Change Management
Two Truths of Enterprise Sales
I have been selling products and services to large enterprise organizations for most of my career. I like to tell people, “Everyone is in sales,” because one way or another, they are.
Early in my career, I was a Systems Analyst for a Marketing company. I created what I’ve been told was the first custom coupon system for Subaru, as well as several systems for Mitsubishi Motors and Mitsubishi Electric. We would devise several ideas to pitch to the customer and then have follow-up meetings to flesh out the idea and help sell an extensive, multi-faceted program. It was a great learning experience in understanding what mattered and how to effectively upsell deals.
Standard sales advice is to sell to a known problem or a project. The thinking behind finding projects is that a tactical or strategic need has already been identified, with executive support and funding to address it. Most companies have some degree of dysfunction (which is why Patrick Lencioni’s books are so popular) that tends to affect projects negatively.
Focusing on problems is the way to go, but a business rarely comes to you to disclose those problems and their impact. A Consultative Selling approach is helpful in this situation. The upfront preparation can be time-consuming, but the results are often bigger deals that close in less time.
The process I use involves understanding the business, its customers, and competition, as well as potential changes to that business or industry. I will search for clues that indicate potential problems (from financial reports and filings to product-specific forum posts). I will then hypothesize about a few potential problems and reach out to the highest-level individuals in the organization likely to be responsible for these issues.
When you do speak with someone, you need to demonstrate your understanding and potential value add to learn more and begin gaining their trust while listening for validation or other information to refine your hypothesis. People buy from people they like and trust, and this approach becomes the foundation. From here, you can guide the process and expand your reach to other areas and layers of the organization. As a seller, your focus is on proposing real solutions that are mutually beneficial and have a high probability of success.
So, back to the two truths –
- Companies and teams are often biased toward the status quo and the familiar. Problems are rarely solved using the same people, products, and processes that got them into this position in the first place. Your focus as a seller needs to be on outcomes. Help them visualize what success looks like and how it feels. Overcome negative emotions of fear using positive emotions and envisioning a better future.
- Change can be expensive at first. It is an investment in the future that should yield both short-term benefits and long-term savings. Your focus as a seller should be on delivering value.
This approach and understanding can lead to new customer acquisition and ongoing account growth. You are continually demonstrating your value and commitment to your customers’ success, and that pays off.
Here’s a bonus third truth. If you cannot quickly gain consensus on the root cause problem(s) or traction with your proposed solution, qualifying out is often the best next step. Nurturing the prospect may lead to a future deal, but leveraging that 3-6 months on another prospect will likely result in more deals closed. Qualify out quickly and move on – that is better for everyone involved.
Remember, hope is not a strategy.
Perfection is the Enemy of Progress
The title is a quote from Winston Churchill. I have learned in my career that these behaviors can be very costly from a business perspective, especially when decisions affect large parts of a business. It took me years to learn this lesson as I transitioned from perfectionist to “reformed perfectionist,” which was challenging.
Below are a few examples that could help you better understand people like this, and if you are someone like this, it might even provide motivation to try to change.
Early in my career, as I expanded my role from a Programmer to an Analyst Programmer to a Systems Analyst, I often found myself spending too much time and effort on things that only made a minimal impact. Applications and subsystems looked a little better, ran a little faster, integrated easier, were easier to modify, and generally had fewer problems. Those are all good things, but in hindsight, those benefits often did not justify the associated costs.
Some industries and applications require a degree of quality and reliability, such as nuclear power plants and lifesaving medical equipment. Since very few things are perfect, there are usually a variety of built-in safeguards to mitigate the impact of errors and failure. I have worked on a few of those systems, and I get it. But they are not in the majority.
Identifying the intersection of meeting the stated requirements, delivering the required quality, and knowing what “good enough” looks like is essential. That point is where there are diminishing returns on every additional hour spent on an activity.
I worked with a hardcore perfectionist at a small software and services company. On a consulting engagement, he spent two days on a task that I viewed as having a 2-4 hours level of effort. We discussed it, and he told me he had at least three more days to finish. We had a heated discussion, and he was frustrated with me for a while. Years later, he admitted I was right, talked about how difficult it was to change, and how much more productive he is now.
I consulted with a small software company that spent 10+ years on a SaaS product and was still “just two to three weeks away” from their MVP (minimally viable product). I started working with them over three years ago, and they are still at that point today.
I have also sold to companies stuck in analysis paralysis because they (leaders and teams) are always second-guessing decisions and want to be 100% certain before making a decision. Those companies need to solve a problem, or they would not be seeking a solution. In most cases, making an informed decision on a proven solution now will solve their problems and deliver value quickly. There is an actual business cost for every month of delay.
Are these behaviors costing you or your company money? If yes, dig a little deeper to understand the potential positive impact making small changes could have. Daily improvement is a great thing!
The Coming Changes to Manufacturing
Recently, I spoke with a person on a team analyzing ways to “mitigate the risk of exclusive manufacturing in China” while not fully divesting their business interests in a growing and potentially lucrative market. This bifurcation exercise got me thinking about how many other companies are evaluating their supply chain relationships, inventory management, and the predictability of their cost of goods sold.
In the mid-1990s I had done a lot of work with the MK manufacturing software that ran on the Ingres database. Some of the issues were performance-related and fixed by database tuning, some were fixed by using average costs instead of a full Bill of Materials (BOM) explosion using dozens of screws in a window, but some were more interesting and also more business-focused.
After NAFTA became law, one manufacturer built a facility in Mexico and started manufacturing a few basic but important parts. When I arrived as a Consultant the main problem they faced was a reject rate of roughly 20% and additional related QA costs. My suggestion was to treat this part (a single piece of steel like the rotor from a disk brake system) as a component and build in the cost of both the scrap and the QA. They could then benchmark the costs against other suppliers in an apples-to-apples comparison to determine if they saved money. That approach ended up working well for them.
While that approach helped manage costs, it did not address the timeliness of orders or lead time required – important aspects of Just-in-Time (JIT) manufacturing. Additionally, it should be possible to estimate shipping costs by considering changes in petroleum costs or anticipated changes in demand or capacity.
There are systems out there that claim to estimate the cost and availability of commodities based on various global factors and leading indicators. It is tricky, to say the least, and we can’t anticipate an event like a pandemic. But, companies that are able to manage their inventory and production risk the best will likely be the ones that succeed in the long run. They will become the most reliable suppliers and have increased profits to invest in the further growth and improvement of their businesses.
The next 2-3 years will be very interesting due to technological advances (especially AI) and geopolitical changes. Those companies that embrace change and focus on real transformation will likely emerge as the new leaders in their segments by 2025.
New Perspectives on Business Ecosystems
One of the many changes resulting from the COVID-19 pandemic has been a sea change in thoughts and goals around Supply Chain Management (SCM). Existing SCM systems were up-ended in mere months as it has become challenging to procure raw materials to components, manufacturing has shifted to meet new unanticipated needs, and logistics challenges have arisen from health-related staffing issues, safe working distances, and limited shipping options and availability. In short, things are a mess!
Foundational business changes will require modern approaches to Change Management. Change is not easy – especially at scale, so having ongoing support from the top down and providing incentives to motivate the right behaviors, actions, and outcomes will be especially critical to the success of those initiatives. And remember, “What gets measured gets managed,” so focusing on the aspects of business and change that matter will become a greater focus.
Business Intelligence systems will be especially important for Descriptive Analysis. Machine Learning will likely play a larger role as organizations seek a more comprehensive understanding of patterns and work toward accurate Predictive Analysis. And, of course, Artificial Intelligence / Deep Learning / Neural Networks should accelerate as the need for Prescriptive Analysis grows. Technology will provide many of the insights needed for business leaders to make the best decisions in the shortest amount of time, which is both possible and prudent.
This is also the right time to consider upgrading to a collaborative, agile business ecosystem that can quickly and cost-effectively expand and adapt to whatever comes next. Click on this link to see more of the benefits of this type of model.
Whether you like it or not, change is coming. So, why not take a proactive posture to help ensure that this change is good and meets the objectives your company or organization needs.
Changes like this are all-encompassing, so it is helpful to begin with the mindset, “Win together, Lose together.” In general, it helps to have all areas of an organization moving in lockstep towards a common goal, but at a critical juncture like this, that is no longer an option.
Blockchain, Data Governance, and Smart Contracts in a Post-COVID-19 World
The last few months have been very disruptive to nearly everyone across the globe. There are business challenges galore, such as managing large remote workforces – many of whom are new to working remotely and managing risk while attempting to conduct “business as usual.” Unfortunately, most businesses’ systems, processes, and internal controls were not designed for this “new normal.”
While there have been many predictions around Blockchain for the past few years, it is still not widely adopted. We are beginning to see an uptick in adopting Supply Chain Management Systems for reasons that include traceability of items – especially food and drugs. However, large-scale adoption has been elusive to date.
I believe we will soon begin to see large shifts in mindset, investments, and effort towards modern digital technology driven by Data Governance and Risk Management. I also believe that this will lead to these technologies becoming easier to use via new platforms and integration tools, which will lead to faster adoption by SMBs and other non-enterprise organizations, and that will lead to the greater need for DevOps, Monitoring, and Automation solutions as a way to maintain control of a more agile environment.
Here are a few predictions:
- New wearable technology supporting Medical IoT will be developed to help provide an early warning system for disease and future pandemics. That will fuel a number of innovations in various industries, including Biotech and Pharma.
- Blockchain can provide data privacy, ownership, and provenance to ensure the data’s veracity.
- New legislation will be created to protect medical providers and other users of that data from being liable for missing information or trends that could have saved lives or avoided some other negative outcome.
- In the meantime, Hospitals, Insurance Providers, and others will do everything possible to mitigate the risk of using Medical IoT data, which could include Smart Contracts to ensure compliance (which assumes that a benefit is provided to the data providers).
- Platforms may be created to offer individuals control over their own data, how it is used and by whom, ownership of that data, and payment for the use of that data. This is something I wrote about in 2013.
- Data Governance will be taken more seriously by every business. Today companies talk about Data Privacy, Data Security, or Data Consistency, but few have a strategic end-to-end systematic approach to managing and protecting their data and company.
- Comprehensive Data Governance will become a driving and gating force as organizations modernize and grow. Even before the pandemic, there were growing needs due to new data privacy laws and concerns around areas such as the data used for Machine Learning.
- In a business environment where more systems are distributed, there is an increased risk of data breaches and Cybercrime. That must be addressed as a foundational component of any new system or platform.
- One or two Data Integration Companies will emerge as undisputed industry leaders due to their capabilities around MDM, Data Provenance and Traceability, and Data Access (an area typically managed by application systems).
- New standardized APIs akin to HL7 FHIR will be created to support a variety of industries as well as interoperability between systems and industries. Frictionless integration of key systems become even more important than it is today.
- Anything that can be maintained and managed in a secure and flexible distributed digital environment will be implemented to allow companies to quickly pivot and adapt to new challenges and opportunities on a global scale.
- Smart Contracts and Digital Currency Payment Processing Systems will likely be core components of those systems.
- This will also foster the growth of next-generation Business Ecosystems and collaborations that will be more dynamic.
- Ongoing compliance monitoring, internal and external, will likely become a priority (“trust but verify”).
All in all, this is exciting from a business and technology perspective. Most companies must review and adjust their strategies and tactics to embrace these concepts and adapt to the coming New Normal.
The steps we take today will shape what we see and do in the coming decade so it is important to quickly get this right, knowing that whatever is implemented today will evolve and improve over time.
Where Ideas, Experiences, and Lessons Learned Intersect 