Once upon a time, in the frigid upper Midwest of the U.S. lived a dearly beloved department store chain called “Dayton-Hudson.” ‘Twas a bit on the upscale side. Garrison Keillor would have called it “above average.” But the store stayed Midwestern sensible. Not like Needless Mark-up, which many around here call Neiman Marcus, or Sak’s, and I’ll refrain from repeating the reference some use. Service was excellent. Selection broad. Return policy fantastic. Extremely philanthropic in its home base of Minneapolis. After a while the chain shortened its name to Dayton’s, but everything else stayed the same.

Then three seemingly transforming events occurred. First, Dayton’s spawned chic discounter Target Stores, which grew like weeds. In fact, Target grew so fast that it left the department store side in the dust, and eventually the corporate entity became Target rather than Dayton’s. Next came the onset of the department store blahs. The whole department store industry lost its way, caught in a squeeze between discounters and more fashionable joints and not appealing to new shoppers coming of age (and into money). And then Target, now viewing its sibling as an anchor (and not the type that dominates a shopping mall), spun off Macy’s.

Transforming changes corporately, indeed, But much less so for customers, most of whom remained loyal through it all.

But even more change was in the offing. Before long, the now “divorced” Dayton’s married the venerable Marshall Field’s chain based in Chicago, also a victim of slow growth and an aging customer base. Economies of scale provided some of the rationale. But Dayton’s married Marshall Field’s primarily for its brand, which was bit more upscale than Dayton’s. So Dayton’s stores gave up their family name and morphed into Marshall Field’s.

Yet even this time, less changed than remained the same. Core customers, although whizzed over the name change, stayed loyal. They just continued saying Dayton’s. At least until the next transition.

But then along came Macy’s. Federated, the parent, actually. Federated management had this brain fart about merging the melded Marshall Field’s chain right into Macy’s. Even more economies of scale. And oh yes, the “strength” and national recognition of the Macy’s brand would certainly lift up Marshall Field’s. Yeah, right. Macy’s, known to be a step-and-a-half closer to discounters than either Dayton’s or Marshall Field’s, was going to raise Marshall Field’s fortunes by applying the more downscale Macy’s brand.

Can you believe that grown men and women actually thought this up? They must have been overdosing on brand pills. That and sitting around in a hermetically sealed capsule carefully constructed to protect them from customer infection. But it gets even worse. Sans sense of customers – and we might say without any sense at all - these retail wizards proceeded to surreptitiously bring Marshall Field’s down to Macy’s level. Of course without downscaling prices. And this included dispensing with traditional and wildly popular holiday sales that dated back to Dayton Hudson days. But hey, customers owed Macy’s a better bottom line, didn’t they?.

I swear, a whole lot of “brand strategists” must sit around, sealed in these capsules, breathing their own fumes. How would any intelligent human being with any insight into customers, customer behaviors and customer loyalties not anticipate how customers would respond?

But customers regardless, Macy’s plunged ahead. Before long, you couldn’t find a salesperson to save your life. One individual would be covering two or three departments. Get advice? Not after Macy’s let go senior employees it didn’t want to pay. Want the traditional selection? Not after Macy’s “leaned out” inventory for efficiency’s sake. Want furniture, one of Dayton’s traditional strong suits? Not when the remaining staff doesn’t know which end of a sofa is up (and we now hear from inside that Macy’s has so mismanaged furniture – a business where it has no prior experience – that Dayton’s or whatever’s once dominant furniture centers will soon be history. And community service? “How do you spell that?”

So what happened? Just the obvious. Lots of core customers voted with their feet. And Macy’s lacks a source of new customers to replace them. So now rumors of divestitures, store shut-downs, etc. are swirling about. Hey, could Macy’s strategy actually be to bring back the traditional holiday sales, now that they’re sorely missed, as going-out-of-business sales?

Sure, long-time customers still return for this or that or in hopes of finding merchandise lines they’ve grown attached to. But many also hold their noses when they enter.

Hey, I was never an avid Dayton’s fan. And I didn’t like the name change to Marshall Field’s. But I deeply appreciate and respect the powerful bond Dayton-Hudson and pre-Macy’s successors built with so many customers.

But Macy’s didn’t. And as if we need it, we have yet one more example proving that making critical business decisions without first consulting customers brings on self-inflicted injuries. An increasing number of which are fatal.

Have you ever sat down and pondered why customer-alignment – including CRM - is so hard for so many companies? Yah sure, we’ve all mouthed the same bromides about changing from company-centric to customer-centric environments; about the customer, not the company, being the boss; and about the damage CRM software vendors have wrought. But there’s much more to it than that – like the following truths that we ignore at our own peril, but ignore anyway. Because believing them requires changing our minds – and our values. And we’re often not up for that, regardless of the consequences of not changing.

1.     Adding value to customers includes cutting costs to lower prices.  Heresy, in CRM circles. Sure, many customers value service and even integrity over low price. But low prices have universal appeal. They’re a principal source of value to customers. So when people tell you that CRM should never involve cost-cutting, believe me, they aren’t wearing their customer hats.
2.     CRM has a beginning, a middle, but no end.  CRM is a direction – a path to follow. It’s not an end point, as in “cross that one off the list.” But business is ruled with a checklist mentality. And that mentality leads many a CRM-implementing company to the only “end” CRM has - a dead end.
3.     There really are specific rules of the CRM implementation road – and we really do get hurt when we run off the road. CRM implementers have ignored more combined research and practical experience than perhaps any other class of business people. Why? Because we’re so resistant to change that we resort to self-deception. “Yeah, I can buy software without waiting.” “Yeah, we don’t have to change anything about us, just change the customer.” “Yeah, we can order sales people to use this software, and they’ll use it.” Yeah, yeah, yeah.
4.     No risk, no reward.  I love it when Salesforce.com and other SaaS vendors tout their approach as “no risk” or “low impact.” I love it even more when companies fall for these lines and rent their stuff. I love it because it’s such a travesty, and I like sick jokes. Doing CRM right requires hard, high impact change. And change creates risk. And if companies lack the guts to implement CRM properly, they should at least have the common sense to keep their wallets secure, before their money gets “hosted.”
5.     You can’t change strategies without redesigning workflow and information flow.  Ugh, who wants to change workflow and information flow? So messy. Correctamundo. But it’s nothing like the mess left by pretending to be one way towards customers but then working another way. Uttering bold words about doing better by customers unsupported by changes in how we work produces self-inflicted injuries. Just ask Wal-Mart and Dell.
6.     You’d better redesign process before implementing any new technology.  Otherwise, you’re going to wind up doing the wrong stuff faster. The same issue rears its ugly head here as in #5. We don’t want to stop to redesign process first because that’s too hard, too expensive and takes too long. So we’ll go buy a bunch of whiz bang technology tools and think about all the money we saved. Ironically, process redesign provides the fastest and surest ROI of any CRM element. Oh yeah, but then there’s the mess.
7.     The same factors empowering customers are empowering employees. You want to see how empowered employees are becoming? Try implementing CRM – including asking employees to change how they work – without putting anything in it for them. Just keep the company nurse’s phone number handy, because you’re going to get bruised. Just as the Internet has exploded our choice of products, it’s exploded our choice of jobs. Workers are more mobile than ever before, and they’re more likely to walk than ever before. Especially when you ask more of them without giving them more. Or when you order them to change without first getting their input.

8.     Customer-alignment decreases, not increases, operating costs.  Hey, this is good news, so why don’t companies believe it? Because “we can’t afford it” gives business a convenient excuse for not facing up to the need for structural change to keep pace with changing customer behavior. Sound improbable? Not if you’ve done battle with managers using “we can’t afford change” to protect their jobs and their turf against changing to a more customer-focused environment. Another irony, customers want to deal with empowered employees more than they want almost anything else from companies. And empowering line employees creates opportunities to eliminate supervisory levels, which does guess what?

9.     CRM is more than a shoeshine and a smile – and a second hand in customer pockets.  Prettying ourselves up doesn’t cost much. Smiling costs nothing. And lots of companies still believe that a shoeshine and a smile will open up customer pockets. “Hey, customers will bow down before us if we play nice – or appear to play nice. Or wow them with our brand strength.” Executives at these companies should spend a week – even a day – being a customer. They might never recover.
10.    We can’t buy CRM.  Spending money can be hard, but it’s a lot easier than changing how we think and how we behave. After all, “We’re business.” “We’re in control,” “We get to make the rules.” “We do unto customers what we would have them give unto us.” So let’s go by some software and get over this “customer-focus” crap.
Tough stuff, I know. But winning companies welcome the tough stuff. They take it head on. They look in the mirror without blinking. But they’re in the minority. And helping clients adopt winning ways requires speaking the truth – more softly than I have here - but over and over and over again.

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Okay, Google doesn’t really eat goldfish. But “gulping goldfish” is quaint term of derision for someone (in this case something) with loose wing nuts. And both these outfits – at least parts of them – are real spinners.

With Google, at most times on most days when you type in keywords such as “customer-alignment,” “customer-centric process,” “business/technology alignment,” or “visual workflow,” on the right side you’ll see a High-Yield Methods sponsored link to our website. Signing up for these keyword links is a purely self-service function provided by Google on a site it calls “AdWords.” Huge business for them. Huge pain-in-the-neck for companies trying to use AdWords.

I swear, I’ve rarely if ever seen a more poorly designed website. How in hell can a company that’s supposed to be the king of the Internet create such an un-navigable monstrosity? This thing looks like a product of locking a half-dozen free-lancers into closets with laptops – in total isolation from each other – and asking each one to independently build one piece of the total functionality. You practically need the code to move from point A to Point B. And yes, I do know the old saw about “shoemakers’ children,” but can you believe this from Google, which touts itself as the Grand Poobah of the Web?

But not to be left behind, Amazon is doing a great imitation of Google on its Amazon Advantage site – which would be better named Amazon disAdvantage. AA is a B2B site Amazon uses to order books and other merchandise from publishers. Because HYM publishes research, we have to use the site to pick up and confirm orders. Hey, at least this website looks like one team developed it – but a team that’s lost its wing nuts. Just confirming receipt of a simple order has regressed from confusing to requiring divine intervention. After the last downgrade, we couldn’t ship for a day while we waited for the Advantage crew to e-mail instructions – to a site we’ve been using for eight years now! And whoever’s responsible continues tweaking the damn thing, making it less and less decipherable. Can you believe this from Amazon, which touts itself as the Grand Poobah of the Web?

What a “competition” between the two - a race to achieve maximum dysfunction. And these sites are both such losers I’d have to call it a tie.

The irony of this situation keeps making me want to smile. But I can’t grin through my “user pain.”

That’s right. An e-mail message from “CIO Magazine” snuck past my spam filter and plopped right into my in-box. “The CIO as Chief Process Officer” was the lead story. Happened just after breakfast, too, and sent me into peptic distress.

Call it what you want – refusal to learn, deep denial of truth, failure to learn from experience – when are they going to “get it” that technology does not drive process – and neither do technologists?
Think about the process/technology relationship from a customer-alignment model. We start by aligning strategies with customers. Then we align business process with strategies. And last, we align technology with process. That’s the only way customer-alignment works. And that’s the only way business process outside of manufacturing contributes up to its potential.

CRM implementers spent years learning this lesson the hard way, as behind-the-curve companies experienced train wreck after train wreck trying to implement CRM “technology-first.” And not to limit this issue to CRM, similarly uneducated companies and software vendors brought about similar carnage trying to implement ERP software with technology driving process.

Ironically, not too long ago SAP offered a wonderful white paper advising companies never to lead process with technology on this very site. SAP gets it. But apparently “CIO Magazine” – and many others - don’t.

Okay, suppose I misinterpreted the title. After all, I didn’t have the stomach to read it. Maybe the premise was that CIOs can think in process terms better than other people. After all, systems and process are both technical, aren’t they?

This interpretation doesn’t fly, either. Even manufacturing process can be more conceptual than technical. Think about Lean. At its core, Lean is visual. It’s about mapping. But when you leave manufacturing and go to variable environments where the majority of employees in developed economies work, That’s where you really see why most CIOs shouldn’t have their hands anywhere near the process steering wheel. And that’s not a criticism of CIOs. Think about how many Chief Customer Officers would function well in a technical environment.

Process design in variable environments requires very heavy right brain activity. It’s much more creative and conceptual than left-brain technical. It’s about understanding people, understanding how business functions interact with each other; and having the imagination to see how things could be different – and better.

Nonetheless, over and over again we see companies assigning process design to IT management, which delegates it to business analysts, usually the low folks on the totem pole. This misassignment keeps recurring because corporate management persists in seeing process as a technical issue, when out of the manufacturing environment it’s anything but.

That’s unfortunate, because the financial losses caused by companies working ineffectively and inefficiently off the shop floor are staggering. And the opportunities to improve company performance by redesigning variable process are equally staggering.

Paleontologists studying the process industry are positively giddy. For once, they have live specimens to examine. No dusting off tiny bones with toothbrushes this time. They can finally study living relics—process approaches with exotic names like six sigmasaurus, leanosaurus, constraintipod and controliform. Manufacturing-based process methodologies that failed to evolve as the bulk of our employment shifted from manufacturing to much more variable, office-based and service environments.

Seriously, you can look out your office door today and see what process was like 20 plus years ago—when process was often notable for its absence. And if you do see process, you’ll be looking back at least as far as 1985, when Motorola first implemented six sigma, the last popular process approach to emerge. Of course, six sigma and Lean live on in manufacturing. And yes, they’ve both grown incrementally over the years. Practitioners have even taken crowbars to them, trying to adapt process methods designed for manufacturing to fit into “variable” environments, as we’ll call the whole spectrum of non-production settings. But for all their efforts, they’re still pounding square pegs into round holes. Working from scratch, you’d never design a process approach for use in variable environments on a six sigma or Lean platform.

Moreover, the evolution in workplace settings is hardly the only change that left 1980s process approaches behind. Think back to 1985. Little chance you had a PC. But if you did, you probably had but one application—word-processing. If you were lucky, a spread sheet, too. How many icons show on your desktop today? And guaranteed you weren’t connected to a network. Although we did have sneakernets back then for spreading viruses. The internet? It was still a brain fart of rocket scientists wanting to collaborate and share data with other rocket scientists. Windows? Forget it. My company had just switched from CPM to DOS the year prior. And the staff had to drag me kicking and screaming because CPM was so much better. Now let’s stride out onto the factory floor. Robots? Only in comic books. Buffer parts inventories? How do you spell that? Managing variances in terms of infinitesimal deviations from the mean rather than whole percentage points? What planet are we talking about? And shifting over to the warehouse, automated warehouse management systems? What’s wrong with quills and scrolls?

I hope I’m not being overly subtle here, but do you perhaps get the sense that we don’t work the way we did in 1985? And might you suspect that circa mid-1980s process approaches, especially manufacturing-based approaches, might not factor in all our new, variable environment tools and capabilities?

Outside of manufacturing, the work world of 1985 bears virtually no resemblance to our variable work environments today. Application software, the Internet, sophisticated data networks, collaborative data sharing and an adult dose of demographic and psychographic work force changes have revolutionized how we work. And to further differentiate yesterday from today, today we understand—at least those of us not pledging allegiance to one process approach under God understand—that designing business process for variable environments takes very different techniques and skill sets than designing the manufacturing side. The work of one bears little resemblance to the other. And neither do the workers.

That’s why it’s long past time for us to design, from the ground up, process approaches capable of addressing variable process needs. Not only will we create the capability to cut costs, increase efficiency, raise effectiveness and reduce cycle times throughout companies—but perhaps even more importantly, we’ll have the opportunity to properly align variable environment processes with the new, customer-focused business strategies many companies are scrambling to adopt to stay competitive.

Any takers?