Process Power

I'm Brad Power, a consultant and thought leader on process innovation, helping organizations that must make faster changes to their products, services, and systems to compete with startups and leading software companies.

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Revenue Growth Is the Primary Benefit of the Cloud

Synopsis: Cloud computing is too often seen as a tactical way to reduce costs, when its most important benefit is as a strategic way to grow revenues. Such revenue growth can come about in a variety of ways, such as through faster innovation of new products, processes, and customer interactions; identifying more customers and closing more purchases; and improving customer relationships through more targeted offers and better service and experiences. Companies that clearly understand the relative magnitude of cost savings and revenue growth and orient themselves toward the latter will better exploit the cloud and related technologies such as big data, artificial intelligence (AI), the Internet of Things, and blockchain, and thus strengthen their competitive advantage and customer value.

Examples: Easy experimentation: Staples was able to rapidly prototype a new version of its iconic “Easy” button that tied to an IBM Watson chatbot. Democratizing innovation: Tanmay Bakshi released his first iPhone app at age nine (thanks to app dev SDKs and Apple’s cloud-based App Store) and as an eleven-year-old heard about IBM Watson, and within a week had built a Watson-based app. Cloud-mediated contests and challenges: GE FlightQuest, the Netflix prize and Fold.it. Product recommendations: Netflix collects and processes in the cloud trillions of data points from each viewer, such as search intent, navigation behavior on the “home page” displayed in browsers, phones, and smart TVs; viewing behavior such as watching, pausing, and rewinding; contexts such as mobile device or TV, time of day, and location; social graphs; and convolves this with external data such as director, filming location, actors, and subjective evaluations of content metrics, such as whether the content is romantic or funny in the cloud, all to generate recommendations intended to increase customer satisfaction and reduce churn, thereby increasing customer lifetime value.

Question: Have you seen companies emphasize the top line or the bottom line in justifying cloud investments?

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Digital Transformation Through SaaS Multiclouds

Synopsis: There are lots of big companies that would love to switch from their big legacy systems to avoid compromises in functionality, make them more agile, lower IT costs, and help them to become faster to market. This article describes how they can make the move. 

Examples: FCR Media Belgium sourced its software from multiple “Software as a Service” (SaaS) providers and reduced its annual IT spending from €14M to €6M and headcount from 75 to 20 in less than five months. IT staff focus on architecture and vendor management. Paycor managed 20-25% annual growth by switching to a suite of 40 compatible marketing and sales apps from the Salesforce AppExchange. Cardella Waste Services switched from a standard industry software package that didn’t quite fit the company’s needs to six cloud apps, including a real-time operations management system, to get software services that fit better with its unique business needs—tracking trucks and dumpsters. JF Hillebrand, a logistics company, managed the data across multiple cloud applications by using one as the source for customer management, sales, and marketing data; another for finance; and a third for human resources. Aggregate Industries, a producer of asphalt, aggregates, and ready-mixed concrete, has gradually replaced parts of its ERP solution with multiple cloud solutions - a “starve the beast” strategy. Merrow Manufacturing, a high-tech sewing machine and soft goods manufacturer, has many small, independent applications that easily communicate with the other applications, so that they can swap them in and out or build their own. Ardent Mills, a $4 billion flour supplier, similarly has a “Velcro” architecture of over 40 cloud applications.

Question: Are you seeing any companies that are sourcing their software from multiple cloud applications?

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How to Get Employees to Stop Worrying and Love AI

Synopsis: Companies will be unable to take full advantage of the huge potential of AI if employees don’t trust AI tools enough to turn their work over to them and let the machine run. Many people resist AI because of the hype surrounding it, its lack of transparency, their fear of losing control over their work, and the way it disrupts familiar work patterns. You can overcome AI resistance by running experiments, creating a way to visualize the decision process of the AI, and engaging constituencies who would benefit from the technology.

Examples: Albert, a provider of an AI-based tool that helps marketers make better advertising investment decisions developed a visualization tool (“Inside Albert”) so its users could see the way the system arrives at its decisions — opening the black box so people can see inside.

Waymo has partnered with Mothers Against Drunk Driving, The National Safety Council, The Foundation for Blind Children, and the Foundation for Senior Living to rally these constituencies who benefit from the adoption of self-driving cars to build political momentum.

Question: What techniques have you seen to accelerate the adoption of AI-enabled systems?

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Microsoft Podcast: Beyond the Buzz about Artificial Intelligence

Artificial Intelligence (AI) is a hot topic these days, drawing the attention of not only technologists and research scientists, but of C-suite executives as well. Organizations that are currently exploring the potential of technologies such as robotics, expert systems, machine learning, speech, computer vision, facial recognition, and more are poised to transform and impact how we all do business.

Join this Microsoft webcast (64 minutes) with Brad Power and Leslie Gaines-Ross to:

Learn how to separate hype from the true potential that Artificial Intelligence offers

Understand common challenges to consider and address

Review the top business applications for artificial intelligence

Explore what artificial intelligence means for the future of the workforce

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How AI Is Streamlining Marketing and Sales

Synopsis: Many companies are now investing in AI-powered sales and customer service assistants to promptly engage customers in personalized conversations to help identify those with high potential, without wasting the time of employees to comb through unproductive leads. What’s more, AI bots are now intelligent enough to elicit information from customers as a human being would, enhancing the customer experience. 

Examples: Epson America (printers, robots, and projectors), CenturyLink (telecommunications), and RapidMiner (data science services) employed AI in their sales and marketing departments to help interact with customers, answer questions, resolve complaints, comb through sales leads, and increase customer satisfaction — all while freeing up staff to focus on other innovations.

Question: Is your organization using AI-powered tools to promptly engage large numbers of customers in personalized conversations and identify high value customers?

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How Harley-Davidson Used Artificial Intelligence to Increase New York Sales Leads by 2,930%

Synopsis: Today, Amazon, Facebook, and Google are leading the AI revolution, and that’s given them a huge market advantage over most consumer goods companies and retailers by enabling them to lure customers with highly personalized, targeted advertising and marketing. However, companies such as Salesforce, IBM, and a host of startups are now beginning to offer AI marketing tools that have become both easier to use (that is, they don’t require hiring expensive data scientists to figure out how to operate the tool and analyze its outputs) and less expensive to acquire, with software-as-a-service (SaaS), pay-as-you-go pricing.

Examples: A Harley-Davidson dealer in New York City used an AI tool to drive in-store traffic by generating leads. It identified prospects who resembled past customers who had bought, ran test campaigns of possible headlines and visual combinations through various digital channels, and autonomously scaled what worked. By the third month, the dealership’s leads had increased 2930%.

Question: Can your organization run some small, quick, reversible experiments with an AI tool to increase sales?

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Don’t Just Improve Work, Innovate Continuously

Synopsis: Driven by market forces (from hardware to software, from products to services, and transactions to services), companies are shifting their performance emphasis from operational excellence (consistency, reliability, and low cost) to adaptability at scale (continuous experimentation, personalization). To achieve this new focus, leaders are transforming from monolithic, hierarchical organizations, batch and waterfall processes, and decisions based on intuition to strong product organizations with matrixed small services teams, microservices technical architectures, and decisions based on data. Improvement and innovation are shifting from projects and manual testing at stage gates to A/B testing, and automation of testing, integration, and deployment of product, service, and process changes.

Examples: GE, Roche, Ford, Goldman Sachs, Amazon, Facebook, Google

Question: Have you seen examples of companies making continuous innovation a line job, not a project?

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Moving Fast While Maintaining Control

On this podcast with Paul Barnhill of Cloud Technology Partners, we discuss how large enterprises tend to react to stability issues by shutting down new changes and ramping up testing, which is the opposite of continuous delivery and can be detrimental to the organization. I introduce three elements that enable companies to move fast and maintain control: workflow automation, testing in production, and developer freedom.

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Why John Deere Measures Employee Morale Every Two Weeks

Synopsis: Many companies go to great lengths every year or two to determine just how motivated their work force really is. Studies have linked stronger employee engagement to higher customer satisfaction and profits. But it’s important to remember what comes between the motivated employee and the satisfied customer: the innovative products and services that employees create and the company sells. As the pace of product or service innovation increases, the pace of monitoring employee morale must increase too.

Examples: For John Deere, the agricultural equipment manufacturer, incorporating up-to-the-minute digital technology has become critical to its product innovation. As it accelerates new product introductions and feature releases, and quickly gets them into the hands of customers to get their feedback, frequent monitoring of employee motivation has become as essential as operational and financial metrics are to understanding whether the business is firing on all cylinders. At the end of every two-week development cycle, teams review what went well and didn’t go well, and what should change. This tests how employees are feeling about their work. Deere managers call it a “motivation metric” or even a “happiness metric.”

Question: How do you keep your finger on the pulse of employee morale in the fast-paced world of continuous product innovation?

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The Best Digital Companies Are Set Up to Never Stop Innovating

Synopsis: The companies that excel at continuous online product innovation have five capabilities that laggards have yet to master or, in some cases, even begun to pursue: (1) organize around small teams responsible for the building blocks of products (often called “services”), (2) automate testing and product updates, (3) conduct lots of small experiments, (4) continuously inform developers on how their product is performing in the market, and (5) emphasize lifetime services over product transactions.

Examples: New employees at Facebook release product changes in their first week. Google has an integrated testing engine that runs hundreds of millions of tests each day on updates to its online products. Etsy projects on monitors key system measures like checkouts, listings, items sold, and new registrations so its developers can keep track of the services they are responsible for. Tesla upgrades the performance of its cars online so that customers don’t necessarily have to trade in their car for the next new model to gain greater battery life or speed.

Question: How do you make thousands of changes to your products and services a day?

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a16z Podcast: On Corporate Venturing & Setting Up 'Innovation Outposts'

In this podcast produced by Silicon Valley-based venture capital firm Andreessen Horowitz (aka “a16z”), my co-author of our recent Harvard Business Review article on IBM Watson, Evangelos Simoudis, talks about how large organizations are setting up corporate venturing arms and/or “innovation outposts” in startup ecosystems, and whether “the elephant can dance again”.

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The 5 Things IBM Needs to Do to Win at AI

Synopsis: What does it take for big, successful companies to remain relevant? They can't stand still. They need to take a point of view about the future, place a big bet, and then closely follow the techniques of startups and venture capitalists. Based on research with my friend Evangelos Simoudis, a venture capitalist in Silicon Valley, we believe there are five basic moves that a big company must make to succeed with a big new strategic venture. To illustrate these moves, we explain each one, and then test them against the experience of IBM in their Watson Health venture, pointing out what IBM has done to date and what it must do next.

Question: How should a big, successful company manage a big bet on a future business?

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3 Ways Big Companies Are Connecting with Younger Consumers

Synopsis: Newer, hipper, more entrepreneurial and web-savvy companies, often founded and run by Millennials, naturally have a strong understanding and connection to younger consumers, who are, after all, their peers. Making this connection can be more challenging for big established companies, whose primary success is built on products and value propositions from an earlier time. But shifting to meet Millennials’ expectations is something big companies just have to do. Here are three big companies using innovative approaches to make this crucial connection.

Examples: MassMutual looked at ways to connect with Millennials and learned something else: between the ages of 25 and 45 people make a lot of hard, grown-up life decisions, and they want and need help. Consequently, MassMutual made the risky decision to pivot from trying to sell products to Millennials (which they hate) to having conversations with them. MassMutual opened a storefront in the Boston suburb of Brookline called Society of Grownups.

To keep up with the high tech expectations of Millennials, Starwood Hotels launched keyless entry using guests’ smartphones and a robotic butler which delivers guest requests for items they may have forgotten, such as a toothbrush or cell phone charger.

Marriott is addressing the challenge of attracting a younger generation of consumers in part by attempting to individuate its restaurants and bars by turning spaces over to local entrepreneurs to make them local hotspots.

Question: What is your organization doing to connect with younger generations?

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How Coca-Cola Uses Entrepreneurs (And Keurig) To Jump-Start Innovation

Synopsis: Through its Coca-Cola Founders Platform, Coke has been investing in a number of promising entrepreneurs even before they have business plans. The Founders Platform has a portfolio of 12 startups in 10 countries, creating two potential benefits: future financial growth for Coke, plus solutions to thorny business problems like product restocking and marketing to Millennials. Coke maintains the startups as separate, independent entities. It provides seed funding, becomes the first customer, and then takes a minority share if and when the business becomes viable.

Examples: Vending Analytics tailors the mix and frequency of restocking in each vending machine uniquely, instead of, for example, treating all the restocking requirements in vending machines in sports stadiums the same way. Wonolo matches merchandisers that need stocking assistance with people seeking temporary work. Winnin, based in Rio de Janeiro, targets teenagers looking for online videos. Winnin does this through “battles,” where teens compete to create the best playlists.

Question: Does your company have core business problems and marketing challenges that you’d like to point creative startup minds at?

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How IBM, Intuit, and Rich Products Became More Customer-Centric

Synopsis: Every company of any scale and in any sector wants to be closer to its customers, to understand them more deeply, and to tailor their products and services to serve them more precisely.Yet wanting to be closer with customers, and knowing what actual, operational pathways to take in order to achieve this are two very different things.

Examples: IBM developed a hybrid design-engineering-based method which synthesized deep customer analysis and rapid product and service changes. Rich Products reengineered its product development process by demolishing traditional functional silos and creating a team primed for speedy responses to customer needs. And Intuit embarked on a multi-year cultural transformation to re-embed the idea of creating customer delight in its DNA.

Question: What is your organization doing to understand your customers’ needs and tailor your products and services uniquely for each customer?

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Too Much Profit Can Doom Your Company

Synopsis:  What defines success for a business? For most of the last century, it was profits. The leading enterprises of the world were ones that fashioned a profitable business model and leveraged it over time. Profitability as the key measure of business success was akin to a law of physics – like gravity – a foundational assumption which we all take as given: you have to deliver profits to create long term shareholder value. But what was once a natural feature of the competitive landscape has now become a trap for people and companies who are not able to adapt to a new landscape and change their focus.

Examples:  Two big, well-known tech companies neatly illustrate this shift. Consider Microsoft under Steve Ballmer. The former CEO believes that delivering profits is the main measure of a company, and he’s justly proud of the $250 billion of profits Microsoft generated during his tenure over 14 years. Then consider Amazon, the first big company to deliver long term stock growth for the better part of two decades with essentially no profit to show for it. The contrast could not be clearer: Amazon – fearlessly making big, risky bets like a serial entrepreneur; and Microsoft, eschewing disruptive innovation in favor of remaining the “fast follower” it has always been, wringing profit from previously proven technologies.

Question:  Can your organization escape from the profit trap, maintain its founding spirit, and keep taking risks?

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Artificial Intelligence Is Almost Ready for Business

Synopsis: Artificial Intelligence (AI) is an idea that  has oscillated through many hype cycles over many years, as scientists and sci-fi visionaries have declared the imminent arrival of thinking machines. But it seems we’re now at an actual tipping point. AI, expert systems, and business intelligence have been with us for decades, but this time the reality almost matches the rhetoric, driven by the exponential growth in technology capabilities (e.g., Moore’s Law), smarter analytics engines, and the surge in data.

Examples: IBM invests in the Watson Group to offer an AI platform. DataXu uses machine learning to decide which online ads to place where. The Cleveland Clinic, The Mayo Clinic, MD  Anderson, and Memorial Sloan-Kettering work with IBM to develop systems that will help healthcare providers better understand patients’ diseases and recommend personalized courses of treatment. USAA uses Watson to enhance navigation on their popular mobile app, the Enhanced Virtual Assistant, or Eva. WayBlazer uses Watson for a new venture in travel planning. Cognitive Scale provides more intelligence into business processes and applications through the “cognitive cloud” where massive amounts of first- and third-party data are fused to deliver real-time analysis and learning.

Question: Is your organization ready for Artificial Intelligence?