ROUNDMAP_RoundTable_2000_shutterstock_1120985537

© 2014-2019 Edwin Korver, CEO Tenfore BV – all rights reserved – MOBILE +31-(0)6-52341111
Registered at BOIP.INT i-DEPOT 094029 (3.0), 095482 (3.1), 103610 (3.2), 105496 (3.3), 106619 (3.4), 110465 (3.5), 115384 (3.6)

INTRODUCTION

ROUNDMAP™ Customer 360 is an integrated mapping system of the Customer Dynamics, designed to improve the long-term outcome of the customer acquisition, creation, retention, and extension process.

To be successful, a business has to establish a habitat of mutual trust, individual commitment, and joined accountability, ensure effective communication between separate teams and departments, share one vision and execute on one mission, and build a unified customer profile for each prospect and customer, to enable the interconnected departments to create and deliver relevant, personalized, meaningful, and purposeful experiences, forging strong customer bonds.

ROUNDMAP™ is a creation of Edwin Korver, CEO of CROSS-SILO CUSTOMER INTELLIGENCE

Let’s start by looking at the traditional customer creation process. While the division of labor has improved productivity for individual factory workers as well as front-office employees, it also created organizational, mental and data silos.

Silos obstruct effective communication between teams and departments, stall innovation, lower employee engagement, increase resistance to change, and ultimately decrease operational success.

Customer Dynamics is a theory on customer-business relationships that describes the ongoing interchange of information and transactions between customers and organizations. It goes beyond the transactional nature of the interaction to look at emotions, intent, and desires. It views interactions as a chain of events rather than single point occurrences. Customer dynamics is a subset of organizational dynamics, which describes how people function together to accomplish a task.

THE SILO SYNDROME

Best-selling author and entrepreneur Ricardo Semler identified the negative effects of industrial compartmentalization on the level of engagement of factory workers. However, by adopting siloization – dividing the front office into separate departments – we’ve advanced front office workers in such a way that they have become disengaged as well.

As shown in the figure below, a product assembly line is equivalent to a modern customer creation process.

In both cases, specialized employees are divided in organizational silos, disassociated from the entity on the assembly line, working at repetitive tasks, that are performed routinely. If, additionally, the voice of the employee is being suppressed and the end result obscured, employee engagement will falter and performance will tumble.

If interdepartmental turf wars further obstruct the exchange of information, because of resentment and cynicism between teams, blocking cross-functional solutions and creating inefficiences throughout, the business will fail in its mission.

Employee disengagement will result in a lack of empathy for and commitment to the customer’s cause. Departments and individual workers become self-centered, deepening the silo effect, and inevitably decreasing the customer performance. This goes back to the business strategy: instead of tying to be the best, leading to machismo, tribalism, fragmentation and friction, we should strive for uniqueness, appealing to our creativity and our sense of purpose and meaning.

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The paradox of the modern age, I realized, is that we live in a world that is closely integrated in some ways, but fragmented in others. Shocks are increasingly contagious. But we continue to behave and think in tiny silos.

Gillian Tett, FT journalist, author of The Silo Effect

CROSSING THE SILOS

We are not suggesting to break down the silos: they serve a purpose. However, we do propose to cross the mental, organizational and data silos, and embrace a customer-focused, collaborative and circular mode of operation.

To advance from a siloed customer creation process to an integrated customer development process, we need a bridge, a fourth department: customer success. This department needs to be assigned with the task to pro-actively assist customers in achieving their objectives sooner, rather than later, to raise the significance of the product/brand/relationship.

Mind you, we shouldn’t focus on creating more one-off customers: if we want the business to be(come) more profitable we need more customers to return more often and spend more money over the course of the customer relationship.

To improve value creation and delivery, regardless of the business model, each front-office employee should have access to a unified customer profile to be able to act on relevant emotions, intent and desires. Customer feedback needs to be shared regularly, preferably at a Customer Roundtable, to advance from a departmental to a collaborative sense of achievement.

INTEGRATED CUSTOMER LIFECYCLE

Once you have the right processes and systems in place, developed a collaborative mindset based on a shared vision, and established cross-functional teams that understand the customer dynamics, then you’ll appreciate the high level of detail we’ve put into the customer lifecycle, the ultimate level of truth.

Contrary to common practice, we perceive the Customer Lifecycle not as a timeline or funnel, but as a double helix, consisting of 8 Moments of Engagement, i.e., touchpoints created by the brand, and 8 Moments of Reflection (MoRe), representing the customer’s journey, directed by 8 Prompts, or startingpoints. We call it the Integrated Customer Lifecycle™.

ROUNDMAP Integrated Customer Lifecycle Circular

We do understand a circular setting might be difficult to comprehend at first, so we created a linear version as well, which might be more familiar to you, given the popularity of funnels and timelines:

man-left-to-right-black

We were able to obtain one-third of the steps of the ROUNDMAP’s Integrated Customer Lifecycle™ from known marketing and sales models. Complementary steps were handpicked from reading hundreds of books, expert articles and blogs.

Although Peter Drucker stated “The purpose of business is to create and keep a customer”, few companies actually have a customer retention strategy. In fact, most companies are so much focused on creating customers, incentivizing sales while cutting down on cost for customer service, that they appear not to care at all about their customer’s longterm objectives.

In essence, the Integrated Customer Lifecycle™ (ICL) is a value chain of interconnected front-office specialists, teams and departments, working as one, executing on one shared vision.

Because of this, and as an example, we love the making of Queen’s memorable song ‘One Vision’, as the recording so clearly expresses the devotion to and pleasure derived from working together on one mission.

STEP BY STEP

It would be naive to expect an organization to make an instant leap, from a siloed to a cross-functional mode of operation. It requires a radically different mindset, involving trust, commitment, and accountability, as well as cross-departmental information systems. However, it can be done and it is worth every effort, for it has been proven time-and-time again that silos stifle organizations, depriving stakeholders from their full potential.

“In order for collaboration to take place, managers must their silos and their perceptions of power.”

Jane Ripley, “Collaboration Begins with You: Be a Silo Buster”

REALM OF THE ROUNDMAP

To perceive the realm of the ROUNDMAP we’ve created the following slide, explaining the role of Cutomer Dynamics relative to Organizational Dynamics and Porter’s Value Chain.

We see the Customer Dynamics as the business’s intermediate primary activities, in between the back-office and the market. Encompassing both the busines-facing, supply side as well as the customer-facing, demand side of the organization.

ROUNDMAP_CD

This new perspective gave us the opportunity to fit in the SWOT-model (Strengths, Weaknesses, Opportunities and Threats), as well as the Backstage and Onstage Competitive Advantages, relevant to defensible differentiation.

BUSINESS STRATEGY

We’ve looked at the Integrated Customer Lifecycle™, the ultimate level of truth. Now let’s look at strategy. The silo mindset does not appear accidentally: more often than not silos are the result of a conflicted leadership team.

As shown in the figure below, the Integrated Customer Lifecycle is a lateral process (= roundtrip) and as such the completion of a cross-structure top-down execution of the Business Strategy (= roadmap). Together, they make the ROUNDMAP.

man-right-to-left-black

ROUNDMAP

The name refers to the cross-structure (Business Model Matrix), cross-silo (Integrated Customer Lifecycle) and cross-market execution of the business strategy.

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ROADMAP

Including culture, values, vision, mission, addressable opportunity, priorities, business model, value proposition, and measurable objectives.

+

ROUNDTRIP

Including marketing strategy, competitive differentiation, brand promise, value proposition, customer experiences, channels, touchpoints and lifecycle dynamics.

If we start off with a fragmented leadership team, each member heading his/her own group, rooted in their own culture, values, beliefs, symbols, and taxonomies, thus risking tunnelvision and mental blindness, the execution of the business strategy will be crippled. If departments hord their own data, reluctant to share it with outsiders, the mission will be at grave risk.

The way to break down the silo mentality is by creating a unified vision, work towards achieving a common goal, motivate and incentivize cross-functional teams to collaborate and co-create, and measure the outcomes continually.

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Cultivate a deep understanding of yourself - not only what your strengths and weaknesses are but also how you learn, how you work with others, what your values are, and where you can make the greatest contribution. Because only when you operate from strengths can you achieve true excellence.

Peter Drucker, best-selling author and management consultant

MAPPING COMPOSITION

ROUNDMAP™ Customer 360 is covering three operating levels: (1) Business Strategy, (2) Strategy Execution, and (3) Performance. In the figure below you can see how these three levels are laid out in the system.

At first glance the ROUNDMAP might look overly complex, not allowing you to see the forest for the trees, which can be discouraging. However, you’ll need to perceive it as three-in-one mapping system:

These three elements are tightly interrelated: it makes no sense to measure Customer Performance without being aware of aspects like tactics, strategy, objectives, business model, mission or market circumstances.

We believe you are now ready to have a peek at the ROUNDMAP:

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TARGETED AUDIENCE

ROUNDMAP™ was designed to help organizations, whether for profit or non-profit, faced with disappointing Customer Performance due to siloization or otherwise, and are now looking for ways to improve operating outcomes – by stimulating cross-functional collaboration, more meaningful and purposeful value creation, longer lasting differentiation, advanced business modeling, and increased customer loyalty – to achieve higher returns on investments.

“Customer centricity is a strategy that aligns a company’s development and delivery of its products and services with the current and future needs of of customers in order to maximize their long-term financial value to the firm.”

Peter Fader, author of “Customer Centricity” and Professor of Marketing at Wharton University.

BUSINESS MODEL MATRIX

We’ve looked at the overall composition of the ROUNDMAP. Unexpectedly, after having created the Integrated Customer Lifecycle, we found that two known business models, product and customer centricity, correlated to an emphasis on marketing and sales, respectively. This opened up a new way of thinking about business models.

By adding an extra dimension, i.e, serviced used versus products sold, we were able to incorporate, in addition to the known AS-A-PRODUCT type of business models, two AS-A-SERVICE type of models into a splendid two-by-two matrix.

The Business Model Matrix™ provides a single framework of all possible business models, ranging from Product Centricity to Network Centricity. Whether you want to leverage your ROI from a Share of Market or a Share of Transaction, or otherwise, is part of your strategic heading, while an additional choice of value discipline offers further means of differentiation.

Previously, a business was either focused on growing market share (product-centric) or gaining a larger share in the customer’s wallet (customer-centric). But these two models did not account for the rise of the platform economy, servitization or the sharing economy. The framework was incomplete.

After matching Marketing to Product Centricity and Sales to Customer Centricity, we were able to identify Delivery with what we call Resource Centricity and Success with what we refer to as Network Centricity. This then became the Business Model Matrix™.

© 2014-2019 Edwin Korver, CEO Tenfore BV – all rights reserved – MOBILE +31-(0)6-52341111
Registered at BOIP.INT i-DEPOT 094029 (3.0), 095482 (3.1), 103610 (3.2), 105496 (3.3), 106619 (3.4), 110465 (3.5), 115384 (3.6)

ELEMENTAL BUSINESS MODELS

The four Elemental Business Models™, identified by Edwin Korver, each have a distinct dynamic. Complementary to Don Peppers’ graphical representation of product and customer centricity (the AS-A-PRODUCT business models to the left), we added two new graphs (the AS-A-SERVICE business models to the right), to complete the series.

Leverage (return on investment) determines the business model. Prior to the Business Model Matrix™ business literature recognized two levers: Share of Market or Share of Wallet. We pride ourselves to have added two new ones.

LEVERAGING THE ELEMENTAL BUSINESS MODEL

The leverage of a resource-centric business model, Share of Utilization, comes from a ROI on deployable resources. For instance, if you deploy a car in a ride-sharing concept, the objective is to utilize the car to its maximum capacity.

On the other hand, if you offer a ride-hailing platform, in a network-centric business model, your objective isn’t to plan for capacity, but to get as much riders and ride-hailers together to facilitate rides, to obtain a Share of Transaction.

A product-centric business model focuses on gaining market share to profit from economies of scale, while a customer-centric business model focuses on a select group of customers that are likely to increase their spending.

A resource-centric business model is all about planning for capacity by utilizing a syndicated resource, while a network-centric model aims to grow participation of an aggregated network to capture a share of transactions.

ROUNDMAP PLAYBOOK

To understand the level of sophistication of the ROUNDMAP™ and its components, we have created a strategic playbook, explaining some of the most noticeable dynamics of each of the four Elemental Business Models™.

Whether you aim to leverage from economies of scale, or from planning for capacity, or something else, is up to you. But each business model has coinciding dynamics that are hard to ignore. For instance, a product-centric business model demands campaign-based marketing, while a network-centric business models benefits most from word-of-mouth. A resource-centric business should emphasize on the service chain, while a product-centric one needs to address the supply chain. Et al.

ROUNDMAP Strategic Playbook

There is so much more to this. If you want to learn more, subscribe to our newsletter or apply for a free Visitor Membership to be able to follow the free ROUNDMAP™ Introduction Course.

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PLANNING FOR SUCCESS

Choosing the right business model and value discipline could be vital for success. Airbnb’s market valuation ($38 billion in 2018) is higher than Hilton and Hyatt combined, yet it has no hotels. The new AS-A-SERVICE business models have become alarmingly disruptive to many industries and there will be more to come.

“I know firsthand the complexities of leading an enterprise through business and technology transformation. It takes intense focus, a strong drive, and a clearly communicated to inspire and take an organization from where they are, to where they need to be - or where they want to go.”

Safra A. Catz, co-CEO, Oracle Corporation

TRANSFORMATION

We’ve discussed the Integrated Customer Lifecycle, Business Strategy and the Elemental Business Models. Let’s have a look at how we can change our course to adapt to the world around us. We believe business models have evolved over time in two directions: either through Business Model Shifting or Business Model Regeneration.

Business Model Shifting is by far the most disruptive: it is a revolvement to the next Elemental Business Model.

In 1974, IBM was known as Big Blue. As the company struggled to battle for market share in many areas, IBM soon realized that a select group of customers were likely to spend more than others. By focusing on this smaller group, IBM could maintain its high standards and price levels. However, in 1993 it found itself in dire straits, reporting a $5 billion loss, the highest in American corporate history. Desparate to turn the ship around, it could have lowered its prices or introduce a cheaper brand. Instead they acquired the consultancy branch of PwC and named it IBM Global Services. One decade later the company had trippled in size. IBM had shifted from a product-centric, to a customer-centric, and finally to a resource-centric business model – monetizing its highly skilled workforce of IT system integrators and businss consultants. However, in 2017 the company again reported a $2.6 billion loss. They will need to fill the capabilities gap to become a network-centric business, which is the next logical path of business development.

SHIFTING AND REGENERATION

Business Model Regeneration has been going on for ages: it is an evolution of an existing business model.

You might believe that the Sharing Economy is something completely new, but it isn’t. If you ever took a plane, train or taxi, you were essentially sharing a resource. And what about the Platform Economy? Nothing new either. Over two thousand years ago, traders and buyers met along the Silk Road, a series of trade routes between China and Europe. Facilitating a digital platform is similar to setting up a physical marketplace. The evolution, clearly, has transformed the business model from a physical (marketplace) to a digital space (marketspace).

DESIGN FOR Experience

Depending on the Business Strategy, value (equity) is derived from a focus on one of four Elemental Business Models™. For instance, brand equity (storytelling) will be vital for any product-centric business, while an excellent customer service experience will be more crucial for a resource-centric model.

Experience Design (ED) has been at the forefront for some years now. However, we do have to realize ED differs, depending on the choice of business model. In case of a product-centric business model brand experience prevails, while f.i. in case of a Resource Centricity it is mostly about the service experience.

ROUNDMAP_EEM

Customer Experience design, in our view, is the main driver in case of a customer-centric business model, in which a select group of customers, for which the business can deliver additional value, mean more to the business than others. Content marketing is used to help these customers make informed decisions, while account-based marketing aims to develop the relationship. We don’t support the idea that customer experience is all-encompassing.

DIGITAL TRANSFORMATION

Now you understand how a business strategy of ‘trying to be the best’ will lead to machismo and tribal behavior, sabotaging cross-functional solutions and deminishing the chances of achieving the key objectives of the business.

Considering all this, what are the odds that digitalization by itself will transform a business?

70% of Digital Transformation (DT) initiatives fail, according to a recent McKinsey study. Indicating a humongous amount (900 billion out of 1.3 trillion USD over 2017) of money and time wasted, let alone the opportunity costs.

A business does not transform simply because it adopts fancy digital technology, like artificial intelligence, big data analytics, micro services or some other bag of tricks. Yes, the world is changing and business will need to adapt. But the biggest challenge is not to cope with customer expectations, or to try and outsmart competition (first-movers advantages are true some of the time), but to transform the mindset of the people inside the company.

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NEWS

Business Model Matrix
BUSINESS MODEL MATRIX
Edwin Korver

Business Model Matrix™

While creating the Integrated Customer Lifecycle™, interconnecting all four front-office departments, we found remarkable similarities between a focus on sales and the traits of Customer Centricity. Similarly, a focus on marketing pointed to Product Centricity.

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Quality OK
CROSS-SILO
Edwin Korver

Quality Control

It might seem strange to talk about quality control in context of the customer creation process, however, when we compare product specifications to customer expectations,

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Business Process Management
CROSS-SILO
Edwin Korver

Business Process Integration

In today’s business world, collaboration is key, not only for humans, but also for systems. Business Process Integration is a distinct practice in itself that

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Stalling business
ROUNDMAP™
Edwin Korver

To Whom It May Concern

What’s the ROUNDMAP™ for? It is a question I get asked a lot. So let me give you a sense of how and when you’ll need the mapping system and use it to your advantage.

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ROUNDMAP Silo Syndrome
BOOKS
Edwin Korver

The Silo Effect by G. Tett

In her book, The Silo Effect, FT journalist and antrolologist Gillian Tett describes the destructive effects of mental, functional and data silos on collaboration, performance and innovation.

Read More »
CROSS-SILO
Edwin Korver

A New Symbol

The ROUNDMAP adopted a new symbol, representing a joint of the business roadmap and the customer roundtrip.

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Equitability
GENERAL
Edwin Korver

Equitability

What made us create the ROUNDMAP™ can be captured in one word: EQuitability. It means being fair, just, and honest. We believe all businesses have

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Growth
ROUNDMAP™
Edwin Korver

Equity and Leverage

There is some understanding on what differentiates product centricity from customer centricity with regards to focus, but much less with regards to growth. Let’s have

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