Brainwaves
Summer 2011

Brainwaves, the official e-Journal of the Business Performance Innovation (BPI) Network, is distributed quarterly to BPI Network members, content requestors and e-newsletter subscribers. Our objectives for Brainwaves are to provide relevant information, stimulate new ideas and help improve your decision-making regarding business performance management initiatives, strategies and execution.


Editor’s Note

I am eavesdropping.But I do it in the name of writing this note for Brainwaves. And to be fair to myself, I am in the airport, so I think we can all agree that loud conversations in airports are BEGGING to be overheard!

The debate raging at Gate 19 revolves around Steve Jobs’ recent announcement that he will be stepping down as the CEO of Apple. Those on the right of the aisle argue that Jobs was not just the “soul” of the Apple brand, but the catalyst or lightening rod of true innovation. Those on the left of the boarding lane believe that Jobs set the cultural barometer for Apple to breed an environment where even the most simple idea can be crafted into industry-shaking innovation.

As the discussion descends into an active debate of what kind of tyrant Jobs may or may not have been, the bigger question that lingers in the air is whether or not Apple’s culture of innovation can withstand the public perception that Steve Jobs equaled Apple. The next innovation by Apple will likely be one of the most scrutinized pieces of technology ever released. But regardless of its success, the new product will really represent the company’s resolve to continue innovating.

In Fiasal Hoque’s article “Tomorrow Is Today! A New World Ecology Is Underway,” featured in this edition, he states that “the imperative to innovate could not be greater” thanks to today’s ever expanding, fast, global economy. He goes on to say that “transformation is driven by an acknowledged need to grow and change, followed by thinking differently about the old ways and means.”

We are swimming in potential innovation, and as Hoque points out, we are also constantly surrounded by transformation. It is unavoidable, but it can be overlooked or unappreciated. The challenge will be where to start applying that innovation or embracing that transformation to impact positive growth and change in the enterprise.

Enjoy!

Liz Miller
VP, Operations
BPI Network

 
Feature Article

Tomorrow Is Today! A New World Ecology Is Underway

By Faisal Hoque, Founder & CEO, BTM Corporation

Tomorrow is today. If you or your company are waiting for “things to get better,” you’re missing the point: It’s  up to you to make things better now. A New World Ecology is underway, and you must to be a part of it.

The basis for moving forward is understanding we live in a globally interconnected economic, business and social environment. As we move further into the 21st century, new technologies are changing these fundamental relationships at an ever-accelerating pace. Cross-cultural boundaries are diminishing. The marketplace is growing ever more intense and demanding. Clearly, the imperative to innovate could not be greater.

These goals are not simply possible. They are inevitable. They are achievable when viewed from a fresh perspective, as an act of transformation: a proactive process for an individual or institution, regardless of purpose or mission, which begins with a passionate need to effect significant change in both the internal and external environments. We don’t make progress in this world by doing the same things we’ve always done and expecting different results. Put another way, the 20th-century economic, business, social models simply aren’t working efficiently any longer.

Transformation is driven by an acknowledged need to grow and change, followed by thinking differently about the old ways and means. It is one of the steps to becoming a successful 21st century enterprise. It can be modeled, documented and implemented as a total game-changing process. The steps in the transformation process are as follows:

                     

  • Human nature is driven by wants and/or needs
  • We develop strategies to evolve tactics to turn those wants and needs into goals
  • With tactics in place, we can formulate a plan, or call to action to achieve the goals
  • The plan, or call to action, involves setting personal or business objectives and determining the most appropriate technologies with which to implement them
  • When the business objectives are combined successfully with the appropriate technologies, the result is convergence, the seamless merging of both to attain goals
  • Convergence makes it possible to gain access to enabling technologies, essential in the process of satisfying the wants or needs
  • Transformation occurs when the individual or enterprise has successfully embarked upon on the new course to achieve its goals
  • Change, innovation, and sustainability, the most sought-after attributes for the individual or the enterprise, have now been unleashed and are powerful tools for bringing goals to fruition.

Those completing this process are now positioned not just to survive, but to progress and thrive. The process is repeatable — in fact it loops — continually transforming actions through the use of powerful enabling technologies into creative, innovative, and sustainable goals and outcomes.

Technology proliferates at a tremendous rate, leveling playing fields in business, politics, medicine, and nearly every endeavor it touches. It may be a smartphone app, solar and wind energy, hybrid and electric autos, social media, cloud computing, or an innovative new Web 2.0 app. Here are a few examples:

  • Borders, once considered a competitor in the retail book market, recently went bankrupt – not only in cash but innovation. Borders failed to take charge of its Internet presence and annoyed customers with long lines and high prices. It lost the in-store Starbucks franchise to Barnes & Noble. It didn’t enter the market for e-readers. In short, Borders never changed, and for that it paid the ultimate price.
  • KickStart sells an irrigation pump to African farmers which lifts water uphill into fields. It has enabled them to increase their yield and their income tenfold, from $110 to $1,100 a year.
  • The cell phone, Twitter, YouTube, Facebook, and Twitpic were used by Egyptian citizens to assemble in Tahrir, or “Liberation,” Square to demand the resignation of President Hosni Mubarek. Over a million people rallied, and Mubarek stepped down.
  • Howard Schultz, CEO of Starbucks, found an unintended consequence of transforming his company in 2008: instant coffee. At first poo-poohed, Schultz learned the market was $20 billion and so brought Via to market to compete against old, tasteless offerings. In its first year, it sold $180 billion and became fifth most popular.

The success for an enterprise is often driven by its ability to recognize significant challenges and immediately identify the strategic imperatives necessary to address them. While nothing new, accomplishing such goals in today’s global climate requires new organizational structures, creating and sharing new kinds of business knowledge, understanding and applying emerging socio-economic models, and developing repeatable, reusable transformational processes.

We can no longer think of ourselves simply as a unique, branded, steel-and-glass tower of commerce, but rather as one member of a community of myriad, pixellated, overlapping, massified groups. We can no longer focus just on short-term goals and quarterly profits. Our efforts must entail adding value to the greater good of the world. In order to succeed, each of us — individual and enterprise alike — must learn how to solve ever-changing, complex business and social problems. We must come up with new ideas for the process of creativity, innovation, and sustainability, not just for the benefit of ourselves or our enterprise, but for business partners, customers, and the ever-growing global social groups in which we interact.

Transformative events of all kinds are occurring hundreds, thousands, of times a day across the world. The application of an appropriate technology jumpstarts transformation, opening the portal to creative and innovative uses of enabling technologies. Convergence, transformation, and enabling technologies in an endless loop sustain ever more creativity and innovation. When mandated by leadership behavior and coupled to collaborative and functional processes, an enterprise can use this transformation model to better position itself to take advantage of today’s — and tomorrow’s — opportunities.

 
Executive Insight



Robert Kamper is Senior Executive Vice President of Marketing Operations at Deutsche Telekom AG, he is responsible for the cost management of the division, the CMO's operating office, and all operational topics within marketing. Previously, he acted as Chief of Staff for the CMO and worked within the Marketing Coordination & Steering department of Europe's biggest Internet Service Provider, T-Online, where he was responsible for Group wide online marketing projects and cooperations.

What is the background and evolution of Deutsche Telekom's business strategy?

Our business model is primarily driven by our executives. We have our mobile arm and our fixed arm of Deutsche Telekom  and I believe that there is a shift towards hardware services and application waves.  There are new players entering the market like Google T.V., Apple T.V. and so forth. So as a former incumbent, we have to create a differentiation of our products and develop the strategy of connected life. For instance, Microsoft also had a connected life strategy or platform strategy and Telekom Deutsche has developed a strategy of connected life to provide a product portfolio that complements our access portfolio by offering unique services like new fields of entertainment.  We are creating new communications suites and home management devices to create new markets, and to move from a mass market product business model to a more focused key segment-oriented business model – like smart metering or payment and cost businesses. The real question is how to expand the core. I think our business priority is to really develop new products and services to enhance our connected life strategy. 

What is the biggest influence upon subscriber complexity for Deutsche?

The biggest contributor to subscriber complexity is the requirement to address opportunities and needs of various market segments.  It’s driven by the shift from access business which was our unique standing proposition for years, the fixed line business to service and application offerings with diverse customer needs.  There is really a shift into subscriber complexity, and really, a shift in the needs of our new target groups.  The second reason for increased subscriber complexity is the growing convergence and diversity of our own services and offerings.  Since conversions by our customers, it’s only on the level of services and not on pure access launch; we have to create convergence products because demand is really high for these offerings. 

How is Deutsche embracing digital marketing channels, tools and technologies to further effectiveness?

In terms of greater insight and intelligence into our subscribers there’s CRM and marketing strategy to consider.  I think customers have more and more choices in today’s communications markets due to the different operator product features and the price wars that are going on. Insight intelligence into the subscriber base such as socioeconomic data and knowledge about communication preferences allows us and the service providers to address our subscribers effectively by considering specific customer needs, and by addressing them with customized products and promotions. We have good insight into our data warehouses to determine which product is best for this specific client.  And a further step is to consider regional differences. It would be possible to offer special products and regional pricing in particular regions of a country. 

The German telecommunications market is affected by a decreasing number of new broadband customers due to market saturation, so this is really going to be a win-back market.  Retention and CRM is really getting important for retention of our customer base.  And the voice in the broadband market is influenced by pressure on prices, and as I stated before, users want entertainment, information and communication.

When it comes to challenges and opportunities for future growth, what is the next big thing for the Telecom Industry?

I think subscriber complexity for the telecom operators is going to be a big thing, because customer needs are constantly changing, so you really have to adapt your marketing strategy every year.  You have to review your segmentations.  Do you have the right target groups? Going forward, I think this is going to be really a big thing for our industry, but if we really have a good market theme for our customers, we reduce complexity.  I think for our customers we have to reduce complexity and create really easy-to-use products.  But for the companies and for the employees and management, it’s really a big challenge to create or to reduce complexity for our customers because it’s not that easy.  Customers are becoming more and more demanding of self-distributed content on social media and so forth.  It’s going to be a challenge. 

We have several management information systems in place.  We have several data management reports and analysis, so I think it’s going to be straightforward.  I don’t think that we have a challenge about data in our industry.  I think we have a challenge in meeting the customers’ needs. The next big thing is going to be really one-stop shopping converged product before you. 

Excerpts provided from CMO Council’s Report, Making Sense of Subscriber Complexity, http://cmocouncil.org/cat_details.php?fid=206

 
Contributed Article

 Can Management Science Unlock the Corporate Genome?

 By: Cedric Tyler, CEO of BusinessGenetics, Inc. 

No doubt we have all heard that a chimpanzee’s genetic makeup differs to humans by a factor of some small percentage. According to lead researcher     Morris Goodman, at Wayne State University, Detroit, “…99.4% of the most critical DNA sites are identical in human and chimp genes”. Yet clearly there are significant differences between the two species.

Similarly, the base genetic code for many organic substances is highly similar. Literally, comparing apples to oranges (!), reveals that their DNA are remarkably similar (Scott A. Sandford of the NASA Ames Research Center), fueling speculation that it is theoretically feasible to transform an apple into an orange, by means of genetic engineering.

This begs the question as to whether any of the remarkable breakthroughs in the field of genetics could potentially  be applied to the field of management science? Why do corporations that essentially do the very same things (manufacture, market, sell, invoice, collect revenues, account for dollars, hire/fire, etc.) behave so differently? Why are some corporations wildly successful whilst others behave like chimpanzees (metaphorically speaking!)?

Recent genetic research reveals that although our genetic makeup is indeed very similar to a chimp, it’s a question of where the genetic differences lie.

According to Professor Svante Paabo, from the Max Planck Institute, Leipzig, Germany; “we….looked at genes in the brain of chimpanzees, and when we compare them (to humans) the surprising finding is that we actually find quite a lot of differences. In any particular part of the brain, about 10% of our gene activity differs from those of chimpanzees”.

So, it’s where the differences lie, that’s critically important. Some base organic components are very similar but some critical components (e.g. brain components, certain sensory organs, etc.), are indeed very different.

Perhaps we can relate this to corporations. We can hypothesize that indeed some (very) high percentage of corporate functions are exactly the same – supported by the fact that many common processes (payroll, recruiting, manufacturing, etc.) are indeed outsourced.

If only we could better understand, at the genetic level, corporate functions. We would then have a significantly important tool to aid in differentiating those functions that make corporations unique (i.e. differentiators). We would also be able to better understand the non-differentiating functions in order to potentially outsource those, or simply “acquire” detailed corporate genetic blueprints, to embed industry best (common) practices.

At the conceptual level this appears to be feasible and very beneficial. Where the similarity with natural science ends, is in the geneticists ability to literally inspect and contrast individual genes (and their sequence) scientifically, at the molecular level. This is something we have not been able to do in the corporate environment because of an absence of formal theory or management science.

Our best management science consists of artistic “process flow” maps, which are typically;

  • “informal”
  • insufficiently detailed
  • missing critical business operational data
  • (grossly) superficial and most disturbingly,
  • not grounded in any formal theory (to speak of).

The geneticist in contrast, has a precise, formal and detailed scientific and theoretical foundation to aid in mapping biological genes. The precise atomic makeup of DNA/RNA is well understood and accepted.

Understanding the inner workings and genetic makeup of the corporation remains somewhat of a dark art. Of course there are exceedingly valuable theoretical contributions pertaining to management science (to name any of the many, would be a disservice) but interestingly, most of these contributions deal with market forces or the science of human dynamics (corporate transformations, change management, organization structure, statistical analysis, etc.). There is a virtual vacuum in the field of understanding the (atomic) elements that make a corporation tick.

Much of current management science also entails the understanding resource consumption, budget or cost/revenue projections (using spreadsheets, PowerPoint or text!). Imagine using these “blunt instruments” (technologies) to map out the human genome – probably impossible. Yet this is what we teach our aspiring leaders at business schools.

Having such a capability in the corporate arsenal would be literally a “game changer”. Imagine being able, at the most “atomic” or “molecular” level, to map out a literal genetic blueprint of corporate operations; to analyze and diagnose corporations with this new science. Indeed, to build and share a documented “corporate genome” – elucidating the (say) 90% similarities of corporations whilst focusing on genetically re-sequencing/remediating the 10%, to truly differentiate the corporation.

Further, imagine applying formal analytical techniques like Six Sigma to this wealth of detailed and scientifically grounded business data. This would indeed be truly disruptive technology.

Corporate Gene Theory

Based upon a body of over 50 years of pure and applied research, as well as solid practical attempts at re-thinking this important discipline, a theoretical (but surprisingly intuitive) business framework theory, augmented by a formal rule based methodology that enables a consistent and accurate description of a business at its most fundamental (atomic) level has been devised

Known as the Business Modeling Language or BML, it has been successfully applied at a number of private and public sector corporations and the results to date are extremely promising.

The base research entailed the abstraction of elemental components (or repeating “atomic” patterns) by literally analyzing thousands of business operation renderings, over many years, in a diversity of corporate and organization environments. Eventually, a definitive and irrefutable pattern was isolated.  Namely that (every) corporation appears to be based upon the following common atomic elements:

  1. Business Activity (required to accomplish the corporate mission or purpose, namely the Why?)
  2. Business Responsibility (indicating activity responsibilities)
  3. Geography (indicating locations where activity is performed)
  4. Information (required to perform activity or resulting from the activity)
  5. Temporal triggers (indicating when activities must be performed)
  6. Sequence of the above (how the above atomic elements interrelate – the business genetic sequence).

Synthesizing and the above into a more formal theoretical foundation, translates into the following (atomic) dimensions:

  1. What? (activity) – (WA)
  2. Who?(responsibility) – (WH)
  3. Where? (location/geography) – (WR)
  4. When? (temporal governance) – (WN)
  5. Which? (information) – (WI)
  6. How? (are the above interrelated and sequenced) – (HW).

This presents a very convenient framework for better understanding business operations. Each of the base elements are “testable” and business operations can be categorized as one (and only one) of the framework elements. This is akin to classifying a biologic gene into one of the four nucleotides: adenine (A), cytosine (C), guanine (G) and thymine (T). From these four base nucleotides, genetic similarity and entirely diverse genetic combinations are possible, just as with our five business elements, combining these in different operational sequences will result in entirely different corporate behavior and operation.

The above 5 elements and the interrelationship thereof, appear to be “intuitively obvious”. If one accepts these dimensions as “stable” and “logically relevant”, it is a relatively simple matter to synthesize business operations into the appropriate (correct) framework “container”.

To facilitate and formalize the translation of business operations into the genetic framework, a set of formal rules has been developed. These rules unambiguously guide the practitioner through the translation of unstructured business operations/processes, into the framework. The rules ensure consistency, independent verification and most importantly; a sound scientific basis for the practitioner. There are currently approximately 60 rules that have been identified to facilitate this translation process.

This approach has shown the potential exists to provide incredibly detailed, precise and accurate industry genetic blueprints of a magnitude and relevance never seen before and in so doing, genetically map the “standard” functions of all corporations.

Conclusion

Understanding the complex operations of 21st Century corporations has never been more necessary.  The demands of modern industry are unrelenting and corporations are becoming increasingly complex in order to cope with unprecedented changes in their external environments.

We have reached the point where the viability of historical (20th century) business definition theory is questionable and unarguably, unscientific and hence redundant. The absence of a relevant and meaningful theoretical framework, or “science”, is a major impediment to corporate understanding and a larger impediment to a corporation’s growth, market share and sustainability in an ever more competitive world.

Today’s demanding business environment requires a major re-think of the basics. Fortunately, there is much evidence to suggest that the BML may be a significant evolution in our path to mapping and better understanding the “corporate genome”.

Can management science unlock the corporate genome?

By: Cedric Tyler, CEO of BusinessGenetics, Inc.

 
Upcoming Events

2nd Annual Business Performance Summit 2011 is the must-attend summit focusing on the latest corporate improvement tools and strategies, including lean, six sigma and kaizen, and how they influence organisational operations. The Summit will also showcase how the concept of People Management and Performance Measurement and Management enable companies to enhance their organisational competitiveness by minimizing costs, raising efficiency resulting in increased profitability.


Join this year’s summit on September 12-13, 2011, at the Maritim proArte Hotel in Berlin, Germany, to listen to keynote speakers such as Neil Morris, Head of Strategic Planning, Yorkshire Building Society, and Peter Stoppelenburg, Director High Performance Organization, Essent. Visit www.performance-summit.com for programme updates and to register online.

WCBF’s 5th Annual Global Lean, Six Sigma and Business Improvement Summit & Industry Awards
Date: October 18 - 21, 2011
Location: Disney's Grand Floridian Resort & Spa, Orlando, FL

WCBF’s unique 4-day convention is THE cutting edge event for the future of Lean, Six Sigma and Business Improvement.

GeoBranding Caucus at the 2011 Rugby World Cup
Date: October 19, 2011
Location: The Cloud on Queens Wharf, Auckland, New Zealand

The Chief Marketing Officer (CMO) Council is teaming with New Zealand 2011 and MasterCard Worldwide to host a gathering of senior marketers preceding the finals of the upcoming Rugby World Cup 2011.