CSL Website & Blog have moved!

We are excited to announce the launch of our new website! We like the clean look and added functionality and hope you will like it too. Check it out here: research.wpcarey.asu.edu/services-leadership/

As an added bonus, our blog will now reside on our website. Don’t worry, you will still be able to find all our previously published posts and we’ll be publishing new posts on our new blog moving forward. Here’s the URL: https://research.wpcarey.asu.edu/services-leadership/blog/ 

Make sure to subscribe and follow our blog to receive updates about the new posts!

 

How Do You Make Business Personal for New Employees?

W. P. Carey School of Business, Where Business is Personal

ASU’s W. P. Carey School of Business is committed to creating an experience for our students that’s uniquely their own by building a tight-knit community through small classes, team-based learning, and individualized attention every step of the way.  As one of the largest business schools in the country, we recognize that working towards this goal every day is a big commitment for our employees.  Ownership of this commitment has to be demonstrated not only by what our employees do as they fulfill their jobs, but also by their understanding of the service needs attached to this commitment. It’s about caring and having this ‘humane attribute’ that naturally flows through the bloodstream (metaphorically speaking).  So one of our overarching school goals is to ‘grow’ student-centric behavior and create a community of caring that is reflected in service performance.

Where do we start? How do we make a service focus to be a school-wide priority and translate it into action?

Together with the Center for Services Leadership, the HR Development team at the W. P. Carey School organized a workshop for its leadership— the faculty and staff who have a direct influence on the behaviors of employees who provide our services. The workshop was led by Dr. Amy Ostrom, PetSmart Chair in Service Leadership and resident Service Blueprinting expert.  She, first, introduced our front line leaders to Service Blueprinting. After that, 3 teams worked through a service focused blueprinting process with a goal to evaluate and enhance the orientation and onboarding experience for new employees – one of the key internal services that impacts the school.

Here’s what we experienced and achieved as we worked through the service blueprinting process:

• We defined the current orientation and onboarding process and then identified ways to enhance a new employee’s experience.
• We built a common understanding of the internal services which cross over into different work groups across the school.
• We recognized the impact of individual roles and activities on the level of service.

As a result of the insights that surfaced, our team implemented the following changes:

• Created a designated area on the school website that offers online resources to support new employees.
• Developed templates for consistent communication, including checklists for service handoffs.
• Created a sense of ownership in coordinating services to enhance a new employee’s experience e.g. breaking down silos instead of creating them.
• Established an actionable plan with specific time and resource commitments, communicating the school’s dedication to providing a meaningful and well-designed service.

Where do we go from here?

The service blueprinting exercise revealed the differences between orientation and onboarding in terms of timing and priorities for each phase. We defined orientation as the initial “set up” phase during the first month, which later transitions into an onboarding process. The onboarding process continues throughout the first year accompanied by consistent interactions via interviews and surveys. From this blueprinting experience, we divided our services into two distinct, yet integrated areas – orientation and onboarding – and both are a reflection of how we care for our employees.

As a school committed to building a community that provides the services our students need, we have to continuously demonstrate how we care about our employees. We’re incorporating this caring and thoughtful approach in how we engage our employees starting from the beginning of employment and continuing through their time with the school. We do that by systematically checking the pulse of our employees’ ‘service health’ and by continuously looking for ways we can perform employee services demonstrating that we care – because we do.

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Beth Sepnieski has been the Human Resources Director for the W. P. Carey School of Business since April 2004.  She earned her Bachelor of Science degree in Human Resources and a Masters in Education with an emphasis in Counseling and Human Relations. Beth also has a senior professional human resources (SPHR) certification through the Society for Human Resources (SHRM) and has been trained and certified in the interpretation of the Predictive Index; a self-assessment tool used within the School to help improve communication, team interaction, and decision making at all levels.

Over her 30 years in Human Resources, Beth has conducted numerous workshops on a wide range of topics.  Her ‘hands on’ consultation and guidance has provided a variety of her customers with sound tools to cut through to problem solving possibilities in order to promote a more productive work environment.

Vixxo – Monetizing Data & Analytics

WEBINAR WITH WARREN WELLER,

VIXXO CHIEF SALES AND MARKETING OFFICER

This webinar was hosted by the Center for Services Leadership Community of Practice on Monetizing Data and Analytics.

About Vixxo: Vixxo is a leading technology-enabled asset management and business insight company providing integrated facility management solutions and services that unite asset and facility management. Through deep expertise across 100+ trades, time-tested processes, and a comprehensive technology platform, Vixxo delivers the complete asset management that allows clients to focus their energy instead on their customers.

About Warren Weller: Warren Weller is the Chief Sales and Marketing Officer at Vixxo, responsible for all aspects of sales, marketing and profitable revenue growth. Prior to joining Vixxo, Mr. Weller held various leadership positions at IBM, serving as the Vice President, Financial Services and also as Vice President, Mid-Market Services. During his 25+ year tenure, he drove operational excellence and innovation across the organization.

Vixxo Case Study

Over the years, Vixxo’s core business model has evolved from providing traditional facility management services, such as lighting, plumbing etc., to offering asset management and optimization services. Moving beyond improving efficiency of traditional assets (e.g. refrigerating, heating), Vixxo has built a highly successful business model around improving efficiency of revenue generating assets, e.g. coffee brewing machines at Starbucks or the baking ovens at supermarkets. The company’s services enable Vixxo’s clients to understand how these assets perform over time, and subsequently make better asset decisions from cost and investment perspectives.

Vixxo currently supports over a billion-dollar worth of spend across 65,000 assets in over 250,000 physical locations. Its primary client segment consists of businesses with widely-distributed retail-estate portfolio (supermarkets, restaurants, convenience stores etc.), where ensuring effective asset management across all locations is a major challenge. By leveraging its expansive supplier network of over 150,000 certified local suppliers, Vixxo is able to provide high quality, consistent services in a very cost-effective manner.

Vixxo’s value proposition to the customers is driven by the company’s 15-year experience in data collection and analytics. Over the years, the company has been able to collect clean and reliable data by leveraging emerging technologies such as mobile devices (tablets, smartphones), to integrate information from clients, suppliers and service centers. Vixxo applies its deep analytics and data mining capabilities to generate insights for clients to improve their CapEx management programs – understanding which assets to repair, replace, invest in etc. for greater customer experience, product reliability and profit maximization.

In the next phase of its evolution, Vixxo is working to monetize IoT and M2M capabilities, by placing sensors inside assets to get real time asset performance information. Sensors can detect and signal issues in assets, allowing Vixxo to dispatch technicians even while the asset is still operating. Vixxo is also focusing on developing the entire IoT eco-system. This includes collaborating with manufacturers to help build assets equipped with IoT capabilities, in exchange for data & insights on asset performance.

Vixxo’s revenue model is based on charging clients for various asset management services they use. The company takes a strong position to ensure clients are paying a fair and transparent price for received services, while the suppliers are guaranteed a prompt payment by Vixxo after each servicing call. Vixxo achieves this by automating its entire work-order management process through the “Continuously Analyzed Pricing System” (CAPS) application, where each supplier locks details of each service they provide to Vixxo’s client. CAPS contains pre-determined and agreed on rates for each element of the work order management process (such as for labor, duration, materials etc), guaranteeing that clients pay a fair market price and receive an itemized breakdown for delivered services. Moreover, Vixxo uses other features such as geo-fencing and supplier rating system to ensure that suppliers provide high quality and timely service. In return, suppliers receive fair and prompt payment for their services as well as training and development.

Backed by its extensive supplier network and over 15 years of data analytical capabilities, Vixxo is a clear leader in the asset management services industry. By implementing and harnessing the IoT and M2M capabilities, the company will be favorably positioned to take full advantage of analyzing granular, real-time data for deeper insights, and to help clients achieve higher profits & operational optimization.

Congratulations to the Winners of 2017 Young Scholar Research Competition

The Arizona State University Center for Services Leadership and the Co-Chairs of the Third Annual Organizational Frontline Symposium (February 2017) are pleased to announce the awards for 2017 Young Scholar Research Competition.

The competition accepted research proposals focused upon ‘frontline’ topics, and the lead author was required to be either a current doctoral student or an assistant professor who is fewer than three years removed from graduation. Twenty submissions were received and evaluated by an expert panel of judges.

The awarded projects include (in alphabetical order):

Corinne Kelley, Florida State University, “The Ambassador Effect: A Frontline Tactic to Enhance Customer Commitment, Loyalty, and Prosocial Behavior”

Advisors: Maura Scott and Martin Mende

 

Blake Runnalls, Michigan State University, “The Impact of Social Networks on Sales Training Transfer and Performance”

Advisor: Doug Hughes

 

Sunil Singh, University of Missouri, “Email B2B Sales Negotiation: Dynamic Use of Textual Cues as Influence Strategies”

Advisor: Detelina Marinova

 

We congratulate the winners of the 2017 Young Scholar Research Competition and wish the award recipients and all the applicants the best with their research projects!

Join the CSL for our Strategic Service Institute

The Center for Services Leadership is continuing its role as a leader in service education with the announcement of the Strategic Service Institute (SSI), March 13-17, 2017. SSI is the only program that provides an immersive executive education experience that focuses on the delivery of service excellence.  The development of this new format is the next evolution of service education. Two modules are now offered, one that delivers the foundational essentials for the managerial knowledge of service delivery and execution and a second that provides cutting edge toolsets and strategies essential to taking an organization’s service excellence to the next level.  An individual may take either one, or both, of these modules.

Dr. Douglas Olsen, Academic Director of SSI, explains advantages of the new format, “we provide incredibly solid grounding in service excellence during the first module and then, with these foundational principles in place, in the second module we introduce key frameworks for implementing strategies for leading service-centric organizations. Throughout the program we create opportunities for engaged discussion and collaborative learning.” The Institute curriculum is led by academics and business practitioners who are at the vanguard of service, and is delivered in a university environment at McCord Hall, of the W. P. Carey School of Business, Arizona State University.

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If you are interested in learning more about SSI and would like to register, please see our website.

 

Driving Business Value from Digital Transformation

Webinar with Dr. Michael Wade, Professor of Innovation and Strategy and Cisco Chair in Digital Business Transformation, at IMD Business School, located in Lausanne, Switzerland and Director of the Global Center for Digital Business Transformation, an IMD and Cisco Initiative

Author of Digital Vortex: How Today’s Market Leaders Can Beat Disruptive Competitors at Their Own Game

This webinar was hosted by the Center for Services Leadership Community of Practice on Monetizing Data and Analytics

The Digital Landscape has changed over the past decade. While businesses and companies understand the power of digital innovation, many firms struggle with either taking advantage of the opportunities or reducing risks that accompany digital transformation. Automotive industry is a great example that demonstrates the impact of digital transformation. The push for development of autonomous cars affects a wide spectrum of industries: from transportation & logistics to insurance, law & order, healthcare, hotels etc. Similarly, other innovations such as block-chains, machine learning, virtual reality etc. will potentially have an impact on a number of industries.

While leading digital transformation, companies have to address two fundamental questions: “Why” and “How”. ‘Why’ pertains to understanding the opportunities and threats that exist because of a rapid digitization. “How” covers the capabilities and roadmaps traditional companies need to create to sustain competitive advantage. Yet, data suggests that most digital transformations fail – the reason lies in inability to push for organizational transformation alongside technology transformations.

Beyond technology, companies need to change their approach to business strategy. According to conventional thinking, strategies are developed with a clear understanding of where the company currently is and where it wants to be. However, in today’s world, predicting the future has become extremely complex. Instead, to compete in digitally disruptive environments, companies must build multiple strategies backed by core digital business agility. The following capabilities are key to building digital business agility:

• Hyperawareness
• Informed Decision-Making
• Fast Execution

Hyperawareness is being fully alert to the internal & external environments, particularly to changes that spotlight opportunities or risks. Data & information collection are the core for this principle, which can be accessed by humans, IoT machines or sensors. Key metrics to measure hyperawareness include the company’s ability to capture insights about/from its employees, customers, partners internal operating environment, competitors and about new digital technology & business trends.

Informed decision-making pertains to collaborating & empowering people to make quick, evidence-based decisions. Decision making power needs to be pushed to the edge of the network (Intelligence at the Edge) to gain speed & accuracy. Informed decision making is measured by the business’s ability to make decisions quickly & based on analytics, to empower people, to share information across organization and to access & display important data in real-time.

Finally, fast execution is putting decision into practice rapidly, mobilizing resources dynamically and continuously monitoring options and progress against goals. Fast execution is measured by our ability to act quickly based on new information, turn decisions into actions, dynamically acquire & allocate people & resources, continuously learn & adapt.

IMD’s digitization piano is one of the tools to help companies navigate the “how” of digital transformation. This tool breaks down the organization’s value chain into 10 distinct keys, broadly categorized under Digital Strategy, Digital Engagement & Digital Enablers. Companies should play multiple keys simultaneously instead of trying to address one specific area in isolation as they navigate their digital transformation journey.

Finally, at the core of transformation, the critical questions that companies must ask are:

• How to use digital technologies to improve performance?
• How to use digital technologies to build a more agile strategy?
• How do we digitize across organizations?

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ABOUT THE SPEAKER

BACKGROUND: Michael Wade is a Professor of Innovation and Strategy at IMD and holds the Cisco Chair in Digital Business Transformation. He is the Director of the Global Center for Digital Business Transformation, an IMD and Cisco Initiative. His areas of expertise relate to strategy, innovation, and digital transformation. Previously, he was the Academic Director of the Kellogg-Schulich Executive MBA Program in Canada. Michael has been nominated for teaching awards in the MBA, International MBA, and Executive MBA programs. He obtained HonoursBA, MBA and PhD degrees from the Richard Ivey School of Business, University of Western Ontario, Canada.

CLIENTS & INDUSTRY EXPERIENCE: At IMD, Michael teaches in several open programs and has directed partnership programs related to strategy and digital business transformation with Vodafone, Ooredoo, AXA, Honda, Zurich Financial Services, Credit Suisse, KONE, and Richemont, among others. He co-Directs IMD’s Orchestrating Winning Performance and Leading Digital Business Transformation programs. He provides consulting services, executive education and expert evaluations to several public and private sector organizations. He has lived and worked in Britain, Canada, Japan, Norway, and Costa Rica.

RESEARCH AND THOUGHT LEADERSHIP: Michael has published works on a variety of topics, including digital business transformation, innovation, social media marketing, information systems strategy, eCommerce, and SME performance. He has more than 50 articles and presentations to his credit in leading academic journals such as Strategic Management Journal, MIS Quarterly and the Communications of the ACM. One of his articles was among the top 20 cited articles in business, management and accounting worldwide for five years, according to Scopus (the largest abstract and citation database of peer-reviewed literature). He’s published eight books, more than twenty case studies and appears frequently in the mainstream media. His Latest book is Digital Vortex: How Today’s Market Leaders Can Beat Disruptive Competitors At Their Own Game. He was named one of the top ten digital thought leaders in Switzerland by Bilanzmagazine in October, 2016.

APPROACH “I define digital business transformation as organizational change through the use of digital technologies to materially improve performance. It is a simple definition, yet difficult to master. Certain industries have been on the vanguard of this changes. Other lag behind. Eventually, digital will become the ‘new normal’. I enjoy working with organizations to help them come to terms about what digital transformation means for them, and then to take appropriate action.”

The Moment of Truth: A Co-creation Perspective

The term “moment of truth” (MOT) is not new to me and I was happy to learn it was an integral part of the customer-experience community vocabulary.  As I have visited with many in the community, I’ve discovered there are various definitions for MOTs in relation to the customer journey. It is generally agreed that customer interactions are called “touchpoints,” and MOTs are the more significant touchpoints. However, the criteria for what’s “significant” depends on who you talk to. Some say the MOT is at the beginning when the customer decides to accept (or reject) the firm’s offer, while others point to the end of the transaction when they determine whether the whole experience was good or bad. Some identify various touchpoints where significant value is or is not realized. Yet another criteria is a touchpoint that shows the greatest likelihood the customer will “fall off”, or is most likely to end the business relationship. I contend there is too much ambiguity for the term to be useful in the context of a professional discussion.  At a minimum, the customer-experience community needs to agree on a more unified definition. I would go as far as to suggest a slightly different definition – one I think was intended by the first person to use the idiom in these contexts.

Richard Normann (1943-2003) is credited with the first use of the idiom “moment of truth” in a business context. Using the MOT concept, Normann was highly instrumental in the turnaround of Scandinavian Airlines (SAS) in the early 1980s. Jan Carlzon, SAS’s CEO during that time, recounts the turnaround in his book titled Moments of Truth (1987), attesting to the powerful perspective the MOT provides and Normann’s more significant contribution to the effort. By removing MOTs which provided little or no value to their customers, and enabling employees to deliver the best experience possible in those that remained, SAS became profitable again by more than three times the first year target.  They also earned the rank of “top Airline” the same year, and held that distinction for many years.

Normann’s book Service Management: Strategy and Leadership in Service Business, Third edition (2002) gives us the greatest insight to his thought process regarding MOTs. I find it fascinating and affirming that his first reference to MOTs is directly preceded by a discussion about co-creation. Normann says:

“…the customer is often more than just a customer – he is also a participant in the production of the service. A haircut, the cashing of a cheque, education – none of these can conceivably be produced without the participation of the consumer. Thus the service company not only has to get in contact with the consumers and to interact with them socially; it is also necessary to ‘manage’ them as part of the production force.”

Normann is clearly stating that a customer is integral to the value creation process. This is co-creation – the customer and the organization working together to create desired value.  If the customer is not involved, no value is ever created.  No customer, no value.

With this backdrop, Normann introduces the concept of MOTs. He states:

“Most services are the result of social acts which take place in direct contact between the customer and representatives of the service company. To take a metaphor from bullfighting, we could say that the perceived quality is realized at the moment of truth, when the service provider and the service customer confront one another in the arena. At that moment they are very much their own. What happens then can no longer be directly influenced by the company. It is the skill, the motivation and the tools employed by the firm’s representative and the expectations and behavior of the client which together will create the service delivery process. A large service company may well experience tens of thousands of ‘moments of truth’ every day.”

From the very first mention, Normann is clear that when a customer comes into contact with the organization, it is a MOT. The two have come together to accomplish something in relation to creating the value the customer seeks – their job-to-be-done. We know from experience there are often many interactions per customer journey depending on the size of the job-to-be-done.

We also know customers judge the experience of each and every interaction as to perceived quality in relation to its part of accomplishing “the service delivery process”.  Customers have some idea of how much time and effort they should be expending. They have some expectation of how they should feel at a particular point in the process, and they judge the interaction based on whether their expectations were met. The quality of each and every interaction is determined and (either consciously or subconsciously) scored in the mind of the customer. Think of this as a “running score.”

When Normann first introduced the MOT concept, most interactions were face-to-face; but don’t take this too literally.  As technology emerged and matured, Normann realized the potential for applying technology to MOTs.  He says, “…new communication and information technology clearly increase the possibilities to ‘store services’, and to make person-to-person interaction in their provision unnecessary.” Customers understand that automation is still designed and implemented by “faces” in the organization.

Normann also talked about the cumulative and/or knock-on effects of MOTs:

“There is a well-known dynamic in interpersonal interactions whereby positive action creates positive reactions, which in turn leads to mutually positive feelings which in turn leads to mutually positive interaction. Or the reverse can apply. A positive attitude and efficient action on the part of the service supplier will encourage the client to participate more, and more effectively, which in turn encourages the service supplier, and so on. A ‘virtuous circle’ has started.”

Normann continues at length to point out when the interactions are positive and customers feel the experience is valuable, a “virtuous circle” ensues.  Furthermore, the outcome of each interaction or MOT sets up the likelihood of a similar outcome at the next interaction. Good interactions tend to foster more good interactions, while poor interactions tend to lead to yet poorer interactions.

Perhaps Normann is the clearest in defining the MOT when he said:

“The quality experienced by the customer is created at the moment of truth, when the service provider and the client meet in a face-to-face interaction. The most perfectly designed and engineered service delivery system will fail until things work out then. Thus, any enquiry into quality must start from the microsituation of client interaction, the moment of truth (emphasis mine). The important question is: what mechanisms lead to and reinforce the client’s experience of quality and good value in that microsituation?”

In defining what Normann meant by the ‘moment of truth’, focus on the most consistent and defining vocabulary he used throughout: the words “interaction” (used consistently) and “microsituation” (used specifically), and more importantly, the juxtaposition of the two – “microsituation of client interaction.” From my reading of Normann, MOTs are each individual interaction with the customer – not high-value interactions, not high-risk interactions, not just the buy/no-buy interaction, and not the last interaction, which are all macrosituations.

The organization typically dictates the customer’s journey, and therefore, determines the time and effort required from customers. Unfortunately many organizations tend to think of some interactions as trivial and inconsequential. All too often, what the organization considers innocuous, the customer perceives as a waste of time and resources. Furthermore, the cumulative or knock-on effects of multiple or poorly executed interactions could culminate at a relatively innocuous one – the proverbial straw that broke the camel’s back.

From a co-creation perspective, each interaction either increases or reduces value to the customer. In other words, that running score really matters. Is every interaction equal to another? Absolutely not, but they are all weighty! We need to consider each and every interaction and what it contributes to customer value in relation to all other interactions.

Therefore, a co-creation perspective takes into account the value exchange of each and every interaction with a customer.  As the customers navigate their journey, moment by moment they are sizing up how they feel about the potential of achieving overall success, and with a few exceptions, they can drop out at any interaction in the journey. Though the organization may identify a particular interaction in which customers typically drop out of the journey, this doesn’t necessarily indicate that interaction is the culprit. The root problem is just as likely to be poor execution of one or more upstream interactions. The customer journey is part of the co-creation ecosystem and systems thinking needs to be applied.

Please keep in mind my purpose is first: to create a better and more common understanding in our terminology, and second: help us leverage the brilliance of Normann’s work. I’m not necessarily suggesting the customer-experience community change its vocabulary. However, I do recommend we at least apply Normann’s research and concepts to whatever the corresponding vocabulary is. Every organization’s success depends on creating Normann’s “virtuous circles”, yet these are only possible when we acknowledge the full significance of what he called the MOT with their cumulative, knock-on effect in the co-creation ecosystem. Call them what you will, interactions, touchpoints or MOTs, but for the good of the customer give every single one their due consideration.

Compete Through Service Symposium 2016: Recap in Pictures

Thank you to everyone who attend this year’s CTS Symposium! Save the date for next year’s symposium: October 25 – October 27, 2017. We hope to see you next year!

Motivating Sales Reps for Innovation Selling in Different Cultures

The commercialization of innovations is the lifeblood for most organizations. However, bringing new products successfully to market can be a complex and difficult challenge, especially if your company operates in a business-to-business (B2B) environment. The sales force is often the dominant sales channel, and it can be a potential bottleneck in the route to market of innovations. That is why it is especially important for B2B firms to direct and guide their sales forces for successful innovation selling.

This task can prove quite difficult, especially since many sales reps have a low initial motivation for innovation selling. This is mainly due to three major reasons:

• First, new products are often complex and difficult to understand. Therefore, salespeople need to invest a considerable amount of time in order to fully grasp the new products and their additional benefit for the customer.
• Second, sales reps are often uncertain about the functionality and reliability of new products: Will the new features and technologies work out as promised? In fact, salespeople represent the “first line of customers” for new products, often equipped with profound skepticism towards novel solutions.
• Third, many salespeople fear jeopardizing good client relationships with new products. They do not want to be held responsible for the latest gadget’s “teething problems” or even serious functional flaws and put their client base at risk.

In our recent article “Motivating Sales Reps for Innovation Selling in Different Cultures” in the Journal of Marketing, we report results on how firms can enhance reps’ innovation commercialization in a broad international context. Specifically, to examine this issue, we collected data from 406 sales reps from an international B2B supplier. These salespeople represent 38 countries on four continents. Consequently, this investigation delivers one of the most far-reaching international studies in sales research.

The study’s results demonstrate that firms should employ specific steering instruments in order to motivate their sales reps for innovation selling. Most importantly however, we find that these sales force steering instruments should closely correspond with reps’ cultural imprint in terms of Hofstede’s four dimensions: power distance, individualism, uncertainty avoidance, and long-term orientation (you may want to take a glimpse at https://geert-hofstede.com/ for more detailed information on Hofstede’s research on cultures).

For instance, we find that the total effect on financial innovation performance surges by more than 350% when firms apply variable compensation for innovation-sales results in highly individualistic (vs. less individualistic) cultures. Moreover, we demonstrate that innovation performance may increases by more than 300% when supervisor appreciation for innovation-sales results is applied in cultures with high power distance (vs. low power distance). Strikingly, we find that the average variation of all steering instruments’ effects across high versus low values for each cultural dimension is greater than 100%. These large percentage numbers illustrate the huge leverage of intercultural sales force steering regarding innovation commercialization.

In the following table we display an overview of our main findings. You might want to challenge your own company’s steering approach: Do your steering instruments actually match with the cultural environment they are applied in?

To enhance your firms’ innovation commercialization through intercultural sales force steering, we recommend three specific actions. Implementing these recommendations may help your company to exploit these large potentials:

1. Adapt your sales force steering approaches to cultural environments

Many companies around the globe today harmonize their sales force steering in the course of globalization as, for example, when implementing one-size-fits-all approaches derived from corporate strategy. However, this study’s results lead us to warn you against overly meshing sales force steering across countries. Instead, we recommend looking carefully at the markets and cultures you operate in and focus on the most effective steering instruments per cultural context. In doing so, you will be able to most efficiently and effectively motivate your sales reps for innovation selling and see a strong performance. For instance, think about flexible steering approaches and heterogeneous incentive plans that have globally standardized elements but also allow for adaptation to cultural peculiarities.

2. Develop a more comprehensive approach to sales force steering

Does the following sound familiar to you? Your firm has many autonomous units that are involved in sales force steering challenges. For instance, there is the compensation division that takes care of financial incentive plans, while the benefits division is responsible for non-monetary incentives. Then, there is global HR that schedules on-the-job trainings and finally the sales supervisors, who make use of on-the-job instruments to motivate their salespeople. However, in contrast to this fragmented common practice, we strongly recommend orchestrating these different sales force steering approaches to systematically align and make use of the entire range of steering instruments. We briefly outline in the figure below how such an integrated intercultural sales force steering approach could look like.

3. Segment your sales force according to their cultural imprint to customize your sales force steering approach

Finally, we recommend segmenting sales reps according to their cultural imprint in order to specifically tailor sales force steering instruments to enhance innovation commercialization. Specifically, you might classify the sales force in terms of power distance, individualism, uncertainty avoidance, and long-term orientation. To motivate innovation selling by sales reps from cultures with high power distance (e.g., Brazil, China, India), we recommend to focus on steering measures that involve close interaction with the direct supervisor, such as supervisor appreciation for innovation-sales results. In contrast, for sales reps from individualistic cultures (e.g., Netherlands, United Kingdom, United States), we recommend a focus on steering measures that reward or foster individual attainments, such as education for innovation selling or variable compensation for innovation-sales results. For sales reps from cultures with high long-term orientation (e.g., Slovakia, South Korea, Taiwan) as well as for sales reps from uncertainty-avoidant cultures (e.g., Belgium, Portugal, Romania), we advise focusing on supervisor appreciation for innovation-sales results.

For more detailed information and in-depth discussion of our study please refer to the original article published in the Journal of Marketing: http://dx.doi.org/10.1509/jm.14.0398

Sebastian Hohenberg and Christian Homburg (2016) Motivating Sales Reps for Innovation Selling in Different Cultures. Journal of Marketing: March 2016, Vol. 80, No. 2, pp. 101-120.

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Christian Homburg is Director of the Institute for Market-Oriented Management (IMU) at the University of Mannheim (Germany). His special subjects are sales management, customer relationship management, and market-oriented management. Dr. Homburg has published numerous books and articles at the national as well as the international level. Today, he is member of the editorial boards of 6 scientific journals in the United States and Germany. Furthermore, since April 2011, he operates as the first German area editor for the Journal of Marketing. Prior to his academic career, Dr. Homburg was director of marketing, controlling and strategic planning in an industrial company that operates globally. In addition to his academic position, he is chairman of the scientific advisory committee of Homburg & Partner, an international management consultancy.

Sebastian Hohenberg is Assistant Professor at the Marketing Department of the University of Mannheim (Germany). He also works as a freelance consultant at Homburg & Partner, an international consultancy agency. During his research and consultancy projects, Dr. Hohenberg focuses on topics in the areas of sales management and innovation management.

Bringing Brands to Life

This post was originally published in 2014.

By Nancy J. Sirianni

Brands are created by companies, but it’s the end customer who ultimately determines what the brand means to them. So, how do customers come to truly understand a brand and what it stands for?

Service brands are experienced on a personal level, with employees engaging customers during one-to-one social encounters, but many firms fail to include employee-customer interactions in their brand strategies. Because human-delivered services are performances and can vary from employee to employee, firms can find it difficult to create coherent experiences that drive home their brand imagery in a consistent manner from customer to customer.

For several years, I was part of a research team at Arizona State University that explored what brand managers can do to overcome this challenge. Through a series of consumer behavior experiments and a large-scale critical incident study that included dozens of service industries, we tested how customer brand experiences can be made more consistent through the behavior of frontline service employees. That is, we examined how service firms can recruit and train employees to internalize brand imagery in order to authentically bring the brand to life with customers in what we call “branded service encounters.”

Customer Success: The Next Evolution of Customer Service

By James “Alex” Alexander

Whether you are a traditional on-premise supplier or a cloud-based subscription business, “customer success” is where the big dogs play.

What is customer success?

“Customer success” is a term bantered about in boardrooms and breakrooms in different ways. It has been perceived as a business model, a company-wide priority, an organization, a profession, or a technology.[1]

Research for my recent study, “Customer Success: Managing the Customer Experience for Loyalty and Profit,” [2] confirmed this disparity—the definitions given regarding customer success and customer success management were as varied as Mexican chilies at Santa Fe’s Saturday farmers’ market.

Customer success is a strategy and a philosophy. It is a way of approaching how you interact with your customers and your marketplace. But an important understanding is that customer success is personal. Just as kids in a candy store might prefer different treats, each customer may value certain outcomes more highly than others at a given point in time, and hence, customer success varies from person to person. So I prefer a concrete, actionable definition.

Customer success is a customer state of mind in which a specific customer (let’s call her a key player) feels that she has achieved her desires (business outcomes and personal wins) while undergoing brilliant customer experiences. Here are definitions of the three requirements of customer success:

• Business outcomes. The results that a key player hopes her organization will get from purchasing and using a supplier’s offerings such as increased revenue, lowered downtime or enhanced productivity.
• Personal wins. The results that a key player hopes will happen directly to her from purchasing, using a supplier’s offerings or both. This could be job security, personal recognition or less job hassle.
• Customer experience. The customer’s perception of a supplier’s performance, including activities that do not directly touch the customer but that affect the customer’s overall view of the supplier. Brilliant customer experience occurs when the seven things that customers want, expect and deserve are met.[3]

Figure 1: Brilliant Customer Experiences Enable Customer Success

 

The Brilliant Customer Success Performance Chain

For those of you serious about delivering success, I recommend using the Brilliant Customer Success Performance Chain as a guide, as Figure 2 shows. It is a robust model applicable to almost all organizations for planning, building, implementing, monitoring, diagnosing, and enhancing customer success results. I will start our discussion on the far right side of the chain and work backward.

Figure 2: Brilliant Customer Success Performance Chain

 

Business Results

This is your reward for doing customer success right. Selfishly, your desired outcome as the supplier is business results. Yes, there can be a multitude of preferable outcomes, but for most organizations, there are two vital business results that trump all others: new streams of profitable growth to fund the future of the business, and brand dominance based on a reputation superior to your rivals’.

Customer Impact

Customer loyalty drives business results. Loads of research over the last several years show that the loyalty of your customers is a prime driver of the business results discussed above and outlined in Figure 3. There is a direct relationship. Loyal customers buy more and more, again and again, rarely quibbling over price.[4]

 

Figure 3: Customer Impact Drives Supplier Business Results

 

Emotionally, loyal customers tout your attributes far and wide and gladly provide testimonials to woo your prospects for you. Loyal customers are the crown jewels of your resources and should be guarded as a miser would a strongbox. If we embrace the eminent management consultant Peter Drucker’s declaration in Management: Tasks, Responsibilities, Practices that the purpose of a business is to get and grow customers, customer loyalty is the secret sauce of the recipe.[5]

Customer success drives customer loyalty. As discussed, to earn that loyalty, you must deliver customer success as each key player in the customer account defines it.

Brilliant customer experiences enable customer success. The promise of customer success requires brilliant customer experiences. Like the catalyst in a chemical reaction, a brilliant customer experience releases the full potential of a supplier-customer relationship. Customer experience is shaped at every touchpoint—every encounter or contact the customer has with your organization.

Touchpoint Management

Brilliant employee performances drive brilliant customer experiences. The more closely your people give the customer what they need, want, and expect at each step in the decision-making process, the more powerful the moment of truth, and the more likely the customer will invite you to participate in the next decision step. Figure 4 shows the progress from touchpoint management to business results.

Figure 4: Touchpoint Management Effects on Business Results

 

Capable and loyal employees are required to deliver brilliant employee performances. Your frontline personnel must have the capabilities needed to interact with the customer the right way at the right time.

Figure 5 shows how performance systems provide the information and tools required to help your capable and loyal employees in their moments of truth.

Figure 5: How Performance Systems Affect Business Results

 

Leadership drives the bus in creating a culture of success and in building and implementing a compelling blueprint to guide implementation, as shown in Figure 6. As we all know, if the big dogs don’t get off the porch, the pack doesn’t hunt.

Figure 6: How Leadership Can Build a Culture of Success

 

Leading the Pack

Customer success is much more than the latest marketing mantra…it is a strategy, a philosophy, a way of doing business. It can make your customer more successful, your company more successful, and hopefully, you will be more successful. Act like the big dog you are and lead the customer success pack!

 

Note: This article was adapted from Alex’s new book Brilliant Customer Success: Managing the Customer Experience for Profitable Growth and Brand Dominance, due to be released in November 2016.

 

References

[1] “An Executive Primer to Customer Success Management.” April 2014. Thought Leadership Paper. Forrester.

[2] Alexander, James A., EdD. 2016. Customer Success: Managing the Customer Experience for Loyalty and Profit. Alexander Consulting and Service Strategies Corporation.

[3] Alexander, James A., EdD. January 26, 2015. “Brilliant CX: The 7 Things Your Customers Want, Expect, and Deserve.” LinkedIn Blog.

[4] Mehta, Nick. October 18, 2015. “The 5 Kinds of Customer Success.” Gainsight, Venturebeat.

[5] Drucker, Peter F., 1974. Management: Tasks, Responsibilities, Practices. New York: Harper & Row.

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Join the Center for Services Leadership at Compete Through Services Symposium on October 27th, 2016, to hear James “Alex” Alexander, Alexander Consulting, speak on Customer Success Management: The Marvelous Opportunity to Grow Your Services Business.

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James “Alex” Alexander is founder of Alexander Consulting, a management consultancy that helps product companies build brilliant services. Contact him at 239-671-0740, alex@alexanderstrategists.com or visit www.brilliantcustomersuccess.com for information and valuable resources to speed your journey to brilliant customer success.

 

Check out my new book!

BRILLIANT CUSTOMER SUCCESS

MANAGING THE CUSTOMER EXPERIENCE FOR PROFITABLE GROWTH AND BRAND DOMINANCE

by James “Alex” Alexander

 

Delivering an Effortless Customer Experience

In early September, I traveled with friends along the Dalmatian coast, enjoying the sunshine and lingering over cappuccinos late into the night. One evening at dinner, I couldn’t help but remark about the wonderful service at the restaurant. While it was the end of the busy tourist season, our waiter was amazingly attentive. He made it easy for us to order the right amount and variety of fish for the table, tailoring the offering to meet individual preferences. I suggested to my friend that I was surprised that although he knew he’d never see us again, he delivered exceptional service. A native, she told me that the customer was an integral part of the dining experience. For the business, ensuring customer satisfaction was as important as ensuring the quality of the food.

So how can companies everywhere deliver effortless, memorable experiences for its customers? How can they ensure that the service they deliver lives up to its brand promise?

It’s simple. The best companies deliver straightforward, reliable experiences that meet real needs. People want to interact with companies where doing business is personalized, easy and hassle free. Consider Starbucks, where you get a consistent experience and your morning jo customized for you no matter what city you are located in. Or Nordstrom, where you can link directly from Pinterest to their store to order the latest products that catch your eye.

Delivering an effortless experience begins with listening to your customers. It’s important to take the time to look at your business through the lens of your customers. This involves setting up multiple listening posts to capture different viewpoints. Most importantly, you need a robust system to capture and categorize that feedback in a manner in which your organization can easily act on it. At Verizon, we have a social media team that monitors posts across a wide variety of sites. The data they collect is analyzed using Clarabridge, a data analytics platform, that lets practitioners quickly identify trends.

Once you understand what matters to your customers, leveraging tools like Six Sigma makes it easy to effectively eliminate pain points. The goal of your process reengineering effort should be to create a simple and intuitive process for your customer. To coin an old phrase, “eliminate the small print”. If you have to explain the offer, it probably isn’t pain free.

Structured, data centric decision making is not only a powerful way to drive problem solving, it also helps align your stakeholders. Verizon found that it was easier to align its leaders when data formed the basis for the conversation.

Finally, successful businesses need alignment throughout their organizations. If the customer service organization isn’t prepared for the latest product offer, it can’t provide the training necessary for a successful launch. If the sales organization isn’t aware of what the marketing team is putting out into the market, it isn’t going to present a consistent message. So, in short, align your brand message internally before you take it external.

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Join the Center for Services Leadership at Compete Through Services Symposium on October 26th, 2016, to hear Carol Fink, Director of Executive Relations at Verizon, speak on Branding Your Customer Experience.

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Carol Fink is Director of Executive Relations at Verizon.  In her current role, she has responsibility for voice of the customer analytics and process improvements across Verizon’s major businesses.  She holds a bachelor’s degree from the University of Michigan and a Master’s degree in Business from the University of South Florida.  She is a certified six sigma black belt, a certified work out planner and a “Playing to Win” strategy facilitator.  She leverages voice of the customer, employee engagement and six sigma principles to improve the customer experience.   Carol is based in Basking Ridge, NJ at Verizon’s corporate headquarters.  She is a member of the CXPA.

 

Branding Your Customer Experience – 2016 Compete Through Service Symposium Theme

We invite you to join us for 2016 Compete Through Service Symposium on October 26-28th, in Scottsdale, AZ!

This year the Symposium will emphasize three themes:

• Branding Your Customer Experience
• Digital Transformation of Service
• Growing the Service Business

Day 1 will focus on insightful and dynamic presentations on Branding Your Customer Experience. Our speakers will share best in class strategies that ensure that the critical touchpoints on the customer experience journey support and align with the organization’s brand promise. We will also explore what Branding Customer Experience means in B2C and B2B context. You will further dive into the topic by participating in our engaging and highly interactive breakout sessions in the afternoon of Day 2:

Breakout A: Authentically Branded Service Experiences

In today’s competitive marketplace, more and more companies are seeking to engage with customers by creating authentic and memorable experiences for them. In this session we will look at the critical role of frontline contact employees in creating memorable service experiences that are consistent with the brand’s positioning. We will share research on employee authenticity and branded service encounters and their impact on customer satisfaction and loyalty intentions. Through an applied exercise, you will examine what authentically branded service might mean for your company and how you can effectively link your employees and your brand image to create positive outcomes for customers.

Breakout B: Environment and Behavior: The Power of a Branded Customer Experience 

Touch-points placed on a timeline can create a great branded service experience, but in order to carry that brand story from touch-point to touch-point, each of those moments has to be dense, using every tool at our disposal to make that happen. This talk will focus on the ways that physical space influences behavior, the ways that architectural elements predict movement, the ways that physical and digital information access can influence decision making and finally in the way those all of those things can contribute to a great branded service experience.  I will share research, insights, and case studies that will give participants tools and understanding that will expand their thinking about great service design.

To learn more about Compete Through Service Symposium and to register, visit CSL website.

We look forward to seeing you at the Symposium!

CSL Leads a Conversation on Leveraging Big Data & Analytics for Service Innovation and Growth at ISBM Academic Conference

Institute for the Study of Business Markets (ISBM) of PennState Smeal College of Business held its biannual academic conference “Advances in Business-to-Business Marketing” in August 2016 in Atlanta, Georgia. Center for Services Leadership (CSL) was invited to to lead a session on Leveraging Big Data & Analytics for Service Innovation and Growth: Promising Research Avenues Grounded in Managerial Practice with managers and academics to discuss managerial challenges and identify promising research avenues.

The session was led by Wolfgang Ulaga, CSL’s Co-Executive Director and AT&T Professor of Services Leadership at W. P. Carey School of Business, ASU. In his presentation he discussed some of the pressing issues identified by CSL’s member companies who are collaborating with Center for Services Leadership in a Community of Practice on Big Data and Analytics.

Center for Services Leadership was joined in the conversation by Georgia State University’s Center for Business and Industrial Marketing and PennState University’s Institute for the Study of Business Markets. The session included a diverse panel of experts who offered business and academic perspectives on the topic. The panelists included:

• Jagannath Rao, President, Customer Services Business Unit, Siemens Inc.;
  Board Member, Center for Services Leadership, Arizona State University.
• Wesley J. Johnston, CBIM RoundTable Professor of Marketing and Executive Director,
  Center for Business and Industrial Marketing (CBIM), Georgia State University.
• Gary L. Lilien, Distinguished Research Professor of Management Science, Smeal College of Business, Pennsylvania State University, Research Director, Institute for the Study of Business Markets (ISBM)
  

Over the next months we will be sharing the highlights from this session and will update you on the work that Center for Services Leadership will be doing in partnership with its member companies in the area of Leveraging Big Data & Analytics for Service Innovation and Growth. Make sure to follow our blog to receive these updates.

Also, don’t miss session Monetizing Data and Analytics for Service Innovation and Growth: Commercial Challenges and Best Practices with Dr. Wolfgang Ulaga and Ed Petrozelli, CSL Board Member, President and CEO of The INSIGHT Group. This session will take place on Thursday, October 27th, 2016, at Compete Through Service Symposium in Scottsdale, Arizona. Visit our website to learn more and to register. We hope to see you there!

 

Innovation – What it is, and is NOT

By Don Smith

“You keep using that word, I do not think it means what you think it means.”

Inigo Montoya’s famous line from The Princess Bride instinctively pops into my head (sometimes muttered under my breath) when I read yet another article on the thin, worn topic of “innovation”. In its often misunderstood overuse, the word has become diluted (even polluted) to the point of becoming ineffectual in portraying any clear and distinct meaning; perhaps in similar fashion to the misuse of the word “quality” in the last 50 years. First of all, innovation is not coterminous with invention and should never be used interchangeably. Secondly, innovation is not rooted in technology. And lastly, the pursuit of innovation is not in and of itself innovation. This severe dilution of the term creates confusion and hinders us from actually achieving real and reliable innovation.

In the early 70’s Peter Drucker wrote, “Above all, innovation is not invention.” Apparently the terms were being confused back then as well. Drucker then gives us an important clue about what innovation really is in the very next sentence saying, “Innovation is a term of economics rather than technology.” It’s probably obvious, but what he means is that innovation occurs because of the economic choices made by a society when they adopt some form of invention. This definition is backed up in the book The Medici Effect, where Frans Johansson says, “Innovations must not only be valuable, they must also be put to use by others in society. …It has to be ‘sold’ to others in the world, whether those people are peers who review scientific evidence, customers who buy new products, or readers of articles or books.” This definition also comes from a body of research on creativity and innovation done by Teresa Amabile, the Edsel Bryant Ford Professor of Business Administration at Harvard Business School.

To illustrate the difference, let’s consider one of the most renowned and prolific inventors of all time. Thomas Edison had 1084 patents; only two others in history have received more. Yet only 31 of those patents resulted in products which were widely adopted commercially. In other words, only 31 of his inventions were truly innovative. I’m not saying the other 1053 inventions weren’t clever or cool in some way. It’s simply that the majority of them were never found to be useful enough by society to be innovative. Innovation is proven when social adoption occurs and the invention is significantly adopted or utilized.

Drucker made a secondary point that needs to be understood as well. He said, “Nontechnological innovations – social or economic innovations – are at least as important as the technological ones.” Technology is not the only platform of invention and innovation. There are as many non-technical inventions as there are technological, if not more. We are constantly coming up with new methods about how we can do things and ways of thinking or perceiving the world. For instance, it can be innovative to simply reconfigure the revenue model by offering free or “freescription” products or services, where basic services are free of charge to the bulk of customers and premium services paid for by a few, which actually funds the business model. Many innovative connector platforms such as Lyft, Uber, and Airbnb are disrupting legacy services. Recent examples of social innovation are the Open Source movement, social media, Open University, Fair Trade, Microfinance, and companies forming for the “social good” (i.e. B Corporations). I recently learned of a for-profit company based in the Seattle area that funds projects in third world countries with no intention of making any profit. This is intentional and allows them to circumvent the governmental oversight imposed on contemporary non-profits and NGOs; not to mention the costs of graft and corruption often associated with international aid. While this cannot yet be confirmed as an innovative approach, when other organizations move to adopt, it may become so.

Another source of innovation is repurposing old technology for value creation in a new context. One recent example of an old technology applied in a new way is the flywheel, which was originally used to help maintain the consistency of the rotational speed of a shaft. This technology was ingeniously repurposed to maintain the consistency of electrical flow in the generation of electricity using wind and solar power generators because those sources do not produce consistently (i.e. wind dies, sun fades). As an old mainframe guy, I’m very keen to point out the concept of centralized computing, which came and went in the 20^th century, has now returned in what is commonly known as Cloud Computing. Old technologies and concepts may have many new and innovative applications, if we can distance ourselves from the bonds of conventional utilization.

An issue of “The Economist” a couple of years ago focused on the debate about the perceived decline of real innovation in recent years. Whether or not the perceived decline is real, it begs the questions of why and what can be done to mitigate the perception. Could it be the pressure to innovate is itself killing innovation? One possible validation of this notion is the often seen phenomena that according to the measure of our intense desire for something, is the measure to which it eludes us. A more rational aspect points to a temptation to label something as innovative when, indeed, it hasn’t reached the level of adoption required for true innovation. While some invention may be massively clever and endearing to its small circle of fans, the bulk of the world remains indifferent. This shouldn’t, but often is, mislabeled as innovation. We lack innovation because most organizations don’t truly know what it is.

Why is the distinction between invention and innovation so critical? I would like to suggest that innovation is the desired outcome, while invention is one of the elements or prerequisites. On the path to innovation we must invent.  The process of invention begs failure, which increases learning and knowledge and is the investment in potential future innovation. Yet many organizations are failure averse. We need prolific invention from all possible sources, technological as well as non-technological. But invention alone isn’t enough.

While invention is the precursor to innovation, another critical ingredient is required. The value proposed in said invention must also be adopted by customers. I often wonder how many truly useful inventions never materialized because their value proposition was never effectively communicated to potential beneficiaries. The sad truth is, most inventors are really good at developing very useful inventions, but lack the skills to effectively communicate the value proposition. Therefore, an additional precursor to innovation is effectively and successfully marketing inventions. Inventors come up with really interesting and clever ideas. However, it’s the innovators who take a clever invention and effectively communicate the value proposition, which then drives significant adoption (i.e. lots of customers). I would like to suggest that the true measure of innovation is the rate of social adoption of some value proposition (social or technological) and thereby creating significant new demand.

Just like the challenges of the “fire swamp” in The Princess Bride, the journey to innovation is anything but easy. Nevertheless, we make the work possible when we have clarity about what innovation truly is, and is not.

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This article originally appeared on FutureSmith Blog and has been republished with permission.