Expert Video

Interviews with Ranjay Gulati, Professor at Harvard Business School

 

 

 

 

 

 

 


 

Defining "Solutions"

"Solutions" is one of those slippery words that can mean anything and everything. Working with some of the world's top technology companies, ITSMA has developed a useful definition:

"A solution is a combination of products and/or services with intellectual capital, focused on a particular customer problem and driving measurable business value."

It's a bit dense, and doesn't exactly roll off the tongue. Nevertheless, we have found that it clicks with both buyers and sellers given its emphasis on solving specific business problems with measurable business value. Understood as such, the "S" word can get beyond the hype and provide important direction to business strategy and operations.

Latest Insight

Tuesday
Jul272010

Strengthening thought leadership marketing: Five steps to excellence

I've just had the privilege of helping judge ITSMA's Marketing Excellence Awards, and was impressed in particular with the submissions in the Thought Leadership Marketing category. 

As recently as five years ago, thought leadership marketing was mainly the province of the top consulting firms. Few other B2B firms took it seriously. Boy, has that changed! The submissions in this year's awards program reflect a substantial increase not only in spending but, more important, in the programmatic discipline that is necessary to make a serious impact with customers and market influencers.

I can't name names yet because ITSMA is still selecting finalists and then the ultimate winners. It's clear from the submissions, however, along with working with many of these companies over the years, that there are five important ways in which the best of the best stand apart from the crowd:

  1. Focus and depth: Lots of companies practice "random acts of content," dashing off periodic white papers, articles, videos, blog posts, and the like with little focus or depth. But when you're dealing with high level customers facing serious business challenges), the scattershot approach provides little value. Indeed, according to a major study of business technology buyers last year by ITSMA and Pierre Audoin Consulting, only 16% of these buyers believe that their solution providers are very helpful in showing them the possibilities to solve their business challenges. If you're going to join the ranks of the "very helpful," you need to pick one or a few issues, stick with it, and go deep.
  2. Do the research: A lot of so-called thought leadership is really just opinion, perhaps based on a project or two. Our customers want evidence, and evidence usually requires research. The best thought leadership programs are built around serious research, including analysis of existing literature, new customer surveys, and in-depth case studies. One of the main reasons that the industry analyst firms remain so influential with buyers is that they are constantly cranking out new research. (Yes, marketers sometimes question the quality of that research, but it is generally miles ahead of the "thought leadership" content that vendors themselves produce.) To help make "thought leadership" worthy of the term, start from the beginning and don't skimp on the research.
  3. Engage and empower internally. Too often, marketers publish thought leadership content but forget to tell anyone else in the organization. At best, this can mean losing the opportunity to have more colleagues representing that good thinking in the marketplace. At worst, customers start asking your people questions on an issue about which they have no idea. Especially as you begin to integrate social media across the business, you want more people engaging directly with customers, prospects, and other stakeholders. Engaging and empowering your customer-facing employees with thought leadership gives them something valuable to talk about, and can quickly become an essential multiplier for overall program impact.
  4. Leverage your best content. Market engagement today is about pervasive presence and ongoing conversation, not just traditional publishing and speaking. Customers want to chew over and debate your ideas, often without you in the [virtual] room. To help make this happen, you need to leverage your best thought leadership content by publishing compelling bits and bytes in appropriate formats across the networks and channels where your customers congregate. If you're working on a white paper, for example, you want to think: Is there a short video we can produce? Where can we blog about this? What articles can we publish? Where are there opportunities to brief our best customers on our new thinking? Is there a debate I can set up?
  5. Invest in expertise. Ultimately, great thought leadership programs are built around experts -- experts in the subjects at hand, of course, but also experts in research, analysis, publication, social media, and collaboration. The most successful programs invest in their people in at least three ways: Funding full time staff positions, recruiting for necessary skills and helping existing staff develop the right skills, and investing in partnerships for complementary capabilities (including brand recognition, as with prestigious academics, universities, and/or outside media and research organizations).

Building a successful thought leadership marketing program is a long-term process. The companies that are best, such as McKinsey, Accenture, IBM, Deloitte, and others, have spent years doing the research, building market presence, and refining what works. They pick key customer issues and stick with them. They go deep. And they invest in their people and programs. 

What's missing from my list? What works best for you?

Wednesday
Jul212010

Marching forward with solutions marketing...at least on the Web

Notwithstanding the endless angst about "solutions" as a meaningful term, it's clear that B2B technology firms continue to march ahead promoting their solutions offerings and capabilities.

Our latest evidence comes from a web-based analysis of 51 of the world's leading B2B technology firms (IBM, Microsoft, Oracle, SAP, Accenture, etc.).

The objective of the analysis, conducted by Solutions Insights Associate Nell Belgado, was to explore how, and how many top tech firms are positioning themselves on the Web as solutions providers rather than simply promoting their discrete products and/or services.

As usual, we relied on a specific definition of the term, as developed by a diverse group of marketing executives on ITSMA's Solutions Council: "A solution is a combination of products, services, and intellectual capital, focused on a particular customer problem and driving measurable business value."

Key findings include the following:

  • Solutions as a main business category: About half of the company websites included a top-level section dedicated solely to solutions. Software and services firms were a bit more likely to include this type of section (58%) while hardware and equipment firms were a bit less likely (44%).
  • Solutions definition: Most companies (82%) define solutions as a combination of products, services, and the unique capability to make them work together. There was virtually no difference in the percentage across the two sub-segments. This type of presentation reflects an important shift in recent years; not too long ago a number of tech firms were promoting stand-alone products as solutions. 
  • Business focus for solutions: A similarly large majority of companies that highlighted solutions, even if not right on the home page, described solutions in terms of resolving specific business issues (88%). Again, software and services companies had the higher total here (94%) vs. a slightly lower but still large majority of the hardware and equipment companies (75%).

Although we don't have specific baseline data to document the trend, anecdotal information along with our experience working with many of these companies over the past decade suggests that, at least on the Web, companies are focusing less and less on products and more on addressing customer business problems. It's been a slow process, but it certainly seems they've gotten the message from their buyers: "Stop just selling technology and help me drive growth, improve operations, and strengthen the bottom line."

The key question now, of course, is how many companies that profess a solutions orientation on their websites actually know how to develop, market, sell, and deliver the kinds of solutions their customers truly need? Based on our experience, those numbers would be quite a bit lower. But that's a subject for another study!

Friday
Jul092010

Solutions Marketing: Should it be taught at business schools?

I’ve had the good fortune to teach an MBA level Solutions Marketing  course  for the past three years. To the best of my knowledge, it’s the only Solutions Marketing course taught to MBA students anywhere in the US. 

I teach the course at the Hult International Business School. Haven’t heard of it? Not surprising.  It’s relatively small, and highly specialized in international business. The Financial Times, however, just ranked it 6th in the world for international business management. It’s also ranked in the top 100 general MBA programs in the world. It might be one of the the best MBA programs that nobody’s ever heard of!

If you scan the curricula of the leading MBA programs, there is no lack of courses on Product Marketing, Services Marketing, Branding, or a raft of other marketing related topics. The concept of "solutions marketing", however, still isn’t on the academic radar. Trust me , I know. When I agreed to teach the course, I went on the internet looking for case studies on the topic.  Nothing. Nada. Zilch. I checked the mainstream business case study collections at Harvard Business School, INSEAD, and Ivey. I couldn’t find a single case that directly addressed solutions marketing issues. 

Given the dearth of public cases and materials, I decided to develop my own. With the help of my business partners, I’ve now developed four case studies on key solutions marketing issues. In fact, we expect that two of them will be made available in the Harvard Business School system before the end of the year. I also borrowed heavily from the solutions concepts that ITSMA had developed over the years, as well as tapping into my own experiences.

The natural question, then, is how have the students reacted to a very different and unknown marketing course. I just finished teaching the course as an elective in June, and here are the results.

Students evaluation rating to the following questions (a 1-5 scale with 1=Strongly Disagree and 5=Strongly Agree):

  • The skills and concepts covered in the course will be USEFUL to me in my professional career:  4.90
  • The SCOPE of the course was appropriate to my professional needs: 4.74
  • My OVERALL EVALUATION of the course is positive:  4.87
  • I would RECOMMEND this course to others:  4.77

Clearly, the course resonated with the students.  Here are some verbatim comments on the experience of learning about how to market solutions:

  •  “I’ve learned that by understanding the solutions marketing framework I was able to see that the concepts could be applied to any company, and that it helps in doing an in-depth analysis of the company’s marketing objectives.”
  • “I strongly believe the knowledge I have gained from the course cuts across all careers and industries and will be invaluable to me as I look for a job.  I came to class expecting to learn about the traditional and conventional tools and methods that most companies use to marketing their offerings, but that wasn’t the case. I loved learning about the concepts  behind the term ‘solutions'."
  • “The Solutions Marketing course has been very instrumental in taking my knowledge of marketing to a completely different level.”
  • “I am now aware of the impact that a solutions approach can offer in terms of differentiation, business continuity, and value generation”
  • "I only selected the course because it was the only marketing course that I could take given my schedule - but having gone through the course, I would select it twice over!"

I think I can safely say…mission accomplished! I have no doubt that there is a place for a Solutions Marketing course in any MBA curriculum, and that the students would line up around the block to sign up for it since it provides a very different perspective on a traditional academic subject.

If you're interested in learning more about the course or curriculum, or have your own experience teaching solutions marketing, please let me know. 

Monday
Jun282010

The four engines of B2B marketing success

A friend recently had the good fortune not only to take over marketing for a successful B2B firm, but to do so with a mandate to build a new strategy that ensures a much greater impact on the business.

He's a bit like a kid in a candy store. He's got budget to spend, executive support for more ambitious marketing, and a relatively clean slate upon which to draw the new strategy. 

The existing program has been pretty traditional: lots of focus on marketing collateral, events, advertising, and direct support for the sales team. He knows that's not enough, and is definitely interested in doing more with thought leadership and social media, but how best to reshape the overall strategy is not entirely clear.

Asked for some advice, I agreed with a stronger emphasis on thought leadership and social media (which I think is appropriate for all B2B firms) and I questioned the value of putting so much energy into advertising and collateral.

More generally, though, I suggested that the strategy focus on the four marketing engines that I think all B2B firms need to have running smoothly to ensure business success.

Four Engines for B2B Marketing Success 


 Content Engine:

As the need for more and better content continues to grow, marketing leaders have realized that they need an integrated "content engine" that consistently produces compelling content for every stage of the buying cycle. This includes thought leadership content to help build reputation and interest, educational content to support lead generation and nurturing, solutions and customer success content to support sales conversations, and, of course, social media content to support ongoing connections with customers and others.

Relationship Engine:

B2B marketing rises and falls on the strength of the company's relationships with customers, prospects, partners, and market influencers. For many marketing organizations, though, the objective of building, strengthening, and sustaining key relationships has no clear owner or strategy. A "relationship engine" may sound awkward but the idea is to ensure a comprehensive, consistent, and focused approach to strengthening critical stakeholder connections to increase sales, loyalty, and market insight. This should work across such areas as events, customer councils, account management, references, and social media.

Lead Development Engine:

The increasingly long and convoluted purchase processes that B2B marketers face puts a premium on well organized systems for lead nurturing and management. No longer can we focus on just the early stages of generating leads and then throw them over the wall to sales. More and more, we need to stay in the game with longer term programs to develop and sustain opportunities in close coordination with sales. Content and relationship programs contribute substantially to this effort but someone also needs to own the overall system for lead development, including qualification, scoring, nurturing, and assessment.

Solutions Development Engine:

Like many B2B companies, my friend's firm has a long history of successful products, satisfied customers, and productive partners. At the same time, also like many B2B companies, his firm is feeling the heat from increasing competition, margin squeeze on products, and buying decisions moving higher up in their customers' organizations. The result is a need for higher value solutions that respond more specifically to individual customer needs. Doing this efficiently and effectively means moving past the one-off approach based solely in the field. Instead, marketing needs to guide and support the field in determining top priorities for new offer development, crafting the right value propositions, and routinizing the process with the right stage gates and metrics.

The four engines don't cover every last aspect of B2B marketing, but they come pretty close and they provide a clear framework for building a comprehensive strategy that balances short- and longer-term success. Get each of the engines humming smoothly and results are sure to follow.

What do you think? Am I missing something important? Are all of your engines in good working order?

Photo credit: Imnop88a

Tuesday
Jun152010

Two cheers for Eloqua's new Content Grid

Actually, I think Eloqua's new Content Grid is fabulous: it crams a complex story and a lot of information into an easy to understand infographic on a critical topic for B2B and solutions marketing. Nice job, folks!

My small beef is with the definition of "content marketing" that underlies the grid. Don't get me wrong: I'm a huge proponent of companies and marketing organizations getting much more serious about creating and executing integrated content strategies to support marketing and sales. Indeed, I make a decent part of my living these days helping companies make this happen.

What I don't agree with, though, is the equation of content marketing with inbound marketing. Perhaps I'm nitpicking at a casual line in Eloqua's blog post introducing the Content Grid, which explains the grid as "a simple framework for content -- or 'inbound' -- marketing." But the grid itself reinforces that equation with its presentation of relevant content types. It's all the fun thought leadership and social media stuff. What's missing are the nitty gritty product and service and solution descriptions and related (horror of horrors!) "promotional" material that, at the end of the day, are still necessary to help make the sale regardless of how effective your inbound marketing is.

Yes, inbound marketing is critical, content marketing is critical, and we all need to keep shifting budgets away from the old push promotion stuff that doesn't work toward educational pull materials and conversations with which our customers and prospects might actually engage. It's just that few of us can yet do away with collateral and promotion entirely -- especially when we're selling complex B2B solutions that require extensive purchase consideration, due diligence, and committee decision making.

I'm not sure Eloqua is even arguing that we should eliminate that stuff entirely, but I think it's a mistake to leave that still-important content out of the grid and the definition. If new directors of content marketing (another trend I support enthusiastically) just manage all the inbound stuff, we're likely to fall short in revamping and refreshing the basic product promotion material that still helps to seal our deal. The last thing we want to create is a great system of thought leadership-driven inbound marketing that collapses in the final phase when prospective buyers see disconnected and inconsistent product and service material.

So, two cheers for the Content Grid and the great intent behind it. Now if we can just broaden its scope a bit more.

What do you think? Do you have a content director? If yes, what's the scope of responsibility?

Monday
May242010

Editorial strategy: Why do B2B customers need your information?

A new report from the always excellent Project for Excellence in Journalism got me thinking a bit differently about thought leadership and content marketing and marketing as media.

We all know that social media is increasingly central to how we get our news and information. The main finding in this new report is that Americans use different media for different types of information.

Analyzing a year of data on the top news stories discussed, linked to, and viewed on blogs, TwitterYouTube, and other social media, the Project found that, "the stories and issues that gain traction in social media differ substantially from those that lead in the mainstream press. But they also differ greatly from each other."

Topically, for example, there is much greater focus on technology-related news with social media. Further, Twitter has emerged as a key source for breaking news. YouTube is more about serendipitous surfing for randomly interesting content. Blogs tend toward more emotional stories and stronger partisan orientations (on all sides).

So what's the B2B marketing connection?

Several months ago, I wrote about Marketing as media: Are you in the top five? My suggestion then was that given the incredible time constraints under which our customers and prospects operate, we need to think about being a "top five" information source. They don't have time to pay attention to much more than that. So you're really competing for attention with sources like The Wall Street Journaland BusinessWeek along with leading trade publications, blogs, and social networks, regardless of what particular market niche we're in.

I still think this is true, but today's research makes me think more about how you carve out the right position in the broader business media landscape

Of course you need to focus on the issues where you have expertise and the markets you serve. Of course you need to provide useful and interesting information. Those are table stakes. But beyond that, where do you fit more specifically for your customers? What do they expect from you? Most important, why do they need your information?

This is not a question about using different media channels for different types of information, although that's indeed important. And it's not about which format is best (white papers vs. videos vs. blog posts, etc.). It's really a question of editorial strategy.

  • Are you a source for breaking news? Possibly, but you better be really good at it! 
  • Are you a "fun" source for diversionary moments, like YouTube? Doubtful, but certainly possible if you think it's worthwhile.
  • Are you the emotion-laden source for partisans on one side of some big industry debate? Maybe, especially if you're in a relatively new or fast-changing market, but you need to accept that you're turning off all the partisans on the other side.
  • Are you an aggregator of everyone else's best content? That's a great service, but does your own thinking and expertise get lost in the process?

I'm not suggesting that it's all or nothing, that you have to pick one thing. But trying to be all things to all customers is not likely a good route to success. Thinking more about the "why us?" question can only help in developing a more effective editorial strategy. 

What do you think? What's your editorial strategy?

Photo credit: stevenharris

Wednesday
May192010

Four steps to strengthening B2B customer connections

IBM's hot-off-the-press 2010 CEO Study confirms again what solutions marketers already know: getting closer to customers is a strategic priority. An overwhelming 88% of large enterprise CEOs told IBM that getting closer to customers is a top business strategy for the next five years, placing it at the top of the list. An even higher number of the best performing CEOs, 95%, stressed the point.  

Is this really news? Isn't this just Marketing 101?

Well, sort of. The idea is basic, but making it happen, especially in large organizations, is not so easy.

The CEO imperative makes sense. Big company CEOs are struggling mightily, as the IBM report notes, with "the complexity of operating in an increasingly volatile and uncertain world."

In this context, and especially from a B2B perspective, close customer connections are essential to:

  • Gain deep insight into customer wants and needs
  • Gather input and advice on potential new offerings
  • Uncover new opportunities and co-create solutions
  • Obtain references, testimonials, and proof of value delivered

Creating and sustaining those trusted connections is extremely difficult, though, when our customers are overwhelmed with their own professional demands and tune out most of our marketing.

Social media brings promise of new and potentially more effective ways to build and maintain vibrant customer connections, both individual and communal -- but understanding how to turn that promise into reality is far from clear.

Meanwhile, face-to-face connections remain essential for key customers, especially at the executive level where so many of us need to be working. But our sales people have less time for relationship building and often little credibility in the executive suite. Beyond sales, it is difficult to know which face-to-face programs are worth funding.

A final challenge, especially for large organizations, is simply managing, coordinating, and building synergies across the wide range of programs and activities designed to strengthen customer connections.

Knowing this is a CEO priority, however, should make it at least a bit easier for marketing leaders to push forward with efforts to do what we all know is so important.

Here are four steps to consider:

  1. Do an assessment. It's hard to even keep track of all the ways we're already connecting with customers. Research, sales, services, and delivery are obvious, but we also have thought leadership programs, social media and networks, executive relationship programs, reference management, key account management, customer councils, collaborative solutions development, and probably many more. Take stock of all these initiatives. Look at funding and staffing. Review effectiveness in terms of customer insight and relationship growth. Benchmark the competition. We need a baseline to identify gaps and next steps and to help build a vision of where we need to go.
  2. Put someone in charge and build a cross-organizational team. We're already doing this with social media (hopefully!), but customer connections is an even bigger deal. We need someone with the big picture in mind and organizational partners and resources available to improve coordination, integration, and information sharing. We're not building relationships for their own sake, and we're not doing it just for sales either. If no one has accountability to ensure efficiency and effectiveness across the range of relationship-oriented programs, it won't happen.
  3. Build executive commitment. The CEO wants to get closer to customers but is the rest of the leadership group on board? Are they setting the right examples and the right tone for their teams? Operationalizing the commitment to customer connections requires real investment and, as important, TIME. We need to push and prod and support senior executives to make the time to work on key relationships, participate in customer councils, and send the message that these initiatives are indeed a top priority.
  4. Provide incentives. Companies that take customer satisfaction seriously put serious incentives in place to support the right behavior. Improving customer satisfaction is not the same thing as strengthening customer connections and relationships, but the principle certainly applies (as it usually does with any strategic initiative). Set specific goals, measure results, and then reward the folks in marketing, sales, service, and delivery teams for hitting their relationship growth targets.

What would you add to the list? What's working for you?

Photo credit: Marc_Smith

Wednesday
May122010

Customer-centricity for catalyzing solutions success

We're thrilled that Tom Sadtler, a veteran marketer with deep experience in solutions marketing at HP, CA, and other industry leaders, has joined the fold at Solutions Insights as one of our trusted associates. Tom is particularly interested in organizational change for solutions, and agreed to follow Steve's recent post on organizational models with some suggestions on how companies can actually get moving on the necessary transformation.

Here are Tom's thoughts:

Most B2B IT companies these days understand the benefits of selling integrated solutions: improved customer satisfaction and the potential to sell bigger offerings with higher revenue and margin.

Similarly, many of these companies are skilled at creating a vision of the organizational integration that it takes to become a stronger, solutions-driven company.

The problem, which I’ve seen over and over during my last 15 years of marketing IT solutions, is that companies have great difficulty actually changing the processes, incentives, and overall employee behavior needed to attain the vision.

Building out a solutions capability doesn’t just “happen.” It takes investment, determination, and a commitment to long-term transformation. In our quarterly results-driven environment, few have the persistence and stamina to get through all the different levels of change. As a result, studies have shown that an unacceptably large percentage of technology purchasers have been dissatisfied with the ”solutions” they purchased, and didn’t received the promised benefits.

One needs three components to drive organizational change:  

  1. Dissatisfaction with the current state
  2. A vision of the future state
  3. Practical steps to get from here to there

Dissatisfaction with the current state often comes from amplifying the voice of current or former customers. For example, many customers want more than a piece of software; they want the product integrated into their business or they want to know how best to use the product to solve a specific business problem.

For the vision, I would use the four-step customer centricity maturity model developed by Harvard Business School Professor Ranjay Gulati, author ofReorganize for Resilience: Putting Customers at the Center of Your Business.

In a recent discussion with Harvard Business School’s Working Knowledge,Gulati summarized his four-stage model:

Level 1: Companies at level 1 are very product focused and have an "if I build it, they will buy it" mindset. The focus is on technological excellence with some diffuse understanding of customers who may buy the product.

Level 2: Companies at level 2 have a basic understanding of their customers, typically coming from some market research and segmentation studies. Many firms get lulled into complacency at this stage. They start talking about customers and distinct segments and believe that this alone is an indicator that they have now made the shift toward an outside-in perspective. Frequently such firms still remain fundamentally oriented toward pushing products, albeit in a more refined and targeted way. Their market research starts to permeate their sales efforts but does not have much of an impact on their product development and other upstream activities.

Level 3: The move from level 2 to level 3 is a major shift in both mindset and actions. The focus here migrates from selling products toward solving customer problems. In so doing, firms become adept at comprehending what their customers' deep-rooted issues are and look for ways to position themselves to address those issues. In trying to go from insight to action, these firms seek to make their internal silos more permeable while also building bridges across them wherever necessary. They shift their culture so that some of these ideas begin to permeate and shape the behaviors and actions of their employees.

Level 4: At level 4, firms become agnostic about whether they produce all the inputs they provide to their customers and, akin to a general contractor in construction, look for ways to assemble the appropriate pieces that may go into tackling customers' challenges. A level 4 firm is more attached to producing solutions to customers' problems than it is to the products and services it offers. This intellectual, structural, and emotional transition means that the company is no longer concerned whether the inputs it uses to solve customers' problems are its own or assembled through a network of partners.

For the practical next steps, I would find a group within the organization that is already operating at a more mature level than most, and point to its success. Most large organizations have at least a few of these groups. As the author William Gibson has said, "The future is already here — it's just unevenly distributed." Highlighting the success of the most customer-oriented groups along with the voice of other customers that are dissatisfied with the more general current state increases the motivation and underlines the practical next steps toward the more customer-centric future.

*Check out videos from Steve Hurley’s recent conversation with Ranjay Gulati on the new Solutions Insights YouTube channel.

Friday
May072010

Lessons from IBM's CIO community

Everyone selling high value solutions wants to engage C-level executives. 

They're the ultimate decision makers. They can provide deep insight into both their own companies and emerging issues in your markets. They can give you the most powerful references and testimonials. 

Of course they're also the hardest to reach. 

Most B2B solution providers have some sort of executive relationship program, often with some combination of advisory councils, executive briefing centers, executive dinners and seminars, and similar initiatives. And most of these companies struggle mightily to make these programs work and gain substantial value from them.

Karla Bousquet, Director of Executive Client Marketing at IBM, provided some useful insight from IBM's experience during a webinar today organized by Farland Group (full disclosure: I used to work with Farland Group principals when we were all at Truman Company).

Most important, according to Bousquet, is beginning with a clear understanding of what senior executives (CIOs, in this case) truly value:

  • Engaging with their peers and extending their professional networks
  • Influencing the direction of organizations or initiatives that are important to them
  • Gaining justification for their business direction and intuition
  • Sharing best practices and lessons learned from peers and experts they trust

They're busy, they don't really care about your products, but they are anxious to learn and grow, most especially with their peers.  

In this context, IBM has taken a strong community approach to serve CIO (and IBM) needs, with four core objectives:

  • Establish a shared agenda for engaging with peers and influencing IBM's strategy
  • Deliver on IBM's belief that customers play a key role in driving new ideas and innovation
  • Provide CIOs with access to experts and expertise across IBM and its partner ecosystem
  • Work with CIOs to share success stories that demonstrate business value with CIO contribution

Each of these objectives responds directly to one or more of the things that executives value most. It's difficult to succeed with any community initiative if you don't focus first on providing relevant value to would-be participants. It's doubly difficult with the busiest and most sought-after executives.

To make it work, IBM has developed a tiered program, with three distinct initiatives:

  1. Board of Advisors (20-25 CIOs). This is the most strategic of the three, and involves IBM's top executives as peers with CIOs from their most important clients. The primary focus is on providing advice to IBM on the company's strategic direction, something that the participating CIOs have great interest in given their enormous stake in IBM's success.
  2. CIO Leadership Exchange (200+ CIOs). Initially an annual event, IBM is working to build more of an ongoing community with this larger group of CIOs from top global companies. The focus here is on sharing of best practices and success stories within a highly accomplished peer group of technology leaders.
  3. Center for CIO Leadership (2,000+ CIOs). Focused on advancing the profession, this mission-driven organization, for which IBM provides lead sponsorship, emphasizes the development of leadership skills for current and future CIOs 

 The tiered approach helps in organizing IBM resources and responding to different types of CIOs with different levels of relationship to IBM. Underlying each of these programs, though, is a consistent focus on delivering the value that executive participants demand:

  • If CIOs want to engage with peers and extend their networks, make sure to prioritize peer exchange and access to experts in every aspect of community and program design
  • If CIOs want to influence the direction of your organization, make sure to empower them and allow them to do this, even if it means listening to dissenting views
  • If CIOs want to justify their business direction and intuition, create serious opportunities for collaboration and dialogue, along with providing relevant research and perspective
  • If CIOs want to share best practices and success stories, ensure a private and safe environment to enable them to do this with relevant and credible peers

It's not rocket science, but it's not easy either. It means letting go of the desire to pitch and sell, and committing to the hard work of listening, facilitation, and collaboration. It means having the patience to emphasize the longer term benefits at some potential expense to short-term gain. Most of all, it means truly putting customer interests first, something we all talk about but all too often fail to deliver. 

Wednesday
May052010

Six Organizational Models to Create and Deliver Solutions

You’d be hard-pressed to find an executive in the B2B space who wouldn’t claim that his company is focused on providing solutions to their customer base.  Of course they feel that way – why would they be in business if it weren’t to solve a customer’s problem?

If you ask a company more questions, however, you might find that what they say and how they operate might be in conflict.  Here are a few follow-up questions:

  • Do you sell highly integrated services and product offerings?  Are they sold by the same sales person?
  • Are your human and technology resources easily shared across your BU’s?
  • Do your customers see and understand how your full slate of resources can address their challenges, or do they typically deal with individual BU representatives?

As a reminder, we look at solutions the same way that ITSMA’s Solutions Council defined it a number of years ago:

A solution is a combination of products and/or services with intellectual capital, focused on a particular customer problem, which drives measurable business value.

The Problem – Internal Siloes

Our studies have shown that, in spite of their marketing, too many companies are still operate in a “siloed” fashion.  The services delivery and marketing teams operate independently from the product teams.   In fact, it is quite common to see the various product groups, whose offerings can often be sold and implemented as complementary components of an overall solution, operate independently with concern only for their own P&L.  This also is a common occurrence when a company has divided its services into separate P&L’s.

How can companies overcome these artificial internal barriers?

Managing for Better Collaboration and Integration

In most organizations, siloed Business Units is a very positive organization structure.  By having each BU be responsible for its own P&L, there is clear responsibility and accountability for performance.  Blowing up the silos is usually not a productive answer to better internal collaboration.   The better approach is to find a way to create bridges across the silos so that integration and communication can take place when and where it is appropriate to combine BU resources for the benefit of the customer. 

Building these silo-to-silo bridges can be tricky business.  Some of the levers that are available to management are a change in incentives across the BU’s, a focus on changing the corporate culture to be more collaborative, and a change in staff to employees that are more willing to collaborate.  None of these shifts require organizational changes.

Ultimately, however, we have found that organizational change is required in most situations if a company is looking for a more effective, permanent fix to the problem of “stovepiped” BU’s.  We have identified 6 organizational changes that companies have made in order to be able bridge across existing silos.  Some of the changes are frankly cosmetic, while others require massive internal restructuring.

The six models that we have identified are:

 

 

Our Recommendation

We’ve seen all six of these models be employed by companies in the technology space at varying levels of success.  Some companies have been very successful – i.e., Cisco’s Solutions Council – while others either applied the wrong fix or were overambitious – i.e., HP’s attempt to transform the entire organization to a “front office-back office” model. 

Our recommendation is quite simple – follow a 3-step process before pulling the trigger and making any changes:

  1. Understand the problem -- Make sure you understand what the collaboration and integration problems are and why they exist.
  2. Be sure the organization change you envision will address the problem -- Be confident that, if you are successful in making the changes, you will be more customer focused and will be able to build out real solutions more economically and efficiently.  We suggest that you choose the model that is the least disruptive and still gets you the results you need.
  3. Make sure that it’s actually doable – given your culture, existing business and management structure, will you be able to actually make the changes you feel need to be made?

 Organization change is often not for the faint of heart – it can be a long, painful, emotional process, with resistance to change guaranteed.  Be sure you’re doing it the right way, and for the right reasons.  It’s hard work, but definitely worth it in the end.