Efficient ‘time governance’

 

“It’s not that we have little time, but more that we waste a good deal of it.”  (Seneca)

Good governance is often described as being a balance between efficiency and effectiveness in setting strategy, overseeing operations, and monitoring performance and conformance.

As meetings are the chief means by which the board formally addresses its duties, the efficiency of those meetings is a key determinant of governance effectiveness.

The Board Chair has a complex role to perform in managing board meetings, and that work commences well before each meeting starts. Good planning and preparation are required to set a meeting up for success.

Efficiency is generally judged by the extent to which a process uses the lowest amount of inputs to create the greatest amount of outputs. In most non-profit organisations that translates into identifying how much labour (paid and unpaid) is involved in producing any given output, and at what financial cost. This approach encourages a focus on the concept of ‘minimal waste’.

In manufacturing, zero waste and recycling commitments have been widely adopted by firms aiming for sustainable operations. In governance, it is inefficient to spend the board’s valuable time on procedural or low priority matters, when these could be approved collectively, or delegated to responsible officers.

Efficient ‘time governance‘ aims to ensure the effective use of time by directors, the board secretariat, and management, before, during and after board meetings.

Here are just a few suggestions for attention by the Board, the Board Chair, Secretariat and CEO, which may help:

• Set limits to the length of meetings and the size of the agenda pack (and stick to them)
• Limit the number of meetings scheduled each year (6-8 meetings p.a. should be sufficient, unless your organisation is dealing with exceptional circumstances)
• Consider the volume of reading and time required for preparation and follow up for each meeting
• Move strategic and other priority items to the start of the agenda so that the most important matters are addressed while participants are alert, and with time to give them the attention they deserve (rather than being rushed later in the meeting because people are tired and the hour is late)
• Allocate a time budget or allowance to each agenda item (or section), and publish this on the agenda paper *
• Label agenda items ‘For Noting’, ‘For Discussion’ or ‘For Decision’, and ensure that recommendations for the last of these are on the agenda, along with longer time allowances for deliberation on these items
• Set agenda item deadlines which allow the secretariat time to provide a draft agenda to the Chair well before it must be distributed to participants. This allows the Chair to amend the agenda as required before approving it for circulation, but also ensures the identification of priority items and the allocation of suitable time allowances
• Use a consent agenda to ‘star’ items of business for discussion or decision, and otherwise note or approve all other business in a single motion
• Use a large ‘time remaining’ timer as a constant reminder to participants of the time budget, and the intention to finish no later than the nominated time *
• Consider use of a cost/benefit analysis when deliberating on high priority proposals to assess the ratio of inputs (e.g. funds, labour, etc.) to outputs (e.g. member or charitable services) in reaching a decision

* See header image

While implementation of these suggestions does not directly affect the quality of deliberations and decision-making, and there is much more that can be said about deliberative processes, a board using such efficiency measures would certainly be less likely to ‘waste’ time.

Customer Carousel™

 Once you have the right processes and systems in place, developed a collaborative mindset based on a shared vision, and established cross-functional teams that understand the customer dynamics, you’ll appreciate the high level of detail we’ve put into describing the entire customer lifecycle process.

8.1 - SHIFTS IN CUSTOMER DEVELOPMENT

We found that the customer development process has changed significantly in recent years and in many ways. Not just because of globalization and digitalization, but also due to rising concerns over matters like income inequality, our environment, and climate.

Let’s review just some of these changes, although there are many more:

Brands need to be purposeful: "It is (about) the story you tell, not the product you sell".

Technically, your mission is your purpose. However, customers demand more than a mission statement explaining what it is you do, how you plan to do it, and to who it may concern. They want to know why you do what you do. What drives you, what passionates you, or what keeps you awake at night. They need to know whether you’re equitable to your stakeholders and care about our planet. With the rise of social media public scrutiny is intimidating, so whatever you do, don’t pretend to be what you’re not. They’re bound to find out and destroy your reputation.

The moment of purchase should no longer be perceived as the end, rather as a means to an end.

Common practice dictates that customer development is mostly about driving a customer to a moment of purchase. This is unsound: purchase is not an end, it is the start of a relationship that is based on an Understanding of Trust™ and confirmed by a contract to which both parties are commited.

Only if you follow through, as promised and expected, the relationship may develop into an Alliance of Trust™ which could lead to a long-lasting relationship. However, most marketing and sales funnels describe ‘purchase’ as a final stage while a few models have added ‘satisfaction’ and ‘advocacy’, without describing how to reach these post-purchase stages or who is responsible for it.

Marketing communications is no longer about sending, rather a real-time reciprocal process.

Before the age of digital, marketing communications was mostly a unilateral process, often referred by as ‘sending’. Due to the rise of
the Internet, mobile devices, and social networks customers can now actively engage in the buying process, driving bilateral communications.

Yet, most purchase funnels still perceive the customer journey as a one-sided process. It is not: from a customer’s point of view, it is a decision tree while from a brand’s point of view it is an influencing tree. As we will explain further down, the buying process is best seen as two separate ribbons, that may become entangled for as long as it is beneficial to both parties.

Buying motivation throughout the buying cycle shifted from rational to emotional triggers.

Due to the amount of information that is now freely available to each and everyone, customers already know most of what is to know about your product and your reputation. Customer activation, therefore, needs to shift, from an emphasis on rational triggers to emotional triggers, i.e., all signals and sensory stimuli customers can experience about your product or brand.

As a result, Emotional Intelligence (EQ) and emotional engagement have become prevalent in customer experience management.

Customer development should not be seen as a series of steps, rather as an integrative process.

The frontline operation has become extremely divided with numerous specialists, each focusing on a fraction of the 360-degree puzzle. It should come at no surprise that individual employees have become entirely disconnected from the overall customer development process and often have no clue what customers experience during each of their interactions with the organization at large.

Customer on-boarding has become a critical component of the customer development strategy.

As more and more companies make the shift from as-a-product to as-a-service business models, the revenue model is also changing from one-off purchases to subscription-based services. While customer churn hasn’t been of much concern to product-centric brands, in case of subscription-based services it is absolutely vital that customers extend their subscriptions.

To reduce customer churn ─ and increase employee engagement to raise customer loyalty ─ brands now resort to Customer Success, a kind of proactive customer support practice. Customer Success efforts commence just prior to or shortly after the moment of purchase.

Significance is the traverse in customer lifecycle management, leading to customer extension.

Customer Lifecycle Management involves many steps, however, one step has been overlooked by most: Significance. Significance supersedes Satisfaction and even Happiness. While Satisfaction and Happiness look backward, Significance looks toward the future. Why should a customer maintain a close relationship with you? What future value do you have to offer them? Why would they want to associate themselves with your brand?

If you want to build strong customer bonds, you’ll need to provide customers (implicitly) with favorable answers to these questions.

Innovation can either extent (sustain) or prematurely end (disrupt) a revenue stream.

It should come to no surprise that we live in an age of technological disruption. Technology that was developed in the previous century is now phasing out, while new (digital) technology is rapidly gaining traction. If your core operation still relies on old systems, or your
business model is out-of-date, chances are that your revenue streams will soon be prematurely discontinued.

Since your business relies on revenue, this disruption could become fatal. While product innovation could provide a temporary edge over the competition, outdated business models may require your organization to make a complete turnaround.

Employee-customer engagement drives customer loyalty and customer advocacy.

As mentioned before, the customer journey isn’t a one-sided process: it involves two parties, your brand, represented by its employees, and the customer. If you want to drive loyalty and advocacy, you’ll need to get both your customers as well as your employees engaged in the process.

Customer expectations may vary greatly depending on their point (or frame) of reference.

Customer expectations greatly determine Customer Satisfaction, Happiness, Significance, and Loyalty. However, each customer has a
different point (or frame) of reference, meaning, their expectations may vary greatly. While one customer may be thrilled because your customer service desk was quick to solve an issue, others may not be so impressed and demand that you proactively help them to obtain as many benefits as soon as possible from what it is they purchased from you.

8.2 - INTEGRATED PROCESS

To incorporate these changes into a modern buying cycle, we’ve created the Customer Carousel™.

The Customer Carousel is the ’roundtrip’ part of the ROUNDMAP framework and contains:

• 4x Customer Development Goals ─ Acquisition, Creation, Retention, and Extension.
• 4x Frontline Departments ─ Marketing, Sales, Delivery, and Success.
• 8x Moments of Engagement ─ Brand-initiated touchpoints.
• 8x Moments of Reflection™ ─ Measurable responses by customers to these touchpoints.

Instead of focusing on creating the perfect customer journey, we believe companies should focus on providing more insights into the gains of their product (Prospect Theory) and adhere to a very simple 4-step response to each touchpoint (f.i., “More info”, “Order now”, “Keep me informed”, and “Not interested”). This way ─ provided brands use the right channels and responsive touchpoints ─ firms will be able to drive their prospective customers forward. Remember the KISS-formula: Keep it simple, stupid.

8.3 - TIMELINE

Since the customer lifecycle is a cyclical process, as suggested by the term, a circular layout may be difficult to grasp at first sight. The cycle includes the classic AIDA, as well as elements of Alan H. Monroe’s Motivational Sequence (mid-1930s). 

To introduce you to these steps, we’ve created a more familiar linear timeline. First, let’s have a quick look at it:

On the bottom half of the figure, you’ll find the brand-initiated touchpoints or Moments of Engagement (Attraction, Awareness, etc.). Beneath each Moment of Engagement you’ll find a Prompt (1-8) that determines its position and meaning in the lifecycle process. While on the upper-half you’ll find the Moments of Reflection™ ─ the measeable responses of customers to the touchpoints. In between is a color-coded wave, representing the Ultimate Level of Truth™.

The figure illustrates how customers respond to the brand-initiated touchpoints as they pass through the Customer Carousel™. By extending the frontline operation with a fourth department, Customer Success (marked in red), the likelihood of retaining more customers ─ getting them to return more often and spend more over the course of their customer life time ─ increases significantly.

According to Zappos, 75% of their daily purchases come from returning customers (successfully extended).

8.4 - RELATIONSHIPS AS A DOUBLE HELIX

Although we’ve chosen to explain the arrangement of the Customer Carousel™ to you by using a linear timeline, please remember fact that the actual motion is circular (360-degrees). Over time this creates a helix (see image to the right), indicating a customer circling around the brand.

However, since it is a two-sided process, engaging the brand as well as the customer in the process, it is actually a double helix ─ much like a DNA-string. In a more abstract way, the Customer Carousel™ is about estabilishing a product-customer fit, as part of the product-market fit, that creates a double helix.

A product-market fit is the degree to which a product satisfies a strong market demand.
Product-market fit is a first step to building a successful venture in which the company meets early adopters, gathers feedback and gauges interest in its product(s).

8.5 - FROM CYCLES TO WAVES

In fact, a product-market fit is exactly that: two interwoven strands, one of demand and one of supply, held together by for the most part emotional bonds. While we could consider customer relationships as a mere consequence of our actions, convictions, or even as strokes of luck, we should place them in perspective. Afterall, cycles are a series of occurrences that occur over time, destined to repeat itself ─ given the right circumstances and conditions. Let’s consider the Customer Carousel™, the customer lifecycle, over time:

By plotting the steps of the Customer Carousel™ on a timeline, you can see that we need to invest in the relationship (downward movement) before we can capture value from it (upward movement), following tipping point #1, i.e., the moment of transaction.

In a similar way Product Carousel™, Growth Carousel™, and Business Carousel™ can be plotted over time while we need to consider that the Customer Carousel™ is the shortest wave (spanning across the lifetime of a customer relationship) and the Business Carousel™ the longest (spanning across the lifetime of the business venture). More can be found in our online programs.

In general terms:

• Business Carousel™ is about developing the business venture over time.
• Product Carousel™ is about developing the product-market fit over time.
• Customer Carousel™ is about developing the customer-product fit over time.
• Growth Carousel™ is about developing the strategy to grow over time.

PETER DRUCKER: PURPOSE OF BUSINESS

Despite Peter Drucker‘s suggestion that “The purpose of business is to create and keep a customer”, few companies actually have a customer retention strategy ─ even though an increase of a mere 5% of the customer retention rate could raise profitability by as much as 25-95% (Harvard).

And: “Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.”

https://bit.ly/3wM9OTS

Timeline Chart

We used a time line chart again in a recent steering committee document for one of our a-connect projects. They can be quite powerful to summarize key information in a succinct way, This information could relate to a specific product line or business unit, to key events of an acquisition target, or to the history of a company’s presence and growth in a geographic market. Time line chart allow you to group information in various ways. The example below distinguishes between internal and external events:

Other ways to structure and group relevant data points:

• On the external side: PEST (political, economic, social, technological), Porter 5 Forces, etc.
• On the internal side: 4Ps (product, promotion, place, price), etc.

I also find it helpful sometimes to overlay the relevant revenue picture (by product line, region, company, etc.) behind the time line chart, to put the key elements in perspective visually.

Note that there are ways to automatically create time line charts in MS Excel (see link - https://www.vertex42.com/ExcelArticles/create-a-timeline.html).