LeveragePoint Value Management Blog

Let Them Build It and They Will Come

When a landscape architect is designing a park or campus, a decision must be made where to put the sidewalks. A favorite trick is to simply plant grass everywhere and wait. In a month or two it will be obvious where the sidewalks should go.  

 

Now the same concept is being applied to the design of online tools to help people do their jobs. For the longest time such tools were designed by people far from the trenches. Those designers had an array of academic skills but lacked the hands-on expertise that only comes from “being there.” As a result, many online tools and eLearning programs were seen by the intended user group as “yet another thing from corporate” that got in the way of doing their job.

 

The problem is that the complex models developed by experts and consultants often don’t fit into the users’ world. People in the trenches understand more than they are given credit for and will resist adopting new methods and tools that don’t actually help them to get work done. They will be receptive to new tools if the tools respect the already overwhelming demands on the time and attention of knowledge workers, and if they help them do their jobs better and measure things that are meaningful.

 

The outcomes from conventional consulting solutions and the methods used to activate and embed those methods in organizations have often been underwhelming, because it has proven difficult to achieve widespread adoption and alignment. I often reflect on the comment made to me by a vice president of one of the world’s largest companies regarding the stacks of PowerPoint decks in his office. “I have eighty-million dollars worth of consulting sitting on those shelves,” he said, “and no way to get it out there.”

 

The solution is to turn the whole problem on its side and examine it from the end-user’s point of view. What busy professionals need is something to help them do their jobs better and faster. There is simply not enough time to learn everything that needs to be known, so needed knowledge must be made available in context on the fly. The people who know best what kind of tools will get the job done are the people who need to use them, so the design process needs to reflect that reality. The solution needs to come from them. Pull, not push.

 

Recently a large industrial company asked LeveragePoint to address the need for simple, elegant tools that treated their Intellectual Capital—the tacit expertise of their own people—as a commodity that could be captured and shared among their professional marketers. The idea was to give the end-users the ability to not only help design the tools they would use—based on their experience—but also the ability to refine and change the methods and practices that were being prescribed by corporate leadership so they would be more effective.

 

The trick was to find the appropriate balance between hierarchical knowledge and “open source” (collaborative, networked) knowledge. Too much of the former and the resulting rigidity gets in the way of an adaptive solution; too much of the latter and there is chaos. The LeveragePoint platform was employed to balance the two, facilitating rating of solutions, feedback on tools and methods, and sharing of best practices. Needed knowledge was embedded into the tool but was not an obstacle to getting the actual work done; it was available if needed, in the smallest coherent chunk and in context, but was not a required part of the process. Collaboration in product groups was facilitated in the online environment, and the tool was iterated again and again, each time capturing suggestions and improvements from the field. Powerful metrics were established to measure use, collaboration, virality, and most importantly, output and business impact.

 

At the end of three months, the tool had been used by a large percentage of the intended audience, far more than we or the company had ever seen previously, and user interest in it was spreading by word of mouth. People, given the chance to design their own solution, liked and used it. While we started out with a design mandate for a simple and elegant solution, the users further simplified it during the pilot phase, and in doing so made it even easier to use. Expertise became something that could be captured and transferred from one person to another, and it remained in the system even when people moved to other jobs or outside the company.

 

Moving from a static solution to a dynamic solution and allowing the end users to participate in the design of their own tools was an important breakthrough, one that moves the corporate competency model from a dry academic standard to one directly related to feet on the ground performance. And it became clear that competency is not just an individual metric—it is a collective capability that can be tapped into by each member of the team when the appropriate tools are made available.

 

Jonathon Levy

President and Chief Strategy Officer

Activating a Winning Capabilities Strategy

When it comes to developing competitive capabilities, it’s foolish to try to boil the ocean. It’s simply not possible for everyone to become all things to all people, no matter how much training may be available. So companies are beginning to bracket their efforts, by being selective in identifying those critical capabilities that are required to create a strategic differentiation and win in the market. These capabilities then become the basis of a focused effort to strengthen their resources in a strategic way. 

In many cases, however, it is the combination of several capabilities that creates success, and that combination changes with each person, each team, each project, and each business unit. No single individual or team possesses all of the capabilities required to meet the oncoming waves of competition and change.

For example, one key capability set for many companies today is the ability to understand, communicate and capture the value of their products for their customers. This requires deep knowledge of one’s own product (which most companies have in some fairly explicit form) and of the customer’s business model (which in most companies is partial and scattered between marketing, sales and customer service with no holistic view available). Customer knowledge needs to be integrated into a set of capabilities around value management and accessible to everyone from innovation and product development, to marketing, to sales and customer service.

Once a firm’s critical capabilities for competitive advantage are understood, what is needed is a way to locate and capture those strategic capabilities within the firm’s resources—people, methods, and tools—and share them as needed in real time. New capability cannot be developed on the spot every time it is required. There simply isn’t time. Instead, capability must be thought of as a global resource to be shared throughout the global organization. And there’s the rub: what is a requirement for a winning strategy also seems impossible to achieve.

But it isn’t. To achieve this goal, what is required is a new way of thinking about what we mean by capability. And that new perspective is what has given rise to what we call the eWorking platform. With eWorking, capability is not something that someone has; rather, it is something that one uses—the result of a creative interface of an individual’s experience and knowledge added to the collective experience and knowledge of the organization. eWorking helps professionals move beyond what they know to what is known, transforming what they can do to what can be done. The eWorking solution puts the expertise and resource base of the entire enterprise at the fingertips of the user in a focused and time-sensitive way, just enough to fill the individual’s current gap at the moment of need (see Figure 1). 

 

To be truly effective in the rapidly changing marketplace, a solution must be not only adaptive, but also fluid enough to respond in real time to the increasing waves of change. eWorking platforms not only capture best practice and experience of the front-line people who apply the methods, they simultaneously drive the evolution of business methods and iterate those methods in real time. As a result, management can rapidly improve or change business methods to adapt to actual patterns of use or unpredictable circumstances. The tools, methods and data can be instantly updated with improved methods and best practice. This is real-time change management, a subject that is ripe for discussion in this space.

As one example, earlier this year we talked about a marketing professional who had just come onto a project. He had some of the needed expertise and knowledge, but was lacking the full picture and due to unexpected internal changes there was nobody to quickly bring him up to speed. However, the company had been using the eWorking platform which had identified and captured the previous project leader’s expertise. The project in question involved the launch of a new product and the creation of value models and value communications to be used by the sales force. The capability the new project leader required had already been embedded in the tool he was using to create the required output. Even though his predecessor was no longer with the company, the needed part of his predecessor’s capability remained embedded in the tools. The new project leader was able to activate that capability and use it to his advantage. 

 LeveragePoint has developed and employs an eWorking platform (see Figure 2) for the LeveragePoint for Value Management product suite, which is now in use around the world. What is being seen by those who use it is an ability to identify, capture and apply capability in a surgical way as it is required. And that begins to change the entire capabilities paradigm.

Jonathon Levy

Chief Strategy Officer

Are spreadsheet applications a good way to support new capabilities?

The spreadsheet was the killer application that drove adoption of the personal computer in business. With Visicalc, Dan Bricklin created the archetype of the spreadsheet as we know it today, and it is this model that was adopted by Lotus for 1-2-3 and then by Microsoft for Excel. Most of us use spreadsheets everyday for everything from note taking (the grid pattern helps us organize lists), to simple calculations, to complex business models. We share these spreadsheets through e-mail, post them to corporate portals, and in some companies we even use on-line versions like the one in Google Docs. Together with presentation tools like PowerPoint and document editors like Microsoft Word, spreadsheets defined the average business user's experience of IT before the World Wide Web (in fact IT departments were much more concerned with databases and their management, a disconnect that still haunts us today).

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Because they are ubiquitous and easy to get started with, spreadsheets are often used to try to embed complex business frameworks and new ways of thinking into organizations. A marketing group or its consultants will develop a complex spreadsheet with a lot of macros (simple programs that can be executed inside a spreadsheet) and restricted fields and then push it out to potential users throuh e-mail and role-based portals. Sometimes they will provide a seminar or coaching on the new tool, and when there is a budget there may be some eLearning or on-line help built in. At LeveragePoint we often see complex value models built by pricing experts in spreadsheets, or applications that are meant to help marketers do everything from marketing mix optimization to conjoint analysis of consumer interests. How successful are these spreadsheets in activating, embedding and evolving new capabilities?

In most cases, the answer is "not very well." The next time you see one of these complex tools, ask the sponsor if they know four things:

1. How many people are using the tool?
2. How are they using the tool?
3. Where do they struggle?
4. How have the people who are using the tool changed and improved it?

In most cases, nobody knows the answers to these questions. But if we cannot answer such basic questions, it is hard to know if adoption is actually happening and if it is having the intended business impact. It is also hard to know what actions to take to remedy any issues.

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Then think about the speadsheets you have created yourself. How easy are these for another user to understand and to modify? In most cases it is the person who created the spreadsheet model who can best understand and modify it. We struggle to understand other people's spreadsheets, and sometimes we even go to the trouble of rebuilding our own version! Why is this? The natural evolution of spreadsheet-based applications is sketched in Figure 1.

Spreadsheets are general-purpose tools that were designed to simplify the process of creating and iterating on business calculations. They do this job very well. They were not designed to guide people through new frameworks for thinking about business problems. Nor were they designed to help people collaborate or to facilitate conversations. But we are using them for all of these tasks. It is not surprising that we struggle so much when we are using the wrong tool. Working harder with the wrong tool often causes more damage than it does good.

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In many cases we ask business analysts to design and program sophisticated spreadsheets for us. We even use the spreadsheet as a database or an interface to a database (usually Microsoft Access). But spreadsheets were not designed to be programming environments and these monster spreadsheets are generally brittle, expensive to program and impossible to evolve and maintain. They cannot leverage the many advances in programming that have been made over the past decade, from object oriented design to web services and RESTful architectures. And business analysts are seldom capable programmers or user interface designers. The result is spreadsheet applications that are overly complex and satisfy only the business analyst.

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The World Wide Web has been with us for more than a decade now, and is broadly used to deliver all sorts of business applications. In the past decade we have moved beyond the broadcast model of the first generation of web applications to the social web, or as Tim O'Reilly calls it, Web 2.0. Social media thinker Raul Pacheco, who tweets as @hummingbird604, has identified four aspects of web-based information that need to be considered in creating tools that foster thinking and communication (and in business the two need to come together). These can be applied to the design of applications for activating and embedding new capabilities.

• Reciprocity - applications need to support communication
• Durability - applications need to make sure that information is saved (and can be found)
• Traceability (and Accountability) - applications need to be able to trace where information comes from and what decisions are being made on the basis of that information
• Scalability - applications need to support distribution of information to and conversations between many different people, with different needs and points of view

Business tools built on spreadsheets fail to support any of these requirements. We struggle to use them to communicate with other people at all, and they are generally not a good way to facilitate communications (reciprocity). It is easy to modify spreadsheets (one of their strengths when used by one or two people to model business issues) but they are not a safe place to store data (durability and traceability). Spreadsheets are personal productivity tools, designed to be used by one person; we should not try to make them into something they are not by using them as an information distribution or collaboration system (scalability).

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Alternatives to spreadsheets are just coming into view. For some uses the combination of a spreadsheet and online collaboration can work. Google Docs is providing some good functionality here (though it is not yet a fully satisfactory spreadsheet). Another approach is to blend spreadsheets and wikis, something that Dan Bricklin is trying to do with wikiCalc. These are potential solutions when only a small number of users are engaged. For larger and more scalable solutions we will need something more like eWorking solutions. These solutions blend step-by-step guidance through a framework combined with collaboration, learning and data. Well-designed, eWorking solutions leave critical dimensions open to be modified by users and allow these modifications to flow back into the general framework, driving a process of continuous improvement. Adoption requires more powerful applications than spreadsheets can naturally support. Let's expand our toolbox and leverage the four aspects of information that the web opens up to us.

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Steven Forth

CEO

LeveragePoint

eWorking is Absorbing Collaboration and eLearning

Today most of us need to learn as part of our jobs. And we don’t do our jobs by ourselves, but as part of teams that are frequently geographically distributed. So it is natural that learning, eLearning and various forms of collaboration and social networking are important themes in today’s enterprise. Virtually all companies, including LeveragePoint and its clients, struggle to find ways to activate new capabilities, embed them in work, and evolve them in the context of what actually drives results.

Unfortunately, we have seen that in most cases eLearning alone does not work much better than conventional training. Blended learning (the combination of various conventional and on-line modes) was touted as the savior a few years ago, and in some cases you can get better results by supporting various modes of learning: face-to-face seminars, webinars, eLearning courses, coaches and mentors. There is some evidence that blended learning, when supported in the field, does lead to better results as these Japanese and US studies suggest. But in our interactions with marketing executives at leading B2B and B2C firms we find there are going struggles to transfer learning into the workplace, an experience that appears to be common.

One response has been to shift the emphasis away from formal training to a reliance on informal training, often delivered through social media tools like blogs, wikis and even Twitter. It is often claimed that most learning in an organization, as much as 75%, comes through informal learning and that increasing the effectiveness of informal learning will be the most effective way to impact an organization. The problem with this is, of course, that the learning is informal and is often poorly aligned with the goals of the organization.

Is there another way, an approach that blends the discipline of formal approaches with the immediacy and (perceived) relevance of the informal? At LeveragePoint, we believe the solution lies in bringing together learning with working. In a way, this is a return to the old paradigm of action learning, where people learn while doing but are guided while they are doing and are asked to reflect on the results of their actions.

LeveragePoint’s applications, such as LeveragePoint for Value Management, are used to help people execute marketing and sales frameworks that lead to new insights into customer behaviors and give them the tools to influence these behaviors. Examples are the use of value models by marketing to craft meaningful value messages that can be used by sales, and then feedback from sales on the relevance of the marketers data and the effectiveness of the messages.

These applications frequently include new concepts and learning is required. To support this learning, we provide learning resources, but more importantly, we help people learn by working with coaches and their peers. Learning, collaboration and data are presented in as part of an integrated experience and in the context of actually working through a framework to create a usable business product, such as a brand plan, a value model or a set of scenarios. The general approach is sketched in Figure 1: Blending Learning, Collaboration & Data With Business Framework Execution.  

We have now had an opportunity to implement a number of these solutions at Fortune 500 companies in a variety of industries. The results are surprisingly consistent. Most users begin by looking at work done by their peers and often proceed by modifying and borrowing (working by “Save As”) or proceed directly to do the work themselves. This generally accounts for 70-80% of initial use. This does not mean that people do not use the learning resources. More than half of them eventually do, and if the integration is well designed (we are getting better at this) they often engage in the learning without being aware they are doing so. The general pattern of results is shown in Figure 2: Preferred Entry Points. Confidentiality restrictions prevent us from publishing more granular data.

Collaboration is also critical to adoption and we suspect performance. LeveragePoint provides a number of explicit forms of collaboration. Users can (and do) comment on all of the following:

• The steps of the framework – Does the framework itself make sense, is it well organized, are the right data and learning resources available?
  
  
• Work done at each step – Teams doing the work and observers all comment on the actual work done.
  
  
• Outputs – For example, in LeveragePoint for Value Management: Sales, sales people can comment on and rate the value packages created by marketing, giving sales an important and often missing feedback loop to marketing and marketing insight into what is actually happening in the field.
  
  
• Save As – Using another team’s work or a best practice example is perhaps the most common mode of collaboration in the enterprise (well, that and e-mail). We provide traceability so that one can see all of the different versions created. (There is an ongoing debate as to whether “Save As” behavior promotes or stifles creativity, the jury is still out on this, but at least with LeveragePoint one can trace the evolution of documents.)

eWorking, the blending of learning, collaboration and data in the context of actually doing work, is an emerging paradigm that will eclipse eLearning for most business purposes. It may not be relevant for certification style learning, and there are always cases where people need to learn by going deeper, but in today’s fast-changing workplace learning needs to be in the context of actually doing work.

Steven Forth

CEO, LeveragePoint Innovations Inc.

Challenges in Executing a Value-Based Strategy

There’s much attention nowadays around the importance of an organization adopting a value-based strategy, especially given the current economic climate.  Pricing guru Tom Nagle and I recently spoke to a group of managers interested in this topic -- 80% of them indicated that their organizations were attempting to implement such a strategy.  For more details about this event, see: http://members.pricingsociety.com/webinar_details.asp?WID=220

Not surprisingly, these managers shared their specific challenges, such as:

• 50% said they lacked effective models and data 
• 42% said their value proposition was not well understood either externally or internally
• 40% said their sales force reject their sales models or materials
• 15% said their value models didn’t address their customers’ real issues

It is clear that the many organizations struggle with the capabilities to create viable value models and to leverage them effectively to communicate value through their sales channels to their customers.  Traditional approaches of training, “one-off” spreadsheet tools, and pricing specialists have definite limitations. 

This task is simply too large for either one or a small group of individuals to take on for themselves.  We’ve found that good value model building is both a collaborative and iterative process.  To facilitate this process requires tools that are easy to use, have a strong visual interface that supports “what-if”, and are easy to share in a secure, online environment.  One that we are working on is described here LeveragePoint for Value Management.

Ed Arnold

Director of Products

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Tom Nagle

Member of the LeveragePoint Advisory Board and Partner at Monitor Group

Taking It the Last Ten Yards

In olden times employers improved workforce capability and managed talent using a natural model of learning, working and collaboration called apprenticeship. That model took advantage of the natural and most powerful ways that adults learn—learning while doing—and was so successful that it continues on today in fields such as medicine, law, and construction.

Apprenticeship was never fully implemented in the business world because of the challenges of scale. The need to train millions of homogeneous factory workers for an industrial age eliminated such personal and targeted methods of gaining knowledge in favor of uniform classrooms and workshops. And uniformity came at the price of squelching individual capability, creativity and potential. The need for both scale and individual contribution is clearly there, but a workable solution that achieves both at once has been a long time coming. Various technologies such as enterprise resource planning (ERP), knowledge management, performance support and eLearning have been used to address parts of the problem, achieving learning at scale but with mixed results.

There is an innovative solution that takes a company the last ten yards, all the way from understanding to application to impact. That solution is now being employed by some of the largest companies in the world. It is called eWorking.

While the classroom model created an artificial distinction between learning and doing in order to achieve scale, today the pace of change and the demands of time on knowledge workers are so great that the traditional model has become completely untenable. eWorking creates a scaleable solution for people to quickly learn and apply new methods on the fly, each in their own way, sharing insights and coaching each other, while compressing both time and space to a single point.

The innovation of eWorking is that learning takes place in the context of doing one’s job. It is no longer "first learn, then do". It is now "learn while doing." The apprentice model that worked so well for hundreds of years has finally returned to the workplace, this time on steroids and far more powerful. Not only can eWorking help achieve global alignment for a company, it can also help to rapidly adapt to change through collaboration channels that tap into the collective knowledge and experience of people throughout the organization and make best practice immediately available and iterative.

Our version of eWorking is an online platform called LeveragePoint. It was developed to help companies navigate these new waters in ways that minimize risk and maximize business results, helping a company move along the continuum from understanding to application to bottom line impact. By combining the principles of apprenticeship—learning, working, and collaboration—on a single platform, LeveragePoint makes frameworks and methods come to life, activating, embedding, and evolving business methods in a single stroke.

It does that by combining eLearning, eWorking, required data and contextual help with web 2.0 style collaboration and the tacit knowledge of the organization, all in the context of the task at hand, all on the same screen. Users can work, learn, get coached, share, and collaborate in the context of the specific work they are doing at that moment. Under the hood is powerful technology providing support for modeling (semantic web), integration (web services) and metrics gathering and analysis.

On the product side of our business, while we have chosen to focus on the corporate marketing function as our initial point of entry, with offerings in Marketing Strategy and Value Management. But our vision is larger than that. We plan to expand into the full range of corporate activity.

On the custom application side, we are already putting the power of the LeveragePoint platform to work for some of the largest companies in the world, creating dynamic and integrated solutions for their own content and methods, creating powerful and sustaining alignment of the organization with its own strategy in ways that are both measurable and transformational.

LeveragePoint addresses an important need of the time, providing an integrated solution that helps organizations capture those last ten yards, taking a company all the way from introduction of methods to evolution of those methods to measurable business impact. To see how that plays out in the challenging economic climate of 2009, watch this space in the coming months. We will hear from business leaders who have adopted our solutions, experts in marketing, strategy and technology, as well as end users throughout the world who are applying the LeveragePoint solution in their jobs, and scoring touchdowns for their companies.

Jonathon Levy

Chief Strategy Officer