BAKERSTRATEGY GROUP
Business Skills for a Changing EconomyCollaborating for Better Business Performance
MAKE IT HAPPEN
Presentation
Wednesday, January 08, 2009CORT – Novi MI
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
Today’s Agenda
The Changing Economy
The Changing/Changed Role of IT Support
Talking Strategy
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
Baker Strategy Group has had experience conducting programs for a number of organizations in a variety of industries
Our Experience
Client Engagements
BAKERPage 3Page 3
Presentation Business Skills for a Changing Economy
January 8, 2009
I. The Changing EconomyA quick look at these remarkable times
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
I. The Changing Economy
The Wall Street Journal
The world is reeling from the economic collapse, and most economist expect a “U-shaped” recovery that isn’t expected to pick up until late 2009 or even 2010 or 2011
A Sample from Today’s Headlines
• Wal-Mart Cuts View Amid Retail Slump
• Madoff Is a 'Danger,' Argue Prosecutors
• Walgreen to Cut 1,000 Jobs
• Kuwait Bank Defaults on Debt
• Commercial Property Loses Shelter
• Cardinal Health Lowers Outlook
• Satyam Scrambles to Assess Finances
• Lenovo Plans Major Revamp
• OECD: Cleanse Banks of Bad Loans
• Home Depot Ends Olympic Program
• Gadgets for Leaner Times
• Europe Stocks Track Overseas Losses
Source: HDI
CNN.com/US
• Crisis and plan to fix it 'unprecedented'
• A $2 trillion bet on powering America
• Warning! Warning! Weak profits ahead
• Detroit Auto Show: The party's over
• Auto execs expect more bankruptcies
• Unsafe? Unsound? A taxpayer bailout
• Will Obama's tax cuts work?
• Radical cheap: $1,000 homes
• Mortgage rates dip to new all-time low
• From Wal-Mart to the mall, a tough holiday
• Windy City's retail downdraft
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
I. The Changing Economy
Recent Developments
Michigan, as we know, is experiencing more than its share of economic difficulty
Michigan’s Ills
Michigan’s outbound migration highest in US
Detroit’s credit rating reduced to junk bond status
Furniture manufacturer to cut 200 white collar workers
Iron mine in the UP to let go over 350 employees
Unemployment system inundated with activity
Forecast for 2009 Michigan state revenues (taxes) was decreased by $870 million
Coal plants projects may get stalled
Borders struggling
Kuwait pulled out of $17.4B joint venture with Dow Chemical Co
Automotive suppliers can’t get access to credit for new projects
Source: HDI
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Presentation Business Skills for a Changing Economy
January 8, 2009
I. The Changing/Changed Role of IT SupportWhat we can expect for the near future
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
II. The Changing Role of IT Support
Below are is a an humorous old IBM commercial that shows smart, reactive support personnel who complicate the issues due to a disconnection with the end user experience
IT Support
IBM Commercial: http://www.youtube.com/watch?v=hoj5Scm7HaY&feature=relatedUnrelated but funny IT video: http://www.youtube.com/watch?v=0eIFoz-Tjf8
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
II. The Changing Role of IT Support
The IT help desk of old has changed/is changing its role within the organization
The New Customer Support
It's time to profoundly reinvent the profession of Customer Support. From the beginning
of the technology industry to the present time, support has been the department of
break/fix; "when something breaks, we fix it." As such, the "profession" offers no real
economic value to anyone; it never has. Even more significantly, as we move deeper into
the gathering recession and farther into the rapidly unfolding SaaS era, support as it is
currently defined has no future. There are two paths that lead away from this point for
companies and support reps. One is downward into obscurity, obsolescence and
ultimately extinction. The other is towards an authentic profession based on the
exchange of true economic value.
Source: “The Redefinition of Customer Support” by Mikael Blaisdell
During the 1/8/09 presentationn, it was generally agreed that this description of the service desk employees is somewhat outdated, and the role, development , and performance of the agents has grown significantly over the last several years
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
II. The Changing Role of IT Support
Service desk managers should be actively involved in organizations such as HDI in order to further develop and grow and managers
HDI’s Position
Ron Munz on why HDI is an important association for service desk managers:
“The reality is you don’t even need to join an association to get facts. If you go to Google and you spend enough time you can get facts. But you don’t change behavior just with facts. You change behavior, and you change strategy, and you change vision, and you increase motivation when you’re around other professionals that are doing thing similar to yours. “
Source: HDI
Service desk managers also can play a key role in helping the service desk agents grow and develop in their understanding of the organization’s businesss issues
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
II. The Changing Role of IT Support
Gillett’s appointment represents the changing role of IT –deep IT experience meshed with a business proficiency that enables him to better align IT with the “customer experience”
Example: Starbucks CIO
Gillett's mission is to create and implement the technology vision of "anything that touches the consumer, whether it's
in back-end [IT operations] or in how a customer interacts in a physical Starbucks store," says Chet Kuchinad, EVP
of Starbucks partner resources, who lead the team that hired Gillett. "Stephen's not just about legacy systems and
not just about efficiency. He's about how we take technology and connect with Starbucks' consumers in a different
way. Frankly, we've just begun, and there's a lot of work to be done yet."
"You'll meet a lot of technology people who are extremely intelligent but they have really stunted social
skills," Cahall says. "They don't have an ability to sell their ideas and don't have the ability to
ingratiate themselves with key leaders.
(Ted Cahall is VP of the platforms business unit and technologies division at AOL)
Source: CIO Magazine
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III. Business Skills: StrategyThe organization’s chosen approach to how it will conduct business
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
III. Business Skills: Strategy
August 1, 2006
Strategy Rabbis
Thought Leader Contribution
Peter Drucker Organizations and Society
Michael Porter Five Forces/Value Chain
Kaplan & Norton Balanced Scorecard
C.K. Prahalad Core Competencies
Gary Hamel Customer Collaboration
Peppers & Rogers Return on Customer
Bruce Henderson Strategic Competition
Tom Peters Back to Basics
Kenichi Ohmae Strategic Thinking
Clayton Christensen Disruptive Technologies
David Aaker Brand Portfolios
Fred Reichheld Net Promoter Score (NPS)
Jack Trout Brand Differentiation
Adrian Slywotzky Strategic Business Design
McKinsey & Company Business Valuation
There has been a proliferation of strategy frameworks over the years
Different Views of Strategy
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
III. Business Skills: Strategy
Our particular view is that of customer strategy: integrating the Five Cs situation analysis: context, customers, company, competitors, and collaborators
The BSG 5C Framework
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
III. Business Skills: Strategy
Financial
Measures
Customer
Perspective
Staff
Development
Str
ate
gy E
xe
cu
tio
n
Internal
Processes
AcquisitionRetention/
Development
Current Customers New Customer Portfolios
Priority Portfolios Secondary Portfolios
Operations Offerings/Core Capabilities
Note: This framework is derived from the Balanced Scorecard by Norton and Kaplan
Here is an example of a Strategy Map (also known as Balanced Scorecard), an effective and commonly-used strategic planning tool that starts with measures and the customers
Strategy Maps
EBITDA
$xx
xx%Revenue
$xx
Current
Students
New
Students
Expenses
$xx
Operating
Expenses
Allocated
Costs
Group A Group B Group C Group D Group F
A Customers
B Customers
C CustomersGroup E
Area A Area B Initiative DInitiative BArea C Initiative A Initiative C Initiative E
Development A Development B Development D Development EDevelopment C
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
III. Business Skills: Strategy
Source: Michael Hyatt Book Expo Presentation
Thomas Nelson had previously operated with a structure that organized around their own brands, trades, and specialties – an internal, outside-in perspective
Case Study: Thomas Nelson
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
III. Business Skills: Strategy
Source: Michael Hyatt Book Expo Presentation
In 2007, Thomas made the bold strategic move to organize the entire company around the customers – the essence of customer strategy
Case Study #1: Thomas Nelson
Source: Michael Hyatt Book Expo Presentation
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BAKERSTRATEGY GROUP
HDI Motown Presentation Business Skills for a Changing Economy
January 8, 2009
III. Business Skills: Strategy
Many of the terms to know related to strategy tend to be economic and finance related
Demystifying Strategy
The Value Proposition looking at and defining ―value‖ not by inputs or an internal perspective but,
rather, the value perceived and received by the customer. The Value Chain, or Value Stream, is the
series of organizations, groups, and processes that make up the final Value Proposition.
Value Proposition/
Value Chain/Stream1
Instead of simply looking at the purchase price, TCO considers all current and future direct, indirect,
and shadow costs associated with the option.
TCO – Total Cost of
Ownership2
This calculation comes in many similar forms, such as ROA, ROCI, and ROMI. Calculating ROI
basically ensures that the return or gain for a project is worth the capital expenditure.
ROI – Return on
Investment3
Not all companies have the same opportunities before them. If a company faces many promising
project opportunities, their WAAC will be high. Therefore, a viable project will need to project a
greater return in order to be considered.
WACC – Weighted
Average Cost of
Capital
4
Some argue that NPV is the best measure for assessing the value of a engaging a project. All cash
flow—both outbound and inbound—are discounted back to today’s dollar value using WACC If NPV
is positive, it’s a worthwhile project to pursue.
NPV – Net Present
Value5
IRR calculates the WACC at which NPV would reach break-even point. If the IRR is above WACC,
then it’s a project worth the investment of the firm. IRR works best if inbound cash flows come only at
the end of the project.
IRR – Internal Rate of
Return6
Baker Strategy Group | 2232 S. Main St. #173 | Ann Arbor MI 48103 | +1 888 BAKER-13 | [email protected]| www.bakerstrategy.com
MAKE IT HAPPEN
Helping Organizations Excel through Effective Customer Strategy
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