Guiden till det perfekta mötet

Posted in Aktuellt, Allmänt on August 31st, 2016 by admin

Lisa Lipinska, mötesrådgivare på Scandic Triangeln, har lösningarna för det ultimata mötet inom organisationen. Här är hennes bästa råd.

Det inte enkelt att få till ett riktigt effektivt möte. Ungefär hälften av tiden är ineffektiv, trots att nio av tio chefer anser att möten är viktiga för företagets utveckling. Enligt Lisa Lipinska måste man investera tid och kraft för att lyckas:

– Alla deltagare ska veta varför de ska på medverka, vad förväntningarna är på dem som individer och vad förväntningarna är på gruppen. När man arbetat ett tag med sina möten ser man att tiden som man investerar i planering och förberedelse ger resultat. I slutändan handlar det om att tjäna pengar och må bra. Dåliga möten är ett stort läckage, säger hon.
meeting
I rollen som mötesrådigvare har Lisa Lipinska sett flera exempel där företag kan uppnå väldigt goda resultat genom att utveckla sina möten:
– Ett lyckat möte är ett effektivt möte där människor når sina mål. Och för att nå dit krävs många bitar, från att man investerar tid i förberedelserna till att vara tydlig med förutsättningarna. Då blir det också roligt att mötas, säger hon.

Mötesrådgivarens bästa tips:

Före mötet:
– Fundera över varför mötet behövs och vilka som berörs.
– Skriv en agenda och bestäm plats.
– Var tydlig i inbjudan över syfte, plats, tid och deltagare.

Under mötet:
– Se till att mobiltelefoner och datorer får vila, lägg dem på en speciell plats vid behov.
– Ha pauser för toabesök och ”kontakt med omvärlden”.
– Avbryt inte kollegor som talar. Alla pratar inte lika snabbt men alla ska komma till tals.
– Ha ståbord i lokalen redo. Variation är bra och att stå ibland ökar blodcirkulationen.
– Respektera tider, mötets regler och var snäll. Hälsa på alla i början av mötet.

Bryt isen:
– Skicka ut personliga beskrivningar om varje deltagare innan mötet, det sänker tröskeln och får igång kontakten.
– En extern gäst kan höja energin rejält i gruppen.
– Att som mötets ledare visa upp en svaghet är ett bra sätt att få deltagarna att släppa prestigen.
– Överraska i mötets struktur. Ett enkelt sätt är att möblera om så att alla sitter i en cirkel istället för klassiska rader.

Källa: DI.se, augusti 2016
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Läs här om hur G8 Meetings kan hjälpa Dig utveckla era möten

Digital in industry: From buzzword to value creation

Posted in Aktuellt, Board work / Styrelsearbete, Digitalisering / Internet, Executive Team / Ledningsgruppsarbete, Försäljning / Sales, Strategy implementation / Strategiimplementering on August 28th, 2016 by admin

From supply chains to production to customer experience, digitization is transforming the way industry functions—and unleashing global opportunities for value creation.

In the past few years, we have seen digitization bring its first benefits to the industrial sector, particularly in processing and manufacturing, yet enormous untapped potential remains. Digital capabilities such as e-commerce platforms can significantly improve traditional customer-supplier experiences. Additional advances in automation, big data and analytics, and the Internet of Things create additional opportunities for substantial gains along the entire industry value chain.

Another industrial revolution

Early signs of the digital revolution are already here. Amazon Business, a B2B e-commerce platform launched in April 2015, turned over $1 billion in sales in its first year, growing at an going D 1impressive 20 percent per month. B2B buyers increasingly prefer digital, with 94 percent conducting some form of online research before purchase.

Further changing the rules of the game are the decreasing costs of new processing technologies such as additive manufacturing and advanced robotics. For example, 3-D printing costs came down by 60 percent between 1990 and 2014, and industrial robot costs decreased 5 percent annually between 2000 and 2012.

Put concretely, what does digital bring in terms of performance jump across functions? Let’s start by looking at operations, where our experts have recently shown that the impact potential is significant across all functions.

And this is not science fiction! Pockets of excellence exist across industrial sectors that have proven it can be done.
•In the oil and gas industry, predictive maintenance is eradicating unplanned downtime and costly repairs. Connected plants use remote sensors to forecast and report on the condition and performance of machinery. Early signs of problems are detected and corrected, maintenance resources are directed at the areas of greatest need, and machinery availability is maximized.
•The pulp and paper industry has seen significant increases in productivity through the use of remote temperature monitoring. Kiln sensors monitor lime mud temperature, a leading indicator of calcination. Sophisticated tools aggregate and analyze the temperature readings and automatically optimize the shape and intensity of the flame driving heat through the kiln. The process has resulted in fuel savings as high as 6 percent and a lime throughput increase of 16 percent.
•In manufacturing, repetitive, strenuous, and complex tasks are performed by robots working alongside operators on the shop floor. The operators themselves spend less time waiting for goods or processes or filling in routine documentation, because information systems optimize materials flows and track key performance indicators. Real-time analytics and advanced process control enable errors and quality lapses to be picked up immediately, minimizing rework and scrap, and automated inventory systems—such as wireless-connected boxes with cameras that automatically reorder when their fill level drops below a certain limit—ensure that inventories are accurate, goods can be easily located, and safety stocks are adequate but not excessive.

Advanced modeling techniques for optimizing complex manufacturing sites and supply chains

Working with a basic-chemicals manufacturer with complex operations, we designed an end-to-end advanced model that generates a holistic optimization of the entire supply chain from procurement to commercial. By incorporating detailed price and cost curves into this model and leveraging the latest advanced optimization engines, we developed a systematic optimization tool that was embedded into the company business process.

The company saw a recurring EBITDA margin increase of roughly 5 percent, equal to approximately 6 percent of overall manufacturing, logistic, and raw-material costs. Application of these techniques on more than ten other cases in the process industry suggests a recurring EBITDA margin increase in the range of two to five percentage points, with value creation being proportional to supply-chain complexity.

Let’s not forget the customer: digital has the potential to profoundly reshape the way industrial companies interact with and serve their customers. Let’s have a closer look:
•Where customer access was once constrained by minimum order sizes and the cost to serve in a particular market, e-commerce and web shops allow companies to reach customers they could nevergoing D 2 have reached before; hence cost to serve can be cut by 50 to 70 percent. Online marketplaces such as Amazon Business and Alibaba virtually connect unlimited buyers and sellers, and established players like Grainger are leading the way with their own platforms, capitalizing on 2015’s estimated $1 trillion in B2B digital commerce sales in the United States.
•Suppliers who once relied on subjective analysis and historical knowledge to determine prices can now use faster, data-driven tools to optimize pricing. For example, a leading technical gases company with a large and highly fragmented product portfolio used advanced data analytics and modeling to design a more strategic and logical approach to pricing. The newly developed value-based pricing led to an increased return on sales of 5 percentage points (see sidebar “Pricing”). Emerging markets can tap the potential of digital in the food chain through innovations such as precision agriculture, supply-chain efficiencies, and agriculture-focused payment systems.
•Sales directors can make smarter resource-allocation decisions based on timely inputs from sales reps, individual performance data, and automated recommendations from tools. Reps making sales recommendations no longer have to rely on hunches about what their customers want, but instead make use of targeted insights about products to sell, customers’ success stories, and simulations run with the customer during the sales visit. The ability to attract new customers, improve cross-selling, and reduce leakage can increase revenues by 5 to 15 percent, while customer satisfaction can be increased by 20 to 30 percent.

Digital’s disruptive power

But digital is not only a means to optimize a company’s existing operations. It also gives both attackers and incumbents the power to disrupt value chains, enter new sectors, and create innovative business models. Established companies face threats from new competitors like Amazon Business, which offers millions of products, from automotive components, industrial lifts, and ramps to lab products, protective gear, and electrical equipment.

Impact of value-based pricing

Working with a basic-chemicals manufacturer with complex operations, we designed an end-to-end advanced model that generates a holistic optimization of the entire supply chain from procurement to commercial. By incorporating detailed price and cost curves into this model and leveraging the latest advanced optimization engines, we developed a systematic optimization tool that was embedded into the company business process.

The company saw a recurring EBITDA margin increase of roughly 5 percent, equal to approximately 6 percent of overall manufacturing, logistic, and raw-material costs. Application of these techniques on more than ten other cases in the process industry suggests a recurring EBITDA margin increase in the range of two to five percentage points, with value creation being proportional to supply-chain complexity.

To get ahead of threats like this, industrial companies can use digital to transform and extend their own business models before change is imposed on them by attackers reshaping their industry. Some incumbents are joining digital platforms and B2B marketplaces to aggregate demand and sell direct to end users. BASF, for example, was the first chemicals company to sell products online through Alibaba. Other businesses, such as the 3-D printing start-up Sculpteo, are selling services rather than products. Still others are offering their manufacturing capacity as a service to third parties.

But are companies ready?
Compelling though the opportunities are, our analysis indicates that industrial sectors in general are lagging behind other sectors in terms of digitization: the MGI Industry Digitization shows that while advanced manufacturing and the oil and gas sectors have already gone some way in their digitization journeys, basic goods manufacturing and chemicals and pharmaceuticals are still in the early stages.

Moreover, the McKinsey Industry 4.0 survey of more than 300 manufacturing experts in Germany, Japan, and the United States from January 2016 shows that only 16 percent of manufacturers have an overall Industry 4.0 strategy in place, and just 24 percent have assigned clear responsibilities to implement it.

Five priorities for competing in an era of digital globalization

Five ways to win
Companies that want to get ahead of the digital pack would be wise to take five key steps:
1. Prioritize and scale up. Use structural assessments to determine the customer appetite versus willingness to pay by using mockups to conduct interviews with potential customers and external experts. In addition, weigh the potential impact against the ease of implementation by assessing the degree of innovation or disruption (Is it a substitute? an extension? a breakthrough?), defining the scalability, studying the feasibility of the pilot and full solution, and ascertaining the fit with existing assets and capabilities.

2. Adopt a test-and-learn approach. As technology-driven change accelerates, forecasting and planning are becoming less relevant and reliable. Agility—remaining open to learning and experimentation—is key. And it is crucial when investing in digital solutions to adopt the mind-set of a venture capitalist. This includes trying out ideas quickly with target customers as going D 3soon as they exist to check market interest and price points. It also means being ruthless: if the idea isn’t worth it, kill it immediately. In addition, successful ventures think about monetization potential as soon as interactions with potential customers start, and they proudly copy from other sectors. A focus on scale is also essential, with the ambition being a tenfold increase.

3. Put foundations in place. To maintain the efficiency and stability of existing operations while providing the processing capacity and speed required by new data-driven activities, smart companies move to a two-speed IT infrastructure—overlaying a fast, next- generation cloud-based IT system on their secure, robust, resilient legacy systems. New talent is another priority, especially data and process experts who can connect up various functions, systems, and levels of management; draw insights from all the information generated across the enterprise; and use their knowledge of the whole production chain to help design new products. Meanwhile, job profiles must be rethought to meet new needs, such as maintenance staff who oversee predictive maintenance rather than acting as troubleshooters, and quality specialists who intercept quality issues online rather than detecting faulty parts after production.

4.Treat data as a competitive advantage. Data fuels the algorithms that provide insights into markets, customers, and business processes, so ensure that data management has a clear structure and governance. And considering that even tech giants such as Google have been vulnerable to malicious attacks, be sure to put cybersecurity high on your management agenda. Physical targets such as connected machinery and systems installed for remote access could also be highly susceptible to sabotage by hackers and other attacks.

5. Work across functions, and manage change in the organization. Digitization requires that all departments work together to capture joint benefits for the whole business. Moreover, because these innovations have a major impact on how people work, it is essential to anticipate concerns and build a persuasive case for the employees.
When thinking about digital priorities, identify the technologies and applications that would have the greatest potential impact. But also make sure not to ignore possible barriers to adoption: devise a plan for helping employees use the new technologies and the related new methodologies most effectively. Remember that no organization achieves a successful digital transformation without taking a thoughtful approach to change management, and that it’s the people applying the technology in their daily jobs who will create the additional value.

Digital’s potential in industry is massive, not only in operations, but across all functions of the sector, and the levers that make the most difference to a company’s bottom line vary—from e-commerce to automation to advanced analytics. But industrial companies must begin taking advantage of digital opportunities in order to avoid losing the value to others. A commitment to digitization from top management is critical to succeeding, as is a systematic method of defining priorities and the ability to leverage early success to drive change.

Source: McKinsey.com, August 2016
Authors: Paul-Louise Caylar, Kedar Naik and Oliver Noterdaeme
About the authors: Paul-Louis Caylar is a partner in the Paris office and a coleader of Digital McKinsey in France. Kedar Naik is an associate partner in the Brussels office, where Olivier Noterdaeme is a partner.
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More than digital plus traditional: A truly omnichannel customer experience

Posted in Aktuellt, Customer care / Kundvård, Digitalisering / Internet, Försäljning / Sales, Strategy implementation / Strategiimplementering on August 25th, 2016 by admin

Adding digital channels requires major efforts, yet payoffs can disappoint. Integrating digital and traditional channels into a truly omnichannel offering is even harder—but multiplies the rewards.

In sector after sector, companies are asking how they can adapt to the digital world—how they can build more digital capabilities, create more digital offerings, and even become “digital first” organizations.

But for institutions that have served customers for decades in person and over the phone, digital too often falls short. After the debut of a new app, for example, a jump in sales may not be as big as expected, while hoped-for operational efficiencies—such as a reduction in expensive call-center and in-store customer-support requests—hardly materialize.

Executives naturally wonder why: aren’t customers demanding digital? Without question, they are. But not to the exclusion of other channels, which remain critically important.

omni 3For example, as much attention (and fear) as Amazon may generate among traditional retailers, as of early 2016 about 92 percent of retail sales in the United States—the company’s home and largest market—were still taking place in person. Furthermore, our analysis of market research confirms that many customers (including large majorities in some markets and industries) want to move freely from channel to channel in an omnichannel experience. Accordingly, the digital end-to-end offerings and internal capabilities that companies are building are important not only in themselves but also in the way they support the other channels (see Driek Desmet, Ewan Duncan, Jay Scanlan, and Marc Singer, “Six building blocks for creating a high-performing digital enterprise,” September 2015).

Retailers have increasingly recognized this reality, with some folding one-time web-only subsidiaries back into their larger businesses. But in other consumer-facing industries, such as financial services or telecommunications, digital efforts often end up becoming just another channel—in effect, a whole set of subchannels including mobile, social, and chat. Given that channel conflicts have bedeviled large companies for decades, with competition among channels sometimes more intense than with the outside world, adding even more to the list is not ideal. The result? More complexity (and cost) for the company and a less-than-optimal experience for customers.

By contrast, integrating digital into an omnichannel experience breaks down barriers for customers—and for performance, allowing companies to hone their digital skills in a way that takes advantage of their strength in traditional channels. But first, companies must break down their own internal barriers, initially by developing a more sophisticated understanding of how their customers think about all of the channel options. Mapping out the journeys customers follow among the channels reveals the most important opportunities for channels to cooperate, forming a list of changes for the company to roll out. Finally, to ensure the changes last, each major journey will need its own leader and cross-unit team—supported by revamped incentive structures to facilitate cooperation, new performance dashboards, a road map for transformation, and clear communications and governance from top executives.

Getting these steps right provides new opportunities to make customers happy—for instance, by letting them start a loan application on their phone before bed and finish it at a branch the next day after asking a few questions via the call center. Capturing moments such as these turns omnichannel into a major growth platform.

After it tightened the links between its digital and traditional channels, a large regional bank increased sales of current-account and personal-loan products by more than 25 percent across all channels. And a European telecommunications company saw a 40 percent increase in usage of its online service channel, reducing its costs by more than 20 percent while increasing customer satisfaction by more than five percentage points.

The obstacles to omnichannel

Companies are starting to understand the omnichannel imperative. But getting there is proving unexpectedly difficult.

A bias toward bigness. Part of the reason is a misplaced belief that omnichannel’s massive implications require equally massive actions, such as an entirely new IT platform or organization structure to bring all channels together. Too often that “silver bullet” mentality leads only to a massive misallocation of resources. Instead, the companies that are most successful in making the digital and omnichannel transition concentrate on a long, prioritized list of pragmatic initiatives that, as they are implemented, unleash the value trapped in the intersections among poorly coordinated channels. Collectively these initiatives counter two larger problems:

Disregarding diversity. In our experience, most companies tend to build their digital and omnichannel experience believing that most customers have basically the same needs and follow basically the same journeys. In reality, customers are far more diverse, not only in their needs but also in how they want to meet those needs. For example, a recent survey of North American mobile customers showed that while approximately 35 percent would turn to digital channels first in dealing with an administrative issue, such as a change of billing information, only 24 percent would use digital channels for solving a technical problem. And, of course, even with administrative issues, more than half of customers preferred either in-person or phone resolution, illustrating how many different pathways are possible within the same basic journey. Accommodating these different behaviors will require organizations to understand their customers better while becoming more flexible in allowing for more options to reach the same end point.

Curbing cooperation. But the need for greater flexibility usually bumps into a hardened reality. Despite decades of discussion aboutoni 2 conflicting channels, many companies still operate each channel as a separate organization, expecting it to optimize its own performance and service model while showing its own results. Incentives ostensibly designed to encourage performance unintentionally reinforce the channels’ isolation—such as revenue-generation targets that push each channel to increase its own sales volume regardless of any impact on sister channels. Competition becomes even more brutal internally than with the outside world.

The better breakthrough: Start small, from the customer

A better outcome is possible, but only by taking a more disciplined approach to understand how different customers think and behave at each step of their individual journeys. By revealing customers’ most important pain points, the resulting analysis helps the organization see which changes to make first, gradually making an entire process simpler and more effective for customers from beginning to end.

1. Discovering ‘personas’

The first step, describing how customers act, sounds daunting. But it’s actually less so because customers’ behavior usually coalesces around a few major variables. These become the basis for creating “personas” describing major segments of the customer population in a richer way than traditional demographic-based segmentation allows.

For example, in wireless services, the major variables could include customers’ comfort levels with mobile technology, the role mobile technology plays in their lives, their financial sophistication, their occupation, and the way they shop—how much comparison shopping they do and what information sources they use. A “work and play” persona would be a professional who relies heavily on her mobile phone both for her job—communicating with clients, managing her calendar, and making travel arrangements—and for personal activities, such as paying bills, shopping for groceries, and making investments. Her busy schedule leaves little time for shopping, so for major purchases she relies on quick Internet searches to understand features and prices. Her ideal is to buy online and then pick items up in the store on her lunch break, rather than wait for delivery.

By contrast, a “social enthusiast” is a bit younger, less likely to have a job requiring a mobile device, and instead uses his phone mainly to keep up with friends and play multiplayer games. He may be more likely to be on a tight budget, so he researches purchases extensively, looks to social networks for a consensus on the best option, tests it out in person, and sends victorious tweets when he “scores a great deal.”

The same basic patterns repeat across industries—in small-business banking, for example, technology and financial sophistication both matter, as does a business’s size and its financial goals. Describing four to six major personas is usually enough to cover about 80 percent of the customer base.

2. Charting a journey’s map

The next step is to understand the personas’ different needs and follow the steps, both offline and online, that the each persona takes along a given journey. The crucial requirement is to identify the important (and often hidden) pain points that the persona encounters and the resulting areas of opportunity for redesign.

Some of the opportunities may be visible just by mapping all of the current journeys customers can follow across all channels and displaying them together. For the regional bank, two points showed particular problems. In the online channel, about 80 percent of customers dropped out rather than fill in a registration form. And in call centers, more than 98 percent of customers did not ask for an offer. A similar map for the European telco found that regardless of which channel customers started in, if they ended up on the online shop, they abandoned their purchases fully 99 percent of the time. Furthermore, across all channels, 30 percent of orders were never activated.

The reasons for these outcomes tend to differ by persona. The work-and-play user’s main challenges center on time: there’s not enough of it. She may grow impatient at sorting through too many options and give up when a form asks for information that she knows the company already has (“They know where I live—my statement arrives every month like clockwork. This is wasting my time.”) Meanwhile, the social-enthusiast user wants to get the best service and product he can get for the lowest price, without committing to a long contract in case a better option comes along later. He may keep getting timed out of his purchase while looking at his social feeds to figure out if the option he’s considering is really the right one.

3. Designing a portfolio of omnichannel initiatives for each improvement area

These findings lead directly to a multipronged improvement strategy comprising several dozen initiatives, ranging from better data links to prepopulate online order forms to revamped offers and new performance-measurement practices. The goal is for each of the initiatives to be pragmatic and achievable, while together they deliver profound and lasting change.

The most urgent changes typically concern the digital channel, where customers often face a vast range of choices with complex pricing provisions and business rules that make it almost impossible to find the right combination (see sidebar, “Becoming more agile—in IT and in processes”). Instead, a new structure would change the experience from the moment a user arrives on the page. Rather than show the same page for everyone, the new page would vary depending on the user’s persona, which typically could be assigned based on a combination of existing customer data and the user’s prior browsing behavior on the site.

The customer therefore has a much more customized experience. A work-and-play user would be taken directly to two or three simple product options based on phone features and service limits. After choosing one of the options, the user would see a second page of add-ons, such as purchase-protection plans and international coverage. Social enthusiasts, by contrast, would get a more detailed interface that allows them to make separate decisions for the phone and for the service levels, so that they can understand the trade-offs and feel like they’re getting the best bang for their buck. The page they see also would provide user-generated product reviews from other clients, social-network links, a chat feature staffed by sales representatives, and a tool to set up in-store appointments.

4. Enabling continuous refinement and improvement

The effort these changes require is too great for an organization to watch the returns fade away and then repeat the exercise a year or two later. Revisiting its internal governance, performance, and capabilities becomes critical to support essential cultural changes and ensure that the organization’s performance continues to improve as the market evolves.

Although difficult, restructuring the traditional governance approach—in which channels operated almost as separate businesses—is the best defense against the most immediate threat to the omnichannel model’s long-term health: the reemergence of silos. During the transformation process, the organization forms cross-unit teams with representation from each channel and from supporting functions such as IT, marketing, and compliance. Each team operates as a work cell, with accountability for the design and implementation of a set of initiatives. As the changes take hold, the cells become the basis for a new organization structure that continually reassesses how the omnichannel model is functioning, identifying improvement opportunities and translating them into new rounds of initiatives for implementation.

Accountability will also depend in part on new performance targets that encourage collaboration instead of competition among channels. Thatomni 1 means, for example, deciding how to allocate credit for shared sales that start in one channel and end in another, and agreeing on performance indicators that provide concrete evidence the collaboration is occurring. Shared key performance indicators for digital, sales, and IT, such as the speed of change implementation or the level of digital adoption, help show whether the different functions are actually working together or whether they are finding reasons to block new initiatives.

Throughout the organization, people will need new capabilities at every level. Frontline sales and service personnel, for example, will need new and deeper skills in recognizing customer needs, understanding where the customers are in their journeys, and finding the most effective ways to help them depending on which persona they best match and which channels would best serve them. The greater complexity of frontline positions will require more coaching and support from managers, who will need their schedules freed up so that they can spend more time with their teams. And senior executives will need to play a more prominent part in role modeling behavior changes, such as in encouraging problem solving by people closer to the customer rather than imposing solutions from above.

What would it mean for your organization if you could promise your customers that they’ll get the service they need, however they need it? How much more effective would your people be if they didn’t have to worry about losing a customer to another channel? Becoming truly omnichannel is demanding for an organization. But the answers it provides to questions such as these make it worth the investment for organizations willing to make the commitment.

Source: McKinsey.com, August 2016
Authors: Raffaella Bianchi, Michal Cermak and Ondrej Dusak
About the author: Raffaella Bianchi is a senior expert in McKinsey’s Milan office; Michal Cermak and Ondrej Dusek are partners in the Prague office.
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Listen to your employees, not just your customers

Posted in Aktuellt, Customer care / Kundvård, Försäljning / Sales on August 16th, 2016 by admin

In 2014, Michael Callahan, then head of customer experience at Hulu, had a mystery on his hands. When the big video streaming service surveyed customers who renewed subscriptions, it discovered, paradoxically, that some customers stayed with Hulu even when they didn’t necessarily have a positive perception of the brand overall.

It turned out that some customer service representatives of the third-largest player in the streaming video space were pushing fence-sitting customers too hard, said Callahan in a recent interview. Paid digital TV companies, which also include Netflix and Amazon Prime, face high churn. Like Hulu, they need to ensure positive perceptions among customers routinely up for grabs between the big players.

“We had a gut-check conversation to discover what it meant to truly serve customers,” Callahan remembers. “We wanted employees to act more authentically to achieve a better, more positive experience of the brand overall. We didn’t want them only thinking about retention.”

That’s when Callahan’s team took an unusual step: The team created and linked an employee feedback system to its customer feedback system, in order to flag interactions where customers and employees had different perceptions. The linked system consisted of two short surveys — one sent to employees and the other to customers — right after a transaction. The linked system allowed for more insight into customers, and managers could use the information to coach employees, to assess whether they had the right tools and resources, and to identify people with innovative ideas and leadership potential.

Many companies love customer feedback, but only a handful have devoted as much energy to employee feedback systems. “For every dollar spent on employee feedback, companies spend hundreds of dollars on customer feedback,” said Troy Stevenson, former vice president of customer loyalty at eBay, in a recent interview.

Turning data into action.
Companies rarely connect the two systems. But, connecting them can create powerful feedback loops that engage employees and help companies adapt to fast-changing customer expectations, according to new research I conducted with my colleagues Carolyn Egelman, Julia Markish, Emma Sopadjieva, and Dorian Stone at the Medallia Institute. The research included interviews with more than 25 customer experience and HR executives and a survey of 1,000 frontline employees working at large companies in the U.S. automotive, financial services, retail, telecomm, and hospitality sectors.

Linking feedback systems allows companies to enlist frontline employees as agents of change. In our Medallia Institute survey, 56% of frontline employees said they have suggestions for improving company practices, and 43% said their insights could reduce company costs. Yet, a third said they were surveyed once a year or less, and more than half said employers weren’t asking the right questions.

In the case Callahan described, two screen pop-up surveys were sent to customers and employees immediately following a customer service transaction.

Customers were asked:
Was your problem solved?
Are we easy to work with?
Did you enjoy the experience you just had?

Employees were asked:
Did you solve the problem?
Was it easy to access the tools and resources you needed to solve the problem?
Did you feel proud to represent our brand in the conversation?

The linked feedback system prompted executives to adjust the compensation plan: customer service representatives received a retention bonus only if a subscriber remained on the rolls 30 days after an interaction.

Reducing customer churn by even a small amount can add up to a lot in a subscription-based business. For example, if linked feedback loopsfeedback helped to improve retention by even one percentage point, the savings on a subscriber base of 12 million (Hulu’s current base) with a typical monthly subscription price of $7.99, would generate an extra $11 million in annual revenue.

Why don’t more companies do this? Organizational barriers are often the culprit. At one 170,000-employee big box retailer, linking the feedback systems would require approvals from three different senior executives, the CMO, the chief human resources officer, and the president of retail. The only person who could drive a linked system was the CEO.

Companies that want the insights from linked systems can navigate the organizational complexities with these six steps:

1. Align feedback systems around high-level business objectives. Which needle do you want to move? Hulu wanted to build more authentic relationships with customers. This drove everything from its questions to how it used the data.

2. Design your feedback system to aggregate data at key touchpoints. Most companies build separate, often expensive systems within existing reporting hierarchies. Instead, work backwards from the customer experiences you want to understand. For example, if your customer feedback is organized around touchpoints within lines of business, survey employees who interact with customers at those same touchpoints, such as a call center conversation or an account signup. Companies often make the mistake of organizing customer feedback systems around one structure — say lines of business or channel — and employee feedback systems around another — say geography or function.

3. Establish the right frequency and pacing for employee and customer surveys. Many companies, including Nordstrom, Four Seasons and Vanguard, collect customer feedback on a continuous basis and distribute it in real time (Disclosure: Nordstrom, Four Seasons, and Vanguard are all clients of Medallia). Most executives I interviewed said employees should be surveyed more than once a year but not more than once a month. Match the timing of your surveys to the pace at which you can act, so that you can demonstrate results. Surveying employees on a rolling basis, and using quarantine rules (designated times when you won’t ask for feedback) for customer surveys can minimize survey fatigue.

4. Encourage honest feedback and protect employees who answer candidly. Employees may worry their feedback will get them into trouble. Counter this perception by rewarding and honoring employees for raising difficult issues. After successes become clear, give even more recognition to employees whose feedback helped move the company forward.

5. Let people speak in their own words and capture emotional cues. As companies rely more on technology, relating to customers emotionally and pinpointing what troubles them gets trickier. Open-ended questions, text analytics and sentiment analysis capture interactions more vividly and compel leaders to act. “To hear an employee who’s deeply empathetic to the customer trying to explain a complex policy … to feel them struggle is painful,” says Callahan, who is now at Seattle-based Blueprint Consulting Services.

6. Act on the most important feedback, and communicate what you’re doing and why. In our interviews, we learned that a handful of companies are using feedback to create specific action plans tied to companies’ broader goals. At one company, executives use an internal website to post plans that grew out of employee feedback. Employees can see who’s leading an effort, view timelines, and track progress. They can also share additional feedback or volunteer for projects.

In a world where big data algorithms and technology increasingly dictate the customer experience, linked feedback systems give companies at least two great advantages. The connections help senior managers get a more complete picture of customer-employee interactions, including the behaviors — and emotions — they generate. And, asking employees for their input, not through a pro forma annual survey but as part of the company’s routine operations, sends a signal that employees have useful insights and that they are valued.

Ultimately, well-designed feedback loops enable employees to be more empowered and companies to be more responsive, creating the competitive edge companies need to adapt and thrive.

Source: Harward Business review, August 2016
Author: Beth Benjamin
About the author: Beth Benjamin is senior director of research at Medallia, a global provider of customer experience management software. She applies organizational science to real-world problems, helping companies to adapt to the challenges of growth and market change.
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Boosta din karriär med Snapchat

Posted in Aktuellt, Allmänt, Executive Coaching, Leadership / Ledarskap, Technology on August 13th, 2016 by admin

“Vi nås av cirka 5.000 budskap per dygn, sju till tio av dem kommer vi ihåg”
Hur säkerställer du att din / er kommunikation når fram?

Jackie Kothbauer är expert på sociala medier och det personliga varumärket. Hon förklarar vilka fördelar och möjligheter det finns, både för den enskilde individen och för företag, med att vara närvarande på sociala medier som Snapchat, Instagram och Facebook.

Jackie Kothbauer har jobbat som digital affärsutvecklare, venture manager, journalist och head of content. I dag jobbar hon som författare och föreläsare inom ett ämne som hon brinner för: det personliga varumärket i sociala medier.sm 1
— Först jobbade jag i tio år som digital affärsutvecklare och lanserade Sveriges första webbportal. Det var parallellt med att Aftonbladet.se sattes på banan, säger Jackie.

Webben var fortfarande jungfrulig mark och företag visste inte hur de skulle skapa det digitala kundmötet. Förväntningarna på e-handelns volymer var stora. Det skulle dock dröja många år innan kunderna erbjöds ett utbud, som gav dem anledning att överge den fysiska handeln.

— Under många år var e-handel och webbplatser stela broschyrer i digital form. I dag har integrationen mot sociala medier och fysiska butiker revolutionerat vårt sätt att handla. Ett köp på nätet tar i snitt 3 minuter att genomföra, men leveransen 3 dagar. Så potentialen är alltjämt stor.

Men Jackie hade en annan karriärdröm som hon beslöt sig för att försöka uppnå.

— Jag hade drömmen om att skriva böcker. Men jag hade ingen roman i huvudet. Så jag gjorde en marknadsundersökning och upptäckte att de enda författarna som kunde försörja sig var Jan Guillou, Liza Marklund, Måns Kallentoft och Camilla Läckberg och liknande. Deras bakgrund var antingen journalistik eller ekonomi. Då tänkte jag att om jag lägger till journalistik till min högskoleutbildning inom ekonomi, skulle det ordna sig på något vänster. Samtidigt slog sociala medier igenom och plötsligt hittade mitt ämne – människan som mediekanal. Nästan lite Matrix och Bladerunner.

Jackies passion för sociala medier och hennes bakgrund inom kundbeteende på internet gav henne en tydlig bild av framtiden. Hon förutspådde att det personliga varumärket skulle bli allt viktigare och bestämde sig för att lära sig allt som fanns kring ämnet.

– Jag såg möjligheten för den enskilda individen att boosta sin karriär eller bli framgångsrik företagare. Allt handlar ju i grunden om att erbjuda marknaden något den behöver och är beredd att betala för. I takt med att sociala medier har ökat i betydelse för marknadsföring och försäljning har en ny roll växt fram – medarbetaren som språkrör för sin arbetsgivare.

Anställda inom försäljning och rekrytering är enligt Jackie Kothbauer de som varit snabbast med att anamma sociala medier som verktyg för att hitta kunder respektive kandidater. De företag som ligger längst fram försöker dock bredda satsningen och få alla sina medarbetare att bli digitala ambassadörer.

– I takt med att kunder och jobbsökare använder nätet för att hitta en produkt eller ett nytt jobb är det logiskt att företag försöker nå ut bättre. Vem är mer trovärdig som representant för en organisation än deras nuvarande medarbetare?

Under min intervju med Jackie så är det någonting som slår mig – hon har hittat sin passion. Hon berättar initierat och med glöd om det personliga varumärket och hur framtiden kommer att se ut knutet till sociala medier.

– Ibland får jag frågan: Kan alla bygga ett eller har alla ett personligt varumärke? Då skulle jag säga: “Nej, alla har inte det.”. Det är en sak att ha en personlig relation och vara känd av någon du umgås med. Det är en helt annan sak att en person som aldrig har träffat dig utan problem kan leta rätt på dig och har en tydlig uppfattning om vem du är. Först då har du ett personligt varumärke.

Jackie lägger en stark betoning på hur viktigt det är för företag att se värdet i sina medarbetare och deras nätverk i sociala medier.
— De nätverken innehåller ett förtroendekapital, som sällan finns mellan en kommersiell aktör och en kund. Om du kan få dina medarbetare och kunder att prata om dina produkter och tjänster, har du skapat världens effektivaste försäljningskanal. Vi har bara sett början av denna utveckling i takt med att reklamtröttheten ökar och mobilen ökar vår konsumtion av sociala medier.

sm 2Ett budskap från en medarbetare skapar större förtroende än traditionell reklam, enligt Jackie.
— Vi nås av cirka 5.000 budskap per dygn, sju till tio av dem kommer vi ihåg. Det betyder att bortfallet är enormt! De människor vi har en relation till använder vi redan i dag i sociala medier för att bli tipsade om värdefulla, intressanta nyheter. Utnyttja den dialogen och försök få in era budskap där.
— Det mest intressanta är om medarbetare sprider budskapen i sina professionella nätverk på sociala medier. Där har de ofta kunder och kontakter som tillskriver dem en högre trovärdighet.

De senaste åren har Jackie sett att värdet av ett personligt varumärke digitalt har blivit allt viktigare och mer värdefullt, precis som hon förutspådde. Intressant nog visar studier att det inte är de mest uppenbara talespersonerna som är mest effektiva.
—Vd:n är ju den vanligaste talespersonen, men samtidigt är alla medvetna om att hen är en säljare som försöker hålla kunder, aktieägare och andra stakeholders på gott humör. När kunden träffar en enskild medarbetare, som är kunnig inom sitt område är trovärdigheten i budskapet så mycket högre. Det beror inte minst på att de flesta enbart möter en vd via massmedier. En miljö som generellt påverkar trovärdigheten negativt.

Medarbetaren som språkrör är inget nytt, enligt Jackie. I vissa branscher som politik, IT och finans har man länge låtit medarbetare agera experter i olika medier.
— Evangelists har funnits sedan 1980-1990-talen inom techbranschen. De var bland de första som blev stora på Twitter när det startade också. Chefsekonomer är populära inom finans och inom politiken har sakkunniga talespersoner för olika ämnen byggts upp av partier för ökat genomslag. Vi minns alla hur Carl Bildt blev betydligt större än sitt parti i sociala medier. Även när han inte var minister.

Enligt Jackie är det en bra idé att bygga sina medarbetares personliga varumärke utifrån deras expertområde. Det maximerar deras trovärdighet. På motsvarande sätt har vi alla större tilltro till dem bland våra vänner som är nerdar och uttalar sig kring sina favoritämnen. De är en slags amatörevangelists och inte minst inom tech- och gamingindustrin har företag varit duktiga på odla relationerna till dessa nyckelkunder.
– Det som techindustrin gjort är intressant. Microsoft, Apple och andra IT-giganter har länge haft anställda evangelists. Det beror på att produktutvecklingen i deras branscher går så snabbt att kundens informationsbehov vid köp är stort. Alla vill ha det senaste och bästa, vilket gör rekommendationer och utvärderingar av experter extra värdefullt.

Jackie menar att företag behöver utbilda sina medarbetare för att bättre utnyttja att 50-70 procent av kundens köpprocess i dag, både inom B2B och B2C, sker på nätet. Sociala medier är en allt viktigare källa till affärer.
— De flesta känner sig inte som ett språkrör, som en Carl Bildt eller Fredrick Federley, som sprutar ut sig massa spännande inlägg. Det går dock att ge kommunikationsavdelningen uppdraget att bli deras spökskrivare. Företagen bör skicka ut ett nyhetsbrev en gång i veckan med exempel på uppdateringar som passar sociala medier. Undvik att bli för ensidigt säljande genom att max hälften av materialet handlar om det egna företaget och dess produkter. Låt andra hälften handla om branschen och världen runt omkring.

Jackie ser nya möjligheter inom de relativt unga sociala mediekanalerna Snapchat och Instagram och tror att företag har mycket att vinna på att lära sig dem.
— Det som är intressant med att vi har så många olika kanaler är att det börjar bli väldigt olika karaktärer på dem. Snapchat får Facebook att framstå som en runsten. Stel och rörig. Både Snapchat och Instagram har rena, enkla gränssnitt medan Facebook är som en gammal dagstidning. Gott och blandat.

Trenderna ändrar sig inom de sociala medierna. Bland annat visar statistiken att vi delar allt mindre eget material från våra liv på Facebook. Istället är det videoklipp, tidningsartiklar och eventnyheter som börjat dominera nyhetsflödet. Livesändningar från diverse mediekanaler är den senaste flugan.
– På Snapchat är det tvärtom. Där är det bara privata nyheter som gäller. Det som var Facebook för tio år sedan.

Det finns många fördelar för företag att vara aktiva på sociala medier, menar Jackie. En av de största är rekryteringspotentialen. Alla dagens medarbetare finns på nätet. Varför inte engagera dem i jakten på kollegor de skall möta varje dag på jobbet?
— Redan i dag förmedlas åtta av tio jobb, och nio av tio av konsultuppdrag via kontakter. En viktig anledning för alla människor att skaffa sig en bra nätprofil och bygga ut sitt kontaktnät. Bättre och viktigare sätt att framtidssäkra karriären finns inte. Alla som söker sig mot arbetsmarknaden under 30, framförallt inom bristyrken som företagen slåss om, som exempelvis programmerare och tekniska projektledare, finns på sociala medier. Därför kommer vi att se rekryterare bygga sina kontaktnät och personliga varumärken betydligt mer målmedvetet fram över. Talent manager är den nya trendtiteln inom HR och avser de rekryterare som har de attraktivaste kandidaterna i sitt stall. Vi går mot långsiktiga relationer där rätt talent manager hjälper dig att skapa en framgångsrik karriär.

Jackie menar att medarbetarnas sociala medienärvaro blir en indirekt form av rekryteringsprocess. För målmedvetna kandidater är framtida kollegor en viktig del av attraktionskraften i en tjänst. De innebär inte bara en chans att lära sig och utvecklas. En framgångsrik karriär kräver att du hamnar i rätt kretsar och odlar ditt kontaktnät.
— Arbetsgivare med duktiga medarbetare får via deras nätverk tillgång till en värdefull talangpool. Allt från studiekamrater till privata vänner. Att aktivera dessa nätverk är en framgångsfaktor i den sociala ekonomin.

Det är stor skillnad på generationerna och deras inställning till sociala medier. Jackie berättar om en senior partner på en advokatbyrå hon träffade.
— Han sa att han absolut inte fanns på Facebook, utan endast hans fru och att hon endast var där för att se bilder på barnbarnen. Hans inställning till sociala medier andades ett djupt förakt, en föreställning om ytlighet och narcissism, och att kunna föreställa sig sociala medier som ett arbetsredskap var omöjligt. Den äldre generationen inom jurister har ju den inställningen att de ska verka men inte synas, det gamla Wallenberg-citatet. Det är klienterna som ska synas.

Jackie kollade sedan upp hans son och såg en tydlig kontrast mellan generationerna.SM 3
— Han fanns naturligtvis på alla kanaler och bygger sitt varumärke på dem. Skillnaden mellan deras inställningar till sociala medier är ju då astronomisk även fast de har exakt samma yrke. Det gäller att vara offensiv, tänk som Fredrik Eklund, stjärnmäklaren. Han säger alltid: “Varenda människa jag träffar är potentiellt kunden till min nästa lägenhet.”. Han vågar vara personlig.

Att vara personlig på sociala medier är en av nycklarna till bygga ett framgångsrikt personligt varumärke, menar Jackie. Men det finns vissa branscher där det ställs högre krav på att behärska nätetiketten.
— Det är självklart att det inom vissa områden inte är lika enkelt, där det till exempel handlar om sekretess. Som exempelvis politiker, sjukvården, rättsmonopolet och utbildningsväsendet.

Så skapar du ett framgångsrikt personligt varumärke på sociala medier
Jackie Kothbauer har några generella tips för den som vill skapa ett framgångsrikt personligt varumärke på sociala medier:

1. För det första ska man förstå att ett personligt varumärke är en relation. Du måste från första början fundera på vem din målgrupp är. Hur kan mötet på nätet värdeladda er relation? Vad gör det värt deras tid och uppmärksamhet att ta del av dina uppdateringar. Gör du rätt blir du uppskattad. Gör du riktigt ifrån dig kan du bli affärskritisk.
2. För det andra bör du hitta en periodicitet, hur ofta ska ni träffas och umgås. Inte för sällan. Då blir du aldrig viktig. Inte för ofta. Då tar du för mycket plats.
3. Sedan ska du aldrig gå ut och bygga något i fler än tre kanaler samtidigt. Tänk på att det är en relation du bygger. Gör det hellre bra och med engagemang än spretigt och ofokuserat.

Källa: Realid.se, augusti 2016
Intervju med: Jackie Kothbauer
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Do you step out of your comfort zone and take risks?

Posted in Aktuellt, Executive Coaching, Leadership / Ledarskap on August 9th, 2016 by admin

If you’re not outside your comfort zone, you won’t learn anything!

You need to speak in public, but your knees buckle even before you reach the podium. You want to expand your network, but you’d rather swallow nails than make small talk with strangers. Speaking up in meetings would further your reputation at work, but you’re afraid of saying the wrong thing. Situations like these — ones that are important professionally, but personally terrifying — are, unfortunately, ubiquitous. An easy response to these situations is avoidance. Who wants to feel anxious when you don’t have to?

But the problem, of course, is that these tasks aren’t just unpleasant; they’re also necessary. As we grow and learn in our jobs and in our careers, we’re constantly faced with situations where we need to adapt our behavior. It’s simply a reality of the world we work in today. And without the skill and courage to take the leap, we can miss out on important opportunities for advancement. How can we as professionals stop building our lives around avoiding these unpleasant, but professionally beneficial, tasks?

c zoneFirst, be honest with yourself. When you turned down that opportunity to speak at a big industry conference, was it really because you didn’t have the time, or were you scared to step on a stage and present? And when you didn’t confront that coworker who had been undermining you, was it really because you felt he would eventually stop, or was it because you were terrified of conflict? Take an inventory of the excuses you tend to make about avoiding situations outside your comfort zone and ask yourself if they are truly legitimate. If someone else offered you those same excuses about their behavior, would you see these as excuses or legitimate reasons to decline? The answer isn’t always clear, but you’ll never be able to overcome inaction without being honest about your motives in the first place.

Then, make the behavior your own. Very few people struggle in every single version of a formidable work situation. You might have a hard time making small talk generally, but find it easier if the topic is something you know a lot about. Or you may have a hard time networking, except when it’s in a really small setting.

Recognize these opportunities and take advantage — don’t chalk this variability up to randomness. For many years, I’ve worked with people struggling to step outside their comfort zones at work and in everyday life, and what I’ve found is that we often have much more leeway than we believe to make these tasks feel less loathsome. We can often find a way to tweak what we have to do to make it palatable enough to perform by sculpting situations in a way that minimizes discomfort. For example, if you’re like me and get queasy talking with big groups during large, noisy settings, find a quiet corner of that setting to talk, or step outside into the hallway or just outside the building. If you hate public speaking and networking events, but feel slightly more comfortable in small groups, look for opportunities to speak with smaller groups or set up intimate coffee meetings with those you want to network with.

Finally, take the plunge. In order to step outside your comfort zone, you have to do it, even if it’s uncomfortable. Put mechanisms in place that will force you to dive in, and you might discover that what you initially feared isn’t as bad as you thought.

For example, I have a history of being uncomfortable with public speaking. In graduate school I took a public speaking class and the professor had us deliver speeches — using notes — every class. Then, after the third or fourth class, we were told to hand over our notes and to speak extemporaneously. I was terrified, as was everyone else in the course, but you know what? It actually worked. I did just fine, and so did everyone else. In fact, speaking without notes ended up being much more effective, making my speaking more natural and authentic. But without this mechanism of forcing me into action, I might never have taken the plunge.

Start with small steps. Instead of jumping right into speaking at an industry event, sign up for a public speaking class. Instead of speaking up in the boardroom, in front of your most senior colleagues, start by speaking up in smaller meetings with peers to see how it feels. And while you’re at it, see if you can recruit a close friend or colleague to offer advice and encouragement in advance of a challenging situation.

You may stumble, but that’s OK. In fact, it’s the only way you’ll learn, especially if you can appreciate that missteps are an inevitable — and in fact essential — part of the learning process. In the end, even though we might feel powerless in situations outside our comfort zone, we have more power than we think. So, give it a go. Be honest with yourself, make the behavior your own, and take the plunge. My guess is you’ll be pleased at having given yourself the opportunity to grow, learn, and expand your professional repertoire.

Source: Harvard Business Review, HBR.org
Author: Andy Molinsky
About the author: Andy Molinsky is a Professor of International Management and Organizational Behavior at the Brandeis International Business School. He is the author of Global Dexterity (HBR Press, 2013) and the forthcoming book Reach: A New Strategy to Help You Step Outside Your Comfort Zone, Rise to the Challenge, and Build Confidence (Penguin, 2017). Follow Andy on twitter at @andymolinsky and learn more at www.andymolinsky.com.
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Maximizing marketing value through smarter procurement

Posted in Aktuellt, Board work / Styrelsearbete, Försäljning / Sales, Leadership / Ledarskap on August 4th, 2016 by admin

Now more than ever, marketing stars need a strong band behind them.

“How come you ain’t ever tried this kind of pickin’, Luther?” asks the musician and songwriter Waylon Jennings in the 2005 Johnny Cash biopic, Walk the Line.

“Well, Waylon,” answers guitarist Luther Perkins, “whatever it is you’re lookin’ for, I’ve already found.”

In an environment undergoing continual transformation, companies are searching for new ways to assess, increase, and monitor the efficiency and effectiveness of their marketing dollars. But like Cash’s legendary, laconic guitarist, procurement might already have found what marketing is looking for.

These are turbulent times for marketers. The digital revolution is transforming the consumption of media. People under 35 watch as much video content as their parents do, but less than half of it is live television. In the United States, more than a third of all video content is now viewed online, much of it on mobile devices. Millennials spend 15 hours a week on their smartphones, and 89 percent check their work email outside of normal working hours. They are likely to trust the views of their peers and social-network connections over those of media professionals.

images (11)For marketers, the proliferation of digital media creates exciting new opportunities to engage with consumers, but ferocious complexity too. Marketers know they must offer an integrated brand experience across both traditional media and the fast-changing ecosystem of digital devices and channels that their customers use. They want to make better use of digital resources, such as real-time feedback on customer preferences and the ability to tailor and target messages more precisely than ever before. And marketers want to innovate by making the most of new approaches as they emerge—without losing sight of the proven value of established, traditional marketing efforts.

To achieve these ambitions, marketers need to make the right choices about what they buy, how they buy, and whom they work with. Those choices aren’t easy. Human eyes view less than half of all digital ads, for example, and programmatic buying through automated-bidding systems has transformed the traditional relationship between advertisers and media owners. Complexity and rapid change make the right agency partnerships all the more important.

In this environment, big advertisers are going to the market in unprecedented numbers. In 2015, an estimated $30 billion in marketing spend was up for grabs in the so-called mediapalooza as many of the world’s biggest advertisers reevaluated the capabilities, fit, and economics of their agency relationships.

Where’s purchasing?
To meet today’s challenges, marketers need new capabilities. They need sharp analytical skills to pull useful insights from big digital data sets. They need to evaluate the potential of new channels and new service providers. And they need new ways to measure how efficiently and effectively they use budgets that must now stretch across far more categories.

On the face of it, marketing needs precisely the robust, fact-based analysis and decision-making capabilities that a high-performing procurement function provides. And since marketing is the largest indirect-spending category in many businesses, procurement experts should relish the opportunity to help it find new sources of value.

In many companies, however, this kind of mutually beneficial partnership just isn’t emerging—the relationship between marketing and procurement is often cool if not downright antagonistic. Last year, one major global consumer-packaged-goods (CPG) company even announced that it was shuttering its marketing-procurement function altogether.

What’s going wrong? As with any problematic relationship, much of the difficulty stems from mutual misunderstandings. Marketers don’t always recognize how their colleagues in procurement can best assist them, so they tend to relegate its input to the final negotiating and contracting stages of the purchasing process, when there’s less opportunity to add value. Procurement doesn’t always communicate its capabilities clearly, so it is perceived as a barrier rather than an enabler. Sometimes, the lack of a common language even makes it difficult for marketing and procurement to understand each other’s aims and intentions (see sidebar, “Singing from the same songbook”). And the two functions haven’t found processes that allow them to work together effectively and make the most of their individual strengths.

Time for a new start
Companies need to reevaluate the role of procurement in marketing. Critical strategic decisions, such as the selection of partner agencies and the design of campaigns, must remain firmly in the hands of the marketing function. Marketers know their customers’ preferences, and with the right information they can identify the best partners to help them attract their target consumers. But just as Johnny Cash’s unique sound relied on the guitar skills of Luther Perkins, so marketers need the right support around them.

Building that support should begin with a clear understanding of the ways a high-performing procurement function can help fulfill key marketing needs. We have identified six areas of focus, from well-established purchasing capabilities that marketers already know to a few that call for the advanced skills of a mature, high-performing procurement function:

– Manage suppliers. Marketers need to verify that suppliers (agencies, in many instances) are financially viable. They need to negotiate competitive rates and robust contracts, to ensure that suppliers deliver what they promised, and to see that they get paid on time. These activities are what the procurement function does every day across all categories.

– Monitor efficiency. Marketers need to understand the performance of their agencies. The procurement function knows how to track and monitor the efficiency of both the agencies engaged and the media they place. It also knows how to lead supplier reviews. Supervising gross-rating-point/targeted-rating-point audits and holding agencies accountable for the findings should be second nature.

– Play the bad cop. When agencies perform poorly, the procurement function can lead the tough conversations, so that marketing teams maintain close and productive agency relationships.

– Find the right capabilities. Marketers must have agencies that can meet their current and expected needs—and bring them the best of the market by meeting needs they didn’t know they had. For example, can an agency track if and where digital ads are viewable? What is the extent of its programmatic-buying capabilities? The procurement function can scan the industry for new competencies and develop processes to test the ability of partners to meet them.

– Create more value. Marketing efforts must focus both on quality (capabilities and fit) and on cost to deliver maximum value. Using marketing-return-on-investment (MROI) data, the procurement function can do all this by creating balanced scorecards that, for example, track both the efficiency of ad purchasing and the effectiveness of the resulting placements.

– Move quickly. Marketing is changing rapidly, and the digital revolution is a key driver. Marketing teams need to respond. Working closely with procurement allows them to develop rules of the road that permit flexibility and responsiveness while controlling risk.
In it together

To capture value of this kind—especially the more advanced opportunities, in the bottom half of the list above—marketing and procurement need a closer working relationship throughout the entire purchasing process. To show how such a relationship can work, let’s consider the example of a large CPG company that recently conducted a comprehensive review of its agency ecosystem, starting with media-buying activities. As a result, the company not only found the most capable agency with the best cultural fit but also saved on media spend and fees. It reinvested half of the savings in additional media, helping to drive growth. The rest went straight to the bottom line.

The company had long-standing relationships with multiple media agencies. It wanted to consolidate its media purchasing and to ensure that it was getting the strongest capabilities and the best prices for its sizable media budget. To check all this, teams from marketing and procurement embarked on an intensely collaborative five-month competitive-pitch process.

In preparation for the event, procurement conducted a detailed analysis of the company’s historical media outlays. Its team looked at more than 100,000 lines of traditional and digital media-spend data—for example, breaking down TV-ad purchases across nine key attributes (such as network, program, spot length, and dayparts) to create a representative basket of around 300 future media purchases that it would ask potential agencies to bid on. The team mapped the remaining traditional- and digital-media purchases onto the items in the basket so it could estimate the full media-buying cost from agency quotes.

Procurement then worked with marketing to understand exactly what the latter required from its media agencies. Next, procurement scanned the market for trends and for emerging capabilities to address them. With this information, the joint team identified a handful of potential agencies, including a mix of incumbents and new organizations. The selected agencies were invited to participate in a rigorous multistage pitch process, which included written assignments and multiple presentations to the marketing team.

While marketing assessed the capabilities and cultural fit of the agencies, procurement evaluated their detailed media-buying quotations for the items in the representative basket. Again, this was a multistage process, and agencies had an opportunity to adjust their pricing when it was out of line with that of their competitors.

Once the marketing team had chosen its preferred agencies, the two functions jointly entered into a detailed negotiation process. Procurement used clean-sheet techniques to evaluate agency bids for the cost of running the company’s account against the actual cost of the personnel and resources required to do so. In this way, it encouraged the agencies to be clear about the cost assumptions underlying their bids. The negotiation process also included the development of a new incentive model to reward agencies for meeting the company’s strategic objectives while controlling overall costs.

At the end of the process, the joint effort delivered remarkable results. Marketers from the company’s multiple brands agreed on a single agency to consolidate their media-planning and media-buying activities. Yet the new agreements also reduced overall media costs by over 20 percent and agency fees by more than 10 percent.

The procurement team’s initial analysis of those thousands of individual purchases continued to pay dividends, too. The company set price guardrails to help it ensure that the agency was achieving the promised discounts across all categories of media spend. And by comparing the cost of different media slots with their ability to meet strategic goals, the company also identified further potential savings by changing the media mix it bought. For example, it was able to shift spend to more efficient channels or cheaper dayparts that still delivered the right audience quality, reach, and frequency for its brands.

As the changing habits of customers force companies to transform their approach to marketing, they are looking for new tools to help maximize the value of those efforts. High-performing procurement functions have already found many such tools. The challenge for CPOs is to demonstrate to their marketing colleagues that procurement’s contribution is not only useful but also vital and to forge new, intensely collaborative relationships capable of delivering that contribution in a dynamic, rapidly evolving environment.

Source: McKinsey.com, August 2016
Author: Cody Butt
About the author: Cody Butt is an expert associate partner in McKinsey’s Denver office.
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