How Do You Get Buy-In for Change?

Gwynne Young
Managing Editor, CustomerThink
Member

Posted 04-Jan-2005 02:50 PM
[Posted for Nick Daly]

For the last three years, I have been in charge of the implementation of CRM solution at my company in the service industry. The company sells its services via hunters (sales) and farmers (account managers). The initial 18 months involved rolling the solution out to the sales team successfully, and now the whole team of 40 users are avid users (although there was a significant turnover of staff, due to change mangement issues). The sales director is very happy, as he now has access to and control over prospect/ customer and opportunity information.

Before it was rolled out to the account managers, the CRM system was integrated with the accounting system so that customer trading information would be available. Also a process was developed so that all the customer information gained during the sales process would be automatically transferred to the account management team during handover.

For the last nine months, it has been rolled out to the account managers, with about a 40 percent of them using the system. This is a change management issue, and this is where my problems lies. The director of customer service does not understand databases; he still wants all his old reports, etc.(Yes, I want the system, but I do not want any of my reporting to change, Yes, I want the system, but I do not have the time to learn about it.) This has led to the account managers' branch managers not being interested and also claiming that they are also too busy to learn how the system can help them. And this, therefore, has affected how the account managers view the system and, hence, the low take-up.

I believe that the roll-out to the sales team was successful because the sales director made CRM his No. 1 priority. How can I change the customer service director's attitude?

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Russ Briggs
Member

Posted 06-Jan-2005 06:55 AM
It may be that your company needs to align its compensation structure with its change management initiatives. Given the size of the investment in these programs—and the additional implementation costs when you get "pushback"—you might try to interest the CFO in looking at the trade-off between some type of executive bonus plan based on application success vs the dollars lost due to resistance to implementing the solution.

Good luck with your program. As Tom Peters says, It's about the raw, naked distribution of power—I realize he was talking about the web, but I think it holds true for any system that threatens/changes the status quo.

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G Chervitz
Member
Picture of G Chervitz

Posted 06-Jan-2005 07:29 AM
One thing I have learned. You cannot change a persons attitude. Only a person can decide to change their own attitude. What you are truly seeking is a modification of the BEHAVIOR of the director of customer service. Unless you are empowered by this persons superior to design and enforce the requirements of their job position you will not be successful in bringing about an effective change. As you know, this all starts from the top of the organization and flows down. If the CEO is indifferent to the behavior of the director of customer service, then this will be noticed by all of his/her subordinates. Some suborbinates, in your case 40% have discovered how leveraging the system provide a personal "win". The majority will not change their behavior and use the system unless the director is persuaded to manage through the system.

Russ Briggs idea of an aligned compensation structure is good advice. This generally gets peoples attention. If the CFO has the authority and influence to implement this change, then and only then will you progress towards the goal complete system adoption.

Until then, my recommendation is to use your efforts to expand the use of the system by your power users.

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Peter de Jager
Member

Posted 14-Jan-2005 05:41 AM
Greetings Folks,

I do a fair bit of work in this area and have been asked to poke my nose in and contribute to the discussion.

First some observations in general on this thingie called Change.

People don't resist Change (we choose to bring all types of change into our lives), they do however (see above) resist being changed.

Primary question? Why should I change?

That's not a 'challenge to authority' as much as a plea to understand why they should give up what has worked in the past in exchange for something new, that they don't know how to use and which WILL take time away from their job, AND reduce their level of productivity while they are messing around with the new system.

I have several dozen articles on Change in the Publications section of www.technobility.com . You might find that a good starting point.

The idea of changing the compensation scheme is a good one IF that is indeed the problem. It might not be, and would therefore, while it might very well get the desired results, it could set a very nasty precedent. "Paying" people to Change is a costly way achieve Change.

Nor is 'force' the right way to go about this problem. (not yet anyway)... ideally this change should have been brought in on the request of all the stakeholders. Ie. it should have been their decision from the begining that this was the solution to an agreed upon problem. Then there is no resistance, although there is still a painful learning curve to climb.

With the lines already drawn, and egos involved, the problem is now significantly more difficult.

Two tactics will prove fruitful. One is less desirable than the other.

1) Benefits, benefits, benefits. What can the new system provide that the old way of doing things CANNOT. What are the demonstrable paybacks of the new over the old. What productivity increases can be proven, are visible, have impact?

2) Start cutting away the old system.
As the TV show said... DANGER! WILL ROBINSON! DANGER!... A drastic measure useful only when all other measures have failed.

What I'd suggest is that the original poster start detailing the situation in much greater detail... each Change management problem is unique. Blanket solutions are more likely to cause problems than fix them.

Cheers
Peter

--------------------
Wet babies scream for Change

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Helmar
Member

Posted 17-Jan-2005 03:11 AM
Gwynne wrote:

quote: But when it comes to business, the person who resists change can bring everything to a halt.

I partly disagree here. Particularly in the area of CRM it would have been very wise to resist change, because what to this day is still communicated from vendors and consultants to businesses is in many cases plain and utter rubbish. It's been done in order to "make money" for them, but not "to satisfy customers". To be fair, and this is exacerbating the problem, the market even in 2005 is largely uneducated or plain ignorant. They are still looking for IT-centric quick fixes rather than holistic, sustainable solutions. And I mean "SOLUTIONS", not just phrasemongery.

So when it comes to CRM, the wise person would have stood back, looked at all the mania and hype from a distance, and then figured that software alone will never do anything to make a company more customer-centric or profitable. They would have realised that there is a lot more to CRM than they are made to believe. And they would have realised that what most businesses need is not a CRM software package but plain corporate brain surgery. But if they had been so wise, they would have been on a journey to reeinvent their company/organisation for a long time already, and therefore almost immune to the hype, half-truths and consultant-speak that are still making the rounds.

On a closing note: I am in one way amazed, in another disappointed that almost 10 years after the whole notion of customer-centricity and CRM gained momentum, so many companies (through their executives) refuse to deal with CRM in a proper and professional manner. It's almost as if they haven't learnt anything from the past. But I know why: because it would require a great deal of questioning of the sense and sustainability of the capitalist system, and a lot of soul-searching as to what their role is within the system.

Sometimes resisting change isn't futile—it's smart. But it's not so much resistance to change—change happens anyway—it's the ability to discern, and to separate substance from junk. Unfortunately, the area of CRM is still largely governed by junk, otherwise we would have already seen substantial changes in business and beyond, but as with all things capitalist, it's money that rules everything, not sense or sustainability. And so I predict that for the next 5+ years nothing will really change in this forum, because as G Chervitz so aptly said:

You cannot change a person's attitude. Only a person can decide to change their own attitude.

But most are so wrapped up and enslaved in their lives, that they neither have the capacity nor the capability to stand back, look at business, themselves AND their role within the system, and critically evaluate all three. And in the meantime, it's business as usual: fire-fighting, quick fixes, the hiring of so-called experts to apply band-aid to a terminal patient.

Life is often weird but many of the discussions here downright bizarre as they continue to miss the point and deal with the symptom rather than the cause.

Just my long 0.02

--
Helmar Rudolph helps companies succeed with their CRM-related business transformation process by utilising his unique "Diamond CRM" framework.

http://www.helmar.org

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Helmar
Member

Posted 17-Jan-2005 03:18 AM

Originally posted by Gwynne Young:
[Posted for Nick Daly]
How can I change the customer service director's attitude?

As G Chervitz said: you cannot change a person's attitude. The person can only change himself, the motivator being fear or greed. If there is really no way to get the CSD to understand what is at stake here, then a) the CSD shouldn't be in that position in the first place and b) I'd make sure he gets removed from that position asap, because he is clearly sabotaging the process—even if only through his own ignorance. An organisation, especially one that aims to be more customer-centric in its operation, cannot afford to be held to ransom by someone who should really know better about all this.

So, my advice: fire him! Sometimes you have to prune the tree and get rid of rotten parts in order to ensure the survival of the system.

--
Helmar Rudolph helps companies succeed with their CRM-related business transformation process by utilising his unique "Diamond CRM" framework.

http://www.helmar.org

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Brooks
Member

Posted 25-Jan-2005 10:33 AM
I am in a unique position to respond to this issue. I am the current director of customer support for a new software company. Prior to this job I started and led the development of a change management service within a consulting firm before branching off on my own delivering organizational change services to fortune 500 companies. I find the issue of resistance you are experiencing to be a pretty classic organizational change issue.

Much of initiating change requires a degree of deplomacy and the ability to see things from another person's point of view...especially when managing those that resist. I completely agree that your initiative was successful with sales based on the sales director's attitude and priorities. If you want to change the CS director's attitude, I suggest doing some or all of the following:
1) Identify the director's issues with the new system—conduct an informational interview.

2) Ensure that the CS director's boss is sold on the new system. Focus on the benefits and use numbers.

3) Have his boss schedule a meeting to discuss the new system and have him communicate the priority.

4) Make the CS director a part of the change team if possible. Utilize his input instead of challenging it.

5) Sell the CS director on the new system and begin creating a dissatisfaction with the current system using comparisons.

6) If reports are his greatest concern, then use this to your advantage. Ask how the current reports could improve and make the new reports better than what he is used to. Make it easy for him to access and run them.

7) Make sure training is addressed for the director and his staff.

8) Communicate benefits of the new system and focus specifically on the perspective of the CS director and his direct reports by answering thier questions, "Why should I change", "What is in it for me", "How exactly will I be affected"

9) Communicate honestly! If there will be a drop in productivity as they assimilate the new changes (and there will be) make sure that the CS director, his boss, and the CSRs are aware of this. They may actually have the best ideas for how to mitigate this. If you tell them it is all roses and deliver them crap, you will find out what true resistance is like the next time you attempt to make a change.

10) You have only communicated enough when the least of the affected stakeholders knows what you are doing, why you are doing it, and how they will be affected.

11) Provide opportunities for the CS Director and his employees to provide input and make appropriate adjustments along the way.

Often times when people or organizations try to do something new, they will search out obstacles, or even actively resist. One thing that seems to consistently ring true when changing human behavior: perception equals reality. If perceptions, real or false, continue to go unaddressed, they have potential to turn into significant hurdles. A few tactics to handle resistors are as follows: have your biggest resistors take the lead on an objective, seek their input and have them help identify solutions, or pair the ‘glass is half empty types' with the ‘glass is half full types'. Remove the obstacles—real or perceived.

-Brooks

_____________________________
Brooks Tutor
MindOH! Director of Customer Support
Office: 713-533-1138
Toll Free: 866-646-3641
brooks.tutor@mindoh.com
http://www.mindoh.com
_____________________________

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Susan Abbott
Member
Picture of Susan Abbott

Posted 28-Jan-2005 07:52 AM
Lots of good comments here, but I'd like to provide a completely different perspective. You've been at this for a while, and may well have tried many of the things suggested above already. (If you haven't tried the compensation thing, I'd stay away from that one, personally, as you risk doing new damage)

I'm going to suggest that you try to change the conversation you are having with this individual and his team. Instead of thinking about his current mindset as a problem to be solved, try to find some positives to build on. What parts of the new system are working best for them now (in their view)? What can you learn from that?
Consider having some structured conversations to look for ways to move forward positively—instead of "getting them to change", maybe you also need to change a bit. Maybe the needs of this group were never really acknowledged, and they still need to have that heard before they can move on.
People typically are acting in a totally rational fashion once you understand their perspective.
Focus on what is working, however small it is, and see if you can find some ways to fan that spark. shift the discussion from negative ("why won't you adopt the system") to positive ("what parts of this system are working well for you?" "What would your three wishes for this system be as we go forward?")

There is a major trend towards the use of positive approaches for growing high performance. You will find some good reference material in these two web sites:
Positive Organization Scholarship
Appreciative Inquiry

I am using these methods more and more in my work, because they work a lot better.
Good luck with these courageous conversations!

Customer Experience Strategist
** Qualitative Research ** Change Management Support
blog: www.arc.typepad.com/customercrossroads

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Edwin Setzpfand
Member Council
Member

Posted 06-Feb-2005 01:35 PM
"Junk-jard"

Helmar Rudolph a/o writes (in his first posting) that "the area of CRM is still largely governed by junk, otherwise we would have already seen substantial changes in business and beyond".

In my opinion it is not so much of the junk that is the problem here, but the lack of understanding among a large part of company management about what CRM really stands for and about what it requires in terms of "re-inventing the company", like he writes about in his second paragraph.

Another aspect is that re-inventing the company and integration of all kinds of systems with CRM often is hard to implement because of large amount of legacy systems still present in those areas.

Edwin

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Edwin Setzpfand
Member Council
Member

Posted 06-Feb-2005 01:46 PM
Nick,

The comments and advice in this discussion so far can be very useful in situations like the one you described. Nevertheless, let me add some comments.

Your company seems to have chosen for "implementation of [a] CRM solution" whereby the "initial 18 months involved rolling the solution out to the sales team". In your subsequent paragraph it then can be read that "the CRM system was integrated with the accounting system so that customer trading information would be available."

Maybe it hasn't been described because you focused on the problems encountered during the last nine months, but it very much looks like as if your company has worked from the idea that rolling out a CRM application would make them customer-centric automatically. Well, the truth is far from that, as also pointed out very well in this discussion by Helmar Rudolph. I fully agree with Helmar where he explains "that software alone will never do anything to make a company more customer-centric". Should rollout of the application not be at the end of the project rather than an "initial" stage??

Actually, your whole CRM implementation story reads very much like one of rolling out systems and integrating them with other systems.

The initial rollout to the sales team was seen as a "success", based on the way the sales director and the USERS think about the system.

But how about the customers? Why aren't they at the centre of the story? Have they become more satisfied about the services delivered? Wouldn't this CS director change his attitude if it became clear to him that the new system would increase customer satisfaction?

And if the customers aren't more satisfied than in the old situation, the new system maybe wasn't such a good idea after all ...

The starting point of any CRM project should be an adequate business strategy. A strategy which aims to make the company really customer-centric and indeed that may require to re-invent the company [cf. Rudolph]. There are many good contributions on these CRMGuru pages including its knowledge-base where this is described with great detail and case studies.

Such a strategy then must be implemented, part of which indeed can involve the implementation of a CRM system. However, that is very unlikely to be successful without adequate communications and training from the very first start. Communications towards the users about the new approach. Communications and training should show them that their work processes and their results are to improve with the new system. User feedback from prototyping can be feed back into the design process from an early stage. Maybe you can write about how you've set up that?

Ownership of the CRM project should visibly and effectively come from the top of the company, a point also addressed by Brooks (#3). All too often on these ThinkTank pages we've read about IT charged with the task to "do us some CRM". Although it is not clear from your description it seems that unfortunately you operate from a similar position.

This latter observation, or rather non-observation, involves the organisation of the CRM project. As you most probably not are in a position superior to the sales director, maybe (hopefully!) your own superior or the senior project sponsor is .. Ideally, this sr sponsor is the CEO.

With regard to the compensation structure I would suggest to announce to the account managers that from the launch date all bonuses will only be based on call reports /sales recorded in the new system. I've seen that working very well. But in that situation the communication and training had been very well organised, with a lot of satisfied users and managers.

This brings us to the change management issues Peter de Jager addressed in this discussion. Although it is no guarantee for success, good communication about this BENEFIT and use of user feedback during the design and development stages can increase the buy-in from the future users, just like also described by Susan Abbott. This may also work very well with the CS director.

I hope you find something useful on these pages.

Edwin Setzpfand

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Helmar
Member

Posted 06-Feb-2005 10:05 PM
Edwin,

spot on! Just two comments...

quote:In my opinion it is not so much of the junk that is the problem here, but the lack of understanding among a large part of company management about what CRM really stands for...

But isn't that the most puzzling of it all? CRM has been around for more than 8 years, and under different guises for more than 10. How daft, thick, ignorant, out-of-touch,.... do you have to be as a manager not to get after so many years? That I just don't get.

Another aspect is that re-inventing the company and integration of all kinds of systems with CRM often is hard to implement because of large amount of legacy systems still present in those areas.

That's a very good point, but at the same time we must realise that IT is only one of (in my opinion) six areas that CRM "touches". And if we look really deep, we realise that CRM is a lot less about IT than we thought (or are told) it would be. In other words: the real benefits of CRM are enjoyed by making changes in areas other than IT. Why this preoccupation with IT still persists is beyond me, especially as for real CRM to happen you need more of a dose of common sense than a fancy 360° IT system. But maybe another 8 years need to pass before CRM is really understood.

This is also why I "complained" in a different thread about the discussions on CRM Guru really going around in circles, with some people sharing a high level of insight and enlightenment, while the others just don't get it or refuse to get it. For them there seems little if any hope.

Maybe a last pearl of wisdom for those who are still struggling with what CRM is:

If you approach CRM from the IT angle and then later hope to score some changes in management (support), skills, structure, service and sales, then you are badly mistaken, and on a road that is costly yet low in yields.

CRM is really about reviewing how you deal with internal and external customers, and what structures, processes and procedures need adjustment in order to satisfy those two types of customers.

CRM is neither about getting IT fancy nor about making more money.

CRM is about removing bottlenecks in all parts of the company so that customers are pleased with the company's performance.

All this usually results in higher profitability, and if not, it certainly results in better predictability, which almost by definition results in higher efficiency. And that alone generally spells more money.

Is that really so difficult to understand? More on that on my website, where it's been available for almost 9 years. Smile

Helmar

--
Helmar Rudolph helps companies succeed with their CRM-related business transformation process by utilising his unique "Diamond CRM" framework.

http://www.helmar.org

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Graham Hill
Guru
Member

Posted 10-Feb-2005 11:32 PM
An interesting discussion which has resulted in plenty of heat and a bit of light too.

But two comments by Helmar set alarm bells ringing in my head.

The first was the comment:

Quote. "If there is really no way to get the CSD to understand what is at stake here, then a) the CSD shouldn't be in that position in the first place and b) I'd make sure he gets removed from that position asap, because he is clearly sabotaging the process—even if only through his own ignorance.". Unquote

Removing staff just because they 'don't get CRM' should be a last resort. At best it generates an environment of fear and being seen to play the game, at worst it leads you into court for unfair or constructive dismissal.

Contrary to Peter de Jager's assertion, people do resist change as well as being changed. It's one of the brain's coping mechanisms faced with a continuous flood of new information. The more personal and the bigger the change required to incorporate the new information into an individual's mental model of how the world works, the more difficult the change. Ergo, resistance. But involving people in change can be achieved through what Insead professors W Chan Kim and Renee Mauborgne describe as 'Fair Process'. This is based upon three mutually reinforcing principles of engaging staff in the changes required, explaining the reasons behind them and their implications going forward, and being honest and clear about expectations. The history of most successful change programmes always have these principles at their core. Simply sacking non-believers isn't the answer.

The second alarm bell was rung by the comment:

Quote. "CRM is neither about getting IT fancy nor about making more money.". Unquote

Whilst I agree with the first part—CRM is not about getting IT fancy—I disagree vehemently with the second. If CRM is not about growing value through reducing costs and/or increasing revenues, through developing future growth options and through reducing risk, then why are we doing CRM at all? Now that doesn't mean that we should focus simplistically on just growing value—the costs, revenues, growth options and risk outlined above—as some shareholder value idealists suggest, but it does mean that we must understand how our CRM efforts will drive them in the right direction.

CRM is an emerging business discipline whose principles and effects are by no means certain. We should expect more of these types of discussion as CRM matures. Surely that's part of the fun of being part of CRMGuru. No-one ever said that business in general, and CRM in particular, should be dull!

Graham Hill
Independent CRM Consultant

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Helmar
Member

Posted 11-Feb-2005 05:56 AM
Graham wrote:

Removing staff just because they 'don't get CRM' should be a last resort.

Sure it's the last resort, but honestly, if the CSD doesn't breathe "change" through every pore of his fragile self, then he's clearly in the wrong place. I know I was a bit harsh with the "firing" aspect—let me turn it into "removed" from his post. I don't have to teach an accountant how to count; I don't have to teacha programmer how to code; do I have to teach a CSD how to adapt to change? No! In fact, change should originate from him.

If CRM is not about growing value through reducing costs and/or increasing revenues, through developing future growth options and through reducing risk, then why are we doing CRM at all?

Uhh... lovely can of worms here. Some lekker Mopane, anyone? ;-)

FIrst of all, most companies don't do CRM, they do SMCFL, which is short for Screw More Customers For Less. Whereas CRM—and for those who forgot... it stands for the Management of the Customer Relationship—is warm, soft, mutually beneficial, sustainable and therefore long-term, SMCFL is cold, hard, beneficial only to the company (more sales!), unsustainable and therefore short-term.

Now we all know today's preoccupation with the short-term, but deep inside we know it's not going to work for anyone for long—neither at micro nor at macro level. Anything else is plain delusion.

Nowhere in CRM will you find anything about selling, about growth, about shareholder orgasms. However, if you do CRM right, the obvious result is that you become more profitable. Why? Because if you don't happen to sell more, you sell smarter, and this means: cheaper. (This doesn't necessarily mean you move all your production to China, where peasant girls work for 54 Euro a month, share 6 wash basins among a 100 co-workers, and get regularly abused, even injured on the job.—source: DER SPIEGEL, 10 Feb 2005)

You don't follow any stupid fad in IT; your staff turnover decreases significantly; your marketing becomes more predictable; your distribution becomes more efficient; your customer acquisition (what an oxymoron!) costs fall through the bottom, and, and, and.

It's the same as in life: you cannot buy love,trust and respect. They happen when you get things right. They happen when you work on the periphery, you know.... movies, flowers, massages, dinner conversations, affection, ....

Same with CRM: you cannot make the customer like you. You cannot specifically aim for all these benefits. They happen when you get things right. The reason why to this day so many still don't know what CRM is and how they can make it work is exactly because of them being made believe CRM is the holy grail in organisational growth and survival. It is, but they go about it the wrong way, and by looking at all the topics and posts on this board, I doubt it's going to change soon—both the organisational structure and consequently the impotence of most managers/directors to effect "proper CRM" change prevents that. And all that often is directly related to the ownership structure of the business.

So, CRM is about making customers happy. The result, not the goal, is "growing value through reducing costs and/or increasing revenues, through developing future growth options and through reducing risk".

In plain English, most people put the cart before the horse and then act surprised if and when the thing doesn't work as advertised.

Funny thing... many years ago I mentioned at a conference that CRM is the ultimate killer of capitalism as we know it today, because in order to make it really work for you, you gotta change to a more humane and sustainable way of doing business. It's just that those whom CRM was sold to weren't told that, because those who did the selling didn't really know what they were doing—and largely still don't. But they've opened a can of worms which they cannot contain anymore. It's spiralled way out of their orbit. And that's ultimately great news!

Did you ever ask yourself why the term CRM is still around after all those years, when it's normally a new buzzword every second year or so? The can of worm is wide open, and they are all coming out now!

Yummy... lekker Mopane worms. Smile

--
Helmar Rudolph helps companies succeed with their CRM-related business transformation process by utilising his unique "Diamond CRM" framework.

http://www.helmar.org

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Graham Hill
Guru
Member

Posted 14-Feb-2005 03:51 AM
Helmar

An interesting response to my challenge: Should CRM focus on customers or profits. Of course, the answer is both!

My challenge was based upon a few simple assumptions:

1. The vast majority of businesses are in business to grow value (from customers) by making a profit, indeed, businesses that don't do this tend to go out of business quickly.

2. Value is primarily created during exchanges with customers. This value may be subsequently frittered away through inefficient internal business operations.

3. Exchanges with customers need value to flow in both directions in acceptable amounts if future exchanges are to take place. This is the basis of the transactional loyalty that is relevant for the majority of customer management activities. Emotional loyalty is a nirvana that the majority of customers will never reach.

4. The customer is best placed to know whether the value they receive from an exchange is acceptable to them. Value comes in many different types. Customers will often tell you what they value and how much if you ask them, but you do have to ask.

5. Businesses are not primaily in business to make customers happy for their own sake. But they are likely to be at least 'fair', maybe even 'good' to customers to further the business goal of growing value through repeated transactions.

Most of my experience to date suggests that businesses are best served if they understand what customers need, want and expect, and then try and provide matching products, services & experiences, at the right price to be attractive to the majority of the market and to make a reasonable profit. Customers are best served if they understand what they want to achieve with these products, what alternative products are available and what price is reasonable to pay.

Sounds easy, but it isn't. The difficult part is in deciding how much value of what type you need to offer customers to be able to extract value from them. Offer them too much value and your own value growth will be affected as you leave money on the table. Offer them too little and they will not buy, or will not return. They may even tell lots of other potential customers how rotten it is to do business with you.

However you reach the right balance, I do not believe that seeking to make customers 'happy' is the right point to start from, although as the British Economist John Kay suggests when he talks about 'obliquity', it may play a big part in getting to the real goal of value growth. But understanding the trade-offs between what customers need, want & expect and what products, services & experiences you can offer to meet them, at a profit, surely is.

No matter how ugly capitalism may seem to so many these days, I am not aware of an economic system that delivers a more equitable result to all players than open, free and fair markets. Businesses are free to compete in markets on the basis of superior customer happiness, but unless they have some other competitive advantage like much higher quality or much lower costs, I would not expect them to be amongst the most profitable, let alone amongst the most long-lived.

Ultimately, no value growth, no business.

Graham Hill
Independent CRM Consultant

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Helmar
Member

Posted 14-Feb-2005 06:34 AM

1.

The vast majority of businesses are in business to grow value(from customers) by making a profit, indeed, businesses that don't do this tend to go out of business quickly.

Fair enough. Profit and excessive profit are two separate things though.

2. Value is primarily created during exchanges with customers. This value may be subsequently frittered away through inefficient internal business operations.

It most certainly is, but the customers is burdened with a high price anyway, because those inefficiencies are factored into the price, esp. if the company gets profit targets from "their investors".

3.

Exchanges with customers need value to flow in both directions in acceptable amounts if future exchanges are to take place. This is the basis of the transactional loyalty that is relevant for the majority of customer management activities. Emotional loyalty is a nirvana that the majority of customers will never reach.

As long as companies treat customers with disdain and disrespect, it will remain a nirvana—that's for sure. You reap as you sow.

4.

The customer is best placed to know whether the value they receive from an exchange is acceptable to them. They will often tell you if you ask them, but you do have to ask.

1. Who really asks them?
2. Who acts on the feedback of the customer?
Most of them simply don't care—never have, never will, yet profess to do so in their advertising/marketing material.

5.

Businesses are not primaily in business to make customers happy for their own sake. But they are likely to be at least 'fair' to customers to further the business goal of growing value through repeated transactions.

No business that isn't centered around customer satisfaction has a reason to exist. In fact, I would go as far and say it's almost mandatory for the consumer/customer to do everything in their power that this business either changes or ceases to exist. Such companies are out on wanton destruction for their own gain. You probably know who they are!

From my experience down here in South Africa, there are very few companies that show integrity and that are interested in a fair business exchange. And I know why: because subconsciously they know their business model is not sustainable and that will will come to a melt-down or crash, yet while this is (almost self-fulfillingly) in progress, they try to milk the market as much as they possibly can.

The above was inserted after writing this:

Hehe... all fine and well, Graham, Wink but you are starting from the assumption that:

1) the customer is educated
2) the customer has a choice
3) the company would listen to customer comments and adapt accordingly

In my 12 years in South Africa I have found all three assumptions to be wrong, and I have sufficient reason/evidence to believe that the same is true for many other countries. Exceptions prove the rule.

And remember JFR's quote:

Thze object of a business is not to make money.
The object of a business is to serve its Customers.
The result is to make money.

Any business that puts "making money" first is not serving its customers, but is putting processes and procedures into place that keep the customer dumb and powerless—for maximum profit. The South African banking, retail & telecomm markets are three that just spring to mind. Interestingly, the same can be said for most governments. Although we may be drifting off here into the terroir of "conspiracy theory" (Read Nicholas Hagger's "The Syndicate" to understand what I am getting at), it has direct relevance to the subject matter.

If a company makes more than a few million Rands/Dollars/Euros profit, it is by default ripping off the customer. It's as simple as that. There is no justification for this at all. All their opportunity costs, etc would have been factored into that already anyway.

We must remember that most of the money isn't real to begin with, IOW the customer pays for money the bank has created on the computer screen (thanks to the Fractional Reserve system), but the customer pays interest on this fake money with real money, a simple destruction of value.

As a result they have to work harder, get more into debt, etc etc. As a result, children grow up by being attended to by 20-odd year olds in kindergarten with f@**-all idea about life, while the old folk are shoved into old age homes—neither of them cheap or humane options.

Consequently society at large disintegrates and has to deal with an inordinate amount of stress, which then manifests itself in more violence, fraud, desperation—you name it.

And... I haven't even touched on the world of advertising, which in most cases falsely suggests that the customer needs this product or that service. Largely unable to discern and subject to pressure from all corners, most succumb to the system while falsely believing it is actually adding something to their quality of life. As we all know, the quality of life for most people on planet Earth has decreased, while a few (usually those in control) have more and more.

Best example once again: South Africa. The more this rip-off society prevails, the more those with the money have to protect themselves against those without the money. Burglar bars, security companies, barbed wire, high walls, electrified fences, dogs, motion-detectors, the lot! (Case in point: at a conference some years ago one speaker who was about to extol on how to take more advantage of the customer got hijacked on the way from the airport.) Yet they still call this "quality of life" when all they do is live in prisons. And I know that S.Africa isn't the only place like that. Most "rich" in Latin America live like that, and even in places with a more even income spread it is starting to happen. But no worries, it all comes full circle soon.

Off on a tangent? Maybe, but I wanted to point out how all these things are connected, and that a simple over-charging of the customer "by decree" has an immediate and negative impact on society. Send out negativity, get back same.

Finally, if you look at my "Diamond CRM" framework, you'll also see how everything is connected, yet CRM is still largely dealt with on technology ("software") level. Why everyone is surprised that those initiatives are costing more than they generate, esp. in the long run, is beyond me.

I was under the impression that those participating in these forums would operate from a certain level of far-sightedness and vision; that they would be able to see what impact their actions have on society; that they would do everything to prevent society from taking harm; that their actions would be ecologically sustainable and aimed at truly creating a mutually beneficial exchange. Instead many a discussion here seem to have mutated into "how can we use CRM to make even more money from our customers": cross-sell, up-sell, down-sell, sell sell sell!

What a shame, but one with a very predictable outcome. That shouldn't be news to anyone, though. And when you leave work later on today, remember that not so long ago your car didn't have an alarm—you probably wouldn't even lock it. Now you have to. Ask yourself why! The answer—in case it still hasn't sunk in—I gave in this posting.

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Helmar Rudolph helps companies succeed with their CRM-related business transformation process by utilising his unique "Diamond CRM" framework.

http://www.helmar.org

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Graham Hill
Guru
Member

Posted 14-Feb-2005 11:09 PM
Helmar

Chan & Mauborgne in their visionary work on Value Innovation suggest that companies can be successful by finding new market spaces that deliver step changes in value to customers, whilst doing so at significantly lower costs for the companies. Examples of such companies are Formule 1 hotels in Europe, Easy Group in Europe and Southwest Airlines in the USA. All have driven the reinvention of their industries or indeed, helped create new ones.

They also suggest that such new market space businesses can describe their ideas in no more than 10 minutes—otherwise they are too complex to really take hold.

What exactly is your new market space business model if the free market one is apparently so broken?
How will it deliver a step change in value to customers?
How will it significantly reduce costs to deliver?

I am not sure how much space 10 minutes equates to on the written page, but you know what your challenge is.

Graham Hill
Independent Management Consultant

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Helmar
Member

Posted 14-Feb-2005 11:38 PM
Despite my comments, I feel it's a gift for me to live in South Africa and be exposed to the behaviour as displayed (not only) down here, because you can only change things if you know how you don't want them to be.

...companies can be successful by finding new market spaces that deliver step changes in value to customers, whilst doing so at significantly lower costs for the companies. ...

I fully agree with this, and that's the great (positive) part of it. The examples you cite clearly aren't the only ones, but in comparison they are far and few between.

It's not companies that change; it's people inside those companies that drive the change. And if those people are constantly living in (sub-)concious fear (of not having enough, of not being safe, of not feeling well, ....) you can expect anything BUT innovation from them. This brings us right back to the beginning of this thread. Dysfunctional staff, dysfunctional organisation. Chain as strong as the weakest link.

What exactly is your new market space business model if the free market one is apparently so broken?

Do unto others as you would like to be done unto you.

Probably too esoteric for most, but it's one that realises and cherishes the "all-connectedness". Competition in order to drive innovation is good, but it turns sour the moment it negatively affects others, because it eventually negatively affects you. Proof of that is ample. Just look around you.

Innovation should be for the higher good, and that is the good of all, not just a few.

The current model benefits the few, but disempowers the many, while deluding them into believing that they are actually better off—the principle of western-style democracy under a so-called "free market" system is nothing but enslavement. Or do you honestly believe that we've been put on this planet with the purpose of working from 8-5? Well, if you believe Sitchin, then the Human Race was created to toil in the mines of Africa after the Gods were getting tired of it, but that's yet another story... Smile

The current model is the more successful the more it takes away from others—the more it enriches a few to the detriment of the many. My model is the more successful the more it gives to others. The scarcity created by the current model is artificial and unnatural. Nothing in the universe is scarce. It's a man-made invention. As such it can and should be changed.

The current model is based on taking. My model is based on giving. Remember that you only live because someone gave something to you. Why does your life revolve around taking away from others?

How will it deliver a step change in value to customers? How will it significantly reduce costs to deliver?

As the entire system changes, it will take an inordinate amount of stress out of the system, because no longer is most of your time spent worrying (how to provide for your family, how to outsmart the competition, how to fend off this attack, how to stay in your job, where to safely park your car, ....). This will have an immediate and positive impact on your right-side brain activity. As your creativity flourishes and your life/career obtains more of a meaning than just "making money", the results will speak for itself. All of a sudden it all has a meaning, but you will only know once there. I speak from experience.

And I am not sure how much space 10 minutes equates to on the written page, but you know what your challenge is.

14 minutes. Oops. Sorry. Wink

Helmar

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Nick Daly
Member

Posted 15-Feb-2005 10:31 PM
Ladies and Gentlemen,

Thank you all for your input to this discussion, I have found all of them very interesting and informative. I have to admit that when this project started it was thought of as an IT solution to Sales Force Automation. If that was successful then move it on to the Customer Service Division and I agree with Helmar, I really do not think that the mangement here gets CRM. So it is not top of mind for the organisation, it is just another project. But that is something that I will have to contend with.

As far has change management goes, I have taken in all the advice that has been offered and have relaunched a resell programme pointing out all the positives to the Account Managers, asking them for input and we have also offered incentives for the most improved users. It will be a slow process, but the initial feedback is positive.

I am also slowly working through the management team showing them how CRM is currently helping the organisation.

As a company in the service business of delivering parcels, operational issues are the most important, if a customer does not get their parcels delivered, that is when they get unhappy and could possibly leave us, so to keep customers our focuss must be in this area.

I am thinking about letting some of my senior mangers read this posting, do you think that would help ?

Is there a CRM group in Australia that I could join ?

Thanks again for all the input.

Regards

Nick Daly

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Graham Hill
Guru
Member

Posted 16-Feb-2005 01:41 AM
Nick

I am pleased that you have stayed with the somewhat convoluted discussion and decided to re-launch the CRM programme. Just as in the world of new product introductions, most new services also have significant difficulties upon launch and have to be 'tweaked' to be successful.

Things to think about when you are re-launching the CRM programme:

1. Try and adapt a well-established change management approach to your needs. The most recent development of John Kotter's approach described in his book, "The Heart of Change" is as good an approach as any and one which you can easily adapt.

2. Focus communications in individuals. Look at Larkin & Larkin's work on "Communicating Change in Small Steps" (available for free from http://www.larkin.biz/publications.htm). Most communications should be done through managers being briefed and in turn briefing their own staff, rather than through centrally planned communications.

Your approach of personal briefings for senior staff is a good way to get this communications cascade started.

3. Identify and manage the blockers of change. Most change programmes focus on driving change but don't focus anywhere nearly as much on ocercoming easily identifiable blockers of change. Or not until it is too late. Peter Senge provides a good blockers framework you can easily adapt in his book, "The Dance of Change".

4. Accept that change is a long-term process that needs continuous management support for 18-24 months if the changes are to become part of business as usual. Staff will have to experience benefits from the changes themselves, will have to see their colleagues experiencing similar benefits and will also have to have long-term management support if the change is to stick. Some of this management support will be in providing a 'practice field' for new knowledge and skills to be tried out before they can be mastered and become daily business.

5. Change is an emotional thing. And the bigger the change affects the individual, the more emotion will be involved. All of the change steps outlined above are based upon this understanding. Top-down directed change has a poor record of success.

Think about these things when planning and implementing the re-launch of your CRM programme.

I have been involved in managing some very large customer-driven change programmes, (e.g. 10,000 UK Govt Dept staff implementing a Citizens Relationship Management approach to working). The factors outlined above have been used to manage these programmes and work very well in real-life change management.

Good luck.

Graham Hill
Independent CRM Consultant

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Helmar
Member

Posted 16-Feb-2005 07:03 AM
Nick, final 0.02 from my (convoluted Wink ) side. Change requires capacity, capability and willingness. Miss one, expect failure. Change is effected by people, not by processes or procedures.

The best foundation you can lay for your CRM programme is to capacitate those who need to effect the change. There is sufficient material (incl. the one Graham suggested) out there.

As a first step, I'd compile a questionnaire, couple it with a reward (nothing like a prize/giveaway to get people going), and find out how capacitated, capable and willing people are to effect the change. That will tell you a great deal, among others who you are likely to count on and who not. Armed with this knowledge you can devise appropriate strategies to turn "duds" into "stars".

It goes without saying that management has to "get" CRM. If not, oh oh... Have them read this thread, in fact... have everyone read it, because many people are only playing dumb and resistant—they are usually a lot smarter than management wants to admit. It's often a basic issue of respect. Don't show it to the staff, don't expect to get it in return.

Small but honest gestures can have a dramatic positive impact. Cherish the small progress. Create those small progresses by splitting up the seemingly complex process into bite-size chunks. Use my Diamond CRM framework as a reference. Free of charge. Enjoy!

Helmar

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Helmar Rudolph helps companies succeed with their CRM-related business transformation process by utilising his unique "Diamond CRM" framework.

http://www.helmar.org