Strategic Alliances are quite ubiquitous in businesses nowadays, but most of them often go unsuccessful.

A Strategic Alliance is referred to as “an agreement between 2 organizations to share resources to carry out a mutually beneficial initiative.”  The arrangement differs from a Joint Venture (JV) given that both firms in a Strategic Alliance remain independent.  Whereas, in a JV, 2 organizations share resources to create a separate company.

Strategic Alliances are typically formed to:

• Better compete in a market
• Venture into a new market
• To improve service or product portfolio.
• Allow the 2 entities achieve a common goal for mutual benefit.

The undertaking may be formal or informal and there isn’t any requirement for merging capital.  However; the role of each entity—in the arrangement—has to be clearly laid out.

The strategy of creating strategic rivals into Strategic Alliance partners has benefited organizations immensely.  This strategy enables:

• Procuring the much-needed cash
• Access to manufacturing facilities and know-how
• Ability to plan production
• Gaining knowledge of industry best practices
• Removing any initial “budding” issues.
• Each business entity to realize growth far more quickly than what they can achieve individually.

To cash in on these benefits, leading organizations endeavor to manage their Strategic Alliances worldwide—assigning executives to oversee multiple alliances.  However, the competencies required for Strategic Alliance Management aren’t well-known and are a bit convoluted.

Multiple research studies by MIT Sloan, spanning several years, suggest that a number of alliances fail to achieve their desired objectives.  In fact, the arrangement shows diminishing R&D performance, marginal returns, and declining absolute learning with subsequent partnerships between the same companies.

A major reason for this failure is the incompetence of alliance managers in handling the alliance portfolio and their tendency to make 3 misguided assumptions:

1. Assumption to always field the best strategic partners
2. Assumption to generate sufficient economic value from the alliance
3. Assumption to get incessant value from the partnership.

The old-school approach to managing alliances concentrated on individual alliances without appreciating the challenges involved in such a deal.   In today’s competitive environment—with factors such as globalization, innovation, and disruption constantly influencing businesses and partnerships—leaders need to have the ability to simultaneously manage multiple partners scattered across various parts of the globe.

Strategic Alliance Management entails understanding the intricacies involved in generating value from such transactions and devoting the attention and preparedness required to do that.  A holistic approach to Strategic Alliance Management encompasses 5 distinct, yet interrelated, phases that are required to be executed to form effective partnerships:

1. Partner Selection
2. Deal Negotiation
3. Execution
4. Exit
5. Portfolio Management

Let’s discuss the phases of approach in a bit detail.

Partner Selection

Strategic Alliances are deliberate partnerships between organizations to expand their existing product / service offerings.  A potential partner’s prior experience in forming and maintaining alliances is a key constituent of selecting the right partner.  This experience supplements internal capabilities and add value to the processes, knowledge, as well as portfolio of services / products.

A detailed assessment of a partner’s experience assists in highlighting the benefits of partnership and negotiating with the partners.  The assessment should measure effectiveness of internal communication, adequate resources, and prioritized management’s attention essential for a viable partnership.

Deal Negotiation

In this stage, the alliance partners outline the conditions of the relationship, roles and responsibilities, and potential returns from the partnership.  Negotiators typically tend to focus on capturing the bulk of potential value without any regard for the other partner.  This damages the partnership and leverages no value at all.

The partners should be quite open and thorough about defining the scope of work for each affiliate.  Appointing a project steering committee assists in information sharing and coordination.  Proactively planning the deal exit terms and procedures at the outset aid in later stages.

Interested in learning more about the other phases of the Strategic Alliance Management approach?  You can download an editable PowerPoint on Strategic Alliance Management framework here on the Flevy documents marketplace.

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– Roderick Cameron, Founding Partner at SGFE Ltd

Data and Analytics, today, play a key role in competing with rivals.  Every passing day leads to creation of enormous amounts of data by organizations across the globe.  These huge data lakes often go unused, or are underutilized, by organizations.  This data, if utilized properly, is of great assistance in informed decision making.

Multiple data types and sources generated by discrete systems are often inconsistent, dispersed, and lacking integration, which makes them unworkable.  Such data results in inaccurate analysis and flawed insights.  Reliability and confidentiality of data can be ensured by stipulating rules and processes to govern access to data and its Metadata.

Metadata Definition

Metadata can be defined as “the Data in the context of Who, What, Where, Why, When, and How.” It’s the information pertaining to the data itself, its attributes, and elements.  Metadata provides searchable key attributes of information to the users e.g., Customer ID or Name.  Appropriate identification of Metadata is a major step in uncovering the potential locked in enterprise data assets.

Metadata Management

Metadata Management relates to handling of data, its description, relationships, and lineage within an organization.  Metadata enables a user to search and identify information on certain key attributes.  Context of data is of prime importance in managing Metadata.

Metadata isn’t all about identification of data.  With ever-increasing volumes and complexity of data, Metadata management is getting critical to identify informational assets and convert those into enterprise assets of high business value.  This entails setting up policies and ensuring efficient information management.  Metadata Management integrates all data at the enterprise level.

Benefits of Metadata Management

• An efficient Metadata Management system helps the business users to comprehend the source of the data characteristic and the calculated measure of that characteristic.
• It supports the technical users in mapping business Metadata with technical Metadata.
• Metadata Management provides a holistic view of the various data systems in an organization.
• It enables automated parsing and loading of variety of Metadata types.
• Building an Enterprise Metadata model based on the data generated from discrete systems—e.g. data warehouse, integration tools, and data modeling tools—is quite efficiently done through Metadata Management.
• Mitigation of any challenges in data accessibility and utility.
• Enhancement of data quality.
• Supporting Digital Transformation by creating data reporting and data analysis experts.

Metadata Classification

People in the same organization perceive Metadata differently. Difference of opinion in the identification of Metadata within the company results in inadequate visibility and access to data.  This is where a broader classification of the types of Metadata is helpful.  A thorough understanding of the different classes or categories of Metadata assists in developing a standardized perception of data across the organization.  These categories include:

Structured Metadata

Structured Metadata provides information on what the data looks like, e.g., data elements names mapped to columns, descriptions of data elements, data types, length of data elements, and the file layout.  This can include tags, primary keys, or foreign keys.

Supplier Metadata

Entails information associated with data origination point, directives, constraints, owners, service level agreements for consumption of data, demographic information about the data asset e.g., size, number of records, date of production, or source of origin of data.

Processing Metadata

Refers to data production processes, including data lineage, any 3rd-party sources of data, derivations of data elements, or the process flows related to data pipelines.

Query Metadata

Describes information on the context and classification of data.  It includes a glossary of business terms, definitions, taxonomies, master data, historical data, types of queries performed etc.

User Metadata

Provides data on Metadata consumers, their roles, data owners, and data stewards responsible for managing the quality and usability of data.

Interested in learning more about the other categories and classifications of Metadata? You can download an editable PowerPoint on Metadata Management here on the Flevy documents marketplace.

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– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Business and technology resources are aligned using Enterprise Architecture (EA) in order to achieve strategic results, make organizational performance better, achieve Cost Optimization, and guide departments to fulfill their central missions more efficaciously through Operational Excellence.

Federal Enterprise Architecture Framework (FEAF) does that for any U.S. federal agency and helps systems transcend interagency boundaries.  FEAF offers a shared approach for the consolidation of strategic, business, and technology management as a component of Organization Design and Performance Management.  The Enterprise Architecture methodology introduced under FEAF transcended several interagency boundaries.

The FEAF comprises of 6 interconnected Reference Models, linked through Consolidated Reference Model (CRM), each relating to a sub-architectural domain of the framework.

These Reference Models convey word-based abstractions of original architectural data and deliver a structure for relating significant elements of the FEA in a collective and uniform manner:

1. Strategy Domain -> Performance Reference Model (PRM)
2. Business Domain -> Business Reference Model (BRM)
3. Data Domain -> Data Reference Model (DRM)
4. Applications Domain -> Application Reference Model (ARM)
5. Infrastructure Domain -> Infrastructure Reference Model (IRM)
6. Security Domain -> Security Reference Model (SRM)

Discussed here is 1 of the 6 reference models of the Federal Enterprise Architecture Framework—the Business Reference Model (BRM), its structure, framework, touchpoints with other reference models, and BRM Taxonomy.

BRM is employed to explain the type of business functions at the system, segment, agency, sector, Federal, national, or international levels rather than giving an organizational vantage point.

Cross-government cooperation between the Executive departments and subsidiary agencies—as well as external partners—is promoted by describing the Federal government in this manner enabling:

• Uncovering of possibilities for cost reduction.
• Collaboration.
• Shared services.
• Solution reuse in agency IT portfolios and collaboration between and within agency.

BRM elucidates the “what we do” of the organization via the delineation of outcome-oriented and measurable functions and services.

BRM’s real usefulness and worth is gained when it is put to use effectively in business analysis, design, and decision support that aids in improving the working of an agency, bureau, or program.

BRM classification is organized as a 3-layer order, embodying Executive Branch Mission Sectors, Business Functions, and Services.

• Mission Sector – Pinpoints 10 business functions of the Federal government in the Common Approach to Enterprise Architecture.
• Business Function – Defines the Federal government functioning at high level, by means of budget function classification codes.
• Service – Elaborates further what the Federal government does at a subsidiary or section level.

Mission Sector is exclusive to the executive branch of the Federal government.  This layer should be used appropriately for other organizations.

The 3 layers allow arrangement and analysis of IT investments and applications for an assortment of purposes.

All reference models are envisioned to work jointly.  BRM’s further mappings to other reference models contribute added context for the investment or activity.  Input for BRM is through Performance Reference Model (PRM) enabling BRM to feed other reference models.

BRM is intended to deliver agencies with a uniform means to classify their capital investments, detect areas for collaboration and reuse, centered on delivery of business capability.

BRM also aids in refining the general IT architecture to further improve mission outcomes. It extends decision-support abilities to stakeholders and various levels of staff, within and outside an agency, and across the Federal government.  From a Federal viewpoint, BRM permits discovery of prospects for joint effort and reuse of shared services, government-wide.  This collaboration takes 2 forms:

1. Inter-agency
2. Intra-agency

BRM is usable in combination with several architecture, development, or analysis methods to deliver all-inclusive standardized design, development, and governance abilities.  There are 3 primary types of BRM methods:

• Business Architecture for Decision Support
• Business Process Modeling
• Business Process Modeling Notation (BPMN) 

Interested in learning more about the FEAF Business Reference Model?  You can download an editable PowerPoint on FEAF: Business Reference Model here and FEAF associated series PowerPoint presentations on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Enterprise Architecture (EA) denotes management best practices for lining up business and technology resources to realize strategic results, expand upon Organizational Performance, achieve Cost Optimization, and steer departments to achieve their core missions through Operational Excellence.

Federal Enterprise Architecture Framework (FEAF) was first introduced in September 1999 by the Federal CIO Council for evolving an EA within any U.S. federal agency.  FEAF assists through documentation and information that conveys a summarized outlook of an enterprise at various tiers of scope and detail.

FEAF offers a shared approach for the consolidation of strategic, business, and technology management as a component of Organization Design and Performance Management.  FEAF introduced a methodology for an Enterprise Architecture that transcended several interagency boundaries.

The Collaborative Planning Methodology suggested along with FEAF is envisioned as a complete planning and implementation lifecycle, for employment down all tiers of scope defined in the Common Approach to Federal Enterprise Architecture—i.e., International, National, Federal, Sector, Agency, Segment, System, and Application.

May 2012 saw a full new guide, called the “Common Approach to Federal Enterprise Architecture.”  The guide offers an overall approach to establishing and employing Enterprise Architecture in the Federal Government for expanding joint approaches to IT service delivery.  The Common Approach homogenizes the expansion and employment of architectures within and between Federal Agencies.

A 2nd version of FEAF was published in January 2013, meeting the criteria set forth by the Common Approach.  It underscores the importance of Strategic Planning and Strategic Goals as the source for driving business services, which consequentially provides the requirements for enabling technologies.  At the heart of it is the Consolidated Reference Model (CRM), which links 6 reference models and equips all departments with a shared language and framework to explain and evaluate investments.

The FEAF comprises of 6 interconnected Reference Models, linked through Consolidated Reference Model (CRM), each relating to a sub-architectural domain of the framework.

These Reference Models convey word-based abstractions of original architectural data and deliver a structure for relating significant elements of the FEA in a collective and uniform manner:

1. Strategy Domain -> Performance Reference Model (PRM)
2. Business Domain -> Business Reference Model (BRM)
3. Data Domain -> Data Reference Model (DRM)
4. Applications Domain -> Application Reference Model (ARM)
5. Infrastructure Domain -> Infrastructure Reference Model (IRM)
6. Security Domain -> Security Reference Model (SRM)

CRM is intended to permit inter-agency evaluation and detection of overlapping investments, disparities and prospects for cooperation within and across agencies.

By means of the collection of reference models a common nomenclature and system is cultivated for describing IT resources.  Making use of this standard framework and terminology, IT portfolios can be managed more suitably and taken advantage of throughout the Federal Government.

A brief description of the reference models is as follows:

Performance Reference Model (PRM)

PRM relates agency strategy, internal business factors, and investments, presenting a way to measure the influence of those investments on strategic outcomes.

Business Reference Model (BRM)

BRM depicts an organization through arrangement of common mission and support service segments rather than through vertical lines of control, thus encouraging cooperation within and across agencies.

Data Reference Model (DRM)

DRM assists in detection of existing data assets located in solitary storages and aids in comprehending the meaning of that data, ways of accessing it, and means for leveraging it for supporting performance outcomes.

Application Reference Model (ARM)

ARM classifies the standards and technologies involving systems and applications that support the delivery of service capabilities, allowing agencies to share and reuse common solutions and benefit from economies of scale.

The Infrastructure Reference Model (IRM)

IRM sorts the standards and technologies relating to network/cloud to aid and facilitate the provision of voice, data, video, and mobile service components and facilities.

The Security Reference Model (SRM)

SRM offers a mutual language and approach for deliberating on security and privacy in connection with Federal agencies’ business and performance goals.

Interested in learning more about Federal Enterprise Architecture Framework (FEAF) and its reference models?”  “You can download an editable PowerPoint on Federal Enterprise Architecture Framework (FEAF) Primer here and FEAF associated PowerPoint series presentations on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Management is not a function nor a blend of functions.  It is a practice best understood by means of experience that are set in context.

All levels of education divide subject matter into definite categories, according to the means of creation of that knowledge, not by the manner in which it is used.  This is true for Management Education as well.

Management Education being imparted in educational institutions, although essential, is missing a tremendous chance of creative learning for practicing managers that may empower them to engage in Innovation Management, by teaching subject matter in compartmentalized form.

For effective management, knowledge is essential but wisdom is key—the capacity to combine knowledge from different sources and use it judiciously.

Art combined with science through craft is what management is all about—coping with issues in their highest complexity of living, not as arranged compendia.

An alternative approach to Management Education has been developed that:

• Integrates Management Education with management development.
• Employs extremely noteworthy innovations in Management Education and development.

This approach has helped leading business schools revamp the whole process of disseminating Management Education.  The approach encompasses the following 7 principles:

1. The criteria for selection of candidates should include practicing managers with demonstrated job performance.
2. Education and practice of management should be parallel and cohesive.
3. Management Education must draw from life and experience.
4. Contemplative thinking should be fundamental to learning.
5. Organizational Development should be a corollary of management development.
6. Management Education should be a continuous learning process.
7. Each facet of education must enable learning.

The application of above principles assists in simultaneous development of managers and organizations.

Let us delve a little deeper into some of the principles encompassed in this approach.

The criteria for selection of candidates should include practicing managers with demonstrated job performance. 

The practice of management can be improved in a classroom, but it did not originate from there.  Merely classroom study cannot produce good managers.  Current Management Education programs rely on the candidate presenting themselves for selection, then choosing from the pool of candidates and setting them on a path for Leadership Development.

Transforming classrooms into vibrant learning platforms requires selecting learners on the basis of managerial experience.  Intelligence is a good basis for selection but verified job-performance is a far more realistic and suitable indicator for participant selection, particularly when the aim is to groom great future leaders.

Education and practice of management should be parallel and cohesive.

It is not logical to select participants on the basis of their practice and improve their skill while keeping them removed from that practice.  Keeping managers on the job enables education and experience to be intertwined making both environments richer.

Continuing both education and practice does create tension but such tension is inherent in management practice therefore encountering it is more beneficial than sidestepping it.

Management Education must draw from life and experience.

Presently, the learning agenda is controlled almost entirely by instructors in the class room resulting in much teaching and little learning.

Formalized knowledge—ideas, concepts, research—should meet the need that the managers bring to the classroom and reverberate with the participant’s wide-ranging but tacit knowledge.

A process of infusion rather than intrusion is required to galvanize the faculty’s educational push and the participants’ learning pull.

Interested in learning more about Principles of Management Education?  You can download an editable PowerPoint on Principles of Management Education here on the Flevy documents marketplace.

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“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Mergers and Acquisitions enable numerous opportunities for growth.  Organizations pursue these initiatives for a number of reasons—e.g. to expand further, attract more clients, or to broaden their product / service offerings.  Scores of M&A transactions materialize across the globe each year, but not all of them achieve the synergies such deals promise.  As a matter of fact, the success ratio is just around 27%.

The M&A Growth Framework is a structured approach to enhance the odds of a successful M&A transaction.  This approach is instrumental in helping organizations capitalize on growth opportunities locked in M&A deals.  The framework comprises 10 phases scattered across 3 timeframes:

1. Pre-deal Preparation
2. First 100 Days
3. Post-deal Closure

The 10 phases of the M&A Growth Framework organized under the 3 timeframes include:

• PRE-CLOSE PLANNING & PREPARATION
  1. Growth Opportunities
  2. Go-to-Market Strategy
  3. Customer Experience Strategy
• FIRST 100 DAYS
  1. Customer and Partner Readiness
  2. Cross-sell Strategies
  3. Pricing Management
  4. Brand and Digital Presence Building
• POST-DAY 1 ENVIRONMENT
  1. Product and Service Roadmap
  2. Sales Force Transformation
  3. Long-term Revenue Synergies

The M&A Growth Framework facilitates in finding growth opportunities, aligning them with Go-to-Market Strategy, reinforcing Customer Experience, and enabling Organizational Readiness for integration after the M&A.

Let's dive deeper into the first 3 phases of the M&A Growth Framework for now.

Growth Opportunities

The first step in achieving growth from a Merger or Acquisition deal is to identify and analyze the opportunities essential for growth.

Identification of growth opportunities necessitates:

• Gauging the ability of the new company to enter target markets.
• Conducting one-to-one interviews and Focus Group Discussions with key people from the management and customers to develop points of reference for existing key competencies.
• Identifying and translating growth opportunities into initiatives.
• Quantifying growth with timeline requirements.
• Prioritizing opportunities based on their magnitude, viability, and potential for effective execution.
• Utilizing clean teams to ensure confidentiality of data.

Go-to-Market Strategy

Identification and prioritization of growth opportunities necessitates delineating the Go-to-Market Strategy of the combined entity.  This phase assists in achieving the newly-formed company’s stated growth targets, business continuity objectives, and proficient utilization of unified team and resources.

Key steps involved in this phase include:

• Combining the acquired entity’s product/service portfolio with the buyer’s offerings.
• Ascertaining and prioritizing strategic inputs.
• Translating the information and inputs available into prioritized action items.
• Segmenting the customers and their needs.
• Creating Go-to-Market plans.
• Connecting the sales channels with the unified company’s product mix.
• Ensuring resource readiness, sales targets, coverage, and channel mix.
• Finalizing marketing plans: communication, branding, targeting, product mix.

Customer Experience Strategy

As part of integrating the 2 unified companies, it is critical for the senior leadership to develop and deploy a Customer Experience (CE) Strategy.  A consistent Customer Experience derives more value from existing customers, aids in the continuation of operations, and boosts customer spending.

Key steps in this phase entail:

• Appraising the existing customer experience, interactions, and customer pain points.
• Developing a customer-focused organization by creating seamless CE “personas” and customer journey maps.
• Identifying and ranking CE improvement initiatives.
• Implementing CE enhancement initiatives, monitoring outcomes, and correcting the course.
• Integrating the customers and Customer Experiences of the acquirer and the target companies.

Interested in learning more about the other phases of the M&A Growth Framework ?  You can download an editable PowerPoint on M&A Growth Framework here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Organizations have, in recent times, become more aware of the worth of regulating their Organizational Knowledge.  Extensive studies in academia have been conducted on the subject, because of its importance.

Organizations learn with time and experience.  The cause-and-effect relationship is gathered in the collective memory of the organization in the form of:

• Shared mental models
• Standard operating procedures
• Rules and routines
• Assets

This learning, in some cases, becomes a source of Competitive Advantage for the organization.

New learning, in organizations, is possible when redundant knowledge and bad habits are effectively erased from the organizational memory.  Managing Organizational Forgetting has to be part of Strategic Planning because of:

1. Wasted resources—Knowledge forgotten, that should not have been, has to be re-acquired by diverting resources that could have been used elsewhere or for acquiring new knowledge.
2. Opportunity cost—Required knowledge not available (because it was forgotten) at the time an opportunity arose.

Effective Organizational Forgetting should be an Organizational Culture so as to keep organizations on their toes and maybe preserve or gain Competitive Advantage.

Organizations that intend to manage their Organizational Forgetting effectively, need to comprehend 2 dimensions of Forgetting and the relationship between them:

Dimension 1:  Accidental Forgetting vs. Intentional Forgetting

The 1^st element pertains to loss of valuable knowledge; the 2^nd to increased competitiveness as a result of Forgetting.

Dimension 2: Entrenched Knowledge vs. New Knowledge

The 1^st element relates to knowledge embedded in relatively durable objects like machines, databases, taken-for-granted routines; the 2^nd to a transient setup like individual minds, association among small teams, makeshift organizational groups.

The process of Forgetting is altered depending on the interaction of the elements of the 2 dimensions.

Interaction of the above 2 dimensions results in 4 processes that constitute the Forms of Organizational Forgetting:

1. Memory Decay
2. Failure to Capture
3. Unlearning
4. Avoiding Bad Habits

The interaction of the 4 processes has been conveyed in the form of a matrix dubbed the Organizational Forgetting Matrix.  These processes explain an array of Organizational Forgetting that may occur.  Each of the 4 processes need distinct management approaches because each process is connected with a disparate set of challenges.

Let us delve a little deeper into some of the processes.

Memory Decay

Memory Decay occurs when concepts, practices, values are lost because of non-use or key personnel leaving the organization.  Organizations can forget elements long ingrained in their collective memory triggering costly and harmful consequences, like spending large sums to regain knowledge that was a source of Competitive Advantage.

Memory Decay is exacerbated in the process of downsizing.  Extremely valuable pieces of knowledge and skills can be lost if proper retention measures are not put in place.

Failure to Capture

Failure to capture new knowledge and disseminate it throughout the organization, results in loss when individuals bearing that knowledge leave.  Knowledge Articulation and Knowledge Institutionalization are 2 processes that can prevent such loss. 

Unlearning

Intentional Forgetting enhances organizational capability.  Intentional Forgetting can be achieved in 2 ways.  The 1^st is strategic removal of knowledge.

Interested in learning more about Organizational Forgetting?  You can download an editable PowerPoint on Organizational Forgetting here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

A traditional Value Chain involves a linear sequence of activities—from conversion of raw materials into components which are assembled into products.  The products are then distributed, marketed, sold, and serviced.  Management plans and execute strategies and operations based on this sequence.

This set of activities worked well for organizations in the past.  However, this linear progression does not encourage Innovation and provides little protection from the risk of being outperformed by rivals in today’s disruptive markets.  Such a competitive environment calls for implementing more robust ways of managing Customer Demand and Value Creation.

An effective approach to deal with this challenge is the Value Grid Analysis Model.  The Value Grid approach provides a perspective beyond traditional linear progression of activities, where organizations need to balance equilibrium between suppliers and manufacturers aside from concentrating only on reducing lead times.  It outlines new opportunities and risks for organizations.

The Value Grid Analysis provides a number of routes to improve Performance and reduce risks.  It encompasses the following 3 pathways—or dimensions:

• Vertical pathway – using traditional Value Chain, companies find opportunities upstream or downstream from adjacent tiers in the existing Value Chain.
• Horizontal pathway – companies look for opportunities from similar tiers in multiple (parallel) Value Chains.
• Diagonal pathway – explore opportunities to create value across multiple value chains and tiers.

The Value Grid Framework necessitates diverting leadership attention towards 3 key opportunity areas to create Competitive Advantage:

1. Customer Demand
2. Information Access
3. Multi-tier Penetration

Let’s dive deeper into the 3 opportunity areas.

Customer Demand

The first opportunity area to drive competitive advantage pertains to controlling internal and external customers’ demand.  It warrants a company to manage customer demand upstream (suppliers and companies that supply to suppliers) as well as downstream (customers).  By managing customer demand downstream, organizations control the decision makers responsible for the purchase decision.  When companies are unable to control the decision makers, they look for levers across the Value Chain to influence decisions.  These levers include direct advertisements to the end users, focusing on distributors, or incentivizing retailers to recommend a product.  Organizations also try to influence upstream, e.g., their R&D units, to create products which can be used in conjunction with the existing product range to boost their efficacy and benefits for the end-users, ultimately influencing consumers’ decisions downstream.

Information Access

The 2^nd opportunity area involves linking information sharing to influence decision making.  A few manufacturers prefer to partner with those suppliers who openly disclose the information (capabilities, flexibility, and pricing structures) of their 2^nd-tier suppliers with them.  This assist them in planning and helping the suppliers manage materials and prices better.

For instance, with increased tariff on imported steel and price of steel continuously going up, car manufacturers like Honda purchase steel in bulk and sell it to their suppliers at a reduced rate.  This helps them keep the prices of their cars down and compete better.

Multi-tier Penetration

Nonlinear thinking (Value Grid Model) enables the organizations to determine innovative solutions beyond the scope of traditional Value Chains.  To manage excess demand organizations take on multiple Value Chain tiers to control demand and buyers’ power.

Leading manufacturers evaluate multiple value chain points for their participation in order to scale.  They sell not only to Original Equipment Manufacturers but also in the aftermarket.  Supplying to more than one Value Chain tier allows organizations to withstand pressure from OEMs to reduce costs, demand shifts, and offers attractive margins.

Interested in learning more about the 3 opportunity areas of the Value Grid Analysis Framework?  You can download an editable PowerPoint on Value Grid Analysis here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”

– Michael Duff, Managing Director at Change Strategy (UK)

Understanding others has a lot to do with collaboration, performance management, and building effective teams.

Developed by Taibi Kahler in the 1970s, Process Communication Model (PCM) is a prominent psychometric tool for individual and team development.  The main utility of the PCM model is in understanding others’ personality types, discovering one’s own personality, and personifying others’ personality types to have better relationships.

PCM allows the executives to understand others’ needs, influence others, find practical solutions to problems, and manage conflict.  The model has found its utilization in a number of Fortune 500 organizations.  NASA has used PCM for the training and selection of its astronauts for over 20 years.

As per the PCM model, each individual embodies an assortment of behaviors, each with its own set of psychological requirements, strengths, weaknesses, communication style, and motivations.  The Process Communication Model describes that each of us exemplify a combination of 6 personality types—each of personality type has its strengths and weaknesses—but one personality dominates the others in an individual.  The 6 personality types are:

1. Harmonizer
2. Rebel
3. Thinker
4. Persister
5. Imaginer
6. Promoter

Let’s discuss these personality types in a bit detail.

Harmonizer

Individuals with a dominating Harmonizer personality type are humble, quiet, and naturally gifted at forming relationships with others.  The Harmonizers care for their family and friends, are compassionate, and use their feelings to judge the world around them.  They treat others cordially, make them feel comfortable, listen to them attentively, and do not shy away from making physical contact.

Recognition of their personality and others’ amiable communication style motivate the Harmonizers.  Under difficult circumstances, these individuals tend to become apprehensive, lack firmness, act irrationally, and make grave mistakes / incoherent decisions.

Rebel

The individuals possessing a Rebel personality are generally creative, fun loving, and radiate positive energy for others.  These individuals respond promptly, reciprocate righteousness with virtue, and enjoy the present.  The Rebels are valued for their extemporaneous humor, interest in others, energy, and problem-solving ability.  They are a bit impulsive and judge the world around them through their likes and dislikes.

Others upbeat communication style and stimulation through playful contact motivate the Rebels.  Under stress, the Rebels tend to get confused, whine, irritate others, leave complex situations, and bounce responsibility to others.

Thinker

Individuals with a dominating Thinker personality believe in data, logic, and perfectionism.  They take on a methodical approach to doing things, ask too many queries, and only attend meetings when there is a formal agenda set in advance.  The Thinker personality likes to evaluate detailed information before drawing any conclusions.  These people are valued for their planning and organization ability, dependability, structuring ideas logically, and clear expression.

Recognition of their thoughts and accomplishments motivates the Thinkers.  Under stress, they reverse delegate tasks and start doing those themselves, try to gather as much detail as possible to understand the situation, and may start arguments or even attack others.  These people need time and assurance of their abilities to return to their organized selves.

Interested in learning more about PCM and its other personality profiles?  You can download an editable PowerPoint presentation on Process Communication Model: Personality Types here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”

– Michael Duff, Managing Director at Change Strategy (UK)

Most organizations aren’t ready to deliver great Customer Experiences across all channels.  Many of them have invested heavily in conventional methods of doing business, backed by in person or over-the-phone customer experience.  This has led to creation of siloed operational structures within companies, where each silo operates individually.

With the advent of digital channels, these organizations set out to use and proffer their services via digital channels.  They did this by creating discrete digital-product groups in their existing operational infrastructure.  However, their siloed infrastructure falls short of meeting customers’ requirements in terms of seamless communication and interaction across all channels.  The reason being:

• Customers’ utilization of multiple channels and touchpoints across Customer Journeys.
• Requirements of personalized services / products by the customers.
• Anticipation of impeccable coordination and communication by the customers no matter how they interact with the business.

This necessitates the businesses to not only provide great Customer Experiences at each channel, but also make the transitions across these channels simple to improve the overall Customer Experience (CX). However, improving the overall Customer Experience isn’t that simple a feat, especially with silo-based operational infrastructures.  Providing consistent amazing Customer Experience warrants:

• Creation of a robust operational ecosystem through Transformation of internal operations, to respond quickly to customers’ expectations.
• Meticulous design and delivery of Customer Experiences.

Most organizations understand the significance of Transforming their Customer Experience—however, they lack the direction and support required to realize this goal. Organizational leadership can make use of the Customer Experience Pyramid to guide their CX Transformation.

The Customer Experience Pyramid is an empirical research based framework, which is quite effective in not only improving individual touchpoints but streamlining the entire Customer Journeys.  The CX Pyramid entails 2 core dimensions:

• Focus Areas – the organizational spheres that must change to enable provision of amazing digital Customer Experiences.
• Strategic Building Blocks – the strategies that define how this change can take place and made part of the organizational processes to deliver exceptional Customer Experiences.

The 4 Focus Areas crucial in a business to change in order to deliver top-quality Digital Customer Experiences at scale are:

1. Vision and Strategy
2. Talent Management
3. Operations
4. Technology

Let’s discuss the first 2 individual Focus Areas of the CX Pyramid in detail for now.

Vision and Strategy

Redirecting focus on making Customer Experience a part of the Organizational DNA necessitates creating a Vision statement and Strategy to depict, clarify, and plan out the purpose and objectives of serving the customers.  The senior leadership needs to come up with a short and crisp Vision statement.  The Vision sets out the foundation that reflects the leadership’s focus, importance the organization gives to Customer Experience, and the high-level objectives associated with the provision of quality Customer Experiences.

Next, the leadership should work on developing strategies to build fundamental competencies within the 4 CX Building Blocks—i.e., CX operations, metrics, CX-centric culture, systems and governance protocols.

Talent Management

Once the Vision statement has been agreed upon, it’s time to work towards carrying out the required actions to produce customer-centric outcomes.  The first step in that direction involves linking all employees who work in discrete silos (in conventional structures).  To align all employees, there is a need to create a Transformation team and define new roles / CX groups.  The Transformation team should train and direct teams responsible for the different stages of the Customer Journey, instill new ideas, and foster desired behaviors in them.

Senior Leadership need to also assign a CX Team to run the CX program.  The CX Team has to lay out processes and yardsticks to foster cross-functional collaboration and coach functional units to adopt customer-centric design practices in their operations.

Interested in learning more about the other focus areas of the CX Pyramid Framework?  You can download an editable PowerPoint presentation on Customer Experience Pyramid here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”

– Michael Duff, Managing Director at Change Strategy (UK)

The phenomenal success of tech innovators using Platforms has spurred a desire in companies, from a greater variety of sectors and markets, to gain advantage of Product to Platform Transformation.

This Transformation is based on the need to model businesses on a Customer-Centric Design approach.  The need has arisen because the concept of Economies of Scale has become archaic and has been taken over by Economies of Unscale.  Each customer is now being offered customized products and solutions.

The phenomenal success, by the trailblazing tech innovators, was achieved partly by deploying Platform Scaling that enabled Business Transformation and monopolization of the market.  Though, this monopolization and questionable use of the Platform, especially data generated therefrom, saw attempts to regulate these tech companies—making the decision to scale a complex one.  Understanding the intricacies of Platform Scaling is thus critical to the development and deployment of any Platform Strategy.

When considering Platform Scaling Strategy, there are 2 key aspects that are of utmost significance:

Regulatory Complexity

Regulatory Complexity means present level of legal and regulatory impediments that govern Platform entry and operation in a sector. 

Regulatory Risk

Regulatory Risk refers to the probability of an upsurge in Legal and Regulatory Costs and Complexity in the future.

Some equitable and measurable metrics for calculating Regulatory Risks do exist but generally it is extremely challenging to predict policy outcomes or even ascribe odds to various outcomes.

A straightforward approach for Platform owners and operators to understand and evaluate the prospective combinations of Regulatory Complexity and Risk is to create a 2×2 matrix of high vs. low for the 2 factors.

Regulatory Complexity and Risk are turning out to be the determining factors in the strategic decision between Fast and Slow Scaling.

Fast Scaling, which has also been referred to as Blitzscaling, requires choosing speed over efficiency.  Fast Scaling has the strategic objective of growing briskly, experimenting swiftly to tweak product-market fit, and taking advantage of robust network effects to achieve and maintain a leading market share.

Fast Scaling is required to activate 3 interconnected positive feedback loops:

1. Network Loop
2. Data Loop
3. Capital Loop.

Slow Scaling is the most sensible strategy in areas with both High Regulatory Complexity and High Regulatory Risk.  Slow Scaling does not disregard the quest for network effects, which are a requirement for success of platform businesses, but it gives preference to analysis, constant growth, and risk curtailment instead of speed.

Platform businesses functioning in High-Risk, High Complexity situations may evade pitfalls by employing 4 key components of Slow-Scaling strategy:

1. Analysis of the Macro Environment
2. Careful Risk Management
3. Investment in Stakeholder Trust
4. Incremental Geographic Expansion.

Let us now delve a little deeper into the various permutations of Regulatory Complexity and Risk, quadrant-wise, in the matrix.

QUADRANT 1

Regulatory Risk              Regulatory Complexity

Low                                        Low

Compliance costs are comparatively low in such situations and there are no serious deliberations among regulators and policy makers concerning restrictions on business models or operations.

The Strategy in this case is to Scale Fast.

QUADRANT 2

Regulatory Risk             Regulatory Complexity

Low                                        High

Sectors in such scenarios are highly regulated e.g., financial services sector.  Significant workforce is employed in governance, risk management, and compliance activities.  Entering such markets necessitates careful consideration of Regulatory Complexity.

The strategy in such scenarios is to Scale Fast.

QUADRANT 3

Regulatory Risk             Regulatory Complexity

High                                       Low

Operations are generally in a Regulatory void—i.e., no established and powerful regulatory authority, tight net of rules, or strict barriers to entry.  There is a great degree of ambiguity regarding how regulators may react.  Environment in such markets makes it difficult for businesses to mature discrete policy scenarios, allocate probabilities, and make strong assumptions on timing.

Strategy is to Scale Fast in such environments.

QUADRANT 4

Regulatory Risk             Regulatory Complexity

High                                       High

There is high Regulatory Complexity, such as unclear approach by various regulators in the various markets.  There are strong chances of sudden change in regulator and policy maker’s approach due to a particular incident.  Precipitous increase in entire sector’s Regulatory Risk triggered by events is highly likely.

The most sensible strategy in such cases is to Scale Slow.

Interested in learning more about the permutations of these 2 Scaling Strategies, areas of strategic focus, and the 4 components of Slow Scaling Strategy?  You can download an editable PowerPoint on Platform Scaling Strategy here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Humans instinctively want to share their experiences.  The more experienced a person, the fuller they are with ideas.

Many people view Listening Skills to be of lesser consequence than articulation and focus on learning how they can present their own views more effectively.

Good listening—the keen and orderly pursuit of probing and challenging the information collected from others to enhance its quality and quantity—is key to developing a knowledge-base that creates new insights and ideas.

Listening is unquestionably the most efficient route to making informed judgments, particularly judgments that leaders have to make.  That is why the Soft Skill of Good Listening is considered a building block of Leadership Development.

Good listening can lead to a longer and fruitful relationship at work and elsewhere.  Exceptional Client Management and Team Management, especially, and a host of other situations demand Good Listening skills.  Respecting the speaker, even if there is disagreement and reacting in the moment without expectation is part and parcel of Good Listening Skills.  The speaker should feel respected and understood after having a conversation with a Good Listener.

People possessing Good Listening ability assume a somewhat passive speaking role in the conversation yet actively participate in the conversation using body language and follow-up questions.  They display 3 Critical Behaviors that make them what they are—Great Listeners:

Demonstrate Respect

Making the speaker feel that what they are saying is important.  This feeling gets reciprocated quickly.

Remain Quiet

One cannot really listen while busy talking.  Remaining quiet enables understanding of the actual point the other person is making.

Challenge Assumptions

Good Listeners seek the underlying assumption in the conversation and challenge it.  This generates new ideas and opens up paths untrodden.

Let us look a little more deeply into some of the key characteristics of the 3 Critical Behaviors of Good Listeners. 

Demonstrate Respect

People displaying a Problem Solving Mindset solicit input from all levels and demonstrate respect in this manner.  They always make the speakers feel that they have something exclusive to contribute and assume that the conversation partner has the proficiency to develop worthy solutions.  

Remain Quiet

In a good conversation, the conversation partner speaks 80% of the time and the Ideal Listener speaks 20% of the time.  A Good Listener poses questions in most of the 20% time.  By remaining quiet the listener’s objective is to extract the prime motivation or thought behind the conversation.  Patience and practice are needed to cultivate the habit of weighing in at the correct moment.

Challenge Assumptions

A Good Listener challenges long-held and valued assumptions in order to make gains from conversations.  Ambiguity is embraced and a quest to uncover what both conversation partners can gain from the conversation is enlivened.

From the above 3 Critical Behaviors, we can synthesize the following 13 actions that a Good Listener should make while in an active conversation:

1. Be fully present.
2. Do not listen to respond.
3. React in the moment.
4. Do not have an agenda.
5. Do not jump to give advice.
6. Never interrupt.
7. Ask follow-up questions.
8. Listen as much as (or more than) speaking.
9. Demonstrate listening.
10. Be patient.
11. Listen to learn.
12. Be interested in what the speaker is interested in.
13. Summarize what has been heard.

Identifying what a Bad Listener looks like helps avoid such behavior and consequentially move us on the path to becoming a Good Listener.  Bad listeners may be categorized into the following 6 types:

1. The Opinionator
2. The Grouch
3. The Preambler
4. The Perseverator
5. The Answer Man
6. The Pretender

The same person can display these behaviors at different times and under different circumstances.  Perfecting listening skills means learning what prevents us from seeking and hearing the information we need.

Interested in learning more about the critical behaviors and actions of Good Listeners, and 6 Types of Bad Listeners?  You can download an editable PowerPoint on Soft Skills: Good Listening here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

The impact of the global pandemic, volatile stock markets, and slowed economic outlook across the globe has hurt the performance of enterprises across the world.  The scenario has forced leaders to consider undertaking Transformation of their strategy and operations significantly.

The strategy to buy out troubled businesses and determining to fix the issues that upset the target companies has been a focus of Buyers’ senior leadership for the past 2 decades.  In the year 2017 alone, 36,000 Mergers & Acquisitions transactions were announced globally.  Acquisition of troubled businesses hoping to have a Turnaround account for around 50% of all M&A deals.

A Turnaround can be defined as the financial recovery of an economy or an organization after a period of inertia or Downturn.  Several issues trigger a Downturn—issues pertaining to technological disruption, regulations, processes, organization’s financial health, management, business model, hierarchy, or competition.

The ratio of success for M&As is, however, not very healthy.  Historical data of 61% of M&A deals based on a BCG’s study, carried out on 1400 M&A deals globally between 2005 and 2018, shows a high failure rate (61%), where they remained unsuccessful to show any improvement in financial performance.

The ones that do succeed offer significant revenue growth and profit margins—around 25% positive variance in TSR than unsuccessful M&As.  However, buying and fixing a business under the weather isn’t an easy job.  This necessitates a meticulous strategy.

In order to materialize a Turnaround, the leadership needs to thoroughly understand the root cause(s) of the Downturn, have a willingness and plan to reform or transform, and rigorously implement the strategy to rectify the situation (Transformation Execution).

Empirical Research demonstrates that the triumph of M&A Turnaround deals is attributable to 6 Critical Success Factors:

• Investment in R&D
• Long-term Horizon
• Clear Purpose
• Investment in Transformation
• Synergy Targets
• Quickness to Action

Deployment of a combination of these CSFs bring about more pronounced outcomes—in terms of positive 3-year TSR and overall Organizational Performance.

A robust M&A Turnaround Strategy—based on lessons learnt from empirical research—revolves around 4 key M&A Deal Characteristics.  These M&A deal characteristics have a profound impact on the outcome of the transaction:

1. Level of Performance
2. Sector Alignment
3. ESG Factors
4. Deal Size

Knowledge of these key Deal Characteristics allow the senior leadership to ascertain the factors liable to affect the deal outcomes.  Now, let’s discuss the first 2 deal characteristics in a bit detail.

Level of Performance

The performance of the Target company during 2 years pre-deal is a key point to consider for a M&A, as it is directly proportional to the deal success rate and Total Shareholder Return.  BCG’s research demonstrates that M&A transactions where the target entity had a 2-year TSR decline of lower than 10% were liable to be more successful than deals where target companies were in more distress (a decline of ~30% or more).

Sector Alignment

Senior leaders should not ignore the significance of uniformity of sectors of the target and acquiring company.  Based on research, the rate of success for an acquisition transaction involving the buyer and the target operating in the same industry is 5% superior to the rate for transactions involving the companies from different sectors.  The reason for this higher success rate is attributed predominantly to similar business models, customers, vendors, and processes in firms of the same sector, which make the Post-merger Integration of the buyer and target a lot easier.

Interested in learning more about the other characteristics influencing the outcome of an M&A deal?  You can download an editable PowerPoint presentation on M&A Turnaround Strategy here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”

– Michael Duff, Managing Director at Change Strategy (UK)

Studies on Team Motivation and Building Effective Teams stem from the research carried out in Psychology and Sociology.  Wilhelm Wundt (1832-1920), the Founder of Modern Psychology, is credited with conducting the 1^st research on the subject.

The Social Psychologist Kurt Lewin (1890-1947) is credited with introducing the term “Group Dynamics.” The term defined the constructive and destructive forces within Groups of people.  Lewin pioneered the Group Dynamics Research Center at the Massachusetts Institute of Technology, first of its kind dedicated to the study of Group Dynamics and how it could be applied to real-world and social issues.

The latter half of the 20th century saw attention shifted more towards studying how Group Performance could be improved in the workplace to foster an Organizational Culture of cohesiveness, and Tuckman’s study proved significant in this regard.

Bruce Tuckman’s Model on Group Development became one of the most influential studies on the subject.  Originally conducted in 1965, the Model was further improved by Tuckman and his colleague in 1977.

Tuckman’s assertion was that each of the phases of the model is indispensable and unavoidable for the team to grow, face up to challenges, tackle problems, find solutions, plan strategically, and deliver results.  Tuckman’s model has become the foundation for following models and commonly used by management consultants for Team Management and Client Management.  For the model to be applicable in the work place, it is vital to comprehend the process at each stage and its concepts.

Tuckman’s Group Development Model comprises the following 5 stages:

1. Forming
2. Storming
3. Norming
4. Performing
5. Adjourning

The 5^th stage of Group Development called “Adjourning” was added in 1977, by Tuckman and his colleague Mary Ann Jensen.

Let us examine some of the stages of Tuckman’s model for Group Development in a little more detail. 

Forming

The key dynamic of the first stage is Orientation.  This is the stage where people are brought together in a Group.  How quickly the group’s transition to the 2^nd stage takes place depends on the clarity and complexity of the goal and members’ previous experience of working in groups.  Some of the key characteristics of this stage include:

• An upbeat outlook of group members about what is to be accomplished.
• Anxiousness on part of members about what the other team members will be like.

Managers of the group at this stage have to be directly and intimately involved.  Clear guidelines and structure by the manager are necessary to ensure that the team builds strong relationships. 

Storming

The key dynamic of this stage is Power Struggle.  At this 2^nd stage team members feel more at ease voicing and questioning opinions, and that is when internal conflict flares up.  Channeling this conflict in a positive direction will make for a cohesive team.  Some of the key characteristics of this stage are:

• Perception formation about other team members’ abilities.
• Alliance formation among team members and discussions regarding the goal and the approach to achieve it.

The group leader has to show a Problem Solving Mindset  at this stage, swiftly channel conflict between teams in order to avoid demoralization.  Among many other actions at this stage, the leader also has to guide the team in decision-making and proffering explanations on how decisions transpired.

Norming

The key dynamic of the 3^rd stage of team development is Cooperation.  The members concentrate on settling differences to make way for clear definition of organizational mission and objectives.  Manager’s role within the team transforms from that of leader to that of a team member.

Interested in learning more about Tuckman’s 5-Stage Group Development Model?  You can download an editable PowerPoint on Tuckman’s 5 Stages of Group Development here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Business Transformations have become a necessity in the fast-changing technological and competitive business environment.  Transformation is characterized by significant and risk-laden Restructuring of a company, with the objective of accomplishing Operational Excellence  and changing its future course.

Business Transformation is a priority for many top executives but it is usually a reaction to challenging circumstances rather than being a preemptive measure.

Business Transformation is prompted by a combination of 2 situations:

• Need to address inherent problems causing organizational drag—these problems may be internal and/or external.
• Aspiration by the top management and other senior stakeholders to seize the occasion of addressing these problems, in ways that deeply alter the Business Model of the organization including Value Creation.

Business Transformation entails not just making incremental changes but fundamentally changing all or some of the following:

• Organizational Structure
• Core Product or Service Portfolio
• Systems
• Processes
• People—the way employees work
• Technology

Undertaking such arduous effort requires approaching the task in a structured way.  Research shows that quite a few of such undertakings are based on anecdotal beliefs instead of being based on empirical data.

Countering this trend, the Boston Consulting Group conducted an empirical study of financial and non-financial data-set comprising 300 U.S. public companies.  The data spanned a period of 12 years from 2004 to 2016.  Selection was based on the following criteria:

• Companies that had a $10 billion or more market capitalization between 2004 and 2016.
• Of these, companies with an annualized deterioration in Total Share-holder Return (TSR) of 10% or more relative to their industry average (2 years running or more) were identified.

Based on extensive analysis—that included use of methodologies like trained proprietary algorithms, prediction models, and Multivariate Regression Analysis—a pattern pertaining to Business Transformation emerged.  The pattern depicted the following themes:

1. Frequency of Failure
2. Impact of Digital Disruption
3. Impact of Downturn
4. Competitive Volatility

The study also suggested the following 5 evidence-based Critical Success Factors (CSFs) for achieving Transformation Success.

1. Cost Management (drives short-term success)
2. Revenue Growth (drives long-term success)
3. Long-term Strategy and R&D Investment
4. New, External Leadership
5. Holistic Transformation Programs

Let us examine in a bit more detail some of the CSFs.

Cost Management

In order to launch the Transformation effort on the correct footing, Cost Management is key, in the short term especially.  Predictably, empirical analysis suggests that the leading driver for organizations recovering from severe TSR deterioration is a determined Cost-cutting effort during the 1st year of Turnaround.  By year 3, Cost Reduction is accountable for the major share of TSR growth as companies divert their portfolios and make available funding for growth investments.

Revenue Growth

Merely short-term operational improvements do not augur well for a sustainable Transformation.  There has to be a long-term Growth Strategy put in place.  For this to happen, leaders have to challenge the foundations of the company’s Business Model.

Research divulges that Revenue Growth progressively becomes the driver for TSR recovery after year 1 in all the successful Transformation efforts.  Revenue Growth overshadows, by far, all the initial drivers for TSR recovery by year 5 of all successful Turnaround efforts.

Long-term Strategy and R&D Investment

Turbulent competitive environments, particularly, require long-term Strategic Planning and investment in Research and Development for fruitful Business Transformations.  Empirical research and analysis demonstrates:

• A 4.8% difference between Transforming companies showing above-average long-term strategic direction compared to companies with a below-average orientation.
• More pronounced findings in transforming companies operating in turbulent competitive environments—long-term orientation linked with a TSR increase of 7%.
• Companies with above-average R&D investments had upwards of 5.1% TSR impact in contrast to those with below-average spending.

These CSFs strengthen the odds of success in Business Transformation individually.  When used together, most of them produce an impact that is larger than the totality of their individual parts.

Interested in learning more about the 5 Critical Success Factors for Successful Business Transformation?  You can download an editable PowerPoint on 5 Critical Success Factors for Successful Business Transformation here on the Flevy documents marketplace.

Want to Achieve Excellence in Business Transformation?

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"If you don't transform your company, you're stuck." - Ursula Burns, Chairperson and CEO of VEON; former Chairperson and CEO of Xerox

Business Transformation is the process of fundamentally changing the systems, processes, people, and technology across an entire organization, business unit, or corporate function with the intention of achieving significant improvements in Revenue Growth, Cost Reduction, and/or Customer Satisfaction.

Transformation is pervasive across industries, particularly during times of disruption, as we are witnessing now as a result of COVID-19.  However, despite how common these large scale efforts are, research shows that about 75% of these initiatives fail.

Leverage our frameworks to increase your chances of a successful Transformation by following best practices and avoiding failure-causing "Transformation Traps."

Learn about our Business Transformation Best Practice Frameworks here.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Problem Solving is a fundamental life skill indispensable for survival of an individual.  It is honed in every person to varying degrees.  It is especially a useful skill to embody Leadership Development.

Problem Solving skill can be taught and learnt.

MIT defines Problem Solving as:

The process of identifying a problem, developing possible solution paths, and taking the appropriate course of action.

Problem Solving is a process that can be approached using various strategies but each Strategy usually follows the same theme, consisting of:

• Identifying the Root Cause of the Problem.
• Logically Analyzing all the Details of the Problem.
• Formulating a Solution.
• Effectively Communicating and taking Action.

Problem Solving Strategies consist of steps that help identify the Problem and choose the best solution.  There are 2 basic types of Strategies:

1. Algorithmic Strategies – customary step-by-step instructions to solving Problems. For example, in algebra: multiply and divide before adding or subtracting.
2. Heuristic Strategies – general guides used to identify possible solutions.  An example would be IDEAL—Identify Problem, Define Context, Explore Strategies, Act on solution, and Learn.

A certain Mindset is required to be developed for becoming a great Problem Solver.  There are 6 traits experts have identified that shape the Mindset of a great Problem Solver.  A great Problem Solver will always:

1. Be Constantly Curious.
2. Be an Imperfectionist.
3. Adopt a Dragonfly-eye View.
4. Pursue Occurrent Behavior.
5. Leverage Collective Intelligence.
6. Practice Show and Tell.

Problem Solving Mindset is valuable for any person especially professionals, particularly an entrepreneur, manager, or someone in the leadership role in an organization.  A team of skillful problem solvers can become a notable source of Competitive Advantage for an organization.

Let us delve a little deeper into some of the Mindsets that make great Problem Solvers.

Be Constantly Curious

Innate human partialities frequently blind us to a range of solutions too early in the Problem Solving Process.  Superior and increasingly creative solutions arise from being Curious about the wide-ranging possible answers.  Very young children embody this trait.  They are resolute in figuring things out hence their never-ending and high-energy inquisitiveness.

Improved results are generated by accepting uncertainty, constantly asking questions like why is this solution better, or why not the other one?

Be an Imperfectionist

Absolute knowledge is virtually non-existent, especially for Complex Business and Societal Problems.  Accepting that our knowledge is Imperfect can bring about more effective Problem Solving.  Constant revision based on new evidence is key to good Problem Solving.  This is possible when we begin by confronting solutions that imply certainty.  And, this brings out tacit assumptions about probabilities and makes it easier to assess alternatives.

Most Problem Solving involves a great deal of trial and error.  We form hypotheses, dive into data for validation, and either refine our premise or discard it.

Adopt a Dragonfly-eye view

The purpose is to gaze beyond the usual arrangement into which our pattern-recognizing brains want to gather perceptions.  This facilitates identification of obscured opportunities and threats.

A good example of this is the approach experts took to tackle a major public health threat.  They framed the Problem in larger social context—taking the Dragonfly-eye view—garnering wider support and success.  Confronted with a complex social map and a ballooning infection rate, the Problem was tackled by widening its definition.  The frame was shifted from a traditional epidemiological transmission model at known hotspots to one where, another affliction of a particular sub-set of the impacted population was targeted because it was more relatable.  The major public health threat was made into a sub-set of the larger issue.  The solution was implemented in 600 communities and was eventually ascribed with preventing more than 600,000 infections.

Interested in learning more about Problem Solving Mindsets? You can download an editable PowerPoint on Problem Solving Mindsets here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Marketing, these days, is shifting towards developing great ideas and creating customer experiences that consumers discuss further in their circle.  The focus of the marketing effort is on building a brand image.  To supplement this organizations need to develop a culture that lives the brand.

Top brands have been built by communicating their message to the most loyal customers who then shout it out to their friends and a chain starts making the brand a known name.  Leading brands, today, strive to win a place in the minds of their consumers.

Building a brand necessitates a robust Marketing approach.  Prioritizing the main benefits of a product that an organization wants to concentrate on is a critical decision to build a brand.  The Consumer Benefits Ladder (CBL) is one such method that informs the leaders on how to position their customer benefits in their Marketing campaign.  These benefits should be those that are offered to the customers, and are not that the organization gets.  The benefits transferred to the customers bring positive outcomes for the organization as well.

The prime focus of the Consumer Benefits Ladder is to identify the key benefits of a product.  The framework classifies consumer benefits into 4 broad types—symbolized by the rungs of a ladder:

RUNG 1 – Product Availability

RUNG 2 – Product Features

RUNG 3 – Functional Benefits

RUNG 4 – Emotional Benefits

The Consumer Benefits Ladder functions on the principle of developing insights incrementally to build Brand Loyalty in customers.  The concept of the Consumer Benefits Ladder originates from the “Laddering interview” technique used in Psychology and Marketing Research.

The Laddering technique explores an individual’s inner views through a battery of interrelated queries. The responses obtained against each query are further probed more deeply.  The data gathered is refined to build insights, revealing the individual’s fundamental beliefs and ethics, without the person knowing it.

Let’s dive deeper into the individual rungs of the CBL.

RUNG 1 – Product Availability

The initial rung of the Consumer Benefits Ladder ensures the availability of the product in the target market.  This step of the Consumer Benefits Ladder focuses on making people understand what the product is and how they can get it.  It is a straightforward yet effective approach to Brand Building where leading organizations employing this strategy:

• Focus on product availability.
• Add some tone and humor in the delivery of their marketing campaigns alongside their simple product availability-centric strategy.
• Emphasize on price as a huge driver for its customer base and value creation.
• Consistently execute their strategy and strive to win their customer loyalty and repeat business.

RUNG 2 – Product Features

The second rung of the CBL identifies the physical characteristics of a product, its unique offerings, and describes what it does.  Most organizations tend to focus on benefits instead of plain product features.  However, product feature strategy is quite effective when:

• The customers are aware of their exact requirements and they do not want organizations translating their product features into benefits.
• The product features are quite evident.

The Product Strategy based on product features entails clearly listing all the features, brand assets, and competitive advantages that a product offers.  For instance, it outlines the material it is prepared of, its weight, and color.

RUNG 3 – Functional Benefits

The 3^rd step of the CBL Framework identifies the promise you make to the customers and the value (rational benefits) that the customers get from the brand.  A focus on the functional benefits of the Consumer Benefits Ladder necessitates careful deliberation of the brand features, screening them from the consumers’ point of view, and their utility for the consumer.

Interested in learning more about the key steps and rungs of the Consumer Benefits Ladder?  You can download an editable PowerPoint presentation on Consumer Benefits Ladder here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”

– Michael Duff, Managing Director at Change Strategy (UK)