Organizational Intelligence

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Myles Gilbert
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1 Organizational Intelligence Understanding how business people think A Business Logic Perspective Chapter 1 Why/How to Use the Model Kearny & Silber 1 A BUSINESS PERSPECTIVE What Who A business model: getting the big picture from a line manager s perspective For specialists with no general business background (MBA, etc) Kearny & Silber 2 1

2 POLL: YOUR EXPERIENCE WHO has had this experience: You developed a brilliant solution You presented it to decision makers They didn t get it Your solution was not adopted Kearny & Silber 3 A BUSINESS PERSPECTIVE Why To be effective, we must: work within our clients culture speak their language Kearny & Silber 4 2

3 A BUSINESS PERSPECTIVE How Identify client business logic Identify clients key metrics for critical success factors Use worksheets to find implications Experts Albrecht, Porter, Kaplan & Norton, Engle, Kearny, Silber, You, your Clients, & hundreds more Kearny & Silber 5 Introducing: BUSINESS What are they trying to do, as a business? Does it logically hang together? Model: the pizza and the box PROCESS STRUCTURAL PRODUCT ECONOMIC CUSTOMER STRATEGY External Logic Kearny & Silber 6 3

4 A BUSINESS PERSPECTIVE How to Use the Model Understand an organization Build a Scorecard for the business Choose a target sub-organization Use on your own department Pick of level of detail Get a high-level overview Get a detailed-level overview Kearny & Silber 7 Kearny & Silber 8 4

results they care about Still more benefits: Establish the value of an intervention

5 Kearny & Silber 9 SUPPORT WITH DATA You ll be able to: Speak so managers understand Address the issues they care about Show costs & benefits they care about Report results they care about Still more benefits: Establish the value of an intervention Surface level 3 & 4 evaluation data Legitimize solutions other than training Kearny & Silber 10 5

6 Supporting Logic With Data Logic Measures Target Current Gap Performance Problems Interventions Measured Results External Economic Strategy Customer Cust. Satisf. 95% 84% 11% Stds unclear Stds & Feedbk 89% Product Process Structural Kearny & Silber 11 Gathering data... STRUCTURAL ECONOMIC PROCESS STRATEGY PRODUCT CUSTOMER How? Many business metrics for these logics Are found in the balanced scorecard Kearny & Silber 12 6

7 Organizational Intelligence Understanding how business people think A Business Logic Perspective Chapter 3 External Logic Kearny & Silber 13 External Logic: the box THE INDUSTRY New entrants Suppliers Buyers Substitutes Rivalry Industry growth PROCESS STRUCTURAL PRODUCT ECONOMIC CUSTOMER STRATEGY THE TRENDS Economic Demographic Political/legal Technological Socio-cultural Kearny & Silber 14 7

8 Internal Logic: the pizza Overview all STRUCTURAL ECONOMIC PROCESS STRATEGY PRODUCT CUSTOMER Apply one in more detail Kearny & Silber 15 Organizational Intelligence Understanding how business people think A Business Logic Perspective Chapter 4 Economic Logic Kearny & Silber 16 8

9 Integrated Business Logic STRUCTURAL ECONOMIC PROCESS STRATEGY PRODUCT CUSTOMER Kearny & Silber 17 Economic Logic Cost Structure Financial Focus Profit Source The Financial Picture: Measures Kearny & Silber 18 9

10 Organizational Intelligence Understanding how business people think A Business Logic Perspective Chapter 5 Strategy Logic Kearny & Silber 19 Integrated Business Logic STRUCTURAL ECONOMIC PROCESS STRATEGY PRODUCT CUSTOMER Kearny & Silber 20 10

11 Strategy Logic Mission & Vision Growth Strategy Objectives Pricing Strategy Culture Alignment Core Competencies Measures Kearny & Silber 21 Organizational Intelligence Understanding how business people think A Business Logic Perspective Chapter 6 Customer Logic Kearny & Silber 22 11

12 Integrated Business Logic STRUCTURAL ECONOMIC PROCESS STRATEGY PRODUCT CUSTOMER Kearny & Silber 23 Market Strategy Customer Logic Customer Needs Satisfaction Measures Kearny & Silber 24 12

Customer Logic How the organization finds & keeps customers MARKET MARKET STRATEGY STRATEGY How are you segmenting g the market: Geographic? Demographic? Psychographic? Behavioral?

13 Customer Logic How the organization finds & keeps customers MARKET MARKET STRATEGY STRATEGY How are you segmenting g the market: Geographic? Demographic? Psychographic? Behavioral? Which segments are you going after & why: E.g. high net worth individuals? Teens, other? Kearny & Silber 25 What you should do 1. Investigate the four categories of market segmentation variables 2. Find out your organization s market strategy. 3. Analyze the market strategy using the variables 4. Assess whether the strategy addresses the market variables in an aligned, coherent way. 5. If some analysis could help the organization better establish its market strategy logic, note it for further investigation Kearny & Silber 26 13

14 Customer Logic How the organization finds & keeps customers NEED SATISFACTION CUSTOMER NEED SATISFACTION How are you satisfying customer needs: Specialized for specific needs? Many products the same customer will buy? Kearny & Silber 27 Issues with niche focus & wide product range Build it and they will come: Offer niche product with no market research to see if niche wants it I know what they want: Offer new items in wide product range without checking if will appeal to same customers Silos: Failure to do cross-functional work needed so economic, product, process, and support activities iti are aligned to deliver what customers require Kearny & Silber 28 14

15 Customer Logic How the organization finds & keeps customers CUSTOMER NEED SATISFACTION, cont d RELATIONSHIP VS TRANSACTION SELLING RELATIONSHIP vs. TRANSACTION STRATEGY Do you focus on: Building a high volume of transactions? or Developing long-term customer relationships? frequent, ongoing contact infrequent, sole source Kearny & Silber 29 Issues with relationship & transaction selling Just do it my way: Some customers don t want a relationship: just want to negotiate features/price I love ya baby, but I gotta go: Once relationship in place, busy client may just want to do transactions until new problem comes up Not my job: Sales/Mktg may have hard time engaging rest of organization to deliver service & quality needed for good customer relationships Kearny & Silber 30 15

What you should do 1. Determine: is the business taking a niche focus or by offering a wide product range. 2. If it has a niche focus, identify the niche (or niches). 3.

16 What you should do 1. Determine: is the business taking a niche focus or by offering a wide product range. 2. If it has a niche focus, identify the niche (or niches). 3. If it has a wide product range, identify the range. Note if the range will attract more business from the same customers. 4. Identify which sales approach the organization uses and promotes: transaction selling or relationship selling? 4. Identify any disconnects you see between the Customer Logic and Economic, Strategy or External Logic. Kearny & Silber 31 Customer Logic How well is the Customer Logic working? MEASURES What key customer metrics do you look at? Size of market segment Share of market New customers Customer retention Complaints Net profit/customer How do you count? absolute, growth, overall, in niche, compared to the competition, #, %, decrease, margin per customer sale Value (benefits vs. cost) Kearny & Silber 32 16

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18 Organizational Intelligence Understanding how business people think A Business Logic Perspective Chapter 7 Product Logic Kearny & Silber 35 Integrated Business Logic STRUCTURAL ECONOMIC PROCESS STRATEGY PRODUCT CUSTOMER Kearny & Silber 36 18

19 Differentiation Product Logic Company Image Measures Kearny & Silber 37 Product Logic How well is the Product Logic working? Measures What key product metrics do you look at? Product/service: functionality quality (defects, returns) price (vs. cost, etc) timeliness safety volume, etc. Company image: knowledgeable proactive, etc Relationship w. cust: convenient responsive, etc. Kearny & Silber 38 19

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21 Internal Logic: the pizza STRUCTURAL ECONOMIC PROCESS STRATEGY PRODUCT CUSTOMER Kearny & Silber 41 YOUR MOVE What Read the book Attend d the ISPI workshop Adapt the model for your own use Try it out, discuss it Share it with clients Suggest improvements Why It s up to us... Kearny & Silber 42 21

BALANCE SCORECARD. Introduction. What is Balance Scorecard?

BALANCE SCORECARD. Introduction. What is Balance Scorecard? BALANCE SCORECARD Introduction In this completive world where techniques are change in nights, it s very hard for an organization to stay on one technique to grow business. To maintain the business performance