Presentation by David Baker or Baker Strategy for the HDI Motown Chapter 1-8-09

1. Business Skills for a Changing Economy
Collaborating for Better Business Performance
Presentation
MAKE IT HAPPEN
BAKER
STRATEGY GROUP
Wednesday, January 08, 2009
CORT – Novi MI

2. HDI Motown Presentation Business Skills for a Changing Economy
Today’s Agenda
The Changing Economy
The Changing/Changed Role of IT Support
Talking Strategy
BAKER
STRATEGY GROUP
Page 1
January 8, 2009

3. HDI Motown Presentation Business Skills for a Changing Economy
Our Experience
Baker Strategy Group has had experience conducting programs for a number of
organizations in a variety of industries
Client Engagements
BAKER
STRATEGY GROUP
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January 8, 2009

4. Presentation Business Skills for a Changing Economy
I. The Changing Economy
A quick look at these remarkable times
BAKER
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January 8, 2009

5. HDI Motown Presentation Business Skills for a Changing Economy
I. The Changing Economy
A Sample from Today’s Headlines
The world is reeling from the economic collapse, and most economist expect a “U-shaped”
recovery that isn’t expected to pick up until late 2009 or even 2010 or 2011
The Wall Street Journal CNN.com/US
• Wal-Mart Cuts View Amid Retail Slump • Crisis and plan to fix it 'unprecedented'
• Madoff Is a 'Danger,' Argue Prosecutors • A $2 trillion bet on powering America
• Walgreen to Cut 1,000 Jobs • Warning! Warning! Weak profits ahead
• Kuwait Bank Defaults on Debt • Detroit Auto Show: The party's over
• Commercial Property Loses Shelter • Auto execs expect more bankruptcies
• Cardinal Health Lowers Outlook • Unsafe? Unsound? A taxpayer bailout
• Satyam Scrambles to Assess Finances • Will Obama's tax cuts work?
• Lenovo Plans Major Revamp • Radical cheap: $1,000 homes
• OECD: Cleanse Banks of Bad Loans • Mortgage rates dip to new all-time low
• Home Depot Ends Olympic Program • From Wal-Mart to the mall, a tough holiday
• Gadgets for Leaner Times • Windy City's retail downdraft
• Europe Stocks Track Overseas Losses
BAKER
Source: HDI STRATEGY GROUP
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January 8, 2009

6. HDI Motown Presentation Business Skills for a Changing Economy
I. The Changing Economy
Michigan’s Ills
Michigan, as we know, is experiencing more than its share of economic difficulty
Recent Developments
Michigan’s outbound migration highest in US
Detroit’s credit rating reduced to junk bond status
Furniture manufacturer to cut 200 white collar workers
Iron mine in the UP to let go over 350 employees
Unemployment system inundated with activity
Forecast for 2009 Michigan state revenues (taxes) was decreased by $870 million
Coal plants projects may get stalled
Borders struggling
Kuwait pulled out of $17.4B joint venture with Dow Chemical Co
Automotive suppliers can’t get access to credit for new projects
BAKER
Source: HDI
STRATEGY GROUP
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January 8, 2009

7. Presentation Business Skills for a Changing Economy
I. The Changing/Changed Role of IT Support
What we can expect for the near future
BAKER
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January 8, 2009

8. HDI Motown Presentation Business Skills for a Changing Economy
II. The Changing Role of IT Support
IT Support
Below are is a an humorous old IBM commercial that shows smart, reactive support
personnel who complicate the issues due to a disconnection with the end user experience
IBM Commercial: http://www.youtube.com/watch?v=hoj5Scm7HaY&feature=related
Unrelated but funny IT video: http://www.youtube.com/watch?v=0eIFoz-Tjf8
BAKER
STRATEGY GROUP
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January 8, 2009

9. HDI Motown Presentation Business Skills for a Changing Economy
II. The Changing Role of IT Support
The New Customer Support
The IT help desk of old has changed/is changing its role within the organization
It's time to profoundly reinvent the profession of Customer Support. From the beginning
of the technology industry to the present time, support has been the department of
break/fix; quot;when something breaks, we fix it.quot; As such, the quot;professionquot; offers no real
economic value to anyone; it never has. Even more significantly, as we move deeper into
the gathering recession and farther into the rapidly unfolding SaaS era, support as it is
currently defined has no future. There are two paths that lead away from this point for
companies and support reps. One is downward into obscurity, obsolescence and
ultimately extinction. The other is towards an authentic profession based on the
exchange of true economic value.
During the 1/8/09 presentationn, it was generally agreed that this description of the
service desk employees is somewhat outdated, and the role, development , and
performance of the agents has grown significantly over the last several years
BAKER
Source: “The Redefinition of Customer Support” by Mikael Blaisdell STRATEGY GROUP
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January 8, 2009

10. HDI Motown Presentation Business Skills for a Changing Economy
II. The Changing Role of IT Support
HDI’s Position
Service desk managers should be actively involved in organizations such as HDI in order to
further develop and grow and managers
Ron Munz on why HDI is an important association for service desk managers:
“The reality is you don’t even need to join an association to get facts. If you go
to Google and you spend enough time you can get facts. But you don’t change
behavior just with facts. You change behavior, and you change strategy, and
you change vision, and you increase motivation when you’re around other
professionals that are doing thing similar to yours. “
Service desk managers also can play a key role in helping the service desk agents grow and
develop in their understanding of the organization’s businesss issues
BAKER
Source: HDI STRATEGY GROUP
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January 8, 2009

11. HDI Motown Presentation Business Skills for a Changing Economy
II. The Changing Role of IT Support
Example: Starbucks CIO
Gillett’s appointment represents the changing role of IT –deep IT experience meshed with
a business proficiency that enables him to better align IT with the “customer experience”
Gillett's mission is to create and implement the technology vision of quot;anything that touches the consumer, whether it's
in back-end [IT operations] or in how a customer interacts in a physical Starbucks store,quot; says Chet Kuchinad, EVP
of Starbucks partner resources, who lead the team that hired Gillett. quot;Stephen's not just about legacy systems and
not just about efficiency. He's about how we take technology and connect with Starbucks' consumers in a different
way. Frankly, we've just begun, and there's a lot of work to be done yet.quot;
quot;You'll meet a lot of technology people who are extremely intelligent but they have really stunted social
skills,quot; Cahall says. quot;They don't have an ability to sell their ideas and don't have the ability to
ingratiate themselves with key leaders.
(Ted Cahall is VP of the platforms business unit and technologies division at AOL)
BAKER
Source: CIO Magazine STRATEGY GROUP
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January 8, 2009

12. Presentation Business Skills for a Changing Economy
III. Business Skills: Strategy
The organization’s chosen approach to how it will conduct business
BAKER
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January 8, 2009

13. HDI Motown Presentation Business Skills for a Changing Economy
III. Business Skills: Strategy
Different Views of Strategy
There has been a proliferation of strategy frameworks over the years
Thought Leader Contribution
Peter Drucker Organizations and Society
Michael Porter Five Forces/Value Chain
Kaplan & Norton Balanced Scorecard
C.K. Prahalad Core Competencies
Gary Hamel Customer Collaboration
Strategy Rabbis
Peppers & Rogers Return on Customer
Bruce Henderson Strategic Competition
Tom Peters Back to Basics
Kenichi Ohmae Strategic Thinking
August 1, 2006
Clayton Christensen Disruptive Technologies
David Aaker Brand Portfolios
Fred Reichheld Net Promoter Score (NPS)
Jack Trout Brand Differentiation
Adrian Slywotzky Strategic Business Design
McKinsey & Company Business Valuation
BAKER
STRATEGY GROUP
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January 8, 2009

14. HDI Motown Presentation Business Skills for a Changing Economy
III. Business Skills: Strategy
The BSG 5C Framework
Our particular view is that of customer strategy: integrating the Five Cs situation analysis:
context, customers, company, competitors, and collaborators
BAKER
STRATEGY GROUP
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January 8, 2009

15. HDI Motown Presentation Business Skills for a Changing Economy
III. Business Skills: Strategy
Strategy Maps
Here is an example of a Strategy Map (also known as Balanced Scorecard), an effective and
commonly-used strategic planning tool that starts with measures and the customers
Financial EBITDA
Measures $xx
Revenue Expenses
xx%
$xx $xx
Current New Operating Allocated
Students Students Expenses Costs
Retention/
Customer Acquisition
Development
Perspective
Current Customers New Customer Portfolios
Priority Portfolios Secondary Portfolios
A Customers
B Customers Group A Group B Group C Group D Group E Group F
C Customers
Internal Operations Offerings/Core Capabilities
Processes
Strategy Execution
Area A Area B Area C Initiative A Initiative B Initiative C Initiative D Initiative E
Staff
Development
Development A Development B Development C Development D Development E
BAKER
Note: This framework is derived from the Balanced Scorecard by Norton and Kaplan
STRATEGY GROUP
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January 8, 2009

16. HDI Motown Presentation Business Skills for a Changing Economy
III. Business Skills: Strategy
Case Study: Thomas Nelson
Thomas Nelson had previously operated with a structure that organized around their own
brands, trades, and specialties – an internal, outside-in perspective
BAKER
Source: Michael Hyatt Book Expo Presentation STRATEGY GROUP
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January 8, 2009

17. HDI Motown Presentation Business Skills for a Changing Economy
III. Business Skills: Strategy
Case Study #1: Thomas Nelson
In 2007, Thomas made the bold strategic move to organize the entire company around the
customers – the essence of customer strategy
Source: Michael Hyatt Book Expo Presentation
BAKER
Source: Michael Hyatt Book Expo Presentation STRATEGY GROUP
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January 8, 2009

18. HDI Motown Presentation Business Skills for a Changing Economy
III. Business Skills: Strategy
Demystifying Strategy
Many of the terms to know related to strategy tend to be economic and finance related
The Value Proposition looking at and defining ―value‖ not by inputs or an internal perspective but,
Value Proposition/
1 rather, the value perceived and received by the customer. The Value Chain, or Value Stream, is the
Value Chain/Stream series of organizations, groups, and processes that make up the final Value Proposition.
TCO – Total Cost of Instead of simply looking at the purchase price, TCO considers all current and future direct, indirect,
2 and shadow costs associated with the option.
Ownership
ROI – Return on This calculation comes in many similar forms, such as ROA, ROCI, and ROMI. Calculating ROI
3 basically ensures that the return or gain for a project is worth the capital expenditure.
Investment
WACC – Weighted Not all companies have the same opportunities before them. If a company faces many promising
4 Average Cost of project opportunities, their WAAC will be high. Therefore, a viable project will need to project a
greater return in order to be considered.
Capital
Some argue that NPV is the best measure for assessing the value of a engaging a project. All cash
NPV – Net Present
flow—both outbound and inbound—are discounted back to today’s dollar value using WACC If NPV
5
Value is positive, it’s a worthwhile project to pursue.
IRR calculates the WACC at which NPV would reach break-even point. If the IRR is above WACC,
IRR – Internal Rate of
then it’s a project worth the investment of the firm. IRR works best if inbound cash flows come only at
6
Return the end of the project.
BAKER
STRATEGY GROUP
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January 8, 2009

19. Helping Organizations Excel through Effective Customer Strategy
MAKE IT HAPPEN
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