Those are the two feelings that I have when thinking about the last four years in Iberia Airlines that I’m now closing.
It is curious how life makes “connecting the dots” easy in retrospective and how difficult it is to do it when looking to the future.
How I fell in love with airlines…
It was June 1991 and a twelve years old Alberto was flying for the very first time ever in a huge American Airlines 767 from Madrid to Dallas. I was alone, on my way to an exchange with a family to improve my very limited English language at that time. The feeling of flying was amazing, and I was writing down every single detail of my customer journey in a notebook: noticing how the flaps were moving, the noise of the engines, all the menu and inflight entertainment details. If I only had known that 30 years later I would be responsible for designing that journey for Iberia 😉
The route map that the captain gave me when arriving to Dallas as they noticed that I was paying so much attention to everything happening in the aircraft:
My notebook full of comments about what I was experiencing up in the air:
Fast forward to Iberia…
Back in 2018 I decided to transition from a wonderful role at 3M creating value by delivering new innovative products in B2B industries in West Europe, and embrace a new venture project at Iberia Airlines. I had a conversation with Gabriel Perdiguero and Nacho Tovar where they told me how Iberia was managing a sound transition and becoming a fully digitally connected airline. That really blew my mind and I can never be grateful enough for it.
I had no experience in the airlines industry apart from flying more than 25% of my work life time, but it was very obvious for me that the mission was going to be a step-change in terms of participating in a very ambitious transformational B2C initiative in one of the most complex business that I have ever experienced.
We had to build an Innovation powerhouse, embracing the vast amount of knowledge and expertise that the very talented Iberia employees had, and helping the organization prepare for a new world in which Digital was the new enabler to deliver high customized valuable experiences to our customers.
Managing the Incremental Innovation and Service Design practice, followed by managing Digital Customer Experience afterwards, gave me the opportunity to interact with more than 300 professionals, learning so much from every one of them.
Somehow, I was closing the loop that I had started 30 years before, and the little boy travelling alone to the US, was now a “forty-something” professional doing his best to prepare Iberia for a digital future.
And then, disruption came…
At the beginning, it was just some news from China and Italy. We thought we would be suffering a couple of months and then everything would be back to normal and we could recover our roadmap ahead. We were soooooo wrong !!!
These last 2 years dealing with the pandemic have been among the most challenging professional years that I have ever experienced. “Transformation” was not only a strategic desire but a necessity. Changing the services, adapting them to the new reality, making them work under very severe operational restrictions, discovering the new pains that our customers had,… I can’t really think of a period of time where the whole World was so much upside-down, and airlines were absolutely disrupted.
The good news was that we had progressed so much in terms of preparedness. All the internal digitalization that we had just went through made easier for us to adapt to the new ways of working, and we could leverage on some key digital assets to better serve our customers.
We had also built a high performing team, combining the talent that existed before and some new people that brought new ways of doing business and a solid customer-centric vision.
So all together, I think these last 2 years have been very stressful, strange and uncertain, but I also think that were the ones that have produced a bigger learning both personally and professionally not only to myself but to all of us. We are now stronger, and wiser, and we are better prepared.
Cross-check complete, and prepare for departure:
And now that the most sever part of the crisis is over and after these amazing 4 years at Iberia, I believe the cycle has come to an end. I have enjoyed participating in building the Transformation unit from the ground, creating a talented team of Service Designers, handing-over to my team most of what I know about change management and preparing for the future.
The whole industry has bottomed and it is now time for recovery and growth, and I’m totally convinced that in 2022 and 2023 we will see outstanding digitalization initiatives in Iberia, managed by my former team and the new talent that they will for sure incorporate. They have the skills, they have the attitude and they have a great roadmap ahead.
I’m now moving to a new industry, where I’ll bring everything that I know, and where digital change management is also so much needed. Servant leadership is a key element of my personal and professional toolkit, and I’m looking forward to helping again an organization full of talent, in a pivotal situation like the one Iberia was back in 2018.
Every time I’ll see a “bird” with a red and yellow tail above my head it will bring me memories of the outstanding experience with Iberia and the joy I had working there. And it will remind me the marvelous friends that I made, and how we dreamt together about transforming the industry.
Hace unos días un buen amigo me preguntó si tenía algún libro interesante sobre “Behavioral Economics”.
“¿Solo uno?” le pregunté. “Tengo muchos, es un asunto que me fascina”.
Acudí a la estantería, y aproveché para ordenar todas las baldas con libros que he utilizado en mi vida profesional. Encontré alguna joyita que ya no recordaba, y rescaté algún otro que tenía pendiente de leer.
Charlie Munger, Bill Gates, Elon Musk y muchos otros referentes en el mundo de la empresa hablan de que el mejor tiempo invertido para desarrollar su visión del mundo, es el tiempo dedicado a la lectura. No puedo estar más de acuerdo y, junto con la escritura, es una de las actividades que más me han ayudado siempre en el desarrollo del pensamiento estratégico.
He intentado en varias ocasiones pasarme al formato digital, pero por algún motivo en los libros técnicos y de ensayo, sigo necesitando de ese ritual de pasar las páginas de papel, marcarlas, avanzar y volver atrás para relacionar varias ideas,…
Además, visualizar la estantería con los libros más o menos categorizados, me ayuda de alguna manera a ordenar mi pensamiento. Puedo valorar si en la última época mi lectura ha estado descompensada, o qué asuntos me han ocupado la cabeza con mayor frecuencia en el pasado reciente.
Hubo además una temporada en la que me agobiaba tener libros sin leer, hasta que este post de “The New York Times “ me llevó a la lectura de “Why You Should Surround Yourself With More Books Than You’ll Ever Have Time to Read”, donde se explica la fascinación de Nassim Thaleb por lo que él llama “Antibibliotecas”. Thaleb pone el ejemplo de Umberto Ecco, poseedor de una biblioteca de más de 30.000 tomos, de inalcanzable lectura en el tiempo material que tiene una vida humana. El valor de esa colección no reside tanto en los libros leídos como en la ingente cantidad de conocimiento potencial de la que Ecco podía hacer uso en un momento dado, en su “potencialidad”.
Y es que los libros que pueblan nuestras estanterías hablan directamente de quiénes somos, de cuáles son nuestros intereses y motivaciones. Es como un retrato robot en el que a través de nuestros referentes de lectura, expresamos cuál es nuestra visión del mundo.
Volviendo a mi pequeña biblioteca y con mi mente de ingeniero, traté con más o menos fortuna de clasificar los libros de acuerdo a temáticas. La verdad es que me resultó algo complejo. ¿Cuál es la diferencia entre Diseño de Productos, Diseño de Servicios, Marketing, Economía, Gestión de personas, Psicología, Sociología,…?
Al final, con alguna dificultad, traté de establecer varias temáticas, de la que voy a realizar una pequeña explicación de la importancia de los 3 títulos por categoría que más me han ayudado:
Behavioral Economics / Toma de decisiones / Teoría del Comportamiento:
“Thinking fast & slow” de Daniel Kahneman: se ha convertido en mainstream absoluto, pero creo que ha cumplido la misión de acercar el Behavioral Economics a un público muy amplio.
“Micromotives and Macrobehavior” de Schelling: me encanta por lo bien que explica cómo fenómenos relativamente pequeños, escalan y tienen impacto absolutamente descomunal cuando se los estudia a nivel agregado.
“Blink. The power of thinking without thinking” de Gladwell: creo que fue el primero de sus libros que cayó en mis manos, y me parece asombrosa su capacidad narrativa para explicar los sesgos cognitivos que operan en nuestro subconsciente.
Economía / Mercados:
“A random walk down Wall Street” de Burton Malkiel: me lo aconsejó un amigo cuanto empecé a coquetear con el mercado bursátil, y me encantó su forma de explicar las inversiones pasivas.
“Contabilidad y finanzas para no financieros” de Oriol Amat: gracias a él dejé de sufrir en el MBA en clases de Contabilidad y aprendí a disfrutar desgranando los balances 😉.
“The world is flat” de Thomas Friedman: me puso sobre la pista sobre lo que con posterioridad acabaría denominándose el fenómeno de la “globalización”.
“The tipping point” de Gladwell: explica de forma muy amena cómo algunos fenómenos entran en fase de aceleración y efecto de “bola de nieve” tras alcanzar una cierta masa crítica.
“Creativity” de Ed Catmull: cuenta con detalle cómo Pixar Animation Studios gestionaba el proceso creativo, y es fundamental para aquellos que creen que la inspiración les debe de pillar trabajando.
“The innovator’s dilemma” de Clayton Christensen: fue el primero en el que vi explicada la diferencia entre los procesos de innovación incrementales y la innovación disruptiva.
“This is service design doing” de Stickdorn, Hormess, Lawrence y Schneider: una de las mejores guías con un marcado enfoque práctico para aquellos que se dedican al diseño de servicios.
“Universal principles of design” de William Lichwell: una lectura deliciosa para comprender aquellos principios fundamentales en el diseño y la usabilidad, de aplicación inmediata en procesos de creación de objetos ó servicios.
“Designpedia” de Juan Gasca y Rafa Zaragozá: una guía con herramientas ampliamente utilizadas en investigación y prototipado de nuevos productos y servicios, en la que participé con algún ejemplo de mi paso por 3M.
“Gamestorming” de Gray, Brown y Macanufo: me gusta mucho su enfoque eminentemente lúdico a la generación de ideas en entornos empresariales, con numerosas actividades propuestas en función de objetivos muy específicos.
“Visual meetings” de David Sibbet: fue la primera vez que escuché de la facilitación gráfica y la toma de notas visuales aplicada a documentar sesiones de trabajo o conferencias.
“LEGO Serious Play facilitation guide”: un pequeño manual que conseguí tras haber asistido, completamente asombrado, a una sesión de diseño estratégico de marcas a través de la metodología de LEGO.
“El arte de presentar” de Gonzalo Álvarez Marañón: una guía práctica con multitud de consejos a la hora de preparar, documentar y ejecutar una presentación.
“Resonate” de Nancy Duarte: un libro indispensable para entender cómo funcionan las estructuras narrativas de mayor impacto en la comunicación de negocios.
“La comunicación no verbal” de Flora Davis: un clásico de los años 70 que explica con detalle cómo ser capaces de extraer información de las iteraciones personales a través del lenguaje no verbal.
“The dip” de Seth Godin: un ensayo de uno de los escritores que más admiro en el mundo del Marketing sobre cómo saber si merece la pena seguir adelante con una iniciativa de negocio o es mejor re-enfocar los esfuerzos.
“The corporate personality” de Wally Olins: un manual clásico elaborado por una de las personalidades más relevantes en el mundo del Branding sobre cómo diseñar y ejecutar iniciativas de marca corporativa.
“Positioning” de Al Ries y Jack Trout: un volumen dedicado a la práctica del posicionamiento de una marca en la mente del consumidor, un concepto tremendamente sencillo y al mismo tiempo tan complejo de ejecutar.
“The inner game of tennis” de Timothy Gallwey: antes de que la fiebre del “coaching” se extendiera en el mundo empresarial, este libro reflexionaba sobre lo que lleva a los atletas de primer nivel a alcanzar un grado de preparación mental que les permita gestas sobrehumanas.
“Good strategy, bad strategy” de Rumelt: quizá el mejor ensayo que he conocido sobre Estrategia Corporativa y cómo establecer un plan de acción para ejecutarla. Para aquellos que confunden establecer objetivos con definir estrategias.
“Managing for the future” de Peter Drucker: soy un verdadero apasionado de la obra del pensador austríaco, pero me gusta especialmente este libro que resulta plenamente actual a pesar de ser ya un clásico, porque resume muy bien cómo desarrollar una cultura de pensamiento estratégico que permita prepararse para entornos de alta incertidumbre.
Decía Ralph Waldo Emerson que “en muchas ocasiones la lectura de un libro ha hecho la fortuna de un hombre, decidiendo el curso de su vida”. Revisitar mi pequeña y humilde biblioteca empresarial a raíz de la pregunta de mi amigo, ha sido un verdadero placer. Más de 150 volúmenes que representan las disciplinas a las que me he dedicado y los principios de gestión en los que creo.
¿Qué otros libros recomendarías incorporar a la mesilla de noche de aquel que se dedica al diseño de productos y servicios?… espero con mucho interés los comentarios.
“Study the science of art. Study the art of science. Develop your senses, especially learn how to see. Realize that everything connects to everything else.”
Leonardo Da Vinci
I was convinced that I would become an Architect since I was little. I loved how they created beautiful structures with a strong purpose out of nothing, just from the ground.
But my father was an architect and he advised me that in Spain, the construction bubble would eventually explode and working as an architect wouldn’t be great anymore. So I studied Industrial Engineering, joining the club of the “frustrated architects”. 😉
But, hey, hold on !!! I soon discovered that as an Engineer, I could work as a Business Consultant, which is a mixture of a Doctor and an Architect, diagnosing where the issues in a company came from and how to build processes, organizations and tools that eventually could make things get better for those corporations.
Just talking about Architecture, I remember my father saying that the most complicated work when building is designing effective joints. No matter how well designed your construction is, if you are not able to plan successful joints between different elements of the building, soon water would penetrate, or cracking on the surface would happen.
And the same principle applies to many other areas in life:
Athletes often get their joints injured (e.g. knee, elbow, wrist, ankle).
Oxidation always happens first on the welding area of two metal sections.
Transmission bands were among the first severe damages in old cars.
Water always becomes turbulent when two streams join (e.g. two rivers).
Infections penetrate through open wounds.
Same as in life, any business is also affected by the laws of physics. Areas where two colliding forces join, are always the weakest:
Strategy execution often fails when middle management is not skilled, knowledgeable or empowered to transmit the vision from C-level to the workforce.
In mergers and acquisitions, when two different business cultures collide, chances are high that the new corporation won’t end up beautifully.
Silos and divisions between different business units are normally driving overall corporate failure.
Integrations and interfaces are the weakest elements in any IT systems project.
In these circumstances, I’ve always seen Innovators as “architects building bridges and removing borders”. They connect the dots, they make people from different disciplines work together, they hack siloed cultures, they break barriers, they bring together knowledge from different areas, they connect with the external ecosystem, they remove friction here and there.
Most of the worldwide challenges ahead are also a matter of how to manage potentially painful transitions, how to remove borders and build effective joins or elegant bridges. COVID has accelerated many paradigmatic changes, but underlying issue of how to solve transitions is still there:
Energetic Transition is about how to make affordable and plausible the renewable sources while avoiding a sharp decline in traditional energies that could damage economies and leave them without time to adapt to the new normal.
Autonomous vehicles biggest challenge is how to make standard cars and unmanned automobiles coexist while the transition happens.
Hybrid workplaces and new ways of working success will very much depend on how effective connection and collaboration between colleagues is wired.
Successful companies will be those that will manage change by embracing ecosystems (customers, suppliers, distributors, competitors, government agencies,…), building bridges between different geographies, teams and cultures.
The innovators will be the new “Chief Architect Officers”, but instead of using bricks and mortar, they will use knowledge and talent.
“Alberto, what do you think about the current war for talent?” a good friend asked to me.
Wow, that’s a big topic and I’m afraid although I have hired, trained and coached many talented teams in my life, I would only have a partial view on it. So, what I proposed him instead, was that I would approach his question from within my area of expertise:
1. I would start a series describing the skills and mindset needed for several roles where I have expertise on. The first post was about becoming a “Marketing Hero”. Today I’ll be touching on what’s needed to be a great “Service Designer”, and soon I’ll be reflecting on how to become an excellent “Product Manager”.
2. I would then try to close the loop by describing how a team of Marketers, Service Designers and Product Managers would address the global talent issue if they were responsible for it.
So, let’s talk today about “Service Design”:
Service Design sits within the fundamental architecture of a company
Service Design is not a function, a role or a department. It is ultimately a collective team sport where small decisions taken by many stakeholders within a company result in an experience for customers interacting with that corporation.
Eventually, in any organization, you will see there is a “Customer Experience” unit, or a “Service Design” team. Although they will play a fundamental role in shaping how a product or service is delivered to customers, the real experience that they will enjoy or suffer will very much depend on a wider stakeholders footprint. From the training that front line agents interacting with customers had, to how the payment process was wired or how human resources hired employees, all those activities will have a fundamental influence on the service the customer experiences.
So, what is exactly Service Design?
A service is something that your company provides to a customer to deliver value. It very often includes a core product/service which is the fundamental element of the value proposition, but has many “satellite value drivers” as great usability, streamlined payment options, excellent delivery, outstanding customer care support, fabulous onboarding, …
A first challenge that companies face when crafting a new service proposal is that they need to reflect on a few topics:
· Who are the customers (customer base)?
· What are the core needs from those customers (pains/gains)?
· How those customers would like to engage with my service (channels)?
On top of that, services are made of things that customers experiment themselves, but they are also supported by a huge amount of processes that are just below the tip of the iceberg.
In this circumstances, Service Designers are the professionals at the cornerstone of service definition, from the pure customer experience perspective as well as how the company craft such a value proposition and deliver it to the customer in an efficient and effective way.
Service Design is responsible for the overall end-to-end experience that customers have over time, where bites of value are delivered along their journey.
You never start with an empty white sheet
Unless you are launching a company from scratch, chances are high that Service Design practice must be adaptative, playing with the existing assets and processes that the company already has.
Whenever we start thinking about how to deliver as product or service, several decisions have been made already in the company, from the organizational chart, to budget allocation or strategic initiatives definition or the culture style. All of them have a massive influence in which services can be delivered, how they are offered, and the value customers can get out of them.
Although this is quite frustrating for inexperience service designers, having some kind of restrictions very often is a nudge to creativity and great service designers embrace them as an advantage.
What are the building blocks of a Service?
There are five elements that define a service:
1. The “Core” Service: this is what we as a company offer, the technical characteristics of our service, the price and commercial conditions, the range,… In my view, it has three fundamental elements that a great Service Designer should address:
· Value proposition: how our service relates to addressing the pains that the customer has or the uplift in the gains that the customer can get by using our service. (e.g. in an airline it would be for example the flight schedule or the seat comfort).
· Quality / Reliability: how solid our service performs, how strong our reputation is, why customers should work with us. (e.g. in an airline, the punctuality).
· Customization: how customers can embrace our service, plugging it within an existing routine, customize it to make the most out of it. (e.g. in an airline, the flexibility to change the flight).
2. The “Delivery”: this is about how our service arrives to the customer, and very often has a more relevant impact than the core service itself.
· Speed: how effective we are delivering the service where and when the customer needs it. (e.g. in an airline, how streamlined the checkin at the airport is).
· Usability / Accessibility: how easy it is for customers to interact with our company and get access to our services (e.g. in an airline, how easy it is to book a flight in the website).
· Friendliness: how we let customers feel when exposed to our services (e.g. in an airline, how responsive customer-facing staff is).
3. The “Processes”: services do not happen “out of the blue”. There is a massive work to be done around creating an operative model that supports the value delivery.
· Technology: which technological tools we use to operate the service (e.g. in an airline, the booking management tool).
· Governance: how different departments interact along the customer journey (e.g. in an airline, how Handling suppliers and Ground operations work together).
· Data: how customer information is shared among different business units to support a consistent experience (e.g. in an airline, the Customer Relationship Management CRM tool).
4. The “Support”: no matter how strong the service design is, disruption will happen sooner than later. Internally generated disruptions are normally easier to control and manage (e.g. internal systems degradation), but there are hundreds of potential external phenomena that can impact how our service operates (e.g. weather, regulatory changes…).
· Channels: which channels are we offering to our customers for attending them when in a disruption (e.g. in an airline, call centers, chatbots, online formularies, agents at the airport…).
· Response time: how fast we are reacting to the disruption and offering an alternative to our customers (e.g. in an airline, accommodating customers in an alternative flight).
· Empowerment: how easy can customers adapt the service to the new environmental conditions (e.g. in an airline, self-management tools to choose alternatives).
5. The “Ecosystem”: a company never operates in isolation. Competition and collaboration are the bread and butter of business, and that is great because it requires Service Designers to never stop innovating and envisioning what’s next.
· Competitors: not only the most obvious ones delivering similar services but also alternative ones competing for the same “share of wallet” (e.g. in an airline, other carriers or high-speed train providers).
· Partners: other corporations delivering services in adjacent territories from the customer point of view that could help us to craft superior services by merging complimentary value propositions (e.g. in an airline, hotel accommodation providers).
· Suppliers: other companies providing services that we can integrate within our core service definition (e.g. in an airline, inflight entertainment suppliers).
What tools do Service Designers use?
There are hundreds of tools that Service Designers can use, and I believe the most talented ones are great choosing from the whole toolkit, those tools that are more effective for the purpose. Although the service design process is iterative, there are some fundamental steps that are great to follow. The tools used for each step are slightly different, but ultimately oriented to designing the right things and designing things right:
· Researching: card sorting (organize content in a way that suits users’ mental models), empathy map (share key assumptions around user attitudes and behaviors), journey map (describe how the user interact with the service, throughout its touchpoints), personas (narrate the different types of users, based on clusters of behaviors and needs), stakeholders maps (identify the role of each stakeholder, and relation dynamics).
· Ideation: experience principles (identify a set of guiding principles to inspire the design of a specific service experience), brainstorming (first diverge and generate as many idea as you can, then converge around solid concepts), evaluation matrix (prioritize ideas based on the most relevant success criteria for the project).
· Prototyping: user scenarios (explain the envisioned experience by narrating a relevant story of use), user stories (detail the features that need to be developed in the form of user interactions), rough prototyping (quickly mock-up ideas using simple assets and materials, already available on the spot).
· Implementation: business model canvas (plan and understand in advance the business model and constraints of the service you are designing), value proposition canvas (describe the value offered by the service in simple words), service blueprint (map out the entire process of service delivery, above and below the line of visibility), service roadmap (plan the service execution over time, from a minimum set of functionalities to delivering the full experience), success metrics (define a set of KPI to measure the project outcomes and service success).
So what skillset is needed to become an outstanding Service Designer?
Well, we have covered what Service Design is, the building blocks of Service and the toolkit that designers should master. But what makes a great designer, orchestrating all of it together?
They need the capabilities to navigate the organization, diagnose the parts that are blocking a service meeting user needs, and collaboratively craft a strategy alongside domain experts on how to improve this and execute it fully.
Depending on their role within the organization (individual contributors, team leaders), the balance between different skills may vary. I would say although individuals could be spiky, teams should be well-rounded.
I will divide the skillset in four different clusters:
· Cognitive skills: The ability to leverage user feedback in all its forms (from casual conversations to formal research) to understand how customers engage with the service, make better decisions and drive meaningful outcomes to the business. Define an overall vision of the service that connects to the strategy of the company and deliver a clear roadmap of highly prioritized features that deliver against that vision.
( System thinker / Process orientation / Research pro / Financial literacy / User Centered Design / UX Fundamentals / UI Fundamentals / Problem Solving / Experimentation / Strategic vision / Bias free )
· Social skills: The ability to connect with customer needs, empathizing with their pains and gains and translating them into actionable and high impact service features. Proactively identify stakeholders and work with them building services that deliver meaningful business outcomes. Manage and mentor direct reports with the goal of enabling them to continuously improve against service design competencies.
( Facilitation / Empathy with users / Story telling / Stakeholders management / Mobilization across the organization / Team building )
· Technological skills: The ability to understand how technology can support crafting services with a strong and positive customer footprint while they improve overall operations within the company. Embrace Data as a key element of service continuous improvement.
( Technology acumen / Data literacy / Agile software development knowledge )
· Self-Management skills: The ability to understand and contribute to the overall business strategy, making the most out of the company assets and position Service Design as a fundamental workstream to survive under high volatility and ambiguity.
( Citizen of the world / Massive curiosity / Fast decision making / Growth mindset / Comfort with extreme ambiguity / Resilience / Results driven / Business outcome ownership )
Putting it all together
Well, who said that Service Design was easy? It is rare that you can find everything above in any single individual. I was lucky enough to work with a number of them during the last years, and when it happens, the progress made in an organization towards customer centricity is massive.
If you are lucky and find one of these “unicorns” ever, try as much as possible to keep it, support the development and create a cultural safe environment for them to flourish. Your customers will very much appreciate it 😉
* Effectiveness / Efficiency * Real / Win / Worth * Design the right things / Design things right * Value creation / Value delivery * Experimentation / Exploitation
Thanks a lot, Iztok, for challenging me with such though provoking questions
“Iztok, I love your new podcast series. You had an airline digital talk. Then you did an airline data talk. What’s next?”
This is what somebody asked me recently on LinkedIn. For me, the next step was obvious: next in line was an airline innovation talk.
Why an airline innovation talk? Because recently when I was thinking about innovative solutions, I started to think, where does innovation really happen? Can you point a finger at one department, one area in a company? Are innovation departments the solution?
In my opinion, innovation happens when you combine insights from different areas and different people: data and analytics, digital experience, UX/UI, experimentation, customer research, customer service, product design, etc. To do innovative things, one needs to know all these areas and understand how they fit together. You need to know how to leverage insights from these areas to understand your customer’s pain points and build innovative solutions to address those needs. And this is what marketing should be all about: how to provide value for your customers.
As I was thinking about all these things, I remembered a great post about marketing and innovation I read a while ago. The article was titled “Marketing Hero“, and it was written by Alberto Terol Conthe. So, the guest for our airline innovation talk was a no-brainer.
Airline Innovation Talk with Alberto Terol Conthe, Head of Customer Experience Design and Development at Iberia
Marketing (Value) + Innovation (Creation) = Value Creation
Alberto opened his article with one of my favorite quotes by Peter Drucker: “Business has only two basic functions, marketing and innovation.” So, my first question for him was, how do marketing and innovation fit together?
I always have thought that they are all together. I’m a marketeer. I started as a marketeer at 3M. Previously I was working in Accenture consultancy as well. But I would say my main business school was marketing, and then moving into innovation, I think they are very close fields. I tend to think marketing is about value, is about understanding customer needs. It is part of the discovery, the research, and understanding the pains and gains of the customer, and innovation is more about creation – bringing some new ways of doing things and new processes and new technologies.
If you put them all together – value creation, marketing, and innovation – they go so well together. It’s turning an idea based on some customer pain or gain into a solution and executing it and providing value from the customer perspective. So they go together. And I think the skills of good marketeers and good innovative people are quite similar. They are around curiosity, questioning everything, bringing the what and the how and the when and the why to every conversation.
Alberto mentioned that execution is an important element of marketing. Recognizing your customer pain points and figuring out innovative solutions is not enough.
I think a fundamental element, as well, of marketing and innovation is the execution. I have had a lot of discussions with certain designers and people from innovation like, “We created this beautiful PPT, and now it’s a matter of the execution team to execute.” My point is that unless a product or a service is crafted and then deployed into the market and it’s being consumed by a customer, there is no success at all. It’s just an idea.
In Successful Companies, Innovation Sits Very Close to the Business
The way Alberto talked about marketing and innovation made a lot of sense to me. But what I see in most companies, especially the big ones, is that marketing is still mostly about advertising – or, in the digital marketing case, it’s mostly about taking care of the website, ecommerce, and digital advertising. Why do we often see a separate innovation department?
I think marketing is very wide. My background is product marketing. You mentioned all the branding and channel management and stuff, and that’s part of marketing. But maybe what I would compare more between marketing and innovation is product management. There, I think it’s very close to each other.
Another example I would bring to you is that I think innovation teams in large companies sometimes are located in the HR people area because of all the change management needed and all the transformation efforts and so on. I think sometimes, very frequently – and I think nowadays even more frequently – they belong to the IT and technical organization, because it’s very much leveraging technology.
Alberto has recognized a pattern when it comes to innovative companies:
The examples I have seen as more successful normally are those in which these companies put the innovation function – the initial innovation function, because I think it has to embrace the whole organization – but let’s say the team mobilizing innovation from the very beginning sits very close to the business. Therefore, again, I see the link between marketing – which for me is value creation and value delivery, which is basically business – very much related to innovation.
Doing The Right Things Vs. Doing Things Right
One other part of Alberto’s article that I really liked was the distinction between two key areas of marketing. One is execution; Alberto calls it “doing things right.” The other part is more about forward-thinking, strategic foresight, and business modeling, and that’s what he calls “doing the right things.”
That’s a sentence [distinction] that we use very much in our service design team. I think both steps are needed. It reminds me a little bit of the Double Diamond in service design, the divergence and then the convergence. I think these two elements – designing the right thing, for me it belongs more to marketing. It’s discovering the underlying customer need, the pain, the job to be done, and so on. It’s designing the right thing.
Source: Alberto Terol Conthe (LinkedIn)
When it comes to figuring out what the right thing is, Alberto mentioned an interesting “Real, Win, Worth” framework.
In 3M we had a heuristic that we used very frequently in designing the right thing, which is Real, Win, Worth. Every time we wanted to address if an opportunity was worth it for 3M, we would first envision if it was real, if there was a market, if there was a customer pain or need to be addressed. Is this opportunity real? The second one was, can we win? Do we have the capabilities in our company to achieve a successful business out of this opportunity? And the third one would be worth. Is it worth it, or would it be so costly or I would have to hire talent that I don’t have? Okay, so there’s opportunity, we could potentially win it, but it’s not worth it. Or it would not support our strategy or whatever. So for me, that’s the designing the right thing – deciding what you’re going to design and what’s out of scope as well, which is also very important.
And then we moved into designing things right. There is more the world of service design, designing a product and service that matches those needs that you have discovered in the designing the right thing. It has much more to do with UX, UI, choosing the right platform for delivering that product or service, choosing the right partners. It’s more the delivery part of the value. You can be very strong in value creation, but you can be very poor in value delivery. Again, execution becomes fundamental in the second part. We always, as service designers, try to keep both areas balanced – designing the right things, choosing the right fights to fight, but then deciding something that was worth it for the customer and appealing.
Top-Down or Bottom-Up?
To me, this concept of doing the right things and doing things right was really interesting. My background, my experience, and also our Diggintravel Airline Digital Optimization research is more about doing things right – how to be agile, how to do growth marketing, how to do digital optimization and conversion optimization. But if you do systematic digital optimization right, with agile loops of analyzing customer needs, managing data, doing structured analytics, trying to find solutions and designing digital products to address those needs, you’re basically moving up to doing the right thing. So, I asked Alberto: how are these things connected?
It’s iterative. You could eventually start defining an arena that you want to fight for. That’s the design the right thing. Then you move into design things right, and then you discover that it’s impossible to deliver value in that field. Then you may decide to reassess if you are fighting for the right opportunity, or you could move into an adjacent opportunity or so on.
I think it’s an iterative process, and moreover, I think when you launch a product – and this is something we very often forget as service designers; we forget about the product when it’s being delivered. I think especially in those first weeks and months and even years after the launch, they should be in hyper-care, and we should be reconsidering every time, every week, following the KPIs, the metrics, and improving the product.
Alberto recognizes the value of applying the principles of experimentation and being agile to the overall business model and overall products, not just the digital side.
I had once a boss that always came with the question, “Are you 100% sure that this product will be successful?” I said, “Come on, I’m not, but this is the Pareto principle. I’m pretty sure that’s the case. I would say I’m 80% confident that it’s the right product for the right market segment. But let’s launch and let’s learn on the go and adjust and adapt.” So I’m very fond of experimentation and agile launching of new products. Otherwise, it’s paralysis by analysis.
Finding new solutions versus optimizing existing ones
A systematic loop of digital optimization is great for incremental improvement, but you have to know whether you’re optimizing the right things.
I think the other element – because you start with A/B testing and improving and these incremental improvements – the reason I was mentioning that designing the right thing is so important is because very often, especially these days, there’s obsession with efficiency. “We have to deliver efficiency gains.” My point is that there’s nothing so useless as doing something very efficiently which is not usable at all, or that we shouldn’t have done at all. We can be executing something beautifully, it’s very efficient, but there is no customer need or there is no market to be addressed. I think therefore we need to keep balance on both aspects.
But experimentation, rapid prototyping and so on – in fact, we had a discussion earlier this week about prototyping. We were discussing research and we want customer research in which we would envision what customers want for a specific product segment. My point was that customers would never come with a solution. That’s the job of the product owner, of the marketeer. Eventually, by prototyping and showing them some mockups, we can show them, “This is the size and the color and the shape that this would have. Are we working in the right direction, or is this something that doesn’t resonate with you at all?” I think all this rapid experimentation makes perfect sense with any product launch.
Source: Visual Summary of “Testing Business Ideas” by David J Bland and Alex Osterwalder
Innovation Is More About Attitude and Culture Than It Is About Skills
One of the key insights Alberto shared in our airline innovation talk was in regard to his key learnings. The first thing he mentioned was attitude:
I thought that innovation was more about skills. I think over the years, I’m discovering that it’s far more about attitude. That’s the approach when I’ve been hiring marketeers in 3M, or now service designers at Iberia: bringing people with curiosity, with this sense of observation, with customer obsession – and when I say customer obsession, it’s spending a lot of hours with customers, interacting with them. Not focus groups, which is a controlled environment, but observing customers dealing with our products and services.
Then Alberto mentioned another interesting aspect of innovation and culture.
I would say another totally different topic which is relevant for progressing with innovation in companies is how managers get measured. Maybe in the vision statement in a company, it says that “we would like to be the most innovative.” Okay, let’s go into the KPIs that managers are using. Are they being measured by the business as usual or by exploring the next big thing? Very often, that tells you the culture of innovation which is happening in the company.
I mentioned culture. For example, something I loved about the American approach to innovation – and I experienced that in 3M, but I’ve been talking with friends from HP, Salesforce – I think in American corporations, there’s emotional safety within the teams for putting some time for exploring and trying to discover things out of business as usual. The famous rule of the 15%. There are many different mechanisms for making the teams work on something which is enriching the total knowledge within the company, and they can openly share their findings, and mistakes are allowed and so on. That cultural aspect is fundamental as well.
“A desk is a dangerous place from which to view the world”
John Le Carre
I was waking up every day at 6:00 am during my holidays. It was just the right time to ride my bike to some beautiful small beaches in the cozy coast of Alicante and experience a stunning sunrise. I was completely alone, and I could fly my drone to capture some beautiful vertical shots of the coast line, where blue and orange merge with each other.
I could not explain the reason behind my proactive daily exercise of “sleep deprivation”. Why I would sacrifice resting in the bed for such a physically exhausting experience?
While talking about it with a great mentor and friend, he answered to me straight forward: “you do it because that is your nature, you always love to see the world from a different angle and then spread the word about what you have observed”.
Ups, I never thought about my passion for aerial photography in such way, but moreover, I had never reflected before on that to be the reason and the fundamental link between the main areas of expertise during my professional career: Marketing, Strategic Planning, Innovation, and Customer Experience.
But my mentor had no doubt: that was the backbone of what I have been doing along the years: observing, empathizing, modelling and taking action. And everything started with a sense for deep observation, whether it was analyzing a market, a technology, a customer or a competitor.
Isn’t it that what Marketing, Innovation and Customer Experience is all about?
September – Personal goal setting time
Summer is normally the best moment for personal deep-thinking. I don’t believe leveraging on January as a kick-off opportunity for making commitments make sense for me, as September seems to be a more natural period for it.
While internal personal goals definition is great, I was thinking about making a public commitment this time. Just as Hernán Cortés did by destroying the ships when arriving in America so chances of coming back were reduced, making public commitments acts as a powerful nudge to act on them.
I found the metaphor of “drone flying” for sound observation of the world around so powerful, that I’m making it my personal motto for the 2021/2022 season:
During 2021/2022 season, I will be “flying drones” to observe the world from a radical different angle
And that “flying drones” approach will mean everything that:
Helps acquiring new knowledge and represents a significant upskilling opportunity.
Supports meeting new people and discuss about Innovation and Product Management from a totally different perspective.
Broadens the view of the world and the relevant social and economical changes that are happening these days and those to come.
So there we go, these are some of my 2021/2022 goals… 😉
Skilling – Become a certified drone pilot
First things first. Beyond the metaphor, real drone flying is amazing. While I have made a good progress this year and I got my official AESA pilot ID, I want to progress by getting the license to fly bigger beasts above 250gr. That would permit accessing new territories and keep on observing the world up to 120 meters.
Boosting creativity – Learn a new instrument
Being a father, I’m amazed with the curiosity that kids have with everything. The beauty of learning something new from zero is just phenomenal. Last year I tried to play piano for the very first time during the lockdown. While becoming a new Mozart is far away from my aspirations, just being able to play some easy pop songs would be great. Observing the notes, understanding how they interact among each other as chords, and creating some music out of it produces so much pleasure.
Upgrading my professional toolkit – Embrace “no code”
Although I personally do not physically create digital products, I’m responsible for the conceptualization, launch and operation of many of them. Proven that I don’t have a coding background and I’m not a developer, embracing the possibilities that “no code” brings will very much help conceptualizing and prototyping new digital services without costly and time-consuming processes. There are a couple of interesting programs to get to know “non-code” that I’m exploring right now.
Establishing new connections – Meet relevant people from other industries
What you eat has a fundamental effect on how you feel. The same applies to feeding you brain by meeting relevant people and have sound conversations. The quality of your perception of the world is highly correlated with the quality of the conversations you have with bright and optimistic people around. It is my intention to have at least 1-2 powerful conversations a week and so far, I’m being quite successful.
So here is the plan. After making this public commitment, I will be summarizing the progress done by September 2022. For sure these plans will get somehow derailed, but that will be OK as the other projects colliding with this initial plan help me progressing with the ultimate goal: getting better at observing, empathizing, modelling and taking action.
“The increase of disorder or entropy is what distinguishes the past from the future, giving a direction to time.”
— Stephen Hawking, A Brief History of Time
I can see it happening every day. People waiting and expecting that sooner than later the pre-Covid situation will come back. They talk about “the new normality”, “coming back to the office”, “coming back to the old good days”,…
I have important news from them: that won’t be the case. Period.
And it won’t be the case for a very powerful reason. It is not my very personal view or a subjective criterion.
The reason why the past situation won’t be back is just that it would be against the laws of Nature, against the fundamental principles of Physics, against what has happened every time a deep disruptive event has introduced chaos in a complex system.
If a mirror is broken, it is absolutely impossible to recover it to the previous status. You can glue it or use it for making a beautiful ornamental device, but it won’t be the same mirror anymore.
It is the Entropy, my friend
The law of entropy increase was first born out of thermodynamics and was discovered when studying the efficiency of perpetual motion machines and heat engines.
The second law of thermodynamics states that “as one goes forward in time, the net entropy (degree of disorder) of any isolated or closed system will always increase (or at least stay the same).
Well, but in the business world, Physics don’t apply…
You think so? OK, just please tell me any mayor industry disruption that ended into a situation close to the original one (same market dynamics, same competitors, same customer behavior,…). I bet you won’t come with any example, because that simply does not happen.
Physics do apply to every process in the world, and business is not any different. In fact, I believe a key element of business success has very much to do with how team leaders manage energy
OK, so as the future will be a disaster, I just give up
No way!!!. I haven’t said the future will be terrible, I just said that it will be different, by definition. So, the sooner we all stop moaning and focus on observing how this complex system is evolving and how to capture the bright opportunities to come, the better.
Time to mentally reset
It is over. Your bright past business is gone. Those customers won’t be back, those prices won’t be the same. The full ecosystem has changed massively and there is much more disorder. But grief and mourning won’t help us building the brilliant future ahead.
It is time for us to rethink the industries in which we are competing and the value proposition that we deliver. For example, in the airlines world where I work:
Classic approach (the aircraft being in the center of the strategy):
Competing in the “60 tons aluminum tubes transportation from A to B” business
Potential new approaches (the customer being in the center of the strategy)
Competing in the “time saving” industry
Competing in the “experiential” industry
You competitors will change according to the industry in which you define you will be competing. In the first case, you would compete against other aircraft operators, while in the second you would compete against players in the videoconferencing world, or in the media industry. We need to understand in which industries does our brand have legitimacy to pretend to occupy a space in the customer top of mind, and be brave and go for it.
But it is not fair
I don’t know if it is fair or not, or how much effort you made building what you had before. We should defer judgement. It is not about what we think it should happen if the world was “fair” but embracing what will happen. Nature does not care about what you did in the past but acts on the situation as from now and builds from here to the future according to its fundamental laws.
Why I’m so optimistic
There is a human tendency towards believing that what happens to us now is the most relevant phenomena that has ever happened to the human kind. But that’s always far from being true. The world used to be a much more terrible place. We have now strong assets that we can fully utilize to build from where we are. Never the human kind has had better access to education, to medical care, to technology.
Businesses have also access to an enormous and worldwide pool of talent and customers, and any new challenge opens the opportunity to new products and services to be delivered.
Next time I want to be prepared
Let’s learn something from what we have just went through. For example, I have personally decided to heavily invest in:
Building an “anti-fragile” life. Instead of a rigid architecture that may suffer when the next storm will hit (and it will), a flexible backbone for your personal life will help pivoting if necessary. For example, avoiding leverage heavily on non-liquid assets or teaching your kids languages so they could eventually start a new life anywhere.
Personal development. Relevant knowledge fields are endless, and very accessible. For example, I want to be self-sufficient when conceptualizing new digital products and services so I’m considering training myself on “no code” software development.
Ecosystems. I’m convinced about the fundamental power of networks and ecosystems in every aspect of life in the years to come. Competitors will suddenly become co-opetitors, industries will merge to deliver new unique value propositions. The definition of what a country or a company or any other institution as aggregators of human volition will be blurred. Associations between individuals will be much more related to achieving a certain goal.
Working on the variables under control and explore scenarios. As an engineer, I never forget that for controlling a complex system, your focus must be on input variables under your control. All the others should be understood and observed, but if there is not much you can do about them, they shouldn’t occupy much mental bandwidth. At the same time, spending some time on “futures thinking” can help you understand potential outcomes of current course of action. The future will never be as you imagined, but preparing for several future situations will very much help you to act rapidly as circumstances will change.
Life is too important to adopt an attitude of “wait and see”. We normally have more levers to press than we think, and it is by far so much interesting. Let’s recover the control of our “aircraft”. Let’s do it, and let’s do it now.
“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”
INTENSIDAD, DIRECCIÓN Y SENTIDO
Recuerdo como si fuera ayer, las clases de Mecánica en la Escuela de Industriales de Madrid. Aquel año, lo pasamos prácticamente entero analizando vectores. Un vector es un ente matemático que se representa mediante un segmento de recta, orientado dentro del espacio euclidiano tridimensional. El vector tiene 3 elementos: módulo (intensidad de la magnitud que representa), dirección y sentido. Se utiliza para representar por ejemplo fuerzas o velocidades.
Hoy me venían a la cabeza estos recuerdos, observando una embarcación de remo en el Lago de la Casa de Campo de Madrid. En ella, 8 remeros impulsaban hacia delante el bote, mientras que un timonel observaba en la popa y emitía sonoras indicaciones.
Mi amigo Martín, nacido en San Sebastián y gran aficionado al remo, me dice que no me confunda, que “el timonel también rema, pero a su manera”. Yo diría que el esfuerzo de los 8 a proa, no era el mismo en aquel con expresión relajada a popa (pero te animo, querido lector, a que lo judgues por ti mismo en la foto) 😉
Las embarcaciones de remo tienen una eslora (longitud) descomunal con respecto a su manga (anchura). Eso les permite alcanzar grandes velocidades, pero dificulta mucho su maniobrabilidad. Es un tipo de bote muy eficiente en navegación en línea recta, pero muy complicado a la hora de modificar el rumbo (no ya solo por su dimensión longitudinal, sino por el hecho de tener que coordinar el esfuerzo de remo).
El origen de la navegación a remo es incierto, pero ya en el antiguo Egipto y en el imperio Griego se utilizaban estas embarcaciones. Prácticamente en paralelo, se desarrolló la navegación a vela. Inicialmente muy precaria (sus velas cuadradas dificultaban la ceñida contra el viento), pronto avanzó gracias al desarrollo de la vela triangular o “vela latina”, que permitía aproximarse en un ángulo cercano a los 45º con respecto al viento.
¿HEMOS PERDIDO UNA OPORTUNIDAD ÚNICA?
Creo que uno de los aspectos más dañinos de la pandemia de Covid en las organizaciones, es que nos ha convertido en embarcaciones de remo. Llevamos más de año y medio remando con una intensidad nunca vista. Las circunstancias de la pandemia, las restricciones, o las instrucciones de las cúpulas directivas, han fijado la dirección y el sentido del vector, y el único parámetro sobre el que los empleados actúan es el “módulo” (intensidad del trabajo). Los equipos caen en el peligro de llegar de forma muy eficiente y lineal a un destino perfectamente inútil, habiendo perdido la ocasión de explorar muchas otras oportunidades por el camino.
Probablemente en el momento histórico en el que las organizaciones necesitábamos mayor capacidad para maniobrar (“pivotar” en términos de negocio), las restricciones externas e internas han sido mayores que nunca. Entre las externas destacaría las prohibiciones, la regulación y la falta de acuerdos en las industrias. Entre las internas, la congelación de las iniciativas, la contención del gasto y el miedo.
Teníamos que habernos puesto a navegar a vela, y sin embargo el mundo de la política y la empresa se abrazó al remo.
TODO GRAN SUPER-PODER, CONLLEVA UNA GRAN RESPONSABILIDAD
La aparente libertad de navegar a vela es sin embargo muy exigente. La facilidad de poder modificar el rumbo conlleva la responsabilidad de tomar la decisión acertada. Al haber descargado la potencia motora en la intensidad del viento, todo el esfuerzo cognitivo se centra en interpretar el estado del mar, elaborar una serie de hipótesis y trazar e ir corrigiendo rumbos para poder maximizar la propulsión a partir de las condiciones del viento.
Una vez eliminada la “linealidad” del remo, la navegación a vela permite jugar en todas las dimensiones del plano.
Ya no es cuestión de ejecutar “hojas de ruta” ajenas, ya que no hay timonel que marque la dirección del bote, sino que existe la responsabilidad individual de dirigir la embarcación. El impulso de la embarcación ya no es directamente proporcional a la fuerza con la que rememos, sino que dependerá de lo buenas o malas que sean nuestras decisiones en el campo de regatas a la hora de aprovechar el viento.
¿Y AHORA QUÉ?
A medida que avanza la vacunación y ahora que el Banco Mundial anuncia un crecimiento global de la economía del 4% en 2021 y que poco todas las industrias muestras indicadores positivos, creo que hay asuntos que estamos cerrando en falso, y que antes o después nos volverán como un boomerang de nuevo:
· El viejo estilo de gestión de “ordeno y mando” podía haber dado paso a otra forma de relacionarnos en las organizaciones, y sin embargo sospecho que hemos perdido una oportunidad histórica. Nos atascamos en pequeños debates estériles sobre si hay que volver o no a la oficina, y no nos hacemos planteamientos más profundos sobre el modelo de trabajo, la responsabilidad y la confianza.
· El tradicional enfoque del alineamiento alrededor de una única visión corporativa, probablemente ya no sea válido en un mundo en el que no podemos elegir como empresa el apostar por una sola palanca de cambio, sino que debemos de ser capaces de tener un discurso en un amplio abanico de dimensiones del plano (producto/servicio, modelos de negocio, modelo de relación con clientes, estrategia de sostenibilidad, hoja de ruta en tecnología, ecosistema e innovación abierta,…).
¿POR QUÉ ENSEÑO NAVEGACIÓN A MIS HIJOS?
Ningún hito relevante en la vida es lineal, ningún modelo de gestión moderno se debería asemejar a una trainera y ningún favor hacemos a nuestros hijos si no les entrenamos en el manejo de situaciones complejas en las que ellos son los que deben de orientar las velas.
A los niños les apasionan las historias, y estos días les recordaba que hace ahora 500 años 239 hombres circunnavegaban a vela por primera vez el mundo conocido, capitaneados primero por Fernando de Magallanes, y posteriormente por Juan Sebastián Elcano. Dicha expedición confirmaba la esfericidad de nuestro planeta, y sentaba las bases para un mundo absolutamente globalizado. Lejos de ser un viaje lineal, aquella navegación a vela constituyó probablemente una de las gestas más complejas de la historia de la humanidad.
Transmitirles ese interés por la navegación, por abrazar la brújula y abandonar el mapa, es uno de los objetivos de cada verano en nuestra particular incursión en la Bahía de Jávea. Una vez acabado el colegio, el aula deja paso al mar.
“Life is like a ten speed bicycle. Most of us have gears we never use”
I remember back in my MBA days when our IE Business School professor Rafael Pampillón insisted in the enormous difference between “flow variables” and “stock variables” in Macroeconomy.
While “flow variable” is a variable whose value depends on a period of time rather than an instant (example being the gross domestic product), a “stock variable” is a variable whose value depends on an instant rather than on a period of time (example being foreign debts).
Managers and Executives frequently confuse the two different variables. A quite relevant difference is that while you can “pile” stock variables, flow variables are gone as you enter into a new accounting period of time.
In the sales world, every January you start from scratch. Well, you can argue that you have invested in creating relationships and some assets that eventually will let you grow the next year faster, but the truth is that you need to “pile” again your new sales quota in order to hit your numbers.
Old school sales managers kept some deals “disguised” in December in order to bring them up new and shiny when the new sales year started in January, which was something quite disturbing for me in my early days as a Marketing Manager at 3M, as I was used to go full speed and I couldn’t understand why they didn’t want to play big in December.
So the question is: “how can you try to avoid the artificial interruption of sales cycles and measure results not based on quota attainment during a specific period but based on the health of the opportunities pipeline?» or in other words, how can you use smart flow variables to “stock” sales capabilities?
Back in the Sales world when I was managing a B2B business at 3M, we introduced the concept “Sales Velocity” in our sales enablement tools for sales reps. It was very relevant, as it allowed sales managers to understand the speed at which they were creating new business for 3M.
Sales Velocity is defined as:
And it measures the speed at which you are creating new business and therefore the health of your pipeline. More important, it shows how to drive that pipeline by:
Increasing the number of active leads
Increasing the average deal size
Improving the conversion rate
Reducing the conversion time
Now in my current role as Incremental Innovation Lead for Iberia Airlines, I tend to see Sales and Innovation pipelines in quite a similar way. Innovation requires betting on a number of initiatives with the hope they will be successful and fundamentally change the business, which is not far from the Sales Rep. taking care and nurturing his key accounts.
So why are Innovation areas frequently not able to traction real impact initiatives?. Well, let’s go back to the “Sales Velocity” concept and let’s make an analogy with the Innovation world:
ACTIVE LEADS = INNOVATION INNITIATIVES
Are you capable of covering the number of Innovation initiatives that are needed based on your teams bandwidth? Are you able to traction Innovation initiatives across every area within the company or you just left some of them unexplored because they are just impossible to cover with the team you have?
DEAL SIZE = BUSINESS CASE
Are you betting on the right projects or are you focusing on those that you fall in love with although they can’t deliver a significant economic impact? Are you supporting those areas in the company that “shout louder” to capture your attention or do you have a strategic process to cherry pick those which make real sense for the corporation?
CONVERSION RATE = IMPLEMENTATION CAPABILITIES
Do you have the right IT capabilities to deliver on the business commitment that you make? Are the systems prepared for the integrations which are needed? Do you have the budget, the Capex, the Opex to support those implementations?
CONVERSION TIME = TIME TO MARKET
Are your internal processes fast enough to deliver according to market needs or are you always one step behind? Are you lost in bureaucracy or are your Innovation squads empowered for fast decision making?
Speed is very often confronted with Control, supported by the famous quote from Mario Andretti “if everything seems under control, you are not going fast enough”, and adopted by Silicon Valley executives for a number of years (“move fast and break things” by Zuckerberg). But that is a very limited vision of speed.
When the right processes to orchestrate Sales Funnels or Innovation Pipelines are implemented, Speed and Control can go together, and that is in my view, the only sustainable way to be in business. Be in charge of your Innovation Funnel and the rest will follow…
“Business has only two basic functions: Marketing and Innovation”
Having devoted my working life as a Strategist and Marketer to Innovation in a number of companies and sectors, I can’t be more aligned with the father of modern Management, Peter Drucker, when he said that without a customer, no business would ever exist. Therefore the fundamental presence of Marketing and Innovation in my professional career resonates so much with what I believe makes businesses possible.
A couple of weeks ago I got a phone call from one of the most relevant Spanish business schools. They wanted me to provide them with insights about the content that a new B2B Marketing executive program should include. So I started reflecting on my early years at 3M as a Marketer and later as a Strategist.
I would like to capture in this post a framework and a vision on how I would create an innovative Marketing unit from scratch if I was given that mission today, and the capabilities a modern marketer should have in my view these days.
Let’s start with the basics. I do believe there are two fundamental dimensions in Marketing:
Doing the right things – Doing things right
A Marketer has to focus on what matters first, doing the right things. But when those things are clear, he has to make sure that execution is flawless. Both capabilities are fundamental and finding someone who masters the two of them is quite unique. I have seen brilliant “thinkers” – “strategists” and outstanding “doers”, but normally they are not the same animal.
Exploitation – Exploration
A Marketer has to master short term execution (“exploitation”) while at the same time he must find bandwidth for envisioning what it is to come (“exploration”). Again, it is difficult to find individuals who can perform both roles, and from the cognitive standpoint I strongly believe the brain cannot handle playing both roles together at the same time. Allocating time and energy for each of the two disciplines is key.
If we would merge the two dimensions together, we would end up with a matrix like this one, with what I call the 4 fundamental capabilities an innovative Marketing team should have:
So now we have a framework so we can move on and dig deeper. The question then would be: what Marketing disciplines are expected under each of those 4 fundamental key capabilities of a modern and innovative marketing team? Let’s review them together:
STRATEGIC FORESIGHT (Doing the right things + Exploration)
Someone once said that “the best way to predict the future is to create it”. Understanding what the future will bring, the new market trends and how value platforms and ecosystems will be reshaping, gives an advantage to every marketer with the ability to explore the future.
Predictive Analytics will leverage the power of Data and will anticipate the probability of future competitive scenarios. Propensity models, customer retention alarms, up-selling and cross-selling opportunities discovery, content personalization,… are just a few of the possibilities Data bring to marketing organizations.
Understanding Value Ecosystems Maps (complementing Michel Porter’s Value Chains), assessing potential coopetition opportunities, exploring alliances and partnerships to deliver added value to the customer,… moves the competitive paradigm from a “zero-sum game” to an endless world of possibilities.
Futures Thinking or the systematic study of the “possible, probable and preferable”, provides marketers with a semi-structured approach to better understand what the future may bring.
BUSINESS MODELLING (Doing the right things + Exploitation)
While the term “business modelling” can also be used for exploring new disruptive business opportunities, I am referring to it in this cluster associated to everything related with the classic and fundamental marketing skills: creating and delivering value for the customer.
The Marketing 4 Ps described by Kotler are now frequently replaced for new paradigms in Marketing, but I do believe they are still 100% valid. Product is the cornerstone of the 4 Ps, as delivering a strong product and a powerful value proposition related to it (addressing customer pains and opportunities), is a foundational element of business success. Optimal Pricing plays a pivotal role in achieving profitable growth. Dynamic pricing, value pricing, price elasticity,… are just basic concepts a modern marketer must deeply understand. Promotion and brand management are necessary elements of the communication with the customer. Understanding market dynamics, channel management and Placement, very often differentiates the marketing rock starts from the others.
Portfolio management (new product introduction, product discontinuation,…) is the bread and butter of a marketing strategy. Most successful companies are very often those who shine in this discipline (e.g. Apple, Zara, 3M,…)
Strong market segmentation capabilities and Customer Lifetime Value management will tell you if everything done in Performance Marketing was worth the effort and a recurring business has been achieved, or acquisition costs have been wasted.
[ Keywords: Business Model / Product / Price / Placement / Promotion / Portfolio / Channel / Distribution / Research / Design Thinking / UX / Human Centered Design / Market Segmentation / Brand / Product Life Cycle / Customer Lifetime Value / Partners / Cost Structure / Revenue Streams / Value Proposition / ABM Account Based Marketing / Inbound Marketing / Content Marketing / Affiliate Marketing ]
OPERATIONAL EXCELENCE (Doing the things right + Exploitation)
This capability is about flawless execution at scale. Priorities have already been defined and now it is time for performing like hell. This is one of the most relevant levers in native digital businesses, while it is being widely adopted by legacy companies as well.
It is also the discipline of Marketing Automation, to ensure the right proposition arrives to the right customer at the right time, supported by strong automation platforms and solid customers and leads databases with a sharp segmentation (CRM).
Strong Loyalty schemes frequently improve customer retention and increase the yield of the existing customer base.
In companies like start-ups where there is not a solid track-record or a historical business to manage, Growth Hacking is frequently a discipline and an attitude where “growth” is the mantra and funnel conversion KPIs are like the North Star.
[Keywords: CRM / SEM / SEO / Display / CRO / Loyalty / Growth Hacking / Analytics / Marketing Automation / CPC / PPC / CPA / CPM / Trade Marketing / Inbound Marketing / Social Selling / Employee Advocacy / NPS / Customer Satisfaction / Service and Aftersales]
TECHNOLOGY ACUMEN (Doing the things right + Exploration)
Technology has always been an accelerator for change. There are two approaches to technology from a Marketing perspective: utilize it for the benefit of operational excellence (e.g.: RPA Robot Process Automation, Marketing Automation,…) or fully embracing it to incorporate it as a fundamental element of your product / service offering (e.g.: cognitive assistants, AR / VR experiences,…). I am covering here the second, when technology is not an enabler for your product offering but an element of it. In that situation, marketers need to understand and explore the possibilities of technology to incorporate it as an essential element of the value proposition.
While pure tech players will drive technology as a core competence and will develop it internally, if you are a marketer in a non tech industry chances are high that you will need to search for it outside. If that is the case, there are a number of possibilities (externalize R&D, embrace Open Innovation initiatives, acquire technology to incorporate to your product,…)
[Keywords: RPA / AR / VR / AI / Cognitive / Voice / R&D / Open Innovation / Corporate Venture Capital / Startup / Intrapreneurship]
So… are these capabilities above everything that a Marketing team should have? No, I have been just focusing on the pure marketing practice, but I would strongly recommend to complement the Marketing team with these other disciplines as well:
P&L literacy: knowing how to build and action a profit and loss statement and how different revenue streams and cost drivers affect to the overall profitability of the business.
Project Management skills: from classic project management to agile and scrum basics, in order to be effective and efficient when managing the business.
Soft skills: Negotiation expertise, team management mastery and strong empathy with customers and stakeholders.
Sensitivity towards environmental sustainability: understanding how sustainability is reshaping the whole business landscape and drives customer willingness to interact and buy from corporations.
Having reflected about all these capabilities required to run a solid Marketing team these days, I’m curious about the feedback that my colleagues and friends will provide. Are you missing something? Do you have another view on everything above?