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Archive for the ‘Uncategorized’ Category

Professional development in an age of uncertainty

Tuesday, March 13th, 2018

Yesterday the University of Exeter Business School presented its report on professional development and the needs of Executive Education in a seminar at the Business School.

‘Executive education in an age of uncertainty’ shared the findings of a study involving nearly 50 business and public sector organisations in the South of England.

Codexx was pleased to be involved in the study as the lead research partner and build on its existing relationship with the Business School by supporting Bill Russell, the Director of Executive Education in this project. 

The report provides insights into the challenges and approaches organisations are taking for professional development in these ‘uncertain’ times – with a combination of Brexit, economic challenges, accelerating technology and new business models. It also identifies key requirements for the providers of Executive Education based on the feedback from organisations in the study interviews and questionnaire.

The report also shares the new degree and executive education services the Business School will be launching from 2018, enabling organisations to make use of the Apprenticeship Levy for Level 6 and Level 7 personnel development.

You can read the report here.

Executive Education in an age of uncertainty

For more information on the Executive Education programmes, contact the University of Exeter Business School here.

 

Why great products are not enough – the story of Nokia

Thursday, January 4th, 2018

The second video in our series ‘Why great products are not enough’ covers Nokia and its fall from market dominance in mobile phones in 2005 to market exit less than 10 years later. There are key lessons to be learned from Nokia’s experience. In this video Alastair Ross reviews Nokia’s fall and analyses why and how it happened and the key weaknesses in Nokia’s business model and capabilities.

 

Why’s your innovation engine misfiring?

Wednesday, November 29th, 2017

Innovation is increasingly critical to business survival

We live in times of major change driven by a combination of globalisation, rapid technology development, the accelerating impact of the internet as a platform for social and business collaboration, security threats and changes in the power balance between the East and West.

The result is a turbulent environment where businesses continually need to adapt their business models and value propositions to meet new competitive conditions. In this challenging environment the ability to effectively innovate is becoming a core competence for businesses seeking to prosper in the short term and survive in the longer term.

How do you ensure that your innovation system is up to the job?

And and if it isn’t, how do you improve it?

Our latest whitepaper tells you how – you can read it here:

Why’s your innovation engine misfiring?

Why great products are not enough – the story of Psion

Monday, May 8th, 2017

Psion logo full

Businesses with great products have enthusiastic and loyal users who value the functionality and other benefits provided by these products. But for a product to be great – there needs to be something more: an ’emotional connection’ made with users. This so-called ‘joy of use’ moves a product from being merely ‘good’ to ‘great’.

In the 1980s to 1990s Psion was  such a company, providing great products in the PDA (Personal Digital Assistant) market with an enthusiastic user base. For many years it was the market leader with products such as the Series 3 and Series 5 PDAs were best sellers. So why did it exit the PDA market in 2001 – to the disappointment of its customers? And what can businesses learn from their experience?

A new Codexx video tells the story.

 

 

New videos – value-based innovation & behavioural change

Tuesday, April 25th, 2017

Front page 5
New videos have been added to the our YouTube channel ‘Business Innovator’. The Business Innovator channel is our channel for sharing innovation approaches and our professional experience with a wide community of businesses, change agents and students.

Videos are intentionally short – to provide interest and insights within ‘bite-sized’ chunks.

Latest videos include:

Thinking about value and how to innovate it

The importance of behavioural change in business transformation

Why not take a look –  we hope you find them useful – and we welcome any comments!

 

The Brexit cost challenge – an effective services response

Wednesday, March 22nd, 2017

 Stock trading monitor (black and white)

Brexit challenges both UK and non-UK businesses

Over the next decade, with economic challenges and potential tariff barriers post Brexit, both UK-based businesses and also those businesses exporting into the UK, will be facing uncertainty, pricing challenges and competitive pressures.

The impact on business services

The inevitable response of businesses tightening their budgets will impact the professional service firms which supply them with research, legal, accounting, consulting, design and other business services.

Professional service firms will need to respond in two ways: 1. Enhance their business value proposition – through innovation – so that customers are less price-sensitive and 2. Reduce costs where possible. This article focuses on how service firms can reduce costs through the intelligent targeting of waste.

Use a magnifying glass – not an axe – for cost reduction

Conventional approaches to cost reduction in professional service firms – sweeping the ‘axe’ of redundancies – risk cutting away core value-adding activities in the business along with any ‘fat’. A better approach is to apply the ‘magnifying glass’ to seek out wastes in service delivery and then eliminate them using Lean principles.

By reducing the costs associated with waste activities, cost reduction goals can be met without impacting the service and value delivered to clients. Indeed the opposite is typically the case – with a more streamlined and systematic way of working delivering a more responsive and consistent service to clients.

In our work with professional service firms over the last decade
we’ve found that service re-engineering typically reduces the cost
of service delivery by between 25-50% whilst maintaining service quality.

There are three key steps required in achieving waste elimination in service delivery:

  • Find wastes.
  • Remove wastes.
  • Stop wastes returning!

Find wastes

Wastes are activities that do not add value – and so professional time spent performing such work can be eliminated without impacting the service to the client – whilst reducing the cost of delivery. The key approaches that are effective in doing this are:

  • Find a Champion – a Partner or Manager to lead the work
  • Engage fee earners – who know how work is actually performed today
  • Understand the client requirements – what’s important to them, today’s service experience
  • Map the service – create a picture of the end-to-end service as it is today
  • Apply Lean techniques – to identify waste and inefficiency

Waste elimination means that service costs
can be reduced without lowering quality.

Remove wastes

The key steps to be followed in removing waste from a service are:

  • Re-engineer the service using a TO-BE design that provides a more efficient and controlled service – making use of procedures, templates and workflow.
  • This reduces service delivery costs in two ways: (1) Reducing the fee earner time required to perform the service and (2) Performing the work using a lower cost blend of personnel (i.e. work pushed down to more junior and less expensive personnel) or automating it. Our work on service re-engineering over the past decade has shown that typically 25-50% of this cost can be removed.
  • Maintain service quality by placing work elements at the skill level at which it can be performed at least to the same level of quality as before (through use of codification into procedures and templates and then personnel trained to these methods). In our experience service quality and responsiveness is actually improved post re-engineering.
  • Use the freed up personnel to perform other work (thus yielding cost avoidance) or made redundant (yielding cost reduction).
  • Generate new revenue using experienced personnel who have been freed up by re-engineering, to work on more complex and higher margin work – if the firm had opportunities which would have needed new hires to meet.

Stop wastes returning!

It is important in a people-based business to ensure that costs don’t ‘drift back’, especially into the delivery of fee earning work. This is why new working methods need to be supported by standardisation of repetitive work elements, making use of procedures and templates. Case Management and workflow systems can help ‘lock in’ new procedures. New metrics should be put in place to monitor time spent on matters by work element and fee earner type – to both ensure that target times are being met and also to support continuous improvement.

Conclusions

A waste-focused approach to reducing service costs in professional service firms is powerful in enabling services to be delivered at a lower cost and at least equal quality and service as before. This is not the case with the more typical people-focused redundancy approach – which can significantly impact clients through reduced service quality.

Lean-based cost reduction is a powerful approach
that is seldom used effectively in professional service firms.

One key reason for this is that few of these firms have ‘process-thinking’ in place to enable process-based improvement. This is changing with the increasingly competitive landscape for services and the accelerating use of IT and the internet for digital services delivery.

Firms should seize this approach and make it part
of their ‘transformation toolbox’ to enable a successful
response to the business challenges of Brexit.

Value myopia – a business killer

Wednesday, March 15th, 2017

glasses for myopia

It all seems pretty straight forward. A business provides a product or a service that a customer values and in return receives payment for it. Those businesses that provide a higher level of perceived value to customers will gain over those that provide less. This is the foundation of our market-based economy. Businesses use Marketing to understand what customers want, R&D to develop it, Manufacturing to build it and Sales to sell it. Basic stuff taught on any elementary business course.

So why do so many businesses get it wrong? How do they lose sight of the value needs of their customers? In effect they have got lost, guided by ‘value maps’ that no longer match the reality of their customers’ environment. Even large, sophisticated businesses are not immune from this disease. Just think about Nokia, Blackberry and IBM.

 

Lessons from the past – Nokia and Blackberry

Nokia started life in 1865 as a forestry business. Over the next one hundred years its business moved from wellington boots to electronics and military equipment and then in 1982 to mobile phones. By 2005 Nokia dominated the global market for mobile phone handsets with more than one third of the market. Yet only nine years later, in 2014, Nokia exited the mobile phone handset business after losses nearly bankrupted the company.

How did this happen? A key reason was that Nokia failed to successfully respond to a new paradigm in mobile phone handsets created by Apple when it launched its iPhone in 2007. Underlying this was that Nokia’s customer value map no longer matched the reality in the market. Nokia’s mobile phones were effectively based on a ‘radio paradigm’, where signal strength, call quality and battery life were key. However customers increasingly valued internet-based services, multiple applications, a fun and slick user experience wrapped in a slim and well designed package and were prepared to trade battery life and call qualities for these value elements. The iPhone was built on a ‘computer paradigm’ that better matched customers’ new value requirements. Nokia could not adjust its mobile phone business model to meet these new requirements fast enough and ended up leaving the market.

Backberry’s fall from market dominance was as calamitous as Nokia’s – with 41% share of the US market in early 2010 dropping to 1% by mid-2015. Whilst Blackberry was successful in selling to corporate customers, consumers became increasingly frustrated at the devices’ limitations in internet access, lack of Apps and usability compared to the more user-focused smartphones provided by Apple, Samsung and HTC. Trends such as BYOD (Bring Your Own Device) and the success of Apple and Google in providing ‘business-level’ applications on their phones meant that it was the users that drove the move away from Blackberry phones. Despite the new Blackberry 10 operating system introduced in 2013 – arguably a superior operating system to IOS and Android – its lack of application support effectively killed it. Blackberry was unable to establish an App ecosystem with sufficient critical mass to provide the required functional value demanded by customers.

 

IBM’s transformation – realising a new map of customer value

IBM successfully managed to realign its value proposition and business model to the needs of its customers – after a serious misalignment became apparent in the early 1990s. Customers were abandoning it for faster, more nimble competitors. Between 1991 and 1993, IBM lost a massive $16 billion. The core reason for IBM’s difficulties was that the IT market was changing and IBM’s value proposition had not. New developments such as personal computing, mobile telephony, integrated software solutions and the internet were moving IT beyond its traditional focus of the IT Data Centre to a strategic business issue.

As a result decision-making for selection and investment in IT was evolving from IT Management to business functions such as Marketing and Operations. IBM’s sales force did not have relationships with these decision makers, Management Consulting firms did and provided strategic guidance on IT issues. Some of these consultants, such as CSC and Accenture were also IT outsourcing companies. Outsourcing of IT meant that other IT providers, such as IBM, would become commoditised as hardware and software suppliers to the outsourcer and their influence and profit margins significantly reduced.

Through a major transformation programme IBM was able to realign its business model to match the new value requirements of its customers. Those value requirements were for an integrated service-based offering that reduced the risks and cost of ownership of IT for customers through consulting and outsourcing offerings. Building the new business model to deliver this was a ten year journey and IBM’s business changed from one where services accounted for 9% of revenue in 1991 to one where services accounted for 40% of revenue in 2001.

So how can businesses avoid the onset of ‘value myopia’ and ensure that their ‘customer value map’ matches what is happening in reality in their customers’ environment?

 

An accurate map of customer value

Here are three key guidelines to help ensure an accurate map of customer value:

1.     Always consider value from the customer’s perspective. Particularly the relative weighting of value elements such as functionality, experience, cost and quality, which vary by customer and the situation that prevails at the point of purchase or use.

2.     Customer and User insight is critical in developing the customer value map.This requires deep understanding of customers and users, their wants and needs. Approaches such as Anthropology, Lead Users and Co-Development are powerful in enabling this insight.

3.     Use structured and responsive methods for developing new and enhanced value propositions to ensure that value innovation improves the fit with how customer and user needs are changing. Techniques such as QFD, Value Analysis and Conjoint Analysis allow a detailed and holistic map of customer value needs to be created. Approaches such as Lean Start-up allow new propositions to be quickly developed and tested – reducing the risk of value misalignment with customer needs. By identifying trends in how customer value requirements are changing, businesses can get early notice of required changes in their value proposition and business model

Businesses need to recognise the ease and danger of a disconnect developing between their value propositions and user wants and needs which are by nature dynamic. They need to continually review and update their ‘value maps’ to ensure they match customer reality.

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Front cover with border for LinkedIn - SMALLFurther information on value mapping can be found in Alastair Ross’s new book ‘Sowing the seeds of business transformation’ and available in paperback on Amazon.

(A version of this article was published on LinkedIn Pulse on February 21, 2017).

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New innovation videos

Tuesday, March 14th, 2017

Screen shot at beginningTwo new videos have been added to the our YouTube channel ‘Business Innovator’. The Business Innovator channel is our new channel for sharing innovation approaches and our professional experience with a wide community of businesses, change agents and students. Our videos will be intentionally short – to provide interest and insights within ‘bite-sized’ chunks.

The first new video introduces business innovation as a ‘journey to value’ and explains how innovation mastery comes from the application of an holistic and systematic approach to innovation within a business. Watch video here.

The second video looks at innovating service design and delivery in Professional Service firms and identifies 5 key success factors, based on Codexx project experience. Watch video here.

We hope you find them useful – and we look forward to your comments.

Let us know areas you would like us to cover in future videos.

New book – ‘Sowing the seeds of business transformation’

Tuesday, February 21st, 2017

Alastair Ross’s new book Sowing the seeds of business transformation was published on the 18th February and is available in paperback on Amazon. The book is aimed at change leaders who are seeking inspiration and guidance for transformation in their own businesses – in both industrial and knowledge intensive service sectors.

Cover with text for Codexx blog

It is a practical guide, based on project work and detailed case studies and is suitable for transformation projects in a single service or process, a function or department, business unit or firm wide.

Sowing the seeds of business transformation examines key transformation-enabling tools and methods such as Value Analysis, Systematic Innovation, Lean, User-Experience, Re-engineering, Continuous Improvement, Business Model Innovation and Digitisation.

Multiple case studies are used to illustrate the use of these methods including businesses such as Nokia, IBM, Blackberry, Apple, Allianz, British Airways, Amazon, Nintendo, AXA and Ryanair. The book also provides proven frameworks and effective approaches to enable a programme of business transformation.

For more information on the book, to read sample pages or order copies, go to Amazon.

 

Presenting Service Innovation at University of Exeter MBA

Wednesday, February 15th, 2017

Exeter University logo

Alastair Ross, Director of Codexx, presented the ‘Service Innovation’ module at the University of Exeter MBA programme on Friday 10th February 2017.

Alastair said “It is always great to share experience with experienced students, get useful feedback and better understand the innovation challenges they face in their businesses and sectors.”Alastair also lectures on Service Innovation at the University of Southampton MSc in Strategy and Innovation.

Energizing Change

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