Patterns: Effects on Your Customer Relationships
dominant paradigm in business today is targeted value creation for
the customer. The organizational system links external customers
(the buyers) with internal customers (the talent) in a flow of interactions
that create or destroy value for buyers, employees and owners. In
the past decade, the customer has become more important than the
product. A similar shift has made talent more important than assets.
shift from product to customer explains why value migrates away
from the product to something else, and why changes related to customers
are key triggers to those patterns. Because of the shift from assets
to talent, organizational patterns will be among the most important
patterns in the next half-decade.
will be a profusion of new organizational patterns in the next several
years, as creative companies invent new ways to solve the organizational
part of the value creation equation. However, many of these solutions
will have one factor in common: the redefinition of the relationship
between the talent and the customer. Just as today's economy requires
that we "reverse" the value chain and begin our strategic
thought process with the buyer, so tommorrow's economy will require
that we fold over the value chain and create the maximum possible
direct linkage between the customer and the talent in our organizations.
This direct contact will expose skill gaps early and will define
the most efficient pathways for new growth opportunities.
Pyramid to Network Cornerstoning
Conventional to Digital Business
companies lose touch with changing customer priorities and market
conditions, they get out of sync with the kinds of skills that are
most important to customers and that produce the greatest profitability.
Oganizational effectiveness and profit opportunities decline. Those
few players who exploit the skill shift pattern well before their
competitors do by engineering radical changes in their skill mix
to match the market, increase their market options. The skill shift
can work along several dimensions:
shift The key to unlocking new profits is a shift of emphasis
and resources from one major function within a company to another.
skill New profits can result from changing the composition
of sill sets within functions.
skills and values Winning capabilities have become a mix
of great performance (ability to lead teams to high achievement)
and great values (skills in communication, coaching and people
do you do when you face a Skill Shift?
at how the customer is changing.
Identify tomorrow's skills and redeploy resources to build
focus kills companies. Moving from a pyramid to networked structure
maximizes the organization's external focus. In business, exposure
to external factors is critical to survival and success. Customer
priorities, channel shifts, infrastructure changes, competitive
pressures, and valuable strategic signals transmitted by customers
and investors are the keys to identifying emerging patterns in your
shift from a pyramid to a network structure exposes more employees
to developments in the market and gives them a clearer sense of
their direct role in the company's fortunes. This can result in
dramatically more efficient and effective internal processes.
do you do if you operate under a Pyramid structure?
your external exposure. Use whatever organizational change
from strength, to strength, to strength. A cornerstoning pattern
has three elements:
terrific A+ initial strategic position in one area, typically
with significant strategic control, since you can't cornerstone
from a weak base.
economically logical next opportunity for the organization that
provides the greatest profit growth for the least incremental
adjacent opportunity space that is significaltly larger than the
is becoming a more broadly available opportunity because of convergence.
As competitive boundaries disintegrate, more adjacent opportunity
spaces are available for consideration.
looking for the next space, experimentation is driven by one difficult
question: What's the single best next opportunity? Getting that
answer right is so valuable that it's worth the two to three years
of experimentation, missteps and wrong turns required to get there.
first step, however, is the most critical one in the sequence: creating
an untouchably powerful strategic position in the initial domain.
Without that base, it is impossible to exploit the rest of the pattern.
do you do to initiate Cornerstoning?
A+ at something. Search for the best next space. Experiment
to find it. Go there first don't skip over it.
Then find the best next space.
to Digital Business Design
technological advance has triggered a pattern of separation of atoms
(physical product requirements) from bits (the information aspects
of products) which, by moving all non-atom aspects of a business
to electronic management, enable companies to achieve orders of
magnitude performance improvements; multiplying productivity levels,
reducing response times and decreasing asset levels.
the true power of digital business design extends into further realms
and can be magnified dramatically when it works in combination with
a network organizational structure. Digital business design enables
a complete redefinition of the supplier-customer relationship since
it can enable the customer to self-select and self-create offerings
as needed. In defining a digital business design, the key is not
about the technology, but about the business issues.
do you do to move from a Conventional to Digital Business
your organization's "paper" and "personal meeting"
Identify your most important business issues and the "bits"
related to them.
Manage all those bits electronically.
is based upon Profit Patterns, written by Slywotzky, Morrison, Moser, Mundt
and Quella, published by Times Business, Random House, copyright © 1999 Mercer
Management Consulting, Inc.