The “S” Curve, the game where one strike could mean you’re out! (Inspired by HBR Jan/Feb 2011)

Trying to be an innovative and changing company (staying ahead in the marketplace), and at the same time trying to be a stable company (one that the employee can develop and grow) could create conflicting priorities.

Let’s talk about the first part of the sentence, being an innovative company, where your products and/or services are state of the art. Let’s call this avoiding to “S” curve. The best way to describe this is by studying the picture below.

This picture is describing the business performance against time in relationship to innovation and leading the market. Let us look at the first cut “S”. Notice the take-off runway, the rise, the peak, and the decline. Now take a look at the path of high performers, notice how the decline is eliminated and the peak is really just a slower growth rate than the rest of the curve. In order for high performers to meet this it means it should be creating a new innovation and or service before the curve get’s to its peak.

For an employee looking for a stable organization, this type of environment will be very challenging. Think about the ever-changing priorities, it will feel like riding a wave in the middle of the ocean, one after another, not truly being able to ride the wave to the shore and get some rest. If change management does not handle it upfront and correct the perception could be one of uncontrolled chaos.

Learning to fix what is not broken, or appears not to be broken is a talent, but a talent we all can develop. The reality is that way before business hits its revenue peak; the competitive advantage on which the service or product was founded will expire. As soon as a service, a leading edge service hits the shelf, the customer, consider for a fact that a group of individuals are already trying to jump into your “S” path and become the one with the next big thing, but you have an advantage they might not have, you hit the market first.

Knowing that you will have competition as soon as the news hits the stands, what is holding you to work on the next big thing that will bring obsolescence to your product or service? Let’s be realistic if you don’t, someone else will.

Consider what is needed:

1.      Foresight - talent

2.      Early commitment - talent

3.      Faith in the power of R&D - talent

In order to stay ahead you need talent, you want an organization that will bring new business growth. The best business will always maintain a steady commitment to talent creation. Talent creation is not talent recruitment, but the idea of investing in your people in order to create new knowledge, knowledge that can move your business quicker and stronger into the future. For example, having someone to go through a course such as Green Belt, Black Belt or Lean Master will provide a new insight on the world. If you are a manager it is your responsibility to provide outlets for this employees with new tools to be able to use them and become experts, if you are the employee, it is your responsibility to teach your manager on what support you need. This conversation is crucial, for everyone development.

One key aspect for success is for the top leaders to match the capabilities at the expertise technical detail. This does not mean that they are THE technical experts, but it does mean that they are supporting the organization correctly and setting the company for success. They need to be the conductor of the orchestra, no need on knowing how to play every instrument.

On a side note, many companies or organization pick the successor by who is next in line. For you to stay above the S curve you need to start giving more thought to the right person. This person should be the person that best is qualified on facing the company challenges, not just the next in line.

As you develop your team, think about this, “Does your team have time to think?” If the answer is NO then you need to start hiring or start taking less jobs. A high performer team always has surplus talent, this will allow to divide and conquer to reach the current goals, and allow your team to develop the next generation of services and products which will keep you riding the “S” wave.

By doing this you are also creating a talent pool that the company can use to leapfrog them into high visibility positions.

Remember:

1.      Start your innovation before it reaches its peak

2.      Develop your team

3.      Create room to work on the next generation always

Shared Value fundamentals (Inspired by Business Harvard Review, Jan/Feb 2011)

As companies grow, they try to find share value with society. Some will try to find this link as an employment creator, others will try environmental factors, other just believe that the simple fact of being there is a favor for the community (BIG NO NO). Well, it will not surprise for you to hear that it takes more than that.

The key is to find the needs and challenges the society is going through. If you are located in a small town, you might be looking at creating or providing different business the opportunity to support your business. If you are in a big city you might be looking at participating in school programs, adopting a highway or cleanup. The important thing is for you to understand the need and give a hand.

The company will and I repeat, will, create some externalities. The company will bring and disrupt the environment in new ways, it could be traffic, environmental, air pollution and others. Smart companies will stay ahead by developing programs which will be ahead of the curve and any regulation impose by the community or government. Many time is this externalities the reason why the community imposes taxes or penalty as a way of control, so stay ahead and the society will appreciate that you recognized the waste or a bi-product you are creating. Most likely the community doesn’t want you to go, but is important not to abuse the relationship.

This are some good ways to find that shared value:

Reconceiving the products and markets

Is this a product or service that the society benefit from? Not only that is it good for society but is it better than yesterday. (nutrition, gas mileage) By doing this you are not only making yourself more marketable but you are creating pride on your company and its product.

Productivity in the Value Chain

The time to look at productivity as making something faster/more with less people is starting to fade away. There will always be opportunity in labor, material and overhead, but in order to create a strong relationship with the community other buckets should be consider:

1. Environmental impact
2. Supplier access and viability
3. Employee skills
4. Worker safety
5. Employee health
6. Water use
7. Energy use

Building supportive industry cluster

This area is one where you not only get to share the knowledge and up-skill the community but also try to create a talent pool in the community. This talent pool can be use by you and other business (small or big) in the area. Many will join forces with the local education system, high school, trade school, community college or even universities to provide this type of programs.

I can not say this without warning you, that this area will create competition for talent. Companies may move to the neighborhood, established companies might start doing some innovation that require the new skills, etc... 

With education the society will grow, will be more attractive for new talent and synergies between the company and the community will grow stronger.

Whatever you do, remember that the shared value is always changing, being part of a community is a very dynamic role so take advantage of that and become a keystone for the community around you.

Opportunity Cost (Inspired by Harvard Business Review, Jan-Feb 2011)

In this article I want to explore the idea such as “Opportunity Cost” and how can it be apply in the service world.

Had you gone to a store to buy a Bose music system and once you are there ready to buy a voice starts telling you “are you sure you want to spend this amount of money? Do you really needed?” Maybe some of you can relate others might replace the Bose system for a car, a house or something out of your price range, but you surely want it.

The experience salesperson will notice this mood change and rapidly will apply a technique called “Opportunity Cost.” At this point the salesperson might gage how far to push you into the buy, but will provide some offers that you will provide the sense of saving money. He/she will continue to tell you “instead of getting this, why don’t you consider that (cheaper) and spend X (the difference) in accessories.”

Without realizing it you might spend the same amount in the store but doesn’t it feel that you save money because your hands are fuller?

Now that I explain the idea, let us see how to best apply it in the service business.

Case study, not so far from today’s real world.

I am the manager of this small department in an organization that serves as consultants to the enterprise in Continuous Improvement. We specialized in methodologies like Six Sigma and Lean that focuses in problem solving, providing a culture change to accept and sustain Continuous Improvements, and building up skills capabilities in this topic.

Going back to the intention of the article: “How do I implement the idea of ‘Opportunity Cost’ when selling my organization and its services?”

First I would start with understanding what is my menu. I would recommend to provide some options (for example): the premium, the value, the basic, and the customized package.

• Premium Package
• Structure Lean Deployment

Here we invest in creating a Continuous Improvement Culture throughout the organization. This will allow for a sustainable, engage and knowledgeable culture that will modify, create and challenge processes to make them effective and efficient. The form of payment is measure in commitment. In this package the department is in for the long haul. We ask for Value Stream Managers, time and resources to learn and develop the Continuous Improvement skills.

• Value Package
• Quick Wins

In this package we provide the organization our support to participate in a Kaizen event or similar. The commitment in this package will be intensive but for a short amount of time, normally less than 2 month, most customers not ready for a dedicated Lean deployment would select this package. This package will provide the customer with the support and leadership from the experts and at the same time they will be acquiring some knowledge as the customer most provide a leader and co-leader to lead by the guidance of a Lean Master.

• Basic Package
• Facilitation

One of the abilities of the experts is the ability to facilitate and guide a group of people with different personality through a session to arrive at a common goal. In order to do this they use Lean Six Sigma, Project Management or Change Management tool. This type of session are less than a day long and have very little pre-work. It is important to note that in this package the commitment from the team of experts is minimal, no pre-work and no post-work. With that being said the more the customer is involve the most valuable and actionable the session will be.

Customized Package

- Catch all bucket

This package is consider as the catch all bucket. This is the package could be a 3-6 month project, a dedicated resource in a remote assignment and may others. Due to the talent pool acquired you will be ask from time to time to share this resource with the rest of the organization where needs arises. It is important to provide the customer with options and accept to this package as a last resort.

Now that we discuss the opportunity cost, let us rank the Price and the Cost from 0 to 100.

Package	Customer Price (Commitment)	Team Cost (Resource)
Premium	100	100
Value	50	25
Basic	25	10
Customize	35	100

I will not do the math but if you subtract the commitment from the resource you will see that the “profit” varies but you will notice that the most risqué category is the customize package as you and your team are more prone to spend and dedicate more time than the customer you are serving.

The hardest part is done. Quantifying the effort and benefits of your service. Now you can prioritized and work and offer the best benefit for your customer.

If you want to balance your scorecard, I would add a customer scorecard for internal use only. This scorecard should reflect if the expectation and commitment were met from the customer. The intention would be to understand what offering is the customer ready for.

Using this tools you can optimized and be able to sell the appropriate service to your customer. The icing on the cake is that you would be setting yourself and your team for success as you will ensure that the customer can provide the right level of commitment.

My Boss, Technology (Inspired by Harvard Business Review, Jan-Feb 2011)

Technology had advanced so much that is making the people manager obsolete. Let's think about it for a second.

Technology today can monitor, keep track, even have reports of people times, productivity and sometime prioritize base on specified parameters. Scary?

So if you are a manager out there, and I include myself in this equation, what is our future? Does that mean our employees will have no need for us? If you answer YES, then you are RIGHT! Let’s be real, we need to change as well, we can’t stay behind. But the question still stand, where do we go?

First we have to ask, who is our customer? In my mind there are two.

1.      The company we represent and the vision and goals we are imposed

2.      Our employees, who look to us for priority, direction and motivation

Employees today are self directed to a point where they are self managed, they are being their own bosses, the question become where do we, the managers, fit?


Well, I’m learning this the hard way, and there are 4 things managers today need to be active on.

1.      Strong vision and mission

2.      Resources and support

3.      Stay in touch and provide as much help as possible

4.      A self project (creating your signature)

Strong Vision and Mission

Create with your team a organization message map. This will help them set sail in the team’s true north. You can use Franklin Covey, and any other team management tools to get there. If budget is not a concern I recommend to hire a consultant or an organization that do this for a living to facilitate the session. This will ensure that you and all your team members are part of the event.

Resource and Support

Make sure to keep in touch in order to provide any roadblock they encounter. With a self directed team they will be capable of removing most of them, but your help, feedback and passion for their success will go a long way creating credibility with your team, and staying in touch with their work.

Stay in touch and provide as much help as possible

Work on your team, not in your team. Make sure they are in a constant learning, developing new skills and sharpening old ones. Improve your teams reputation and emphasize the importance of their existence. Do not be shy to find opportunities for merger, change and evolution.


Salesperson, you want to be able to sell your teams work and be their number one cheerleader. Always have their success, lesson learn and why the organization needs them in the palm of your hands.

Self-Project

Career project: Find a project you want, outside your teams scope. This is your personal side project you want to have. This project should help you create your signature. Remember the name of the article, and if you, the manager, don’t invest in yourself, you might consider yourself obsolete.

Adaptive Pricing (Inspired by Harvard Business Review, Jan-Feb 2011)

Adaptive pricing

The adaptive pricing concept is base on creating off-products or services from your main line, this will provide customers options base on their budget and needs. For example, when customer were trading price for quality, 'Tide' came out with a different detergent to attract the consumer that needed to make this trade-off.

What 'Tide' created was a “Fighter brand”. Keys to success on this fighter brand is:

1.      Be able to remove it from market when there is no need.

2.      Make sure that it does not replace your main line, but keep interest on your product, so that customer doesn’t migrate or explore.

Some side benefits are: the attraction of new consumers, maybe by curiosity, but people that would not had try the product otherwise.

This tactic should be very well plan, as you do not want your brand to depend on the “fighter brand”.