Working Towards Flawless Execution

Nick Wilde*
November 2005
Australian Banking and Finance

A team of researchers in the US (The Evergreen Project) put 160 big companies under the microscope to determine why some consistently outperform their competition and which strategies among the hundreds espoused by management gurus were the ones that worked. They sorted the 160 into 40 industry groups, each with similar scale, scope, finances and future prospects. Next each company’s 10 year track record was analysed and they were sorted into:

• Winners – consistently outperformed the competition
• Losers – fell short time after time
• Climbers – started poorly but then dramatically improved
• Tumblers – started well but fell off the cliff

They then cross referenced the strategy docs and their contents with over 200 key “tactics” including CRM, ERP, Six Sigma etc. The combination of analysis allowed the separation of cause and effect. Final conclusion by the study leaders was:

“It matters little whether you centralise or decentralise, if you implement CRM or ERP. It matters very much though that whatever you choose to implement you execute it flawlessly.”

N Nohria, W Joyce and B Roberson
“What really works”
Harvard Business Review , July 2003

Inside Banks today we see a series of debates that typically serve to divide the organisation and work against flawless execution. These include: Volume vs. Value; Product vs. Customer; People vs. Technology; Strategy vs. Execution; Silos, camps, disconnects, gaps, ceilings. We have developed a whole vocabulary to describe the ways of organisational compartmentalisation and isolation.

This is not the first time organisations have dealt with the challenge of being inappropriately connected. On the information systems side, systems integrators and vendors of integration software make a living helping Banks deal with technology that will not talk with other technology. However, while the world of software is pretty binary – either it “runs” or it doesn’t – the business of influencing the behavior of customers and markets is not quite so clear-cut. Often what appears to be working in fact is not.

It is also important to note that despite many promises technology by itself has not created sustained performance enhancement. New segmentation models, data warehouses, customer profitability, propensity predictors, e-channels and relationship marketing capabilities – they all implicitly promise more value for the customer, and ultimately the shareholder. But in too many organisations we see the Chief Executive has become the Chief “Auto Parts” of banking – all parts, no car.

In fact a ll of these parts will deliver little value until they show up as enhanced judgments and actions at the point of customer interface. Increasingly Shareholders are unimpressed with a suite of parts and a set of promises as Banks continue to lose market share, wallet share, customer satisfaction, brand loyalty and household profitability. It seems the more we talk about CRM (customer relationship management), the less of it we have.

So who is responsible for the integration of organisational competence, flawless execution? Often this role falls mostly in the white space on organisation charts. Paradoxically, this can mean each unit succeeds while the collective organisation fails.

Carreker’s CVE (customer value enhancement) solution helps Bank Executives move assertively to transcend these gaps and achieve sustained organisational performance by doing three things:

• First, it offers a proven framework for performance integration up and across the organisation. This means not just being focused on individual elements but optimising organisation-wide performance through integration across channels, geography, segments, lines of business and products.
• Second, it helps get sales and marketing strategy, information, and CRM tools actionable at the point of customer interface. This is achieved through rigorous processes and metrics to communicate clear expectations to all levels and ensure continuous feedback and measurement which in turn drive appropriate interventions.
• Third, it uses a blended learning approach to provide an organisational learning mechanism driving behavior change at all touch points. This creates new knowledge workers who are able to appropriately apply CRM tools and information such as customer profitability, potential, propensity and so forth, at all levels, including the all important customer interface.

Ours is not a silver bullet solution. The goal is to become smarter each month than we were the month before, and to know where to invest organisational resources against the areas of best opportunity.

Organisational integration towards flawless execution: an idea whose time has come. CVE, a mechanism to achieve it.

*Nick Wilde is the Asia Pacific head of Carreker’s Revenue Enhancement business. Clients for CVE include St George and Westpac.

AUSTRALIAN BANKING & FINANCE/volume 14, number 15, 2005