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"We live in a world of mounting performance pressure. Our Shift Index reveals that return on assets for all public companies in the US has eroded by 75% since 1965. Companies clearly are failing to respond effectively to these mounting pressures. If we hope to turn this around, we need to step back and take a systematic look at the performance levers that drive these results and question the approaches of the past. "
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Most businesses can be understood as bundle of three core operating processes, each driven by a unique performance lever. These three operating processes are: customer relationship management, product innovation and commercialization and infrastructure operation
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In most industries, customer loyalty is eroding, leading to a significant reduction of the average life of a customer. To make matters worse, margins are eroding as well, diminishing the profit generated per year of a customer relationship. In many industries, the cost of customer acquisition is also rising
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"It’s been the issue for a small period of time now, and I’ve contemplated the idea in a few blog posts: I really think this is the end of us throwing technical ‘solutions’ at a business or organisational ‘problem’ – and that we will all agree that E2.0 and Social are about humans, people, change management, radical organisation change, and, in the end, about tools"
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Enterprises aren’t used to adapting. They adapt their environment to themselves. If their environment doesn’t adapt, they adopt their environment: incorporate them into a subsidiary, a third, fourth or fifth leg. There are giants out there becoming even bigger giants just by engulfing others
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Employees aren’t used to adopting. They feel they have to adapt to their company – and rightfully so. Of course they (should) add value to their company, but it’s not their company – they only (want and need to) belong to it; they’ll adapt
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"When an organization launches a social intranet, the changes and benefits reach far wider than freeing up resource in the central intranet team. The intranet undergoes a fundamental shift when focus changes from communication to employees to work."
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A social intranet delivers a platform for a number of activities that aren’t fully supported by all those other systems. Notes, thoughts and links to useful information – lots of what knowledge workers juggle in the course of a day – don’t quite qualify as documents and they are not fit for email because they are inputs into a work process, not outputs. The social intranet addresses this gap in many organizations if it satisfies two criteria: It must be easy to use and it must cater for individual rationality.
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ntegrate the social intranet with other systems (CRM, DMS, your transaction systems) and signals generated in other contexts can be channelled into the main activity stream (including flows from the internet). Each individual defines their own slice of the stream by filtering for relevance and some platforms elegantly lets you subscribe to signals reflecting what your colleagues are finding relevant.
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"The time horizon: "Pull" does not mean thinking only about the short-term Many of the people we have talked to about our book have the misconception that pull is driven by a short-term mindset. After all, one of the key drivers of the move from push to pull platforms is the increasing difficulty in forecasting and predicting demand and the consequent challenges this presents"
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The paradox we cited at the outset can be resolved: the long-term view is not a detailed forecast but a high-level direction, a trajectory and a set of challenging goals, which help to focus and guide near-term efforts.
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he key for pull is to iterate rapidly back and forth between two horizons — long-term direction and short-term (6-12 month) action
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"We thought we would kick off our new postings by summarizing some of the ideas from Pull that resonated the most in our many conversations from the last few months. from The Power of Pull."
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he average return on assets (ROA) of US companies has steadily fallen to almost one quarter of what it was in 1965. We're running faster, but still losing ground. There is no sign of this long-term erosion flattening out, much less turning around.
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Value ain't where it used to be. Competition is not only intensifying (pdf), it's changing the source of value creation from stocks to flows of knowledge, and the means for value creation from push to pull.
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"Every month I review the search terms that lead people to our Knoco website, just to see what people are searching for. A common search term that came up again this month, is "How to incentivise knowledge sharing".
I thought it was worth a blog post on it's own.
The simple answer is Don't!"
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Firstly, make it clear that Knowledge Sharing is part of the job. If you need your sales reps to put knowledge into the CRM system, then write it into the company expectations. Just as timewriting is an expectation, or performance appraisals are an expectation, so knowledge entry should be an expectation, in this case
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"The graphic below outlines a basis for determining when Enterprise 2.0 adoption must be pushed, and when to let adoption be pulled:"
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- Existing ways are ‘good enough’ for employees
- Executives see great potential for value from adoption
Requires a Top-Down Push
Situation:
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Take the case of French company FAVI, an autoparts supplier manufacturing copper alloy components. CEO Jean-Francois Zobrist eliminated the personnel department immediately upon taking the helm of the company in 1983. But that wasn’t all he got rid of. Says Zobrist: “I came in the day after I became CEO, and gathered the people. I told them tomorrow when you come to work, you do not work for me or for a boss. You work for your customer. I don’t pay you. They do. Every customer has its own factory now. You do what is needed for the customer.” And with that single stroke, he eliminated the central control: personnel, product development, purchasing…all gone.
Even these questions indicate a dated view of where talent is and how to get the most out of it. Sure, no one disputes the importance of talent, even in a recession. But, as a Deloitte report contends (.pdf link), companies spend entirely too much time focused on attracting and retaining talent. Moreover, as they do, they often lose sight of what appeals to and keeps hold of talent in the first place. (See John's perspectives on the report and on the mindsets that limit firms.)
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Talented workers join companies and stay there because they believe they'll learn faster and better than they would at other employers.
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Talented workers develop instead by:
- Trying new things.
- Experimenting with what they do in their jobs and how they do it.
- Tackling real problems with talented people who have different backgrounds and skills.
- Participating in talent networks, the largely invisible matrix structures that run within firms and, with increasing frequency, between and across them. - 1 more annotation(s)...
Goals are indeed a pull system. Goals come from internal processes. We have individual and shared goals that motivate us to act.
Goals pull us, we ideally act based on goals. These individual actions are tasks. The tasks we take on are in service of the goals. However, if we don’t actually enjoy what we’re doing in service of these goals or, worse yet, act contrary to our goals – we are squandering our lives.
In a business context, if goals are clear amongst teams and the organization, the work involved in achieving those goals is more likely to be rewarding. We are happier in doing it. And this is a pull process.
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The push of drive is the artificial force necessary to apply to people to get them to work contrary to their own goals.
Enter here the concept of friction. When you apply an external force to an object to get it to move, friction occurs. The amount of friction is the amount of energy lost in the transfer of momentum from one object to another. Loss of energy = waste.
In a pull system, things operate faster by removing friction or constraints. In a push system, things operate faster by applying more force.
The bomb that has blown up the heart of the world's financial system was not primarily financial. It's true that finance provided the high explosive in the shape of the structured vehicles, collateralised debt obligations (CDOs) and derivatives devised by the rocket scientists of Wall Street and the City. But it needed a detonator to set them off: the unfit-for-purpose management model that has governed the way our companies work for the last 40 years.
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This is the challenge for Management 2.0: reorienting management from compliance to creativity, from flogging efficiencies out of existing resources to generating new ones, from zero-sum to positive-sum by recognising, as Hamel says, the commonsense proposition that in the long term the corporation can only prosper if employees, suppliers, the community and indeed the planet do too.
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First, many of the 'grand challenges' put forward in the discussions - the need for companies to articulate a purpose beyond making money (a conference near-consensus), distributed leadership and strategy- making, the fostering of community and citizenship, building trust - are not new at all. It's more that they have been driven to the periphery of management concerns by the treadmill of Management 1.0.
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