Hypothetically, if we switch gears and consider the value of a technology which was recently implemented, can we identify the key attributes of end user value and is the recognized value part of a greater customer satisfaction equation? As a business consumer, one may be quite happy with the service of a local IT vendor and find the applications to be fairly adequate.  The software meets your “user experience” expectations and the purchasing committee feels like they got a great price. Yet, if business process improvements (BPIs) aren’t recognized or operational efficiencies weren’t gained, then it would be difficult to establish added value.  In addition, if individuals at the operational level realize value (BPI & operational efficiencies) yet those at the executive level do not (don’t consider it to impact corporate strategy), then it would be challenging to draw a conclusion that the organization recognized significant value. That might be a reflection of how the technology was sold (consultative vs. transactional) or simply the perception of the B2B consumer. Yet, when you’re accessing value many times perception is everything.

So in essence, how do companies confidently know they’re offering a high degree of value?  How do you measure value and can you?  That’s the nature of future posts to this blog and look forward to insight and participation from others.

A leading application for immersed environments is SecondLife. Registering, downloading, and participating within SecondLife is free – sort of. Once you become acclimated with your assigned avatar, one can explore multiple virtual geographical environments – and there are hundreds. The initial experience is nothing less than amazing as you become immersed within the visual landscape of surreal creativity – by walking, running, or flying no less. You can modify your avatar to look like someone right out of the April edition of GQ magazine or be the most stunning runway model on this side of the Mississippi. Who couldn’t use such an elaborate make over?

Back to business. On SecondLife’s website, there are several case studies (available for downloading) of some fairly impressive corporations providing testimonial to the strategic benefits of immersive business environments; Time Warner, Northrop Grumman, Comcast, Wells Fargo, and others. The recognized benefits are derivatives of using the virtual application for training, education, conferences, and meetings without the need for travel. Similar to the benefits of Unified Communications within the VoIP space, applications for virtual collaboration can save your company or constituents several hundred, if not thousands of dollars in expenses – mostly related to travel. But can consumers derive value from businesses in an immersed or virtual environment?

A few thoughts and inquiries on simulating value in an immersed environment;

• Brand – We all know it takes a lot to build a brand relative to quality, services, uniqueness, classification, etc. From an advertising perspective, there are notable opportunities for organizations to market their logo to an audience of millions in the consumer and business segments. But can you build a brand in an environment where market conditions are impaired or the measurement of market attributes is not really attainable?
• Marketing Analysis – Based upon socio-economic simulations in environments such as Secondlife, perceived value can be attained with product or conceptual service introductions to multiple communities of consumers. In SecondLife you can shop as well as buy and sell land. But can you conduct marketing focus group studies for measuring value of new products or services and obtain accurate feedback? If market conditions are impaired, the analysis results will be as well.
• Applications – Broadcasting can certainly be conducted in an immersed environment as demonstrated by the folks affiliated with Metanomics. Immersive workspaces can not only be a great collaboration solution, but a means of broadcasting to the masses. Remedy, the company that owns Metanomics, has provided a broadcasting journalism studio for purposes of interviewing guests within SecondLife.
• Performance Management – Value can originate from experiences or results. In business, we look for business performance related outcomes that pertain to management initiatives – measurement of operational efficiencies, economic efficiencies, or business process improvements. How do you apply performance measurements in an immersed environment?
• Competition – Value is partially defined by the relative significance and degree of competition. In an immersed environment, without true economic incentives – competition is not motivated to “set up shop” and thus an accurate barometer of value is muted. Without a comparative proportion of competition to assess, the consumer is provided minimal choices or options.
• Strategy – Without true market conditions (competition, limitation of products and services, quality), can you really establish a strategy that projects consumer value . . . . 5 years from now?
• Value Discipline – Can an organization establish a value discipline in an immersed environment such as Second Life? Establishing one’s discipline in the areas of customer intimacy, product superiority, or operational excellence would obviously be difficult to aspire to.

I’m on board with utilizing 3D Virtual environments for collaboration purposes both in business and consumer markets – the technology and application is superb and will only improve with time.  But I’d like to hear from others as to whether this type of technology can simulate new economic markets or improve existing ones.

In 2008, Food For The Poor – who consistently has to address the most difficult supply chain management challenges – generated over $1.5 Billion in support while maintaining a staggering 4% in administration costs. On behalf of the CFO’s that follow this blog, allow me to repeat; 4% administration expenses on top of $1.5B in revenue. To put this into perspective, Reuters recently announced that Time Warner was considering a $1.5B bid for MGM – the legacy Hollywood movie studios. Can you imagine what MGM’s administrative costs are?

Food For The Poor is the largest international relief and development organization in the United States, according to the Chronicle of Philanthropy. The organization serves the poorest of the poor in 17 countries throughout the Caribbean and Latin America. They’re responsible for drilling life-giving water wells, distributing medical care, building homes, constructing sanitation systems, providing education and training, and other concerted measures to help the poor break free from the cycle of poverty. These efforts require the utmost precision in execution and management application including distribution, construction, shipping, building, coordinating, communications, and marketing. For a moment, contemplate the project management requirements of planting over 100,000 fruit trees in Haiti and Jamaica or the coordination efforts needed to distribute 27.9 million pounds of food to countless malnourished children and their families in 17 different countries.

This type of management performance has not gone unnoticed. Organizations such as Forbes Magazine, Ministry Watch, Chronicle of Philanthropy, Charity Navigator, and Better Business Bureau have all recognized Food For the Poor with honorable performance ratings and hold them in the highest esteem. I would suggest that many COO’s should also take notice.

I recently caught up with Mr. Angel Aloma, the Executive Director of Food For The Poor, for an interview to gain insight into how the organization operates at such astonishing levels. “Well, we’re very frugal”, Angel explained. “Our Goods In-Kind department tries to secure donated supplies such as paper, pens, and other administrative items at no cost. In addition, we’re very careful with our expenditures – when we travel we monitor our costs very closely. So when I travel to New York as an example, I’ll eat a slice of pizza as opposed to dining at expensive restaurants. In addition, when we travel with others, we do not purchase alcohol. These are just some of the measures we take to be good stewards and keep our costs at a minimum”. Angel also shared with me that his organization takes an active approach to maintaining costs. As an example, a Speakers Bureau, one of the thirteen (13) different fund raising departments, staffs 85 priests, pastors, and ministers who travel all around the United States to spread the message of need and hope. Also, within their marketing effort there are financial efficiencies gained from having an in-house staff of creative designers, photographers, videographers, and writers; resulting in no expenses for outside marketing consulting – although production requirements are put out to bid in order to obtain the absolute best pricing.

The metrics at Food For The Poor were not always so impressive. If you rewind the tape approximately ten (10) years, the administrative costs were between 7% and 10%. They are currently less than 3% – however, in order to maintain the same marketing materials year after year, the documented ratio is publicized at an average rate of less than 4%. “The directors meet monthly to discuss how Food For The Poor can maintain or reduce costs”, Angel explains as there are several efforts allocated toward creating ideas on how to reduce expenses. Food For The Poor relies heavily on their donor base for support and many donors have graciously exceeded the average historical statistics. Angel points out the average span of donors noted by analysts is typically around 3.25 years, where Food For The Poor recognizes donors who have graciously contributed for 10, 15, and 20 + years. In response to emergency crisis such as the recent Haiti earthquake, thorough preparation helps address “the cost of the moment” and the compassion of their contributors, Angel explains.

“Our Goods In Kind department handles the acquisition and distribution of supplies that can be very expensive. As an example, we once received a shipment of Antiretroviral drugs for the treatment of HIV, and the estimated valuation was over $2M. Another donation consisted of a shipment of 600,000 vaccines for meningitis. Another originated in Taiwan where 40 containers of rice valued at over $20,000 each (a monthly commitment for a year) were logistically managed by our Goods In Kind department. We over-see the shipping and distribution costs of course, but benefit from the volume-based rates. When you move over $1.5B in services and support, that type of volume gains you significant shipping and distribution rates. The economies of scale are very impressive”.

Food For The Poor is the equivalent of a $1.5B Multi National Corporations (MNC) that caters to the needs of people in 17 different countries. The Supply Chain Management requirements of feeding and housing millions of people, providing education and medical care, while constructing orphanages and water projects is absolutely mind-boggling. Within these countries, there is no Medicare, food stamps, or social security benefit. There is no safety net to catch the poorest of the poor. Because of the exceptional management and leadership throughout this special organization – both paid and volunteer – individuals and families have a chance of breaking the vicious cycle of extreme poverty.

If you would like to learn more about Food For The Poor, you can go to their website at www.foodforthepoor.org

RA

http://news.yahoo.com/s/time/20100322/us_time/08599197398900

By utter coincidence, stumbling around www.linkedin.com I recently discovered a business book that could very well be the most valuable tool I have on my desk. If you are a strategist, consultant, manager, innovator, planner, teacher, leader, educator, or marketeer – this tool box, or should I say “Tool Book”, provides an extraordinary score of incremental value from cover to cover. It is a game changer! The name of the book is “Business Model Generation”, and it was written by two gentlemen from Europe; Dr. Alexander Osterwalder and Dr. Yves Pigneur. I bought it on Amazon for $34 (soft-copy)with free shipping. This is a five star, two thumbs up recommendation!

Business Model Generation provides clear and concise instructions for creating a unique business model based upon the utilization of conceptual tools that include visual thinking, storyboard planning, graphics, designing, collaboration, and an incredible framework used as a canvass. So get out your sticky notes, pens, and magic markers and pursue a remarkable experience that will certainly have an impact on your organization’s roadmap and business model. If you’re looking for a creative process to help foster innovation within your team – go to Amazon and order “Business Model Generation”.

Online resources for more information;

http://www.businessmodelalchemist.com/

http://www.alexosterwalder.com/index.html

http://www.businessmodelgeneration.com/

http://businessmodelsinc.com/

I think most would concur that the impact of innovation has a lot to do with timing.  And timing really pertains to market introduction considering multiple relevant factors.  As an example, if I tried to introduce a new and improved typewriter in 2010 – I probably wouldn’t succeed, right? Likewise, if I submitted a proposal to a Venture Capitalist (VC) group to fund a start up company that manufactured film for cameras – I probably would get some very strange looks! Not to mention a huge thumbs down on the capital request.

But innovation can also be introduced to early.  When I was a youngster in the early 70’s, I remember visiting my step-grandfather in South Georgia, who at the time had created a man-made pond to raise catfish.  Knowing that one could go to the local catfish house and eat fried catfish all day long for $3.99, I didn’t quite get the business model.  Now, however in 2010, catfish sells for $5.99 a pound in the grocery store – and not just in South Georgia but also throughout North America!  He was a man with an idea before its time.

Similarly, being a transplant from the east coast, I noticed several years ago that there was a void in good donut shops here in Denver, Colorado.  Coincidently, after traveling several times to Canada and visiting Tim Horton’s coffee shop, I became habitually addicted to their donuts.  It’s a habit I’ve since kicked, but an idea rang out loud and clear with me to open a franchise in Colorado.  The brainchild was riveting and I thought I was nothing less than brilliant until a friend shared with me her opinion and subsequently burst my balloon; “Bob, a donut shop in Colorado is not a good idea. This state is full of health-crazed nuts that live off of bananas, Cliff Bars, and oatmeal. Sorry Bob, it will never work”.  I eventually dropped all notions of living in Aspen and driving a new Mercedes SLS AMG. A year later Krispy Kreme Donuts launched their first store in Colorado. For the first six to eight months, there was such donut frenzy that Krispy Kreme had to contract resources from the local law enforcement agency to help manage and control traffic. Again, an idea before its time! But, note to self; “Self, hire a professional to consult on market demographics and product introduction”.

However, when it comes to product innovation and timing, there is a phenomenal story by none other than a phenomenal innovator, which is Apple.  The company that brought us the first desktop computer thirty plus years ago has established a superb innovation model that’s unparalleled to anyone in the B2B and B2C space.  When you consider the realm of products that Apple continues to “wow” us with, it’s actually quite sensational.  The iPod, iTunes, iMac, iPhone, iTouch, and as of recent the iPad, are a sample of Apple’s uncanny ability to develop products and applications that are disruptive and significant.  The iPod earphones have become a universal cultural display of technology apparel that wears no different than a hat or a scarf.  And, for the third year in a row, Fortune Magazine has recognized Apple as the Most Admired Company.

But the real grit behind the Apple story is the vision of the company and their CEO, Steven Jobs.  To illustrate, let’s rewind the tape to the early eighties timeframe. Microsoft was well underway of mass-producing its operating software (DOS) for desktop PCs that could be manufactured by the masses. Apple’s user interface and desktop computer (MAC) takes the market by storm primarily because of the graphical user interface and the overall user experience.  But in the race for the desktop, Microsoft eventually wins out because of its “openness” to license software to PC manufacturers and consumers all over the world. Apple is subsequently criticized for remaining proprietary to its own hardware, although its software is arguably superior.  Many analyst at the time suggested it would be Apple’s ultimate demise and made reference to fallen companies with proprietary hardware such as Wang and DEC.

Now, lets fast-forward to the last decade – 20 to 25 years later.  Apple remains committed and true to their values by producing products and applications that provide that absolute best user experience on the market. They don’t abandon the design and production of hardware, in fact Apple’s hardware parallels software relative to the overall user experience.  What is important to note as you follow Apple’s product trail is that they subsequently take a leadership role in the world of mobility.  Apple’s proprietary hardware evolves from the desktop to mobility with the iPod, iPhone, iPad, etc., and they eventually secure an ironclad position in consumer and business electronics. What distinguishes Apple from the competition is their online retail store (iTunes) that allows mobile users to download (buy) content. iTunes is now the largest retailer of music in the world. By coupling their mobile devices with iTunes via the Internet, Apple establishes a revolutionary business model like no other.  In retrospect, if Apple would have listened to the critics 25 years earlier and discarded their vision of producing hardware to compete against Microsoft with a software-only model, we would have never seen the ingenuity of Apple like we have for the past ten years. Well done.

Timing is everything.

The rate of a star’s descent and the extent of the fall can be quite extraordinary. And yet, to orchestrate some notion of a comeback from the bowels of mortification will only seem insurmountable.  It’s been no less than 90 days that I submitted a post about the leadership attributes of Tiger Woods, distinguished only from another regarding Toyota’s model of strategy.  Jeez, who would have thunk?

Unfortunately, both parties have recently taken incomprehensible shortcuts that were of self interest and ultimately the vulnerability of a brand has been exposed.  The impact will not be as significant to those in power as it will be to those bearing the repercussions. In Toyota’s case, it’s not only consumers in risk of injury or death resulting from multiple defective parts and components. Thousands of productive U.S. employees will soon be out of work because at the moment, Toyota dealerships are ghostly quiet with the exception of their service department attending to recalls. Multiple individuals, families, and communities will ultimately have to bear that cross.  With Tiger, he’s not just a PGA golfer and athlete, he is a CEO of a billion dollar corporation called Tiger Woods. It’s not necessarily the obvious ramification suffered by family and friends that’s of relative importance, but the collateral damage inflicted upon strategic partners, business associations, the PGA, charities, and foundations – all of whom will have to absorb the public aftermath.

If brand signifies perceived value, then it’s diminished considerably because what it used to characterize – what we once trusted – is no longer. Even after the dust settles and Toyota adequately responds to the recalls, lawsuits, and congressional hearings, they’ll continue to have image concerns regarding quality, integrity, safety, stability, and trust. Ask one of the big three car manufacturers in Detroit what that’s like from year’s past.  American Express, on the other hand, has always been meticulous about their image of security, integrity, privileged, and uprightness. How much debate prevails within corporate hallways when the topic of Tiger’s endorsement crops up? As of yesterday, Gatorade announced that they too are dropping their sponsorship of Tiger Woods.

The virtues of leadership and the principles of management shouldn’t be taken for granted. To think otherwise just may be the cardinal offense that leads to mediocrity and failure, and the subsequent outcome is that people get hurt.  Unemployment, furloughs, loss of benefits, salary reduction, standard of living reductions, bankruptcy, etc..  Within the last twenty-four months, the corollary of arrogance, unethical behavior, and poor leadership has been all too evident. There are multiple socio-economic reasons for implying that strong leadership and management is a priority within corporate, government, and small business environments – otherwise we’ll simply witness more of the same.

Technology is comprised of hardware and software, however, its intrinsic worth (particularly applications) is equivalent to zilch without the association of services; i.e.; implementation, training, pro services, project coordination, maintenance, customer support, etc. So as an example, if my company were to invest in a network based application(s) such as Microsoft Exchange (messaging, unified communications, contact management, etc.), we wouldn’t recognize value in the software and hardware without the required services needed to use it effectively. But getting to the point of “using it effectively” seems to be the services standard or benchmark within the industry – and it really shouldn’t be, and here’s why.

First, when the sales team facilitates the discovery process with the respective client, the key objective is to uncover strategic business problems or issues that they can potentially resolve. Sales personnel accumulate value with their respective solution (technology) by having the customer envision business performance related outcomes and recognize strategic benefits. Examples of such outcomes would include business process improvements, operational efficiencies, cost reduction, enhancing customer service, or improving the clients brand within the market place – just to name a few.  In essence, sales’ has a vision as to how the client will recognize value.  But what typically happens is that once the contract is signed and the project management team steps in to take over the account, sale’s exits stage right. Yikes! If there’s poor communication during the handoff, the vision gets lost in translation.

Second, typically the technical staff is concerned with one thing, and one thing only. And that’s to install the technology to get it up and running. Absolutely – that’s what engineers or techs are paid to do. That means installing the software on the hardware, programming, tenanting departments, managing licenses, integrating the solution with other technologies, and testing, amongst several other tasks. Perfect – with one exception. Although there is an audited check list for each desktop having access to the solution, the end user training that the client receives is normally universal – in other words, it’s standard for every department and every employee.  Yikes! Every department has different needs and requirements, and so does each employee.  Typically, this is where the customer questions the thoroughness of the training.

And thirdly, with the advent of SOA (Software Oriented Architecture) it’s important that the solution is open to standards and plays nicely with the other technology solutions leveraged by the client to help run their business.  Again, not just a technical implementation task that’s in question here.  But, what will the end user experience be if your solution needs to integrate with a SCM, EPR, CRM, or database platform in order to achieve perceived operational value? That was taken into consideration, right? Yikes!

Services – particularly in the technology arena – can actually be more important than the technology itself when attempting to establish a customer centric brand as a system integrator.  And, as with any industry, it’s always important to think about the end user experience – not just getting the product to work. The end user experience is essentially the gauge of customer satisfaction – regardless if you operate a Sushi restaurant or a technology solution company. How content your customers are with using the product and recognizing the perceived business outcome subsequently equates to the value you deliver.  What encapsulates your customer’s experience is limited only by one’s imagination, as creativity is the essential ingredient for establishing a unique and invigorating experience for customers.