of the stealth bombers’ is simply not present in the vast majority of organisation and putting it in place is a BIG ask, which requires patience (think long term) and commitment (to face and overcome the hurdles – big and small).

What is so in the real world?

What is the state of affairs in the real world?  I cannot answer that question as I have not sampled the whole world of business.  Yet, I can share my lived experience with you when it comes to the analytics front.  Allow me to illustrate with two examples.

As a customer based strategist I need and generate insights in order to construct viable strategies.  In one consulting engagement I asked a question: how many customers did you sign-up last year over channel X?  Sometime later I was handed a report.  I got a different answer depending on which page I looked at.  There was only a small difference between the numbers and the point is that there should have been no difference!  Either the definition of ‘customer’ was not consistent over the enterprise.  Or the definition of the ‘channel X’ was not consistent.  Or the enterprise systems and/or people were not able to add up properly.  Sound bad enough?  What if I told you that the managers in this enterprise prided themselves on the quality of their management information?

In another consulting assignment (involving the formulation of a customer strategy) I was in the process of getting to grips with the customer base – specifically, customer profiling and segmentation.  I needed to understand who was buying a particular product.  So I asked a helpful member of the client organisation to come back with the answer.  I was handed a small document and it clearly stated that the buyers were male, in their thirties and living in the larger cities.  Having been burned more than once, I asked to see the actual figures.  Upon reviewing the figures I found that the buyers (customers) were indeed in their thirties and living in larger cities.  However, there was no statistical difference in gender: the buyers was just as likely to be female as male.  You might be wondering how someone who is trusted (and whose job it is) to interpret data get it wrong so badly?  I can tell you that this is no exception – misinterpretation of data is the norm rather than the exception.  Why?  Because we are not statistically minded.  Thinking statistically is arduous and is a skill that has to be learned and continually practiced.