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Business Driven IT KPIs

KPIs (Key Performance Indicators) are a critical management tool to measure the success and progress of effort put in towards achieving goals and targets – to continually improve performance.

Every business set their specific KPIs to measure the criteria that drive the business success – these vary from business to business. One thing every modern business has in common though, is IT – the enabler that underpin operational processes and tools used to commerce daily. Setting KPIs that measure the success of IT operations does not just help IT leadership to continuously improve but also proof the value of IT to the business.

Here are ten IT KPIs that matter most to modern business

1. % of IT investment into business initiative (customer-facing services and business units)
How well does the IT strategy, reflected in the projects it is executing, align with the business strategy? This metrics can help to align IT spend with business strategy and potentially eliminate IT projects for IT that does not align directly with business objectives.

2. % Business/Customer facing Services meeting SLAs (Service Level Agreements)
IT is delivering service to customers; these are internal to the business but can also be delivered external to the business’ client/customers directly. Are these services meeting required expectations and quality – in the eye of the customer? What can be done to improve.

3. IT Spend vs Plan/Budget
Budgets are set for a purpose – it is a financial guideline that indicates the route to success. How is IT performing against budget, against plans? Are you over-spending against the set plans? Why? Is it because of a problem in the planning cycle or something else? If you are over-spending/under-spending, in which areas do this occur?

Knowing this metrics give you the insight to take corrective actions and bring IT spend inline with budgets.

4. IT spend by business unit
IT service consumptione is driven by user demand. How is IT costs affected by the user demands by business unit – are business units responsible to cover their IT cost, hence owning up to the overall business efficiency. This metrics put the spotlight on the fact that IT is not free and give business unit manager visibility of their IT consumption and spend.

5. % Split of IT investment to Run, Grow, Transform the business
This is an interesting one for the CIO. Businesses usually expects IT to spend more money in growing the business but reality is that the IT cost of running the business is driven by the demand from IT users with an increased cost implication. Business transformation, now a key topic in every board meeting, needs a dedicated budget to succeed. How do these three investment compare in comparison with business strategic priorities.

6. Application & Service TCO (Total Cost of Ownership)
What is the real cost of delivering IT services and application. Understanding the facts behind what makes up the total cost of IT and which applications/services are the most expensive, can help to identify initiatives to improve.

7. Infrastructure Unit Cost vs Target & Benchmarks
How do you measure the efficiency of your IT infrastructure and how does this compare with the industry benchmark? This is a powerful metrics to justify ROI (Return on Investment), IT’s value proposition, IT strategy and the associated budget.

8. % Projects on Time, Budget & Spec
Is the project portfolio under control? Which projects need remediation to get back on track and what can be learned from projects that do run smoothly?

9. % Project spend on customer-facing initiatives
How much is invested in IT projects in the business for the business (affecting the bottom line) in comparison with customer-centric projects that impacts the business’ top line.

10. Customer satisfaction scores for business/customer facing services

Measure the satisfaction of not just the internal business units that consume IT services but also the business’ customer’s satisfaction with customer-facing IT services. Understand what the customer wants and make the needed changes to IT operations to continuously improve customer satisfaction.

KPI vs Vision

In the famous words of Peter Drucker “What gets measured gets improved”, KPIs give you the insight to understand:

  • your customer
  • your market
  • your financial performance
  • your internal process efficiency
  • your employee performance

Insight brings understanding that leads to actions driving continuously improve.

NED :: Non-Executive Director’s proposition

Are you aware of the substantive and measurable value a Non-Executive Director can bring to you and your business…?

Introduction

The Non-Executive Director, no longer a role that is associated just with large organisations. There is a growing awareness of the NED role and more and more organisations are appointing NEDs of various types, and specific specialities, often within technology and digital transformation, to enhance the effectiveness of their boards as standard practise.

With the pressure on organisations to compete globally, deal with digital transformation and respond to rapidly changing market conditions, new skills are needed at board level. This leads to the role of the NED diversifying and introduces a need to refresh the NEDs as circumstances change, bringing in new specialities, experience and challenge when the organisation needs it.

A good NED can, and should make a substantive and measurable contribution to the effectiveness of the board. Do not see a NED as a consulting advisor – a NED, within the remit of the role of a company director, play a full and active part in the success efforts of an organisation. Irrespective of the skills, experience and network contacts that NEDs will bring, they must above all, provide appropriate independent and constructive challenge to the board.

Both the organisation and the NED must understand the purpose of being a NED, within the specific organisation, for the role to be effective. This includes a clear understanding of what value the NED is expected to bring. A NED’s value goes beyond just the statutory requirements.

On appointment a Non-executive director can:

  • Broaden the horizons and experience of existing executive directors.
  • Facilitate the cross-fertilisation of ideas, particularly in terms of business strategy and planning.
  • Have a vital part to play in appraising and commenting on a company’s investment/expenditure plans.
  • Bring wisdom, perspective, contacts and credibility to your business.
  • Be the lighthouse that helps you find your way and steer clear of near and present dangers.

The role of the NED

All directors, including NEDs, are required to:

  • provide entrepreneurial leadership of the company
  • set the company’s vision, strategy and strategic objectives
  • set the company’s values and standards
  • ensure that its obligations to its shareholders and others are understood and met.

In addition, the role of the NED has the following key elements:

  • Strategy: NEDs should constructively challenge and help develop proposals on strategy.
  • Performance: NEDs should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance.
  • Risk: NEDs should satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and defensible.
  • People: NEDs are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, executive directors, and in succession planning.

“In broad terms, the role of the NED, under the leadership of the chairman, is: to ensure that there is an effective executive team in place; to participate actively in the decision–takingprocess of the board; and to exercise appropriate oversight over execution of the agreed strategy by the executive team.”; Walker Report, 2009

 

A non-executive director will bring the follow benefits to your company:

  • strengthen the board and provide an independent viewpoint
  • contribute to the creation of a sound business plan, policy and strategy
  • review plans and budgets that will implement policy and strategy
  • be a confidential and trusted sounding board for the MD/CEO and keep the focus of the MD/CEO
  • have the experience to objectively assess the company’s overall performance
  • have the experience and confidence to stand firm when he or she believes the executive directors are acting in an inappropriate manner
  • ensure good corporate governance
  • provide outside experience of the workings of other companies and industries, and have beneficial sector contacts and experience gained in previous businesses
  • have the ability to clearly communicate with fellow directors
  • have the ability to gain the respect of the other directors
  • possess the tact and skill to work with the executive directors, providing support and encouragement where difficult decisions are being made
  • have contacts with third parties such as financial sources, grant providers and potential clients

Looking for a NED?

Now that you understand what a NED can do – What are you waiting for?

Contact Renier Botha if you are looking for an experienced director with strong technology and digital transformation skills.

Renier has demonstrable success in developing and delivering visionary business & technology strategies. His experience include Mergers & Acquisitions (M&A), major capital projects, growth, governance, compliance, risk management as well as business and organisation development. From startup to FTSE listed enterprise, the value Renier can bring as NED is substantive, driving business growth.

Insightful Quotes on Artificial Intelligence

Artificial Intelligence (AI) today, is a practical reality. It captivated the minds of geniuses and materialised through science fiction as I grew up. During the past 70 years (post WWII) AI has evolved from a philosophical theory to a game changing emerging technology, transforming the way digital enhances value in every aspect of our daily lives.

Great minds have been challenged with the opportunities and possibilities that AI offers.  Here are some things said on the AI subject to date. Within these quotes, the conundrum in people’s minds become clear – does AI open up endless possibilities or inevitable doom?

“I believe that at the end of the century the use of words and general educated opinion will have altered so much that one will be able to speak of machines thinking without expecting to be contradicted.”; Alan Turing (1950)

“It seems probable that once the machine thinking method has started, it would not take long to outstrip our feeble powers… They would be able to converse with each other to sharpen their wits. At some stage therefore, we should have to expect the machines to take control.”; Alan Turing

“The study is to proceed on the basis of the conjecture that every aspect of learning or any other feature of intelligence can in principle be so precisely described that a machine can be made to simulate it. An attempt will be made to find how to make machines use language, form abstractions and concepts, solve kinds of problems now reserved for humans, and improve themselves.”; John McCarthy (1956)

“AI scientists tried to program computers to act like humans without first understanding what intelligence is and what it means to understand. They left out the most important part of building intelligent machines, the intelligence … before we attempt to build intelligent machines we have to first understand how the brain things, and there is nothing artificial about that.”; Jeff Hawkins

“The question of whether a computer can think is no more interesting than the question of whether a submarine can swim.”; Edsger Dijkstra

“Whether we are based on carbon or on silicon makes no fundamental difference; we should each be treated with appropriate respect.”; Arthur Clarke (2010)

“…everything that civilisation has to offer is a product of human intelligence. We cannot predict what we might achieve when this intelligence is magnified by the tools that AI may provide, but the eradication of war, disease, and poverty would be high on anyone’s list. Success in creating AI would be the biggest event in human history.”; Stephen Hawking and colleagues wrote in an article in the Independent

“Why give a robot an order to obey orders—why aren’t the original orders enough? Why command a robot not to do harm—wouldn’t it be easier never to command it to do harm in the first place? Does the universe contain a mysterious force pulling entities toward malevolence, so that a positronic brain must be programmed to withstand it? Do intelligent beings inevitably develop an attitude problem? …Now that computers really have become smarter and more powerful, the anxiety has waned. Today’s ubiquitous, networked computers have an unprecedented ability to do mischief should they ever go to the bad. But the only mayhem comes from unpredictable chaos or from human malice in the form of viruses. We no longer worry about electronic serial killers or subversive silicon cabals because we are beginning to appreciate that malevolence—like vision, motor coordination, and common sense—does not come free with computation but has to be programmed in. …Aggression, like every other part of human behavior we take for granted, is a challenging engineering problem!”; Steven Pinker – How the Mind Works

“Ask not what AI is changing, ask what AI is not changing.”; Warwick Oliver Co-Founder at hut3.ai (2018)

“Sometimes at night I worry about TAMMY. I worry that she might get tired of it all. Tired of running at sixty-six terahertz, tired of all those processing cycles, every second of every hour of every day. I worry that one of these cycles she might just halt her own subroutine and commit software suicide. And then I would have to do an error report, and I don’t know how I would even begin to explain that to Microsoft.”; Charles Yu

“As more and more artificial intelligence is entering into the world, more and more emotional intelligence must enter into leadership.”; Amit Ray

“We’ve been seeing specialized AI in every aspect of our lives, from medicine and transportation to how electricity is distributed, and it promises to create a vastly more productive and efficient economy …”; Barrack Obama

“Artificial intelligence is the future, not only for Russian, but for all of humankind. It comes with colossal opportunities, but also threats that are difficult to predict. Whoever becomes the leader in this sphere will become the ruler of the world.”; Vladimir Putin

“I think we should be very careful about artificial intelligence. If I had to guess at what our biggest existential threat is, I’d probably say that. So we need to be very careful.”; Elon Musk

“Whenever I hear people saying AI is going to hurt people in the future I think, yeah, technology can generally always be used for good and bad and you need to be careful about how you build it … if you’re arguing against AI then you’re arguing against safer cars that aren’t going to have accidents, and you’re arguing against being able to better diagnose people when they’re sick.”; Mark Zuckerberg

“Most of human and animal learning is unsupervised learning. If intelligence was a cake, unsupervised learning would be the cake, supervised learning would be the icing on the cake, and reinforcement learning would be the cherry on the cake. We know how to make the icing and the cherry, but we don’t know how to make the cake. We need to solve the unsupervised learning problem before we can even think of getting to true AI.”; Yan Lecun

“Artificial intelligence would be the ultimate version of Google. The ultimate search engine that would understand everything on the web. It would understand exactly what you wanted and it would give you the right thing. We’re nowhere near doing that now. However, we can get incrementally closer to that, and that is basically what we’re working on.”; Larry Page,  Co-Founder at Google (2000)

If you had all of the world’s information directly attached to your brain, or an artificial brain that was smarter than your brain, you’d be better off.” – Sergey Brin Co-Founder at Goolgle (2004)

 

 

 

What is P3M3

Maturity models are tools that can benchmark current performance against best practise. It provides valuable information on the current status of operations and point out areas for improvement that could increase the operational effectiveness, not just from a processes perspective but also the involved people, the tools used and the interaction of different disciplines within an organisation.

P3M3 is a management maturity model looking across an organization at how it delivers its projects, programmes and portfolio. P3M3 is unique in that it considers the whole system and not just at the processes.

P3M3 provides three maturity models that can be used separately to focus on specific areas of the business, or more generally to help the organization assess the relationships between their portfolios, programmes and projects.

The three P3M3 maturity models are:

  • Portfolio Management
  • Programme Management
  • Project Management

Structure

Each sub-model is further broken down into seven perspectives:

  • Organizational governance
  • Management control
  • Benefits management
  • Risk management
  • Stakeholder management
  • Finance management
  • Resource management

The P3M3 model has five maturity levels:

  • Level 1: Awareness
  • Level 2: Repeatable
  • Level 3: Defined
  • Level 4: Managed
  • Level 5: Optimized

P3M3 allows an assessment of the process employed, the competencies of people, the tools deployed and the management information used to manage and deliver improvements. This allows organizations to determine their strengths and weaknesses in delivering change.

There are no interdependencies between the models so an assessment may be against one, two or all of the sub-models. It is possible for an organization to be better at programme management than it is at project management.

Benefits

Through baselining an organization’s performance it is possible to identify areas where an organization can most effectively increase its project, programme and portfolio capability. Therefore the sort of benefits expected from using P3M3 to develop and implement an improvement plan would be:

  • Cost savings
    • On delivering project outputs and programme outcomes
    • Integrate processes across an organization
    • More effective use of budgets
  • Improved benefits delivery
  • Improved quality of delivered projects and programmes
  • Improved customer satisfaction
  • Increase return on investment
  • Providing plans for continual progression
  • Recognizing achievements from previous investment in capability improvement
  • Focusing on the organization’s maturity, not specific initiatives (you can run good programmes and projects without having high levels of maturity – but not consistently).

DevOps: An Immersive Simulation

It’s 8:15 am on Thursday 5th April and I’m on the 360 bus to Imperial College, London. No — I’ve not decided to go back to college, I am attending a DevOps (a software engineering culture and practice that aims at unifying software development and software operation) simulation day being run by the fabulous guys from G2G3.

I’ve known the G2G3 team for several years now, having been on my very first ITSM (IT Service Management) simulation way back in 2010 when I worked for the NHS in Norfolk and I can honestly say that that first simulation blew me away! In fact, I was so impressed with that I have helped deliver almost 25 ITSM sims since that day, in partnership with G2G3.

Having worked with ITIL (IT Infrastructure Library) based operations teams for most of my career, I remember when DevOps first became “a thing”. I was sharing an office with the Application Manager at the time and I can honestly say that it seemed a very chaotic way of justifying throwing fixes/enhancements into a live service. This really conflicted with my traditional ITSM beliefs that you should try to stop fires happening in the first place, so as you can imagine, we had some lively conversations in the office.

Since then, DevOps has grown into the significant, best practice approach that it is today. DevOps has found its place alongside service management best practice, allowing the two to complement each other.

Anyway, back to the 360 bus — let me tell you a bit about the day…

On arrival, I met with Jaro and Chris from G2G3 who were leading the day. The participants consisted of a variety of people from different backgrounds, some trainers, some practitioners, but all with a shared interest in DevOps. Big shout out as well to the guys who came all the way from Brazil!!! Shows how good these sessions are!

The day kicked off with us taking our places at the tables that are scattered around the room as we are given an explanation of how the sim works. I do not want to go into detail about what happens over the day, as you really need to approach these sessions with an open mind, rather than know the answers. What I can tell you is that the rest of the day consisted of rounds of activity, with each one followed by opportunities for learning and improving and planning. There are times when you find yourself doing something you would never normally do, amidst the chaos of the first round. This was summed up by my colleague, another service management professional, who had to admit that they “put it in untested”, much to the enjoyment of the rest of the room!

The day itself went by in a blur! People who you met at the beginning of the day, are now old friends that you go down the pub with at the end of the day! These new-found friends are also a fantastic pot of knowledge, with everyone able to share ideas and approaches.

The day was a rollercoaster of emotions — At the beginning of the day, I was apprehensive about whether I had enough knowledge of DevOps. Apprehension quickly changed to a general feeling of frustration and confusion through round one, as I tried to use my Tetris knowledge to develop products! I finished the day with a real sense of satisfaction — I had held my own and the whole team had been successful in developing products and delivering a profit for the business. There were some light-bulb moments for me along the way, in particular around needing to make sure that any developments should integrate with each other and also meet the user acceptance criteria. I also realised that DevOps is more structured than I thought with checkpoints along the way to ensure success. The unique way in which simulations are delivered serves to immerse people in a subject whilst encouraging them to change behaviours through self-discovery.

I have always received very good feedback for ITSM simulations, and I can see that the DevOps simulation will prove to be as successful.

Several of us also returned to Imperial College the next day to attend the Train the Trainer session for the DevOps simulation. This means that we can now offer tailored simulations either as an individual session or as part of a wider programme of change.

Simulations are always difficult to explain, without giving away the content of the day, but if you would like to find out more, please contact me onsandra.lewis@bedifrent.com


Written by Sandra Lewis — Difrent Service Mannagement Lead
@sandraattp | sandra.lewis@bedifrent.com | +44(0) 1753 752 220

5 Whys

5 Whys” technique for Root Cause Analysis (RCA)

Do you have a recurring problem that keeps on coming back despite repeated actions to address it? This might be an indication that you are treating the symptoms of the problem and not the actual problem itself – you need to determine the root cause of the problem – you must conduct a root cause analysis.

Root cause analysis (RCA) is a systematic process for identifying “root causes” of problems and the appropriate response that effectively deals with it. RCA is based on the basic idea that effective management requires more than merely “putting out fires” through quick fixes for problems that develop, but finding a way to prevent them from occurring again or in the first place. A root cause analysis is a process used to identify the primary source of a problem.

An effective method to get to the bottom of a problem is to use the “5 Whys” that was initially developed as part of TPS (Toyota Production System) that gave birth to what we know today as Lean Six Sigma – discussed in more detail in the article on “Lean Six Sigma – Organisational Development and Change”.

5 Whys is an iterative interrogative (problem solving) technique used to explore the cause-and-effect relationships underlying a particular problem.

The primary goal of the technique is to determine the root cause (source) of a defect or problem by repeating the question “Why?”, five times. Each answer forms the basis of the next question.

Why five time? This derives from an anecdotal observation on the number of iterations needed to resolve the problem.

How to conduct the 5 Why technique:

  1. Write down the specific problem. Writing the issue helps you formalize the problem and describe it completely. It also helps a team focus on the same problem.
  2. Ask Why the problem happens and write the answer down below the problem.
  3. If the answer you just provided doesn’t identify the root cause of the problem that you wrote down in Step 1, ask Why again and write that answer down.
  4. Loop back to step 3 until the team is in agreement that the problem’s root cause is identified. Again, this may take fewer or more times than five Whys.

For example:

5Whys - RCA

In business, only one cause for a problem is not the usual case. Using the 5 Whys in conjunction with the Fishbone Diagram (Ishikawa), that helps the exploration process to cover all potential inputs and hence potential causes of problems or defects.

fishbone-diag3

 The 5 Whys method can be used to uncover multiple root causes by repeating the process asking a different sequence of questions each time.

 

Building a Compelling Value Proposition

What does a professional, consultant, executive or entrepreneur have in common, seeing that business success is a common driver and key performance indicator – the need for a compelling value proposition.

In the blog post “Your Value Proposition” we discussed four simple elements of a value proposition being:

  • Need
  • Approach
  • Benefits
  • Competition

We concluded that in presenting your value proposition, it is your responsibility to adapt to situations as needed and to ensure that you can validate the actual need, have reassurance that the approach will work, know that the benefits as real and that you are a competitive player in the market. How well you can demonstrate agility in aligning the right value proposition to the customer, will determine your success in business.

In this conclusion lies the clue in how you could go about when building a compelling value proposition?

  • Validate the actual need
  • A workable approach
  • Real benefits
  • Being a competitive market player

Let’s recap on a Definition of a Value Statement: It is the positioning statement that you communicate to articulate the benefits that you provide for your target audience (customer) and how you do that uniquely well.

Where to start

The need is the most important part of the value statement, the need is the source of innovation and inspiration, the starting point that defines the problem you are trying to solve. Once you understand the real need – you are halfway there, as you’ll have an offset point, a target for your solution – an audience with a the need and interest to buy you product or service.

To identify and understand a real need, you need to do some research to gather some insight in the challenges your potential customers are facing. Asking targeted “what, why, how, who” questions to guide you in finding the real need with questions like:

  • what is the actual problem,
  • why is it a problem,
  • what are the outcome requirements,
  • what does good or outcome success really look like,
  • what is currently offered in the market,
  • what has been tried,
  • did it work,
  • what works and what does not work,
  • why does not work or work,
  • what is the root cause of the problem

Validating the need

Once you have established the real need you should ask a very important question: “Is the problem worth solving?”

Forbes mentions for 4Us – four questions you should ask when defining your value proposition:

  1. Is the problem Unworkable? (if not fixing it, is their measureable consequences i.e. someone will get fired)
  2. Is fixing the problem Unavoidable? (i.e. driven by new legislation, or a governance mandate)
  3. Is the problem Urgent? (an urgent problem has the attention of the decision makers, the C-suite)
  4. Is the problem Underserved? (absence of valid solutions currently in the market)

If you can answer ‘Yes’ to all four questions you are on the right track in defining a compelling value proposition.

Measure if your solution and associated approach is compelling

Understanding the real need enables you to define the solution – the product or services that will address the need and solve the defined problem.

Forbes mentions having a product or service that is simply faster, cheaper and better is not enough to make it compelling – you should evaluate it in 3D.

  1. Discontinuous innovation – looking at the problem differently and offering transformative benefits
  2. Defensible technology – does it introduce intellectual property that can be protected and create a barrier to entry, hence create a competitive advantage.
  3. Disruptive business model – delivers value in monetary terms to incubate business growth.

A solution with benefits in 3D is worth pursuing.

Ease of Integration

You must ensure that the solution can easily integrate into the life of the customer. Defining the solution in an easy understandable language goes a long way, but if you end up with a complicated, time-consuming and costly project trying to integrate your solution with the customer’s business you are introducing an unwanted barrier of entry. For example – as technologist we can get so caught up in the fascination of cutting edge technology, the technical jargon and functionality, that we loose sight of the actual business driver – understanding and addressing the customers need – the use of the technology must make things easier and better, not more difficult and worse.

When engineering your solution focus on integration with the minimum business operation disruption while still delivering increased business value. This is referred to as the Gain/Pain ratio: the gain your solution brings to the customer versus the effort and cost to the customer to integrate and adopt the solution.

Understand your own SWOT

Remember that you are the core to your value proposition – so keep in mind your own Strengths, Weaknesses, Opportunities and Threats – focus on your Strengths to realise your Opportunities.

Build the Value Proposition

Incorporating the findings – understanding, defining and validating the need, which is addressed by a compelling, easy to integrate solution and playing towards your own strengths – you are ready to build your value proposition.

The value proposition statement could read: For (target audience), who are dissatisfied with (the current alternatives), our product or service is a (your new brilliant service and product definition), that provides (key problem solving capability) and (the benefits to the audience) unlike (the product or service alternatives).

Last tip: Ensure that you capture what you really are about – be true to yourself and authentic in your presentation, people see straight through anything else.

 

Related Blog posts: Your Value Proposition; Value!?

Your Value Proposition

Your Value Proposition

Being in business means that you have something of value for sale, that is desired by someone else who is buying. Being in business isn’t just about running your own business, it also means that you are working within a commercial workplace where goods or services of value are being sold and delivered to a customer who is buying. These customers can be external to the business for example selling products and services to another business or to the public, or these customers can be internal if it is delivering value to another department or to your colleagues within the organisation or your workplace. Apart from providing your services to the customers, other people also benefit from your deliverables. These people are stakeholders and they can include your business partner, the board of directors, your manager or team leader, your team, the shareholders or even other businesses for example your vendors and suppliers who would all benefit from your success.

Even if you are not running your own business and are working for an organisation to earn your living, you are in business – the business of selling your own skills, experience and knowledge, which is of value to the company you are working for, in exchange for a salary or wages. The organisation hiring you is in essence your customer.

To be successful in business it is clear that you need to have something of value. Something of value means you have a defined product or services (skills, knowledge and experience) and a market with customers who value what you have on offer and are willing to exchange it for money. The customer must be aware of your product or service and more so must understand its value, before they will engage and buy. Creating this customer awareness is done through marketing, which is dependent on a clear definition of the product and it’s value to the target audience (the customers). This value definition is your value proposition.

Remember – you define your value proposition, but it’s true value is in the eyes of the beholder – your customer. Ultimately it is the benefits that your product and service bring to the customer that defines it’s value.

The value proposition is the backbone of the business – everything what your business is about evolves around delivering and continuously improving the value proposition. To gain new customers and to keep current customers and stakeholders involved and happy, you need to be crystal clear of your well defined value proposition.

Having a look at the value proposition examples of some of most successful companies like Uber, Apple, Slack, Digit, reveals that a good value proposition includes four elements:

  • Need
  • Approach
  • Benefits
  • Competition

Need – understand what your customer really wants, what do they need, what problems are they looking to solve. This is probably the most important part of the value proposition as without understanding the need, you’ll find it hard to define the solution (the product or services) that will satisfy the customers need in such a desirable way, that they are willing to spend money to get it.

Approach – having a solution to the customer’s need, your approach explains how you go about applying your solution (product or service) to satisfy the customer need – how the solution will solve their problem. The solution must be a direct fix for the problem. The approach you choose in delivering your solution must be the most effective means to apply your solution to the specific problem or customer need. Your approach will consist if specific components i.e. methodologies, solution architecture, prototyping, processes, templates, standards, etc, selected specifically to optimise the success in applying the solution (product or service) to the customer’s problem (need).

Benefits – focussed on the customer, what benefits would they get from using your services or products. Back to defining what value will you bring to the life of the customers when they are using your product or receiving your service. To understand this, you have to understand how the customer experiences your offering, answering fundamental questions like: “How much does this cost?”; and “Is the benefits worth the price?”. Benefits are tangible and measurable – usually in monetary terms. Benefits are not just ideas. Define the benefit in the terms the customer will relate to. Benefits should attract customers to what you offer.

Competition – what is your unique differentiator that sets you apart from your competition in the market. Again this should be approached from the customer’s perspective. How does your customer perceive your offering in relation to the other providers competing for their money. In what way does your offering differentiate from the competition i.e. quality, durability, reliability, guarantee and price.

Example: Let’s apply this to the Apple iPhone Value Proposition

Need: everyone uses smart phones – but it can be complicated to navigate. Your phone has become an accessory, and expression of your personality, a needed tool conducting our day to day lives.

Approach: Apple offers a unique user experience and design; it is not just a phone but also a lifestyle.

Benefits: Hassle free, superior operation – “It just works”. There is nothing quite like iPhone as every iPhone is built on the belief that a phone should be more than a collection of features. Exceptional design and state of the art engineering that oozes with built-in quality. Simple, elegant, beautiful and magical to use. (Just listen to their launch keynotes)

Competition: Genuinely unique iPhone features are highlighted on all marketing media i.e. security. Most of the iPhone features are not unique but experiencing the already known features on a iPhone is magical – that is what sets iPhone apart.

Using your Value Proposition

Breaking down your value proposition using the four elements mentioned above, puts you on the front foot to easily position all customer conversations towards insight and perspective of your proposition, to  the value you deliver for your customers and your stakeholders. Following through on all four elements during conversations takes the customer on a journey, a journey that makes it easier for them to relate to you and a clear holistically understanding your offering in context to the bigger picture. It also gives them the reassurance that you have the needed insight in what matters to them. Even if a prospect customer wants to focus on only one area for example the benefits aspects, you will be prepared for the engagement.

Keeping your value proposition front-mind during all customer and/or stakeholder engagements. This keeps you focussed on what’s important for business success – satisfied and happy customers.

To Conclude:

In real live you cannot predict the future, especially as you know that every situation is unique in it’s own right. In presenting your value proposition, it is your responsibility to have the agility to adapt to situations as needed, to ensure that you can validate the actual need, have reassurance that the approach will work, know that the benefits as real and that you are a competitive player in the market.

How well you can demonstrate agility in aligning the right value proposition to the customer, will determine your success in business.

 

Also read…

“How to Build a Compelling Business Proposition” for some valuable tips to consider in compiling value propositions.

Value!? – what is value and how do you define customer value.

Effective Leadership Communication

We have all heard the saying: “Communication is the key to success!”

Leadership coaches and successful leaders all agree that when it comes to communication – A leader can never communicate enough! The communication gurus say that even when there is nothing to communicate, the leader should communicate that there is nothing to communicate…

I have been asked the questions: “ How do you communicate effectively to ensure that everyone in the team are on the same page?” and “How do you ensure that you address and manage people’s expectations?”

To answer this, I’ll start by over simplifying in saying that communication is simply the exchange of information between a sender and a receiver, through a specific medium. In electronic engineering information is transferred from a transmitter to a receiver as an electric signal in a controlled way, ensuring the receiver receives the same information that left the sender – effective communication. That is no different with humans. As a leader communicating to your team, you are distributing information amongst other humans, amongst people – and herein the challenge. People, unlike electronic senders and receivers (which are manufactured to be identical) are different, not one is alike. Hence will the interpretation of the information exchanged through communication  differ as well. The challenge to effective communication is to align the interpretation of the information into a common understanding between the communicator (speaker/sender) and the audience (listener/receiver).

The ways in which you can ensure that you are addressing and managing people’s expectations better, are in understanding the people better. A better understanding of people, paradoxically comes through effective communication – to ask questions and listen more than actually doing the talking (active listening).

Communication is more than just your words – it is also:

  • how you say it – tone of voice, passion, authenticity
  • why you say it – the message’s intention
  • when you say it – time of day or after a specific milestone or prior an event
  • what you say AND what you don’t to say – sometimes what you don’t say gives a clearer picture of what you want to say…
  • your body language – facial expression, gestures and posture communicate a lot of the unsaid word

Communication Empowers

Consuming information leads to knowledge and knowledge is power. Thus communication leads to empowerment.

The ‘One Minute Manager’ refers to empowerment as: “Empowerment is something someone gives you – leadership is what you do to make it work.”

Communication empowers people with knowledge – to be informed and to feel part of something bigger. How the communication is being delivered (leadership) will determine it’s outcome.

What is LeadershipMy definition: “Leadership is the art of leading a group of people or an organisation to execute a common task by providing a vision that they follow willingly through the inspiration received from the leader’s passion, knowledge, methodologies, approach, and ability to influence the interests of all members and stakeholders.”

How can you accomplish this if you cannot effectively communicate the vision in a way that people feel inspired to willingly take action towards achieving it? Effective communication is key…

You can have the best team mission with SMART objectives but if you cannot communicate it to your team, you will struggle to make progress. How well you can communicate your plan (unambiguously) will determine if your team will really mobilise and unite behind you and go the extra mile to make it happen. The ultimate success measure of effective communication is: “your plan becomes the team’s plan” – everybody on the same page!

People are not mind readers – they need clear instructions and clear information to make decisions and conduct their work, especially if the work is delivered within a team where coherence and a mutual output objective are of the essence. Ultimately, it is in your best interest to accept responsibility for getting what you need to succeed in the workplace. As leaders it is in your best interest and your responsibility to ensure that what’s needed to succeed, is effectively communicated to your work teams.

Consider This

You can improve the effectiveness of your communication through paying attention to the following aspects, each discussed in more detail below:

  • Know & Understand your audience
  • Motivational & Confidence building
  • Have a Plan
  • Make sure the communication subject is clear – stick to it
  • Be Direct
  • Be Authentic
  • Enough detail
  • Bi-directional communication is more impactful
  • Common Cause
  • Think before you speak
  • Emotional Intelligence
  • Get Assurance – get feedback, assure the message sent is the message received
  • Build Trust
  • Situational leadership – choose the communication style to suite the situation

 

Know & Understand the Audience

Being an effective communicator allows you to address the interests and concerns of your target audience whether it being your team, your customer or client, the stakeholders or an audience listening to your presentation. Knowing and understanding your audience help to ensure that your grab their attention when you communicate and that they feel your are addressing the message to them. To understand your audience better and to structure communication appropriately, you can ask questions like:

  • Who is the audience?
  • Why is that the audience? (sometimes this is obvious but by asking this question, really think about who should be getting this message and why? Why not?)
  • What are we trying to achieve?
  • What are your plans?
  • What are the expectations of me as the leader/presenter and of the people the team members/audience?
  • What will be the desired impact of your message? (Also think about the undesired outcomes and how you can proactively prevent that?)
  • What will be the impact of your plans to the business, the team and to the people personally? – Do not leave people with more questions than before.
  • Why can we productively work together? (Understanding this is key to structuring the message to utilise people’s strengths to bring acceptance and empowerment – a sense of belonging.)
  • How will we know we are doing a great job? (How will this be measured within the audience – everyone needs to understand the metrics.)
  • Are you using a language (terminology and jargon) that the audience can relate to? There is a difference in technology speak and business speak. Align the vocabulary to your target audience – i.e. when addressing business leaders do not use too much technical acronyms and terms, rather focus on outcomes and financial numbers.
  • Do you understand the audience’s needs?
  • How can you, as the leader, meet their needs?
  • How frequently do I need to communicate? (Constant)
  • What method, approach and medium (usually a combination of) will deliver the message best? (Face to face, one to one, round table, town hall, informal stand-up, email, presentation (power-point), graphs, bullet points, etc…)
  • To what level of detail do I need to go into, to describe clearly what I mean? (Post communication, everybody must have the same picture in their minds.)

Motivational and Confidence building

Communication should always be motivational and aim to build confidence within the audience – especially when bad news is being delivered. Ensure that you mention the performance of the team, the success resulting from the efforts. The positive future that awaits and the confidence that you have in the teams abilities to realise that future. Keep repremending content to the point and as short as possible and always follow it up with a positive prospect building trust and confidence.

Have a plan

If you are communicating change or progress, you must come prepared with a plan. Have a relevant understanding of the past, the present and the future. The plan is usually “how” the team will progress from where they have been, using what they have today to build the desired future. Progress against a plan must always be measurable to unsure continuous improvement.

Be clear on what is being communicated

Ensure that everyone is clear of the subject being communicated. Focus on the key message of the communication and present it in a direct and authentic way. Stick to the subject. Ensure that the message comes with the right context and content for the receiver to place it in the right perspective.

Be Direct

I believe in a direct approach – say it as it is. Have the guts to say what is needed. Speak about the hard things that no one talks about but everyone wants to hear. Address the elephant in the room, preferably before you are asked about it.

 Be Authentic

My believe is to always be truthful and authentic in delivering your message, be yourself – people see straight through anything else…

Enough detail

Ensure that you communicate just enough detail to ensure everyone has the same picture in his or her minds after you have communicated. Too much detail and people will loose interest. Too little detail and people will makeup their own inconsistent picture. Remember the story of the group of people that were told that there is a cat in the room next door… the storyteller waited for the picture to start forming and then asked each one of the audience to describe it. As you can imagine various different pictures were presented – a black cat, a ginger cat or is it a tiger?

Always be prepared to go into way more detail than what you expect – your ability to use detailed facts to support your message, especially when asked about it, will determine the credibility of your message.

Bi-directional

Successful communication always has to be two-way. You have to be a good listener as well. Be prepared to have collaboratively discussions – listen intently before you respond. Do not formulate your next response in your head instead of listening to what is being said or asked. Your team will have a wealth of knowledge and insight that might help to enhance the right picture. This means being able to have a meaningful discussion with people, understanding, assisting and facilitating the resolution of their problems, ensuring people know what to do and why they are doing it without you having to tell them how to do it. (See Success – people come first).

Effective communication is the continuous search and commitment to seek for a better understanding. Approach conversations from a learning perspective, an opportunity to get to know more rather than a one directional “tell” perspective.

Common Cause

For the message to hit home it must address a common cause – something that address the benefit of the team but also on an individual level. Either create a common cause in your communication or remind people of the common cause – why it is important to be part of something bigger rather than just you as an individual.

 Think before your speak

Stop and think things through before you act in haste, sending out an ill-considered communication. Think what needs to happen, what are the benefits, risks, what are the desired outcome… Then compile a well-considered and effective communication. Remember this – Once the message is out, you can never really take it back.

Emotional Intelligence

In the blog post on Emotional Intelligence, EQ is defined under five interconnected components:

  • Self-awareness
  • Self-regulation
  • Motivation
  • Empathy
  • Social skills

Use your own EI to assess the situation before your decide on the appropriate way to react and how what needs communicating. In short I say:” Trust your gut feeling.”

Get Assurance

Continuously test the effectiveness of your communication by asking people to relay to you what their interpretation is. Ask this questions at all levels – do not assume that the organisation structure will distribute the intended message to all that needs to hear it – go check for yourself. Get feedback. Get the assurance that people understand what you are communicating and that if people are remembering and acting on what has been communicated. If not – communicate again, again!

Build Trust

You want your communications to be trusted. How do you build trust? By doing what you say you are going to do and build relationships at all levels with integrity and honesty. When you are trusted, your communication is on-boarded more sincerely and you are taken seriously – building rapport.

Situational Communication (and Leadership)

There are many different leadership styles (read more here) as outlined in the list below:

  • Autocratic Leadership
  • Bureaucratic Leadership
  • Charismatic Leadership
  • Democratic/Participative Leadership
  • Laissez-Faire Leadership
  • People-Oriented/Relations-Oriented Leadership
  • Servant Leadership
  • Task-Oriented Leadership
  • Transactional Leadership
  • Transformational Leadership

The “One Minute Manager” summarised leadership into four basic styles:

  • Directing – The leader provides specific instructions and closely supervises the accomplishment. (Communicate mainly by telling people what needs to be done)
  • Coaching – The leader continuous to direct and closely supervise but also explains decisions, solicits suggestions and support progress made. (Communicate a directive or corrective after team collaboration)
  • Supporting – The leader facilitates and supports people’s efforts toward accomplishment and shares responsibility for decision making with them. (Communicate similarly to the Coaching style)
  • Delegating – The leader turns over responsibility for decision making and problem solving to subordinates. (Communicate collaboratively and inclusively)

Usually the leaders default communication style is directly related to the leadership style. An effective leader can adapt his management style and hence his communication style according to the situation, including consideration for the audience and the nature of the message to be communicated.

To Conclude

Remember and think about all the aspects mentioned for consideration, before you communicate. Be flexible and agile in your approach to communication – as a leader you must be able to fluently switch between different leadership and communication styles and mediums to ensure optimum results, in the moment. There is no one glove that fit them all, leadership is not a science – hence the art of leadership. You’ll know when you get it right – do more of those!

Every situation is different and hence can a single communication approach not be seen as superior to the other – there are no equals. I’ll conclude with this saying from the ‘One Minute Manager’: “There is nothing so unequal as the equal treatment of un-equals.”

 

Also Read:

Management Communication Plan

 

Bimodal Organisations

The continuous push towards business improvement combined with the digital revolution, that has changed the way the customer is engaging with business through the use of technology, have introduced the need for an agility in the delivery of IT services. This speed and agility in IT delivery, for the business to keep abreast of a fast evolving and innovative technology landscape and to gain an competitive advantage are not just required in the development and/or introduction of new technology into the business, but in the way “keep the lights on” IT operations are reliably delivered through stable platforms and processes enabling business growth as well.

IT Bimodal

We can agree that once systems and solutions are adopted and integrated into business operations, the business requirement for IT delivery changes with IT stability, reliability, availability and quality as key enablers to business performance optimisation. There are thus two very distinct and equally important ways or modes of delivering IT services that should seamlessly combine into the overall IT Service Operations contributing to business growth.

Gartner minted in 2016 the concept of IT Bimodal – the practise to manage two separate coherent modes of IT delivery.

Mode 1: Focussed on Stability Mode 2: Focussed on Agility
Traditional Exploratory
Sequential Non-linear
Emphasis on: Safety & Accuracy Emphasis on: Agility and Speed

Each of the delivery modes has their own set of benefits and flaws depending on the business context – ultimately the best of both worlds must be adapted as the new way in which technology delivers into business value. Businesses require agility in change without compromising the stability of operations. Change to this new way and associated new Target Operating Model (TOM) is required.

Bimodal Organisation

This transformation is not just applicable to IT but the entire organisation. IT and “the business” are the two parts of the modern digital business. “The Business” needs to adapt and change their work style (operating model) towards digital as well. This transformation by both IT and “the business”, branded by Gartner as Bimodal, is the transformation towards a new business operating model (a new way of working) embracing a common goal of strategic alignment. Full integration of IT and business are the core of a successful digital organisation competing in the digital era.

The introduction of Agile development methodologies and DevOps, led to a transformation in how technology is being delivered into business operations. IT Service Management (ITSM) and the ITIL framework have matured the operational delivery of IT services, as a business (#ITaaBusiness) or within a business while Lean Six Sigma enables business process optimisation to ultimate quality delivery excellence. But these new “agile” ways of working, today mainly applied within IT, is not enough for the full bimodal transformation. Other aspects involving the overall organisation such as business governance and strategy, management structures and organisational architecture, people (Human Capital Management – HCM), skills, competencies, culture, change management, leadership and performance management as well as the formal management of business and technology innovation and integration, form additional service areas that have to be established or transformed.

How do organisations go about defining this new Bimodal TOM? – In come Bimodal Enablement Consulting Services in short BECS.

BECS – Bimodal Enablement Consulting Services

Gartner’s definition: “An emerging market that leverages a composite set of business and technology consulting services and IP assets to achieve faster more reliable and secure, as well as business aligned, solutions in support of strategic business initiatives.”

To establish a Bimodal enabled TOM, organisations need to architect/design the organisation to be customer centric, focussing on the value adding service delivered to the client/customer – a Service Oriented Organisation (SOO) designed using a Service Oriented Architecture (SOA). This set of customer services (external facing) should relay back to a comprehensive and integrated set of supporting and enabling business services (internal facing) that can quickly and effectively enable the business to innovate and rapidly adapt and deliver to changing customer needs and the use of technology within the digital era. This journey of change, that businesses needs to undergo, is exactly what digital transformation is about – not just focused on the technology, processes, quality and customer service, but on the business holistically, starting with the people working within the business and how they add value through the development and use of the right skills and tools, learning an applying it rapidly throughout the business value chain.

A customer centric delivery approach requires the development and adoption of new ways in which work are conducted – new management structures, building and enhancing A-teams (high performing individuals and teams, getting the job done), optimised processes and the right tool sets.

BECS must address the top bimodal drivers or goals, as identified by Gartner research:

  • Deliver greater IT value to the business
  • Shorten the time to deliver solutions
  • Enable digital business strategies
  • Accelerate IT innovation
  • Transform IT talent/culture/operations
  • Increase the interaction between business and IT
  • Embrace leading-edge technologies, tools and/or practices
  • Reduce IT costs (always a favourite)
  • Change the organisation’s culture

Take Action

Are you ready, aligned and actively engaging in the digital world?

Can you accelerate change and enable revenue growth with rock-solid service and business operations?

Are you actively practicing bimodal, continuously adapting to the changing digitally empowered customer demand?

The ultimate test to determine if you are bimodal: Every business process and every enterprise system needs to work without a blip, even as more innovation and disruptors are introduced to make the business more efficient and responsive.

It is time to be a bimodal organisation!

___________Renier Botha specialises in helping organisation to optimise their ability to better integrate technology and change into their main revenue channels – make contact today.

Related post: Success – People First; Performance ImprovementAGILE – What business executives need to know #1; AGILE – What business executives need to know #2; Lean Six Sigma; The Digital Transformation Necessity; Structure Tech for Success