ISO, TQM, Paradigm Shift, SCM, CRM, PRM, DRM, Whatever!
(Originally published in the May/June 2003 issue of AFSMI's Sbusiness.)
By Leo A.P. Moerkens and William K. Pollock
We have all been barraged with a seemingly endless list of terms and acronyms over the past couple of decades that have been hyped to solve all of our business problems. These include ISO 9000; Total Quality Management (TQM); Paradigm Shift; Supply Chain Management (SCM); Customer, Partner or Device Relationship Management (CRM/PRM/DRM); whatever! At some point during our careers, each of us has probably sponsored or served on one or more of these initiatives in an earnest attempt to change or improve our respective businesses. We know that we personally have been part of these initiatives in one role or another over the past 25 years either as a manager, executive and/or consultant. While some of these initiatives may have fallen in and out of favor, others are still squarely on today's radar screen.
However, the question still arises: Are all of these terms and acronyms nothing more than smart marketing campaigns devised by innovative software vendors and consultants, or is there something more to them? What do they all have in common, and how do they relate to one another, if at all? How can you make sure that you focus on the right things to improve your business and make sure that you stay competitive and profitable?
We believe that the commonality among all of these initiatives is the ability to focus your efforts on the improvement of your business, and create both an atmosphere and an environment for change that ultimately result in a true competitive edge. In the past, depending on how you scoped out or executed any of these individual initiatives, you may have been able to change or improve your business to some degree. However, as we have seen in many client situations, this success represents a hollow victory when the realized results turn out to be only minimal, unmeasurable, or not directly correlated back to the original goals of the program.
This does not necessarily mean that the initiatives themselves were not important, or that they didn't lead to at least some improvement. What it does mean, however, is that the real challenge - upfront - is to focus on the business improvement aspects that are necessary to move your business forward and keep your customers satisfied - regardless of the specific name or acronym. The one constant that we know for certain is that if you don't keep changing and updating your business, you will fall behind the competition, and ultimately lose customers. However, this can be avoided if you take the right approach.
Drivers for Change
But, how do you know that it is time to change? Sometimes it is obvious, and sometimes it is not - but by the time you realize that change is necessary, you're probably already significantly behind! Based on our mutual experiences we have identified some symptoms that indicate that something is wrong, and that change may be required:
Recognizing where you stand with respect to any of these symptoms, and developing a plan for overcoming them, will ultimately determine how successful your business can be. However, the most dangerous approach is to start reacting to any of these symptoms as if they were standalone issues. Such a myopic determination usually leads to a fragmented approach that will ultimately do the business more harm than good. For example, if profitability goes down, you can start cutting costs to maintain your profit targets. Sometimes, this is unavoidable, but can be very dangerous if you don't address the underlying root causes of the problem. Not facing the totality of the problem may ultimately lead to a downward spiral that can ruin your historical customer relationships, and send the business into an even more pronounced tailspin.
So what is the best way to approach these symptoms and effectively address the root problems? First, you must be proactive and structured in your approach. We believe that the best way to proceed is to stay ahead of the curve by utilizing the appropriate mix of customer satisfaction measurement and analysis that focuses on all key aspects of the business, including the ongoing assessment of customer needs and requirements, and corresponding levels of customer satisfaction. In many cases, it is only through these ongoing market research programs that management can be kept fully aware of exactly what customers need, require and expect; where the company is presently meeting - or failing to meet - their expectations; how they rate the company's overall product and service performance; and how to translate all of these findings into effective operational processes. Besides that, it requires continuous attention to, and an ongoing re-evaluation of, your products and services, business processes, Information and Communications Technology (ICT) tools, and organization.
Based on over 25 years each of either managing and operating businesses - or consulting to them - we have developed a structured approach designed to help you stay ahead of the curve. Over the years we have seen many organizations increase their chances for success by following this model.
Based on our mutual experience, we recommend a four-step approach, executed in a continuous cycle. These steps, in turn, ultimately impact all areas within the organization, including marketing, development, manufacturing, sales, and service and support, (Figure 1). The four steps are:
There Is a Four-Phased Approach to Organization Change Management
that Should Be Executed in a Continuous Cycle
Phase 1 - Strategy Verification
In any case, these programs need to be carefully designed and executed in order to effectively complement the internal measurement systems you already have in place, thereby serving as an early warning system that will allow you to be more proactive in identifying and responding to potential problems - and avoiding them. The output of this phase is a validated and updated strategy that will provide both the vision and future direction of the business. This will be extremely critical to communicate within the organization, and can also be incorporated directly into a customer-focused marketing strategy.
Phase 2 - Assessment
The results of this phase will clearly identify areas for improvement based on the updated strategy, and help to define specific executable actions and priorities. During this phase strategic alternatives will also need to be developed and presented to executive management for their approval. The outcome of this phase will be a plan for the development of the accepted direction that is necessary to close the gaps and capitalize on the opportunities. All outcomes will also need to be clearly articulated and communicated within the organization in order to fully motivate the staff and create an atmosphere that both promotes - and effects - the desired change.
Phase 3 - Solutions Development
The development of the new ICT requirements will then lead to a transition or reconfiguration plan for migrating the existing systems or, if the gap is too large (e.g., if you still have legacy systems that will need to be replaced), to the development of an RFP for selecting a new system. In either case, we strongly recommend developing the new processes first, before specifying your requirements in detail, so that you can select the most appropriate system to fit the specific needs of your updated strategy. This is an important consideration to avoid the possibility of investing in an inadequate system solution that may limit your possibilities, or - worse - prevent you from attaining a maximum ROI.
The development of these new processes will also lay the foundation for the definition of the functions and functional requirements that will be needed to properly execute them. As such, both a transition and training plan can also be developed to support the organizational changes, and motivate the people who have to implement and execute the new strategy. This will all come together in terms of a detailed implementation plan and implementation timeline.
Phase 4 - Implementation
Sequentially, the change management cycle moves from strategy development through the assessment, development and implementation phases, before once again cycling through the entire process as the situation warrants. The overall process is illustrated in Figure 2.
The Organization Change Management Cycle Is an Ongoing Process
that Moves from Strategy Development through Implementation
In either case, utilizing this structured approach will guarantee that all of the activities emanating from the strategy are focused on yielding a maximum return on investment and that neither time, nor resources, are being wasted. Like anything else, there is no guarantee for success - but without utilizing a structured and orchestrated approach such as the one we have outlined in this article, there is less chance for any success at all! However, if these steps are taken, you will see the results manifest themselves in terms of increased customer satisfaction, and maintained or improved profitability - all at the lowest possible integral cost, and in the shortest possible time. Even more, it will provide your organization with a strong foundation for embarking on the next set of steps in its ongoing business improvement process.
Leo A.P. Moerkens is president of Hands-on Management Consultants, Inc., an international management consultancy firm that assists clients in developing and implementing business improvement programs. Leo can be reached at 203-888-1671, or via e-mail at LMoerkens@Hands-onMC.com.
William K. Pollock is president of Strategies For GrowthSM, a consulting firm specializing in strategic, marketing and business planning; market research and customer/market surveys; customer satisfaction measurement and tracking; services marketing; and Customer Relationship Management (CRM). He may be reached at 610-399-9717, or via e-mail at firstname.lastname@example.org.
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