Making experience matter by building the right incentives into processes

Last month at the Bizagi virtual conference, I gave a keynote on aligning intelligent process automation with employee incentives and business goals. I decided to expand on those themes a bit for my monthly post on the Trisotech blog. Rather than the usual sort of performance metrics, I suggest the following:

The key to designing metrics and incentives is to figure out the problems that the workers are there to solve, which are often tied in some way to customer satisfaction, then use that to derive performance metrics and employee incentives.

There are a lot of challenges with figuring out how to measure and reward experience and innovative thinking: if it’s done wrong, then companies end up measuring how long you spent with a particular app open on your screen, or how many times you clicked on your keyboard.

We’re going through a lot of process disruption right now, and smart companies are using this opportunity to retool the way that they do things. They also need to be thinking about how their employee incentives are lined up with that redesign, and whether business goals are being served appropriately.

You can check out the whole post over at Trisotech’s blog.

Disclaimer: Trisotech is my client.

(Post image by my talented friend Alison Garwood-Jones).

Disruption in 2020: now down on the farm

I’ve been writing and presenting a lot over the past several months about the disruption that the pandemic has brought to many aspects of business, and how successful businesses are harnessing technology to respond to that disruption. In short, the ones that use the technology to become more flexible are much more likely to be coming out of this as a success.

I usually work with financial services clients on their technology strategy and execution, but this story caught my eye on how farmers are embracing Zoom calls and much more to make their operations work better. To quote the article, “the pandemic has sped up the adoption of technology in the agricultural industry as farmers spend more time with digital tools and programs and less time having face-to-face meetings”, which is exactly what’s happening in many other industries. If you thought small family farms were low-tech, think again: the farmer interviewed here uses his iPhone to monitor conditions in his fields, market his products, and track weather predictions from wherever he is. And starting this year, due to social distancing protocols, he orders his seed and supplies online, and uses Zoom to talk to experts about problems that arise during the growing season.

He thinks it’s working out well, which probably means that he’ll continue to work this way in the future. This is a theme that I’m hearing in many other types of businesses: once they’ve had to use technology and reorganize their business to accommodate the current disruption, they’re probably not going back to the old way of doing things.

There is definitely a big lesson here for businesses of any size: failure to innovate is going to cause failure, period.

Focus on Insurance Processes: Product Innovation While Managing Risk and Costs – my upcoming webinar with @Signavio

I know, I just announced a banking webinar with Signavio on February 25; this is another one with an insurance focus on March 10 at 1pm ET. From the webinar description:

With customer churn rates approaching 25% in some insurance sectors, insurers are attempting to increase customer retention by offering innovative products that better address today’s market. The ability to create and support innovative products has become a top-level goal for many insurance company executives, and requires agile and automated end-to-end processes for a personalized customer journey.

Similar to the banking webinar, the focus is on more management-level concerns, and I’ll look at some use cases around insurance product innovation and claims.

Head on over to the landing page to sign up for the webinar. If you’re unable to attend, you’ll receive a link to the replay.

Focus on Banking Processes: Improve Revenue, Costs and Compliance – my upcoming webinar with @Signavio

I’ll be presenting on two webinars sponsored by Signavio in the upcoming weeks, starting with one on banking processes on February 25 at 1pm ET. In this first webinar, I’ll be taking a look not just at the operational improvements, but at the (executive) management-level concerns of improving revenue, controlling costs and maintaining compliance. From the webinar description:

Today’s retail banks face more challenges than ever before: in addition to competing with each other, they are competing with fintech startups that provide alternatives to traditional banking products and methods. The concerns in the executive suite continue to focus on revenue, costs and compliance, but those top-level goals are more than just numbers. Revenue is tied closely to customer satisfaction and wallet share, with today’s customers expecting personalized banking products and modern omnichannel experiences.

You can sign up for the webinar here. This will be a concise 35 minutes plus Q&A, and I’ll include some use case examples from client onboarding and KYC in retail banking.

Goals and metrics

I’ve been spending some time recently helping a few companies think about how their corporate goals are aligned with key performance indicators (KPIs) at all levels of their organization, like this:

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Top-level goals, or what keeps the corporate executives awake at night, usually fall into the following categories:

  • Revenue growth
  • Competitive differentiation
  • Product agility
  • Customer retention

As we move down the hierarchy, different levels of business managers are also concerned with operating margin/profitability, service time, compliance, and operational scalability; you can see a pretty direct line between these KPIs and the top-level corporate goals. For example, improved profitability is likely going to improve (net) revenue, while better service time means happier customers. When we reach the level of front-line workers, their KPIs are usually based on individual performance and skills advancement.

The problem arises when those worker-level KPIs are not aligned with the corporate goals; I’ve written about this in several presentations and papers in the past, in particular about how we need to change worker metrics in more collaborative work environments so that they’re rewarded for more than just personal performance. In doing some research on this, I came across Goodhart’s Law (via the book The Tyranny of Metrics), which is basically about how people will game measurement systems to their own benefit, particularly when goals are complex and the metrics are crude. That’s so true. In other words, given the choice between maximizing a poorly-designed metric that will benefit them personally, or doing the right thing for the customer/company, people will almost always choose the former.

Examples:

  • An organization has a “same day” SLA for incoming customer inquiries, except if the inquiry needs to be reviewed by the legal or accounting departments. Business units are measured on how well they meet the SLA, so everyone forwards all of their unfinished work to legal or accounting at the end of the day in order to they meet their SLA, even if the inquiry does not require it. This decreases productivity and increases customer service time, but maximizes the departmental time-based SLA.
  • An HR department is measured by the number of candidates that are hired, but not on the quality of the candidates. I don’t need to explain how that goes wrong, but suffice it to say that it has a big impact on customer satisfaction as well as productivity.

Any metric that is based on individual (or departmental) performance but can’t be aligned up the hierarchy to a corporate goal is probably going to be detrimental to overall performance, or at least neutral. If you can’t show how a task is contributing to the good of the enterprise, then why are you doing it?

Obligatory futurist keynote at AIIM18 with @MikeWalsh

We’re at the final day of the AIIM 2018 conference, and the morning keynote is with Mike Walsh, talking about business transformation and what you need to think about as you’re moving forward. He noted that businesses don’t need to worry about millenials, they need to worry about 8-year-olds: these days 90% of all 2-year-olds (in the US) know how to use a smart device, making them the truly born-digital generation. What will they expect from the companies of the future?

Machine learning allows us to customize experiences for every user and every consumer, based on analysis of content and data. Consumers will expect organizations to predict their needs, before they could even voice it themselves. In order to do that, organizations need to become algorithmic businesses: be business machines rather than have business models. Voice interaction is becoming ubiquitous, with smart devices listening to us most (all) of the time and using that to gather more data on us. Face recognition will become your de facto password, which is great if you’re unlocking your iPhone X, but maybe not so great if you don’t like public surveillance that can track your every move. Apps are becoming nagging persuaders, telling us to move more, drink more water, or attend this morning’s keynote. Like migratory birds that can sense magnetic north, we are living in a soup of smart data that guides us. Those persuasive recommendations become better at predicting our needs, and more personalized.

Although he started by saying that we don’t need to worry about millenials, 20 minutes into his presentation Walsh is admonishing us to let the youngest members of our team “do stuff rather than just get coffee”. It’s been a while since I worked in a regular office, but do people still have younger people get coffee for them?

He pointed out that rigid processes are not good, but that we need to be performance-driven rather than process-driven: making good decisions in ambiguous conditions in order to solve new problems for customers. Find people who are energized by unknowns to drive your innovation — this advice is definitely more important than considering the age of the person involved. Bring people together in the physical realm (no more work from home) if you want the ideas to spark. Take a look at your corporate culture, and gather data about how your own teams work in order to understand how employees use information and work with each other. If possible, use data and AI as the input when designing new products for customers. He recommended a next action of quantifying what high performance looks like in your organization, then work with high performers to understand how they work and collaborate.

He discussed the myth of the simple relationship between automation and employment, and how automating a task does not, in general, put people out of work, but just changes what their job is. People working together with the automation make for more streamlined (automated) standard processes with the people focused on the things that they’re best at: handling exceptions, building relationships, making complex decision, and innovating through the lens of combining human complexity with computational thinking.

In summary, the new AI era means that digital leaders need to make data a strategic focus, get smart about decisions, and design work rather than doing it. Review decisions made in your organization, and decide which are best made using human insight, and which are better to automate — either way, these could become a competitive differentiator.

DSTAdvance16 Keynote with @KevinMitnick

Hacker and security consultant Kevin Mitnick gave today’s opening keynote at DST’s ADVANCE 2016 conference. Mitnick became famous for hacking into a lot of places that he shouldn’t have been, starting as a phone-phreaking teenager, and spending some time behind bars for his efforts; these days, he hacks for good, being paid by companies to penetrate their security and identify the weaknesses. A lot of his attacks used social engineering in addition to technical exploits, and that was a key focus of his talk today, starting with the story of how Stanley Rifkin defrauded the bank where he worked of $10.2M by conning the necessary passwords and codes out of employees.

Hacking into systems using social engineering is often undetectable until it’s too late, because the hacker is getting in using valid credentials. People are strangely willing to give up their passwords and other security information to complete strangers with a good story, or unintentionally expose confidential information on peer-to-peer networks, or even throw out corporate paperwork without shredding. Not surprisingly, Mitnick’s company has a 100% success rate of hacking into systems if they’re permitted to use social engineering in addition to technical hacks; the combination of internal information and technical vulnerabilities is deadly. He walked us through how this could be done by looking just at metadata about a company, its users and their computers in order to build a target list and likely attack vector. He also discussed hacks that can be done using a USB stick, such as installing a rootkit or keylogger, reminding me of a message exchange that I had a couple of days ago with a security-conscious friend:

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Mitnick demonstrated how to create a malicious wifi hotspot using WifiPineapple to hijack a connection and capture information such a login credentials, or trigger an update (such as Adobe Flash Player) that actually installs a fake update instead, gaining complete access to the computer. He pointed out that you can avoid these types of attacks by using a VPN every time you connect to a non-trusted wifi hotspot.

He demonstrated an access (HID) card reader that can read a card from three feet away, allowing the card and site ID to be read from the card, then played back to gain physical access to a building as if he had the original card. Even high-security HID cards can be read with a newer device that they’ve created.

He described how phishing attacks can be used in conjunction with cloned IVR systems and man-in-the-middle attacks, where an unsuspecting consumer calls what they think is their credit card company’s number, but that call is routed via a malicious system that tracks any information entered on the keypad, such as credit card number and zip code.

Next, he showed the impact of opening a PDF with a malicious payload, where an Acrobat vulnerability can be exploited to insert malware on your computer. Java applets can use the same type of approach, making you think that the applet is signed by a trusted source.

Using an audience volunteer, he showed how online tracing sites can be used to search for a person, retrieving their SSN, date of birth, address, phone numbers and mother’s maiden name: more than enough information to be able to call in to any call center and impersonate that person.

Although he demonstrated a lot of technical exploits that are possible, the message was that many of these can be avoided by educating people, and testing them on their compliance to the procedures necessary to thwart social engineering attacks. He referred to this as the “human firewall”, and had a lot of good advice on how to strengthen it, such as advising people to use Google Docs to open untrusted attachments, and using technology to protect information from internal people when they don’t need to see it.

Lots of great — and scary — demos of ways that you can be hacked.

This is the last day for ADVANCE 2016; I might make it to a couple of sessions later today, then we have a private concert with Heart tonight.

DSTAdvance16 Day 1 Keynote with @PeterGSheahan

I’m back at DST‘s annual AWD ADVANCE user conference, where I’ll be speaking this afternoon on microservices and component architectures. First, however, I’m sitting in on the opening keynote where John Vaughn kicked things off, then passed off to Steve Hooley for a market overview. He pointed out that we’re in a low-growth environment now, with uncertain markets, making it necessary to look at cash conservation and business efficiencies as survival mechanisms. Since most of DST’s AWD customers are financial services, he talked specifically about the disruption coming to that industry, and how current companies have to drive down costs to be positioned to compete in the new landscape. Only a few minutes into his talk, Hooley mentioned blockchain, and how decentralized trust and transactions have the potential to turn financial services on its ear: in other words, the disruptions are technological as well as cultural.

He turned things over to the main keynote guest speaker, Peter Sheahan, author of several business innovation books as well as head of Karrikins Group. Sheahan talked about finding opportunity in disruption rather than fighting it. He presented four strategies for turning the challenge of disruption into opportunity: move towards the disruption; focus on higher order opportunities; question assumptions; and partner like you mean it. These all depend on looking beyond the status quo to identify where the disruption is happening to drive recognition of the opportunities, not just trying to do the same thing that you’re doing now, just better and faster. Some good case studies, such as Burberry — where the physical stores’ biggest competition is their own online shopping site, forcing them to create unique in-store experiences — with a focus on how the convergence of a number of disruptive forces can result in a cornucopia of opportunities. It’s necessary to look at the higher order opportunities, orienting around outcomes rather than processes, and not spend too much time optimizing lower-level activities without looking at how the entire business model could be disrupted.

A dynamic and inspiring talk to kick off the conference. Not sure I’ll be attending many more sessions before my own presentation this afternoon since I’m doing some last-minute preparations, although there are some pretty interesting ones tempting me.

PegaWORLD 2015 Keynote with @BrianSolis: Innovate or Die!

Brian Solis from Altimeter  Group was the starting keynote, talking about disruptive technology and how businesses can undergo digital transformation. One of the issues with companies and change is that executives don’t live the way the rest of us do, and have to think of the shareholders first, but may not have sufficient insight into how changing customer attitudes and the supporting technology will impact their profitability, or even their ability to survive. “A Kodak moment” is now about how you go bankrupt when you ignore disruptive technology: not something that you want to capture for posterity.

Digital Darwinism

Customer experience can just happen by accident, or it can be something that we design in order to achieve a “higher purpose” of being customer centric. That doesn’t mean that we have complete control over that customer experience any more, since our brands are made up of what we put out there, and what other people say about us. Customer experience is not about what we say, but about what we do, since that’s what will be examined under the social media microscope. Altimeter’s research shows that almost all companies undergoing their digital transformation specifically because of customer experience, but that few of them really understand what the problem is. 67% of buyers’ customer journey is now done online, consulting 11 different sources for information even if they purchase IRL, and your online customer experience is the difference between surviving or not. Part of this is omni-channel presence, since almost none of those pre-buying search journeys happen on a single device. You can’t force customers to do business your way: you have to do it their way. And in order to do it their way, you have to understand what that is (that sounds kind of obvious, but may companies don’t get that). You have to think through the eyes of your customers: as Solis said, “Think like a customer. Act like a startup.”

Innovate or Die

Solis’ message, in short: if you don’t disrupt yourself, someone else will do it for you. Innovate or die.

Making Yourself Invaluable: Content2015 Keynote by @markeaton7ft4

I’m usually not a fan of “inspirational” keynotes at technical conferences that have nothing to do with the topic, and just have a few of the sponsor’s buzzwords sprinkled incongruously throughout the presentation. However, this morning at the IBM Content 2015 conference in Toronto (part of a road show of mini-conferences), Mark Eaton — a former NBA Alll-Star who turned his experiences into a career in speaking and coaching — gave a keynote on making yourself invaluable on teams. Eaton played defense, so he know all about how teams work, and how you need to support others in order to make everyone successful rather than just making the glory moves yourself.

He presented four key things to creating a winning team:

  1. Make people look good (provide others with recognition)
  2. Know your job (narrow your focus, rather than broaden it)
  3. Do what you are asked to do (listen what others are asking for)
  4. Protect others (create an environment of safety and freedom to enable innovation)

His key message: to achieve lasting success, make others successful.

This isn’t necessarily a unique message amongst inspirational speakers, but he put a lot of detail into how this worked for him, and made us think about how it could work for us on our own teams. Made me  bit nostalgic for the days when I did run implementation teams, and got a lift from making my team members successful.