A Relentless Focus On Efficiency Can Kill Innovation

Why do organisations who say they are innovative fail to put their money where their mouth is and invest in innovation in the same way Amazon do?

This week I did a slot with Ian Wright on innovation and failure as part of Digital Leaders Week.

Ian posed a killer question during the chat:

Why do organisations who say they are innovative fail to put their money where their mouth is and invest in innovation in the same way Amazon, Google etc do?

I’m not sure I answered the question brilliantly, but this comes down to the choice between efficiency and investing in the future.

Right now – there cannot be a board in the country who is not looking to cut costs. Offices stand empty, a second (and possibly third, fourth and fifth) lockdown looms and the medium term outlook is , at best, problematic. We all have to accept that we’ll be dealing with increasingly limited resources.

None of us can compare ourselves to Amazon – a company who are single minded in their dedication to owning the future. In 2019 their spending on R+D was $35billion which has increased year on year since they spent a paltry £12billion in 2012.

But if Amazon have an R+D to Revenue ratio of say 30%, how much should you spend?

0.5%? 1%? 5%?

As I said to Ian, the answer is you probably don’t know how much you spend at the moment, never mind what spend is right for your organisation.

When Cost Cutting Goes Bad

Right now accountants are running through organisations looking to eliminate every bit of slack they can.  It’s all about getting costs off the books and the swift abandonment of any capabilities not regarded as ‘core’.

The problem is:

Slack can be good.

Under utilised but latent capabilities can be good.

In the book When More Is Not Better , Prof Roger Martin argues that that efficiency needs to be balanced by resilience. He says we need to recognise that slack is not the enemy. In the right amounts, slack contributes to greater resilience. We should stop thinking of “no slack” as an achievable goal. By way of example he says that retailers such as Costco build slack into their staffing to allow employees to provide extra attention to customers.

Cutting slack out of your organisation can severely limit your internal capability for innovation and put you increasingly in the need of something potentially more costly: management consultants.

A piece for the Guardian contains some choice quotes about over reliance on consulting from Lord Agnew, the Cabinet Office and Treasury minister. “We are too reliant on consultants. Aside from providing poor value for money, this infantilises the civil service by depriving our brightest people of opportunities to work on some of the most challenging, fulfilling and crunchy issues. We seem to be ineffectual at harnessing our fast-streamers to do work that is then outsourced to consultants using similar people at a vastly inflated cost. This is unacceptable.”

The news this week that some consultants are being paid £7,000 per day to work on Test and Trace is an extreme example of what happens when you outsource all your capability. Weren’t we once a leader in the development of public digital technologies?

Unacceptable (and crazy maths) , but it’s sadly common practice within Government and our own organisations. I’ve had several younger colleagues say the same thing to me about our own sector.

Outsourcing capabilities defined as ‘non-core’ can lead to a reduction in your overall capacity for innovation. It can also lead to workplace dissatisfaction with career development options and can – in your determination to get cost off the books NOW – increase your costs in the medium term.

As I said in the session this week, a better approach would be to assess what slack you have at the moment and optimise it.

  1. How many people have you got working in roles that have an R+D element?
  2. What value are you getting from these?
  3. How could they be better connected?
  4. How could they help you tackle some of ‘the most challenging, fulfilling and crunchy issues’ that you face?

You cannot match Amazon for R+D spend , but you can emulate a lot of their behaviours.

Innovation and efficiency: It is possible to have it all.

Header Image by Pete Linforth from Pixabay

Smaller, Flatter, Faster. Is The Two Pizza Team Finally Going Mainstream?

This weeks post looks at the two pizza team which was popularised by Jeff Bezos.

In the early days of Amazon he instituted a rule that every internal team should be small enough that it could be fed with two pizzas.
The goal was, like almost everything Amazon does, focused on two aims: efficiency and scalability.

Is it finally the time that our organisations will make the shift to smaller teams, not just because of financial savings, but because of their increased effectiveness and productivity?

Read the post by clicking the link. And if you like it I’d really appreciate a share on your social network of choice.

Have a great weekend!

Best wishes

Paul

The latest cartoon by Tom Fishburne seems to sum up what a lot of people are feeling right now. As he writes, “In a chaotic year, many brands and businesses are relying on adrenaline only. Organizations can only run on those fumes for so long. Adrenaline-based speed can lead to burnout.”

I’d argue that we are not seeing speed as much as lots of activity. Organisations are busy , sure , but it’s a reflexive response to an era in which they have no control over anything , even down to when and where people work. In organisational design terms – we are all still out there panic buying toilet rolls and hand sanitiser.

One of the issues here is that legacy organisations are not designed for speed, it’s just not what they do. Many people who have set up internal accelerators or innovation labs ultimately fail as they run up against hard wired bureaucracy and hierarchy purposefully designed to crush any ideas that threaten the status quo.

In their report , Reinventing the organisation for speed in the post COVID era , McKinsey note that CEOs recognize the need to shift from adrenaline-based speed during COVID-19 to speed by design for the long run.

It calls for work to speed up in three ways:

Sped up and delegated decision making.  This means fewer meetings and fewer decision makers in each meeting. They point out that some organisations are adopting a “nine on a videoconference” principle. (I’d suggest this is still a couple too many). Others are moving towards one to two-page documents rather than reports or lengthy PowerPoint decks.

Step up execution excellence. Just because the times are fraught does not mean that leaders need to tighten control and micromanage execution. Rather the opposite. Because conditions are so difficult, frontline employees need to take on more responsibility for execution, action, and collaboration.

Cultivate extraordinary partnerships. Working with partners is routine. But the speed of action only goes so far if other players in the ecosystem fail to move just as fast. The connected world is breaking down the traditional boundaries between buyers and suppliers, manufacturers and distributors, and employers and employees.

The building blocks at the base of all these things are , guess what, small empowered teams.

Is it finally the time that our organisations will make the shift to smaller teams, not just because of financial savings, but because of their increased effectiveness and productivity?

I’ve been an advocate of a the minimum viable team for a number of years. The concept of as few as people as possible – small enough to be fed on two pizzas, is attractive because it reduces social loafing and allows us to get off the hamster wheel of management and ‘work about work’. Once you’ve done it and moved away from managing lots of people it would take an almighty pay rise to tempt you back.

The Two Pizza Team was popularised by Jeff Bezos who in the early days of Amazon instituted a rule that every internal team should be small enough that it could be fed with two pizzas. The goal was, like almost everything Amazon does, focused on two aims: efficiency and scalability.

Its roots lie in the concept of the Minimum Viable Team which recognises that many companies spend an awfully long time thinking and planning to do something: longer than it takes to actually do the thing. It’s built on the premise of Parkinson’s Law – that work just expands to fill the time and resources available. The MVT idea is rather than layer on additional resources (that are ultimately wasteful) , you “starve” the team and make them pull only the necessary resources as and when they need them. 

Most organisations reserve this structure, if they use it at all, for either DevOps type environments or hipster design or innovation teams. However it has a sound evidence base – after devoting nearly 50 years to the study of team performance, the Harvard researcher J. Richard Hackman concluded that four to six is the optimal number of members for a project team and no work team should have more than 10 members.

How many project teams do you know that have four to six members?

Remote work exacerbates this problem. It’s hard enough to run productive in-person meetings with lots of people in the best of times, but trying to foster engaging discussions with lots of virtual participants is nearly impossible.

Despite the rhetoric of agile small teams – the shift won’t happen overnight as there’s a genuine question about what to do with all the people you might not need. I’d argue that post- COVID the immediate challenge is how we slow down to speed up.

We are in a new world with new challenges and we sometimes confuse operational speed (moving quickly) with strategic speed (reducing the time it takes to deliver value)—and the two concepts are very different. The more you can reduce organisational initiatives to a few key problems the more you can bridge the gap.

Do Fewer Things, Better. And Faster

No organisation, large or small, can manage more than five or six goals and priorities without becoming unfocused and ineffective, and it’s exactly the same for us as people.

The best organisations don’t try and do everything. They focus on a few differentiating capabilities — the things they do better than any other company.

This is not an either/or. IF we can reduce our priorities to a few key goals AND make small focussed teams the default way we operate , arguably we’d be a lot happier, healthier and more productive.


Photo by Erik Mclean on Unsplash

Four Factors Hindering Transformation

The problem with good service design is that you don’t notice it.

It’s only when you experience truly bad design that you appreciate the good stuff.

That’s why so few organisations are design led. They focus on designing out the bad rather than designing in the good from the beginning.

Earlier this week I ordered a package – to be delivered from the Royal Mail.

It required a signature so I arranged it to arrive on Thursday when I planned to be working from home.

On Tuesday morning the Royal Mail sent me an SMS and email to say they were pleased to announce that the item would arrive earlier than expected.

They might well have been pleased at the early arrival, but I was 60 miles away and stuck in a meeting. There was no option to request a redelivery. No option to even cancel it. Just accept an inevitable failure. 

Any redelivery could only be attempted after they had first failed to deliver it.

Here was a company actually wasting the time of their employees and their customer – and seemingly proud of it.

In defence of Amazon and Uber

It’s easy to criticise the likes of Amazon and Uber for their ethics , but we forget at our peril the benefits these providers have bought us.

But they don’t pay taxes! As if no company ever evaded taxes before Amazon.

But they exploit workers! As if taxi drivers were never exploited before, or resisted the opportunity to exploit us customers.

We shouldn’t let these type of companies off the hook for their transgressions, but neither should we forget what life was like before their breakthroughs in customer experience.

Getting a delivery within 24 hours or not having to queue for a taxi now feels so normal that one starts to wonder why it took so long.

The incumbent companies they disrupted all had the same money, time and technology to change the way they did business, but they resisted the opportunity to shape themselves around what customers actually wanted.

Why digital transformation isn’t enough

Richard Godfrey makes a similar point about the failure of banks to reimagine their services. Setting up a new account in most cases still requires a bank visit, or an e-form or a phone call at the very least.  How can that still exist in a world where you can sign up for a Monzo or Revolut account in minutes by downloading an app and proving your identity and address with image capture software and facial recognition?

As Richard points out, most ‘transformations’ are nothing of the sort, but simply a digital overlay on top of how business has always been done. He wonders why the process of claiming housing benefit can’t be made so easy. Of course it can, people just don’t want to make it easy.

As someone who has worked to redesign services from the ground up, putting the customer in control, I’d say you can’t underestimate how difficult this culture change required is.

Many of our organisations – despite the rhetoric – have policies and procedures that are profoundly anti-customer. We have built checks, balances and verifications into our process because , deep down, we don’t actually trust the motivations of the public.

This is an uncomfortable truth – but goes some way to explain the difference in satisfaction levels between some of the public and private sector.

PNG_Public_sector_CX_Ex1

A new post from McKinsey finds that whilst many the public sector and governments are moving forward with customer experience initiatives, in general private-sector organisations are a lot better at providing services.

I don’t always agree with the private/public distinction but some of the stumbling blocks they identify are helpful. The common traits that prevent genuine transformation are:

  1. A monopolistic mind-set. When customers don’t have a choice, it dramatically removes a major incentive to innovate and improve service.
  2. The public sector have to be fair to everyone.  They can’t just ignore certain customer segments. This ‘fairness’ often solidifies over time into a principle of providing one-size-fits-all service. Or rather, one-size-fits-no-one.
  3. We often lack the capabilities needed to assess and address gaps in customer experience. Those with deep analytics skills, as well as human-centered design skills, are often in short supply.
  4. Data is typically incomplete or sequestered in silos. Organisations often lack a full, timely picture of the customer’s overall experience.

This ‘fair for everyone’, but exceptional for no-one, agenda presents a genuine design challenge. The capacity for innovation for huge, but the capability for it is virtually zero.

It’s hampered because innovation requires a tolerance for failure , and upsetting people.  It’s too easy to see the short-term political consequences of initiatives gone wrong and debate whether public money is going down the drain.

However we have a responsibility to take risks – we need to cultivate a culture of innovation, and sometimes that means spending money trying new things, and being ‘unfair’ to some people.

What if Uber and Amazon did health, housing and social care?

Three years ago I wrote a post speculating on that very question – it remains the second most popular piece on this blog.

I don’t stand by everything I said back then, but I do agree with the final point.

Any sector that has multiple players performing similar services is ripe for disruption.

There’s no question about whether the Uber , Amazon, Facebook and Alibaba of the public sector will emerge.

It’s simply a matter of when.

What We Can Learn From The Oldest Companies in The World

Shigemitsu Kongo, a Japanese Buddhist temple builder, formed his construction company Kongo Gumi in in 578 AD. His company built relationships with their customers that lasted for 1,400 years, surviving through many wars and natural disasters,  just like their temples.

It wasn’t technology that nearly killed the company, but cashflow. The oldest company in the world became a subsidiary of Takamatsu Construction in 2006.

There’s a very good chance you will outlive the company you work for. Whilst our life expectancy is increasing, the lifespan of organisations appears to be in decline.

The average age of a company listed on the S&P 500 has fallen from almost 60 years in the 1950s to less than 20 years today. Only 30 of the original companies still exist in 2019, the 35th anniversary of the FTSE 100.

Disruptive technology is killing off older established companies at a much faster rate than ever before.

This is why when you go to conferences you’ll see presentations selling the virtues of Uber, Amazon, Netflix and Google.

Be like them the wisdom goes. Be agile. Only by doing as they do may you survive.

This is only half the story though.

Rarely , if ever, do we look at the companies that are bucking this trend. The companies who have been around forever and are still doing business.

A look at the oldest companies operating today is fascinating.

Worldwide there are over 5,500 companies that are over 200 years old. However the distribution of these is heavily weighted to just a few. Japan dominates the list (3,146), followed by Germany (837), then the Netherlands (222), and France (196).

I started this week staying in Düsseldorf, Germany, in a district known as “Little Tokyo on the Rhine” — one of Europe’s largest Japanese communities. I was there to talk to European students about the opportunities of smart cities , but I concentrated more on the possibilities of building upon the wisdom of communities that have existed for generations.

It’s deeply unfashionable to talk about , let alone revere, older things today. It’s almost like innovation started with the iPhone and disruptive companies began with Uber.

My week ended with a visit by the Disruptive Innovators Network to Bromford, who at 56 years old is barely out its pre-school stage in Japanese or German terms. It was interesting to hear in the talks by Helena Moore and John Wade how there was almost an apology for referring to things we had learned more than five years ago, as if we were becoming embarrassed by the weight of our own history.

We shouldn’t be though. The right culture for innovation is one where there is:

  • Just enough friction – with teams having regular, intense debates
  • The practice of high standards, with a steady supply of high performing people who are committed
  • Permission to be different – a culture where it’s allowable, even encouraged, to push back. 
  • The ability to think and act experimentally with a tolerance for failure through practical experiments

However it’s also a culture that creates a feeling of belonging and a feeling of purpose.

Why have so many Japanese and German businesses lasted so long?

A study by the Bank of Korea found that such companies thrived over the years because they created new demand while sticking to a corporate culture that promoted tradition, attention to detail, and frugal innovation.

Instead of going after short-term results, they pursued longstanding trust with customers and partners. They also pursued growth within their means, rarely borrowing to expand.

In his book The Living Company, Arie De Geus attributed the success of older businesses to four factors:

1. Long-lived companies were sensitive to their environment and remained in harmony with the world around them.

2. Long-lived companies were cohesive, with a strong sense of identity. No matter how widely diversified they were, their employees felt they were all part of one entity.

3. Long-lived companies were tolerant and generally avoided exercising any centralised control over attempts to diversify the company.

4. Long-lived companies were conservative in financing. Frugal even.

However his strongest point is contained in one sentence “Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations’ true nature is that of a community of humans.”

It’s time to stop worshipping the new and the shiny. We need to strike a delicate balance between continuation and innovation, being reliable and disruptive at the same time.

Creating a culture where these two competing sets of values can coexist is difficult – and not always a comfortable place to be.

Clearly though , the innovation potential of us older lumbering giants is vastly under appreciated – and the disruptive power of the younger and hungrier is often overstated.

The Rise Of Business Bullshit – And How We Can Fight It

“One of the most salient features of our culture is that there is so much bullshit. Everyone knows this, but we have no clear understanding of what bullshit is, why there is so much of it, or what functions it serves.” – Harry Frankfurt  On Bullshit

Many people in the social sector will have heard about the 80/20 rule –  that 80% of the demand comes from 20% of users.

It’s one of those things that seems to intuitively make sense. If we can solve the problem of the 20% of people who are sapping all our resources – then the world would be a much better place.

Except of course….it’s bullshit.

Recent work by our own Insight team found the belief that a small group of users were responsible for a disproportionate amount of contact with us simply had no foundation.

So why do these myths – dangerous in that they lend themselves to silver bullet solutions – swirl around the modern workplace?

John V. Petrocelli is the author of a new paper which looks at the Antecedents of Bullshitting and the conditions that need to exist to encourage people to bullshit. 

First of all, bullshitting is not the same as lying, which is a deliberate and premeditated attempt to conceal the facts.

By contrast, bullshitters may or may not know what the truth is. They are simply communicating with little or no regard for evidence, established knowledge, or truth.

Petrocelli ran two experiments that revealed major factors that might cause someone to bullshit:

  • Firstly, people bullshitted most when they felt pressure to provide an opinion and believed their audience didn’t know much about the subject. Even though they may not have the knowledge or experience to have an informed opinion, the social pressure to contribute something kicked in.
  • Secondly, if there is no accountability for bullshit, it’s more likely to happen.  People appear to be more likely to bullshit when it’s perceived as acceptable or relatively easy to do without challenge.

As Petrocelli says – it seems unlikely that people are generally ready to admit to bullshitting, so it’s even more important we understand the psychological processes that both enable people to communicate with little to no concern for evidence as well as the processes that explain why people accept so much bullshit without questioning its validity.

So how can we stem the flow of BS and encourage people to challenge its validity?

Four Tactics That May Reduce Bullshit

Get Better At Problem Definition

Many of our organisations have a bias towards getting quick answers. We favour execution rather than contemplation. Great performance at work is usually defined as creating and implementing solutions, not finding the best problems.

So we need to build a culture around asking:

  • Is that really true?
  • Do we honestly know that?
  • Where’s the evidence on that?

Simply calling each other out on potential BS has to become a leadership behaviour.

Hold Fewer Meetings

Bullshitting is hard work. It requires the capacity to continually come up with new, over-packed, ambiguous concepts -so said Andre Spicer

As Spicer points out managers and employees can spend large chunks of their day attending meetings or implementing programmes actually disconnected with the core processes that actually create value.

Pointless meetings are a breeding ground for bullshit – something that’s been known for a long time. In 1944, the CIA’s precursor, the Office of Strategic Services, created the Simple Sabotage Field Manual that was designed to advise Europeans about effective ways of frustrating and resisting Nazi rule.

It advises people to “talk as frequently as possible and at great length,” “bring up irrelevant issues,” and “hold conferences when there is more urgent work to do.”

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Meetings are often opinion, rather than evidenced based.

Stop Asking Everyone’s Opinion

The modern organisation is obsessive about collaboration and consultation – but encouraging everyone’s opinions on everything invites bullshit.

Social media should have taught us by now that more opinions aren’t necessarily better.  We’re inclined to believe what we see on social media because it comes from people we trust: our friends, our family, and people we have chosen to follow because we like or admire them. However, most of us know deep down that what our families and friends say is hardly ever evidence-based.

The same applies to work. More consultation = more bullshit.

Ban PowerPoint

Presentations at team meetings are the modus operandi of the skilled bullshitter – and used to propagate all sorts of half-baked propositions in a way that few would dare challenge.

Not for nothing does Jeff Bezos ban presentations at Amazon -insisting that Powerpoint-style presentations give permission to gloss over details, flatten out any sense of relative importance, and ignore the interconnectedness of ideas.


There’s one big tactic for battling bullshit that Petrocelli identifies:

Evidence.

Certainly, we’ve become much more focused on being an evidence-based organisation – as Carole Clarke writes – we increasingly need to become more rigorous in how we evaluate the impact of our services so that we can say with a lot more confidence that things work.

We need to bust myths. Slay Zombie Projects.  And wage war on jargon.

An indifference to evidence breeds an indifference to the truth.

Nudging our organisations towards a more evidence-based culture becomes the surest way to stem the flow of bullshit, if not kill it.

Why Small Teams Win

In the early days of Amazon, Jeff Bezos came up with a rule: every team should be small enough that it could be fed with two pizzas.

The ‘Two Pizza Rule’ signalled that Bezos didn’t want more talking, more line reports and more communication. He wanted a decentralised, even disorganised company where creativity and independence prevailed over groupthink and the bureaucracy of management.

A smaller team spends less time managing timetables and keeping people up to date, and more time doing what needs to be done.

These small teams promote autonomy but also a better approach to collaboration. Having lots of small teams means they all need to be able to work together and to be able to access the common resources of the company, in order to achieve their larger goals.

The thinking has precedence in things like Brooks’ Law – which states that “adding manpower to a late project makes it later.” Getting bigger often means your communication overheads grow and doesn’t necessarily yield faster results. As Brooks himself said: “Nine women can’t make a baby in one month.”

Thinking small also avoids ‘social loafing’  – which is where people take less accountability for individual and team performance when doing work as part of a group.

It’s human nature that some of us may take advantage of a situation in which it’s harder to pinpoint responsibility—a situation created by the fact that too many people have a role in the team’s performance.

When nobody’s noticing what you are or aren’t doing, the easier it is to keep doing nothing.

As a leader of a Two Pizza Team, I can firmly say that the high degree of “identifiability” means there is no room for anyone to hide – including me. Underperformance becomes apparent in days or even hours, not over weeks or months.

The Value of Small Teams in Change and Transformation

In many organisations, small teams are undervalued. Like introverts, they can often be overlooked.

Yesterday I facilitated a session for the regulator of social housing in the UK – and its theme was that in an age of big change (and arguably, big failure) – small distributed teams might be an answer to how we balance productivity and innovation.

Buurtzorg, the Dutch model of neighbourhood care started with an initial team of four. The system that evolved deploys teams of up to 12 nurses, who are responsible for about 60 people within a particular area. There are now around 900 teams in the Netherlands. This system balances small team thinking also whilst operating within a much larger framework.  The framework is what provides the scalability, the autonomous team provides the personalisation.

RSH Session (3)

Buurtzorg was very much an inspiration for our model of neighbourhood coaching – which again provides a framework for semi-autonomous small teams to bring solutions together around a community. It puts people at the centre – not housing ‘professionals’.

Visual

The Corporate Rebels have written about the Minimum Viable Team. Start small, get experience, grow bigger only when necessary.  I agree with this but also think there’s crossover with the points Chris Bolton makes in his post on Minimum Viable Transformation.

Most transformation programmes are about BIG ideas (and BIG language), where there is little room for failure.

Most approaches to organisational design are about BIG teams (and BIG resources) – despite no evidence linking these to productivity or innovation.

  • Maybe it’s time to think differently about how we solve complex problems rather than continue the endless annual cycle of calls for more resources and emergency injections of cash.
  • Maybe it’s time for smaller, more organised and better-connected teams to take centre stage.
  • Maybe it’s time to think about what minimum viable teams and minimum viable transformation look like and apply them in practical settings.

At the end of the day, radical innovation only comes from diverse networks, never from big teams.

Avoiding The Yo-Yo Effect of ‘Corporate Change Convulsions’

Speeches you never hear at a corporate conference: “….. Our Transformation Programme is going to be small and imperfect. We are going to do many small things that probably won’t work straight away.’ – Chris Bolton

In the early 1960s, a New York housewife named Jean Nidetch began a weekly meeting with friends at her home to talk about their issues with dieting. She was a ‘cookie addict’ who had struggled for years to lose weight through a succession of fad diets.

Her weekly meetings helped her lose nearly 10kg in a year. So successful was her personal transformation that she turned the gatherings into a programme and ultimately a company – called Weight Watchers.

This began the commercialisation of dieting, creating a worldwide industry expected to be worth 245 billion dollars by 2022

The idea behind most of those diets is straightforward and obvious: eat fewer calories and you will lose weight.

But that’s not what actually happened: instead the diet trend coincided with mass weight gain and the beginnings of the obesity epidemic.

According to research, most dieters will regain almost all of what they lose – which is why the typical dieter tries a new bright and shiny personal transformation plan four times a year.

Change fails, try a new approach, spend more money.

A few weeks ago I wrote The Big Problem With Change Programmes – my most popular post for a year. It drew a lot of responses and messages. Here’s a selection:

“There’s a sense of complete deja vu – we’ve been here before and because the last one didn’t work it’s hard for even the most positive of us to be excited.”

“Change programmes are an industrialized construct and, as such, they are rarely culturally insightful because they often fail to get under the skin of the deep issues around how a group of people adapts and changes.”

” Our organisation are doing ‘change theatre’ – spending a lot of money on consultants helping us address things that will change the organisation as little as possible. The big complex issues are being ignored.”

The common theme – hired help brought in every few years to sort things out – is well illustrated by Ian Watt who describes regular ‘corporate convulsions’ that fail to transform anything – as predictably as a January diet.

Does Big Consultancy Really Work?

One of the reasons it’s hard to evaluate the relative success of change programmes is very few organisations share what actually happened, how much they spent, and almost none share which ones failed.

Similarly, the use of big consultancy is shrouded in mystery.

According to the main industry body in the UK, the Management Consultancies Association (MCA), for every £1 spent on consulting fees, you can expect £6 in return.

However, a new study by Ian KirkpatrickAndrew Sturdy and Gianluca Veronesi challenges that view.

What if consultancy is actually making you more inefficient?

The study – across 120 NHS trusts – showed that management consulting didn’t make the organisations more efficient – it had precisely the opposite effect.

NHS yearly expenditure on management consultants almost doubled from £313 million in 2010 to £640 million in 2014.

The study shows that in some cases spending on management consultants did improve efficiency, but overall consulting use generated inefficiency, thus making the financial situation of clients worse.

Although the inefficiencies were relatively small it doesn’t take into account the amount of money paid to consultants and – perhaps more importantly – the huge amounts of time and resource involved.

It notes that NHS organisations have been either unable or unwilling to engage in the formal evaluation of management consulting, resulting in an absence of ‘rigorous, peer reviewable, transparent data’.

The study also highlights the active role of management consultants in pushing services when there is no need for them. Change for the sake of change.

Perhaps – as Chris Bolton has written – we should instead be seeking minimum viable transformation, and change should be small and imperfect:

“Most Transformation Programmes are about BIG ideas (and BIG language), where there is little room for failure.”

These corporate convulsions are little more than crash diets, where the weight is almost certainly going to pile back on.

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At Bromford as part of our programmeOne approach, we’ve taken time to look at the case for change, redesigning all 31 service areas and mixing larger-scale transformation with small-scale experimentation.

Part of that included a lot of time spent looking at why previous attempts hadn’t worked and getting deeper into problem definition. As David Anderton has said that means convincing your organisation that you’re not that special, and not creating bespoke solutions for problems that don’t exist. We only need change where it makes a tangible difference to customers.

Amazon, so we are told, have never had a change programme.

Just as a permanent lifestyle change is a flexible, ongoing process that involves body, mind and spirit — so changing an organisation is a journey without end and not a fixed point ‘transformation’.

Why Transformation Fails – And How To Avoid It

The concept that 70% of change and transformation programmes fail emerged in the mid 1990’s. There’s actually little evidence that this is true.

The 70% figure seems to have emerged because of a lack of clarity about what success looks like – and that most people have a bad experience of them.

My contention is that programmes fail for three reasons:

Why Transformation Fails And How To Avoid It

When was the last time you heard an organisation openly talking about what didn’t work? The problem we face is that large scale transformations become too big to fail – resulting in a ‘wall of silence’ when objectives don’t get met.

The irony is that this silence is the root cause of failure – as we become eternally doomed to repeat the same mistakes.

Why Transformation Fails And How To Avoid It (2)

Most organisations exist in a fixed state of transformation – time-limited programmes of change (usually 3-5 years) rather than a flow state. 

Amazon, we hear, have never had a transformation programme. That’s because they exist in a flow state – where the culture is accepting that change is perpetual rather than something that – if we just grin and bear it – will be over in a few years.

The danger with a fixed state is that the driver becomes a business plan focused on implementation not experimentation. 

Accordingly we end up with optimisation not transformation.  Or, as Emma McGowan has said, we end up digitising the status quo.

Why Transformation Fails And How To Avoid It (3)

Too often we focus on transforming parts of organisations rather than looking at whole system change. This results in the creation of more efficient silos rather than anything fundamentally different.

There are cultural reasons for this. We have a western bias towards individualism rather than looking at the whole picture. Rice farmers in South-East Asia tend to be more collaborative and cooperative as a successful crop requires a holistic approach to nature and irrigation systems rather than just a focus on the self.

Most change programmes do not look at interconnected systems – they narrowly focus on efficiency.

Accordingly , as Andy Reeve said, transformation gets a bad reputation as it often becomes equated with fewer jobs rather than creating a different world.

The End of Change Management

Perhaps we’d achieve more if we gave up on big change. People lose heart, are daunted by the scale and the programmes lose momentum.

We need to get back to basics;

  • We need a clear vision of why we need to change and what benefit it will bring. If you step behind the rhetoric of transformation you’ll see it is usually about reinforcing existing business models rather than truly challenging them.
  • We need influence devolved to people closest to the change. Change is best served when we devolve power, and institutions and hierarchy get out of the way.
  • We need change through small experimentation. We shouldn’t initiate change without a clear problem statement and some evidence that any proposed solution would result in a net positive outcome.

And we need a new honesty about what’s not worked well. Chris Bolton has suggested a Museum of Failed Products for public services.

Perhaps we need a Museum of Failed Change Programmes too?

Surely the best way we can avoid repeating our mistakes is to put our previous ‘failed attempts’ on show for everyone to see.


This is an edited version of a talk that was originally given at #HQNFlight on 11th October 2017

Know Your Customers, Just Never Ask Them What They Want

We do not really know what our potential users will really respond to, what they will understand or what they’ll hate until we really see them using it –Jonathan Courtney

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If you are working on any new service change or product there’s one question I guarantee will be asked of you at some point:

“What do your customers think of this?”

The thing we never say – but we need to be brave enough to is this:

“We haven’t asked them – it would be a complete waste of time”.

Despite no evidence of any real impact, each year millions of pounds are spent across the social sector on market research, focus groups, and ‘coproduction’.

At best it’s well intentioned paternalism , at worst a cynical tick box exercise.

95% of products launched this year will fail – and it won’t be for lack of customer involvement. Many of these will have asked people to articulate what they want whilst failing to actually get to the core of what they need.

It is difficult for us as users , of any service , to think in abstractions or envision a new concept.

There is little evidence that we can even predict our own behaviour. We don’t necessarily know why we make decisions.

When anyone proposes a change – even humdrum day to day changes (think self-serve check outs in supermarkets , or charging people for plastic bags) – we don’t react rationally.

Our status quo bias, the tendency for us to lean towards doing nothing or maintaining our current or previous decision – is a strong reason for never asking customers what they want. Unless you want your business to stand still.

Customers often don’t know what’s good for them.

If you ever go to an airport here’s a quick experiment. Look at the queue of people checking in manually versus the queue for people who’ve checked in online and are using bag drop.

Despite all the benefits (huge time saving, plus the airline can’t close the flight and move on without you) people are disposed to stick to what they know.

These are probably the same strange group who applaud the pilot and crew when the plane touches down, simply for doing their job and not killing you.

Asking them to design your next service would be catastrophic. They’d request a lot of features that they would never use.

As Jason Fried has said – a great question to ask ourselves is  what are people going to stop doing once they start using our products or services?

That’s how Amazon and Google have conquered the world – not by surveying us to death – but by understanding our problems and taking them away one day at a time.

The challenge is understanding the problem better than your competitors and then road testing solutions. As Jonathan Courtney writes, the useful data comes not from research, not from surveys – but from the first user tests.

Every pound we put into asking customers what they want is basically wasted.  My aspiration at Bromford is for us to the become the best organisation at understanding the problem, before deploying rapid experiments to prove or disprove any solution.

Our customers have big problems to solve, the social sector faces unprecedented challenges – and we simply don’t have the time anymore.

 

Have you really got the time to be distracted by what customers think they want?

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It’s a great line but there’s no evidence that Henry Ford ever said this. It never appeared anywhere until about 1970.

A better quote , and one he did say in his 1922 book, is this:

“I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.”

Ford understood his customers aspirations before they did.

Knowing our customers is about a deep understanding of the day to day problems they face and the opportunities they haven’t even begun to realise.

You won’t get that from your next customer workshop.

Lessons From a Year Spent on a Two Pizza Team

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Work alone. You’re going to be best able to design revolutionary products and features if you’re working on your own. Not on a committee. Not on a team – Steve Wozniak

In the early years of Amazon , as the company was in transition from fledgling startup to world-eating behemoth , managers held a corporate away day to consider their main challenges.

One executive opined that communication across the company needed improving – employees simply needed to talk more. The CEO , Jeff Bezos,  is alleged to have stood up and said “No, communication is terrible!

Bezos didn’t want more communication. He wanted a decentralised, even disorganised company where creativity and independence prevailed over groupthink and management.

Hence he established a fondness for what became known as the Two Pizza Rule: if a team couldn’t be fed with two pizzas, it was too big.

The term has precedence in things like Brooks’ Law – which states that “adding manpower to a late project makes it later.” Getting bigger often means your communication overheads grow and doesn’t necessarily yield faster results. As Brooks said: “Nine women can’t make a baby in one month.”

It’s interesting then if you observe any management meeting when a problem comes up around a deadline or late project. Invariably the solution is to throw resources at it. In fact the opposite is often true – you should take resource away. 

Historically career progression has been gauged on the amount of people you manage , the budgetary responsibility you bear. Your position in the hierarchy. In a networked age –  power and influence simply don’t work this way.

The monolithic management structures across much of public services need aggressive simplification. Revolution rather than evolution.

Twelve months ago , as we prepared to launch Bromford Lab, I had all my resources taken away.  And I’ve never felt better. 

We have four people on the Lab. A lot of people who visit ask if there are any jobs going. The answer, sadly, is no. Two Pizza Law means we can never expand.

What are the benefits I’ve found from this way of working?

Agility ramps up.

We can have an idea on Monday morning, have the process mapped by lunch and the product in place by the end of the day. There’s less consultation and less ego to negotiate.

Hierarchy gets blown apart.

There’s no management meetings as there isn’t really any conventional management. Everyone knows what’s going on in the wider company – even the things that could previously be marked management confidential. The tendency for lower-paid employees to defer to the highest paid person’s opinion (HiPPO syndrome) just doesn’t happen.

Performance becomes transparent.

In big teams I’ve managed and worked within I’ve experienced “social loafing” – where people exert less effort to achieve a goal when they work in a group than when they work alone. But there’s no hiding in a two pizza team. A weak link gets shown up straight away.

I’ve noticed that performance management has become more democratised too. We call each other out publicly (usually on WhatsApp) when tasks are unfinished or performance drops.

The downside? 

Well, even Steve Wozniak would agree that to deliver great product you need a great team around you. You can’t do it alone. And that’s where the rest of Bromford come in.

Next week we’ll expand Two-Pizza working by assembling four semi-automonous squads to help us work on themes we know are important to customers.

These will synchronise with the work of the Lab, Insight and Customer Experience teams – adopting some of our agile methodology – as well as working out loud using more collaborative social business tools.

Each squad will be encouraged to be radically transparent – engaging more colleagues and customers in their work without the hindrance of line management responsibilities.  In time we hope these guerilla cells turn our approach from innovation lab to innovation company.

In truth – we know all management is waste. In a connected business power no longer emanates from the boss or the top of the hierarchy. It lies right at the centre of the network.

The challenge for all large organisations is how they make every business unit act like a startup. Every employee thinking like a business owner rather than being served by the company.

The future of work is already here, just not evenly distributed.

And it’s a lot smaller.

What Uber, Comms Hero and HouseParty tell us about the future of the conference…

(A version of this post originally appeared on 24Dash – go visit them as they’re great!)

Marco Rubio Speech On Innovation At Uber's DC Offices

2pm 11th June: London grinds to a halt.

Cab drivers have downed tools for an hour.

Uber, a smartphone app that offers an easy and cheap taxi booking service, has rolled into the UK. Our taxi drivers, required to do training of between 4-7 years, are understandably outraged at this tech startup rocking up and suggesting services can be delivered in affordable ways that are more tailored to the customer.

The howls of anguish from the striking drivers were heard all across Europe. But far from highlighting the cause of taxi drivers it served only to promote Uber itself- which saw an 850% increase in subscriptions.

The hackney carriage – a tradition dating back to 1654 – faces potential disruption.

Plenty of howls of anguish in Manchester too this week as the annual housing conference rolled into town. This year though the conference had an Uber-like startup to contend with.

HouseParty – an unofficial fringe – had parked its (mini)bus just over the road.

Much like Comms Hero, it would be easy to dismiss HouseParty as a bit of inconsequential fluff. A bunch of malcontents fiddling around with social media and shiny tech whilst Rome burns.

But both formats deserve closer scrutiny. Both have super smart business brains behind them in Asif Choudry and Matt Leach. Both have got the sheer balls to deliver something different in a market starved of original thought. And both show an implicit understanding of their customers.

Comms Hero was developed after speaking to Comms people and asking them what they would design if they could create their ideal event.

HouseParty has evolved through social media connections and captured the imagination of people who would never have thought of attending a housing conference. Additionally it’s been co-designed by Esther Foreman a social entrepreneur who also happens to be – guess what? – a real life housing association tenant.

And they are new and achingly cool. Whereas the annual CIH conference has roots in a tradition starting back in 1931. On that basis it’s unfair to compare and contrast the three. But anyone who has attended them, or followed their social media feeds, will do so.

Let me be clear. This isn’t an attack on the CIH, an organisation I have huge respect for and who employ some inspirational people. Neither is it a ringing endorsement of Comms Hero or HouseParty – concepts that are taking their first awkward baby steps into the world.

But the fact is the annual conference , and public sector conferences like it , have to change.

You can’t blame the CIH. The public gets what the public wants. And, if we’re honest, the UK housing public wants an annual sideshow to the real business of getting together and having a chinwag and a few beers.

The conference this year certainly had a unified message: We need more social housing and we need more money. We need more of the same. Impassioned stuff and I, optimistically, hope it’s heard.

But at £525 for a one day non-member ticket you’d expect passion at the very least.

How attractive would this be to people in the top 5 of the digital Power Players list. People like Anne McCrossan, John Popham or Helen Reynolds? Sole traders who could help the sector be much better than it currently is.

How attractive would this be to a tenant?

Comms Hero has undercut its rivals by a good £100. HouseParty offered an innovative ‘pay what you can afford’ option.

Much like ‘affordable’ rents, our conferences need to consider their purpose, pricing and accessibility.

Thom Bartley has made the brilliant point that it’s now cheaper to fly to Amsterdam to see a 3D printed house than to pay to go to a housing conference and hear someone talk about it. We all know that housing has to revisit its purpose but that also involves a restatement of its values.

This is less an issue for the CIH than it is for the sector itself.

In reality neither Comms Hero nor House Party are competitors to traditional conferences – they offer something different. But just like Uber,  Spotify and Netflix they are bringing the question of customer value into the spotlight.

The annual conference, just like black cabs, will be around for a good while yet. But if nothing else the new kids on the block have made us consider “would we do it this way if we started again?”

And that’s always a pretty good question to ask.

Don’t Listen To Your Sector: Be More Weird

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Had a bit of drama over the past week. I’ll recap it for you as quickly as possible – as most readers of this blog don’t work in the same sector as I do.

Essentially Mick Kent, my CEO, wrote a challenging piece setting out why we have embarked upon a different service vision. Bromford are celebrating 50 years in business – so you wouldn’t think it particularly controversial to reflect on the past and consider the future.

Not so. The piece sparked some astonishing responses – especially on social media. Many in the sector expressed derision and even outright contempt. How could one of their own say such things?

But experience suggests this is just a natural crowd reaction to someone stepping out of line and being different.

You’ll never see a sector – be it Housing, Care, Support or Health, drive innovation. It’s simply not in the interests of the majority to reward disruptive behaviour.

It’s one of the eternal challenges for industry bodies – they have to reflect the views of their average member. And the views of the average member are, by definition, average.

You’ll never find a sector that is wholly admirable either. Be it banking, retail, travel or charitable – you will find the good, the indifferent, and the bad.

And you’ll also find a few disruptors – pacesetters who are pushing forward with a bold new vision. Often that vision will be treated with initial scepticism – sometimes by customers as well as industry peers.

In the last month the 2013 UK Customer Experience Excellence Top 20 was announced. You’ll see that it’s made up of companies who have faced criticism precisely because they challenged the accepted order of things.

Let’s glance at the Top 10 :

10 – Waitrose – Broke out of their southeast heartland despite people saying, “It’ll never work in the north”.

9 – M+S – Launched Plan A (“because there is no Plan B”)  a programme to instil innovation across 81,000 employees and lose their old fashioned image.

8 – Ocado – A High St store “without any stores “ founded by three guys with no experience of retail. “A disaster waiting to happen” said critics.

7 – Lush – Showed cosmetics can be ethical and environmentally responsible, whist also being super indulgent and pleasurable. ” We hire for values , not skills”.

6 – M+S Simply Food – Darling of the middle classes opens branches in railway stations , airports and hospitals. Critics predict failure – “People will resist the idea of carrying high cost food shopping around with them.”

5 – Virgin Atlantic – Challenging the establishment, improving service and astounding its customers: “We’ve never been afraid to upset people”.

4- Amazon – From “destroyer of Book Shops” to “destroyer of the High Street”. Adored by their customers.

3 – First Direct – The only bank people love. Launched with two ad campaigns:  a negative one showing the everyday aspects of normal banking. A positive one showing how good First Direct would be. The banking sector was appalled. Customers applauded.

2 – QVC – Almost universally derided on its UK launch in 1993. Now a global leader in video and eCommerce retail. Just launched QVC Sprouts, a crowdsourced competition to search for the best up-and-coming entrepreneurs and new products

In first place? John Lewis.

A few years ago I was talking to John Lewis employees at a conference where they had been speaking. They told me that far from being lauded by their own sector they were often criticised. People said it was arrogant and pretentious they had their own language (colleagues as “Partners” for example). Their recruitment practices and culture had been described as “a cult”.

“People just think we are a bit weird,” they told me. “But we’re not bothered by what the industry thinks. Just the customers.”

I imagine the retail sector were cynical about the fuss around The Bear and The Hare , the Christmas advert by John Lewis . As was I.

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Nearly 8 million YouTube views. Number 1 in overall UK Customer Experience. Profits of 415 million.

A lesson for innovators – don’t listen to your sector: Be Different. Be More Weird.

5 Lessons in Simple Customer Experience (Indonesian Style)

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A new report puts Amazon, McDonald’s and First Direct as the leaders in the top ten of the UK’s ‘simplest’ brands. The companies that are the easiest to deal with.

Whatever you think of them most of us could learn from their “frictionless” customer service. It’s interesting to ponder how sectors might be transformed if we had Amazon Health , McDonald’s Housing and First Direct Care.

“Our survey reveals that both in the UK and on a global scale, consumers would pay more for simplicity” says the report.

There is a huge irony here in a week when three of the brands in the bottom ten , Npower , British Gas and SSE, have announced huge price increases. Simply put – we are being asked to pay more for the companies we value the least.

I’ve been out of the UK recently and it’s led me to ponder how – as customer experience seems to get more complex –  it gets easier in places like Indonesia. Now the worlds fourth most populous country and packed full of newly aspirant Generation Y , Indonesia is tech savvy and connected. The number one consumer purchase is the smartphone. It’s a country unencumbered by bureaucracy, rules and rigid infrastructure.

No-one tells you that’s not the way to do it.

Here are 5 examples I saw that remove the friction from customer service:

You know that moment when the plane hits the runway and everyone takes their phones out only to be told you can’t use them? Annoying right? Well Qatar Airways  say it’s OK – you are free to use your phones. Texting your parents to say you’ve arrived isn’t going to kill anyone.  Which is why it’s great to see that British Airways is the first European carrier to end this outdated “rule”. Don’t create rules for your customer that are meaningless. Or at least revisit your rules often to check they are still relevant.

At Circle K and the convenience stores that are on every corner – WiFi is freely available. Benches are put up to encourage locals to park their mopeds , buy a coke and sit chatting and browsing online. These community hubs – dotted all over the place , bring the internet to everyone. If all the supermarkets in the UK did the same – we’d have a better connected society. And people would spend more in stores. Simple.

The Pop-Up Bar
The Pop-Up Bar

One of best things about South East Asia is that everyone seems to be an entrepreneur. It’s hardly ever “not my job”. A lovely example of this are the Pop-Up Bars on many of the beaches. Take one cool box, an umbrella and a couple of chairs , and hey , you’re a bar owner. On hearing that he didn’t stock what we wanted,  the “owner” left us for 10 minutes while he popped out to stock up – specifically for us. As a counterpoint – two nights after I got back to the UK I was in a bar where I heard the waitress tell a customer that they had “run out of chips”. The customer asked whether she could go to a local supermarket (literally next door) and buy some potatoes. The waitress replied that company policy said they couldn’t buy potatoes from another supplier.

On arriving at Komeneka – everyone seems to know your name. Even the gardeners greeted us as “Mr Paul and Miss Karen” as if they’d known us forever. We only stayed a short time but in 72 hours Komeneka had built a deep and meaningful customer relationship that most businesses couldn’t build , or rather couldn’t be bothered to build, over a lifetime. The Manager also told me about his unique service vision “We compete on experience. We try to be unique. Our food and wine doesn’t come with the usual hotel surcharge – we want you to stay here so you have a better experience”.

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Arriving at another hotel I apologised for being so early and said we’d wait around whilst the room was prepared. “It’s OK” they said “The boat company you used told us what time you were getting here – so we got ready early”. Despite the fact I’d used a fairly budget boat transfer they had noted where I was staying and had forwarded on my arrival time. To make it easier for me. How many times does your organisation make your customers day a little bit easier – not because there’s anything in it for you – but just because you can?

The lessons here?

  • Don’t create false rules – check them for relevance
  • Give your customers something free – or something that “feels like free”
  • Go out of your way to personalise – people remember you for it
  • Build deep and lasting relationships – even if the experience is brief
  • Make your customers day a bit easier – just because you can

It’s not complicated. Let’s get simple.

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Why Your Business Plan Just Killed Innovation

 Unless you are a fortune teller, long term business planning is a fantasy.

Why don’t we call plans what they really are: guesses.

Start referring to your business plans as business guesses , your financial plans as financial guesses and your strategic plans as strategic guesses.

Now you can stop worrying about them so much.

Jason Fried and David Heinemeier Hansson – “Rework”

Turtles

One of the reasons that your organisation or sector has largely stuck to “business as usual” is the great little idea that you , your customers or colleagues have in your heads has stayed there.

You might be worried that your suggestion of a different way of doing things may be dismissed as fanciful , naive or even WTTOIDW (“We Tried That Once It Didn’t Work”).

But supposing you take the plunge and your idea lives beyond its first breath: You now have something far worse to contend with.

The business plan.

One of the reasons why innovation fails to take hold in many organisations is our relentless focus on long term business planning.

Your great idea is going to get mortally wounded the moment it hits a 20 page project initiation document. And if it does survive that it has to go through a series of internal approvals culminating in the trial by fire that is the 30 page Board Report.

The odds of a turtle hatchling reaching adulthood are said to be 1 in 1,000. But in most organisations the chance of an idea reaching maturity has significantly worse odds.

But why is this?

Most businesses would agree that innovation is vital for future success –  but very few can articulate how they protect new ideas from becoming an endangered species.

And this is one of the problems we have: Innovation is treated the same way as everything else – whether it’s forecasting how much coffee people drink or estimating annual sick days.

We seek certainty where this is none and assurances of success where it can never be assured. We have grown afraid of failure.  And if there’s one thing we all know it’s – if you fear failure you cannot innovate.

There are very simple and easy ways to reintroduce the creative capacity in our organisations.  One is to skip the business plan altogether and start backwards. Literally. 

A company who do it well are Amazon.

After an idea is generated they start by writing a press release as if the product or service is ready for launch. They bring it to life.

It’s mocked up with pictures of the product and quotes from (imaginary) customers about how life changing it has been.  It’s passed around internally at the company, so that they can get feedback on the product, and to solicit any questions.

After getting an initial response (did it create a buzz?) and people adding their own ideas (building ideas – never destroying) it’s passed to a product development team to work it up.

But the team are fairly small – in fact they have to conform to the Two Pizza Rule. That is , there can’t be more of them than can be fed on two pizzas.  If you have to buy more than two large pizzas – the team is either too large … or the team members are. (There’s an important point here – large groups often become an average of themselves – they can kill innovation.)

Only when a shared vision is produced does the actual design stage begin. And guess what?  It happens quickly. As the idea has matured more people have contributed to it , bought into it,  and are dying to see it take its first steps.

It’s no longer an idea. It’s happening.

I’ve used the starting backwards approach on a few occasions and feel its a great way of introducing new concepts. In the past year I can think of at least two projects that have reached Board level – without a paper ever being written. I’ll be sharing how this can work in the context of non-profits over the next few weeks.

But what do you think? Do you agree that business plans and risk assessments can stifle innovation?

(Note: You can read a fascinating insight into the Amazon working backwards approach on the Werner Vogels blog from all the way back in 2006)

How To Keep Your Customers Loving Your Brand

Your brand is what people say about you when you’re not in the room” – Jeff Bezos, Founder of Amazon

Inside the wallets of Generation Y

This is one of the most interesting infographics I’ve seen recently.
  • The huge advocacy for Amazon is amazing.  95% of those surveyed say they “Love the Brand”.
  • But TUI – the German travel company that most of us know for operating Thomson and First Choice Holidays have the opposite relationship with Generation Y. An astonishing 99.4% say  the brand “is not for me”.
What have Amazon done to get pretty much 100% of an age group as fans? 
And what on earth has TUI done to disengage an entire generation?
To help us understand – I present my experiences of the two brands over the past few years.

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I’m unashamed in my love of Amazon.

Amazon , for my money , provide the best low cost customer experience in the world.

Amazon.co.uk isn’t a website – it’s a living breathing eco-system. The reason Amazon are lousy at social media is they don’t have to be good at it. It’s all contained in Amazon World.

Amazon got to know me on our first date. They discovered what I like and since then have made some really helpful recommendations.  They never let me down. When one of their suppliers has messed up they have taken full responsibility without us arguing.

They never , ever , talk about themselves. Only about me.

I have only spoken to the mythical Amazon people once. I broke my Kindle. It was my fault. But they didn’t even want to know that. All they said was – ” Mr Taylor – our priority now is to get you a new Kindle as soon as possible”. That was on a Sunday evening in a telephone call from somewhere in the US.

I had a new Kindle the following morning.

I love them and it feels like they love me too.

TUI

I love holidays. And there was a time I was in love with Thomson.  But Thomson don’t pay me much attention except when they want my money.

I used to spend a lot on them. I don’t have kids and am lucky enough to travel fairly often. I always complete their surveys on the flight back. But I’ve never once heard back from them.

I arrive home and they send me an email to say “When are you booking again?”.

Once they asked me to take part in an exercise to design a new loyalty scheme. I told them that I didn’t like their proposals but had lots of ideas I could share with them. They never got back in touch with me.

Last year I forgot to pay the balance on my holiday. By one day. It was the first time in 10 years I had ever done this.

They said they were sorry but they had resold the holiday. They had a new policy on late payments as a lot of customers were letting them down. I pointed out that I was a loyal customer with two other holidays booked with them at that time.

They said the policy applied to everyone regardless of loyalty.

They said I should speak to complaints and see if I could get my money back.

I’ve never had a bad holiday with them. But sometimes in a relationship you can get taken for granted.

It was time to call it a day whilst we were still friends.

What do these two experiences tell us?

Generation Y are no different from you or I . They like companies to engage with them and treat them like they are special. They hate companies talking about themselves – they thrive on being part of an experience. A relationship that matters.

But this post isn’t really about Amazon or TUI.

  • It’s about the Charity who takes £5 out of a donors bank account every month and keeps asking them to pay a bit more.
  • It’s about the Housing Association tenant who has been resident for 20 years without a thank you for paying their rent each and every month.
  • It’s about mobile phone providers who don’t proactively offer you reductions in your contract before your renewal date.

It’s about organisations not listening to what people are saying about them when they are not in the room.

So listen to Jeff Bezos.

Be in the room.

The Amazon Test – #CustomerExperience Blog Post

The Kindle Touch

I ordered a Kindle Touch yesterday – expecting a delay as you usually get with new product launches.

It was ordered online at 15.38pm.

1-Click.

It arrived at my door at 7:35am this morning.

It arrives charged.

It knows my name.

By 7:45am it is up and running and has my entire library on it.

When you go into work on Monday morning – use that as a benchmark against any of your interactions with your customers.

Speak to a customer and ask them how it was when they last ordered something from you.

How easy was it.? How quickly was it dealt with? Did it exceed expectations?

I’m pretty much certain we will all fail The Amazon Test

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