Prof' Horst O' Bender, Ph'D'

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IMPLEMENTING MARKET-DRIVEN CHANGE
Prof. Horst O. Bender, Ph.D. Rotterdam School of
Management Erasmus University (NL) THESEUS
Institute (F) hobender_at_B2B-MSI.com
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DIAGNOSING MARKET ORIENTATIONAND IMPLEMENTING
MARKET-DRIVEN CHANGE

• DETERMINE
• The degree to which customer activities pull your
  internal agenda (Appendix 1)
• The degree to which your customer information is
  instant and complete (App. 2)
• The degree of market orientation by business
  function (Appendix 3)- RD - Purchasing -
  Manufacturing- Marketing - Sales -
  Logistics- Accounting - Finance - Public
  Relations
• BASED ON THESE DIAGNOSTICS, IMPLEMENT
  MARKET-DRIVEN CHANGE

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IMPLEMENTING MARKET-DRIVEN CHANGE ALIGNING
PEOPLE, TECHNOLOGY, BUSINESS PROCESSES
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IMPLEMENTING MARKET-DRIVEN CHANGE MANAGING THE
PERFORMANCE WITH REAL NUMBERS
Customer Perspective
Financial Perspective
Customer Relationship Management
BALANCED BUSINESS SCORECARD
Upstream Supply Chain Data
Downstream Supply Chain Data
Supply Chain Integration
Innovation and Learning Persp.
Business Process Perspective
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ISSUES IN IMPLEMENTING MARKET-DRIVEN CHANGE

• Top management must champion the cause- Top
  management must explain the benefits and drive
  the change
• Plan for cultural change
• - Change the marketing, sales and customer
  service culture
• Define spearhead projects
• - Dont try to change everything at once
• Measure productivity
• - Measure it before and after the spearhead
  projects have been implemented
• Re-engineer customer relationship processes
• - Make technology part of the CRM process, but
  dont let it dominate
• Achieve salesforce buy-in- Explain benefits-
  Align incentives
• Learn as you go
• - Make adjustments while you implement
• Prepare for resistance
• - People wont change overnight and
  organizations are even slower

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IMPLEMENTATING MARKET-DRIVEN CHANGE (I)

• 1. Make the establishment of the market-driven
  company a corporate objective and include it in
  the mission statement
• 2. Make the achievement of total customer care a
  company goal
• 3. Demonstrate senior management commitment-
  The leader owns and champions the change, invests
  time and resources, and creates a sense of
  urgency
• 4. Train the workforce to achieve buy-in -
  Cascade/diffuse the idea - Create a top
  management steering committee to guide the
  transition - Select champions who understand
  the need to be market driven, know the changes
  needed, and see the benefits of the initiative -
  The champions must have credibility and know how
  to form coalitions to overcome resistance -
  All employees must know what they are trying to
  accomplish and understand how to create
  superior value - Instill a sense of urgency

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IMPLEMENTATING MARKET-DRIVEN CHANGE (II)

• 5. Align structures, systems, and incentives-
  Create customer-driven metrics (scorecards)-
  Create teams to conduct root cause analyses of
  successes and failures- Make sure that learning
  (the sharing of experience across teams) becomes
  systematic- Establish incentives to reward
  success
• Steer the process- Balance patience with a
  sense of urgency- Be visible in the effort by
  attending workshops, personally participating in
  recognition events, and spending time with
  teams- Put the total customer care issue on
  virtually every operating meeting agenda and
  discuss them first
• There is a separate handout for detailed
  implementation steps!

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THE MARKET-DRIVEN COMPANY
CUSTOMER
Saturate your
company with the
voice of the customer
Smash the barriers
Liberate your
to customer-winning
customer champions
performance
CUSTOMER
CUSTOMER
Create a customer-
COMPANY
keeping vision
Go to school
on the winners
Walk the talk
Measure, measure,
measure

• VALUE
• COST
• SPEED

CUSTOMER
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DIAGNOSTICS
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APPENDIX 1 DETERMINE THE DEGREE TO
WHICHCUSTOMER ACTIVITIES PULL YOUR INTERNAL
AGENDA

• 1. Most of my time is spent on customer
  issues ..
• 2. I know what the customer requires ..
• 3. I understand what we can do for this
  customer ..
• 4. I understand what we plan to do for this
  customer ..
• 5. I know who within our organization takes
  prime responsibility for this customer ..
• 6. I know my role and contribution to
  satisfying the customer ..
• 7. We deliver good value for the customer, much
  better than our competitors ..
• 8. The customer believes that we deliver good
  value ..
• 9. My manager believes that we receive good
  value from this customer ..
• 10. I do not undertake activities that are not of
  value to the customer ..
• Note monitor your performance on a 1-10 scale

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APPENDIX 2 DETERMINE THE DEGREE TO WHICH YOUR
CUSTOMER INFORMATION IS INSTANT AND COMPLETE

• 1. We know everything we need to know about
  this customer ..
• 2. We have accurate data on our performance
  with this customer ..
• 3. Information on the customer is always up to
  date and complete ..
• 4. I can easily access the information that we
  hold on this customer ..
• 5. I can easily access the people within the
  organization responsible for this customer ..
• 6. The customer can always contact us ..
• 7. We know about all contacts that the customer
  has with us ..
• 8. We analyze customer information regularly as
  the basis of improving our services ..
• 9. All departments as well as our business
  partners have access to the same information on
  this customer ..
• 10. Our management tries to give everyone instant
  access to the customer information which is
  relevant to them ..
• Note monitor your performance on a 1-10 scale

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APPENDIX 3 ASSESSING THE DEGREE OF MARKET
ORIENTATIONBY BUSINESS FUNCTION (I)

• Asses the different functions in your business on
  a 1-5 scale,where 1very poor and 5very good,
• RD Rating (1-5)
• They spend time meeting customers and listening
  to their problems
• They welcome the involvement of marketing,
  manu-facturing, and other departments in each
  new project
• They benchmark competitors products and
  seekbest of class solutions
• They continuously improve and refine the product
  on the basis of market feedback
• Purchasing
• They proactively search for the best suppliers
  rather than choose from those who solicit their
  business ...
• They build long-term relations with fewer but
  more reliable high-quality suppliers ...
• They dont compromise quality for price
  savings

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APPENDIX 3 ASSESSING THE DEGREE OF MARKET
ORIENTATIONBY BUSINESS FUNCTION (II)

• Manufacturing Rating (1-5)
• They invite customers to visit and tour their
  plants .
• They visit customer plants to see how customers
  usethe companys products .
• They willingly work overtime when it is important
  tomeet promised delivery schedules .
• They continuously search for ways to produce
  goods faster and/or at a lower cost .
• They continuously improve product quality,
  aimingfor zero defects .
• They meet customer requirements for
  customizationwhere this can be done
  profitably .
• Marketing
• they study customer needs and wants in
  well-defined market segments ..
• They allocated marketing effort in relation to
  the long-runpotential of the targeted
  segments ..
• They develop winning offers for each target
  segment ..

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APPENDIX 3 ASSESSING THE DEGREE OF MARKET
ORIENTATIONBY BUSINESS FUNCTION (III)

• Marketing, continued Rating
  (1-5)
• They measure company image and customer
  satis-faction on a continuous basis .
• They continuously gather and evaluate ideas for
  new products, product improvements, and services
  to meetcustomers needs .
• They influence all company departments and
  employeesto be customer-centered in their
  thinking and practice .
• Sales
• They have specialized knowledge of the customers
  identity .
• They strive to give the customer the best
  solution .
• They make only promises that they can keep .
• They feed back customers needs and ideas to
  those in charge of product development .
• They serve the same customers for a long period
  of time .

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APPENDIX 3 ASSESSING THE DEGREE OF MARKET
ORIENTATIONBY BUSINESS FUNCTION (IV)

• Logistics Rating (1-5)
• They set a high standard for delivery time and
  meet thestandard consistently .
• They operate a knowledgeable and friendly
  customerservice department that can answer
  questions, handle complaints, and resolve
  problems in a satisfactory andtimely
  manner .
• Accounting
• They prepare periodic profitability reports by
  product, market segment, geographical areas
  (regions, sales territories), order sizes,
  channels, and individual customers .
• They prepare invoices tailored to customer needs
  andanswer customer queries courteously and
  quickly .
• Finance
• They understand and support marketing
  expenditures (e.g.image advertising) that
  represents marketing investmentsthat produce
  long-term customer preference and loyalty .

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APPENDIX 3 ASSESSING THE DEGREE OF MARKET
ORIENTATIONBY BUSINESS FUNCTION (V)

• Finance, continued Rating (1-5)
• They tailor the financial package to the
  customers financial requirements .
• They make quick decisions on customer
  creditworthiness ..
• Public Relations
• They disseminate favorable news about the
  companyand they damage control unfavorable
  news
• They act as an internal customer and public
  advocate for better company policies and
  practices
• Other Customer Contact Personnel
• They are competent, courteous, cheerful,
  credible,reliable, responsive ...