Tag: management

Ominious days for the omni-channel

The omni-channel retail buzzword bites the dust, and a good thing too.

At the beginning of the year we heard much about Omni Channel strategies as it dawned on retailers like Harvey Norman, David Jones and Myer that this Internet thingummy they’d heard about wasn’t going away.

When asked at the time what a ‘omni channel’ strategy was, Gerry Harvey admitted he’d had no idea what it was a week before it was announced while Myer CEO Bernie Brooks said late last years it was something about having electronic kiosks and free delivery.

So it was interesting to hear the CEO of US cloud computing service Netsuite, Zack Nelson, talk about his company’s ‘omni channel strategy’ this week at a lunch in Sydney.

On being asked what exactly Netsuite’s omni channel strategy was Zack let the cat out of the bag about the holy grail of the omni channel.

“There are so many channels, there are no channels,” said Zack. “Omni-channel was the only word we could find.”

So we can safely put the omni-channel myth to rest – the idea businesses can focus on one, two or three channels such as bricks and mortar, the web, iPhone apps or tablet computers was always flawed and risked locking companies into one or two technology platforms at a time when things are changing quickly and in unexpected ways.

Netsuite’s response is to adopt ‘responsive design’ principles where sites adapt to the device being used rather than spend lots of money building apps for devices that might be redundant in the near future.

This is true of business in general – we often forget the core role of our businesses, like the retailer’s mission is to get goods into the hands of eager consumers and TV stations or newspapers are ways of delivering advertising. Instead we fixate on the type of delivery vans we use, the background colour of our websites or which apps we are going to develop.

For retailers there’s a far more fundamental problem which Micheal Hills of CoCo Republic described at the same lunch, “people boast about buying designer labels online at discount prices but still want to go to bricks and mortar stores.”

That paradox is the sort of problem many businesses have to deal with which aren’t going to fixed by trendy buzzwords.

In Netsuite’s defense their use of the word ‘omni-channel’ is about offering multiple currencies and languages in the one package rather than selling to customers on different platforms. They aren’t using it as a cover for failing to notice their markets have changed in the last decade.

The main change in the market place is the good old fashion imperative of getting back to the basics of service and delivering value for money. The days of making money from finance packages or vendor rebates instead of looking after the customer are over.
Some managers are yet to understand this and their companies won’t have the luxury of indulging in buzzwords over the next decade.

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Every business is a cloud business

Cloud computing can present an unexpected set of problems for a business.

Every business is a cloud business claims Zach Nelson, the CEO of cloud Enterprise Resource Planning service Netsuite.

In Zach’s view every business should be using cloud computing services and at a lunch in Sydney he illustrated this with companies ranging from agribusiness Elders through to furniture and design store CoCo Republic.

A buzzword used by Zach and Netsuite is ‘omni-channel’ and this is something we’ve heard from local retailers in the past.

Interestingly Netsuite’s definition of omni-channel is more as a catch-all phrase than a definition. “There are so many channels, there are really no channels,” says Zach. “Omni-channel was the only word we could find.”

This doesn’t bode well for older retailers struggling with the idea of a website as part of their “omni-channel’ strategy, let alone tablets, smartphones or 85” smart TVs.

The problem also faces businesses adopting cloud computing platforms with the related trend of Bring Your Own Device being in itself is an “omni-channel” medium where an employee could be using anything from a smartphone with a 7″ touchscreen through to a fully equipped PC workstation with a 27″ cinema display.

How Netsuite deals with the plethora of channels is through responsive design strategy where their sites adapt to the various screen sizes their customers use. This is the opposite to the philosophy of building specific apps for each platform.

We’re seeing other cloud companies struggle with this problem as well, Mark Zuckerberg recently described focusing on the open HTML 5 standard over dedicated iOS and Android apps as one of Facebook’s biggest mistakes while Salesforce founder Marc Benioff used the recent Dreamforce conference to confirm his company’s commitment to the web despite releasing an iOS application.

Zach Nelson’s notion that every business is a cloud business is interesting and true, whenever business owners or managers say “no” asked it they use cloud computing they are genuinely shocked when its pointed out to them that almost every external internet service they use runs on the cloud.

Slowly we’re seeing this being accepted by the business community as show by diverse companies adopting services like Netsuite, Salesforce and Xero.

The big challenge for managers is in taking advantage of the processing power businesses find that cloud computing gives them.

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Are you a worthy customer?

Some businesses aren’t worth worrying about as customers.

“Those companies are not going to be winners in the long term. We’re very happy to work with the fastest growing companies in the world; the companies who understand that people are core to who they are,” says Daniel Debow, Vice President of Salesforce’s Work.com at the recent Dreamforce conference.

Debow was talking about companies that aren’t interested in social software, or those who don’t have the infrastructure or management culture to implement changes which reflect the modern workplace.

When writing about social and cloud services one thing that jumps out is just how unprepared many businesses, big and small, are for changes that are happening in both the workplace and the market.

The story of Work.com reflects those changes – the idea behind Rypple and Work.com, which was born out of Salesforce’s 2011 acquisiton of Rypple, is that workplaces are inherently social.

“We spend as much more time with the people we work than with our families. It matters to us what our workmates think” says Daniel so Work.com gathers the social intelligence within the business to give people real time feedback on their performance.

The Rypple idea lies in the inadequacy of existing HR software and management practices. Daniel says, “today this model we have it’s totally not reflective of the reality of how people work; people are more connected, they’re collaborative, more realtime.”

This collaborative and realtime way of doing business challenges the structures in many businesses and the methods of a lot of managers. Many are ill-equipped to deal with a more open and transparent way of managing their teams.

In fact, software like work.com and its competitor Workday make some of those older style managers redundant, particularly those whose roles involve little more than box ticking and following the strictures of the company’s procedure manual as this can be done better by a computer program.

The problem for many organisations, both private and public, is they have become more focused on cossetting and protecting the box ticking bureaucrats of middle and upper management rather than delivering service to their customers and supporting their staff responsible for keeping clients happy.

Something that jumps out when you talk to entrepreneurs like Daniel Debow and others building new social and cloud companies is their lack of interest in selling to those organisations, their view is the old school companies are dinosaurs on the path to extinction.

Dinosaurs though lasted a lot longer than we often think and the same is true of the current generation of zombie companies being kept alive by government or investors too scared to book the losses which the failure of these enterprises would entail.

While those dinosaurs are going to be a drag on our economies for the next decade or two, the real opportunities – and rewarding work – is with those businesses who want to change and aren’t run for the administrative convenience of their managers.

The question for many business owners and managers is whether companies like Rypple or Workday could be bothered selling to you. If you’re not, it’s time to consider your exit strategy – or lobby your local politician for some subsidies.

Paul travelled to Dreamforce courtesy of Salesforce.com

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Walking the floor

Getting out of the office and seeing what your customers and staff are doing is a neglected management fundamental.

“He walks the site three times a day,” said awed contractors about a construction project manager – who we’ll call Rob – that I encountered as a cadet Engineer in the building industry. Getting out of his site office and seeing what was going on made sure dodgy contractors or inexperienced trainees like me couldn’t slow down his projects.

Slate Magazine’s story of how the Wendy’s hamburger chain changed the US fast food industry recalls how Rob would successfully run his projects and the importance of hands on management.

Jim Near was recruited as president by his friend and Wendy’s founder Dave Thomas to get the business on track after over-extending in the mid 1980s. Slate says of Jim’s hands-on management style;

Near liked to stalk through the dining areas of his stores examining people’s trays. If customers were leaving fries, he’d go harass the fryers: Were they serving the potatoes too hot? Too cold? Not using enough shortening? And he would sit in his car in the parking lot, surveilling the activity at the drive-thru window.

That obsession sounds like Steve Jobs and its no-coincidence; Jobs, Jim Near and Rob the project manager gave a damn about the product that was being delivered. Rather than sitting in an office obsessing over paperwork and meeting artificial KPIs, these effective leaders got out and saw what the realities were in their business.

Probably the best example of this “management by walking the floor” ethos was Bob Ansett who built up the Australian Budget Rent-A-Car business in the 1970s. Every senior manager was required to spend a couple of days a month working on one of Budget’s rental desk dealing with customers.

That policy forced Budget’s executives to understand the business, just as Jim Near was described as ““a ketchup-in-his-veins type of guy” through working at every level in the fast food industry.

One of the many conceits in modern management is the idea that everything – from building high rise towers, running car rental companies or operating a hamburger chain – is like selling soap. This philosophy ignores that every industry has its own characteristics and even selling soap has its own unique challenges in different markets.

It’s easy to think everything works as described in a 1980s business school textbook when you have artificially constructed KPIs and layers of managers to deflect responsibility.

Over the last quarter of the Twentieth Century we saw customer service become disdained in the Corporatist business culture which favours accountants and lawyers as managers who rely on marketing people and lobbyists to protect them from the reality that they aren’t really very good at running their companies.

Now that era has come to an end and the times now suit those who listen to customers and the marketplace. Walking the floor and paying attention to what the public are saying about us on new media are competitive advantages.

While the corporatists lobby their friends in government for subsidies and protection, entrepreneurs and genuine business builders like Dave Thomas, Jim Near, Steve Jobs and Bob Ansett have the opportunity to seize the markets that are being neglected.

There’s never been an excuse for not listening to the customer and today it’s more important than ever.

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Management by fear

Dictatorial managers are killing organisations in an era which rewards openness.

The sad story of the passing of Bea, the Golden Retriever who died while in the care of United Airlines portrays a fundamental problem in many organisations’ managements – the rule of fear by middle managers.

A telling part of Bea’s sad tale is how her owner Maggie Rizer was treated when she went to collect her two dogs from United,

When we arrived in San Francisco to pick up our dogs we drove to the dark cargo terminal and on arrival in the hanger were told simply, “one of them is dead” by the emotionless worker who seemed more interested in his text messages.  It took thirty minutes for a supervisor to come to tell us, “it was the two year old.”  Subsequently we requested that our dog be returned to us and were told that she had been delivered to a local vet for an autopsy. Whatever thread of trust remained between us and United broke and we then insisted that she be returned to us for our own autopsy by our trusted veterinarian, Shann Ikezawa, DVM from Bishop Ranch Veterinary Center. Over the next two hours the supervisor’s lie unraveled as it became clear that Bea was right behind a closed door the whole time and he had been discussing how to handle the potential liability with his boss who had left and sticking to the divert and stall tactic that they had been taught. Eventually Bea was returned and we drove her to the vet at midnight.

The ‘divert and stall’ tactic took over two hours for Maggie and her partner to get around.

When I recently flew United I saw a similar attitude from the cabin crew, their lack of initiative and beaten attitude was noticeable. As I said in the post;

Overall the cabin crew seem tired and beaten, while they aren’t rude or unpleasant one wonders if they have all received too many stern memos from management about being friendly to customers.

Those stern memos have a corrosive effect on a business where every employee worries more about being sanctioned for breaking a rule or directive rather than helping customers.

Eventually the entire organisation becomes risk adverse and focused on protecting staff, or management’s, interests rather than looking after those of customers, shareholders or taxpayers.

Too many organisations are like this, where the staff are motivated by staying out of trouble rather than helping and adding value to their customers.

Making staff fear you is one way to run a company, or a nation, but ultimately those who are scared of the leaders lose all initiative and the empire collapses because every decision has to be sent to head office as the minions are scared to do anything that will be bring the Imperial Displeasure down upon their hapless heads.

From ancient Rome to the Soviet Union empires have fallen because of this, in today’s private sector companies that run on fear are ultimately doomed, including the ones who can tap into government subsidies to kick the can down the road. Even public sector agencies where this attitude reigns will change when the chill winds of austerity blow through their corridors.

One staff member taking a little bit of initiative probably would have saved Bea the golden retriever. One supervisor taking responsibility and helping Maggie Rizer would have avoided the PR disaster United now have.

In an economy that’s radically changing, inflexibility and slow decision making are possibly the worst possible traits an organisation can have. It’s time for dictatorial managers, along with control freak politicians and their public service directors, to let the reigns go on their staff.

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Towards the social media enabled jet engine

General Electric’s GEnx engine illustrates how social media is changing business

“What if my jet engine could talk to me and what would it say?” Asked Beth Comstock, General Electric’s Chief Marketing Officer, at the Dreamforce 2012 conference.

The idea of social media connected jet engine is strange, but the idea that a key piece of technology can talk to engineers, pilots, salespeople and management makes sense.

At the Dreamforce conference, Salesforce.com were showing how their Chatter social communications tool can be applied to more than just salesteams, in GE’s case by giving their new GEnx engine the opportunity to talk to its support teams.

In flight telemetry is nothing new to the aviation industry, ACARS – Aircraft Communications Addressing and Reporting Systems – have allowed airlines to monitor the performance of their aircraft over high frequency radio or satellite links during flight since 1978.

The difference today is the sheer amount of data that can be collected and who it can be shared with. If relevant data is being shared with the right people it makes managing these complex systems far easier.

More importantly, it helps teams collaborate. The GEnx engine is a new design that’s fitted to Boeing’s latest airlines including the troubled and late Dreamliner 787 so streamlining the design process of a new, high performance piece of technology pays dividends quickly.

Although things can still go wrong – one wonders what the final tweet from this engine would have been.

We’ve been talking for a long time about how social media and cloud computing services improve collaboration in a work place, the GEnx jet engine illustrates just how fundamental the changes these technologies are bringing to organisations.

If an industrial jet engine can be using social media it begs the question why service based companies and workforces aren’t. It’s where the customers and staff are.

These tools are radically changing the way we work right now – the question is are we, and the organisations we work for, prepared for these changes?

Paul travelled to Dreamforce 2012 courtesy of Salesforce.com

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The Olympian quest for control

The control freakery of the Olympics marks an organisation struggling with threats.

“Blogs or tweets must be in a first-person, diary-type format and should not be in the role of a journalist,” state the International Olympic Committee’s social media guidelines.

The London Olympics Committee betrays how their ignorance of how the Internet works with an unrealistic and unenforceable linking policy.

More worryingly, an army of ‘brand police’ are scouring Britain for renegade cake decorators or knitting clubs breaching Olympic copyrights. Council trading inspectors have been redeployed from their main role of protecting the community to guarding the sponsorship values of the IOC and the world’s biggest corporations.

All of this is about control – a country that bids to host the Olympics agrees to draconian rules and regulations on free speech and commerce. Athletes too find themselves subject to harsh, and sometimes arbitrary, controls.

The purpose of these controls is to enhance the commercial value of sponsorships – this is why only McDonalds can serve fries, except with fish, at Olympic venues and only Visa credit cards can be used to buy a souvenir t-shirt.

Like all major sporting organizations, the value of Olympic rights exploded with the growth of advertising and broadcasting rights from the 1960s onwards.

We’ve reached the logical end of that growth as broadcasters struggle under the load of funding massive rights payments and advertisers find campaigns based on what worked in the 1960s or 1980s have less resonance with the debt addled consumers of the 2010s.

None of this will stop the IOC and other sports administrators from enacting iron fisted controls on participants, sponsors, spectators and any one else they can bully, but their power is waning.

Just like the Soviet Union tried to control fax machines as their economy crumbled around them, the same thing is happening with the Olympics and other big ticket sports.

Top level sports administrators are very good at currying favours from the corporate Bourbons and political princelings who love to spend other people’s money to build their own egos which will allow the facade to continue for a few more years.

Eventually though the money will run out as shareholders question the value of billion dollar sponsorships coupled with executive gold passes to the VIP marquee and taxpayers will ask why governments have money to spend on stadiums or elite sports programs when their local school, hospital and police stations are being closed.

History shows that threatened leaders tighten controls when they are threatened. We can expect the next couple of Olympics to have even more draconian rules than London’s.

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