Issue 36, Sunday 11 March, 2001
Made in New Zealand - twice winners of the America's Cup
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"Gaining a new customer can cost four to seven times more than retaining an existing one; existing customers are an obvious and critical commodity. Loyal customers translate into lower marketing costs, more referrals, increased spending per customer, and insight into performance improvement." APQC


Award is a free fortnightly email magazine featuring the tools, techniques and best-practices that deliver high performance in the new economy
In this issue
WarmUp – What's Award about?
Ten Second MasterClass® – THE CUSTOMER IS ALWAYS ...
YOU KNOW!?
Quick Study® – Innovation
Quick Study® – Career development plans
UpDate – A plug for us (Award delivers the goods …) and a plug for ...
STOP PRESS – Armand Feigenbaum at Emerald Now

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WarmUp® – What's Award about?
We've had a flood of new subscribers over the past couple of months. Why? Who knows – it's one of those mysteries of the internet. But it has made us think about purpose and value – about delivering the 'big ideas in a small package' that we've always promised. Which 'big ideas'? About what?
Award began as a sort of adjunct to www.baldrigeplus.com, which began as a sort of support site for people interested in the Malcolm Baldrige National Quality Award and all the derivative performance excellence schemes around the world. Baldrigeplus has stayed on course, but the newsletter has morphed into a web magazine, and wandered all over the place … but always with a focus on 'performance' issues, and often explicitly directed at one of the generic Baldrige categories.
Our goal is to add value to your day – especially if you have an interest in how and why organisations succeed. A steady rise in subscribers, and a lot of re-publishing through corporate and personal email networks, is evidence that for our subscribers, and their networks, we're doing the right thing.
Ten Second MasterClass® – THE CUSTOMER IS ALWAYS ...
YOU KNOW. The Boston Consulting Group suggests several answers for surviving the dot-com shakeout. And they all come under the heading of responding to customer demand. Some online sectors are doing a better job than others of keeping online customers happy. Two of the best-performing categories are books and health-and-beauty, where consumers say they are satisfied with their experiences 31% of the time.
BCG outlines its five-point plan in a report released last week called, "Winning the Online Consumer 2.0: Converting Traffic into Profitable Relationships." The Boston-based research firm recommends that online retailers avoid a piecemeal approach and address the following benchmarks simultaneously:
1) Visitor-to-buyer conversion rates;
2) Traffic, measured by the number of unique visitors;
3) Proportion of repeat customers;
4) Orders per customer, and
5) Ratio of repeat-order revenue to first-time-order revenue.
In a survey of almost 3,000 consumers, BCG found that customer dissatisfaction has a chilling effect on e-tail – 41% of consumers who ordered, but did not receive their purchases, stopped shopping at the Web site in question.
Quick Study® I – Innovation
In an e-company.com story (Four Kinds of Uncertainty) one of our fav authors – Thomas A Stewart – began with:
"Gee, I don't think so ...."
These, he said, are the words of a boss trying to be nice as she turns down the idea you've spent months developing – an idea that makes your eyes dance and your heart race, an idea that was going to win you the Nobel Prize and net you a fortune, or at least the chance to lead a project team yourself.
Whether you hear or speak those words, listen carefully to what gets said next, our Thomas said. When an idea is turned down – it doesn't matter whether the innovation is in technology, marketing, or management – most people offer one of two reasons:
technology ("I'm not sure it will work")
or money ("It won't sell," or "We can't afford it").
Behind these two common explanations are the real reasons why ideas are killed: the four different types of uncertainty. If you can understand which kinds afflict your company most often, you can increase your ability to innovate, he said (attributing the original work to Mark Rice of the Radical Innovation Research Project at Rensselaer Polytechnic Institute in New York).
According to Rice, these are the four reasons good ideas get killed:
Technological uncertainty. Will it work? It may work in the lab, but can it work in less controlled conditions? ("The theory's nice, but as a practical matter ....")
Resource uncertainty. Also familiar. Money's the big factor here, but it's not the only one. Time, talent, and space are resource constraints, too. Sometimes bosses will nix an idea and cite resource uncertainty when they really mean ....
Market uncertainty. Market uncertainty is a beast with several subspecies. For instance, is the market big enough? (A famous example of this comes from Thomas Watson Sr., who once said, "I think there is a world market for maybe five computers.") Also, can it be produced at a price the market will pay? And, finally, is there a market at all? (640K ought to be enough for anybody, said Bill Gates - urban legend).
Organizational uncertainty. The least talked about, and therefore most interesting kind of uncertaincy. This is the sense that an idea might be perfectly fine, just not a good fit for the company. For example, "We're too small: We don't have the distribution, the big guys will kill us if we tread on their turf." Or, "We're too big: Our overhead's so great that we can only afford to take on $100-million ideas; we can't afford to hand-sell to a lot of small customers; we can't move fast enough to play in this market."
If an idea really won't work, or if it's really impossible to get the resources, or if the market's really not there, there's not much you can do except go back to your cube and wait for a new flash of inspiration. But pay attention – no matter which end you're on – when an idea gets killed because of organizational-uncertainty-based causes. You may be sitting on a gold mine, and need only find someone else who has the right kind of shovel.
Quick Study® – Career development plans
On-line lists can be a bind - they arrive every day (or week), take ages to skim, and mostly come up empty. One exception we always scroll slowly through is the UK-based UKHRD, a list for trainers that's rich in experience and advice. Recently, one topic up for discussion was career development, and we'd like to share what (Welsh? You guess!) Wyn Llewellyn had to say:
Although it is widely agreed that career development and succession planning mechanisms have great potential for adding value to organisations and individuals, many find difficulty delivering that value.
There are many analytical techniques and instruments that can be applied in this process, and it depends on the culture, preferences and skills of the organistion as to which ones are chosen. What is important is that there is a sound process in place which is valued and can deliver the required outcomes consistently to everyone's satisfaction.
The process for assessing development potential that I have outlined here is one that I have found to be effective in making decisions that take account of the key interests.
Here are the definitions of the components of the process model:
1. Competency requirements of the role. A clearly defined set of statements describing the critical competencies necessary to enable delivery of the Key Results Areas of the job. It is helpful if the organisation has a competency framework in place.
2. Types of work analysis of the role. This is based on the Margerison-McCann instrument taking the views of the job-holder and one other, eg the line manager.
3. List of key issues to influence and their payback potential. This is the link to Business Strategy and the contribution potential of this job to delivering it.
4. Individual's competency development plan. This is the output of the Appraisal Process which should ideally have a very specific set of diagnosed development needs and plans
5. Team management profile. This is the Margerison-McCann self assessment done in a work context. It yields a comprehensive 15 page report of an individual's styles, strengths and work preferences and is matched with item 2.
6. Competency profile. Current view of the individual's ratings against the competency set being used. Should be an output of the Appraisal process.
The purpose of this process is to provide a method for guiding a career development decision in a way that factors in the following interests ...
a. A motivational fit between the individual's strengths and development requirements and the opportunities provided in the role.
b. An opportunistic fit between the strengths the individual brings to the role and the issues the role has the potential to influence or solve.
c. A clear understanding of the fit between individual competencies and role requirements from a type of work perspective.
d. A high value decision for the organisation and the individual based on a simple process and sound data.

MOTIVATIONAL MATCH Compare items 2 and 5 using the report

JOB DEVELOPMENT MATCH Compare item 3 with 5 and 6

PERSONAL DEVELOPMENT MATCH Compare item 1 with 4 and 5
UpDate
Here's a plug for us (Award delivers the goods …) and a plug for them (to paraphrase a famous BBC comedy duo): a 'RAPID' update.

What's RAPID? Read on …

Since the launch of 'RAPID' in the UK (you read about it here first … in Award 31), author/operators Malcolm Holden and Philip Atkinson report that there has been “tremendous interest from all manner of organisations in both the Public and Private Sectors.
“Requests for information on 'RAPID' have been received from organisations in Australia, India, New Zealand and the US” says Malcolm Holden “and many of these are undoubtedly attributable to the excellent AWARD publication.”
At this stage the authors have taken the view that material will not be licensed - because it is personality, drive and business acumen that are required for success, not just doggedly following a process. Moreover, the 'RAPID' approach is unique in that it focuses upon creating cultural drivers that deliver business results.
Without giving too much away the authors claim that “Without Leadership there is no change” and they maintain that “management teams must focus their energies on rewarding behaviours that promote a culture of rapid and continuous measured improvement and discourage those behaviours that do not.”
Holden and Atkinson claim that effective change is both a political and behavioural process and significant input to differentiate specific desired “behaviours” requires a process of developing a culture where “cause-effect relationships” are thoroughly analysed. Philip Atkinson has worked with many top teams in major companies and has perfected a process to do just that. With Malcolm Holden's perspective they have created a powerful tool that identifies specific outcomes with actions.
What makes RAPID different and so successful? Perhaps it is the consolidation of man-years of effort into a Management Process that is simple enough for the Chief Executive to get his/her teeth into. Perhaps it is the approach followed by the authors - which is to transfer skills into businesses as fast as possible - no messing. Perhaps it is the unique combination of hard systematic approaches with the softer cultural issues. Perhaps it is the fact that the approach can help transform businesses overnight, generating infective enthusiasm from the CEO down to the shop floor.
Atkinson - asked how long does it take to implement the RAPID process - “how long do you want it to take? It's all a matter of management commitment.”
In January a UK Government contract was signed to pilot the process in 60 diverse manufacturing companies. Some pilot…!! This programme - stretching over 12 months will enable the process to be rigorously tested and will address both ends of company supply chains.
Participating companies receive a free 'health check' and a Vital Few' action planning service - in return for which they commit to report their progress on a bi-monthly basis. Provided these companies show a relative improvement to companies using other approaches there is a possibility of extending the process on a large scale. Given the heritage of 'RAPID' the authors believe that improving the relative performance gap is not a difficult challenge...!!! Time will tell.
The same approach is going through assessment in Scotland and a major business in the USA has favoured the approach and wishes to see how it fits with their Rapid Improvement initiatives.
From a standing start just over 18 months ago the 'RAPID' team now provide consultancy and 'door opening' services for over 100 other consultants in the UK, and have a growing network of close Associates operating, for example, in Finance, Marketing, Selling, E-commerce Scorecards, IT, Executive Search, Change Management, Psychometric tests for Team Building, Leadership, Interim Management, Personal Tax Planning and Expense Reduction.
And – here's what I like – Award played a wee part in that.
Not an advertisement
We'd like, as always, to remind you about EDGE FIRST, our companion eZine dedicated to leaders and leadership - a fortnightly serving of provocative thinking about what it means to be a leader, and the tools, techniques and best-practices that drive leadership improvement. If you haven't seen it, click here for a complimentary issue.

In recent issues
Competing for the future - Hamel is THE MAN, embrace innovation!
Women and leadership - for real progress ... give men the nappies
Quick case study/Jennifer White - on picking winning teams
tompeters! - new economy DNA. Flaky? Irresistable! The survival kit
Snapshots of the new economy - from Seybold to Subramanian
eStrategy - best, first, fastest, lastest ... just watch out for Wal-Mart
A better way - but don't try this at home
Gen II - who wants to be a CEO
STOP PRESS
SPOTLIGHT INTERVIEW
Just as we reached out to hit the button and email this issue around the www, in dropped the latest issue of Emerald Now, from MCB Press in the UK. In this issue, Dr Armand Feigenbaum talks to editor Sarah Powell about the concept of total quality control, the need for continuous improvement, the crucial importance of customer-orientation, and the main messages of his two forthcoming books, The Power of Management Capital and Total Quality Control, 4th edition.

Read the full interview at: http://www.mcb.co.uk/emrld/now/spotlight.htm

ARTICLES
Access the full text at http://www.mcb.co.uk/emrld/now/articles.htm
Organizational effectiveness indicators to support service quality G. Ronald Gilbert, Ali M. Parhizgari Managing Service Quality; 01:10 2000; pp.46-52 ISSN: 0960-4529
E-business strategy: how to benefit from a hype Floris P.C. van Hooft, Robert A. Stegwee Logistics Information Management; 01:14 2001; pp.44-54 ISSN: 0957-6053
A customer-supplier interaction model to improve customer focus in turbulent markets John Griffiths, Bruce Elson, David Amos Managing Service Quality; 01: 11 2001; pp.57-67 ISSN: 0960-4529
Service quality as a competitive opportunity Molly Inhofe Rapert, Brent M Wren Journal of Services Marketing; 03: 12 1998; pp.223-235 ISSN: 0887-6045
>> Next issue March 22 (ish), 2001 - reader contributions warmly received
>> Copyright © 2001, Macpherson Publishing
>> All rights reserved. But if you found this eZine useful we strongly encourage you to email it intact to associates, friends or acquaintances
>> Award and EDGE FIRST are trademarks of Macpherson Publishing
>> Contact us at macalex1@xtra.co.nz
>> Visit our web site at www.baldrigeplus.com

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