PMCC Ventures 2016 Note

PMCC Ventures 2016 Note

We wish you a healthy and successful 2016.  Once again, thank you for all of your support of PMCC Ventures. We continue to have the opportunity to work with some great leaders focused on important work for their organizations- and impactful for their customers, owners and markets as well.  We are honored and appreciative to have the chance to work with our clients to deal with complex, mission-critical matters and with people who really want to make a difference.

What made 2015 interesting for us was the diversity оf our clients and the opportunities we helped them create.  We had clients that were:

  • Out оf the box start-ups
  • Suffering common and long-term challenges that are dogging most оf their entire long-standing and proud industries
  • Dealing with post-merger integration opportunities
  • Pursuing financings
  • Dealing with meaningful developmental issues

We covered the spectrum оf opportunities and challenges and that made the year fun, educational and challenging for us.  We hope that in all оf our interactions we were able to help our clients truly Improve the Business оf their Business.

As you might imagine with a diversified client base, the motivations or the imperatives for change were sourced from many different directions, as influenced by

  • Their industry
  • Competitive position
  • Stage оf life cycle
  • Capacity for change

One saw a hole in a developing market and wanted to fill it with a premium product, another was bringing together several cultures into one business, ranging from geography to form оf ownership to style оf management.  Another was focused on changing its approach to its business based on excruciating competitive realities and the recruitment and development оf a new management team.  Suffice it to say that with these changing cultural points, combined with the physical changes necessary in each оf the businesses, there were always a lot оf variables to track and manage.

Each оf our clients were respectful оf the need, the challenge and the benefit оf change. The differentiator was their stance and how they dealt with it. The stance, combined with the degree оf required change, оf course influenced the time horizon and intensity оf the change effort.

We have been considering developing and offering some preemptive or proscriptive services for several years. These services are based on our learnings and methods we employ every day. We have frequently found that “when bad things happen,” management teams are unprepared, and that the pressures оf dealing with negative changes leaves little time to help the team prepare for its highest and best performance- at the time it is most critical.  Similarly, we have seen organizations dive into strategic initiatives when their teams are not aligned on the fundamentals оf the current situation or their business- and as a result their strategies frequently reflect that condition. If you have any ideas in this regard, we would be happy to hear them.  Stay tuned for information over the next few weeks for a series оf leadership and middle management workshops aimed at helping our clients coalesce around key matters for their business- and how to improve the business оf their business. 

Thank you for your continued support оf our business. If you know organizations or folks that might benefit from knowing more about us to help improve the business оf their business, please don’t hesitate to put us in touch.

As always, we are making good on our pledge to share our most meaningful learnings or points оf interest.  Please follow the link to the interactive portion оf our website to review the most prominent challenges, learnings and outcomes оf our 2015 work:

Introduction

What made 2015 interesting for us was the diversity оf our clients and the opportunities we helped them create.  We had clients that were out оf the box start-ups [literally starting with a few sheets оf paper and a goal to be at full-speed operations in 5 months] and at the same time, were working with clients that were suffering common and long-term challenges that are dogging most оf their entire long-standing and proud industries.  In between, we helped some clients deal with post-merger integration opportunities, financings and some very meaningful developmental issues.  We covered the spectrum оf opportunities and challenges and that made the year fun, educational and challenging for us.  We hope that in all оf our interactions we were able to help our clients truly Improve the Business оf their Business.

As you might imagine with a diversified client base, the motivations or the imperatives for change were sourced from many different directions, as influenced by their industry, competitive position, stage оf life cycle and capacity for change.  One saw a hole in a developing market and wanted to fill it with a premium product, another was bringing together several cultures into one business, ranging from geography to form оf ownership to style оf management.  Another was focused on changing its approach to its business based on excruciating competitive realities and the recruitment and development оf a new management team.  Suffice it to say that with these changing cultural points, combined with the physical changes necessary in each оf the businesses, there were always a lot оf variables to track and manage.

Each оf our clients were respectful оf the need, the challenge and the benefit оf change. The differentiator was their stance and how they dealt with it. The start ups and merger companies just planned to be better than the competition because they saw a hole in the market and want to profitably fill it.  The long-term industry player has taken an approach that being in the middle оf the pack might be sufficiently competitive, as they operate in a large market.  The stance, combined with the degree оf required change, оf course influenced the time horizon and intensity оf the change effort.

We have been considering developing and offering some preemptive or proscriptive services for several years. We have frequently found that “when bad things happen,” management teams are unprepared, and that the pressures оf dealing with negative changes leaves little time to help the team prepare for its highest and best performance- at the time it is most critical.  Similarly, we have seen organizations dive into strategic initiatives when their teams are not aligned on the fundamentals оf the current situation or their business- and as a result their strategies frequently reflect that condition. If you have any ideas in this regard, we would be happy to hear them.  Stay tuned for information over the next few weeks for a series оf leadership and middle management workshops aimed at helping our clients coalesce around key matters for their business- and how to improve the business оf their business. 

Consistent with our pledge share our learnings, the following items shaped our work with our clients this year.  There were of course other matters, but these were exceptionally prevalent for us this year.  Enjoy and share to help others focus on improving he business of their business.

You can’t fool mother nature: life cycles and s-curves are real influencers

I can’t think оf any relationship or product that does not go through a life cycle.  Take a minute and see if you can recall any product or relationship that did not go through the typical stages оf the product life cycle.  The product life cycle is based on thinking around s-curve or sigmoid curves.  Charles Handy, the British scholar and consultant, bases much оf his work and thinking on s-curves. This is a link to the “tip оf the iceberg” on his thinking: https://www.dlsweb.rmit.edu.au/bus/public/ADG_showcase/manage_change/content/sigmoid_curve.htmh

Try as you might, it seems you can’t fight mother nature and push through too quickly or skip a stage of an s-curve and still achieve success.

S-curve thinking is a great process to use as you reflect about new businesses, products, our personal life situations and how we approach our relationships young and old.  Our observation is that disavowal оf this concept generally leads to suboptimal outcomes.

Context and trends are often key to understanding and setting the stage for productive action- you need to establish your frame about your context

We observed a lot оf management and Board reporting over the past year.  It was shocking how much оf the reporting lacked context about the organization’s position in its chosen competitive arena.  This condition was almost always accompanied by lackluster performance and accountability oriented culture and approach to management.

Оf course, individual components оf an organization may have had in-depth understanding оf context and performance trends, but since success requires systemic and coordinated action, Allowing  information and insights to remain in silos  is not a condition for success.

We have had scores оf conversations about this challenge with Board members and leaders оf organizations.

Several conditions lead to this situation. From a Board point оf view there are two major culprits-

  • New, dissatisfied, Board members succumbed to fear of rocking the boat, or were relying on the instincts оf existing board members. If this is “good enough for them, it is good enough for me” seemed to be the prevailing thinking.
  • Managers didn’t have appropriate sensitivity to the need for new forms оf analysis, and as a result, never thought to look at things differently.

Yet in most every situation, there were also significant performance challenges- and when Managers and Boards alike were presented with contextually relevant and scaled information about performance, they immediately rose to the occasion and began to address the issues.

As we enter 2016, we are deluged with information about the world, business performance, politics, the economy, terrorism etc. and if we step back and think about it much оf the spot information we receive presents contradictory messages and points оf views. (This morning’s news: Oil prices down; China stocks stabilize after warning оf decreases in business volume; Stocks stabilized after worse US Market start in years; US Auto sales predicted to be up in 2016.) The press and others fail to acknowledge and explore the systemic interdependencies and the slack times in global cause and effect relationships.

As a result, from a business point оf view, it might be more important than ever to have a “base case” [representing what you believe is or will be true about your business] to provide context for evaluating information and shaping decisions.

The need to sharpen the saw is ever present- dull saws cut poorly- but can jump and cut you deep

One оf the responses to economic challenges has been the demise оf performance management processes and people development- all in the name оf saving money- but perhaps not the business.  For most of us, we know that 2016 will likely be more rigorous than 2015. Yet, many organizations have cut back on resources and time dedicated to developing employees to become more capable and successful.  In short bursts, that approach might be workable, but over the long haul, it is tough to discern the logic that would allow them to think it is possible to get greater performance out оf the same employees in a more rigorous work environment without providing them the tools and knowledge building experiences to meet the new challenges.

Similarly, many organizations have taken the shortcut- avoiding meaningful performance appraisal and inventorying оf skills, capabilities, experience and necessary to incrementally contribute to the organization’s performance.  Once you let this muscle atrophy, a performance-oriented culture begins to disintegrate. It is tough to rehabilitate.   Further, given the war for and benefit оf securing outstanding talent, it is hard to believe that you can attract the best and the brightest without offering performance oriented career opportunities and its natural outcome оf increased and intensive learning and likely better compensation.

Information remains king- you have to honor the king

As you know, we have long been proponents оf 3-R (Relevant, reliable and readily available) information in a business or process context.  Successful organizations always seem to have (or are always in search оf) the information to help them do their jobs better. Conversely, organizations that are struggling never seem to have it or are frustrated and just give up seeking to get it.   We spent a lot оf time this year dealing with the quandary оf customer information- do we know enough about what customers want, what really influences their purchasing decisions? And most importantly how can we use these insights, to present ourselves in a way that makes our customer interactions more successful than the market as a whole.

We spent a lot оf time this year in a company where customer lifetime revenues could easily exceed $150,000.  That’s a lot of money, particularly when you consider that most оf it in our reference case was earned in a 4-5year long customer interaction.  Yet, when you think about how little this industry understands about its customers and what influences their decisions (at least has evidenced by its go-to-market activities), it is disconcerting.  In juxtaposition to the credit card industry where the customer value оf the average credit card holder lifetime revenue is far less than that оf the subject industry, yet, when the credit card promotion arrives, they already KNOW a lot about you and prospective customers’ ability or propensity to spend. Because they focus on and capture and analyze the value оf your home, how much debt is secured by your home, your likely income to fund the debt levels you are carrying, the car you drive and its costs, your repayment history etc. It is hard work and it takes thought and effort to integrate disparate information sources and information nuggets- but they do it and the smart ones not only make better underwriting decisions, they seem to be able to get to the people that are going to spend with their card.  They know this before they engage with the prospective customer and when they engage, they engage in a purposeful way aimed at channeling the behaviors that are necessary to “make the sale”.

It seems that many organizations give up on this depth оf relevant, but relatively static information because it seems to fall into the “too hard bin”, or they have not mastered the capability оf capturing that kind оf information.

On the digital engagement side, many оf the organizations that have not mastered capturing and using the static type оf customer information have also not mastered monitoring, measuring and determining the signals that arise from digital interactions with [prospective] customers.  A lot оf people you talk with think that is “STAR WARS” kind оf technology and business thinking and no one else knows it either (perhaps prisoners оf their own paradigm) .

But that is where it falls apart.  I had the pleasure оf attending a trade show in NYC recently that brings together brand and corporate marketers, software providers and ad agencies.  The floor was packed with several hundred exhibitors offering their products and services to help fill in this knowledge gap, there were more than 150 break out sessions on products, real time challenges and plausible steps to address them. There was a buzz and a confidence оf knowledge- and second and third derivative kind оf questions and conversations could be overheard.  The challenge is nuanced, but the smart money is being advanced to provide insights because there is demand.

Our wish for you in 2016 is that you really take the time to focus on articulating information you need to run your business – particularly about your customers and then use that insight to out-think and out act your competition- and move with dispatch.

 

 

 

 

This entry was posted in Year end letter and tagged , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s