This month’s article is a collaboration with Andy Shockney, Redbank Advisor. Andy has over twenty years of operational leadership with companies in Central Ohio. He has over ten years of corporate experience, and over ten years in entrepreneurship. He has been a full-time consultant since 2016.
This month we explore the 5 levels of growth in the Redbank Business Capability Maturity Model and the steps you need to take to prepare your business to achieve the next level of growth.
REDBANK BUSINESS CAPABILITY MATURITY MODEL
“Management is doing things right, leadership is doing the right things.” Peter Drucker
Understanding what the right things to do is challenging as a business leader. You are constantly being inundated by problems, challenges, obstacles, and opportunities. They are overwhelming to anyone who dares to take on management or leadership responsibilities.
Redbank recommends that your focus can be found with clarity within the business life cycle. With a broad market-based perspective, we advise taking a solid look at where you’re at to inform what to focus on to achieve your next level of growth.
Redbank has identified five stages in what it refers to as it’s Business Capability Maturity Model. For the purposes of keeping things simple, we will focus on where many of our recent clients have really benefitted from this guidance – stage 2. In this stage, you’ve identified a great business idea, and you’re learning how to bring it to market in a more meaningful and valuable way. This is the space where your company can really grow from good to great, as Jim Collins would say.
Your growth boils down to one very important key driver.
Customer experience.
Understanding clearly what promises you make to your customer today and ensuring how you become great at keeping your promises. This experience will set the bar on how much growth you can achieve.
It’s worth noting that Redbank expects this growth to be profitable growth. Not growth at the expense of profits, nor growth at the expense of your customer experience.
STEPS TO ACHIEVE GROWTH
1. CUSTOMER-DRIVEN LEARNING
In the Second Stage of the Redbank’s Business Capability Maturity Model it is all about your most valuable business processes. Understanding each step in the planning, purchasing, delivery, use, and support of your products and services will enable scalable growth for your company. When you map your business processes, you have a great opportunity to understand how your customer engages with your company and what they have come to expect. This all begins with listening to the voice of your customer, and having a clear understanding of their satisfaction. Are you listening to your customers today? If not, this could be an incredibly valuable place to start. Talk to your sales, marketing, and support teams immediately to help understand where you can best capture the voice of your customer.
2. PROCESS-DRIVEN UNDERSTANDING
This information can immediately point you to any gaps in your expectations and where you are meeting or exceeding your customer’s expectations. This step in the process often involves closing obvious gaps that shouldn’t exist, and how to better ensure you are setting clear and fair expectations with your customers in the delivery of your products and services. It will naturally result in the defining of your most critical business processes, especially for your key customers. Your company’s process mapping will help bring clarity to what promises are made, how you keep them today, and where there are opportunities to improve execution by documenting all the expected handoffs and assigning clear accountability with each step in the process. It will become clear through this process mapping what steps are the most value-added within each business process. When you’ve learned the key processes, and the key value-added steps, you can now establish key drivers – or key performance indicators (KPI’s). These KPI’s will enable you to create a scalable platform that enables growth for your company. Growth can and does happen in companies without knowing these key drivers. It creates unnecessary risks, however, in culture, strategy, and profitability.
3. CULTURE EATS STRATEGY FOR BREAKFAST
Mapping your processes to enable scalable growth is not enough, by itself. You must also change the culture around your new process driven understanding. The key drivers you identify should be able to directly connect to your financial performance. You will track each of these key drivers in your Monthly Business Review (MBR’s). Over time you will better organize your resources and staff to better align for scalable growth in support of your key drivers. These are often broken down into client segmentation, region, line of business, or product management dimensions. It is important to complete this breakdown and alignment to ensure that you have a clear understanding from an internal perspective of what types of customers are most beneficial to your business, and how to make their experience more relevant. This will help to create loyalty in your most valuable customers over the long-term, as well as enable you to better identify all the ways your customers expect you to add value when you provide them with your product or service.
4. IMPROVE VALUE PROPOSITIONS
Now you have the opportunity to improve your customer experience by improving the value proposition. Focus first on your key business processes and how an improvement will drive your value proposition to improve customer experience and in alignment with your strategic purpose. Redbank advises that you employ methodology such as lean and six-sigma to help engage your subject matter experts on ways to improve the most important business processes. These methodologies focus on identifying root-cause challenges and obstacles to your most valuable processes. We recommend doing this with collaborative cross-functional teams who will be able to provide insights on your key business processes in ways you’ve never considered before putting the people who do the work in the same room. You will find ways to immediately deliver value by improving the experience for your customers! This will benefit you in two key ways. First, your improved experience will act like a magnet, helping you to attract more of the most valuable customers to your company. Second, this improved value proposition also becomes a means for your sales team to drive commercial excellence by focusing on the acquisition of more key customers with a terrific story about how you provide even more value today, than in the past! If you are doing it right, this is all in strict alignment with your purpose and will teach you some important lessons on things you were doing that weren’t valuable, or weren’t in alignment with your purpose – or both.
5. THEN ROBOTS BURST THROUGH THE DOOR AND THEIR AI TAKES CONTROL OF EVERYTHING
Notice the complete absence of technology mentioned in the scalable achievement of growth! You can and should use technology to enable your work processes, however, until you have a firm understanding of those key drivers, and how to improve them you are taking unnecessary risk when you attempt to enable your “current” work processes. In these cases, it has been our experience that the value provided by new technologies will be captured in time saved by the people doing the work today. This could have the unintended result of neither improving the customer’s experience nor improving the profitability and scalable delivery of products and services. Instead, a clear focus on your key customers and the experiences you want to create for them, should be the primary focus that will enable a measurable and scalable growth objective through the implementation of new technology. Thus, empowering employees will allow your business to accomplish more in a profitable manner by remaining focused on delivering more value and doing so with a more scalable solution.
PROFITABLE GROWTH BECOMES INNOVATION
Learning the disciplines of profitable growth through customer experience also pays long-term dividends. It is equally important to develop and focus on capability development as an organization. As you maneuver through these difficult waters, one thing many business leaders have learned is that an innovation capability is increasingly becoming a requirement of today’s competitive landscape. Learning to listen to and understand your customers and their needs, as well as how to create and add value to their experiences, are essential building blocks upon which the innovation capability will rest. These investments in new critical capabilities will help you define a new era for your business, and enable you to not only achieve profitable growth in the short-run, but to inspire your organization into the achievement of long-term innovation through customer-focused product and service development.