Effective CRM versus Efficient CRM


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Over the years the clarion call for CRM was that you must implement technology that would automate your existing sales, marketing and service processes. The mere thought of handing off work to your computer was enough for us to impulsively whip out our checkbooks. Just think, we’ll be able to do everything faster than we ever could before, and this efficiency will become our new competitive advantage. Efficiency: doing something extremely well.

Of course, there are the iconoclasts out there that view the world a little differently. They question whether that process you want to automate adds any value (to the customer). Does it receive (or hand-off) defects from the preceding (or succeeding) process, and simply do so faster? Have we taken a step back to understand how value flows through the organization, and not simply a small, isolated process? Have we gone an inch wide and a mile deep in the right places, and asked the right questions? Effectiveness: doing the right thing, even if you don’t do it well yet.

Nobody wants their organization to be inefficient because it can be costly. As a result, we often see the wrong process automated, only to amplify the negative effects of the wrong process. Essentially, you’re providing your competitors an advantage with zero effort on their part. Even worse, it can be a reinforcing influence that drives you to automate even more bad processes, or even create more (even if your customer doesn’t need them) just so you can automate them! It can get ugly really fast, and you can spend a lot of money building the enabling technology; enabling you to make an even bigger mess!

A Real Story

010213_1413_EffectiveCR1In my quest for income, I have been forced at times to work on projects which were questionable at best (they were still fun for me!). Otherwise highly intelligent (and successful) people would make very troubling decisions. On one such project, I was introduced to a company that was struggling to scale due to a myriad of approval processes that dated back to the founding of the company…when it was small. Now that it was large, these processes were strangling the company and the lead time to get anything done was getting longer and longer as the company got bigger and bigger. Why? Because nothing could be done unless it was formally approved.

I was tasked with designing a workflow system for routing these approvals in near real-time so that they could get done faster. There is nothing wrong with being more efficient, and technology is often a good enabler to that end. But, maybe there are times when you should question the purpose of such a process before further enabling it. In the name of Gemba, I ask you if any of these approval processes (by committee) sound like they create value for the customer…

  • Approval of travel plans and estimates of costs
  • Approval of actual costs incurred after pre-approved travel
  • Approval to enter a new sales opportunity into the CRM system
  • Approval to win a pre-approved opportunity when customer agrees to terms

I designed this system to allow one or more approval processes to be attached to any entity in the CRM system (current and future). It included a fairly sophisticated rule builder which made it simple for users to create rules based on just about anything. It also allowed them to chart the approval path and order (if order was required). Basically, I created a solution that they could strangle themselves with! But, was it the right thing to do (for them)? I had little choice in the matter at that time J

This organization clearly didn’t trust their employees. Nor did the managers employ systems thinking in any way, shape or form. They were managing people through bad processes and hoping the system would perform better. Clearly, this is not an effective way to design an organization. They needed to find a more effective way, one which delivered value to their customers. The time saved automating existing process will certainly be lost as users freely add more approvals; why, because they can! In the end, customers lose when efficiency is selected over effectiveness.

What do you think?

Republished with author's permission from original post.


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