Below are a few of the best articles we’ve seen published this year.

Top 10 Challenges for Investment Banks 2012

To help investment banks plan and execute with success as macro trends reshape the industry, Accenture has developed a list of the top 10 challenges to address in 2012.

Different key ingredients for successful Innovation

The responses to a poll Accenture ran on LinkedIn revealed that people have very different ideas about the key ingredients for successful innovation. A full half of the respondents believe that understanding customer challenges is the key, while another third believe it is essential to embed innovation in an organisation.

The truth is that all of these play a role in successful innovation. But is there one element that is so crucial that without it successful innovation would be impossible?

The importance of Data Governance
Does your company consider its data to be a strategic asset? More important, do you not only consider it to be an asset, but are you also treating it as any other asset?

In my 20 years of experience in Data and Information Management, I worked for companies, who claimed to understand the importance and potential value of their data, but struggled to live up to this understanding. And, up to today, many companies I visit are still not taking full benefit of the wealth of information that is stored in their systems.

Are you moving fast enough in Digital?
As the world is changing rapidly, organizations need to stay in the game by investing in digital capabilities. But many organizations find it difficult to predict the expected ROI, resulting in little investments and lack of innovation.

Digital is radically changing the traditional ways organizations interact with customers. Customers are willing to interact with organizations via social media, and expecting them to be out there too! Therefore the question is no longer how fast things are moving, but: are you moving fast enough?

High Performing Business in changing economic times
In this volatile, uncertain and increasingly complex world, many businesses and governments have an urgent need to reassess current strategies and vital capabilities to achieve high performance.

Companies that want to stay in business need to make concrete plans for the future, with little room for errors. After all, companies will need to keep launching successful business concepts or products to outperform their rivals in these challenging times.

On behalf of Gold partner Accenture, Andrew Meade and I had the opportunity to present and discuss the Dutch background and results of Accenture’s High Performance Finance study, which explored the current state of Finance in the Netherlands and how it is adapting to the significant environmental changes. With Finance on the rise, the finance organization assumed greater responsibility for helping the enterprise deal with the growing risks to the business as the recession unfolded.

One of the highlights the HPF study shows is that Dutch finance organizations have strong capabilities in managing and reporting existing performance, but are less focused on managing the future value of the business.  More data analytics can create advanced insights to drive business value, a capability not yet as whole heartedly embraced in the Dutch finance community as globally. As discussed during the session, many executives recognize these practices in their organization. In terms of finance partnering with the business, the effectiveness is largely limited by the use of reports and excel sheets by finance as comfortable ‘shield’ towards business. As one of the participants stated “It’s the spreadsheet culture in the Netherlands. Reporting these kind of data is safe and secure, and offers executives the feeling of a warm blanket”, at the same time shielding finance from an open dialog. Compared to the so called “Masters of finance” the most important differences are that masters are more aligned than with the enterprise’s growth agenda. They leverage more of the practices and capabilities available to them to help address those environmental factors which increase the complexity of today’s environment:

• New and changing regulations
• Continued market and economic volatility
• Attracting, retaining and maintaining talent
• And managing the avalanche of data being generated

In the following discussion we compared the Dutch top 3 practices to improve the finance workforce, and it becomes clear that the global peers are perceiving Talent management as more important than Dutch CFOs do. While Dutch CFOs choose real time critical feedback and formal finance competency models as top priorities, global peers choose competitive salaries and benefits, and performance based rewards as the most important practice. This is also the case with Risk Management. The Dutch Financial Risk Management capabilities are rated significantly below the global peers, yet few Dutch CFOs plan to invest in their Risk Management capabilities. Finance masters are more likely to focus on an even split between growth and cost control than apt to gear solely towards cost control.

The main conclusion of the Round Table is that a high-performance finance organization is an essential catalyst in a company’s or government’s pursuit of high performance overall, and is highly valued in the C-suite as a key enabler of enterprise performance. This is especially the case when a company seeks growth in an uncertain and permanently volatile world. In such conditions, any weakness in finance capability will be quickly exposed; thus, CFOs need to carefully review their options, including balancing the desire for cost reduction with the greater value that enhanced capabilities can help deliver.

Lastly I would like to congratulate Tom Francken (CFO Desso), Hans Janssen (CFO Mediq) and Ton van Veen (CFO Jumbo Supermarkten) with winning the CFO Special Achievement Awards 2012.

For more information about the High Performance Finance study, please read our report titled ‘Delivering Value in a Complex World’.

The second HPB study, published during the crisis in 2009, revealed that AEX-listed companies were still underperforming and less well positioned for growth. However, this time their underperformance was also due to the fact that they lacked the operational agility to adjust quickly to the changed market conditions.

The following year saw a slow recovery, largely fueled by government investment in infrastructure projects, stimulus packages, the restocking of global supply chains and strong growth in many emerging markets. However, these measures only addressed part of the core issues, and the remaining weaknesses in segments of the banking sector and lagging production volumes in mature markets remain a major drag on the global economy to this day.

In the period 2002-2012, the AEX has been constantly outperformed by leading US and European indices

Meanwhile, in early 2012, the financial and social crises have not been resolved and governments have incurred massive debts. The level of governmental spending, through programs like quantitative easing and bailout packages, has increased to such a degree that debt-to-GDP levels are out of proportion in large parts of the Western world. And countries like Greece and Portugal are being kept afloat by commercial banks and international financial institutions like the European Central Bank and the International Monetary Fund.

There are early signs of a recovery from the crises, but different parts of the world are recovering at different rates. The US is making good progress in recovering from the crises, growth in emerging markets (e.g. China) is decreasing but still significant and most European countries are struggling with the euro crisis. People in every walk of life are wondering to what extent we have recovered from the economic collapse, or if we have recovered at all.

The emergence of structural imbalances
Even if the Eurozone does stabilize, structural imbalances are leading us towards a world that is permanently more volatile, uncertain and increasingly complex. We have made no progress in rebalancing global trade; countries like China, Germany and Japan still have large trade surpluses, while other countries like France, Spain and the US have structural trade deficits. This continues to aggravate trade imbalances in the resource, product & service, labor and capital markets.

Furthermore, demographic changes will probably lead to more imbalances. The planet is anticipating the arrival of another 1 billion people by 2027. At the same time, the middle class is on the rise in the emerging world, while the Western population is ageing rapidly. These imbalances could create bottlenecks, spikes and asymmetries in the global economy. And because the world is more interconnected than ever before – in terms of information sharing, trade and the financial markets – companies everywhere are affected by these structural imbalances.

The challenge
In this volatile, uncertain and increasingly complex world, many businesses and governments around the globe are facing an uphill struggle to restore profitable growth and the jobs lost during the recent recession. There is an urgent need to reassess current strategies and vital capabilities to achieve high performance. Companies that want to stay in business need to make concrete plans for the future, with little room for errors. And not just related to production and sales, but also for fundamental business issues, such as developing talent and building (new) capabilities. After all, companies will need to keep launching successful business concepts or products to outperform their rivals in these economically and socially challenging times. The companies that understand this and act now will thrive at the top for decades to come.

Jumping the S-Curve (Nunes and Breene, 2011) explores and explains the secrets of lasting high performance by identifying what companies must do to successfully climb a business S-curve, especially in this changing marketplace. Imperatives include: (1) seeing and pursuing a ‘big enough market insight’ that can take a company to the top of an industry. This means identifying new economic motors that can drive accelerated expansion in output, income and jobs over the next decade. It also means that companies must (2) reach ‘threshold competence’ before deciding to scale up the business and (3) recognize the importance of becoming worthy to attract and sustain ‘serious talent’.

New HPB research
Business leaders cannot afford to allow change and uncertainty to paralyze their decision making. We are currently launching the third Accenture HPB study, to gain a clearer understanding of how AEX-listed companies and their peers are performing in this ever-changing marketplace. And of course to share that insight with the marketplace. Once again, we will also be identifying the companies that consistently outperform their competitors and reveal their road to success – this time in the context of a volatile, uncertain and increasingly complex world.

Selecting a new health insurance plan has been on my ‘to do list’ for a couple of weeks. I was not looking forward to this task, as I was expecting my only choice was between marginal differences in monthly payments and reimbursements.  However, when I finally got to it, I was highly surprised! Not only could I choose from monthly payment options, but I could also choose between various levels of service defined per insurance package.

It seems that a majority of Dutch health care insurance companies have picked up a strategy that is called delivering a ‘Differentiated Service Experience’.  Insurance companies are now offering different service levels per insurance package. They range from a more basic package, where all requests have to be handled online, to extended packages where full support from a call centre is provided.

Accenture believes delivering a ‘Differentiated Service Experience’ will become a major trend this year. Our belief stems from research conducted among 2900 US consumers which established a link between an increase in customer retention, reduction in support cost, and growth in the customer base by providing a differentiated service experience incorporating control and choice by the customer. As customer’s needs are rising and becoming more diverse, companies can no longer offer a one size fits all service experience that meets the needs of all customers while controlling costs.

By offering different service experiences, the diverse needs and expectations of customer segments can be met. For instance, customers vary in the extent to which they prefer self-service. Different service levels can cover multiple degrees of self-service. A differentiated service strategy also allows for providing service through the channel that is preferred per customer segment. Our research confirms consumer receptivity towards differentiated service experiences: 82% of all consumers appreciate if they can customize their service experience.

Controlling costs is the another benefit of delivering a ‘Differentiated Service Experience’.  The costs of providing certain customers higher service levels are being compensated either by the higher price the customer is willing to pay, or the higher life time value the customer has.  Further, the research shows that consumers are far more receptive to differentiated service if they feel they are empowered to control their service choices even if their choice comes at a cost. In general, consumers prefer incentives for choosing a lower cost service and they don’t want to be charged more for better service.  The previous mentioned health insurance package are examples of cost controls and customer control and choice.

My positive experience with ‘choice and control’ when arranging my health insurance has left me with hope that I can soon customize my service experience for other products and services such as banking and energy.

Read more on Accenture’s research and insights on ‘Differentiated Service Experience’ in our recent point of view.

Tomorrow marks the kick-off of the 42nd edition of the World Economic Forum (WEF) Annual Meeting which will take place January 25-29 in Davos, Switzerland under the theme The Great Transformation: Shaping New Models.

Over 2,600 top officials from leading private-sector companies, governments, nonprofit organizations and academic institutions will gather to discuss the increasingly complex, interdependent and fast-paced era we live in whereby leaders return to their core purpose of defining what the future should look like, aligning stakeholders around that vision and inspiring their institutions to realize that vision. Ahead of the event Accenture CEO Pierre Nanterme outlines 3 trends that are driving this global transformation.

Like last year, Accenture Chairman Bill Green was once again invited to share his vision and opinions and will moderate a panel session entitled A Smart Growth Solution that examines how technological advances drive economic growth and employment.

Accenture has an extensive program lined up for this week including the launch of a extensive research report from the Accenture Institute on High Performance on the importance of grasping opportunities in high-growth markets. Additionally, Accenture conducts year-round joint research with the World Economic Forum and this year was awarded a record number of four projects. During Davos, the project teams will share the latest results from these projects on the topics of Green Growth Partnerships, Driving Sustainable Consumption, New Energy Architecture and Supply Chain and Transport Risk.

I’ll discuss the key take-aways of this year’s WEF in my next post which will be published on Monday January 30. To read last year’s report, please read Mark Foster’s notes from Davos.

With the explosive growth of online, mobile and social media channels, customers choose their interaction channel of preference and demand a seamless multi-channel experience. To sustain high performance and growth through uncertain times, companies will need to work harder and smarter to find and capitalize on growth opportunities and to provide a great customer experience.

Some companies were preparing to take a rest over the Christmas holidays, but at Accenture these are always busy times. Renewing contracts, clients who send out RfP’s and a High Performance Marketing Conference (HPMC) that is approaching fast, all very energizing.

Last week I got an update from the HPMC team and was impressed with all the great client stories that they have identified and the speakers they have confirmed for the conference. One case that I am particularly interested in to hear more about is the case of Aviva, a large UK- based provider of life and pension products, which also has a strong position in Europe and other parts of the world.

James Henderson, head of Aviva’s UK Life & Pensions Customer Management will tell the story on how Accenture helped them better targeting their customers by gaining more customer insight through Analytics. Together with the client Accenture created a Customer Analytical Record (CAR) within 6 weeks. This CAR was used for creating several analytical models. The valuable insights that came from these models were used in campaigns.  This has allowed us to profile, segment and understand the customer base in a new way. We made  discoveries about Client’s customers such as second policy purchase behaviour, tenure and product holdings, average policy and product holdings, life stage and wealth stage segments.

Key results from the project; reduction of throughput time with up to 25% and an increase of conversion of 200%

The cool thing about this case is that the solution was made in a truly global way, by leveraging Accenture’s customer insight center in Milan, Indian analytics experts for the creation of the models and local management consultants from the UK who created actionable insights from the analysis. The models are hosted by Accenture and now available for Aviva as hosted or managed service.

On February 9th 2012, Accenture organizes the 7th High Performance Marketing Conference at the WTC in Amsterdam with the theme: “Creating Customer Value in a Cross Channel World”. Get up-to-date on the latest innovations in Marketing, Sales and CRM. Broaden your scope by attending presentations and break-out sessions on leading practices implemented at KLM, Canon, SAS, Aviva, Accenture and others.

Would you like to know how Aviva and Accenture realized this transformation, please register: http://www.accenture.com/Microsites/hpmc/forms/Pages/register.aspx

I opened the 2011 year with a positive post about customer service and a challenge question as to whether this would be the year that companies would make the difference or if they would continue to kick-back and let customers scream at the door.  As a law abiding Netherlands consumer let me just say I have lost my voice a few times this year.  But has all been lost?  Can our little Dutch customer service economy be saved?  I still really believe so and am awaiting to meet the individuals with the ‘doorzettingsvermogen’ to change the game. Oh where oh where can they be….?

My goal this year was to also share with you my top customer service experiences.  Well there hasn’t been much action on my blog lately as the inspiration has not been trickling in, until recently that is.  Last week I had what I like to term, a ‘mini-wow’ moment.  In my customer service vocabulary a ‘mini-wow’ is a feeling customers get when they are surprised by a company that previously gave them a ‘wow’.  The ‘mini-wow’ stimulates the positive memories of the initial ‘wow’ bringing back the positive feeling the customer experienced during the initial interaction.

Back in June of 2010 I had a significant ‘wow’ moment provided to me by the Ace Hotel in NYC.  I will spare you the details of the ‘wow’ for now, but know that upon my return from NYC I sang the praises of the Ace Hotel from the rooftops for the remaining months of 2010.  It had been more than a year since I had visited this hotel, and though I had not forgotten about the experience, I hadn’t shared it recently with anyone until one grey and rainy day in early November this year.  On this day I had a meeting with a client to talk about customer experience design and management and much to my surprise the individual had a photo of the coffee bar in the Ace Hotel in his deck of ‘examples’ that he wanted his company brand to become.  Seeing that I recognised the coffee bar (yes, it is that special) I immediately shared with him my ‘wow’ experience and we sat there with grins on our faces…two customer service geeks.  This was not the ‘mini-wow’ moment, this was just me happy to share this with someone who appreciates it as much as myself.

Now onto the ‘mini-wow’ moment.  Last week when roaming through my overloaded inbox I saw an email from a name I recognised but could not place.  I opened the email and it contained a very simple image with a very simple message which triggered my ‘mini-wow’ moment.  It was from the Ace Hotel.  It was wishing me a happy holiday season and it informed me that they had made a donation to the American Cancer Society’s Hope Lodge in my name. A year and a half after my stay there they hadn’t forgotten about me, nor have they lost focus on what the holiday season is all about, being there for others.  Even if they had only donated one cent in my name to the society it means so much more to me than all the other coupons and gift certificates I received from every loyalty program I belong to (and I belong to a lot as I consider it field research).

So to close off 2011, a reminder that sometimes it is just that simple.  Remember your customer, acknowledge them, and show them you care about more than just your bottom line.

To be a real high performer, it’s not enough to simply win. You have to win big; so big, in fact, that the market knows immediately that you’re playing in a different league to your competitors. One example is pharmaceutical company Novo Nordisk. Years ago, Novo Nordisk saw that increasing affluence would lead to a change in diet and a drop in physical exercise. The company saw that this would result in a big increase in the incidence of diabetes. In 1999, the company boldly predicted that by 2009 the number of diabetics would triple to 300 million, from the 100 million at the time. Despite being a relatively small player in the insulin market, Novo Nordisk made a push for global dominance. And it worked. The company now has a 52 percent share of the world’s  insulin market.

A case of being in the right place at the right time? Partly, perhaps. But this is about a lot more than just luck. High-performance companies see and grab such opportunities because they are constantly on the lookout for the next BEMI. This could be something entirely new, or it can be a game-changing product or service offering that totally rewrites the rules of a given market.

Of course, all that glitters is not gold. So not all perceived BEMIs turn out to be BEMIs in the long run. The Segway is a startling piece of technical innovation, but it’s a product still searching for a BEMI. High-performance companies are able to identify true BEMIs, because they ask themselves a number of vital questions. Firstly, they ask is this insight big enough to justify the investment it will require? Secondly, is the insight valuable enough? Or how much will customers be willing to pay for a new product or service and how many potential customers are there? And finally, is this insight certain enough? Novo Nordisk’s prediction of a sharp rise in the number of people with diabetes turned out to be true. Meanwhile, Segway’s gamble that consumers were eager for a revolutionary new form of transportation has so far proven less of a winner.

Hindsight is a wonderful thing, of course, and many BEMIs look startlingly obvious today. Who can imagine today’s consumer world without the Apple iPad or the Nintendo Wii? But these products exist solely because their makers saw real demand for products that did not yet exist. What makes these companies true high-performance businesses is that they are able to predict a world that would be, as opposed to a world that could be, or might be. What now seems obvious to most of us was based on real market insight and early commitment to a significant shift in market conditions. Our research shows repeatedly that high-performance companies are those that are able to identify BEMI opportunities from certain trends and are prepared to exploit those trends well before they occur.

In my next post, I’ll be talking about how successful companies achieve what we call threshold competence: the level of competence needed to sustain a successful business. Until then, I’d like to leave you with a couple of questions, that should help you decide whether your company is on course to identify its next BEMI.

1.         How does your company identify BEMIs?

2.         Is your company currently working on a BEMI initiative?

So how do a select group of companies outperform their peers over a sustained period? And how do they manage to consistently grow both revenues and profitability, even during economic downturns and market disruptions? Is it down to the business ‘excellence’ that was the focus of so much business literature in the latter part of the 20th century, or is it the ‘greatness’ that everybody was talking about in the early part of the last decade? In 2003, Accenture embarked on a major research project to find out what really sets these companies apart. Over the past eight years, we have looked at over 800 companies across dozens of industries and going back decades. What we found is that truly great companies get to the top and stay there by accomplishing the one thing that evades the majority of companies: they jump the S-Curve of business performance.

S-Curve

So what is this S-Curve? Essentially, it is the pattern of revenue growth common to all (initially) successful companies. They start small with a good product and a small but eager client base; revenues grow rapidly as demand swells and eventually peaks and levels off as the market matures. That is the end of most businesses. Our research, explored in more detail in the book “Jumping the S-Curve” by Accenture’s Paul Nunes and Tim Breene, shows that once companies hit a revenue peak – a stall – they rarely ever return to rapid growth.

So how do the genuine high-performers avoid stalling? By moving on. Before they reach the top of one S-Curve, they’re already preparing to jump to the start of the next S-Curve. They make the leap to another successful business, and they do this repeatedly. What this amounts to is not simple greatness, but recurring greatness – the ability to achieve greatness repeatedly. These companies are able to create whole new playing fields, with themselves as the leading players. This may sound simple, yet why did such a small percentage of the 800 companies Accenture looked at achieve this jump? Or, why did the vast majority fail to jump the S-Curve?

One of the secrets lies in understanding three hidden S-Curves: the competition, capabilities and talent curves, all of which mature and decline much faster than a company’s financial performance. What they are, in fact, is an early warning system, signalling the time to prepare for the jump to the next S-Curve. What this boils down to is that high-performance businesses manage four S-Curves simultaneously. And they pull off this balancing act by creating an edge-centric strategy. They make a strategy a permanent process, rather than a one-off event. These companies also refresh their leadership well before it is necessary, and they make themselves hothouses of talent, ensuring they have the talent needed to drive the next growth spurt, or the climb up the next S-Curve.

Does this sound like your company? Answering two simple questions should give you an idea of whether your company is a true High-Performance Business.

1. Where is your company on the current S-Curve?
2. Is your company prepared or preparing for the jump to the next S-Curve?

The highlight of the morning was a plenary session led by President Nicolas Sarkozy of France on the role of the G20 in global governance.  He explained that a direct implication of our interdependent and complex planet is that no nation in the G20 or outside it can “go it alone.” In setting out the agenda of the French presidency of the G20 he covered many topics including making a plea for more collaboration and convergence between the players. He paid tribute to the contribution of the G20 to creating the conditions for 5% growth in global GDP in 2010 but recognised that it was easier to get agreement under the pressure of a crisis – and will be tougher to do in a more benign context.  The G20 is only legitimate if it continues to be a decision-making body rather than a ‘talking’ shop.  He identified real continuing challenges and issues that remain, including inflation and global tensions from commodity price volatility and currency imbalances. The G20 and G8 must discuss this and act. The President called out the weakness of the UN as a body to deal with the issues due to its lack of permanent representation on the security council of Africa, India and Latin America.  He described a vision of a new global architecture for collaboration in an interdependent world.  In the Q and A which followed, President Sarkozy was deeply emphatic about the long-term future of the Euro at the heart of a durable Europe despite recent uncertainty. He was also pretty ardent on the need for substantive regulation of the financial sector.

It is clear to me that the general tone of optimism which is pervading Davos this year has to be set against the context of ongoing global risks and tensions.  It is not clear that the G20 can solve all this but I would agree with the President that it has to play a more significant role and more global governance must be vested in this group. The world needs a framework to prevent the risks of further fragmentation.