Monday, July 13, 2009

The treasure within...

I frequently look at data to gauge source of business - and every time the answer is the same. The biggest source in our industry happens to be references - we get new customers if the existing guys are happy. Clearly, the corollary to this is - if proactively done, there is potential to create demand from existing engagements and relationships. If this hypothesis is true - and I will come back to it, lets look at some math.
In Indian IT, the typical sales : delivery ratio is in the region of 1:100. The typical sales productivity ranges from $5 mn - $ 10 mn. Assuming that proactive steps taken by the delivery organisation can have an impact even fractionally correlated with sales productivity - the implications are fairly mind boggling.
I recently had the privilege of conducting a workshop on demand creation with a talented bunch of delivery leadership. We actually used an interactive case study methodology to generate the learnings from within the group. Interestingly - as many as 15 ways of thinking came out of this workshop. If we club these 15 items into a Demand Creation "Hat" - this will be a richly rewarding hat for delivery teams in our industry to wear. Impact is only achievable when the engagement team in totality kicks in. My definition of the engagement team includes the sum total of account management and delivery for the client.
1. Reposition : Indian IT today is roughly comparable to japanese auto in the 80's. The japanese crept up on American Auto with 100 cc bikes. American auto laughed them off and got blind sided while Japanese auto repositioned into high end cars. Indian IT comes from a commodity labor background - and needs to do a similar switch. I have previously written about the three components of positioning - target segment, frame of reference and point of difference. There is little option in the first two - we have to target the business audience (there is play available here in terms of which function / level of business to target) and the frame of reference has already shifted to global mnc's (the global majors are increasingly becoming rate competitive). The engagement team needs to focus on finding the right point of difference in one of the three axes. It could be a unique relationship, unique commercials or unique solutioning. What's your point of difference ? I need one answer.
2. Relevance : Having made a positioning choice - the engagement team should leave no stone unturned to use this to demonstrate relevance to the client. This can only be done if significant effort goes into understanding and living the client's business. Frequently, the client can be a very good participant in this process - you just need to ask. Every proposal should be able to enumerate relevance, every employee should know his or her own relevance, every workspace should visibly manifest relevance etc. Those who soak in relevance build great relationships with clients - the rest grimly hang on to the engagement till they mercifully get consolidated out.
3. Applied Frameworks : In the services business, IP typically manifests itself in frameworks. For instance - we now have a Business Aligned IT framework in HCL which is exceptionally powerful in aligning IT to business process with the express intention of minimising process cycle time. I am sure most firms in the industry have invested in such wonderful frameworks. Unfortunately, I find when the time comes to expose IP / frameworks to clients; most engagement teams call upon the central team responsible for the framework and showcase it in an as is / where is state. Those engagement teams who choose to internalise such frameworks - and present it in the context of the clients specific situation and problems create tremendous impact. The rest just send their clients to sleep.
4. Situation Analysis / Problem Definition : Do look up Bill Bradley in Wikipedia. At one time America's best (white) basket ball player - who more interestingly went on to became a Senator. One of his really neat tricks was the ability to throw the ball over his shoulder straight into the basket while facing away. Whenever asked he used to say it had to do with a sense of where you are. Bill's sense came from complete knowledge of the basket ball court - while maneuvring in a client's business a "sense of where you are" is critical. It makes a lot of sense to put together all data and information we have about the client (including the use of secondary research) to come up with an incisive analysis leading to a very clear definition of the problem/s we seek to solve for the client. If you dont understand the problem clearly - there is no way you can offer a solution. And as they say - if your not part of the solution, then your part of the ........
5. Sizing the addressable market : I think - therefore I am; sounds pretty close to - I have solution, therefore I will sell. Given that I am primarily looking at delivery organisations addressing the task of demand creation - since teams are mostly in the back-end, its quite easy to get lost in the outside in trap. Imagine, a team handling a manufacturing client offering everything but a supply chain solution, a team handling a financial client offering everything but a regulatory / compliance solution, a team handling a retail client offering everything but a POS / CRM solution.... It's only by accurately sizing markets that demand can be created in the most amenable territory. Else you may be selling ice to eskimos.
6. Dimension : This is one of the biggest problems I find most delivery teams struggle with in communications - the inability to appropriately dimension. Statements like -"we saved operating expense by 20%" - can create enormous confusion with clients. Without any qualification - most business people interpret operating expense in P&L terms (not IT operations cost - or as was meant in this statement, IT Operations for a specific business unit in the client's organisation). If this case study refers to a $ 10 BN enterprise - a client who understands this statement to mean an over $ 1 Bn saving is not interpreting the statement incorrectly. When he finally figures out that it actually translates to some measly $ 10 mn the fallout can be awe inspiring.
7. Best Practice : Most of us forget that one of the strongest value propositions in outsourcing is the service provider MUST be working with other firms in the same industry, and with leading firms across industry. Both translate to best practice. When I look back at the last 4 HCL global meets - the biggest value realised by attendees was networking and experience sharing. If this is the case - and engagement team that continuously strives to find best practices (could be within the same client organisation, industry or across industry) will over a period both build confidence, as well as engage really well in cross sell.
8. High impact customer touchpoints : Any marketing person will understand the investment and sweat that goes behind creating a new customer touchpoint. With existing customers these are freely offered - in visits, negotiations, new projects etc. Every such touchpoint offered should be treated with the value it deserves - there needs to be demonstrated thought leadership (leveraging all the previous 7 points) in converting that touchpoint into a delightful experience. Remember, your customer will only hang with you if your company is valuable and refreshing. Else you can hang alone.
9. Hypothesise : Do you remember the Hitch Hikers guide to the galaxy ? The answer to the Life, the Universe and Everything was 42. To get to this answer the worlds best brains spent about a billion years aided by unbelievable computing power. Perhaps a lot could have been saved with a little hypothesis ? Assuming that a good situation analysis is done and problems are clearly identified - remember one thing. Usually nobody has the answer. And if the client does not have the answer it is always best to work off a solution hypothesis - and let the client accept, bounce or improve with this as a starting point. It's incredibly important to have a point of view.
10. Reason to Believe : Unfortunate as it sounds - skepticism is today deep rooted in humanity. And I must confess - IT service providers have not really been the poster boys of governance and integrity. Actually - let me not be unfair. This is the case for most big business. Consequently, gone are the days of the deal sealing handshake - especially in the B2B environment. Communication needs to be couched with reason to believe. This will require the discipline within the engagement team to avoid statements which they cannot prove. The unfortunate reality is - truth is perception.
11. Solution NOT Capability : beyond a point an engagement needs to mature to see itself as a set of solutions. As the engagement team aligns itself to solution-speak ; it doesnt matter if the engagement is largely T&M / Labour oriented - the engagement language will start changing to cover techno / functional domains and increasingly the relationship will genuinely head towards solutioning. Each individual in the engagement needs to recognise the technical or business solution they are part of - if they can do this, and if the problem identification stage has been well done the engagement will start climbing the value chain like Tarzan of the Apes.
12. Length of Answer : A-ha. How scared are you of a scorpion bite ? Small things can have big impact. This is one of them. This is especially true when westerners deal with Indian teams (its a culture thing - please dont bash me up on any other count). During interactions a client asks a simple question. He expects a simple answer. I have seen interactions where the answer goes round the world like Phileas Fogg and reaches a zone which bears no resemblance to the answer asked for or (in some cases) to the original question. When engaged in a discussion - answer a question in less than a minute (even that may be too long).
13. Measurement of Value : Too much is never enough. Every engagement needs to measure the value it delivers the client. Assuming it does deliver such value - this needs to be communicated every opportunity in an ingestible form to the client. Again. And again. And again. Measurement is crippled without appropriate and adequate broadcast. So equal emphasis - measure and communicate. For a quick lesson on how to communicate refer point 12.
14. Thought Leadership : Trusted Advisor. Two words that are achieved the other way around. First comes the thought leadership necessary to be seen as an advisor - only then can the relationship be worked into a level of maturity for the service provider to reach this status. While who plays the trusted advisor role as an individual can be up for debate - the overall engagement team has to be actively involved in thought leadership relevant for the client. There are many routes to this - the problem definition and best practices pieces lend themselves well to it.
15. Thematise : When the time comes to integrate all of the above into one holistic and consistent experience for the client - it is important to thematise the engagement. This serves as a vision and guide for the engagement as it progresses on relationship and value parameters. Themes should be very relevant for the client. For instance - a theme I quite like is one we had built for a major luxury hotel chain - "Mission Critical Luxury". Having established this as the overall theme for the relationship, specific engagements / touchpoints could be rendered to fit to this - Failproof operations, Top end customer experience etc. Remember, most people have low attention spans - especially in things outside their immediate domain. For a client to make sense of the relationship an integrated thematic approach can serve as a very powerful glue for the entire engagement.
Engagement teams that manage to do these 15 things well will come across to their clients as relevant, aligned, engaging, visionary and trustworthy. In essence a commodity relationship will translate to a value centric one. From here it does not take much effort to get a happy customer to generate many more. The best part of the treasure within is its impact - it ripples and multiplies.


Blogger [Supra]™ said...

The Raison d'être is well summed up from points 10, 12, 13, 14, 15 especially when you move from a commodity based business (what IT is today) to say engineering services which is, I believe slightly higher up in the value chain. The customer today is looking for a trusted partner who will engage in multiple areas (read projects) and bring in value (which is not judged in pure play cost savings only) through newer areas of partnership, newer markets that can be addressed globally and the works. So if a product based company is looking for a particular solution the value add from a partner can be (say) a complete outline or guide to address newer markets, improved internal processes and compliance frameworks – and these are probably the areas Indian IT cos have typically shied away from.

As (Indian) IT moves away from a commodity based stance, positioning is of critical importance and $$ variation over the rate from majors or % cost savings is not always enough. How you approach the solution, how you are positioned to handle cases efficiently and what are the key solution parameters are probably the reason for success – companies that understand the change in business landscape and adapt quickly will survive the storm and grow while the others will probably exist as shadows of their former self or simply be gobbled up by competition.

5:07 AM  

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