Category Archives: The Da Vinci Institute

Nosipho’s challenge is to get everyone on board for internal audit findings

Nosipho’s challenge is to get everyone on board for internal audit findings

While company boards and senior executives generally understand the critical role internal audit plays in promoting good governance that does not mean everyone else always does. If Nosipho Kabeni had her way, everybody at Transnet Freight Rail would be fully on board in appreciating the value that internal audit adds.

“People don’t always understand that when we don’t close internal audit findings quickly and effectively, the consequences can be very serious for our revenue, reputation and certification,” says Kabeni. “For instance, if the external auditors come in and find an unresolved audit issue around quality, we could lose our ISO certification.”

Although she no longer works in internal audit, having moved on to Integrated Management Systems at Transnet Freight Rail, Kabeni retains a keen interest in the field and a firm believer in its business-critical nature. So when the time came to choose a topic for her work-based challenge as part of her BCom degree in Risk Management through Da Vinci, internal audit sprang to mind.

Seeking answers to niggling questions

“It has always niggled at me that people struggle to close internal audit findings timeously and effectively, and I wanted to find out why and come up with ways to change that,” says Kabeni, who originally trained as an analytical chemist and worked in a laboratory.

Targeting all six-business units of Transnet Freight Rail, Kabeni conducted an electronic survey among line managers, administrators and specialists. “I sent out 50 questionnaires and received 35 back,” she says, adding that the best response was from the administrative group, who load the findings of internal audits, followed by specialists who conduct audits. Line managers had the lowest response rate.

Her findings revealed a lack of enthusiasm among some line managers when it came to audits and audit findings affecting their business units. “They referred to heavy workloads and felt they are here to do transport; audits are not seen as core to their business,” she says. “Some said there are too many audits, while others said audit reports were full of jargon and were not written in a way that is understandable.”

A big problem that she identified was the “silo mentality”, especially when audit findings had to be addressed through inter-divisional collaboration.

Value of training and communication

Most of Kabeni’s recommendations for addressing the shortcomings revolved around training and raising awareness, particularly among line managers. She also recommended improving the simplicity and clarity of audit reports and involving line managers in the timing of audits so that these would not be conducted in their busiest periods.

Finally, she suggested that line managers’ performance in closing audit findings timeously and effectively be assessed as part of their annual performance reviews. Admittedly, this would not be easy to achieve. “We would need to put together a robust business case first,” she says, adding that she is still pondering how to take the findings of her challenge further. 

One thing she does know is this: she has a much better understanding of Transnet Freight Rail’s business than before. “My BCom studies and work-based challenge have helped me understand the culture and organisational dynamics, and also how to engage and relate to people. It takes an effort to work and study, but is definitely worth it.” 

Spotless tracking record takes SA technology off the beaten track

Technetium (Pty) Ltd

#TT1002016 Winner of the Award for Excellence in the Management of Technology

Category for small enterprises

Spotless tracking record takes SA technology off the beaten track

Across Australia, it’s South African tracking technology that’s helping to keep the bathrooms of major hotel chains spick and span. In the United States, that technology is being used to keep businesses compliant with required fire extinguisher inspection codes. Here on home soil, it’s helping to reduce the time hospital nurses spend searching for missing equipment, as well as to manage the movement of smartphones in and out of retail stores. It has even been used to check when wheelie bins in Johannesburg were last emptied.

This is all a far cry from conventional asset track-and-trace, and that’s deliberate. “Although we market ourselves as an asset management and tracking company, our business strategy is not to play in a space that is overplayed by everyone else but rather in spaces that are not addressed,” says Wayne Aronson, chief executive of Technetium.

The versatility of its tracking technology is what enables Technetium to play in such spaces. Its technology is underpinned by a core generic system that, with some careful customisation here and there, can be adapted for virtually any industry. “When we develop functionality for one specific industry, we architect it so we can port it across to other industries – and we do this at no extra cost to the client,” says Aronson.

No charges for changes

This is a key strength of Technetium. “We don’t charge for user-requested additions or changes to our technology. We allow our clients to ask for new or added functionality at no cost, and we do this regularly. In this way, our clients in effect then become our R&D department, and we benefit because our technology stays at the forefront and never stagnates.”

This strategy also puts Technetium in a strong position to identify new markets that could benefit from its asset-tracking know-how. Those spotless Australian bathrooms are a case in point.

“Our client, a cleaning company, wanted to add more value to their clients, which include a number of hotel groups, one of which owns one of the largest casino resorts in the world,” Aronson says. “The problem was that the existing process of capturing cleaning records was very laborious. Every cleaner would fill in a card behind the bathroom door every time the bathroom was cleaned, and all those papers would need to be captured weekly. Going back historically was difficult, bearing in mind that in Australia you need to hold paper records for five years.”

Technetium’s response was neat and tidy. It developed a barcode-based smartphone system for all the casino’s bathrooms, dramatically simplifying the record-keeping process – and adding lots more value into the bargain. “Our client’s client, the hotel group, received the usual cleaning report and a value-added report that drilled down into the data, offering them insights they didn’t have before, such as high-peak periods when the bathrooms needed extra work.”
Lasting loyalty

Not surprisingly, both Technetium’s clients and their clients, in turn, appreciate this kind of value-add, which builds high levels of loyalty. “Our clients’ clients rely on them, and they, in turn, rely on us,” says Aronson.

Although they have won a number of awards for their technology, there’s no room at Technetium for resting on laurels. “Complacency will be our death knell. We have to maintain a sense of urgency and be willing to push ourselves beyond our comfort zone, forever combing horizons to see what new technology is coming out and how we can stay ahead.”

Andries Agenbag shares his Work Based Challenge with us

How to make lighter work of a heavy load

Transporting a heavy load such as a 625-ton ship or lifting a 1 200-ton conveyor belt structure is no mean feat but lighter work can be made of it through integration and teamwork. That was Andries Agenbag’s thinking when he set out on a journey unlike any he’d embarked on before: his work-based challenge for his BCom degree in Operational Risk Management.

Like every qualification from The Da Vinci Institute, relevance to the workplace is essential. So Agenbag chose to tackle a problem that had troubled him for quite some time: the need for greater operational integration at Vanguard Rigging (Pty) Ltd, specialists in heavy lifting and abnormal load transportation.

“When planning a big lift or transportation move, there are two key components – the lifting machinery element and engineering element, on the one hand, and safety, health, environment and quality (SHEQ) on the other,” he says. “But, having served on a lot of SHEQ and engineering committees, I have seen that the two areas don’t speak the same language.”

The language of SHEQ is legal compliance; the language of engineering is technical. When the two are out of step, planning big lifts or transportation moves take longer and can be more complicated than necessary.

As SHEQ Manager at Vanguard Rigging (Pty) Ltd, Agenbag had noticed this and been trying to figure out what could be done about it. He had even gone so far as to complete a Lifting Machinery Inspection course and registration process with the Engineering Council of South Africa, ensuring that he understood the language his engineering colleagues were speaking. “The problem was that I didn’t really know where I was going with this.”

Finding direction

His BCom studies and specifically the requirement that he do a work-based challenge put an end to that uncertainty. “Through my challenge, I gained a proper sense of direction. My BCom gave me the tools and knowledge I needed to define the exact steps I needed to take towards operational integration.”

Agenbag’s chosen topic was an “assessment of the impact of non-integrated operational systems on service levels”. He began with a literature review and extensive consultation with subject matter experts in the SHEQ, engineering and lifting machinery sectors.

“The feedback from 80% of subject matter experts was that it is possible and preferable to run SHEQ and the engineering side as one. One of the biggest benefits of working together is the time saved on planning, and greater efficiency and effectiveness.”

After presenting his findings to the company’s board of directors, he received the green light to formulate and implement an action plan to make operational integration a reality. This included developing a software package to support integration and appointing auditors to conduct a gap analysis and identify risks.

The implementation of Agenbag’s action plan is underway, and he is confident that the company will reap the benefits of operational integration. “My BCom made it happen. The idea was there but I didn’t know how to put that into practice. My studies opened it up for me.”

Michael is a mine of information on safety at the coalface

Michael Madonsela is the kind of safety officer who is willing to roll up his sleeves and work at the coalface – literally.

When he was elected and qualified as a mine health and safety representative 14 years ago, he looked at the two short-term diplomas he had earned and decided he wasn’t satisfied. “I wanted to broaden my knowledge of mine operations.”
So he qualified as a miner.

After three years at the coalface underground, with blasting certificate in hand, Madonsela went back to the safety environment – where his true passion lay – with a deep understanding of coal mining.

His hunger for knowledge and broader horizons was still not satisfied, though. “I enrolled for a National Diploma in Safety at Unisa and then met Chanel Swart, a Marketing and Sales Manager of ERCA, who recommended the Da Vinci Institute.” He enrolled for a BCom degree in 2014.

For his work-based challenge, mine safety was a natural choice of topic for Madonsela, who is now chief safety officer at Kanga Coal’s mine in Ermelo, Mpumalanga.

Why do people take risks?

His focus was on safety hazards associated with what is known as the “Continuous Miner”, a machine operated by remote control and used to cut coal from the coalface underground.

“Statistics showed quite a few operators were getting injured,” he says. “Investigations showed that some of the injuries were due to at-risk behaviour by the operators and I wondered why. What causes people to take risks?”

His starting point was to go through all the accident investigation reports. “I then went to observe machine operators underground and also interviewed those operators.”

Getting to the root of problems

He soon identified several problems. One was that visibility underground was sometimes so poor that machine operators could not see the exact positions of the Continuous Miner machine and the shuttle cars (vehicles used to load cut coal from the Continuous Miner onto conveyor belts). That could make it difficult for them to navigate the machines accurately, sometimes exposing themselves to hazards that may result in injury.

A related problem was operators misjudging their own proximity to the machines and the mine’s sidewalls, sometimes finding themselves caught between the two.
Another problem was when machine operators went into areas where coal had been freshly cut but the roof was not yet properly supported.

It also transpired that some, more experienced operators were taking risks because they were so familiar with the job they were cutting corners.

“It was a combination of conditions and human error,” says Madonsela, who then came up with concrete recommendations for preventing Continuous Miner-related accidents as far as possible.

Coming up with solutions

His recommendations included installing reflective sticks to demarcate areas considered dangerous for operators, installing ducting to clear dust and keep air flowing to improve visibility, and improving communication between machine operators, especially by using sign language (given noisy underground conditions).
“We also send out a weekly bulletin to inform employees about not only the latest safety issues but to raise awareness as well,” says Madonsela.

He graduates with his BCom degree in September 2017. “I’d like to say thank you to Da Vinci because my studies have helped me a lot with understanding operations. When I started my studies, I didn’t know what to expect but I have received quite a lot of support from my colleagues and management from the mine, and my lecturers have been helpful. I have learned a lot.”

Innovation Systems – Making Sense of the Noise

Innovation Systems – Making Sense of the Noise

Technology is recognised as an enabler of innovation and growth. Having a software tool, specifically the right software tool, can greatly accelerate your innovation results by creating an easily accessible and self-sustaining platform for ideation and innovation management. Over recent years, however, the innovation technology systems market exploded and an influx of players are contributing to an ever increasing maze of offerings with functionality that features internal and external collaboration capability, enterprise communication tools and in some instances the integration of various ecosystems for co-creation.

The result is an increasingly growing and crowded landscape of innovation management tools that are becoming more and more difficult to navigate – a trend that is expected to continue as new and existing offerings incorporate more radical technologies such as artificial intelligence and crypto currencies.

The current innovation technology market is estimated at over $200 million and boasts up to 250 vendors (and counting), almost doubling its size in the last two and a half years. In a fragmented innovation system market differentiation is not easy to come by. This does not come as good news for increasingly frustrated customers trying to make sense of it all. The very reason the innovation system vendors make a case for their software (to help organisations innovate and differentiate) might become a paradox in itself that begs the same question from them – how are innovation technology vendors creating new value and differentiation in an increasingly dynamic market?

At Innocentrix we understand this problem as we work with both vendors and clients to make innovation intentional, repeatable and supportive of next level growth. One solution will not universally fit all needs. Organisations need to understand the functionality on offer, how it fits the organisation’s own requirements, the financial and business models available as well as how this aligns with current innovation maturity levels and future goals.

Where to start is not always easy to figure out. The aim of this article is to offer a practical point of departure to assist organisations to navigate this landscape better.

But we can Build?

Customers increasingly look for a voice in the development of a solution that best meets their needs and prefers “exceptional service” as opposed to traditionally offered technology services. This might be one of the reasons investigating in-house development is often one of the first activities undertaken by organisations when the need for an innovation management system has been identified. It is possible that certain organisations by the nature of what they do have the ability to develop in-house and it seems like an attractive option when one ponders the crowded innovation technology landscape mentioned above. Add to this foreign currency hurdles if you are considering best of breed international solutions that also naturally comes with geographical and time zone challenges. The other reality is the speed of change, the impact of digital innovation and the requirement to have to run hard just to stand still, for what could be considered to be a non-core activity. Building you own is not impossible but with the rise of mobility and SaaS offerings, it is becoming increasingly challenging to do so well. 

Apart from functionality and development costs, organisations need to consider time available for development as well as servicing the organisation’s future innovation aspirations.

Other considerations should be:
Insight
Does your development team understand the organisation’s technical and innovation-critical requirements to enable it effectively? Can you map the minimal viable product (MVP) and do you have a good understanding of the future roadmap for the product? Moreover, does the development team really understand innovation and innovation software development?

Skill
Does your organisation have the required technical in-house experience to deliver a solution that is reasonably comparable to what is available off the shelf right now? Will you have continued access to these skills in the future and do they have the time available to bring the product to the organisation reasonably quickly?  

Relevance
Innovation software vendors have been in the game for several years, they understand the dynamics of the market and are trusted by some of the world’s largest companies. This is their core competency, the reason they exist. It is in their interest to remain relevant and at the forefront of best practice in innovation management. Consider the internal stakeholder challenge as the organisation has to continually justify the investment and when it becomes a cost/price game the 3rd party vendor has the scope to offer compellingly lower prices.

Total cost of ownership
It is necessary to consider the complexity of total cost of ownership. The allure of building your own is attractive when one considers the ubiquity of the tools and seemingly low barriers of investment, but what costs are associated with personnel, ongoing maintenance, and continuous development. Opportunity costs if this is not a core competency for the organisation also need to be considered.

Building an in-house solution is possible but it is not straightforward. Initially and at low levels of innovation maturity in-house built systems can serve their purpose, but they soon fall by the wayside as maturity levels and the complexity of needed functionality increases. Another challenge is that in house development can become someone’s pet project. Organisations often fail to maintain their systems due to a change in roles and responsibilities over time, resulting in an eventual waste of not only money but time as well.

So how do you make sense of it all?

It is important to select a fit for purpose tool to fulfil the organisation’s objectives in support of its innovation business case, and to be able to adapt as the organisation matures on its innovation journey, or as needs become more varied.

Answering the question is, in essence, coming back to basics. Innovation is a business necessity but it is important to understand what you are trying to do and what good looks like for you. What are the organisation’s aspirations in this regard? Once that is defined, the road to find the best tool and operating model might be less complex.   

The Forrester Wave Report (2016)[1] used 26 criteria to evaluate a list of 15 current Innovation Management vendors and grouped them according to (1) current offering in the market (2) strategy of the vendor and (3) market presence. This resulted in a list of leaders and strong performers that according to the report represent strengths and trusted expertise in the field. But the picture is much more complex as the authors allude to in the introductory contextualisation.

Consider the following nuances.

Technology firms operate on very similar business models

Industry operating models chase brutal quarterly targets, a maximisation of licenses sold to customers and discounts for multi-year deals.  Painstakingly logged and managed, sales discussions will focus on these main aspirations which can be counter to client needs. Continuity with staff presents another challenge. Direct dealings with a vendor can become problematic as staff turnover impacts on relationships and the history with the vendor. Consistency becomes a moving target. One can argue that the technology sector is still in its formative years. Standards and interoperability across platforms are limited, with the story often being about the ‘best’ widget in town. Some have compelling features that are more influenced by the development of user interface design, but in many cases, there are much maturing to do. 

Many organisations want a voice to get what they view as valuable. They prefer more flexibility in their engagement models with vendors, as the needs of the organisation will change with a maturing innovation capability and as new learnings are integrated.  Which brings us to the next point.

An innovation system does not create an innovative culture

There are many great systems out there. None of them is going to guarantee that innovation work in your organisation. Your system will most likely become your cornerstone for success and enable innovation if managed well, but your people and doing the right things will be your secret sauce. You will need to consider many things like strategy, leadership, management, effective communication, impacting on engagement, measurement of outcomes, ROI and much more. It is important that you manage this from the beginning.

The need for partners

Many vendors have not eloquently addressed the need for partners. Strategic services are being offered by some whilst sharing their view of best practice for the use of their solution with customers is part of the package. But as put forward by Forrester’s report, few innovation management solution vendors can address wider business transformation requirements alone and need to work with outside consulting partners. Recent partnerships between KPMG and Idea Factory and IdeaScale and the content platform InnovationManagement.se play to this point. It will, however, require vendors to actively build and contribute to the market in a collaborative manner. In too many instances the opposite is still true and vendors are found to dilute the innovation ecosystem instead of positively and actively contributing to it. The winners in the innovation systems market will most likely be those that recognise the exponential power and value of true collaboration to the benefit of all parties, especially their client’s. The most valuable partnerships will be those between a vendor and a partner offering expert strategic innovation expertise. Trust, ethics and respect still make good business sense and often provides an indication of vendor reliability. Choose your vendor well in this regard.

The market, maturity and attitude

In all of this, however, the client has a responsibility too. Do you have real strategic intent for innovation in the organisation?  In other words, do you have a budget in support of building an innovation capability and culture, and are you open to working with your suppliers to make it work? It might seem like an obvious question but it is an important one. Why invest in an innovation management system if you do not intend to enable it. Tripping over dollars to pick up pennies does not make sense, especially in this scenario. Your innovation team, if you have one, needs to be empowered for success. They cannot be expected to go at it alone. That is setting them up for failure from the beginning. And just like your vendors and your strategic partners, it is necessary to pull together a dynamic innovation team internally as well. This is no place for ego’s, immature jockeying for power or feeling intimidated by partners or team members for fear of being stood up for expertise. You will need to collaborate to be successful. Your external team are there in support of your success. If your innovation team cannot appreciate this your efforts will be compromised and your investment will most probably be wasted.  Take heed, this is a leadership responsibility.

So when starting out on the road in evaluating innovation management systems, think further than the obvious. Whichever way you dress it up, innovation is a complex coming together of multiple capabilities. Getting it right is hard and finding the right solution takes effort.

This article attempted to call out a number of the key tenets to consider when setting off on the journey.  Like in all relationships, it is often the little foxes in the vineyard that can destroy something good.

This article is written by Mrs Henra Mayer, CEO of Innocentrix and Da Vinci Head of Faculty related to the Management of Innovation.

About Innocentrix

Innocentrix is an ideas and innovation company. We help our clients to deliver the future. We improve existing offerings or bring to market new business models, projects, products or services. We help our clients to Create, Engage and Deliver. Find us at www.innocentrix.co.za.



[1] The Forrester Wave™: Innovation Management Solutions, Q2 2016 

DA VINCI LAUNCHES ACADEMIC YEAR WITH A BANG

The Da Vinci Institute for Technology Management is a School of Managerial Leadership contributing towards socio-economic development and transformation. The Institute’s purpose is to cultivate managerial leaders through the core principles of business driven action learning by offering students a personalised journey of self-discovery and co-creation.
The launch of the 2017 academic year takes place on Thursday 16 February 2017 at The Institute’s campus, situated in the peaceful suburb of Modderfontein, Johannesburg. The official Academic Opening serves as a momentous occasion led by a traditional academic procession. The procession will consist of Da Vinci Council and Da Vinci Faculty members who will march around The Institute’s campus.
Students, alumni and guests in attendance will witness the hoisting of four flags. The one flag signifies the relevance of The Da Vinci Institute in relation to its dream of contributing to the development of a sustainable society.  The second flag signifies the importance of the TT100 Awards Programme, which has been recognising companies for their business prowess in the Management of Technology, Innovation, People, Systems, Research and Sustainability.
The third flag signifies that of the Purple Cow, which is popularised by author and marketer Seth Godin. The Purple Cow serves as a reminder to practice remarkable behaviour every day. The fourth and final flag is that of the South African flag and signifies the love of our beloved country.
Another highlight of the Academic Opening is the launch of a new cohort titled the TT100 Certificate group. Twenty-two individuals from various host companies will start their learning journey on this day. The Department of Science and Technology (DST), MTN and Eskom have respectively sponsored the individuals. This is the first programme of its kind at The Institute and certainly will not be the last.
The final highlight of the Academic Opening is the official welcome and announcement of Da Vinci Faculty Heads and Faculty. The entertainment for the day will be Gauteng Opera, an all-round performing arts and entertainment company and Drumtribe, an interactive drumming team.
Ends-
CONTACT
Storm Thomas
Communications Manager
011 608 1331

TT100 makes adjudicator feel proudly South African

Car key locks that won’t let you drive if you’re over the limit; tracking systems that can tell when a wheelie bin in Johannesburg was last emptied; grinding balls for mining that are fantastic at taking infections out of wounds… these are some of the amazing South African inventions that have impressed Mike Davies, TT100 adjudicator, over the years.
“I’ve seen wonderful innovative ideas by companies big and small. The programme shows another side of our economy and the people who work in it, and I absolutely love being an adjudicator. I get energised by it and it makes me feel great to be a South African,” says Davies, Director of Optimum Learning Technologies (Pty) Ltd (an accredited education and training provider that is in itself a South African success story, having grown from only three people to 70 full-time staff in 10 years).
He has been a TT100 adjudicator for the past five years, and thrives on the positive energy the programme spreads. “It blows me away year after year. Through the programme, I’ve seen that if you can make it in South Africa, you can make it anywhere. South African companies have people who are motivated, exhibit high levels of innovation and a work ethic second to none.”
What makes this particular awards programme stand out is the recognition that award-winners receive, says Davies. “The certificates and awards are really something to be proud of. Sometimes entrepreneurs don’t need money to be recognised – that will come. What matters is recognition by your peers. The recognition and exposure that these awards give to entrepreneurs and innovators is exceptional.”
Ends

TT100 an opportunity to learn from the best, says X/procure

How often does a small business have the opportunity to learn directly from the best and most successful companies in the country across all industries? That’s relatively rare in the normal course of business. On the TT100 Awards Programme, it’s one of the benefits of participating, says JD Henderson, managing director of X/procure, a regular entrant since 2007.

“In the years when we didn’t win, we networked with the winners to find out what they were doing with their systems, people or technology that we weren’t. They were willing to share and we to listen, just as when we have won, we were willing to share,” says JD Henderson, managing director of X/procure.

Exposure to the best practices of top-performing small, medium and large companies in many different sectors has brought practical benefits to X/procure, whose electronic procurement software is now used by more than 65% of pharmacies in South Africa.

A simple but critical example of lessons taken to heart is the necessity of running failsafe systems that are fully redundant and comprehensively backed up so that clients restocking their pharmacies with medicines are never let down if one link or switch goes down.

“But what’s really amazing for us is that as we grow our technology platforms and stabilise our systems, we are expanding into other industries,” JD says. “We’re now expanding into liquor, where the supply chain is virtually the same as it is in pharmaceuticals.”

The inspiration for this expansion was none other than the TT100 programme. “While we were networking, we saw that these guys (winning companies) were diversifying, and we asked ourselves how we could do the same.”

Changing a weakness into a strength

However, the area where participating in the TT100 has been most valuable to X/procure, according to JD, is in the management of its people. “We identified that as a weakness,” he says. “Software developers and programmers are generally perceived to be introverts; they’re not really socially out there. So we wanted to know what others are doing to win in that category.”

The lessons X/procure brought home from its networking included introducing flexible working hours and leave, and innovative employee wellness initiatives. As a result, by 2015, the company had turned its perceived weakness in managing people into a strength: X/procure won the Management of People category in the small enterprises section of the TT100 in 2015.

Also in 2015, by the way, X/procure won the Management of Innovation category for small enterprises, the Minister’s Award for Sustainable Performance and the DST Director-General’s Award for Overall Excellence. And the company was a finalist in two other categories, the Management of Systems and the Management of Technology.

Interestingly, JD says X/procure has been invited to participate in other awards programmes but would rather stay with the TT100. “None of the others are as focused on our core business as the TT100. Nobody else has a model like the TIPS model. For us, it works.”
Ends

For more information, contact
Carol Varga at Carol@davinci.ac.za

Part 5: The Roadmap to Customer Centricity: Measurement – Dr Mary Ritz

In a research study I concluded recently it was emphasized the failure to measure customer centricity is one of its major limitations.  It was accentuated that the measurement of customer centricity proves difficult to implement for many organizations because the phenomenon is qualitative in approach. Due to this perceived challenge, most organizations do not find a compelling reason to be customer centric.   For those organizations that do measure the phenomenon, most tend to measure its financial aspects only.  A product centric model tends to take this same approach to business performance measurement.
Alternatively, a customer-centric model requires the measurement of the phenomenon not only in financial terms, but in non-financial terms as well.  The model takes into consideration what is measured, how, and when it is measured.  This implies that all team members need to understand that every single action they take impacts on the customer management or customer experience and the bottom line.     
In the next session of the article, I discuss some of the ways a customer centric organization could measure its performance from both non-financial and financial points of view.    
Non-Financial Aspect 
·         Customer Satisfaction
This is the basic measurement of performance and I consider it a starting point to business performance measurement. It’s an important driver of profitability and, generally, there is a positive relationship between customer satisfaction and customer loyalty.  Numerous factors have an impact on customer satisfaction.  Some of the factors include; employee friendliness, knowledge, service quality, helpfulness, and value.  An organization would need to survey and measure these elements to determine customer satisfaction.  Effective survey tools and questionnaires must be used.  A combination of qualitative and quantitative research methods must be deployed for optimum measurement.  The National Business Research Institute (NBRI) and American Consumers Satisfaction Index (ACSI) offer a variety of instruments that measure customer satisfaction and employee engagement.  Amazon.com, for example, has been successful at measuring these customer dimensions and using the information to make informed decisions. 
·         Customer Loyalty
As indicated previously, though customer satisfaction is significant, it’s not always adequate because in some cases a satisfied customer will still switch brands for various reasons.  Customers must be extremely satisfied for it to lead into customer loyalty.  Customer loyalty ushers in sustainable competitive advantage.  Customer loyalty will be achieved through focusing on key customers, proactively generating high level of customer satisfaction with every interaction, anticipating customer needs, and responding to them before competition does.   Moreover, customer loyalty allows building closer ties with customers and creating a value perception.  Rewards programs can help foster customer relationships and their measurement.  Successful programs connect with customers at three levels: introduction, service provider initiated communication, and service provider initiated feedback.  Nordstrom and Neiman Marcus are two retailers that are doing better than most in this area.
·         Customer Advocacy
Michael Lowenstein defines customer advocacy as “… active personal espousal or support of a brand, product, service, or company”.  He claims that the concept should not be confused with recommendation, which is simply one possible outcome of advocacy behavior.  Customer advocacy means advocates are deeply (and emotionally) connected and involved with a brand that they energize.  They are vocal and positive about a company and its offerings. Customer advocates are repeat buyers, they refer new business, and provide feedback.  They “defend” and make a business case for the brands in which they believe.  
Customer advocacy includes elements such as brand favorability, evidence and frequency of positive and negative voluntary personal communication, and the likelihood of continued consideration and relationship. Informal communication by advocates is active on a peer-to-peer basis, resulting in the improvement of business performance.  Companies that have benefited from customer advocacy tend to be responsive, accountable, and communicate constantly with their customers and other stakeholders. 
·         Customer Lock-on
According to Sandra Van der Merwe – customer lock-on means “…the customer wants the enterprise as their sole or first choice over time, even over a lifetime.”  Lock-on is voluntary and is anchored in authenticity of the brand and not marketing hype.  It capitalizes on stronger and deeper relationships over time.  Alternatively, customer lock-in happens (for an example) when an entire industry is underperforming.  This means customers will have to deal with the brands or organizations because they have no other option.  It implies that organizations that need to attain customer lock-on have to disrupt an industry and offer new options and solutions that offer great customer experience.  An example of customer lock-on is a South African bank – Capitec Bank – that disrupted the banking industry in that country by offering creative and innovative solutions that the traditional banks were not offering.  Amazon.com is another great example of an industry disruptor that has achieved customer lock-on. 
Financial Measurements
Though the financial performance measurement should not be the only form of measurement organizations use, it plays a significant role. Organizations are in business to make money, so, ultimately, this is the definitive measurement in the long term.  Measurements such as return on sales and return on investment fall under this category.  The most important aspect to business performance measurement, assuming all the customer dimensions (mentioned above) are managed and measured effectively, is that there will be a positive impact on the financial performance of an organization over time.
At the core of measurement, the clarity of a company’s mission, purpose, goals, creation of the right customer culture, and establishment of an integrated organization play a significant role.  As these elements are defined, measured, and assessed they will determine business performance measurement whether non-financial and financial.
Join me again in the last part of the series in a few weeks time….  
For more information you can visit our website: www.almentainternational.net or email us at info@almentainternational.net.

Written by Dr. Mary Ritz:  International Trainer, Speaker, Author and Consultant

Part 4: The Roadmap to Customer Centricity: Technology

Achieving customer centricity calls for an understanding of customer behavior, segmentation, and insights.  It requires an integration of departments, systems, processes, and channels among many other issues.  Consequently, technology becomes a critical component in a company becoming customer centric.  Technology in itself is not customer centricity, but it enables it as well as the effective management of customer experiences.
As indicated above, inherent to customer centricity are diverse components that often require innovative technology.  In this part of the ongoing series, I point out a few of these areas where technology can be used to maximize customer centricity.

  •    Designing and delivering excellent and differentiated customer experience: In this case, technologies like customer journey analytics can be adopted to measure how the organization is doing at delivering the customer experience.  Example of such technologies include 3D Journey Maps, which offer an in-depth understanding of customer journeys and then identify the most critical points and opportunities to the customer experience and bottom line.  Such technologies capture how customers are feeling and experiencing and using that information to design customer experiences. 
  •          Voice of the Customer:  Mobile and social technologies can also be used to find new ways to interact, engage, and support customers. While most companies can capture different aspects of the customer’s voice, from social media, traditional surveys or other platform – the integration of this data remains a challenge.  There isn’t a holistic view of the customer voice, but there is a need for technology that can do that.  If the truth be told, this is very difficult to achieve.  The best way to work around it is to implement technology that at least captures all customer voices leading to technology that can integrate many different platforms. 
  •   Data management:  Under this umbrella, organizations can use Customer Relationship (CRM) to understand customer segmentation and identification (i.e. focal customers and those who are not) and collect and analyze data.  Gaining in-depth customer insights and information will enable organizations to provide relevant customer experience and the right products and services.  Customer data analytics and future customer forecasting are central to customer centricity.  The right customer CRM technology provides more than mass marketing, promotions, and seasonal sales.  It is about strengthening relationships by understanding customer data. 
  •    Integration, Agility and Workflow:  Integration of different departments, channels, systems, and processes is an important part of customer centricity.  For example, collaboration across customer-facing teams, including access to and the sharing of information and resources becomes imperative.  This can only be attained through the implementation of effective technology.
Just as important is the organizations’ agility and workflow.  This speaks to the organization’s ability to deliver a customer centric experience at a speed that enables an organization to organize itself to meet the ever-changing customer needs and act on new opportunities as they arise.   To achieve this, an organization requires an agile decision-making frame supported by technology-enabled processes that integrate teams and deliver on the opportunities for real-time responses.  In addition, customer focused processes should be designed and developed on workflow principles. 
  •         Systems: Technology and systems work hand-in-hand. Systems must support the creation of great customer experiences, develop a single view of the customer, and allow for a deep customer understanding. For example, customer-facing systems should be managed effectively and help the organization deliver on the customer promise.  Customer systems address the level to which a product or service can be used by specified users to achieve specified goals with effectiveness and efficiency.  In a customer-centric business model this also implies that technology takes into account user experiences such as the users’ emotions, beliefs, perceptions, physical and psychological responses, etc., that occur before, during and after use. 
This is a wide step, and, for the purposes of this article, I will keep it short.  The main takeaway is: Technology is an integral part of furthering customer centricity and building the capabilities and structures for effective management.  The challenge that companies have is to ensure they create effective innovations/technologies that help solve customer management complex issues and create value going forward in an ever changing economy. 
Join me again in Part 5 as we continue on our journey: A Roadmap to Customer Centricity.

For more information you can visit our website: www.almentainternational.net or email us at info@almentainternational.net.

Written by Dr. Mary Ritz:  International Trainer, Speaker, Author and Consultant