What Lies Ahead. Mike Jacoutot, Founder & Managing Partner Butler Street February 3, 2015

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1 What Lies Ahead Mike Jacoutot, Founder & Managing Partner Butler Street February 3, 2015

2 The Whirlwind

3 Digital Darwinism When Charles Darwin presented his theory of evolution in 1859, he described a world in which only the fittest survive, a world in which species must constantly adapt to their changing environment or face extinction, a world in which organisms must continue to grow in a profitable direction and develop new skills and traits or perish, a world in which lifeforms must look around and learn with whom to cooperate and with whom to compete, a world in which the surrounding conditions for life can, suddenly and drastically, improve or take a turn for the worse. Darwin even wrote that we are all bound by a complex web of relations. Evan I Schwartz, Author, Digital Darwinism

4 Digital Darwinism A world in which only the fittest survive

5 Digital Darwinism A world in which species must constantly adapt to their changing environment or face extinction

6 What Do Customers Want?

7 Understanding the Client s Operating Reality Being able to see problems and opportunities as they appear through the client s eyes

8 Digital Darwinism A world in which organisms must continue to grow in a profitable direction and develop new skills and traits or perish

9 Digital Darwinism A world in which life-forms must look around and learn with whom to cooperate and with whom to compete

10 How Customers Segment Suppliers HIGH SUPPLIER SEGMENTATION MATRIX Enterprise Sales Cost or Strategic Importance of Supplier s Products and Services LEVERAGE SIZE SHOP Transactional Sales Consultative Sales PARTNER MANAGE RISK LOW HIGH Difficulty of Substitution or Obtaining Alternatives

11 Client Relationship Pyramid Type of Relationship Role of Supplier Collaborative Win/Win as One Client & Supplier Strategic Partner Cooperative Give and Take Client Supplier Trusted Advisor Competitive I Win, You Lose Client Supplier Subordinate Vendor

12 Perseverance Being good is a stupid idea. The only thing that counts is whether you are getting better at a more rapid rate than your principle competitors. It s real simple if you are not doing more, better, faster than they are doing more, better faster, then you are getting less better, or more worse.

13 Digital Darwinism A world in which the surrounding conditions for life can, suddenly and drastically, improve or take a turn for the worse

14 Digital Darwinism Darwin even wrote that we are all bound by a complex web of relations.

15 Aligning Strategy and Culture Mission, Vision, Values Strategy Culture Voice of the Customer Voice of the Employee Deep Review of Competition Deep review of the culture Client Loyalty Establish Value Creation Vision Design Structure to Enable the vision Create & Communicate Meaning Develop proper progressions to ensure the desired capability Associate Engagement Provide Capabilities, tools, and training to enable the vision Align recognition and rewards to drive behavior Establish and communicate KPIs required to enable the vision Communicate and Recognize Performance Often Results and Cultural Brand

16 Operationalizing Strategy The Balanced Score Card

17 We Use the BSC to Articulate Cause & Effect Themes

18 How Do You Measure Strategy? Financial The Vision "To satisfy our shareholders, what financial objectives must we accomplish? Growth Financial Perspective Objectives Measures Targets Profitability Shareholder Value Initiatives The Balanced Scorecard converts strategy into an integrated system of objectives, measures, targets, and initiatives defined across four business perspectives Customer "To achieve our financial objectives, what customer needs must we serve? Customer Perspective Objectives Measures Targets Image Service Price/Cost Initiatives Internal/Process To satisfy our customers, and shareholders, in which internal business processes must we excel?" Internal Perspective Objectives Measures Targets Initiatives Cycle Time Quality Productivity Learning and Growth " To achieve our goals, how must our organization learn and innovate? Learning Perspective Objectives Measures Targets Initiatives Market Innovation Continuous Learning Intellectual Assets

19 Sample Balanced Scorecard Theme Objectives Measurements Targets Initiatives Finance Profitable Growth % Revenue Growth EBITDA 40% CAGR 12% EBITDA Complete acquisition & integrate by 12/16 Client Client Acquisition, Retention and Expansion (ARE) ARE: o # of New Clients o % Clients Retained o % Clients purchasing products & technology Customer Net Promoter Score ARE: o 4/qtr. o 99% o 38% o 60% Train on Strategic Selling (4/1) Implement Key Account Management/ X-Selling (1/31) Net Promoter Score Survey (quarterly) Internal/ Process Increasing Productivity per Employee First-Time Call Resolution Gross Margin per Associate 80% $200K Standardize On-Boarding (1/31) Develop KPIs by position, review monthly (3/31) Learning Associate Engagement VOA Survey 4.0 Administer VOA Survey (2/28) Succession Planning % Promotions from within 80% Complete Succession Planning by 4/1

20 Wrap-up and Review