Today, executives and managers struggle with the problem of stagnating or even declining growth. Often due to forces like global competition, digital disruption, erratic customer behavior, broken supply chains, government-imposed restrictions, and so on.
As suggested by Einstein, we cannot solve our problems with the same thinking we used when we created them. And although learned linear thinking has led to more productivity and continuity, what we now need is more creativity and ingenuity.
Besides, who can afford to plan rigorously for a discontinuous future?
Practitioners of the ROUNDMAP™ Framework aim to boost frontline performance across all relevant distribution and communication channels. Drawn from an awe-inspiring vision, astute leadership, and a shared purpose, they seek to fortify existing customer relationships while simultaneously pursue viable, feasible, and desirable innovations, differentiating propositions, and compelling customer experiences to find new opportunities for growth.
Note: Astuteness requires Conditional Leadership.
Obtain a complete oversight of the business to make better and faster decisions, taken from diverse, objective, inclusive, intuitive, and informative vantage points.
We live in turbulent times. Change is omnipresent. On the one hand, firms need to defend ongoing business while on the other hand, discover new opportunities for growth.
In this scenario, 80% of staff may continue to thrive on a fixed mindset (business-as-usual) but 20% will need to adopt a growth mindset (change-as-usual).
Expecting the 20% ─ that have been conditioned for years to walk a straight and narrow road ─ to miraculously demonstrate creativity, curiousity and ingenuity, simply because they have been unleashed is unrealistic.
As a leader, you’ve got to provide the conditions for them to feel safe. To speak out, to take the intiative, to experiment, and to make mistakes.
To be able to grasp the internal and external conditions that influence the business will improve the overall capacity to mitigate risks early and benefit from opportunities.
While Hersey’s Situational Leadership® is about raising an individual’s readiness to perform, Conditional Leadership™ is about selecting the most effective leadership style and course of action of the business enterprise, given the internal and external conditions of the business.
The most effective way to learn about new trends, changes in customer behavior, competitive offerings, and new market entrants is by being on top of the market.
When IBM reported the biggest corporate loss ever, in 1993, it had to change course dramatically. While management was ignorant, salespeople already knew what needed to occur from talking to customers. Their voice had been deliberately ignored for years.
Market research is often too slow and too late. It can expose explicit needs but often fails to reveal implicit or tacit needs.
Mental and functional silos are known to inhibit cross-functional communication and collaboration and thereby stiffle innovation, sabotaging customer experiences, and decreasing customer satisfaction.
Especially in large product-based or market-based organizations, breaking down the silos may cause too much havoc. An alternative could be to introduce organic roundtables on top of the formal structure.
Most firms are product-driven.
Value creation taken from a customer’s perspective (customer-driven) could significantly improve customer satisfaction and customer loyalty.
This will require people with a high touch (emotional intelligence).
There is nothing more damaging to the bottom line than an alienated workforce. Provide meaningful and challenging work and encourage self-organization. The financial rewards of an engaged frontline are significant: 1.7x better financial results (Gallup, Human Sigma).
Additionally, if a firm engages employees as well customers, the rewards are doubled, leading to 3.4x better financial results.
If you are able to engage customers to provide genuine feedback, to suggest new ideas and opportunities for improvements, the financial rewards are truly significant: 1.7x better financial results (Gallup, Human Sigma).
Additionally, if a firm engages employees as well customers, the rewards are doubled, leading to 3.4x better financial results.
Without clarity of vision, strategy, purpose and mission there is no focus, no consistency, no alignment, no passion, and no commitment.
Paul Ruskens compared sharing a vision (V) to building a connection (C):
- -V/-C: You’re stuck.
- +V/-C: You’re in a ivory tower.
- -V/+C: Kum ba yah!
- +V/+C: High Performance.
High performance, however, not just requires clarity of vision but of all four aspects of the business: vision, strategy, purpose, and mission.
A product that is relevant may fulfill actual customer demand. A product that is perceived significant is able to fulfill future customer demand.
Significance, therefore, is what forges strong customer bonds and drives customer lifetime value.
To drive meaningful innovation, to increase customer satisfaction, and to increase the perception of future value, you’ll have to build a continuous customer feedback loop.
To understand how to benefit from digitalization and new digital-driven business models, to achieve sustained growth with which to secure the future of the company.
Contrary to common practice in a time of market contractions, firms should distribute authority by engaging, empowering, and entrusting employees.
Consolidation and exploiting resource interdependencies may lead to a positive cash flow but it will also increase fragility, thereby limiting the readiness for change.
By creating a strong alignment on vision, strategy, purpose, and mission, firm’s create a shared interest in the success of the endeavor, allowing people to collectively create for the future. Passion and commitment lead to self-motivation.
To cross the silos, often the result of a formal, mechanistic organizational structure, we’re suggesting to facilitate organic roundtables to increase horizontal collaboration.
Hording of information could lead to self-proclaimed experts, giving rise to a form of powerplay that naturally opposes structural change while also hindering organizational learning.
Data that is kept locked up in silos will lead to a disconnected customer experience, uninformed managerial decisions, and disorganization.
Deploy an enterprise-wide customer data platform (CDP) to create a unified profile of every customer to personalize customer experiences.
Research by Google and others confirmed that the best performing team didn’t deliver because of talent, resources, or money. Out of 250 factors that were examined, the common denominator for outstanding teams was psychological safety. Those that lacked it, didn’t do so well.
Experts use a Gap Analysis to examine what possible gaps could cause a growth gap ─ between the current growth rate and aspired growth rate ─ to occur.
There are many: aspiration gaps, capabilities gaps, communication gaps, customer gaps, delivery gaps, and so on.
Understanding the gaps and constraints will help plan for growth.
Mastering Conditional Response
We’re in the endgame of the 5th K-wave, a business cycle of about 53 years that started around 1971. Many products and business models that came from innovations based on inventions in the sixties and seventies, like the transistor, Kevlar, laser, and the computer mouse, are reaching their end-of-life almost simultaneously.
At the same time, innovations derived from most recent inventions, like 5G to power autonomous vehicles and the Internet of Things, quantum computers with unimaginable data processing speed, AI uses in manufacturing, autonomous buildings, and in diagnosis for cancer, CRISPR Cas9 and the sequencing of the human genome, and so on, are on the verge of a breakthrough.
While sudden breakthroughs are generally welcomed, seemingly inevitable breakdowns from technological disruptions cause anxiety and fear amongst workers.
Learned linear thinkers, representing the vast majority of managers, have long been persuaded into thinking that to get from point A to point B all you need to do is to follow a series of predefined steps. However, in times of erratic change connecting the proverbial dots looking forward will surely drive the company down the cliff.
The Ruling Mode of Operation
What will ultimately determine your firm’s mode of operation depends on whether you’re riding the remains of the 5th outbound K-wave, or are on the verge of the inbound 6th K-wave. When you’re part of the outbound wave, you’ll need to be in a consolidator mode and pull up your defenses, while scouting for new ideas and innovative ventures. When you’re part of the next inbound wave, you’re likely in a challenger-mode, looking for overlooked segments, testing assumptions, and hoping to one day bring down the incumbents’ walls.
To master a specific business situation from an integrated viewpoint you may want to consider questions like:
- What/who is causing the breakdown and how can we respond to it?
- How long can we defend our market share?
- Can we extend the product or do we have to abandon it?
- Will a different business model offer new opportunities for sustained growth?
- Can we become more cost-effective while at the same time improving customer experiences through digitalization?
- Can we decouple segments of the value chain and find strategic partners who can do a better job?
- What is the customer’s job to be done and are we currently providing the best product for hire?
- Are there (overlooked) segments in the market in which we can play to win?
- What gaps and constraints hinder us to make progress?
- What scenarios of growth should we consider?
A Scrimmage of Two Archetypes
Our addiction to the linear way of thinking has led us to believe that the best way to direct a company is from a centralized command and control structure. In a typical bureaucracy, it is the CEO at the helm that is making most if not all of the decisions, which are then passed down through a chain of command (hierarchy), expecting everyone to abide by these decisions, in an effort to maximize productivity and to achieve a consistency of output. As long as the success of the business depends on executing the mission with military precision, this linear and masculine structure makes sense ─ I’m no fan though, but habits are hard to break.
However, when growth is in decline and employees no longer trust a CEO’s objective judgment to make the right decisions on their behalf ─ as is confirmed by international research (Edelman Trust Barometer, 2018 and onward) ─ the bureaucracy is at its wit’s end. We’ll need a new paradigm, a different way of thinking and organizing.
Today, most companies are in either a Consolidator mode or a Challenger mode of operation. And these two modes collide: it’s the age-old battle between the decadent defender of the old versus the fearless pioneers of the new. I’ve explained the Four Archetypes of the Business Cycle in a separate post.
In brief: In a Consolidator-mode, a CEO’s natural response to a Challenger is to defend existing revenue streams for as long as possible; to either buy time, and to allow for the allocation of resources to support favorable and scalable initiatives carried out at the base of the operation, or to abandon the operation. If to buy time, a Consolidator has to develop a customer retention strategy to keep existing customers close. To do so, it needs to convince customers of the significance of future value that could be obtained from an ongoing relationship. This is why we’ve created the Customer Roundtable Blueprint.
To compare the two states, the masculine versus feminine mindset, you may enjoy a classic presentation by Mark Gungor, called the Tale of Two Brains. Although a generalization, Mark makes a clear distinction between the male brain, in which ‘everything and everyone is kept in a box while making sure none of the boxes touch’, and the female brain, in which ‘everything and everyone is connected.’
While on the subject, by focusing on empathy, and emotional triggers in general, the commercial operation will inadvertently change to a predominantly feminine mode. About 90% of a buyer’s decision to purchase a product, as described in the Customer Roundtable Blueprint, relates to emotional triggers. It’s one of the main reasons why women tend to be much better in practicing customer success, and therefore in engaging and retaining more customers than men generally are.
Everything is Connected
When we set out to design a system to plan for commercial growth, we didn’t realize that without executive backing our system had little chance of being deployed. While research suggested that driving customer and employee engagement could lead to 3.4 times more financially effective outcomes (Human Sigma, 2008), 2.7 times higher operating margin (Towers Watson, 2011), and 22% YoY net income improvement (Kotter & Haskett, 2011), these results won’t be achieved without strong leadership support and a culture in which frontline employees are being entrusted and empowered.
Therefore, to benefit from an engaged workforce and a loyal customer base, firms have to consider the dynamics of the entire business enterprise. Because it all ties together: you can’t develop a loyal customer base without developing the desired products, you can’t deliver on the promise when your supply chain is a mess, you can’t devise a (digital) vision without customer feedback, and you can’t grow sustainably without a shared vision, a shared strategy, a shared purpose, and a shared mission.
The Circular Motion
ROUNDMAP™, as a proprietary integrated business framework, was constructed from the ground up, using a method closely related to Systems Thinking.
“Systems thinking is a holistic way to investigate factors and interactions that could contribute to a possible outcome. A mindset more than a prescribed practice, systems thinking provides an understanding of how individuals can work together in different types of teams and through that understanding, create the best possible processes to accomplish just about anything.” ~Dr. Marie Morganelli
By perceiving the world as a series of connected systems, and by understanding our part within them, we can begin to make better decisions, be better teammates, suppliers, or strategic partners and find infinite new ways to be more productive in all areas of our (corporate) lives.
Besides, similar to nature, business growth isn’t linear, it is circular. By practicing linear thinking we consider an idea or a process to begin from a point (A), follow a series of connected steps, and end at a point (B). At the end of the business cycle, point (B) can be anywhere. To discover it, we need to think outside the mental and functional boxes and make connections among unrelated concepts or ideas.
The Value Hub Theory
My journey to devise the Framework began in 2012 when I was asked to assist a local radio station to transition from a traditional broadcasting company to a two-way communications company. Following a brainstorming session, I found a ‘systemic pattern’ that led to the description of the Value Hub™ theory.
Essentially, the theory suggests that every entity has a value deficit on one hand, and a surplus on the other. When two Value Hubs are drawn to each other, because one hub is able to fulfill the deficit of the other, value starts to flow between them. When the deficit is filled, both Hubs depart as there is no more reason to stay connected.
When in partnership with others, essentially forming a value network, the hub becomes a node. However, most relationships
Value Chain Theory
By using Michael Porters’ Value Chain theory, we began to describe the activities within the Value Hub. At first, we focused on the aspects of customer interaction. We found that existing marketing and sales models, and the linear funnel analogies, in particular, did not incorporate the social dynamics that had begun to surface following the rise of social networks and dynamic web technologies. Meanwhile, these social dynamics inspired Marketing focus more on customer satisfaction, engagement, and advocacy.
We came to realize that the customer interaction process should NOT be perceived as a finite linear customer journey, from suspect to purchase, but as a continuous lifecycle. This circular motion of building lasting customer relationships, enabled by social dynamics, was the start of what became the Customer Lifecycle Map.
Besides, we found the arrangement of the Value Chain theory, in particular the separation of primary and secondary activities, impractical. Instead, we divided the value chain along the line of the supply chain (the supply-side of the Business Dynamics), on the one hand, and the demand chain (the demand-side of the Customer Dynamics) on the other. With Delivery (the wider perspective of Service) as the bridge in between the two sides.
This arrangement also provides a better understanding of a SWOT Analysis, while it allows for a clear distinction between the backstage and onstage competitive advantages.
The Bigger Picture
From experience, having led various companies, we knew that functional silos, a direct consequence of a bureaucracy, interfered hopelessly with horizontal collaboration. We realized that Taylorism, which had long been confined to production, has also invaded every other department and division of the organization. And while Ricardo Semler had made a strong case against product disaffection on the factory floor due to Taylorism, very few people seem to realize that the same division of labor and the preoccupation with specialization has led to customer disaffection in the frontline operation. Frankly, most frontline employees don’t have a clue or even care who the customer is, let alone bother with improving their lives.
To drive the customer lifecycle process firms really need to consider the ruling silos dynamics. Harvard’s Heidi Gardner confirmed that firms with better cross-functional collaboration achieve more customer loyalty and higher margins:
“As innovation hinges more and more on interdisciplinary cooperation, digitalization transforms business at a breakneck pace, and globalization increasingly requires people to work across national borders, the demand for executives who can lead projects at interfaces keeps rising.”
To survive and thrive in our digital age, the need to communicate and collaborate effectively across the silos is even more pressing as digitalization is all about finding new ways of creating value between the silos. Additionally, the corporate value chain extends far beyond the traditional boundaries of the business enterprise and now includes key external partners in the supply chain and those in the demand chain. Having a highly connected, preferably digitized value chain has become a precondition for driving an integrated business (IB).
Supporting Harvard’s Heidi Gardner findings, Financial Times’s Gillian Tett, author Patrick Lencioni, and Harvard’s Vikram Mansharamani all confirmed that horizontal or cross-functional collaboration is critical to the success of any business endeavor ─ as do we.
Separation and Alienation
Because of a lack of a shared purpose and confusion about what the company aims to achieve, departments have become separated, “each defending its products, its ideas, its brilliance,” as stated by Tett, thereby creating disconnected organizations crowded with people that alienated from the whole. Needless to say that employees’ passion and commitment suffer deeply because of the disconnectedness and alienation ─ as predicted by Karl Marx (although born in Germany, Marx spend most of his life living in exile in London because of his political publications).
Why is this particularly harmful today?
To appreciate this, you’ll need to understand more about the characteristics of business cycles, in particular the Kondratieff long waves or K-waves. We’ve explained more about these phenomena in the article Ascending from Decline. In summary: We’re in the final stage of a long wave, a business cycle of about 53 years that started in 1971. Many products and business models are simultaneously in decline; ready to be disrupted. A linear (or sequential) way of thinking isn’t going to help firms in this stage. To ascend from decline, executives need to stimulate a nonlinear way of thinking, often addressed as spiral or systems thinking. Hence, the ROUNDMAP.
As a consequence, the linear and masculine command and control structure, which can be beneficial in a more predictable market, however, it isn’t going to help the firm in times of unprecedented and unpredictable change. Instead, leadership has to rely on more collaborative, distributive, and supporting management structures, taken from practices like servant leadership, stewardship, holacracy, or sociocracy.
ROUNDMAP™ consists of several components:
- The Business (Venture) Roadmap, consisting of:
- A linear map to discover, design, develop, and direct new business ventures.
- The Business Model Matrix™, consisting of:
- Four foundational business models: Product Centricity, Customer Centricity, Resource Centricity, and Network Centricity.
- The Business Lifecycle Map™, consisting of:
- Four Mastery Aspects (SCOT): Strategic Mastery, Commercial Mastery, Operational Mastery, and Transitional Mastery.
- Four Maturing Lifecycles: Business Carousel, Product Carousel, Customer Carousel, and Growth Carousel.
- The Customer Lifecycle Map™, consisting of:
- A comprehensive map of every aspect of customer interaction, including the social dynamics and emotional triggers.
The Framework combines both nonlinear (the round trips) as well as linear (the roadmap) mappings, explaining the Framework’s name. What type of thinking to use depends greatly on the conditions; hence the use of terms like Conditional Growth™ and Conditional Mastery™.
The bedrock of the ROUNDMAP Framework is the Customer Lifecycle Map, which offers an effective tool for frontline employees to communicate and collaborate across the silos, by removing mental and functional barriers. The Framework suggests to set up roundtable sessions, bypassing the silo barriers, to discover new opportunities for growth and translate these opportunities into viable, feasible, and desirable business ventures.
When we bring the key elements together in one image, named the Business Lifecycle Map, it looks like this:
The core of the figure above contains three elements: the core values (middle), the leadership roles (blue), the management functions (yellow), and the PACE formula.
If we split the figure in two, the connecting elements (blue; leadership roles) on the one hand and the developing elements (yellow; management functions) on the other, it will look like this:
The essence of the Framework, seen from the top-down, is that you can’t develop value sustainably without giving meaning to the connecting elements.
- If vision isn’t shared, people have no way of mentally preparing themselves for where they are heading, when they need to get there, and what is expected of them.
- If strategic goals and objectives aren’t cascaded down to each level, people have no way of knowing how their actions relate to the overall strategy.
- If the purpose is undefined, people have no clue why they need to do what they are hired to do, and you’ll have a tough time engaging them.
- If the mission is vague, people won’t know who to commit to or care for.
Please be aware that this is a small part of the Framework, including the Customer Lifecycle Map, Business Roadmap, Business Model Matrix, Change Map, and four Carousels.
Change & Alignment
Along the same line (the connecting elements), we need to investigate whether people are in alignment with the current or desired corporate vision, strategy, purpose, and mission. If not, people may begin to disengage, or even oppose what the firm is aiming to achieve or become alienated from their own values and beliefs.
Especially during a transformative change process, stakeholders need to be realigned with the new vision, strategy, purpose, and mission. In general, organizations perform best when they are stable, while most people prefer a situation to be left unchanged. Kurt Lewin’s ‘Unfreeze, Change, Refreeze’ mantra is typical for how people respond to change initiatives.
To understand the individual’s motivations, you’ll need to ask questions and observe.
- Tell me about a time you had to be flexible or adaptable.
- Tell me about a time you had to learn quickly.
- Tell me about how you work under pressure.
- Tell me about a time when you handled a challenging situation.
- Tell me about a goal you failed to achieve.
- If we are our own worst critic, in what ways are you too hard on yourself?
- What are you trying to avoid?
- What inner rules do you have for yourself that get in the way of you taking the next step?
- Is there something you are afraid to look at that is stopping you from taking action?
- What do you believe is stopping you from completely stepping into your (new) role?
- Give me an example of how you set goals.
- Tell me about the proudest moment in your professional career and why it was meaningful to you.
- Can you give me an example of a time when you felt dissatisfied with your work?
- Tell me about a body of work you felt was most impactful for you or your company.
- How do you stay motivated when a job requires you to perform repetitive tasks?
- Who are you?
- What makes you special?
- Is there a pattern to your life?
- Where are you going?
- What is your gift?
- Who can you trust?
- What is your message?
- Do you life a rich life?
The critical parts of the ROUNDMAP™ Framework are (plotted from the center to the edge):
Notice how, for instance, the leadership roles trickle down from ‘Execute Strategy to Marketing and Awareness’ and from ‘Create Vision to Success to Significance’. The first may seem straightforward, but the second is critical: developing an evolving vision relies on customers’ success. Without engaged employees and engaged customers it’s unlikely to get constructive feedback.
Framework as a Stack
Another way of perceiving the entire Framework is to see it as a stack (image left).
Or better yet, as a six-sided dice with the Business Lifecycle Blueprint on top (1), the Customer Lifecycle Blueprint on the bottom (6), and the four Carousels on the sides:
The Business Roadmap
As mentioned, the Business Roadmap offers the linear perspective of the ROUNDMAP Framework. We’ve cross-referenced the four management functions (to the right of the image) of the Framework with the stages in the Business Roadmap.
The Practitioner Program, offered by ROUNDMAP Academy, will provide more insights into each of these components. Just be aware that success is a delicate balance, requiring Leadership, management, and staff to be in close contact with the market to effectively respond to the forces exerted onto the business (text continues below image).
Even as a child, the ability to bring everything together in the correct order is considered an achievement. Similarly, employees want to contribute in a meaningful way to the purpose of the organization. The study of Coch and French (1948) found that stakeholders react more favorably and become more committed if they participate, for instance, in the process of change or strategy development. Very few people desire to be just a cog in the wheel.
Feel inspired? Contact us for more information.
Just for references: A manager’s primary challenge is to solve problems creatively. While drawing from a variety of academic disciplines, and to help managers respond to the challenge of management have long been categorized into the four major functions of planning, organizing, leading, and controlling.
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Hi Edwin, Russell Here. Just reading over all your blogs. do you have this blog in some format we can promote as an eGuide to help build our database/ “lead generation process”
There are a few options to export posts directly from WordPress and automatically produce an eBook (PDF/ePub). I’ll look into it.