Steve Neiderhauser

Make Your Next IT Strategy, Your Last IT Strategy

Have you ever worked at a company where the computer systems didn't work, users were frustrated, and management had nothing but headaches. To make the pain go away -- management creates new strategies, new applications, new procedures.

Alas, after several months, you discover the relief was only temporary. You miss business opportunities and your headaches return.

What would it feel like if you had a magic recipe that made your frustrations disappear? Unlike Coca Cola's secret formula, business authors have shared their secret formula. To create a refreshing IT strategy, simply combine select ingredients.

Ingredients:

1 box Free Prize Inside
6 cups Customer Evangelism
1 quart Purple Cow

Directions:

Mix ingredients together.
Chill for one minute.
Serve immediately.

In Free Prize Inside, Seth Godin introduces edgecraft -- a process that allows you to find the soft innovations that live in the edges of your product. He describes edgecraft as a straightforward process:

1. Find an edge - a free prize that has been shown to make a product remarkable. (“A free prize isn't a gimmick. It's a game-changing soft innovation; a cool twist that doesn't cost a fortune but that transforms the way people think about your product or service.”)

2. Go all the way to that edge - as far from the center as the consumers you are trying to reach dare you to go.

Most IT strategies start with technology and focus on making technology remarkable. When your core business is retail or finance or something other than software, a strategy to push the tech envelope is usually a losing battle.

If you design software that competes with commercial software, you'll find that companies like Microsoft, Apple, and Oracle will creatively destroy your best efforts. Your best efforts are no match for companies that have focused their energy and resources on new product development.

What's a strategist to do? Skip to the next edge until you find one that rings true. Remember, the edge you're seeking isn't your primary reason for being. Successful edgecraft depends on two things: “Pick an edge that matters to your consumer and figure out how to get right to it.”

What matters to the users in your company?

How about customer service? Don't users love easy-to-use software? Can you go all the way to the edge and be remarkable? Absolutely. Your IT department is perfectly positioned to create and own the user experience. Users will be thrilled when they see applications that are flexible and easy-to-use.

How do you engage customers to the point where they embrace your service and tell others about it?

That's why the recipe calls for 6 cups customer evangelism. Creating Customer Evangelists, written by Ben McConnell and Jackie Huba, contains case stories that highlight the six tenets of customer evangelism. These principles provide a framework for planning activities that engage customers. When you read their TiVo case study, you'll learn how to use customer evangelism in business.

My favorite concept? Bite-size chunks. It has been my experience that users finally "get it" once they see a working model. Their eyes starving for examples, users gaze upon prototypes in hopes of understanding abstract applications.

Don't think you can champion the concept of bite-size samples within your company? Free Prize Inside devotes an entire chapter on how to sell your ideas.

By the way, customer evangelism is an inexpensive and effective marketing framework. In fact, this framework dovetails with a free prize; Seth writes, "You can't afford to do huge media and PR buys because the return you'll receive is unlikely to justify the investment."

What's more, when you focus on customers, it's unlikely that users will jump ship and smuggle IT services into their departments.

Every CIO in American can benefit from this approach. They may, however, continue to focus on technology and get the same result: Their next IT strategy could be their last IT strategy.

How One Absurd Analogy Helped me Discover the Power of Story

I want to tell you about the time I was in a meeting with a Stonebridge Technology salesperson, when he decided to give this analogy to a potential customer:

“Software is like music. You have six notes, and I play them in different ways to accomplish our goals.”

The clients looked at each other, scratched their heads and said, "We'll get back to you next week." They were gone like the wind, never to be seen again.

If you're a wide-eyed wonderer, you've got to think there's a better way to sell customers on your products than the standard salesperson prattle. In The Story Factor, author Annette Simmons explains how story can be used in a variety of business situations. My interest peaked when I read about story as a demonstration.

Stories can be used to show customers the benefits of your product even when your product is invisible. The author provides several examples of stories where it's difficult to see benefits--consider exercise programs.

"If you are selling a good product there are plenty of wonderful stories you can tell. You just have to find them. Stories demonstrate the benefits you promise in a way that promises can't."

Annette also references a story from FastCompany about WhirlPool's new training program. Whirlpool decided their employees needed to experience their products to the point where they could tell stories. “The best salespeople build stories around their products that deliver an entire package of facts and feelings.” Just imagine your mouth watering when you hear the story about how blueberry crisps were perfectly made in a microwave.

Annette explains, "They know from experience that performance statistics from product catalogs and reliability and quality ratings don't sell microwaves. Stories sell microwaves."

Few companies have taken the time to train their staff regarding story, so your company stands out from the crowd when you use story as part of your sales process.

What's more, stories naturally align themselves with the sales process, since a good story starts with a problem and moves to a solution. Customers buy products to either solve a problem or to be entertained. When you create a story to "demo" your product, you accomplish both goals.

Today, when even CEOs have little authority over employees, story can be a powerful influence tool for an executive. Without stories, your statements may ring hollow.

Free Prize Inside a Gas Station

A Conoco gas station is causing a stir in Tarrant County, Texas. It’s not the cool gas prices (same price as other Texas stations); it’s the hot food that’s being served inside the gas station at Chef Point Café.

Here’s a sample of what Chef Franson Nwaeze has on his menu:

Duck a l'orange

Fresh grilled sea scallops

Blacked ribeye

Blackened red snappe

Grilled tuna

Customers love inviting their friends to a nice dinner, and driving them to a roadside convenience store. The typical reaction? First their friends are angry, then delighted and surprised by the great food. Nwaeze doesn’t mind the surprised looks and jokes. He planned it that way.

"Everybody comes in angry," he says about those lured to the store by their friends. "They leave happy."

In Free Prize Inside, author Seth Godin writes that a free prize has two key characteristics. First, there's something about the product that makes you want to remark about it. Second, it satisfies a person’s wants. The product is sad or fun or delightful or surprising.

With the buzz surrounding this café, you may want to visit Chef Nwaeze and taste the duck a l'orange before you need a reservation to dine at this Texas convenience store.

When is a Story not a Story

Thanks to Cliff Atkinson for sharing James Bonnet's latest article "The Importance of the Threat in Great Stories and Its Relation to the Essence of Story"

Mr. Bonnet writes that stories are about changes of state and the problems that drive change. He shows us how to make story ring with meaning; he also tells us when story lacks meaning.

Without a problem and change of fortune, there is no story. If the story ends in the same place it began without some significant progress up or down, the audience will wonder what the point of it was. If Cinderella goes to the ball, falls in love with the prince and marries him without a single hitch... there is not story. The audience is left muttering: So what?

The same is true in business. When the waters are calm customers may have little interest in your product. When customers are surrounded by storm clouds, however, you often find your phone ringing off the hook. Grab your customers by the hand and walk them from a pain point to a relaxed, happy state, and they will tell stories to their friends, coworkers, and customers about your products and service.

B2B Evangelism

Jakob Nielsen lists the goals of a B2B website in his April Alertbox. He suggests you provide an advocacy kit, so your fans can help make the sale.

Of course, Jakob tells you how to make the kit easy to use.

When Finance meets Computer Science

This past Friday I had lunch with Paul Haubrich, a computer equipment leasing expert who reminded me of the benefits of operating leases.

Suppose you become the new CIO of a company and discover that you're constrained by large capital investments in new computer hardware. It may be to your advantage to enter into a sale leaseback agreement for the hardware -- you'll have free cash for new projects, and you'll be protected from technology obsolescence.

Architecting for Change

There I was, working in my San Francisco office on the 27th floor of Embarcadero Two when I felt the building dip and then sway about ten feet toward the San Francisco bay. I had just experienced my first earthquake -- 4.8 on the Richter Scale.

My coworkers -- old pros at riding earthquakes -- delighted in telling me that our building rested on a flexible foundation that allowed the structure to bend and roll with the earthquake’s energy.

The owners of the Embarcadero had a business goal -- the building must dynamically respond to seismic waves, assuring the safety of her tenants. The designers of the building achieved this goal by peering into the future and providing an architecture with the ability to respond to waves of change.

Before departing to the abstract world of computer algorithms, what can software architects learn by visiting a building that has withstood earthquakes?

When the same visionary thinking is applied to business, we create architectures that showcase business strategy and make your problems melt like snow before the summer’s sun.

How do you get some summer sunshine?

Imagine your business 12 to 18 months in the future on a brilliant summer day. Now, take a picture of that business. Think of all the capabilities your company will need to keep the picture in focus. Craft an architecture with options and flexibility that allows you to skate to where your business will be.

It’s the adoption of options that creates a competitive advantage. When you grasp this concept, you’ll skate circles round your competition. In fact, your competition may feel as though they’re playing in a hockey game in which they are wearing basketball shoes, while you’re wearing ice skates and gliding across the ice like Wayne Gretzky.

Story versus Story

When a company creates a remarkable product, customers naturally share a story to explain the benefits and the experience:

"It's like the feeling you get just before you drift off to sleep, but in the form of a doughnut."

-- Krispy Kreme Customer; Source: Creating Customer Evangelists

Steve Denning points to how the questionable low-carbohydrate diet story is slimming Krispy Kreme's bottom line.

Improv at the Google

The Google File System (GFS) has been described as the operating system of the Internet. We’ve talked about GFS as a product platform that offers brilliant benefits. Typically, after a company has laid a software foundation, they start to push layers onto their technology stack -- to make development easier.

Review the layered design of OS X. At top, you’ll see the Cocoa application framework. Cocoa provides building blocks that are already programmed and waiting for you to play with.

Now, I haven’t talked to Google management lately (truth is, I’ve never talked to Google Management), however, I have a feeling that application layers will be built on top of GFS. Or as John Battelle writes -- an application server for business innovation.

Why do I have this feeling? Simply by the approach taken with GFS. The next step would be to create and improve the development capabilities needed to grab a competitive advantage.

In Leading Product Development, author Steven Wheelwright describes the energy source role. In this role, managers deliver resources, capability, services, and support to their team. “For this to work, managers need to get into the service business... they must understand how to succeed by developing functional capabilities, processes, and tools that can be parlayed by development teams.”

Google has placed a solid bet on GFS. While other software companies may teeter on a foundation of sand, GFS is the bedrock on which other Google apps can be launched. It’s like building a sky scraper. Once the cornerstone is in place, it's a snap to add floors. GFS allows for rapid-fire improvements to application software and -- fosters innovation.

Steve Jobs comments about innovation during a 2003 conference call:

With Mac OS 9 and the current Windows it's like you have a house that's eight stories and when you want to add on that ninth story, you spend 80 to 90 percent of your energy not working on the ninth story but shoring up the first eight stories, because if you put the ninth story on, it will collapse of its own weight. ... With OS X we don't have to do that any more. We can spend 90 percent of our time adding floors above the eighth floor, and so look at how much faster we can go.

We're seeing tremendous software innovation within Apple because of that, both in the operating system itself and the applications that go with it, as well as our applications division.

Creativity consultant Pamela Meyer writes of seven competencies for improvisation. She leads with flexibility.

Flexibility -- Beyond cutting costs, streamlining operations, and increasing efficiency, working “smart” means looking for ways to improve responsiveness and flexibility.

You see, flexible software allows employees and partners to drink from the wellspring of innovation.

Emerging from the Shadows

A research report by Spencer Stuart suggests that the role of CIO will move from the shadows of technology and be more likely to take on CEO roles.

The summary of the report identifies eight actions for achieving IT leadership. Picture what it would be like if your staff mastered this action:

Steering and managing business (not IT) projects

In companies where IT is seen as a strategic, competitive tool, IT projects as standalone activities cease to exist and the main thrust becomes one of moving the company forward through a series of business projects.