Business Skills For A Changing Economy

BAKERSTRATEGY GROUP

Business Skills for a Changing EconomyCollaborating for Better Business Performance

MAKE IT HAPPEN

Presentation

Wednesday, January 08, 2009CORT – Novi MI

http://www.thinkhdi.com/

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HDI Motown Presentation Business Skills for a Changing Economy

January 8, 2009

Today’s Agenda

The Changing Economy

The Changing/Changed Role of IT Support

Talking Strategy


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January 8, 2009

Baker Strategy Group has had experience conducting programs for a number of organizations in a variety of industries

Our Experience

Client Engagements


http://www.statefarm.com/index.asp

http://www.johnsoncontrols.com/

http://www.sensicore.com/public/default.aspx

http://www.cfigroup.com/index.htm

http://www.rescuerooter.com/rescue-rooter/index.do

http://www.homebanc.com/

http://www.zondervan.com/Cultures/en-US

http://www.vector-worldwide.com/vi_index_en,,223.html

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Presentation Business Skills for a Changing Economy

January 8, 2009

I. The Changing EconomyA quick look at these remarkable times

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January 8, 2009

I. The Changing Economy

The Wall Street Journal

The world is reeling from the economic collapse, and most economist expect a “U-shaped” recovery that isn’t expected to pick up until late 2009 or even 2010 or 2011

A Sample from Today’s Headlines

• Wal-Mart Cuts View Amid Retail Slump

• Madoff Is a 'Danger,' Argue Prosecutors

• Walgreen to Cut 1,000 Jobs

• Kuwait Bank Defaults on Debt

• Commercial Property Loses Shelter

• Cardinal Health Lowers Outlook

• Satyam Scrambles to Assess Finances

• Lenovo Plans Major Revamp

• OECD: Cleanse Banks of Bad Loans

• Home Depot Ends Olympic Program

• Gadgets for Leaner Times

• Europe Stocks Track Overseas Losses

Source: HDI

CNN.com/US

• Crisis and plan to fix it 'unprecedented'

• A $2 trillion bet on powering America

• Warning! Warning! Weak profits ahead

• Detroit Auto Show: The party's over

• Auto execs expect more bankruptcies

• Unsafe? Unsound? A taxpayer bailout

• Will Obama's tax cuts work?

• Radical cheap: $1,000 homes

• Mortgage rates dip to new all-time low

• From Wal-Mart to the mall, a tough holiday

• Windy City's retail downdraft


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January 8, 2009

I. The Changing Economy

Recent Developments

Michigan, as we know, is experiencing more than its share of economic difficulty

Michigan’s Ills

Michigan’s outbound migration highest in US

Detroit’s credit rating reduced to junk bond status

Furniture manufacturer to cut 200 white collar workers

Iron mine in the UP to let go over 350 employees

Unemployment system inundated with activity

Forecast for 2009 Michigan state revenues (taxes) was decreased by $870 million

Coal plants projects may get stalled

Borders struggling

Kuwait pulled out of $17.4B joint venture with Dow Chemical Co

Automotive suppliers can’t get access to credit for new projects

Source: HDI


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January 8, 2009

I. The Changing/Changed Role of IT SupportWhat we can expect for the near future

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January 8, 2009

II. The Changing Role of IT Support

Below are is a an humorous old IBM commercial that shows smart, reactive support personnel who complicate the issues due to a disconnection with the end user experience

IT Support

IBM Commercial: http://www.youtube.com/watch?v=hoj5Scm7HaY&feature=relatedUnrelated but funny IT video: http://www.youtube.com/watch?v=0eIFoz-Tjf8


http://www.youtube.com/watch?v=hoj5Scm7HaY&feature=related

http://www.youtube.com/watch?v=hoj5Scm7HaY&feature=related

http://www.youtube.com/watch?v=0eIFoz-Tjf8



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The IT help desk of old has changed/is changing its role within the organization

The New Customer Support

It's time to profoundly reinvent the profession of Customer Support. From the beginning

of the technology industry to the present time, support has been the department of

break/fix; "when something breaks, we fix it." As such, the "profession" offers no real

economic value to anyone; it never has. Even more significantly, as we move deeper into

the gathering recession and farther into the rapidly unfolding SaaS era, support as it is

currently defined has no future. There are two paths that lead away from this point for

companies and support reps. One is downward into obscurity, obsolescence and

ultimately extinction. The other is towards an authentic profession based on the

exchange of true economic value.

Source: “The Redefinition of Customer Support” by Mikael Blaisdell

During the 1/8/09 presentationn, it was generally agreed that this description of the service desk employees is somewhat outdated, and the role, development , and performance of the agents has grown significantly over the last several years


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January 8, 2009


Service desk managers should be actively involved in organizations such as HDI in order to further develop and grow and managers

HDI’s Position

Ron Munz on why HDI is an important association for service desk managers:

“The reality is you don’t even need to join an association to get facts. If you go to Google and you spend enough time you can get facts. But you don’t change behavior just with facts. You change behavior, and you change strategy, and you change vision, and you increase motivation when you’re around other professionals that are doing thing similar to yours. “

Source: HDI

Service desk managers also can play a key role in helping the service desk agents grow and develop in their understanding of the organization’s businesss issues


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Gillett’s appointment represents the changing role of IT –deep IT experience meshed with a business proficiency that enables him to better align IT with the “customer experience”

Example: Starbucks CIO

Gillett's mission is to create and implement the technology vision of "anything that touches the consumer, whether it's

in back-end [IT operations] or in how a customer interacts in a physical Starbucks store," says Chet Kuchinad, EVP

of Starbucks partner resources, who lead the team that hired Gillett. "Stephen's not just about legacy systems and

not just about efficiency. He's about how we take technology and connect with Starbucks' consumers in a different

way. Frankly, we've just begun, and there's a lot of work to be done yet."

"You'll meet a lot of technology people who are extremely intelligent but they have really stunted social

skills," Cahall says. "They don't have an ability to sell their ideas and don't have the ability to

ingratiate themselves with key leaders.

(Ted Cahall is VP of the platforms business unit and technologies division at AOL)

Source: CIO Magazine


http://www.aol.com/

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January 8, 2009

III. Business Skills: StrategyThe organization’s chosen approach to how it will conduct business

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January 8, 2009

III. Business Skills: Strategy

August 1, 2006

Strategy Rabbis

Thought Leader Contribution

Peter Drucker Organizations and Society

Michael Porter Five Forces/Value Chain

Kaplan & Norton Balanced Scorecard

C.K. Prahalad Core Competencies

Gary Hamel Customer Collaboration

Peppers & Rogers Return on Customer

Bruce Henderson Strategic Competition

Tom Peters Back to Basics

Kenichi Ohmae Strategic Thinking

Clayton Christensen Disruptive Technologies

David Aaker Brand Portfolios

Fred Reichheld Net Promoter Score (NPS)

Jack Trout Brand Differentiation

Adrian Slywotzky Strategic Business Design

McKinsey & Company Business Valuation

There has been a proliferation of strategy frameworks over the years

Different Views of Strategy


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January 8, 2009


Our particular view is that of customer strategy: integrating the Five Cs situation analysis: context, customers, company, competitors, and collaborators

The BSG 5C Framework


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January 8, 2009


Financial

Measures

Customer

Perspective

Staff

Development

Str

ate

gy E

xe

cu

tio

n

Internal

Processes

AcquisitionRetention/

Development

Current Customers New Customer Portfolios

Priority Portfolios Secondary Portfolios

Operations Offerings/Core Capabilities

Note: This framework is derived from the Balanced Scorecard by Norton and Kaplan

Here is an example of a Strategy Map (also known as Balanced Scorecard), an effective and commonly-used strategic planning tool that starts with measures and the customers

Strategy Maps

EBITDA

$xx

xx%Revenue

$xx

Current

Students

New

Students

Expenses

$xx

Operating

Expenses

Allocated

Costs

Group A Group B Group C Group D Group F

A Customers

B Customers

C CustomersGroup E

Area A Area B Initiative DInitiative BArea C Initiative A Initiative C Initiative E

Development A Development B Development D Development EDevelopment C


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January 8, 2009


Source: Michael Hyatt Book Expo Presentation

Thomas Nelson had previously operated with a structure that organized around their own brands, trades, and specialties – an internal, outside-in perspective

Case Study: Thomas Nelson


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In 2007, Thomas made the bold strategic move to organize the entire company around the customers – the essence of customer strategy

Case Study #1: Thomas Nelson



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Many of the terms to know related to strategy tend to be economic and finance related

Demystifying Strategy

The Value Proposition looking at and defining ―value‖ not by inputs or an internal perspective but,

rather, the value perceived and received by the customer. The Value Chain, or Value Stream, is the

series of organizations, groups, and processes that make up the final Value Proposition.

Value Proposition/

Value Chain/Stream1

Instead of simply looking at the purchase price, TCO considers all current and future direct, indirect,

and shadow costs associated with the option.

TCO – Total Cost of

Ownership2

This calculation comes in many similar forms, such as ROA, ROCI, and ROMI. Calculating ROI

basically ensures that the return or gain for a project is worth the capital expenditure.

ROI – Return on

Investment3

Not all companies have the same opportunities before them. If a company faces many promising

project opportunities, their WAAC will be high. Therefore, a viable project will need to project a

greater return in order to be considered.

WACC – Weighted

Average Cost of

Capital

4

Some argue that NPV is the best measure for assessing the value of a engaging a project. All cash

flow—both outbound and inbound—are discounted back to today’s dollar value using WACC If NPV

is positive, it’s a worthwhile project to pursue.

NPV – Net Present

Value5

IRR calculates the WACC at which NPV would reach break-even point. If the IRR is above WACC,

then it’s a project worth the investment of the firm. IRR works best if inbound cash flows come only at

the end of the project.

IRR – Internal Rate of

Return6


Business Skills For A Changing Economy

Technology

Transcript of Business Skills For A Changing Economy