Category: leadership

Professional Branding

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Anyone who has searched for work in the last decade has learned about the importance of the 15 second elevator speech and fine-tuning their personal brand.

Many have rejected this sales and sound-bite oriented approach to career progress as being undignified, unprofessional and personally demeaning.   Most have learned that this approach is required for even a scrap of success.

Modern recruiters and counselors advise that “it’s not about you”.   It’s about what a hiring manager or screener are seeking.   A generalist brand, multiple professions, multiple industries or a complex story are deal-breakers.   Hiring agents are seeking an exact match.  A Swiss Army knife has no perceived value.

Job seekers are well-advised to network broadly, but to focus on opportunities with a clear match of experience to requirements.   Hiring managers want to be sure that professional skills and experience are solid.  Degrees, majors, certification and prior job titles provide 90% of the evidence.  It is a rare recruiter or hiring manager who will really dig deeply into technical skills.  Interviewers also know if they are seeking a specialist or generalist within a profession.  Candidates should tailor their resume, cover letter and answers to one or the other.  A state and local tax specialist is hired for very different reasons than a division controller.

Most businesses strongly prefer candidates to demonstrate mastery of a single profession, even for entry-level positions.  General management majors are handicapped in the job search.

In addition to being technically proficient, most firms want applicants to be dedicated to and knowledgeable about their industry.  There are many reasons.  Learning industry jargon, technology and the basis of competition takes time.  Industry veterans truly believe that their industry is different and special.  Sharp managers understand that turnover is lower for industry specialists.  Most industries have a well-established culture and a leading function (merchants, scientists, deal-makers, architects).  Like most clubs, they prefer to hire familiar faces.

A wide range of professional, industry and project experience is of great value within a firm.  Unless an individual is able to sell very specialized technical skills or are seeking work through a consulting firm, they must stay focused on a simple story line when searching for a new firm.  “Cost accountant – heavy manufacturing” sells well.  “Management accountant with project success in various industries” sends vague signals.

A specialized industry and professional brand is required today.

World-Class Operations Summarized

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The classic and current classroom texts on operations excellence tend to become too technical, specialized or applied.   Quality, process, lean, six sigma, supply chain management and other buzz words compete for supremacy.  Modern operations management can be distilled into eight simple insights.

The results of activities vary in ways that can be described and predicted by statistics and probability distributions.  Variability is inherent in human and natural activities.  Reducing variability is as important as improving efficiency or effectiveness.   Fail-safe solutions are especially valuable.  Confusing inherent variability with true exceptions/trends is common, but leads to wasted efforts.

Processes are everywhere.  Inputs are processed into outputs.  Improving the links in a process may be more important than optimizing component steps.  Processes cut across natural functions and require different management.  The broad outlines of product development, sales and operations are similar across diverse organizations, allowing rapid definition and optimization.

Most importantly, self-improving systems can be constructed by defining simple goals, measures  and feedback loops.  The cumulative effect of incremental plus breakthrough improvements from project teams and front line participants is enormous, often dwarfing the improvements from the far greater investments of organizations in day-to-day pursuit of urgent but unimportant tasks.  Self-improving systems clarify the different opportunities presented by re-engineering, kaizen and continuous process improvement efforts.

The quality paradigm, focused on perfection and eliminating waste, is a complement to the finance paradigm which focuses on short-term trade-offs and diminishing returns.  The true total direct plus indirect cost of quality together with the sales and margin benefits of higher quality usually justify greater investment in quality, even within a strict financial decision-making paradigm.  But the pursuit of extraordinary quality levels (six sigma) and the elimination of waste in all forms have revolutionized the way world-class operations teams approach their work and create new value.  The belief in the possibility of zero defects has led to a simple approach of repeatedly eliminating half of the remaining defects, improving all measures of customer value.

The notion that all value is derived from customers has ordered a complex world.  The balanced scorecard aligns resources to operations to customer perceptions to financial value in a logical fashion.  Processes can be directly evaluated to determine value added versus non-value added steps from a customer perspective.  The customer centric view has helped to align sales, operations and product functions.  It has led to a set of universal customer demands for quality, speed, flexibility, value, relationships and related costs.

The logical connection of sequences of variable events resulted in the overthrow of deeply held beliefs in planning, scheduling, optimal capacity, inventory buffers and production.  The pull approach promotes extra capacity, reaction, controlled production, zero inventory, single unit batches, flexibility and integrated suppliers.  It rejects many of the push worldview’s attempt to deterministically control a probabilistic set of process steps.  The implementation of lean manufacturing has demonstrated new ways to make processes more effective in a world of variable final demand.

People matter.  In the long-run, they are best positioned to operate self-improving systems for maximum total value.  Managers who can set clear goals and engage staff succeed.  They empower staff and hold them accountable for long-run progress while maintaining controlled systems.  They encourage the use of visual feedback systems, fail-safe steps and simple measures to gauge progress.  Managers provide resources, eliminate roadblocks and teach the principles of modern operations.

Finally, modern operations is only sustainable as part of an integrated planning, analysis and control system.  A stand alone quality system will fail.  When quality and operations goals, measures, plans, projects and reports are incorporated into the overall management system, they are self-sustaining.

There is synergy across the pillars of modern operations.  Understanding variability, defining processes, building self-improving systems, using ideal long-term goals of zero waste, pursuing customer value, using pull production designs, empowering people and operating a single management system are mutually reinforcing components of world-class operations.

Managing the Tail in Operations and Product Development

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Marketers and investors have recently discovered the importance of “the tail” in distributions of opportunities, results and risks.  Virtual organizations, micro-marketing and web-based access to tiny clusters of customers has allowed start-up firms to profitably sell products to in truly niche markets.  Nassim Taleb’s book titled “The Black Swan” alerted investors to the rare events with large impacts which are not well-managed by modern portfolio theory and its attendant financial instruments.  Wise investors now consider the impact of once in a generation or once every century type events. 

As processes, product differentiation and product complexity grew following the mass market global recovery of the 1950’s and 1960’s, operations manager and engineers have increasingly faced greater challenges and opportunities “managing the tail”.  Early information technology forced companies to document and standardize their core business processes.  This automation helped companies to see their self-imposed administrative limits and explore computer assisted processes to handle all possibilities.  Product differentiation was pursued for every customer group and product dimension, creating sales, production, quality and support issues.  As customers received more options, higher quality, lower prices and shorter lead-times, they were NOT satisfied, but asked for MORE. 

Managers and engineers found that working in the tail became increasingly more difficult, costly and sometimes just plain impossible.  The number of combined options in production, assembly, catalogs, project steps, flowcharts and diagnostic guides approached infinity due to the potential combinations and permutations.  The challenge of identifying and resolving opportunities increased as remaining failure rates in quality, repairs, out of stock position or on-time shipping fell from 1 in 50 to 1 in 100 to 1 in 500 to 1 in 1,000 to 1 in 5,000 towards the gloriously named six sigma level (2%, 1%, 0.2%, 0.1%, 0.05% …).

In general, an army of scientifically oriented quality, business, marketing, financial, IT and engineering analysts have addressed these opportunities as complexity has risen and customer demands have increased.  Along the way, the quality paradigm was defined, setting zero defects, variability, travel, inventory, waiting and waste as eternal goals.  The financial paradigm’s focus on limiting costly investments to obtain small benefits acted as a resistor throughout this period.  

As organizations have moved deep into the tail for their IT and product development, operations and reverse logistics processes, conflict has become more common.  Analysts and process owners understand the trend and know that eventually any error, combination or possibility will be required by an internal or external customer.  They hate disorder and doing things twice.  They enjoy describing processes, diagnosing problems, designing and implementing complex processes, at whatever cost.  Their product development, IT and operations managers and directors, backed up by finance, tend to focus on the short-run, employ cost-benefit analysis and value compliance with project deadlines and budgets as higher goals.  The conflicts can be gentle comments, indirect negotiations or all out wars.

All of the players agree that demands for systems to handle more complex options with near perfect results will continue to grow.  They differ in how they value the short-run and the long-run.  While the financial paradigm develops a payback period or ROI based upon “solid” financial estimates for 5-10 years, the quality paradigm employs an infinite time horizon where infinitesimal improvements have subjectively valued importance as customer satisfaction, market share or risk management benefits.  As quality guru Dr. Deming said, the most important benefits are “unknown and unknowable”.  Hence, the two approaches are fundamentally incompatible.

Managers should take a number of general and specific steps to manage these situations, especially since they involve highly skilled, compensated and critical resources.  First, help the participants to understand the financial and quality paradigms.  Help them to see that the finance paradigm has great short-term applicability and is no going to be subsumed by the quality paradigm.  Teach staff members to deeply understand the quality paradigm, the transformation it has facilitated in global business and its contribution to long-run success in a consumer driven world. 

Second, encourage functional and project team members to alternately apply both paradigms to specific situations.  Either can help to trigger break-through solutions or to find an obvious next improvement level.

Third, reinforce with staff members the need to have functional hierarchical structures, process improvement resource plans and project management as tools to manage the improvement effort.  Front line staff and analysts may have the best ideas, but they need to be administratively coordinated by managers.  Even in the most dynamic, entrepreneurial environment, there is some need for structure.  Managers and staff can debate the right overall level or need for exceptions, but they need to appreciate the need for limits and ultimate decision-makers when conflicts can not be resolved.

Fourth, help staff to see the long-run commitment to improvements.  Cutting errors in half today, rather than pursuing a 90% reduction, is not a failure, it is a win.  The organization will be back to this process in 3 or 5 or 7 years, with new tools and customer demands, again analyzing 50%, 90% and 99% improvement paths.  Decisions to accept “good enough” are part of the long-run improvement process.

Fifth, employ the best practices of product development, diagnosis, problem solving and project management to reduce variability and meet goals in cost-effective ways.  With 50 years of experience, professionals have found great approaches that can be broadly applied.

Managing the tail of operations processes is an increasingly important role for managers and analysts.  Greater variety and consumer demand makes it ever more challenging to resolve issues or to know when to stop pursuing them.  Teaching staff to understand the complementary roles of the financial and quality paradigms and providing them with best practices tools helps them to produce cost-effective results.

Creating Infinite Customer Value

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Process engineers create structures and use them to create infinite value. Most subscribe to the balanced scorecard view of commercial firms as four linked levels: 1) assets/resources used to create 2) operations excellence which 3) satisfies customers, allowing firms to 4) maximize financial returns. Many use some variation of Richard Schonberger’s six universal customer needs (QSFVIP) to structure strategies for satisfying customers. They have found that there is no practical limit to increasing the value delivered to customers.

In the world of quality, we have seen ISO 9000 type quality management systems become standard and Six Sigma quality levels approached. Informal quality assurance has been supplanted by a variety of formal measurement, feedback and improvement systems. Product defect levels have fallen from 5% to 2% to 1% to 0.1% to even smaller fractions. The improvements show no signs of stopping and customers appear to value each new level. The accident rate in commercial aviation provides a powerful case study. The basic quality feedback loop combined with statistical tools and employee engagement have made this possible.

 Speed, measured as product delivery cycle time, continues to improve. Manufacturing processes are designed in cells, using “unit of one” batches and just-in-time supplies to reduce production from weeks to days to hours. Supply chain coordination reduces production lead times from months to weeks to days. In distribution, lead times have dropped from weeks to days to latest cutoff hours for air, parcel, LTL and truck load service. Customers continue to ask for more, even beyond 2pm cutoffs for 10am next day delivery.

 Flexibility to accept orders of any size or kind at any time continues to improve. Customers no longer order ahead of peak seasons to assure supply. They order when then need goods. Customers share sales forecasts, but have no qualms about ordering 3-6-12 months of supply in a single shot and expect normal delivery. Firms have learned to add low-cost equipment and labor capacity, hold semi-finished goods and outsource peak needs to partners. This pressure has moved up the whole supply chain. Lean manufacturing techniques and integrated supply chain management have facilitated this change.

Value, as measured by unit cost, continues to improve. Labor and total factor productivity increase by 2-4% annually for decades at a time. Quality, supply chain, IT, communications, institutional, engineering and basic science advances drive these benefits.

Value, as measured by combinations of features and benefits that meet individual needs, grows each year. Micro marketing, partnerships and customer intimacy strategies ensure that goods and services better meet expressed customer needs. Data analysis, individual promotions and sales tracking allow firms to anticipate the needs of smaller and smaller groups of customers.

 Information or transaction costs continue to fall. EDI and simple electronic markets reduce transaction costs at every stage. Supplier websites, catalogs, pricing, ratings and portals reduce the costs of transactions. Formalized information sharing, vendor managed inventory and evaluated receipt settlements further reduce costs. Standard project and document collaboration systems reduce the cost of product development. Formalized risk management and emergency preparedness resources and plans reduce potential liabilities for all.

 Personal attention grows, in spite of the increased complexity of systems and use of high-technology. Firms know more about each other through partnerships, joint suppliers, product development projects and customized offerings. Firms which have adopted customer intimacy as their primary strategy have organized to become customer centric, employing customer relationship management systems (CRM) to shape their data. As routine transactions are automated, sales, customer and technical service staff focus their time on personal attention.

 Customers will be fully satisfied when there are no product defects and no risk of product defects, when goods and services are delivered at the second they perceive a need, when no purchase is delayed as being too large or unusual, when products are free or customers are paid to take them, when products are uniquely created for their needs, when transaction costs are zero and when they feel like they are the only customer in the world. Tremendous progress has been made towards those goals in the last 30-50 years, often beyond what was imaginable even 20 years ago. The rate of progress towards those ultimate goals has not yet slowed.

Talent Day

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As George Orwell demonstrated in his novels, words and word frameworks have tremendous power.  It’s time to replace Labor Day with Talent Day.

The term Labor Day reinforces several old misconceptions and needless conflicts.   Labor connotes physical labor, which became less important to the economy as energy and innovation moved the economic focus from agriculture to manufacturing to services to information.  Labor echoes the Marxian concept of class solidarity which has limited applicability in a dynamic world.  Labor is conceptually distinct from capital in the economic factors of production model, but the two are blended in many economic forms and their returns can be structured the same way.  Public sector (unionized) labor is contrasted with productive private sector capital in political ads, even though public sector employment is a shrinking share of the economy, supplanted by innovative contracting and outsourcing.  The old “labor” no longer exists.

Instead, firms rely upon a variety of human resource talents to succeed.  Physical labor or energy is the least important talent.  Hours worked or energy expended is a minor source of productivity and economic success.

Professional skills and knowledge have become more important and valued in all functions and industries.  Compare the skill levels of nurses, machinists, warehouse workers, purchasing agents, salesmen, engineers, maintenance technicians, auto mechanics, insurance adjusters, physical therapists, bankers or accountants today with those of 50 years ago.  Entry-level jobs today require professional, IT, process, quality and communications skills beyond those of master professionals in the post-war era.

The oddly named “soft skills” have also been upgraded in the last few decades.  In a world that is no longer static, mechanical and bureaucratic, all employees are required to have the skills required for a dynamic, organic and evolving workplace.  Individual character, responsibility and self-management is required.  Supervisors have been eliminated.  Research, development, innovation and improvement are expected of all employees.  Employees and contractors are expected to have teamwork skills, to understand processes that cut across functions and to manage constant change.

The human resources sector is also being asked to assume the risk management function once largely absorbed by capital.  With less labor intensive organizations, the role of financial capital is lowered.  With less employee loyalty, staff are asked to assume greater business risk of unemployment.  With greater outsourcing, contracting and narrow functional specialization in evolving technical fields, individuals are investing in skills with less assurance of ongoing usage.

On this Labor Day, let’s celebrate the value of talent in the new economy and the end of “labor” as a misused word and concept.

Functional Specialization Solutions

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There are many solutions strategies that can be used to maximize the potential net benefits of functional specialization and overcome the inherent limitations.

First, processes can be defined and optimized to effectively leverage functional talents.  The mechanical and modular paradigms can be refined to incorporate specialists.

Firms can adopt a portfolio strategy whereby the average success ratio largely offsets random failures.

Specialists and generalists can trade positions to increase their effective coordination skills and understanding.

Communications meetings, technologies, experiences and priorities can improve alignment.

Process management can be elevated to a meta-analysis level, with individuals responsible for the success of prospect to customer, concept to product and order to cash processes.

Countries, states and firms can develop long-term partnerships with their suppliers and customers and improve their prospecting, bidding and negotiation skills.

Individuals can improve their situational leadership skills, learning to balance task and people needs.

Firms can greatly improve their means-ends skills, improving staff delegation, board governance and supplier management skills.

In highly diverse and risky product development areas, firms can invest in specialized firms or in competing development teams.

Firms can invest in staff members who are highly skilled in translating strategy into projects and then into operations.

Finally, firms and individuals can increase their understanding of situations where there are two inherently conflicting objectives.  They can learn from the experience of statisticians, researchers and actuaries who routinely manage the alpha risk that a predicted relationship exists when it really doesn’t against the beta risk that a relationship is found to not exist when it really does.

Functional specialization is an incredible driver of incremental value.  Countries, states, firms and individuals will be rewarded for their attention to this factor.  Common tactics can be used to maximize the value of this strategy.

Ch Ch Ch Changes

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The Baby Boomers may have digested more workplace changes (1970-2010) than any prior generation, moving from an industrial to a post-industrial, services, or virtual world.  The post-Civil War generation saw the initial transition from an agricultural to an industrial society (1880-1920).  Their grandchildren saw the full flowering of the industrial world, with incredible advances in manufacturing, transportation and communications (1920-1960). 

Nearly every usual business practice or function in 1970 has been superseded or turned upside down in the last 4 decades.

The office world of 1970 looked much like 1920.  It was hierarchical, manual and rigid.  Secretaries assisted managers.  Typing, filing, shorthand and bookkeeping were essential skills.  Today, only a few senior execs or sales staff members have administrative or executive assistants.  Everyone else completes their own clerical functions as an integral part of work.  Paper ledger forms and 10-key adding machines have been replaced by Enterprise Resource Planning (ERP) systems in even the smallest firms.  QuickBooks offers capabilities that were unimaginable in 1970.

Mainframe computers automated high volume transaction and office tasks in large firms in 1970.  Computers have since expanded to touch every function, moving through minicomputer, PC, network and cloud phases.  Sophisticated applications exist today for every function and industry, including a dozen end-user tools such as spreadsheets, databases, word processing and collaboration/time/task management.

Communications has progressed from rotary phones, party lines and PBX systems to WiFi, VOIP systems, wireless phones and personal digital assistants.  Media has progressed from AM transistor radios through 8-track and VHS tapes to disks, digital downloads, massively multiplayer games and social media entities.

Companies today pursue core competencies, partnerships and virtual structures in contrast with the old vertically integrated ideal or financial portfolios of conglomerates.  Firms are financed through a broad range of instruments and investors throughout their lives rather than with simple stocks, bonds and preferred stocks.

Companies today compete globally and engage in partnerships with suppliers, customers and competitors.  They also compete with suppliers, customers and competitors, including small entrepreneurial start-ups.

Support functions are more important today.  The Personnel function has become Human Resources.  Marketing has assumed a strategically important role in product development and sales management.  Finance is a strategic partner in decisions.  Many functions are outsourced.

Product development is managed through a gates and phases process.

Operations functions have been totally transformed.  Quality has evolved from a technical necessity to an organizing principle.  Processes shape decisions.  Variability and waste are shunned.  The near-perfection of Six Sigma is pursued and achieved.  Firms benchmark and copy best practices.  Forecast based push systems have been replaced with JIT pull systems, reducing inventories to zero and lot sizes to units of one.  Mass production has been replaced by a network of focused factories, modular manufacturing and outsourcing.

Strategic planning has migrated from an infrequent fully integrated top-down approach to an iterative  process that massages top-down and bottom-up factors within a balanced scorecard composed of assets, operations, stakeholders and final goals. 

Suppliers are managed as long-term partners, instead of short-term contractors.  Staff members are treated as partners, even though company and staff initiated turnover is much higher.  Simplistic theory X and Y approaches (employees are good or bad) have evolved into situational leadership type approaches that match task/people dimensions to current needs. 

These generic changes have occurred seen in every industry and function, layered on top of the major technical and professional progress seen in each area. We are rapidly approaching a time when virtual organizations are a reality because they are more effective than forms suited to an industrial era.  Baby Boomers have experienced this whole cycle of change and are well situated to mange the final transitions.

Tale of Two Cities

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In a recent speech at the Carmel Rotary Club, Indianapolis Star editor Dennis Ryerson warned the audience of the risk of a central city meltdown in Indianapolis as he had observed in Cleveland 20 years ago.  As someone who has lived in each region for more than 20 years, this prompted me to collect some historical statistics and speculate on the differential success of these two mid-sized Midwest areas.

In 1900, Indy was two-thirds the size of Cleveland, which at 654,000 people, was the nation’s seventh or eighth largest urban area by various definitions.  Indianapolis was in the 21st-25th range.

By 1930, Cleveland had grown by an astonishing 173%, adding 1.1 million people for a total of 1.8 million, reaching a peak national ranking of 6th to 8th.  Indianapolis was the turtle in this race, adding a mere 200,000 residents to grow by 50% to reach Cleveland’s 1900 650,000 population level, while maintaining a 21st-25th highest population ranking.

By 1960, Cleveland had added another one million residents (50%), reaching 2.7 million residents and maintaining a top 10 population ranking.  Indianapolis grew a little faster on a percentage basis, adding 400,000 residents to reach the 1.1 million population level.  Its national population rank slid to 26th as Sunbelt and west coast cities began to grow.

In the next five decades to 2009, Indianapolis continued its modest 1-1.5% annual growth rate, adding 750,000 residents to reach a population of 1.8M, while sliding to 34th place in the national metro population rankings.  Cleveland reached a peak population of 3M in 1970 before declining to 2.8M in 2009, good for a 26th place metro population ranking. 

In summary, Cleveland grew by 1 million people from 1900-1930 and from 1930-1960, but added ZERO population in the next 50 years!   Indianapolis added a quarter, half and three-quarters of a million people in those 3 periods.  What could possibly account for these divergent trends in cities located only 300 miles apart?

The locations are not very different.  Indy claims to be the “crossroads of America”, while Cleveland has said it is “the best location in the nation”.  Cleveland is on the New York to Chicago train line, the Great Lakes and interstates I-80, I-90 and I-77.  Indy boasts I-70, I-65, I-74 and I-69 interstate access.  Indy has leveraged its location and lower labor costs to become a greater distribution hub.  Cleveland has enjoyed a decade as a mini-hub for Continental, while Indy once served as a minor USAir hub.  Both cities have attracted rural residents from a 100 mile circle, but Cleveland’s area is only half as large due to Lake Erie.

Both cities had strong historic banking companies.  All of the Indy companies are gone.  Cleveland maintained National City Bank and KeyCorp as major banks through most of the period.

Cleveland has maintained a large Fortune 500 headquarters lead.  Firestone, Republic Steel, Uniroyal, Goodrich. TRW, Std Oil, White Motor, Eaton, Sherwin-Williams, Cleveland-Cliffs, Hanna Mining and Reliance Electric appeared in the 1960 list.  Cleveland had grown from 12 to 15 firms by 2009, adding Progressive Insurance, National City, KeyCorp, Parker-Hannifin, PolyOne, Lubrizol and Travel Centers of America.  Indy had 5 firms in 1960: RCA, Lilly, Curtis Publishing, Stokely Van Camp and Inland Containers.  It maintained only Lilly, WellPoint and Conseco in 2009.

On the professional sports scene, Cleveland has maintained football and baseball teams, while adding basketball, but dropping the second level hockey Barons.  Indy added the Colts and moved the Pacers from the ABA to the NBA.  Indy has successfully pursued an amateur sports strategy, attracting the Pan-Am games, the NCAA and many collegiate tournaments.

The cities share historical strengths in their art museums and orchestras, with Cleveland’s ranked higher.  Indy has added the Children’s Museum and Eiteljorg Museum, while Cleveland added the Rock n Roll Hall of Fame museum and lost the Salvador Dali museum.  Neither city has a major state university, with IUPUI and Cleveland State growing in parallel.  Cleveland has Case Western Reserve as a local research university.  Greater Cleveland has a much stronger community college system.  The Cleveland Playhouse and theatre groups offer more than Indy’s scene.  Cleveland’s Coventry/University Heights area is more vibrant than Indy’s Broad Ripple.  Cleveland adopted Michael Stanley while Indy embraced John Mellencamp.

Both cities focused on manufacturing for growth, especially automotive and metal forming manufacturing.  Cleveland had a greater emphasis on basic manufacturing in steel, rubber and plastics.  Indianapolis attracted a significant amount of investment from Japanese manufacturers.  Indianapolis’ health care industry has benefited from Lilly, Roche and IU, while Cleveland has leveraged CWRU University Hospitals and the Cleveland Clinic.

Net, net, Cleveland should have continued to grow slightly faster based on the factors above.  The drivers for Indianapolis’ positive differential growth include:

Better public relations regarding momentum.  Cleveland’s river fire and “mistake on the lake” moniker have hurt.  Indy was able to overcome the “naptown” label through continued positive growth and publicity.

Indianapolis and Indiana have maintained a low tax and low service environment conducive to business investment.

Indy has benefited from being the state capital and the only large city in Indiana, while Cleveland has battled Columbus and Cincinnati for state leadership.

Indianapolis has avoided major racial conflicts.  The 1966 Hough riots in Cleveland contrast with the calming Bobby Kennedy speech after Martin Luther King’s 1968 assassination.

Indianapolis public schools have not fallen as far as IPS.  Busing and white flight had a bigger negative impact in Cleveland where a more established Catholic school system option existed.

Downtown Indianapolis has recovered based upon major public and private investment in the Circle Center Mall, convention center and sports arenas.  Cleveland’s investment in the Brown’s stadium, Jacobs Field, Cavaliers arena, major office buildings and “the flats” has never reached the critical mass required for downtown growth.  Indianapolis’ downtown residential growth has been modest, but adequate.

Indianapolis pioneered the concept of uni-gov, merging the city into the county.  Cleveland has remained an island within Cuyahoga County and a small island within the metro area. 

Indianapolis civic leaders found a variety of ways to preserve and grow the central city and avoid having widespread areas of decay.  As Mr. Ryerson noted, this strategy will be more difficult to maintain as the surrounding counties grow at the expense of Marion County.  Both cities could benefit from some degree of regional government and taxing authority that aligns the interests of suburbs with the central city.

  Cleveland Indy  
  7 counties 9 counties  
       
1900          654         429 66%
1910          913         489 54%
1920       1,426         569 40%
1930       1,784         656 37%
1940       1,817         702 39%
1950       2,154         829 38%
1960       2,734       1,071 39%
1970       3,000       1,248 42%
1980       2,833       1,305 46%
1990       2,759       1,381 50%
2000       2,844       1,605 56%
2009       2,791       1,824 65%
       
1900-30       1,130         227  
  173% 53%  
       
1930-60          950         415  
  53% 63%  
       
1960-2009            57         753  
  2% 70%  

What Customers Really Want

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As organizations and organizational units adopt more customer-focused strategies, there is a need to better understand what customers really want.   Although firms can invest years and decades in marketing research on this question, they can also choose to obtain 90% of the value in a single day by facilitating an honest discussion with key leaders and customers.

 Those who have adopted the quality/process view believe that the first step is to confirm that customers mostly (only) care about the perceived value of final results.  They will pay for a value added process or feature, but don’t care about other activities.  Richard Schonberger proposed that all customer needs can fit into a small number of categories, which can be used to define and prioritize the findings.

Customers value final product or service quality.  More today than before; and more tomorrow than today.  Some customers value process quality, because it reduces their risk, serves their customers or is required by regulators.  What quality level is required to remain in business, to meet expectations or to differentiate a product?

Customers value delivery speed.  Product lead times have fallen from weeks to days to hours to minutes.  Service delivery is sometimes measured in seconds. 

Customers value flexibility.  They expect your firm to have the capacity to meet their orders within standard lead times.  They expect you to make exceptions.  As in the Pink Panther movies, they may agree to a standard lead time or capacity, but when they need an exception, they want you to ignore what they told you before.  Expectations regarding flexibility vary widely across industries and firms and can change rapidly.

Customers seek value.  They want lower prices or total cost of ownership.  They want features and benefits that are cost-effective, which meet their needs or which are market leading.  This is a very broad category, but firms must operate with some understanding of what is expected.

Customers value information.  They want business relations with clear information flows, minimal transaction costs and shared accountability for risks.  Ideally, you anticipate and fulfill their needs in a cost free way, without surprises and take care of surprises of all kinds: regulatory, supplier, customer, competitor, acts of god, etc.

Finally, customers value personal relationships.  This varies by culture, industry, firm and purchasing agent.  Business relations are rarely purely business relationships.  Personal connections, loyalties, favors, culture and understanding often matter.

Firms or business units should understand what their customers want.  They should identify minimal, expected and differentiated performance levels.  They should understand relative customer priorities.  This may require formal marketing research or trial policies or pricing exercises to determine real preferences.  This may require sales, marketing, engineering, production and finance to work together like never before.

A consensus one-page QSFVIP customer profile can help to shape decisions at the strategic and tactical levels.

Project Opportunity Analysis Template

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    Opportunity Analysis – Name of Project
     
    1. Key Strategic Priority Areas/Critical Success Factors
10 A Creatively addresses more than one of the nine key strategic priority areas.
7 B Directly targets a significant improvement in one key strategic priority area.
3 C Contributes to the achievement of one key strategic priority area.
  D Provides benefits, but does not address any of the nine key strategic priority areas.
     
    2. Annual Strategic Plan
10 A An integral and significant preplanned component of the annual strategic plan.
7 B An initiative within the annual plan.
3 C Consistent with focus areas of the plan, but not defined as a planned initiative.
  D Provides benefits, but is not connected to the initiatives defined in the plan.
     
    3. Mission, Vision and Precepts 
10 A Creatively addresses more than one precept or component of the mission.
7 B Directly targets a precept or component of the mission.
3 C Contributes to a precept or component of the mission.
  D Provides benefits, but the connection to the mission and precepts is weak.
     
    4. Long-term Strategic Plan
5 A Creatively addresses more than one goal of the plan.
4 B Directly targets a significant improvement in one goal of the plan.
2 C Contributes to the achievement of one goal of the plan.
  D Provides benefits, but does not address specific goals of the plan.
     
    5. Program/Product Portfolio
5 A Builds on an existing area of strength, leveraging a core competency.
4 B Provides services the organization has targeted for growth or improvement.
2 C Addresses an area of weakness considered critical to portfolio of services.
  D Serves a new area, a weak area, or one that de-emphasized.
     
    6. Customer(s) Served
5 A Targeted to serve an existing primary customer group.
4 B Serves a customer group which has been identified for growth potential.
2 C Serves a secondary customer group, by leveraging an existing program.
  D Serves a secondary customer group or channel,  which others could serve as well.
     
    7. Proven Demand for this Service
5 A Members, customers and sponsors have paid for this program before.
4 B Marketing research and tests indicate that this is a top priority service.
2 C Marketing research supports some demand, but dollar value is unproven.
  D Some constituents demand this service, but no research or market proof.
     
    8. Brand Consistency
5 A Service reinforces key brand messages and is promoted with existing vehicles.
4 B Service is consistent with key brand messages, but requires separate promotion.
2 C Service connects with some brand messages and requires separate promotion.
  D Service is not consistent with key brand messages.
     
    9. Delivery Channel Environment
5 A Reinforces historical and current programs and values in delivery organizations..
4 B Consistent with historical programs and values in delivery organizations.
2 C Some degree of innovation or stretch that may be a concern to some players.
  D Innovative program designed to introduce change for delivery partners.
     
    10. Financial Resources
5 A Earns a financial payback of investment in one year or less.
4 B Earns a financial payback in two years or less.
2 C Breaks even in more than 2 years, but provides significant qualitative benefits.
  D Qualitative benefits are deemed to exceed quantitative costs.
     
    11. Sponsor/Funding Resources
5 A Creates a strong opportunity to attract new sponsors and contributions.
4 B An attractive project 80% likely funded in a year, without harming programs.
2 C More than 50% funding chance, but may compete with existing programs.
  D Less than a 50% funding chance or clearly competes with existing programs.
     
    12. Information Technology
5 A Uses existing capabilities without modification.
4 B Uses existing or planned strong capabilities with minor enhancements.
2 C Uses existing capabilities, but requires development outside of current plans.
  D Requires pioneering development work to provide appropriate service.
     
    13. Delivery/Operations/Processing Capabilities
5 A Uses existing strong capabilities without modification.
4 B Uses existing strong capabilities with minor enhancements.
2 C Uses existing capabilities, but requires significant development.
  D Requires pioneering development work to provide appropriate service.
     
    14. Human Resources
5 A Service can be provided by existing staff and structure.
4 B Service requires some additions to staff in existing categories.
2 C Service requires new staff skills and minor adjustments to structure.
  D Service requires major initiatives in recruiting, retention and structure.
     
    15. Monitoring and Evaluation
5 A Success is easily measured by existing measurement and evaluation tools.
4 B Success can be measured with only minor enhancements to current system.
2 C Success can be measured, but will require adjustments to existing measures.
  D Success is difficult, if not cost prohibitive, to measure directly.