Are you still convinced to be selling just products?

There is a continuous increase of information available nowadays and internet is contributing dramatically in giving a viable and easy access to every kind of information to almost everybody. This fact have an important influence in the consumer behavior and in our customer relationships. Especially in the B2B (Business to Business) environment the relationships are more complex than in the past. This is to say that despite general way of thinking I’m seriously convinced that more and more customers are not buying anymore products but services and expectations in B2B and B2C (Business to Consumer) segments. This is even more true if we are just selling products, objects, goods.

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To confirm the statement let’s try do it using proof by contradiction. And let’s do it thinking about our behavior. Will you buy a product if you know that there is no service, no assistance, no manuals and not a real firm supporting it? The answer is yes for some kind of products, in general this is the approach to “low cost products” probably manufactured in the far east, in other words commodities. But for many other products the consumer approach is quite different. For example, will you buy an iPhone (at today price) if you know that this is going to be the last model of iPhone and there won’t be any evolution of the model or new products available from the same supplier in the future? Probably not, or at least not with the same determination. Will you choose as you future product supplier a company that has stopped to innovate on their products or that is not developing anything new? Probably not. Will you choose a supplier that is not giving you any assistance or is not giving support in the development and system integration of the products or that strategically is not considering you as an important customer? I think not. Will you buy an operative system that you know for sure will not have any further development or improvement? Probably you will try to choose another one.

The value of the products that we are going to buy (sell) is composed by several things. One is the product itself but this is only a part, and in many of the transactions mentioned we are going to pay an extra added value for all the rest: services, goodwill, brand loyalty, intangible things, etc… So as I said we are not selling just products but services and expectations. And in a society where the technology is  taken for granted and evolving so fast the focus is more and more on the future expectations of the product (and the company) that we are choosing. We cannot say anymore that we are just selling a product.

This fact have outstanding implications. This means that the today choices in terms of strategy, business plans, investment in R&D, in marketing and so on that a company makes today have an important role in determining the value of the current products! Not only, even in the value of the already sold products and of course in the ones that we will develop in the future. We are in an era where we do not just make products, we are developing, creating and selling products, services and most important expectations. People (and not only stock markets) are giving a significant value to the services connected with a product and an increasing value to the expectations that these products represents.

The human resources skills involved in all these processes are inevitably part of the package and this means that with the products we are selling also employees potentials at all levels, from the workers and employers directly involved with the product to the top managers, shareholders, R&D, support, back-office and so on.

Stop thinking that you are just producing and selling products because the truth is that you are selling a full package of services and expectations and that the human factor involved in this process is one of the main factors determining the value of your products.

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There are no wrong decisions!

During our life we are always called to make some decisions. During everyday life, at work, in sports, with family and so on. When we have a decision to take there are very few things that we can do, basically we can just evaluate pros and cons and then we have to take a decision. The only real bad decision is not to take a decision at all. But apart from that “not acting” situation, in all other cases we are going to take a decision (sometimes we are forced to).
My opinion is that whenever you take a well thought decision, evaluating rationally pros and cons, then this is the right decision, and also the best one. Basically the decision process involves the evaluation of the possible outcomes, of the different scenarios and our goal is to choose for the best one.
So the decision is based according to information available. Whenever you apply this basic criteria, there are no bad decisions – they are just the most rational result of the available information.
So the point is not to made the right decision, but to have the right information and possibly to collect as much information as possible in order to improve our decision process. In this way there are no regrets about decisions taken, but there is a continuous pro-active involvement in an improvement process of collecting and processing information. The focus itself is moved from the decision to be taken to the collection of the data and in our capability of managing it.
This is a reason why in general I’m not disappointed for a failure but I’m more disappointed for the fact that I have not forecasted the best decision. And this is even more clear when I have not invested enough time on the collecting information process.
So the outcome of this post is to never regret for a decision taken, not taking any decision is the real mistake. To make your decision just use the information available, if you have time collect even more data, and then use all the collected information to make a rational, balanced and coherent decision – OK this is the best decision you could have made without ifs, ands or buts!

The power of individuals

During the financial crisis of 2001 and 2008 we have assisted to a lot of bad guys who focused only on their personal results without caring at all about the possible consequences. The result of all these bad practices is clear nowadays to everybody – society has to pay the bill for that. Some magazines titles like “Can we ever trust wall street again?” are just illustrating the common thinking that all the people is having now in financial institutions and in big companies. Unfortunately there are plenty of examples in that direction.

But nowadays the traditional communication channels are changed. A reputation survey (trust.edelman.com) demonstrated that people believes that to evaluate a reputation of the company is extremely important if the company is “a company I can trust” (65%), just a little less than “high quality products” (69%), but definitely more than “delivers consistent financial returns to investors” (39%) and “widely admired leadership” (39%). So is more important to be trusted than the financial results or managerial leadership.
And the first primary source for evaluating the trust of a company is based on “conversation with company employees” more than “Live communication such as a CEO speech”.
Looking at institutions, people gives more trust to “people you meet for the first time” than in commercial enterprises or major banks.
This means that the trust of people to company and institutions is seriously compromised and to restore it will take a long time.
Then there is the web 2.0. Now there is the power of individuals. Every employee or customer or end user could blame a company for their behaviour. There are some “funny” stories like the United Airlines case that break the guitar of a singer which dedicated them a new song, or the Carrefour opening at Assago where a journalist behaviour against a kid caused big troubles to supermarket managers after the case exploded on internet and the word of mouth on Internet created serious problems of credibility to the company. There is a big series of examples of managers who have been forced to resign after public blame from the network that revealed some bad behaviour inside companies or after episodes of missing respect against some employees at work. Today everything is public.
Everybody in the company nowadays is important and can behave as a communicator or, if not respected, like a bomb who can create troubles to the company reputation. But in order to keep a good reputation for a company, managers have to be competent, concrete and trustable, they have to be aware of the stakeholders requirements, with dedication and motivation, putting the respect for the others at the first position of their priorities.

In the next post we will see how to cultivate trust or at least how to try to restore it.

The challenges of growing companies

I have started working for a brief period of time in a medium-big company. Then I moved to a micro organization (actually I was the first employee).

When in you work in a very small company there are a lot of difficult things but there are also a lot of opportunities. You have to be flexible and be able to do everything, but at the same time you can take decisions very quickly. You cannot rely on specialized teamwork, but you could easily have an overview of everything that is happening around the company. You have to deal with a lot of day by day problems, but at the same time you have the opportunity to explore all the subjects and problems that a normal business faces.

It is clear that because there is a leakage of specialization, the general efficiency of the company is very low especially from the structural point of view, but at the same time, if you are competitive (and you have to be in order to survive) you can create big opportunities leveraging on the flexibility and your ability to respond to niche market needs.

And then the company grows. And everything changes. And everything has to change. Moreover, a lot of people working in the company feels the need for a change.

The change from a small company to a medium one is really difficult. From one side there is the need of more structure, the need of clear directions, the need to be better organized. On the other side there is the risk to lose flexibility, to feel the pressure of strict rules or to be less involved and informed about what’s going on.

Unfortunately during this transition the growth of the company generally absorbs a lot of cash and resources in general, so the situation is even more challenging.

The growth of the company is a difficult moment at all levels of the company, for the workers, for the employees, for the managers and for the top executives too. The workers are less and less involved in the interaction with managers and employees but in general their work tends to be more organized and structured (at least in the long run). The employees are required to be more specialized and to focus more in some skills and at the same time to interact with more people and more departments within the company. Managers have less freedom but at the same time they are less involved in the work itself and more responsible for the organization of the work environment and for creating the right synergies between the different departments.

For the top managers and for the executive there should be a transition too. This last one is very important because is the main driver for the change of the company. Without it, the company will be in trouble. The company needs more structure and the flow of information have to be more clear, more easy to be understood at all levels.

A company could decide to remain small, and in some industries this could be a good strategy. But in most cases the growth of a company is the only way to be very competitive in today challenging world. The transition from a small to a medium and then to a big company is not easy at all and involves all the levels of the organization. But at the same time it could be a good opportunity. Managing it in the best way could create solid basis for a leading company of the future competitive globalized world.

What is the main motivation driver

I have this feeling from a long time but I have never been able to make up my mind and to really understand it clearly. Then I read this HBR article on how to “Increase your team motivation” and everything seems so clear now.

When we manage a team of people we always think about what is the main driver to improve team performances, to increase reliability, to make people feel more satisfied about their own work,  how to reach objectives in the most effective way (effective for the people and for the objective). And we always think about the balance of the two “classical methods” the stick and the carrot. At the end of the day they are just two metaphors for two different approaches to the management of people – Push or Pull.

Push is much more “pushing” people when they need to be guided trough a new project, when they need assistance. An example of this is the fixing of milestones, scheduled meetings, planning of step by step targets, checking progress day by day and so on.

A pull strategy is much more leaving the people reach the target without interfering too much, giving them the picture of the objective and trusting on their own experience and skills in order to reach the target, checking only the final result.

Of course both approaches are useful and they have to be used very carefully and in the appropriate moment (Situational Leadership II model).

To these two basic approaches I would like to add a third one, maybe is just an extension of the Pull strategy, but I prefer to think of it as a separate approach. And this sounds like “let the people decide for themselves”. As the HBR article says when we choose for ourselves we are more committed to the outcome by a factor of 5 to 1.

This is a very important factor that a lot of managers forget. If the people is involved in the decisions or better is making their decisions according to the picture given, then the result is five times more efficient than without this self choice. Of course this approach is not easy at all because it means to share more information, to discuss more the projects before starting them and also to receive a lot of feedback on what’s going on (and feedback sometimes is not easy to be managed, especially for “Push” manager). But nevertheless this is the most effective approach and it is clearly demonstrated by results.

In nowadays competitive society, being able to leverage on people skills and let them be part of the decision process, to let them find the time to be part of decision itself is not an easy task at all but if managed in a good way could be the thing which makes the difference between an average organization and an outstanding one.

Transparency into organizations

When I am put in charge of a project I normally start asking questions. I ask a lot of questions because the more I know the easier it is for me to understand what is expected the project to be. And sometimes the questions that I made seem to be not so much correlated with the project itself. This is typical of my style of doing things. I want to have clear in mind the full picture of the project, starting from the customer needs, the reasons for the request, the country where the product will be sold and so on. But I want to know more. I want to know the expectations of the customer, of the company management, of the potential customers and so on. Basically in mind I want to create the best picture as possible, like a Prezi presentation, a big picture where you can zoom in and see all the small details and even more. If you do not give me all the information I need, of course the result of my project will be less accurate, or let’s say, less effective.

The same is valid for all organizations in general. The more you know about the organization, the more efficient you could be in meeting the organization expectations, the more easily you will be integrated into the organization itself. Unfortunately I should say that in this case there is a big difference between the delivering of information for a technical project and the delivering of organization information in general.

In the case of a technical project when I ask questions the result is very simple – or I get the answer or I will not get the answer because the answer is still unknown (and sometimes is part of the project to find it out). In the case of information within organization, the situation is a little more “blurry” – sometimes you receive the answer, sometimes you will not because this information is “reserved”. Or even worst, sometimes it is better to don’t even ask questions on that subject.

All this comes to the tile of this post. The transparency into organizations. There is great post with title: “Transparency is the New Leadership Imperative” which speaks about the modern concept of leadership and transparency.

As I said before, if you want to be really effective and manage at best all the resources that you have you must know the full picture together with the small details. And your team and your employes are the most important resource that you have and should be put in the best possible condition to drive your company to the global competition. In order to do that the sharing of information between the organization, with no secrets and with complete transparency, is the key factor to be competitive. Of course the way that you deliver the information is very important and is the crucial factor for having excellent managers into the company.

The old style companies where the top level management knows the most, than the middle managers know less but have to report everything, and the low level employees know almost nothing is over. This model of business could still survive for a while. But in the nowadays society where there is an excess of information and the channels for delivering information are so diversified and easy to use the real challenge is not keep information for yourself but it is to be able to distribute the information as best as possible. An excellent manager today is not anymore the one with experience but is the one able to transfer experience, the one able to facilitate the delivering of information at all levels of the organization itself.

Information within organizations

I have always looked at the information concept from an Engineering point of view. In particularly in my mind the concept of information is correlated with the telecomunication concept of “bit”. As it is indicated in Wikipedia – A bit (a contraction of binary digit) is the basic unit of information in computing and telecommunications; it is the amount of information stored by a digital device or other physical system that exists in one of two possible distinct states.
In particular in telecommunication the most important goal to achieve is to trasfer the maximum quantity of information with the minimum occupied bandwidth or in other words to limit as much as possible the use of the channel or the media necessary for transfering the information.
I think that in our social life we do almost the same, basically we try to transfer the maximum possible information with the minimum effort and the minimum amount of energy. Of course there are a lot of us who enjoy to speak and to interact with other people but in that cases the interaction is mainly driven by the pleasure that this social interaction is giving to us more than the necessary efforts to trasfer the information.

I think that this concept is applicable also to the organizations where the exchange of information between the members is the key point for creating succesful business organizations.

The biggest problems that organization are facing is the effectiveness of the exchange of information between the employees, with customers, with suppliers and with everybody in general.

Everybody when is in the process of exchanging information is more focused in what has been sent, more than in what is received from the opposite site. For example when I meet someone I’m more focused in saying my name than in listening the name that has been told to me. And probably nobody is focused in checking if the listener have really listened, understood or remembered correctly our name. People is more focused on delivering the necessary quantity of information than on the verification of correct reception from the other side.

It is matter of perspective that is absolutely essential in order to improve our relations with others. If you start thinking in this way, then probably you will also realize that sending an e-mail does not necessary mean that the information has reached the target (Don’t send an e-mail, get the job done). You will realize that telling things to the people does not necessary means that they have understood the meaning of what has been told. You will realize also that a huge amount of information could saturate the channel (the listener attention) and result in a not efficient transfer of information.

How many times the people says -“I have told him to do this” or “I have sent him an e-mail, he is not answering me” or “I have clearly expressed the concept to my colleagues” and so on. But the we must change our perspective and sometimes I’ll try to push people to change perspective so I made the following questions – “Are you sure that he has understood what you told him?” or “Are you sure he read your e-mail and understood clearly your point of view?” or “yes, you have expressed your point of view, but is it agreed by your colleagues, is it clear to them?” Sometimes with that questions people looks a little bit displaced, as if the new point of view is new and unusual. Probably it means that I reached my objective – force to check the information from the receiver point of view.

This concept could seem obvious but I believe that a good leader should keep this in mind and repeat to itself continuously that it is absolutely important to look at the transfer of information from the listener perspective more than the transmitter of the information.

Investing time in the process of improving the exchange of information within organizations is a key point for the success of the organizations themselves. I think that with the global competition, with the increase of media channels for communications and with the expanding of the customers base around the world, the efficient transfer of information will be the key point for the success of future leading companies.