Archive for November, 2012|Monthly archive page

Social media’s productivity boost

Most companies are using social media exclusively to drive marketing objectives such as building product awareness or highlighting new promotions.  A small number of dynamic organizations, however, have deployed social media as an instrument to improve employee productivity and engagement.   Research suggests that (at least for now) the biggest payoff from social media will come from higher corporate productivity in terms of better communications, enhance data management and improved collaboration.  As such, leaders should consider adding internal social media tools as part of their corporate social media plans. However, they need to be mindful of organizational challenges that can limit the payoff.

Social media has hit the big time.  According to comScore more than 1.5B consumers worldwide are registered on a social networking site.  Almost 20% of the time online is now spent on social network sites, triple the amount spent in 2008. Not surprisingly, marketers have been the first to exploit this growth by launching new advertising programs, setting up their own social sites and engaging in real-time dialogue with their consumers.  This initial consumer focus has produced crucial insights on how people interact with the technology as well as communicate and collaborate with each other.  Savvy managers are analyzing these learnings and the experiences of some early adopters to explore how their firms can leverage social media inside the organization.

When properly designed, social media applications can dramatically improve communications, knowledge management and collaboration within and across the organization and with external stakeholders. The McKinsey Global Institute estimates that in the packaged goods, consumer finance, advanced manufacturing and professional services sectors alone, new social technologies can produce between $900B to $1.3T in value creation.  Two-thirds of this benefit would come from improving collaboration and information flows between knowledge workers in the product development, marketing, customer support, sales and operations departments and across the organization.  One third of the incremental value is created from using social applications within these functions.

Social media is a powerful communication and collaboration enabler.  For one thing, most employees are already comfortably using public platforms and storing information there.  Furthermore, these tools have a unique ability to catalyze rich and varied interactions as well as enable easy data searching and archiving.  Finally, social platforms are not hamstrung by the technical, physical or behavioral limitations of existing email and knowledge management systems.

New research suggests that middle managers, in particular, will get a performance boost from using social technologies.  Middle managers are important, expensive and skilled individuals who spend an inordinate amount of their time communicating in email, looking for data and attending meetings.   Improving their effectiveness can significantly enhance organizational productivity, and decision-making. McKinsey estimates that middle managers that use social technologies in their everyday work could save 20-25% of their time and effort – and solve real business problems.  In our experience, social media-enabling a firm can also unlock the latent creativity and problem solving skills of newly empowered workers as well as serve as a powerful tool for reinforcing corporate values and strategies.

We witnessed first hand how social media can improve a company’s performance. Our firm helped a major IT services provider develop a private-platform social media strategy to support customer service in their financial services business.  The platform expedited the dissemination of time-sensitive information (e.g., upgrades, announcements) and reduced the time to respond to end user queries. Moreover, the firm unlocked the problem solving talents of hitherto overlooked employee groups.  Productivity enhancements like these led to higher customer satisfaction scores and improved service team effectiveness and efficiency.  Other companies such as Cisco and Dell are benefitting from internally focused social platforms.

Capturing social media’s value creation is more than choosing the right technology – although that is vital. The bigger challenge is on the organizational side.  For example, managers need to consider how new social platforms will fit with their existing (and implicit) workflows.  In many cases, these will have to be tweaked or new processes will have to be created.  Furthermore, the leadership should seek to maximize employee participation across the enterprise. This will depend on the leadership commitment, the firm’s culture (i.e. is there an environment of sharing and trust?) and the employee’s inclination to embrace change.  To improve the odds of successful change, managers should think about how their on and offline practices will co-exist, and how they can leverage proven change management methodologies like Gamification.

For more information on our goods and services, please visit the Quanta Consulting Inc. web site.

Next generation manufacturing, today

Recent advances in digital fabrication technologies have the potential to revolutionize how companies build products and target consumers. Manufacturers can now produce many customized products and prototypes ‘when needed, as needed’ with the same economics as high volume production.  DF technologies will transform many industries including apparel, consumer & industrial products and healthcare – as well as local economies, which may experience a manufacturing revitalization.   Savvy manufacturers are exploring how they can leverage these new technologies to compete better.

The rapidly evolving field of DF is doing for manufacturing what the Internet did for information-based goods and services.  DF turns traditional, volume-based manufacturing economics upside down. In the conventional “subtractive” production model, the existence of scale economies means that it costs much more money to produce one unit than it does to produce say 100,000 units.  When DF technologies and approaches are employed, it now becomes cost effective to manufacture much smaller batches of customized products on demand, while shortening the cycle time between design and production.

Not surprisingly, DF has disruptive characteristics. “3D printing can provide the garage entrepreneur with the same productive capabilities as the large corporation,” says Abe Reichental, CEO of industry leader 3D Systems.

Additive technologies

At the heart of DF has been the development of additive-based technologies like 3D printers.  These machines allow firms to take digital designs and rapidly print (i.e. build) products or parts from a variety of materials using bonding or fusing techniques. The 3D printer’s advantages in programmability, quick set up times and rapid change-overs enable firms to produce small batches and prototypes for the same cost per unit as long production runs.  Furthermore, companies can rapidly adjust production to meet customer demand and changes in taste.

3D printing is best suited for products or parts that are expensive to inventory, need high levels of customization and require quick production runs. In the healthcare sector, the 3D printing future is already here. Over 10 million 3D-printed hearing aids are currently in circulation worldwide. 3D printing is being adopted by industry leaders such as GE, Medtronic, Boeing and Mattel as well as a host of smaller enterprises to make a myriad of items such as aerospace parts, iPhone accessories, orthopaedic implants, jewelry and toys.

The future looks promising:  additive technologies are evolving on a path similar to Moore’s Law: machine capability is growing while cost is decreasing exponentially.  Jeff Immelt, CEO of engineering giant General Electric, is convinced.  “I think it’s going to be big, I really do… [particularly for] shortening cycle times between designing products and making them.”  This advantage could help North American manufacturers compensate for higher wage costs compared with those in emerging economies such as China.

Of course, DF has its limitations.  The technology is not mature enough to handle large or complex products.  Furthermore, additive technologies cannot match the low cost and throughput of conventional manufacturing for routine parts.

Open Source Manufacturing

Perhaps the most intriguing facet of the DF revolution has been the emergence of an ‘Open Source’ manufacturing movement. Booze & Co. describes this as the rise of a ‘Maker Culture’ – a self-organizing community and supply chain made up of hundreds of connected manufacturers, consumer groups, on-line shopping sites, and hacker groups.

The Maker Culture encompasses an ecosystem of players.  Online fabrication services like i.materialise and Sculpteo provide on-demand 3D printing for personalized small volume production, at rates that are affordable to individuals and small businesses. Customers forward a digital design and receive the corresponding physical item by mail a few days later.

New open design repositories and DF-powered supply chains are sprouting up on the Web.  Thingiverse is an online hub where people can freely download each other’s designs and programming code for such ubiquitous products as bottle openers, gears, and coat hooks.  Distributed manufacturing networks like Makerfactory and 100kGarages connect digital manufacturers directly with a global market. Potential customers post job requests, which are then bid on by individual fabricators.

Similar to their programming cousins, Makers are forming open source collaboratives and workshops around the world. These spaces are not centrally owned or organized, but they share information collectively and collaborate on each others projects. Makers are expected to publish their plans and specifications, typically under an open source license.  This allows others to copy, adapt, and co-develop designs, along with ensuring credit and mutual access to ideas. This cultural shift has the potential to germinate a diverse, dense and innovative network of local vendors centered around large original equipment manufacturers or by industry.

The rise of DF has important implications for every manufacturer.  Those that embrace the technological and cultural opportunities will benefit from lower production costs, greater innovation, a faster design-to-build cycle, and the support of a more responsive supply chain.

For more information on our goods and services, please visit the Quanta Consulting Inc. web site.

The power of underdog brands

Increasingly, many firms are looking to connect to their consumer’s heartstrings by repositioning their brands as underdogs.  Although this strategy has been employed many times, there had been no empirical research to prove the supposition that underdog narratives resonate well with customers — until now.  A topical study by Anat Keinan, a professor at the Harvard Business School, shows that a narrative grounded in hard luck and determination can improve a brand’s attractiveness across multiple sectors and a variety of geographies.

Branding a company or product as an underdog is not a new idea.  Though there are many variations, all of them incorporate a ‘David vs, Goliath’ or counter-culture theme.  Examples range from Avis’ classic positioning: ‘We are number 2 but we try harder’ to more recently Adidas’ “Nothing is Impossible” brand campaign which emphasizes the underdog stories of famous athletes.

Despite its usage, it is not self-evident that underdog branding passes the common sense test. Extensive psychological research has shown that people want to associate themselves with winners — and by connection with winning brands — even if they find underdogs more appealing.

The Findings

Professor Keinan conducted a series of lab and online studies with more than 2,000 American consumers recruited from national online samples. The studies examined the effect of different underdog brand biographies on a consumer’s choice, purchase intention and product loyalty.   Her findings clearly supported the premise that an underdog narrative can improve a brand’s relevance, purchase intent and loyalty.  According to Keinan, “underdog brand biographies are effective in the marketplace because consumers identify with the disadvantaged position of the underdog, and also share their passion and determination to succeed when the odds are against them.” Having these two important narrative components is vital to building a powerful underdog brand.

The research also found that the underdog effect crosses cultural boundaries.  Participants in Singapore and the United States both exhibited preferences for underdog brands. However, underdog preference was stronger for American participants.  This may be due to the fact that Americans may be more receptive to underdog narratives because of the unique role of underdogs in their history (think Rocky and Seabiscuit).  In particular, underdog stories about overcoming great odds through passion and determination resonate strongly during tough economic times. They inspire and give hope when the outlook is bleak.

In addition to its primordial appeal, underdog branding may also reduce an organization’s reputational risk by shielding it from attacks from activists who look to criticize a company for being large, successful or too visible. Including underdog branding elements and values allows consumers to identify with a brand’s passion and struggles rather than its size or profile. This effect may overpower any negative attributions associated with large size or a firm’s leadership position.

Making it real

To implement an underdog branding strategy, marketers need to carefully build a compelling story:

  1. Frame the external environment as largely negative. Underdogs start from a disadvantaged position based on having a more difficult history or less resources.  They hit obstacles along the way, making it a more difficult struggle for them than for others.
  2. Create a likeable brand personality. Underdogs possess appealing and universal values and goals that many people can relate to. Underdogs appear more passionate than others about achieving their goals, even when facing challenges.
  3. Align with each consumer touch point.  Great underdog brands fully integrate their story through their advertising, packaging, web sites, social media, and marketing communications.

Some watch outs

Authenticity is a critical ingredient in an underdog brand narrative.  If the underdog appears disingenuous or is later acquired by a large corporation, it will diminish the credibility of their story. For example, consumers criticized brands like Snapple and Ben & Jerry’s after they were acquired by conglomerates. Additionally, there are product categories that may be ill suited to an underdog brand strategy. Specifically, consumers may question the quality and safety of an underdog healthcare, financial services or security brand.

For more information on our services and work, please visit the Quanta Consulting Inc. web site,

Do you have too much IT?

These are heady times for technophiles.  New technologies like mobile computing, data analytics, social networking, and cloud computing has propelled IT back to the top of corporate agendas.  However, in the rush to exploit new applications, many companies can easily over indulge in IT with negative repercussions on cost, ROI and organizational performance.

In today’s competitive economy, IT exuberance is understandable.  Managers want to use breakthrough technologies to serve customers better, improve performance and ring out more cost savings from operations.  At the same time, nobody wants to go through the carnage of the early 2000s when firms threw away $130B in IT spending between 2000-2002 (source:  Morgan Stanley). Furthermore, CEOs can no longer ignore the high cost of IT in their search for bottom line savings.  In some firms, the IT budget is now approaching 12-15% of total corporate spending.

Managers are faced with a dilemma:  how do you take advantage of new technologies (if they are any good) without overspending and distracting the business?  Based on our research and client experience, we recommend the following maxims:

1.  IT must follow business strategy not the other way around – Typically, many managers look to get the latest applications, functionality and hardware before they understand how it would fit into the corporate strategy and workflows, or because they succumb to common phenomena like ‘feature creep’ or ‘keeping up with the Joneses.’  As a result, much of the IT purchased does not end up being deployed or effectively utilized.  There are a variety of reasons for this, including:  uneven management attention, insufficient employee training or poorly articulated requirements.

When strategy and goals dictates what resources are needed and when, less IT is inevitably purchased and more is utilized.  To make this happen, firms should tweak their cultures in two ways.  First, business sponsors should take the responsibility for better understanding existing IT assets and capabilities.  They should jointly propose with IT technical solutions that align to business needs and corporate strategy.  Second, the IT department must adopt an ‘inside-out’ approach to recommending technology.  To do this, they must be congruent with business goals, strategy and plans before seeking out the ideal IT solution.

2.  The organization is the focus – The role of IT is to support the organization, not the other way around.  It is common for impatient managers to throw IT resources at what appears to be a business problem, when in fact it is the workflows, structure and policies that are the issue.   Leaders need to first make sure the organization’s roles & responsibilities, decision rights and processes are optimized before considering new IT resources.

In addition, firms need to recognize that IT is an aid to judgment not a replacement for it.  A case in point is data analytics.  The potential of new DA technologies to better segment customers or identify operational improvements is hard to resist.  However, managers need to tread carefully to ensure their organizations have the capabilities, skills and focus to fully leverage the power of DA or implement its insights.

3.  IT simplicity should be the goal – Not surprisingly, the typical IT department is a mish mash of hardware, applications, operating systems, vendors and skills.  This complexity breeds more complexity when managers start to add capabilities while continuing to support legacy systems.   No wonder IT spending can quickly, quietly and unexpectedly spiral out of control.

Standardizing the computing platform across a company or business unit is one answer.  Many companies like Cisco and Zara have gained significant productivity improvements and enterprise-wide IT savings by standardizing on a limited number of platforms, applications and vendors.  In fact, firms can generate savings through scale economies and experience effects even when the individual asset is not the least expensive or the most capable.

Another way of getting more IT for less money is to move your computing into the cloud.  While valid security and technical concerns remain, there are enough case studies and organizational best practices to justify moving many IT operations and applications, particularly non-core activities.

4. Re-exert transparency and control – Mismanaged IT spending is a pervasive problem in large organizations, particularly where there are weak controls and spend opacity. We’ve seen companies with strict headcount ceilings simultaneously give free rein to junior IT managers to purchase hardware, software licenses and consulting services at their leisure.  A hospital we work with allows researchers to buy new hardware for every new project regardless of the presence of hundreds of under-utilized servers and licenses lying around.   In our experience, rogue purchases can account for up to 25% of an IT budget.

To counter this, management needs to apply the same spending rules and discipline to IT as they do with other functional groups and expense categories.  Furthermore, centralized purchase and finance departments should have more knowledge and visibility into existing IT assets and vendors in order to encourage the sharing of assets across business units and departments.

Many companies will flourish despite a minimalist approach to IT but to a large extent because of it.  A ‘less is more’ IT strategy can lead to lower spending, reduced business complexity and higher employee engagement. Achieving this is as much about strategic alignment and organizational optimization as it is about technology selection and resourcing.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.