Принципы менеджмента в торговых предприятиях: лучшие подходы и практики

Василий Сметанин, SICenter

Каждый сотрудник, занимающийся индивидуальным обслуживанием,
должен быть боссом для всех остальных в своей организации.
Питер Друкер

Любая компания, которая продает на рынке услуги или товары, должна отдавать себе отчет в том, что у сегодняшнего потребителя есть огромный выбор. Магазины предлагают товара больше, чем они это делали всего несколько лет тому назад. И даже находясь дома покупатель может совершать покупки по Интернету или телевизионным каналам, по каталогу или телефону у агентов.

В то время как конкуренция ужесточается, количество потребителей не увеличивается. Компании открывают новые магазины быстрее, чем увеличивается население. Все эксперты единодушны во мнении, что наше общество перегружено розничной торговлей. Все чаще бизнесы открывают не для того, чтобы обслуживать клиентов на новых рынках, а скорее, чтобы отбить клиентов у конкурентов. По мере усиления конкуренции возникает потребность в новых подходах, обеспечивающих конкурентное преимущество.

Рассмотрим ключевые фигуры, стоявшие у истоков менеджмента в торговле.

Фрэнк Вулворт (Frank Winfield Woolworth). Изобретатель ценников, разработал собственную стратегию, противоречащую всем негласным законам торговли того времени.

1. Размещал товары на полках, доступных покупателю, с указанием цены.
2. Менял выкладку товаров каждые две недели.
3. Устраивал распродажи, как только замечал, что спрос на товар падает.
4. Нанимал неквалифицированный персонал, в обязанности которого входил только контроль наличия достаточного количества товара на полках.
5. Клиентов обслуживал один или несколько кассиров на выходе из магазина, куда подходили покупатели с уже выбранными товарами.
6. Заключал прямые договора с производителями товаров, отказавшись от услуг посредников.
7. Ввел жесточайший режим экономии на всём.
8. Установил режим ежедневной отчётности для более быстрого реагирования на изменение конъюнктуры рынка.

В общем и целом можно сказать, что Фрэнк был первым, кто частично автоматизировал и улучшил процесс продаж. Именно Вулворта называют отцом супермаркетов.

Сэм Уолтон (Samuel Moore Walton). Основатель сети «Wal-Mart» сформулировал свои 10 универсальных заповедей успеха.

1. Будьте преданы бизнесу.
2. Делитесь прибылью с партнерами (так он называл персонал магазина).
3. Мотивируйте партнеров.
4. Обсуждайте с партнерами проблемы.
5. Цените то, что делают партнеры.
6. Празднуйте успех.
7. Выслушивайте каждого партнера
8. Предвосхищайте ожидания клиентов.
9. Контролируйте расходы.
10. Плывите над течением.

Стоит обратить внимание, часть этих заповедей относится к партнерам. Уолтон как можно чаще встречался с сотрудниками компании и требовал того же от своего менеджмента и совета директоров.

«Самые лучшие идеи поступали к нам от клерков и складских рабочих (среди них — бесплатный паркинг у магазина и разрешение вывозить тележки с товаром прямо к автомобилю). Если вы позаботитесь о служащих магазинов, то и они, в свою очередь, точно так же будут заботиться о клиентах», — говорил Уолтон.

Однако одной из ключевых идей Уолтона также было оказание постоянного давления на поставщиков. Продавец, поступая на работу в любой из магазинов «Wal-Mart», клянется всегда, когда покупатель окажется рядом с ним на расстоянии 10 шагов, улыбнуться ему и спросить, не нужна ли помощь.

«Чем больше становятся универмаги «Wal-Mart», тем больше мы должны избегать гигантомании, сохраняя атмосферу небольшого магазинчика», — одно из утверждений Сэма Уолтона.

Джон Джейс (John F. Geisse). Основатель сети Target заложил в основу своего успеха следующие 5 принципов.

1. Чистые магазины.
2. Хорошее освещение.
3. Товары хорошего качества со скидкой.
4. Одежда от известных дизайнеров под маркой Target.
5. Быстрое качественное обслуживание.

Менеджмент торговых предприятий. Что действительно работает

Согласно исследованиям Нитина Нория (Nitin Nohria) компании, которые реализовали 4 первых принципа и 2 из второй четверки, были самыми успешными в период 1980-2010 годов.

1. Разработка ясного стратегического плана.
2. Совершенствование безукоризненного ведения операций.
3. Создание культуры, ориентированной на повышение результативности.
4. Построение подвижной, гибкой плоской структуры организации.

1. Сохранение людей, проявивших талант и привлечение новых профессионалов.
2. Верность руководства успеху дела.
3. Разработка новшеств, способных принципиально изменить индустрию.
4. Осуществление роста за счет слияния компаний и заключения новых партнерских отношений.

Остановимся подробнее на успешных подходах.

1. Разработка ясного стратегического плана. Успешная стратегия любого из победителей состоит из 5 элементов.
   • Ясная сфокусированная стратегия и понятная покупателям концепция ценностей. Например, магазины Target — это хорошее обслуживание, чистые просторные магазины, товары по низким, но не слишком, ценам. Компания сотрудничает со всемирно известными дизайнерами, чтобы делать одежду под своей маркой.
   • Стратегия разрабатывается от клиентов и партнеров. Прежде чем открывать свой первый магазин, основатели Target проинтевьюировали сотни покупателей.
   • Постоянное обновление информации.
   • Сделать так, чтобы успешная стратегия распространялась на все бизнесы.
   • Стратегия должна быть ясной и понятной для акционеров.
2. Совершенствование выполнения операций
   • Постоянно обеспечивать потребителя услугами и товарами, отвечающим его ожиданиям.
   • Завоевание лояльности потребителей к торговой марке фирмы при взаимодействии с клиентами.
   • Увеличение продуктивности, исключение напрасных расходов.
3. Ориентирование на культуру в компании
   • Поощряйте инициативу сотрудников и гордость за свою компанию.
   • Обучайте кадры внутри компании.
   • Награды за достижения в виде похвал и премий.
   • Создание атмосферы удовлетворенности и радости от общего труда.
   • Установление ясных и четких ценностей и требование к работникам подчиняться им.
4. Борьба с бюрократией
   • Исключение структур, дублирующих друг друга.
   • Необходимость поддерживать творческую и финансовую заинтересованность лучших специалистов.
   • Члены советы директоров обязательно должны быть акционерами компании.

Для растущего числа компаний таким новым подходом стала наука торговать. Разработанная Пако Андерхиллом (Paco Underhill) наука торговать раскрывает, почему потребители покупают и почему они этого не делают.

В большинстве своем проблемы розничной торговли легко разрешимы, но их не так просто увидеть, и это не произойдет до тех пор, пока кто-то не распознает гибельную модель.

Возможно, товар размещен слишком высоко или слишком низко. Возможно, слишком узкие проходы, недостаточно освещения, вывеска слишком мала.

Сегодня покупатели стали менее лояльны к бренду, сила торговых марок ослабевает. Ранее покупатель мог выбирать товар и пользоваться им всю жизнь. Это значит, что решение о покупке покупатель все чаще принимает прямо в магазине. Успех или провал товара зависит от впечатления или от информации, которую получил покупатель. Вывески, организация полок и то, как выставлен товар, — все это влияет на решение о покупке.

Ранее в качестве исследования использовали кассовую ленту. Сейчас данная процедура значительно усложнилась. Благодаря сканированию универсальных кодов товаров, квитанций кредитных карт, карточек лояльности, магазины и маркетологи знают гораздо больше, кто покупает и как продается товар.

Исследования Андерхилла позволили найти очень много интересных выводов:

• 65% мужчин, примеряющих джинсы в супермаркете, купят их, в то время как женщины составят всего 25%.
  Вывод: примерочных комнат в отделах мужской одежды должно быть много, т.к. 2-е из 3-х мужчин, которые зайдут в них, выйдут оттуда, готовые совершить покупку.
• 21% покупателей приобретают компьютеры в субботу после 5 часов вечера. В то время как 4% покупок делается до 12 часов дня.
  Вывод: обеспечьте большее количество продавцов в субботу вечером.
• 8% покупателей используют корзины для покупок. При этом 75% из их числа действительно покупают товары. По сравнению с 34% людей, которые делают покупки, не пользуясь корзинами.
  Вывод: найдите способ заставить покупателя пользоваться корзинами.
• Люди отойдут от товара, который их заинтересовал, чтобы избежать того, чтобы их толкали в спину.
• Взрослые преимущественно выбирают еду для собак, а дети и пенсионеры выбирают угощения для домашних питомцев. Как только в супермаркетах угощения и игрушки поместили на нижнюю полку — торговля данными товарами пошла гораздо лучше.
• Самым главным фактором, позволяющим перевести посетителя в категорию покупателя, является время, проведенное покупателем в магазине. В некоторых магазинах время, проведенное покупателем в магазине, было в 3 а то и в 4 раза больше по сравнению с тем, кто ничего не покупал.
• Очень важная мера — степень соприкосновения покупателя и продавца, т.е. процент покупателей, которые имели какой-либо контакт с сотрудниками магазина. Чем больше покупатель контактирует с сотрудниками магазина — тем больше товара он покупает.
• Мера ожидания — очень важный фактор. Когда покупатели слишком долго стоят в очереди, их общее впечатление от уровня услуг неизменно падает.
  Часто проектировщики торговых площадей не учитывают, что у людей всего 2 руки. Существуют пределы, сколько человек может прочитать при ходьбе, сколько товаров он готов нести в руках… Как только люди входят в магазин, как правило никто не останавливается из-за нежелания быть затоптанным, происходит адаптация под освещение и температуру помещения. Если в этой зоне будут находиться товары — то покупатели их не увидят, если там висят вывески — покупатели их не прочитают. В маленьких магазинах, где подобная зона будет роскошью для сокращения времени на адаптацию можно приветствовать покупателя — используются мелодия или звон во время открывания двери, специальное освещение, купоны для приобретения товара (скидка). Можно вынести стенды с товаром на автостоянку.
• Как правило, у покупателя свободна одна рука, вторая занята портфелем, одеждой и т.п. Как только покупатель выберет 1 или 2 товара, он больше не сможет покупать. Если обучить персонал предлагать корзину покупателю, который держит в руках более 3-х предметов, это незамедлительно увеличит размер средней покупки. Как вариант, можно разместить корзины на полках или расставить в магазине.
• Покупателям не удается читать вывески в идеальных условиях. Каждый магазин является картой зон, где вывески будут читабельны. Для начала нужно сделать карту этих зон, прежде чем поместить хоть одну из этих вывесок. В одной зоне люди будут ходить быстро, а в другой медленно. Например, в зоне, где продается масло для машин, люди будут думать о своих автомобилях, поэтому можно сделать сообщение о других товарах для автомобиля. Возле кассы люди проведут минимум 90 секунд, а это даст возможность для более длинного сообщения.
  • Максимальная длина сообщения должна читаться не более 12 секунд.
  • Вывеска должна быть на уровне взгляда покупателя.
  • Вывески на окне или дверном проеме должны читаться за 1 секунду (2-3 слова).
• Покупатель фактически всегда при входе в супермаркет поворачивает направо! Фактически всегда люди стараются достать товары, помещенные справа. Самый популярный продукт нужно помещать перед глазами покупателя. А товар, который вы хотите сделать популярным, должен лежать справа.
• Возможность присесть в магазине часто увеличивает продажи в случае, если человека кто-то сопровождает. Возможность присесть дает возможность не торопить покупателя и увеличивает шанс совершения покупки.
• Покупатель-мужчина чаще всего предпочтет уйти из магазина, чем попросить о помощи. Если мужчина идет в примерочную с вещью, то единственной причиной, по которой он ее не купит, чаще всего является, что она не подходит ему по размеру.
• Мужчины-покупатели любят получать информацию из письменных источников.
• Женщины тратят меньше времени и меньше денег, когда они идут вместе с мужчинами.
• Почти не запланированная покупка является результатом осязания, звука, запаха или опробирования чего-то в магазине.
• Любой контакт с представителем магазина увеличивает вероятность покупки.
• Выгодная сделка. 4 Пары за 20 долларов звучит лучше, чем нормальная цена по 5 долларов.
• 90% новых продуктовых товаров не покупаются потому, что покупатель ничего не знает о их вкусе.
• Покупатели, которые разговаривают с продавцом и примеряют одежду, в 2 раза чаще ее купят.
• Когда покупатель ждет 1,5 минуты, чувство времени их не подводит, но после 90 секунд оно становится преувеличенным. На этом этапе настроение покупателя резко меняется с радостно взволнованного на раздраженно разочарованное. Если ожидание длится слишком долго, покупатель просто оставляет товар и уходит.
• Как только сотрудник магазина вступает в контакт с покупателем, время, как кажется покупателю, проходит быстрее. Как решение дается информация о времени ожидания. Просмотр видео на мониторе также может послужить решением данной проблемы.

Цель написания данной статьи — собрать в единую систему практические принципы менеджмента торговли, сведения о лучших мировых подходах и практиках. Автор данной статьи уже на практике внедрял большинство из них в различных торговых сетях. Результатом внедрение данных принципов являлось:

1. Улучшение производительности труда торгового персонала.
2. Улучшение удовлетворенности торгового персонала компании.
3. Улучшение удовлетворенности покупателей.
4. Увеличение скорости операций.
5. Увеличение среднего чека покупателя.

Что касается наблюдений Пако Андерхилла, замечу, что некоторые из них уже успешно применяются в отечественных торговых сетях. Но останавливаться на достигнутом нельзя: ведь большинство торговых сетей обладают большим потенциалом для развития.

Список источников

1. Пако Андерхилл "Почему мы покупаем, или Как заставить покупать" ("Why We Buy: The Science of Shopping" by Paco Underhill)
2. Нитин Нория, Вильям Джойс "Что действительно работает в бизнесе" ("What Really Works: The 4+2 Formula for Sustained Business Success" by William Joyce and Nitin Nohria)
3. Profile Facts: Target Corporation
4. Frank Winfield Woolworth — Wikipedia
5. Sam Walton Biography — Wal-Mart Founder
6. Biography — Nitin Nohria
7. Paco Underhill
8. Envirosell

Motivation In Action: How Motivation Can Make Employees More Productive

Author: Anna Rodriguez

Not everything is about money. People have other sound reasons for going to work and doing their jobs than earning a pay-check. To name a few, there’s self-ffulfilment personal and career growth, social interaction, and satisfaction. Employers and managers know that employee satisfaction is crucial if you want to have productive team members.

There is high regard on the importance of productivity in the workplace. The easiest way to boost productivity seems to be through incentives. However, employers should be happy to know that there are other things that employees appreciate. These are sometimes even more than money: work conditions, well-being, positive recognition, personal growth, sense of purpose, etc. Employee satisfaction and perception has a direct impact on a company’s success and there are several studies to prove it. Here are ways to motivate your team members and make them productive without sacrificing their happiness and sense of self-fulfilment.

Never use fear

There is a whole world of difference between being respected and being feared. Strive for respect. A good manager doesn't motivate his team members to be productive by yelling what needs to be done and instilling fear. Yes, maybe employees will be forced to finish their jobs but only for the wrong reasons.

Do what you say

An impressive leader is the one who does what he said he will do. If you say something that you don't intend to follow through, you lose credibility. Keep your team motivated by letting them know that they have a leader who honors his words and acts on his promises.

Show appreciation

Give credit where it is due. A study by online career site Glassdoor revealed that 80% of employees are motivated to work harder when their bosses show appreciation. This number is twice as high compared to those who work harder because they fear losing their job or their boss is demanding. Not only does appreciation keeps employees motivated but, it also makes employees stay longer in a company.

Don't slow them down

When you have to make a decision, do it as fast as you can, without of course sacrificing the quality of the decision. Growth and success largely depend on action and procrastinating will only slow the entire team down. Be decisive and influence your team to develop the same decision-making skills.

It's okay to show emotions

Showing emotions doesn't make a manager look weak. It only shows that you are human. Do not be a robot when talking or giving instructions to your team. It's okay to laugh, smile, and have fun. Managers should also be more personable and accessible. Employees will not only be more comfortable, they will also feel more confident about their suggestions and comments.

Give feedback

Give honest feedback regularly to let employees know where they stand. Be careful with the way you approach them, mind your tone and your words, never shame and avoid assigning blame. Keep in mind that employees react to negative comments by their bosses six times more strongly than positive ones according to one study by the University of Minnesota. 

Encourage personal growth

Personal and career growth are crucial to keep employees motivated. This is especially true with millennials who are expected to take over the workforce in just a few years. The work demands of millennials are not limited to a hefty paycheck but also to flexibility and continuous learning. The career opportunities that millennial must not miss in today’s competitive work environment are vast and diverse and they desire for growth and fulfilment every time.

Motivated employees can truly make all the difference. It is important for employers and managers to know what exactly does their team need, what their concerns are and what drives them to go further in order to make more productive team members. No two employees are the same and good leaders know how to deal with every kind of personality, insecurity, and ego. Be more personable in motivating your team and strike a balance between achieving company targets and keeping employees happy.

Sense of accountability
Accountability is what keeps everyone on their toes. Giving your team something to be accountable for makes them feel like they are invested in a company. If managers encourage team members to take responsibility, employees become more willing to navigate potential obstacles and they feel the importance of getting things done.
 
Rewards are important
Rewards and incentives put value on achievement. They energize progress by making employees realize that they have to earn it. If you are working with teams, having a team reward system is encouraged. This is a way to keep a team motivated on reinforcing "team goals." This is also a great way to demonstrate that teams win and lose together.
 
Surprise with treats
There are a lot of inexpensive ways to keep employees motivated and make your team more productive, happy, and engaged. One great idea is surprising them with lunches or snacks. One study showed that 46% of employees feel appreciated with unexpected treats from leaders or managers. Company-sponsored activities and events are also preferred by many.
 
Reiterate purpose 
Shared goals and common objectives keep a company on track. Always assure your team that all their hard work is contributing to the company's goals and purpose. Constantly reminding your employees why your company started out in the first place keeps them focused and on target.
 
You are no Big Brother
It is okay to stay plugged in with what's happening with your team but as a manager, you should also know how to trust that they are doing their jobs well. Among the tips on building on a team’s productivity is to resist the urge to constantly look over someone's shoulder all the time. Resist the urge to micromanage. Remember that freedom can unlock creativity and productivity.

Keep everyone involved
Encourage your team to get involved and stay in the loop. A team that feels they are a part of something bigger than themselves are inclined to find more meaning in their work. Employees are inspired and motivated when they are involved with the plans of the company, making them feel part of growth and success.
 
Responsibility to build
One way to add value to the work that teams do is by giving them responsibility and room to grow. Switch Communications CEO and Founder Craig Walker suggests that managers should not "overbuild" when building a team. Give them work to do and opportunities to push themselves more.
 
Keep them happy
An article from the Harvard Business Review stated that the level of happiness has profound impact in creativity and productivity of workers. When employees are unhappy, they don't show up consistently and produce less quality work as revealed in a recent well-being index. This also means losses for the company. Other than reward and benefits, employees need nourishing personal relationships in a social workplace and find meaning in the work that they do.

Thriving in an Increasingly Digital Ecosystem

Peter Weill and Stephanie L. Woerner

Given the amount of turmoil digital disruption is causing, it’s time for companies to evaluate the threats and opportunities — and start creating new business options for the future.

The business world is rapidly digitizing, breaking down industry barriers and creating new opportunities while destroying long-successful business models. We call this process digital disruption, and although sweeping technology-enabled change often takes longer than we expect, history shows that the impact of such change can be greater than we ever imagined. Think steam engines, cars, airplanes, TVs, telephones and, most recently, mobile phones and e-books. With e-books, the market has been slow to develop. Traditionalists said you wouldn’t be able to replace the experience of a paper book. But e-books are gaining traction — they are cheaper than paper books, faster to acquire and searchable. Although the margins on them are thinner than the margins on traditional books, the market is growing. In 2014, 28% of American adults read an e-book, up from 17% in 2011.1

Given the amount of turmoil digital disruption is causing, it’s time for companies to evaluate these threats and opportunities and start creating new business options for the future — the more-connected future of digital ecosystems. Board members at large companies agree. In recent research by the MIT Center for Information Systems Research, board members estimated that 32% of their company’s revenue would be under threat from digital disruption in the next five years; 60% of board members felt their boards should spend significantly more time on this issue next year.2Among the disrupters board members worried about the most were Uber (disrupting taxis); Airbnb (disrupting hotels); Apple Pay, Kabbage, Venmo and others (disrupting banks); and Amazon (disrupting booksellers and retailers of many other products).

On the other hand, increasing digitization also offers opportunities. Companies can leverage strong customer relationships and increase cross-selling opportunities. This article presents a framework, supported by examples and financial performance impacts, for helping managers to think about their competitive environments in the digital era. (See “About the Research.”) We had an important insight in the course of our research: that in this period of digital disruption, businesses focused narrowly on value chains were at a disadvantage; they needed to think more broadly about their business ecosystems. Indeed, we found that companies that had 50% or more of their revenues from digital ecosystems and understood their end customers better than their average competitor had 32% higher revenue growth and 27% higher profit margins than their industry averages.

About the Research

We began this research in March 2012 in a series of virtual roundtables with senior executives from 13 large corporations across a variety of industries. We then followed up with an in-person roundtable with executives from 17 companies. We posed the following: “Describe a breakthrough organizational change enabled by digitization where your company has significantly changed the way you operate with early indications of good results.” Participants described 77 initiatives, which we classified by types of transformation. We found many of the companies were seeking to transform on two dimensions: to know more about their end customers, and to operate in an increasingly digital ecosystem where they become a destination to solve a customer’s life or business need with products and services from their company, from complementors and sometimes from competitors. These two dimensions became the axes of the 2×2 framework with four business models: supplier, omnichannel, ecosystem driver and modular producer.

To understand best practices and the impact of these business models on financial performance, we surveyed two groups of senior executives: clients of Gartner Inc. and companies associated with the MIT Sloan School of Management’s Center for Information Systems Research. We asked participants to rate a variety of organization practices and performance measures and to describe a significant breakthrough initiative; we received an additional 67 descriptions (for a total of 144).

To place companies on the 2×2, we used (1) their knowledge of their end consumer (we asked seven questions, including “To what extent does your enterprise know the identity of the most important end consumers of your products or services?”); and (2) the percentage of revenues from ecosystem activities. Companies above the horizontal midpoint on the 2×2 had more complete customer knowledge and scored at least 80% on at least six of the seven questions about customer knowledge. Companies to the right of the vertical midpoint line had 50% or more of their revenues from ecosystem activities.

To identify top performers, we collected self-reported company data on net margins and revenue growth. To check the accuracy of the self-reported data, we added actual 2013 financial performance from Onesource.com (now Avention.com). Self-reported net margin/growth correlated significantly with actual net margin/growth. Financial measures were then industry adjusted. Two important measures for future performance — customer experience and time to market — were assessed relative to competitors. All performance measures were transformed to a 0-100% scale. The differences across the four quadrants in the 2×2 were statistically significant. We also tested a series of hypotheses to understand best practices for each of the types of businesses. Finally, we did an exemplar case study for each quadrant (using P&G as the supplier, Woolworths as the omnichannel business, PayPal as the modular producer and Aetna as the ecosystem driver).

To better understand digital disruption, we studied where companies intended to move in the next five to seven years, on the principle that “the future is already here — it’s just not evenly distributed.”3 Based on this view, we decided to observe leading companies that were embarking on one or more new digital initiatives to see what works. In effect, the companies were buying strategic options for the next-generation enterprise — in other words, making investments now that can be exercised in the future. We began by asking senior executives to describe their enterprises’ most important transformation initiatives. We heard about a wide variety of initiatives, but generally companies were seeking to transform in two dimensions: to know more about their end customers, and to operate in an increasingly digital ecosystem.

Today, most companies don’t think of themselves as operating in an ecosystem but instead as controlling or participating in a more linear value chain.4 In many ways, Wal-Mart Stores Inc.’s primary business model exemplifies this approach. Wal-Mart knows a lot about its products: where they come from, where they are in the store and when they are sold. However, it doesn’t always know who its customers are and why they are buying what they are buying. But digitization enables consumers and companies to seek out a wider array of benefits. The ecosystem for Amazon.com Inc., for example, offers greater customer choice and enables faster innovation. The enhanced consumer value comes from having different vendors selling similar (or even identical) products — often at different prices or service levels — and fast feedback that allows vendors to improve their products and services. Consumers get a one-stop Amazon-managed experience with greater choice and with more information about prices and quality. Amazon gets to see the data on all of the activity in its ecosystem, enabling fine-tuning and identification of new opportunities while it extracts rents from the ecosystem.

Do you engage your customers in episodic, disconnected transactions, the way Wal-Mart and most other physical retailers have done, without always knowing who the consumers are, what they have previously purchased or from whom? Or are your interactions with customers (whether individual consumers or businesses) more like Amazon’s: continuous, collaborative and informed by extensive knowledge of their purchase and search habits?

Deep knowledge of your end customers includes their names and addresses, demographics, IP addresses, purchase histories with your company and with other companies, and most importantly, their life events (such as upcoming weddings or births or, for businesses, planned mergers or expansions). Consider the Commonwealth Bank of Australia (CBA), headquartered in Sydney. When CBA’s managers thought about how to grow their mortgage business, they realized that the customer’s goal wasn’t to get a mortgage — it was to buy a house. So CBA developed a smartphone app that helps customers achieve that goal. Users can point their phone at houses they are interested in to review their sale price history as well as similar information about homes nearby. Users of the app thus become better informed about prices in their target areas — and a hot source of mortgage leads for CBA. Historically, those who get mortgages become long-term bank customers — the best kind. Using the app, consumers made more than 1.2 million property searches in the first six months after deployment, and CBA estimated the app’s return on investment to be 109%.5

Options for the Next-Generation Enterprise

The combination of moving from value chains to ecosystems and increasing consumer knowledge provides business leaders with four distinct business models, each with associated capabilities and relationships. First, companies need to determine the extent to which they want to control the value chain or be part of a more complex ecosystem. Second, they need to decide how much they want to invest in knowing their end customers. They can choose to operate as (1) suppliers, (2) omnichannel businesses, (3) ecosystem drivers or (4) modular producers. (See “Four Business Models for the Digital Era.”)

Four Business Models for the Digital Era

In selecting the right business model, business leaders have four distinct options (alone or in combination), with associated capabilities and relationships. Executives need to determine (1) the extent to which they want to control the value chain, or drive or be part of an ecosystem that delivers on the end customer’s total needs; and (2) the extent to which they know about their end customer’s goals.

The Supplier Model

Suppliers have, at best, a partial knowledge of their end consumer, and typically operate in the value chain of another powerful company. Companies that sell insurance via independent agents (for example, Chubb Group), electronic goods through retailers (such as Sony) or mutual funds through brokers (for example, Vanguard) are suppliers. As enterprises continue to digitize and search becomes easier, suppliers are likely to lose power and be pressured to continually reduce prices, perhaps resulting in further industry consolidation. For example, the Procter & Gamble Company, a prime supplier in many other companies’ value chains, has anticipated this potential loss of power and flat growth. To gain more leverage, P&G has recently begun a campaign to learn more about, and connect directly with, its more than 4 billion customers worldwide using a variety of branding, social media, direct-to-consumer connections and data-based approaches, in an effort to move from the supplier model to the omnichannel model. P&G operates more than 40 “business spheres,” which are real-time decision support environments worldwide, which company executives use to address particular business challenges (such as how to increase Tide laundry detergent sales in London). The data is collected in planetarium-like display rooms where analysis and debate take place and decisions are made. P&G uses sophisticated cockpits where the impact of decisions can be tracked in real time over the next few weeks and months, allowing managers to change course as needed.

The Omnichannel Model

Omnichannel businesses provide customers access to their products across multiple channels, including physical and digital channels, giving them greater choice and a seamless experience. Retailers including Carrefour, Nordstrom and Wal-Mart and banks including Toronto-based CIBC and Bilbao, Spain-based BBVA aspire to be omnichannel businesses controlling an integrated value chain, with a strong claim to “owning” the customer relationship. The challenge is to gain more and more knowledge of the end consumer and his or her goals and to reduce the amount of customer churn. Many companies we talked to mentioned big data analytics, social media, mobile apps and customer experience metrics such as the Net Promoter Score as avenues for increasing their understanding of the end consumer. Some companies have significantly invested in ways to better understand their end customers’ life event needs and restructured their organizations and uses of data to reflect these changes.

United Services Automobile Association (USAA), for example, was started in the 1920s to serve the auto insurance needs of U.S. military families. However, over the years, USAA, based in San Antonio, Texas, has expanded its financial service offerings to address the evolving needs of customers as they experience life events such as buying a car, moving, getting married or having a child. Each of these events triggers an integrated package of products designed to meet customer needs. For example, customers buying cars are offered car loans, extended vehicle protection, car insurance, month-by-month maintenance guides and assistance selling their current car.6Rethinking the business in terms of life events prompted USAA to make organizational changes; for example, it created a member experience group that sits between the product owners and the customer. USAA’s approach has earned high marks from its customers.7 Of course, many banks and financial services companies use life events to organize their marketing, but they often only put a digital facade over their complex product silos without reorganizing the way USAA did.

The Ecosystem Driver Model

Some companies, such as Amazon, Fidelity, Aetna, Apple and Microsoft, establish an ecosystem by creating relationships with other providers that offer complementary (or sometimes competing) services. Ecosystem drivers provide a platform for the participants to conduct business; the platform can be more or less open. For example, Google has a very open platform, while Apple’s is more closed. Fidelity’s platform offers its own mutual funds but also includes funds from competitors such as Vanguard and products and services from complementors such as personal investment advisors. Like omnichannel businesses, ecosystem drivers use their brand strength to attract participants, ensure a great customer experience and offer one-stop shopping. They aspire to “own” the customer relationship in one domain like financial services by increasing their knowledge of their end consumers. They extract rents from participants in their ecosystem — both consumers and service providers — and rely on brand strength and feedback from consumer ratings and reviews to build their reputation and revenues. An ecosystem needs to be a destination for customers in a specific domain (for example, health care, retail, entertainment, financial services or small business).

Aetna Inc., the $47 billion managed health care company that serves both individuals and employers, is attempting to become a health care destination. In addition to being part of 17 public health exchanges, Aetna aims to be the company consumers turn to for more and more of their health and lifestyle needs. This means moving from being primarily business-to-business (managing companies’ health plans) to business-to-business and business-to-consumer (managing companies’ health care plans and interacting with consumers directly) and business-to-consumer (selling directly to consumers), while continuing to learn about the lifestyle needs of end customers. Aetna is increasingly focusing on a multiproduct and multiservice customer experience that integrates its own products with those of third parties — for example, wellness and health coaches, and smartphone apps such as iTriage, which lets users check their symptoms, get information on medications and find nearby hospitals.

The Modular Producer Model

Modular producers such as PayPal provide plug-and-play products or services that can adapt to a variety of ecosystems. To survive, modular producers must be among the best in their category. To thrive, they need to continue rolling out new products and services to demonstrate that they are among the best options available and also well priced. After all, they operate in a hypercompetitive environment in which it’s often very easy for customers to search for alternative solutions and switch.

PayPal Inc., which had revenues of $7.6 billion in 2014, processed transactions worth $235 billion and had a five-year annual growth rate of 17.2% and operating margin of 23%. Because PayPal is hardware-agnostic, mobile-enabled and cloud-based, it can operate in virtually any ecosystem. About 50% of PayPal’s revenue is from outside the United States, demonstrating how a modular producer must be able to fit into many ecosystems and regulatory environments. One of the fascinating characteristics of modular producers is that while there may be many players (in this case, Apple Pay and Square), past experience indicates that only a few players make significant profits while the others struggle to survive in a commodity business. Also, in contrast to ecosystem drivers, most modular producers don’t get to see all the customer data; they are limited to the data from the transactions they process.

Where Companies Are Today

While most companies today are concentrating on developing better products and building their relationships with customers, they are using different models. Among the larger companies we studied (those with more than $1 billion in revenue), we found that 24% were omnichannel, 12% were ecosystem drivers, 46% were suppliers and 18% were modular producers. Interestingly, the smaller companies we studied (with revenues of less than $1 billion) have started increasing their knowledge of their customers and becoming more networked, or they were already that way: 31% of the smaller companies we studied were ecosystem drivers and 36% were omnichannel. Such companies are currently seizing digital disruption opportunities while their larger counterparts are struggling to respond. This shouldn’t be surprising. Smaller, younger companies tend to have fewer legacy systems, be less global and be more willing to take a risk with their business models than larger enterprises. They are also more able to collect, analyze and act on the data required to really know their end consumer — data that larger companies also have an abundance of but generally don’t exploit as well because of their numerous silos, geographies and systems (and yes, politics) that make it difficult to connect the dots. We found that companies that derive more revenues from managing ecosystems and that have better customer knowledge tend to perform better. For example, companies with ecosystem drivers as their dominant model had the highest margins and growth of all four options in the companies we studied. Part of the reason is that these companies are measurably more responsive to their customers’ needs and become a destination to sell their own products as well as others to address their customers’ life events.

Today, as companies struggle to build ecosystems and learn more about their customers, only a small percentage of the large companies we studied (12%) are ecosystem drivers. Omnichannel companies deliver the equivalent customer experience as ecosystem drivers but are slightly slower to market with new products. As a group, the omnichannel companies we studied were less successful than the modular producers on both revenue growth and margins. Companies operating strictly as suppliers show weaker performance in all four categories.

Understanding the Digital Threat

For senior managers, a critical question is how urgently and aggressively you need to establish options for future success. How serious is the digital threat for your company, and how quickly do you need to establish an ecosystem and develop a deeper understanding of your customers? To help answer these questions, we have developed a simple self-assessment tool. (See “Assess the Digital Threat.”)

On the upside, increasing digitization offers opportunities such as the opportunity to leverage a strong customer relationship and increase cross-selling. On the downside, the threats are often real and immediate. Two-thirds of respondents said they were experiencing a high level of threat (threat levels that are 70% and above) from enterprises in other industries that have existing relationships with their customers; with competing products or services, these companies can potentially disrupt their businesses. In addition, one-third of the respondents said that a competitor’s alternative digital offering presented a high level of threat to their core business.8 In cases where the threat is significant, managers should actively be buying strategic options for future business models and developing their ecosystems and increasing customer knowledge. But what does it take to make this move?

We see many companies begin by using digital capabilities to improve their end-customer knowledge: collecting, consolidating and using insights about their customers. They move from providing services directly to the consumer to assembling a web of relationships that provide services. For example, with its Auto Circle program, USAA helps customers find the right car, negotiate the lowest price and even arrange delivery. The average savings for a USAA member in 2014 was $3,485 off the recommended retail price of a new car.9 USAA is extending the use of third parties to broaden the services it provides customers for other life events such as child care and home remodeling.

Banco Bilbao Vizcaya Argentaria S.A. is becoming a more effective omnichannel business by investing heavily in new-style consultative branches, ATMs and a new digital bank to improve the customer experience — even as it attempts to keep costs low through automation. At the same time, BBVA is experimenting with opening up its core banking system to customers and third parties, such as software vendors, telecommunications companies and retailers, with applications that embed these services. For example, a telecommunications company could develop a peer-to-peer payment offering that uses BBVA’s core services for executing payments.

Preparing for the Future

To prepare for the future, companies need to develop new capabilities in two areas. The first area is learning more about their customers:

Use digital capabilities to obtain information about customers’ goals and life events. Many companies have customer data stored in separate departments, systems and geographies, but not often enough can they bring it together to act at the “moment of truth” (the moment the customer remembers and talks about) on the customer’s mobile device, during a phone call or at a physical outlet.

Amplify the customer voice inside the company. Every company we saw that put a premium on better customer knowledge found a way to amplify the customer’s voice inside the company. Amplifying the customer’s voice typically involves compelling the widespread use of some kind of customer satisfaction metric, accessing customers’ unvarnished sentiments via social media and using big-data techniques to test and learn.

Emphasize evidence-based decision making. Effectively using more and better knowledge about the customer also requires a change in the decision-making culture. Many companies have relied on gut instinct and management experience for making their key decisions about customer needs. However, in the era of big data, real-time dashboards and many other sources of hard evidence, companies need to create much more of an evidence-based culture. Experience and gut feel still matter for the intangibles, but decisions must be driven by the evidence, not by title or position.

For senior managers, a critical question is how urgently and aggressively you need to establish options for future success. How serious is the digital threat for your company?

Develop an integrated, multiproduct channel customer experience. Making actual customer needs and goals central to the business model means that companies stop selling products and instead meet the customer’s needs in the context of life events. This change requires companies to become multiproduct and multichannel simultaneously. That is no easy feat and often requires significant organizational surgery, as we saw with USAA.

The second area is to become more of an ecosystem. For companies that have learned how to manage value chains, redesigning the business requires a difficult transformation. Here’s what is required:

Become the first choice in your space. Being successful requires being the first choice in your space for a significant number of customers. Amazon is the first choice for many customers for retail. Aetna would like to be the first choice for your health care needs. Fidelity would like to be the first choice for your wealth management. We believe that as business designs become more open, with more competition, industries will consolidate. There will be fewer profitable players that are ecosystem drivers and modular producers. Being first choice requires a combination of having a great brand, delivering on the brand’s promise, receiving great customer recommendations and delivering world-class execution in meeting customer needs.

Become great at building partnerships. Ecosystem drivers have to find ways to partner with providers of complementary products and services (and probably competitors, too) and then integrate other things customers want, such as payments and delivery. At Fidelity’s website, for example, customers can use the company’s portfolio analysis tools to identify gaps in their portfolios and then purchase a wide array of mutual funds from competitors (including Vanguard, PIMCO and hundreds of other fund companies).

Create service-enabled interfaces that others can use. Success requires taking what makes you great — your core business transactions — and making them easily and securely available throughout your business — and also to your partners. Achieving this is dependent on two things. First, you need to standardize and make your business rules available (for instance, Aetna would describe how it assesses a claim). Second, you need to make the business transactions available as services. For example, both Aetna and BBVA provide the application programming interfaces to their core transactions to both insiders and outsiders to help drive innovation. For Aetna, each API bundle includes additional health content, data and services that can be included in any new product or service offering and speed time to market. For BBVA, learning how to make these business services available to other parts of its global bank further informs how to offer the services outside the company.

Treat efficiency and compliance as a competence. Success also requires increased digitization of your company’s operations, recognizing the inherent potential efficiencies, responsibilities and threats. These include dealing with data privacy issues, cyberthreats, potential service disruption and the need for increasing levels of compliance with governments and other regulators worldwide. Companies that can do all this will make compliance a competence, not a chore, and will strive to be the best in class.

What’s Next?

As we consider the future, we see digitization bringing threats and opportunities. However, for existing businesses, the threats seem to loom larger. Take banking, for example. The United States has thousands of banks. As digitization compels banks to transform, we expect to see industry consolidation. Banks that succeed in being local and relevant in their communities will thrive as omnichannel businesses. But many banks will need to become ecosystem drivers, at least for a subset of their customers. If they succeed, they will become the first choice for meeting all of the financial needs for a segment of customers, providing not only their own products but also complementary products and services from others. However, if they don’t succeed in becoming the first choice for a large enough group of their customers, the future becomes less rosy. Some banks will be relegated to providing highly regulated, back-end transaction processing (in other words, they will be modular producers), selling commodity services and losing touch with their customers. Their customers will increasingly look to companies such as Apple or Google as the destination to meet their financial services needs. It will be a slow death of a thousand cuts — year by year — as margins decrease.

To avoid this outcome, we suggest that you take the initiative now. Work with a group of colleagues and customers across your respective businesses to assess your business, and then share the results with each other. If you have multiple businesses, repeat this exercise for each of your major products and services. When the threat is serious, we recommend reviewing efforts to buy strategic business options for the future. Are your current efforts sufficient?

As you ponder how a digital future will change your business, it’s worth remembering the words of computer visionary Alan Kay: “The best way to predict the future is to invent it.”10

REFERENCES (10)

1. K. Zickuhr and L. Rainie, “E-Reading Rises as Device Ownership Jumps,”January 16, 2014, www.pewinternet.org.

2. P. Weill and S.L. Woerner, “Working With Your Board on Digital Disruption?,” research briefing, MIT Center for Information Systems Research, Cambridge, Massachusetts, April 16, 2015.

SMART Acronym

The establishment of all objectives should be created using the S.M.A.R.T. philosophy.  What do we mean by a S.M.A.R.T. objective?  S.M.A.R.T. is an acronym that is used to guide the development of measurable goals. Each objective should be:

Specific
Measurable w/Measurement
Achievable
Relevant
Time-Oriented

Specific

Specific answers the questions "what is to be done?" "how will you know it is done?" and describes the results (end product) of the work to be done. The description is written in such a way that anyone reading the objective will most likely interpret it the same way.  To ensure that an objective is specific is to make sure that the way it is described is observable.  Observable means that somebody can see or hear (physically observe) someone doing something.

Measurable w/Measurement

Measurable w/Measurement answers the question "how will you know it meets expectations?" and defines the objective using assessable terms (quantity, quality, frequency, costs, deadlines, etc.).  It refers to the extent to which something can be evaluated against some standard.  An objective with a quantity measurements uses terms of amount, percentages, etc..  A frequency measurement could be daily, weekly, 1 in 3.  An objective with a quality measurement would describe a requirement in terms of accuracy, format, within university guidelines.

Achievable

Achievable answers the questions "can the person do it?" "Can the measurable objective be achieved by the person?" "Does he/she have the experience, knowledge or capability of fulfilling the expectation?" It also answers the question "Can it be done giving the time frame, opportunity and resources?"   These items should be included in the SMART objective if they will be a factor in the achievement. 

Relevant

Relevant answers the questions, "should it be done?",  "why?" and "what will be the impact?"  Is the objective aligned with the S/C/D’s implementation plan and the university’s strategic plan?

Time-oriented

Time-oriented answers the question, "when will it be done?"  It refers to the fact that an objective has end points and check points built into it.  Sometimes a task may only have an end point or due date. Sometimes that end point or due date is the actual end of the task, or sometimes the end point of one task is the start point of another. Sometimes a task has several milestones or check points to help you or others assess how well something is going before it is finished so that corrections or modifications can be made as needed to make sure the end result meets expectations.  Other times, an employee’s style is such that the due dates or milestones are there to create a sense of urgency that helps them to get something finished.

As you start to write your objectives, completing the worksheet below will be beneficial in helping you build objectives that are S.M.A.R.T.  Also listed below is a sample completed worksheet for your convenience.