Are you in the transactions or the solutions business – or both?

For many businesses especially in the business-to-consumer space, the volume of transactions is a key determinant of underlying performance. Whether it be the volume of items sold in a department store, or the number of new loans for a bank, or the number of tickets sold to passengers for an airline, but the common factor is the need for a base load of transactional activity. This is typically the bread and butter of the organisation, and managing these fundamentals underpins its success.

At the other end of the scale are typically business-to-business organisations whose offers are tailored solutions that are unique to each of their customers. Many project based businesses in engineering and consulting for example fit this model.

But transactional businesses can find themselves in the commodity trap. That is, they can do the transactional activity very well, but this may not be enough to be competitive or to maintain margins at a healthy level.

Enter the solutions business, or at least the business that places a strong emphasis on solutions to provide differentiation in the market. Many industries are experiencing a surge in activity around business solutions.

Solutions business in different industries

Take travel agencies as an example. This industry was challenged from the very early days of the internet. Over the past ten years in particular, the traditional lifeblood of the industry, namely sales of airline tickets, shifted heavily online and became commoditized.  Whilst this is still very much the case, we also see a growing emphasis on more of a solutions approach. As the global economy has grown and as the cost of airline travel has fallen dramatically in real terms, key players in the industry are bundling, shaping and delivering broader based offerings or solutions to customers. For instance, specialized tours or packaged adventures are in demand. Their point of difference is in bringing the component parts together easier and cheaper than a customer can do alone, and in different configurations.

Retail is also an interesting case in point. The so-called “big box” retailers in the home improvement segment do much more than sell hammers and nails. They provide solutions to many different facets of their business. For example, they might provide an offer of how to use their products to build a whole new patio or how to landscape the garden. In other words, they are not just selling the component pieces, but they are providing a broader solution to meet a bigger customer need.

Even supermarkets have quietly ventured into this space. Whilst their business is highly transactional, some organisations have leveraged the whole recipe approach including the mix and match of beverages. In other words, the customer can participate in a broader offering than simply the same old shopping list week to week.

Banks, law firms, technology organisations and many firms in the services sector have attempted to re-shape their offers to become more solutions based. The aim is to provide customers greater value and to expand market share.

The challenge of driving harder in solutions

But why is the solutions approach not more prevalent and why don’t we hear of more widespread success stories on this front? Indeed, all organizations profess to seek differentiation in some form, and to provide even better value to their customers. Moving to more of a solutions focus makes intuitive sense and has some very obvious benefits, including customer satisfaction and loyalty.

However, it is not as simple as it sounds, and there are two significant challenges to be addressed.

Brand

Any organization is seen in the eyes if its customers as having a certain brand image and profile. There is a whole science around brand management which we will not be going into here, but suffice to say that moving into a higher value space such as broader solutions can create some real questions in the eyes of customers. Indeed, it can be confusing in their eyes.

For instance, a firm that specialises in the routine preparation of tax statements for individuals and small businesses may struggle to introduce a broader solution around say tax strategy and planning. In the eyes of its clients, its core competency is very much in the transactional business of preparing tax statements. Dealing with tax planning and strategy is a different positioning in the eyes of the customer. This shift can be achieved of course, but there are challenges in how the brand is perceived and therefore how the client base will respond.

Internal management

The other factor is how the internal organization and management of the business is calibrated to accommodate both the transactional and the solutions approach. Things such as culture, performance measures and organization may well be very different.

Using the example of the tax business from above, the skills and capabilities needed to run the transaction side of the business are totally different from running the client strategy and planning side. It is very much a production line focus vs a project focus.  In addition, the performance measures would be very different as well as the type of people needed to undertake the work. In other words, the organisation in this instance would need to take re-shape the way it is structured and managed.

Value to customers is a key driver of strategy. But organisations that have a strong transactional base in their business have a challenge in how they move into more of a solutions approach, and how they can really deliver that expanded value proposition to their customers. Mixing the transactions and the solutions needs some clear thinking on the right business model and how it can be achieved.

Career development needs an MBA – fact or fiction?

Over the years, I have mentored many people whose opening question was “should I do an MBA?” The real answer to the question is of course “it depends”. But career development is not about fence-sitting. It is about clear thinking and taking some decisive actions, so lets explore this further.

A former IBM colleague in the US Bill Smillie would sometimes interject in a meeting to say “are we asking the right question”. Which is exactly what we should be saying in the case of the MBA question above. Indeed, the MBA choice can only be fully understood if we are sure to explore the right question.

Starting points are different

People approach the MBA issue from many different starting points. Some will have recently completed undergraduate education, and see the MBA as a natural launching point into the world of business. Others may be ten or so years into their careers and see the MBA as an opportunity to re-group and refresh or possibly change direction. Other will approach the issue strongly influenced by the culture of their national business community. For instance, the MBA in the US has long been the popular and in many cases the expected track from college into business careers, whereas the MBA in Europe or Asia has not been as prominent.

The MBA decision is a big one as it may involve significant timeout from an existing career, plus a substantial cost in dollar terms and personal and family commitment.

So notwithstanding the geographic and cultural differences, what are some of the questions to be explored.

1. What can you bring?

The first is about what the person can bring to an MBA programme. Some find this a strange place to begin. What about the nature of a specific course and the reputation of a business school? Yes these are important, but a good MBA is as much about learning from each other as it is about learning from a professor or management guru. You get out of an MBA as much as you put in. What you can bring to the table determines whether you should embark on an MBA in the first place, and indeed which MBA should be undertaken.

A good MBA is about shared learning rather than an experience of being taught. This can be viewed in the context of that wonderful thought from Benjamin Franklin “Tell me and I forget, teach me and I may remember, involve me and I learn.”

2. How will your specific needs be addressed?

The second is about how the MBA may help the person address his or her needs. Is it about a career change or about career enhancement in specific areas? How does the MBA really address these points, and why? Someone said to me once that they wanted to embark on a MBA to enhance their skills in marketing. I responded by asking why the MBA would help in that regard. We then engaged in a full and frank discussion, not so much about the MBA, but rather about the perceived need to enhance the skills in marketing. We finally agreed that the marketing need could be better addressed through different roles back in their organization. But what we did agree was that the MBA would provide a different set of thinking around business problems. One example might be how marketing can provide a better role in delivering value to the business, and help to re-shape its business model.

A good MBA will provide an excellent set of experiences about the process of solving a problem as distinct from learning specific functional techniques. For example, in statistics, there are plenty of ways of learning how to calculate a standard deviation. But in a MBA context, the point is not how to do the calculation, but rather how to interpret the results in a particular business context, what it means for the business and what decisions need to be considered from the data.

3. How will the MBA make you different?

The third and final key question is to have an understanding of what broader success might look like after the program is completed. This needs to go beyond the warm and fuzzy feeling upon graduation, and monetary opportunities that may arise. It needs to take into account the new capabilities that are acquired, and how people will be different, both personally and in a business sense. This is akin to the personal business case for doing an MBA. What will be different after your significant investment of time and money into the MBA?  Will you be a better person and one with enhanced capability to grow your career both professionally and personally?

So back to the original question, “should I do an MBA?” For many people, the answer is definitely yes, and significant benefit can be gained in many dimensions. For others, it may be a different outcome. But the real point here is not so much a “yes” or “no” position, but rather the level of engagement in a rigorous decision-making and questioning process. Only then will we have the right answer.

Drinking the fire hose of social media

Over the centuries, some extraordinary landmarks of enduring achievement have punctuated the journey of humanity. Think of the ancient Greeks and their achievements regarding learning and philosophy. The Romans stand out because of their organization and empire building skills as well as infrastructure. The oceanic explorers such as Columbus, Magellan and Cook expanded the world way beyond the imagination and perspectives at the time. These and other major achievements not only defined an era, but they also heralded a step change for humanity at that time.

Fast forward fifty or more years from now, and it will be interesting to see how writers describe our place in the sun, especially the 1990s and the 2000s. What will they say and how will they view our achievements? I suspect the internet and the digital world will rank very highly, and will be seen as truly transforming our society. Whether this is viewed with the same aura as the Romans or the Greeks remains to be seen.

But I also suspect that future writers will give social media a special highlight for the era in which we live, both in terms of its impact on individual behaviour, but particularly its impact on society overall.

Social media is frequently lauded for the way it has changed human interaction. Social information and photos on Facebook are often cited as significant and beneficial additions to how we connect with each other. On Twitter, expanded business opportunities through better direct engagement with customers are widely seen as transforming the way organisations do business.

But focusing on what the tools can do is actually missing a broader point, which is that social media has re-defined the way that information and knowledge are shared. Indeed, social media has re-written the rules for knowledge management. Let me explain.

If we wanted information about a topic in days gone by, we would seek it out either from a library or from some organised database of information that was held in some central location.  In essence, we would use a “pull” type system to bring that information to us. This “pull” system has been the foundation of knowledge management over the past several generations.

But social media takes us in the other direction as it provides a very strong “push” model that complements the traditional pull approach. Thanks to technology, the “push” approach is revolutionary because it is instant, global and transparent. Facebook with over 1 billion users worldwide (and growing) enables the push of a huge variety of information to many different individuals, groups and geographies. Twitter generates some 500 million tweets every day, many of which push valuable information to recipients across the globe.

It is this “push” of social media that effectively creates the so-called fire hose of information in all its forms. However, the push of social media is not a one size fits all proposition. It helps to think about this point in three broad buckets as follows:

• The social push
• The business push
• The information and knowledge push.

The social push

This has social interaction as its main objective, and includes the push of photos to friends or details of holidays and so on. It includes messages from celebrities to their social media fans stating for example they have just landed in New York and the weather is cold. I am not sure this is adding significantly to the world bank of knowledge, but the fans probably think it is important. The popularity of this truly social medium has been enormous, and has without doubt been a major underpinning for Facebook.

The business push

Sales, product development, product information and product conversations are the main areas of activity here. Organizations have made great strides in recent years to really tap into the business opportunities that social media provides. This is still an evolving space for many organizations, but we are already seeing the huge uplift in the number of organizations actively engaged in social media with specific business objectives in mind.

The information and knowledge push

Thirty minutes on social media and search engines today can generate an array of information that would be considered impossible even twenty years ago. Information releases that are pushed on social media have become not only prevalent but also extremely popular with users. Leading magazines and journals are now circulating massive amounts of quality information that is readily digestible by readers. This has been helped along by user-friendly consolidation and filtering tools, such as Flipboard for the iPad.

Of course, these three areas above can all revert to a pull model whereby a user can interrogate social media tools to seek and obtain specific pieces of information.

It is hard to guess what writers in fifty years times will pen about our current times. How will the balance of the above be seen and how will the dynamics be played out? For example, how will the blending of the three areas above play out in the future and what will be the balance? One suspects that there may be no definitive answer other than it will be changing constantly.

However, what is clear from the explosive growth of social media is that people are not just talking or conversing about it, but they are getting rapidly engaged in all its forms, both as individuals and also as business and government. Future writers may well say that we have taken to heart the lyrics of the Elvis Presley song “A little less conversation, a little more action please”.

 

Getting hooked on career development

Not so many years ago, career development was somewhat passive, and was often assumed to happen automatically given solid performance. Much of the conversation around career development was narrow, and often geared towards training. Indeed, training courses were provided to help with skills enhancement, which in turn enabled promotions to occur in a fairly orderly fashion.

But the contemporary work environment, modern technology and the global nature of business has changed all that. More importantly, the expectations about careers have altered dramatically. Generational change has also meant that people are changing jobs (and indeed careers) a number of times across their working life.

Career development is now a multi-dimensional facet of the modern business, and is trumpeted for driving better retention of people and more effective recruitment of talent into the organisation. Company websites and on-campus recruitment campaigns focus heavily on the mantra of career development. An organisation that does not have a good narrative on this issue will struggle in the global war for talent.

But that narrative is not simply a process or a flowchart showing the steps in the promotional cycle of the organisation. In fact, that is only one piece of the puzzle. People in organisations look at career development through multiple lenses, and this makes it challenging for organisations to get the right point of balance and focus.

A practical framework that is both usable and flexible can be expressed as the OPEN principle, namely: Organise, Personal, Explore and Nurture.

Organise

There must be an organized set of activities around career development to provide transparency and clarity for both individuals and organizations. But the point is that it is not one size fits all. For example, training activities need to be very flexible to suit specific requirements of the individual or the job they are expected to undertake. Old models of set training programmes with a “mass market” feel are becoming far less prominent.

Personal

The personal situation, whether it be around family or preferred life style, is so important in the career development context. In recent times, this has been given much greater prominence to accommodate the legitimate choices that people take regarding their personal lives and circumstances. For instance, career choices around overseas or domestic re-location, reduced days per week or flexible work routines are all part of the personal choices that are a key part of career development. This is very much a two-way street, and organizations are increasingly seeing flexibility in this area as vital to retaining key people in the business. The old rigid model of tightly structured careers with less regard to the personal situation is rapidly becoming a relic of the past.

Explore

Today, career development is not only about exploring options, but also being able to blend different options or opportunities. One example is job rotation. Whilst rotation between roles is nothing new, what has changed is the trend for many organizations to proactively help people explore the different options that might be available, including job rotation, job splitting and job sharing, and to use this as a positive motivator.

Nurture

Career development needs to be a real conversation, but also one that is ongoing and enduring. The annual or periodic performance review is not the right place for such a conversation. Rather, ongoing ways of shaping career development often work well if they are once removed for the day-to-day environment. For instance, the use of external mentors is a key approach for many organizations. Or there could be mentors from within the business, but from a different part of the organization. There are several combinations that can work, but the key is to ensure the conversation is enduring and combines the needs and expectations of both the individual and the organization.

Today, we often hear the idea that “your career is your personal responsibility”. This is a quantum shift from the more passive approach to careers in earlier times. It brings with it some complexity, but also some major opportunity for individuals and organisations to strike a win-win position for careers.

Taking the “I” out of teams

A work colleague of mine had a nasty habit of starting conversations with comments like, “When I managed such and such..” or “I used to lead this..” or “When I was the CEO ….” or “When I saved the world ..”. Well not quite, but you can probably see my drift. He used the “I” word so much that I nicknamed him PP, which stood for the Perpendicular Pronoun (ie the letter “I”). This was perhaps a bit obtuse and he did not really get it, but it made a key point about his mindset. If you believed even half of what he said, you could be excused for feeling quite inferior.

The real problem however was that he was a menace in a team situation. Two problems in particular can emerge in such situations where a big ego is part of the team.

1. Big egos can drive people to distraction

A big ego in a team can be an annoyance and distraction to the task at hand. This occurs especially through unnecessary and repetitive stories about self-centred activities and experiences. People can quickly tire of such behaviour. Whilst teams should have a range of personalities, there is nevertheless a need for teams to work out and accommodate the different personalities represented. This does not mean that personalities need to be shut down, but it does mean that some protocols of the workings of a team need to be clearly understood. A big ego can provide a real challenge in this regard.

2. Team members can stop listening to a big ego

Even though a big ego can have some good ideas, people in the team can actually stop listening and ignore the suggestions or ideas presented. This can have unfortunate consequences as the team is not gaining the full value from one of its team members. In other words, the team cannot be high performing. Amongst other things, a team is about making the most of a diverse range of thinking and ideas, and a big ego can sub-optimize this aspect of teaming.

Naturally, people bring their egos to a team. That is human nature, and is part of how our confidence is conveyed. But the issue is how can the ego be positively managed in a team situation, and focused towards effective outcomes for the team.

A high performing team needs to deal with the big egos, and ensure that the outcomes of the team are not compromised. Assuming there is a need to keep the big ego on the team, three strategies can be employed:

Strategy #1 – Embrace and capitalize

As the saying goes, if you cannot beat them, then join them. This strategy is about using the big ego to energize and stimulate the team. In other words, it is about turning the ego into a positive. This would include language such “Tell us a bit more about your experience with such and such..” or “What can we learn from what you did at ..”. This strategy focuses on how to get the most from the positives, and integrating the big ego into the team in a positive and fulfilling way.

Strategy #2 – Tolerate but drive clear focus

This strategy is more about managing a collective tolerance of the big ego, but at the same time placing a strong focus on the outcomes and deliverables expected. This can be characterized by language such as “We want you to bring these specific inputs back to the team meeting, but leave other areas to different team members”. It is about using the big ego in specific areas of strength and making sure that a focused contribution occurs.

Strategy #3 – Quarantine and leverage

This is a risky strategy, but can work especially where more technical input is needed. In this case, the big ego operates somewhat outside of the team, but is tasked with providing specific deliverables to the team almost in a customer / supplier relationship. This has the effect of obtaining the material or contribution required, but at the same time avoiding some of the challenges in the normal team environment. The language here would be along the lines “We want you specific inputs in the following areas, and we will then decide how these will be discussed with the broader team”.

Teams are challenging at the best of times, and we all bring our egos to the table. But managing that big ego can provide team members with some real heartache and frustration, and can compromise the performance of the team. Film director Fred Durst gave this some perspective when he once said, “To walk around with an ego is a bad thing. To have confidence in yourself is a great thing.”

 

A business endurance test – the teleconference

About twenty years ago, I was introduced to a newfangled business tool called the teleconference. Here was a way of talking to a team of people in multiple locations by using just the one dial-in number, and it could be managed very simply from the desk phone (not many mobiles at that time). For my initiation, we had a team of about twelve people across three cities in conversation, and we were all very excited. The wonder of modern technology never ceases to amaze.

The teleconference has now evolved, and become a normal part of doing business. It is a common and essential tool for many organizations, and executives and managers can be involved in multiple calls each day. Indeed, some complain of a day of “back-to-back calls”. Over time, the teleconference will give way more and more to the video conference, but for the moment the teleconference is a tool that is used extensively across all levels in business.

Whilst the teleconference has brought much benefit at low direct cost, there are some serious productivity traps. Indeed in some situations, the teleconference is often seen as a chore which adds little value. Here are some of the ways that value can be compromised on a teleconference:

1. The race to multi-process

Too many conference calls involve significant multi-processing by participants which can be a major distraction from the subject at hand or the decision to be made. Chat room conversations are the worst offenders, and often these generate multiple exchanges between people on the teleconference that are totally peripheral to the subject. Worse still is the habit of people setting the call to mute, and then conducting an entirely separate conversation in the background. How this helps to make better decisions or conversations defies belief.

2. The straggler co-efficient

Over the years, I have come to learn that the more frequent the teleconference, the greater the percentage of latecomers. This applies in particular to daily or weekly calls. Teleconferences that occur less frequently, such as monthly or quarterly, have the effect of bringing people to the call more or less on time lest they miss key but infrequent messages. Put another way, the number of latecomers or stragglers is in direct proportion to the frequency of the calls. Stragglers can seriously impact the flow and quality of the call for everyone.

3. “Sorry – I was on mute”

The mute button on a phone is a powerful tool in itself. Unfortunately, some participants will hit the mute button, and carry on a totally separate discussion or activity. This is a frequent occurrence. In extreme cases, participants may actually leave the call completely to quickly grab a coffee. The mute button can also be used as a means of privately venting some emotion or anger at comments being made. Occasionally, the mute button is overlooked in error, and the resulting public comments can add a somewhat entertaining dimension to the call. The mute button is important to shut out extraneous noise, but using it to effectively opt out of the teleconference would seem to compromise the quality of the call.

4. The dreaded mobile phone participant

Some years ago a senior colleague of mine had two very simple rules for teleconferences – no mobiles and no speaker phones. Whilst this sounds a bit draconian, his point was a good one highlighting the need for everyone on the call to be able to hear all participants clearly and without distraction. There will always be good reason for someone to be on a mobile, but doing so from the train station or near a nosy road is not exactly conducive to a good teleconference.

But all is not lost. Here are some simple guidelines that can help shape more productive teleconferences:

1. Clearly articulate the purpose of the call. Be clear on whether the call must result in a decision or whether it is just information sharing or discussion.
2. Outline and follow an agenda with some structure. This is so simple yet so often ignored.
3. Gather the right people for the call, and avoid the rent-a-crowd syndrome.
4. A good teleconference starts on time and finishes on time.
5. An even better teleconference is a short one. Many calendar systems default to a 60 minute time slot, but some calls should be set for a more suitable shorter duration.

With some focus and adherence to the above guidelines, much can be done to ensure the teleconference does not degenerate into an endurance test.

Teleworking is alive and well

There has been much excitement over the past week as a result of Yahoo’s announcement to bring its teams back into the face-to-face work environment, and to severely curtail the amount of teleworking. Some commentators have suggested that elements of the Yahoo culture had seen teleworking go too far in parts of the business causing issues in productivity and performance.

But the publicity has also placed the telework discussion in the headlights on a broader front. In doing so, it has provided a real focus on people issues and workforce effectiveness.

Teleworking is a fluid topic in how it is defined and measured. Some teleworking is no more than catching up on unfinished work, but in the home environment. With the right tools, almost anybody can work from home to finish a presentation or report. Of course, this can also extend to catch-up work in a hotel room, a coffee shop or an airport.

Other forms of telework are more formalized. For example, a person may work from home or a remote location for say a set number of days each week. This could be due to a whole range of lifestyle reasons, such as extensive commuting times.

To expand and promote the concept, teleworking events and forums have become more common in recent years. The US and Europe have conducted  “telework weeks” over the past several years. Australia held its first telework week in November last year with significant input and presence from national business and political leaders. These events serve to highlight some of the challenges of teleworking, but also they celebrate the many successes. At the telework week in Australia for example, US Ambassador to Australia Jeff Bleich painted a compelling picture of success from teleworking in parts of the US Government, both in terms of productivity and lifestyle benefits.

Successful teleworking does need to be managed carefully so that benefits are realized, but also that the organization culture is not unduly compromised. Organizations that use teleworking successfully exhibit three guiding principles:

1. Focus more on the outcomes, not on the process

If outcomes can be delivered more effectively and efficiently by teleworking then it should be encouraged. It helps the organization, and also is a win for employees as they have more flexibility and lifestyle benefits. At a conference not so long ago, I met a man who commuted two hours each morning and evening. He was supposedly “required” to be in the office. Yet his role in fielding enquiries on customer issues could have easily been done from home, at least for a couple of days each week. His organization was too focussed on the process of work rather that delivering the outcome more efficiently. To say nothing of the horrendous commute each day for the employee.

2. Maintain a balance between teleworking and face-to-face activity

Not so long ago, I met a person from a large global organization, and he told me he has not been into his local office for about 6 months. Indeed, he almost saw this as a badge of honour. Upon further enquiry, it turned out that he was not alone. This situation is clearly an extreme, but imagine the negative impact on organization culture, productivity and teamwork just to name a few. There is no shortage of technology to help us work remotely, but it needs to be balanced with real interaction with colleagues and the workplace. Disappearing off the radar for six months is an amazing copout from both the employee and the organization. There are no hard and fast rules, but in my view some face-to-face contact with colleagues needs to occur at least twice a week.

3. Know when to get a meeting happening

One of the traps of teleworking is that the so-called flexible arrangements can become fixed. That is, someone who normally works say 2 days a week at home will of course build this into the routine. There is nothing wrong with that, and indeed there may be some family or other reasons for that arrangement. However, it is important that all participants in teleworking have some flexibility to gather together reasonably quickly for that urgent proposal or report completion. There is nothing worse that having four people from a six person team meeting in a room in the office, but with the other two trying to participate via phone just because it is their day to work remotely.

Whilst Yahoo may have specific issues to consider in their environment and have chosen a course of action, for most organizations teleworking presents a strong win-win opportunity for productivity and lifestyle improvements.