The Value of Clear Targets for Simplification of B2B Commerce
Part 5 of the 5 part series on Simplification of B2B Commerce.
Claude Harmon raised his sons to become great golf professionals. I had the good fortune to take lessons from one of them, Craig Harmon, at Oak Hill CC in Rochester. Now, to be clear… I am not an Oak Hill member (sorry no invitation to play this legendary track), nor am I very close to being a scratch-golfer. BUT, Craig was my best coach ever and he did help me to become a better golfer. Actually, as a side point, he did this through a true process of simplification of my golf swing. Anyhow, in those days I read his brother, Butch (formerly Tiger Woods’ swing coach) Harmon’s, book THE PRO about lessons that were drilled into the Harmon boys by their father as they were growing up. It’s a great read.
What does that Claude Harmon quote have to do with B2B Commerce Simplification? It’s about setting targets before firing away with your time, money and all of the organization/customer impacts of change! All too often we see companies invest heavily in projects that fall short or fail (ummm… straining the metaphor ‘they end up in the rough’). Most of the time they are launched (ouch) without setting the measures of performance. Don’t stop reading yet… this isn’t one more rant about the magic of KPI’s and management dashboards. In fact, over-reliance on someone else’s idea of YOUR dashboard is another big mistake.
What we see is that companies that best understand and articulate their STRATEGIC IMPERATIVES (a term we used frequently when I worked for my best CEO boss, Tom McDermott) keep a sharp focus to avoid the distractions, abstractions and even wandering around in the world of solutions. Companies with clear targets know where they want to be and they remove the obstacles systematically, measuring the hits/misses and learning from them as they go.
One of the best e-Commerce projects I’ve ever led had three clear targets:
1. ‘Nothing but Net!’ – Advance apologies to anti-sports readers… two sports references in ONE post? For NCAA Basketball fans this is a familiar Dick Vitale/sports commentator outburst. The CIO of the company we were working within was a big NCAA/Big East fan, and this was his way of setting a target to make ALL of the commerce flow over the web (this was ambitious in those days because we were in the EARLY dot.com era). It succeeded. All of this company’s channel partners were brought on board and eventually DID become early-adopters of the emerging internet enabled and greatly simplified commerce solution. That company remains a benchmark to this day.
2. “Lights-Out” – The CEO set this target. It translated to the need for the solution to remove ALL of the internal manual/redundant human processing of quotes and orders that were already being handled by the sales channel. That is, once the system was in place the process did not require human involvement. The target was that 80% of the demand went through the system without any human intervention. It increased productivity and lowered cost/order by 50%+.
3. 1% Minimum – The third metric was set by the CFO to force the new solution to deliver at LEAST 1% Gross Margin improvement (enough to PAYBACK the investment within 6 months). To achieve that, we needed to eliminate the very high levels of quote, order, pricing, and Bill of Material errors from the manual and error prone processes in place. This forced the clean data, knowledge enablement and systems integration into the solution to ensure that errors were avoided at each stage of the process.
I’m certain that having those three targets in view from the very beginning drove that program to a successful outcome. Because it is pretty much true that ‘you get what you measure’, it was important that the senior leadership team based their buy-in and steering around clear measures that they KNEW would make a big difference. They treated these as IMPERATIVES and never once waivered.
A key benefit of clear targets during the early stages is that all decisions can be vetted against them. When less critical scope issues came up the team asked the questions “How does this contribute” and “How necessary is that”? Without these reference points, it’s too easy to lose focus. Later in the program it became the stake in the ground to drive continuous improvements. So, as Claude Harmon recommends, before each shot, take the time to understand where you want to be and pick your targets wisely. Before launching your improvement program understand your targets, know why they matter, and stick to them on the entire journey.
Stay tuned (subscribe!) to follow my new series on B2B Commerce Simplification – Four Responses to the Four Faces of Complexity.