PART II: The Road Map
Chapter 8: Creating a Religion around Convergence
Write Your Road Map
Over the past 5 or 10 years, everyone, not just IT, began using road maps. We’d contend, with apologies to John Wanamaker, that the road map is the new advertising. Half of it is wrong; you just don’t want half. Here are some thoughts on how to get it right.
- Clients want three-year road maps. And, in a way, that’s good. You want to be looking down the road. But the reality is that more than 12 months down the road, we have no idea what the external world is going to look like—what marketing tools are going to be available or how consumer behavior has changed. Perhaps the time frame is shorter. “The three-month road map is about the best horizon you can be thinking about coherently,” Box founder Aaron Levie has said.
But this isn’t an argument against having a long view. Instead, we’re urging you to take that long view with a grain of salt and know that part of it is going to be wrong. And know that it’s a mistake to treat every year of that road map equally. You really want to be stronger on the first year, essentially knowing your release plan over the first 12 months. At Razorfish, we develop a 12-month road map with our clients, but cycle and review that road map every month. It really becomes a living business strategy document so that we can respond to the ever-changing marketing and technology worlds.
- Many road maps are concerned with technical dependencies to the exclusion of other important considerations, such as financial concerns. The financial story of the road map is very important and if you’re not building it in you’re not doing it right. When do you break even? When do you see positive return on investment? When do you need to recalibrate?
- Inherited road maps are a tricky business. As a change agent, you need to be aware of what’s in them and who owns them. Who had a seat at the table in informing the road map? Road maps can be touchy. Often, they’re not well understood even though they were developed at great cost by a consulting firm that has long since departed.
- Finally, you need to be flexible about road maps. When you’re on month three and already falling behind, the road map becomes an albatross nobody wants to talk about. It can even become a barrier to getting stuff done. Agile practices, which we’ll discuss later, are the antidote to some problems with road maps. But all in all road maps need to be living, breathing documents, and there needs to be a well-defined process for having a conversation about where you are and what needs to change. When new technologies are introduced or a sudden change in the economy happens, your road map must adjust. For example, overnight Ford’s owner priorities went from helping owners deal with the gas price hikes to understanding owners’ need to focus on keeping their cars longer, and the company started looking for extended warranties from the credit crisis. Android overtook iOS as the top smartphone platform in just months, not three years.
When Telling Your Story, Think Right Brain and Left Brain
The failure of traditional approaches to strategy is that you end up with a thick binder of charts, graphs, and big blocks of text that will probably end up gathering dust. You need that binder, but there are other tactics that will better rally the organization.
We’ve found that visualizing strategy through videos or perhaps an interactive room that depicts a retail environment helps. Clients are sometimes reluctant to go down this road, but we find increasingly that they want it. It’s something tangible and rich and easy to deploy. And it helps your convergence evangelists by allowing them to tell the story by just pushing play. We’ve even had one of our videos reenacted on stage at a client’s 20,000-person sales conference.
Alongside that, you need a financial model. This is a business case for the changes you’re describing.
Otherwise, you’re just talking.
Visualization + financial is what makes change possible.
PART II: The Road Map
Chapter 9: How To Change Your Organizational Structure
Create Cross-Functional Project Teams
This is a way to get marketing and technology collaboration happening fast. Get all the relevant players on a team with a clear shelf life and deliverables. Maybe it evolves to become a permanent team structure focused on digital experiences; maybe it won’t. The key is to get people working together where they haven’t before.
Create New Roles within Both the Marketing and IT Functions
The approach here depends on where you sit within the organization. Within the marketing department, you can hire a chief marketing technologist, a new title whose responsibilities might range from making display advertising more effective to coordinating data programs. The marketing department can hire tech-conscious product managers or creative technologists who bring expertise in the experience layer, the tech that supports digital experiences but not the core enterprise IT infrastructure. Finally, a marketing department can hire data scientists, not just experts in running regression models but also in how data warehouses are set up and how to architect them. IT, historically all about security, stability, and redundancy, can shake things up by hiring people who specialize in that digital experience layer.
Moreover, there’s an opportunity here to help each other become better shoppers. We all need to stipulate that tech is changing rapidly and nobody has a handle on it. Marketers often don’t know how to buy tech. They don’t know how vendors and pricing works. IT doesn’t get the speed and customer-centricity that’s essential to marketing. If marketing is hiring a chief marketing technology officer to help bring more automation to bear, IT is hiring someone who’s an expert in marketing platform solution suites. Both sides win. Ideally, you encourage marketing and IT to start trusting each other and driving toward the same goals. Hackathons where IT and marketing work through the night together help teams on the ground better understand each other’s challenges, while enabling great innovations to bubble up within organizations. Ideas can come from anywhere but need cross-disciplinary input.
Employ Internal Account or Relationship Management
In this schema, a person in marketing has a corresponding person in IT who can be sought out when there are problems. Internal points of contact are created. Think of it like a cross-functional buddy system. The digital lead for each brand has a go-to person in the IT organization. This also begins to change the talent mix because it means marketing has to hire a tech-savvy digital marketer and IT has to hire someone good with digital platforms and not just an expert in Outlook.
Here are a few specific examples of how clients are tackling marketing/tech collaboration issues. At Mercedes-Benz USA (MB), CEO Steve Cannon installed a 14-person customer experience group culled from existing teams to help, in his words, “carve through silos.” Mercedes-Benz is obsessing over the customer experience, trying to ensure that it’s consistent from the company website to the mobile experience to the dealer floor. To create this team, he pulled from marketing, from the group that works with dealers, from after-sales, and from other silos as well. The idea is to get a holistic understanding of how Mercedes-Benz is serving its customers.
“Unless someone is monitoring the whole, all of a sudden you get a clunky thing,” Cannon said.
That team is there to optimize the system. How? One example: When Cannon found out that all the departments were standing up different surveys, he blew that up. In total, MB surveyed 4.3 million people. All these well-intentioned silos and some departments couldn’t describe what they were doing with the results. “Let’s combine those surveys and drive down cost,” he told us. “I’d rather have 500,000 that I can use as intelligence.” MB created a Digital Center of Excellence last April to facilitate best practice sharing.
“If something’s working well,” said Kevin Biondi, “we make sure it gets channeled throughout the organization.” Biondi has also used the center to improve Staples’ digital analytics effort, helping improve marketing effectiveness.
“We can get better, cleaner insights on how marketing is working, which translates into shifting investment into the most effective marketing vehicles.”
A Fortune 50 enterprise we work with that has struggled with serving customers through its website as efficiently as its rivals chose a different path. Rather than blow up its entire organization, the company moved the 500 or so people from marketing and IT teams responsible for a single product to a different location and put technology media and marketing side by side. The change in location communicated that their jobs had changed. The goal was that they better understand the customer experience and improve. Thus far, it’s resulted in simplified interactions with potential customers, reducing the amount of friction. And innovation is happening on a daily basis to provide their consumers with new tools and products.
Each of the approaches in the examples is distinct and right for the organization, but there is a common thread that runs through them. One is customer-centricity, which needs to inform everything that a modern marketing organization does. Digital is a lever for this.
Establish a Collaborative Culture
“You’re not going to be able to do it alone.” That’s Frans Johansson’s advice to CIOs as they are asked to take IT out of the role of mere tech support and into a more strategic place that touches every function of the modern organization. But we’d all do well to listen to those words.
In Chapter One, we mentioned that Johansson’s 2006 book, The Medici Effect, has been an inspiration to us as we think about where business is going. Late last year, we talked to Johansson about how the ideas might become practice. He consults with a large swath of the Fortune 500, so he’s had plenty of insight into how companies fall down as their culture becomes more collaborative and their teams more heterogeneous.
One of the key things to remember is that heterogeneous or cross-functional teams don’t progress at the same rate as homogeneous teams do. Homogeneous teams progress in a linear fashion and then reach a low peak. For cross-functional teams, especially newly constructed ones, there is often an S-curve—a slower rate of progress early on as the team comes together and people from different functions get used to working with each other followed by an explosion. But it’s important to remember that the cross-functional leader is not running a touch-feely perpetual brainstorm. Real collaboration can yield long ideation periods that at some point need to be clamped down so that the team can execute.
Heterogeneous or cross-functional teams don’t progress at the same rate as homogeneous teams do.
As a way of illustrating collaboration in action, Johansson talked to us about Dice, the video game publisher known for the Battlefield series. After one of the company’s animators read The Medici Effect, Dice began implementing some of its principles. In the original setup, animators and programmers sat apart from each other and they communicated about specifications and so forth through e-mail or paper. Dice changed this and within two weeks they started seeing results. The award-winning and very popular games Mirror’s Edge and Battlefield 3 were built under a setup that had pods of people working in tandem around the company. Now animators can communicate directly with programmers and vice versa.
Once you’ve got the structure, then you need goals. When it comes to goal setting, Frans advises that you set a goal immediately, but be ready to challenge and reexamine it. “The more time sitting around talking about it, the more time that’s wasted,” he said.
If all the different functions have different ways of defining success, should you just create new objectives? Yes, says Johansson, advocating that companies call a “time-out” for incentives. The leadership needs to let the team ignore the specific goals and deadlines on current projects and create a separate pot of money for the project in question. Doing this short-circuits any arguments over which department is footing the bill for which cost.
But that doesn’t mean that the new project is the recipient of some bottomless pot of budget. “The rule we give is that you have to do it without extra money and within your current job. Only when an idea merits it, then does it break away.”
As we wrapped up, we asked Johansson what kind of proof points he has for this approach. He surprised us by telling us that he once created a hedge fund that managed a portfolio based on companies’ success at embracing diversity and collaboration. “It did really, really well,” he said, but he got out of it because he “didn’t want to be in hedge funds anymore.”
Johansson believes that people do things because of emotion, not because of data. When it comes to management, there are firms that hire only Harvard Business School graduates. But on what basis is this a good idea? To them, it should be just obvious, but these companies didn’t make this analysis based on a spreadsheet or ROI. They just thought it was the best course of action. “People rarely do something because they’ve been shown the data for it,” he said. “It happens, but it’s not the overwhelming impetus.”
He paused and added a point to ponder for anyone doubting the power of collaboration: “I’ve never heard anyone ask for the ROI of a homogeneous team,” he said. “No one ever asks me for that.”
PART II: The Road Map
Chapter 9: How To Change Your Organizational Structure
No amount of big talk about convergence will matter unless your organization has the right processes to guide it on a day-to-day basis. Unfortunately, few do. Most plan and budget for the long term in a way that doesn’t respect today’s lightning-quick innovation cycles. They fail to take advantage of a marketing ecosystem that allows for real-time optimization and constant reiteration. In this chapter, we’ll describe the specific steps you need to take to get the right processes in place to embrace convergence.
1. Change Measurement and Establish Objectives
You’re about to make a lot of big changes and cause a lot of disruption in your organization, likely causing some queasiness among those used to doing things the old way. There is a need to be able to demonstrate that these changes are having a concrete impact on the business. What you need is a shared measurement framework. Or if you already have one, you might need to optimize it or tidy it up.
A call for measurement may have you worrying about a huge new outlay. This step doesn’t necessarily entail huge incremental spending. Many companies who aren’t measuring properly are already spending many millions of dollars on Oracle and Omniture. It’s just that the investment isn’t well deployed. Fixing it is often a case of doing better with what you have, remediating your current systems, and getting more out of it. It might be switching on your always-on research tools—listening platforms and the like. Execution is crucial.
One of the important things here is making sure that the measurement framework is shared. Too often we’ll hear that a measurement system is already in place. When we ask to take a look, we’ll get an answer along the lines of the following: “It’s complicated.” “There’s one guy who has access and he’s never here.” We’re exaggerating, but you get the picture. Measurement needs to be relatively open access, transparent, and something close to real time. We’re advocating getting multiple functions to rally around a shared set of objectives and a shared method of measuring process—that’s a big change and it has to be tracked cleanly and carefully. You also don’t want to have to conduct a science experiment every time you want to see how things are working. Thus, you’re getting your systems to feed a dashboard that tracks these five metrics. Then you have to get the team to check in regularly, or at least pay attention to the readouts they’re receiving.
Measurement needs to be relatively open access, transparent, and something close to real time.
You want your people to have incentives around shared objectives, not objectives in silos. They need to be shared goals so it’s clear we’re all in this together. And targets need to be fair. It’s not fair when digital is held to a greater return on investment accountability than traditionally, or physical store commerce is expected to get higher margins than digital commerce.
2. Change Planning
Too many companies are stuck in an annual planning-only mode, another remnant of the slow-changing analog media world that required lengthy periods of planning and creative development with media budgets and campaign ideas locked down long in advance.
In those days, it was all about the big idea. Now it’s about a big idea expressed in many ways that is created in collaboration with consumers and molded in an ever-changing technology world. The articulation of your idea is two-way (at least) and changing month to month, if not day to day.
Moreover, the future of marketing will be marked by a shift of money from working media into what we’ll broadly define as marketing operations. In the past, marketing ops were largely limited to the maintenance of an internal marketing team and hiring and firing agencies that produced the creative work. In a converged world, it will be about those activities, but also about investing in people and systems to ensure that the marketing spending is optimized. In the old days, people were accountable for spending the dollars, not how well they were spent.
Now you need to think of planning this way:
Annual planning
Quarterly executive reviews and recalibrations
Monthly checkups
Weekly stand-up meetings for the marketing team
Daily scrums and real-time changes
Product backlog prioritization sessions
This is just a general model. Every organization will attack planning differently. But the important point is true for any organization: You need to be planning across a range of different timescales. Each timescale is crucial and will enable your organization to become nimble and frequently revisit to see what’s working and what’s not.
For IT and marketing to work together, alignment of plans is key. Put the functions’ respective road maps together, and align them as well as the budget. Everyone is grappling with change. Grapple with it together, rather than separately.
3. Change Budgeting
You need to change your budgeting process in a way that mirrors the overhaul to your planning processes. This isn’t just a question of shifting money around in media silos. It’s not just turning TV ad buys into banner campaigns. There’s a fundamentally different type of spending here. Ultimately, you’ll be taking money away from media and putting it into operations. In other words, it will be less about Super Bowl ads and more about software. This is tricky, given that marketing organizations are still incentivized around billions of dollars of ad spending.
Besides funding people and systems, you need a slush fund to react to stuff. You need money in reserve for programs you don’t know you want to do yet. Here you’ll want to start small. After all, in a world of measured media planning, you’d be crazy to have any money in reserve because you couldn’t get it into the market until the last minute. You’d be stuck holding a bag of money and you’d get in trouble for not spending it. The key here is to begin with 90–10, then go to 80–20 and so on.
If you do change your media mix in a big way, you need to be doubly sure you’ve invested in the systems capable of proving that as you migrate to a different mix, the world didn’t end. If you can’t prove it, a conservative organization will conclude that anything bad that happened in the business cycle is a result of you not spending the money in traditional media.
4. Think Like a Software Company
Thinking like a software company means remapping your organization around product management. This is exactly how many of our clients have approached it. For most organizations the title product manager is a new addition to marketing and technology teams. In fact, it’s more befitting a tech company than a traditional enterprise. As we’ve mentioned a few times now, you need to imagine your company as a software publisher, increasingly under pressure to frequently update, test, and learn, and to respond to real-time consumer feedback.
Adopting a product manager approach means that there will be accountability for each step along the consumer journey. Much like there is someone at Facebook who owns the News Feed, there is someone at your organization who owns the tablet experience or the website. In convergence, change is going to be perpetual. With a product manager setup, it is someone’s job is to manage that change both as representative of the silo but also as a broader organization. There is a process to developing talent to think like a product manager.
As one of our clients describes it, product managers have to understand the customer and constantly prioritize and re-prioritize against what’s best for the customer. It’s such an important skill that organizations like the Scrumalliance, a professional organization created to share the Scrum Software Development processes, have created a course to help train people on product management. Across Razorfish, we continually see it as the top challenge when executing with an Agile and iterative methodology.
Finally, once you have the right people in place, they need to be empowered. If people looking at data aren’t empowered to make changes, you’re dead in the water. If you have to go through an IT organization’s unwieldy process, it doesn’t matter how good the data is because you can’t react quickly.
5. Change Incentives/Compensation
One of the clearest messages you have to send is this: Convergence isn’t some sort of hobby to be done during downtime. The way to ensure that it happens is to change the way that team members are compensated by building in a system of goals and incentives that reflect the changing nature of what it is they’re doing.
It’s worth noting that this is a sensitive process, not only because you’re tweaking the stuff of people’s livelihoods. Compensation changes touch parts of the broader organization that you might not be used to dealing with in a meaningful way—most notably, the human resources department. Much like IT, human resources is slow to change. It’s a function not known for innovation; it just keeps the paychecks coming. As a result, the function has often been treated like a group of clerks, even though it should have a large role in culture setting. Nevertheless, human resources has to be made a strategic partner in all this.
Personal Goals
The shared measurement framework that everyone is working off of has to be translated into all team members’ personal goals so there’s a clear sense of individual and team missions, and with this the basis for changing performance reviews. At least in the early days, you’ll most likely be adding goals, not wiping out the old ones. So, marketers might already be tasked with affecting traditional marketing metrics, such as raising brand awareness, and techies will have their corresponding metrics, such as maintaining uptime. Those don’t necessarily change or go away—at least at first. Instead, you’ll be adding goals that relate to the work of cross-functional teams and getting your team members to weight them as equally important if not more important. Of course, this needs to be done in such a way that the new goals don’t contradict the old ones.
It’s important to note that this isn’t just about picking on predigital goals. It’s just as important that a marketer whose goals are exclusively digital—such as reducing cost per click—ends up thinking about convergence goals, such as raising customer satisfaction and so forth. It’s about getting away from legacy goals that are solely based on marketing channels, whether digital or analog, and thinking about team-based outcomes.
Pay
The goal here is to shift incentive compensation away from legacy functional or business unit goals to cross-functional goals. We write this knowing that this is a big idea that requires fundamental organizational change. But the reality is that for any employees whose bonus rests on old thinking and goals, they will not invest themselves in the new goals.
The overarching problem is that in most cases, at least some portions of bonuses are pegged to stuff that’s going on at a functional or department level in a way that encourages behavior that props up silos. Another problem lies in the fact that bonuses hinge too often on things the people can’t control. You have to bring it down a level. In general, you want to weight incentive compensation to stuff that people can actually control.
Remember, though, that pay is not the only thing that matters. It might not even be the most important if you subscribe to the rather large amount of research suggesting that focusing too much on pay can actually demotivate people. The organization becomes focused entirely on quantitative goals and monetary compensation and neglects extrinsic motivators. These are the big questions: What do you want out of life? What gets people out of bed in the morning? Extrinsic motivation is about helping your team members answer those questions in a way that also moves the organization forward.
Some ideas follow:
Cultivate innovative “hot teams” and give them the trappings they need to be set apart from the rest of the organization. The classic model here is Apple’s old Macintosh development team that moved across the street and famously hoisted its pirate flag.
Give people a break from the legacy role, with a temporary leadership role or a rotational assignment in another geography, or find some way to satisfy their entrepreneurial urge.
Organize an exchange program with other functions. Spend a year in IT, if you’re a marketing person.
Review Process
We begin with the proposal that you ditch the once-a-year review focus in favor of more frequent feedback sessions. Although there still needs to be a top-down, quantitative assessment of whether a team and its members hit the goals that were set, relying on numbers alone may seem like you’re operating a forced march. There also needs to be a peer component that looks not at key performance indicators but at how the team performed as a team. That means team members evaluate each other. This, to be clear, isn’t about money, but rather about developing an understanding of just how well the team is functioning as a team and benchmarking how well the team comes together over time.
PART II: The Road Map
Chapter 11: Achieving Convergence through Agile Methodology
In 2001, the Agile Manifesto was published after 17 developers gathered at a ski resort in Utah to chat about how a slow, documentation-driven software development process could be made over. They came up with an 11-point plan, the first of which sums everything up: “Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.”
Since then, Agile has grown quickly, with all kinds of different flavors sprouting, and more and more companies have adopted it. Agile coach Joe Little maintains a running spreadsheet and lists more than 200 companies that use Agile, including American Express, Bank of America, Nokia, Xerox, and too many media and tech companies to name. Electronic Arts is one well-known practitioner. The game designer used scrum and kanban to develop the physics engine that breathes life into many of its games.
Why has Agile become popular? Because it works. In cases where the waterfall process was being used, the success rate was only 14 percent, according to Standish. In cases in which Agile was applied, success was three times more likely: 42 percent. And the failure rate declined, precipitously too, from 29 percent under waterfall to 9 percent under Agile. That’s a decade’s worth of data to show that Agile is a more efficient way to go about software development.
Why does it work? Agile and iterative Web development were built to solve business issues by focusing on enabling change and learning from real-world feedback.
Commonly used waterfall processes assumed that the business would stop changes when development entered the design process. That’s why commonly used processes fail—they require business and product owners to lock in decisions before they start using the technology. If innovation stops after the concept and design phase, this approach locks your business and users away from your product during the building phase. Success requires an iterative ongoing process, taking a hard look at the concept and product as designed and continuously innovating. Business and marketing priorities change as users get their hands on your digital products, and incorporating those changes back into the product builds trust with your consumers and creates opportunities for innovation.
It’s often a difficult reality to swallow, but nothing speaks more loudly than real-world analytics. With studies from respected companies such as the Standish Group showing that 64 percent of designed functionality rarely or never gets used, it’s easy to see that the big bang approach to building digital products and marketing experiences wastes a lot of time and money. Following an iterative approach enables our focus on the highest priority items in every release.
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