Example of saying “yes, but” to customers…

Per some recent comments and posts (here and here) on discussing responsiveness to customers, Henning Kagermann related a story on a call that I had completely forgotten about.  I’m certain that it has been told publicly before, but I’ve disguised it a bit just in case…

In the early 1990’s, SAP was approached by a delegation of firms w/r/t industry-specific improvements to R/2.  They had a list of demands that they wanted to see implemented in R/2.  Fair enough.  That industry was perhaps the core of SAP’s success to that time, so why not do it?  Except that SAP was in the midst of developing its next generation product, R/3.  We also wanted to expand our footprint to other industries and markets.  There was no way we could do R/3 and satisfy much of that list of demands in the current product.

If you know anything about the history and success of SAP, you can guess the answer.  We chose to spend the preponderance of our efforts on R/3.  While some of the key demands were satisfied, most were deferred in favor of ensuring that R/3 got to market.

This example illustrates the challenge well.  Most of the time you should listen to your customers so you can satisfy and delight them.  But listening for too well for too long can mean that you wake up one day and find that you’ve become a no-growth “legacy” business.  Sometimes you need to say “yes, but.”


More on saying “no” to customers, stakeholders, etc.

Pawel Brodzinski had a good comment (here) on my post about saying “no” the right way (here), which links to his post laying out his full perspective on the customer is always right principle.  I replied to his comment — agreeing with the principle, but cautioning on its application — which I’ve posted below:

Sometimes it is about saying no — or as the Japanese say “Yes, but.” There are times when we don’t take business, especially when we are being “forced” to do so. But if we aren’t taking their money, is that customer really a customer? IMO, no, at least not for that topic.

Of course, I agree that the customer is always right — which makes it critical to be choosy about one’s customers. But the application of that principle is tricky. PMs who allow scope creep to happen on their projects often justify it with a customer service rationale — “the users asked us to build it.” But are the users really the customer of the project? Aren’t the executives who chartered the project and the company they represent the customer? Too many IT staff and PMs are very confused about who is the “real” customer.

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Saying “No” the right way

A colleague of mine, Schalk Klee, has a couple of posts of interest (Schalk’s blog is here).  I had forgotten to link to his original post on saying “No” as a PM (here), so his follow up post on when and how to say “No” (here) was an appreciated reminder.  Schalk highlights the balance that must be struck:

We all know that good scope management and customer focus are both critical success factors for value adding projects and in a professional service environment there is always the sales focus as well.  How do I balance this?

This is where I believe the art of making a deal comes into play.  This is a skill that a “good” project manager has to develop.  How do I give my client what they want without putting myself into a worse position?  Creative thinking, negotiation tactics and customer focus all need to be combined. 

Deal-making and negotiation skills are not emphasized enough in most PM career paths; frankly, I could stand brushing up on them myself!

PM Quote of the Day — Esther Dyson

A worker’s paradise is a consumers’ hell.

While Dyson was referring to life in communist states, I instantly thought of so many of the industries we have (or are about to) bail out.  The management and workers of these firms seem to have lived in worlds divorced from reality.  As a consequence, being a customer of a bank, auto maker, or airline is a legendarily bad experience.  Too many times the attitude has been: “We do what we do, we make what we make, take it or leave it.”

How easy it is to think about strategy inside->out.  I can understand the temptation to look within to see what we are doing or can do, and simply keep doing it.  We may be able to keep our customers and stakeholders hooked for a while.  But as their dissatisfaction and resentments grow, we can’t be surprised when one day we’re thrown out in favor of a younger, nimbler, and more attentive suitor.

Has Starbucks jumped the shark?

What's next... undead baristas?

Jeff Nolan revisits the phenomenon of the now strangely soulless Starbucks (here).  I’ve opined on SBUX’s travails a number of times (here, here, and here). 

Sadly, my initial optimism was misplaced.  A true “back to basics” movement may well have worked, but it hasn’t materialized.  As Jeff notes, all the changes are half-baked or contradictory:

Fewer cookie cutter stores but still cookie cutter in nature, expanded non-coffee products like smoothies and pastry products, and replacement of old automatic espresso machines with new automatic espresso machines. Someone needs to send Schultz the memo he wrote… 

Also, my personal experience is that service has remained inconsistent — ranging from interested to indifferent and back again.  Today’s Starbucks experience was typical.  One associate remembered my favorite drink, but the serving barista barely got it to me within 15 minutes (they weren’t that busy).

Diagnosing “Pakled Customer Syndrome”

Please give my brother a hearty welcome to the blogosphere, where he is now shamelessly flaunting his Spargel obsession. 

Stephen’s just getting rolling, but I can’t resist linking to his re-telling of one of my favorite development war stories: Pakled Customer Syndrome.  Star Trek TNG hasn’t aged very well at all — my episode yield is about ten percent — I last an average of six minutes then I can’t stand it any more.

However, anyone who has had stakeholders with alternative agendas will get a few chuckes from Samaritan Snare.  Not that I’ve built a Crimson Force Field

Is Starbucks’ stuck in the middle?

Thoughts after tag surfing….  A lot of the comments on the Starbucks store closings claim that the 600 closings are driven by location mistakes.  The recent internal memo from Howard Schultz listing the stores to close in July 2008 headlined the “poor real estate decisions” made (story here).  There has been a lot of talk of cannibalization (here) also.  I’ve seen estimates of 20-30 percent long-term sales declines when new stores open (sorry, but I can’t find the link).

I don’t buy that store location screw-ups are the central story. Less than two years ago Starbucks claimed that this wasn’t an issue at all (story here).  In my experience with McDonald’s, as along as we had our operations act together — which MCD had lost for a while and re-gained recently — the store “in fill” strategy worked and cannibalization wasn’t long-term. 

My take is that Starbucks just isn’t all that in any way any more: the coffee is good, but not great; the service is surly and slow, not showy and speedy.  Dunkin and McDonald’s do it cheaper and local shops do it better.  John Quelch puts the Starbucks dilemna succinctly here (actually it is a nice little piece):

Starbucks is a mass brand attempting to command a premium price for an experience that is no longer special. Either you have to cut price (and that implies a commensurate cut in the cost structure) or you have to cut distribution to restore the exclusivity of the brand.

IMHO, the store building spree itself simply sped up the public’s realization that not only had their old Starbucks lost it, but that all Starbucks had lost “it”. 

Hat tip: Christian Mullins at CU Potential (here)

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