Human Success Management

We all know working with customers is crucial for our success as a business. They are a top priority – and need care. In the world of cloud, as you move your business model to a recurrent revenue business model, license & sales income turn to subscription revenue, and over the years – many of the top vendors and innovators in the cloud industry have formed the role as a Customer Success Manager (CSM). The CSM acts as a lifetime account manager, who’s purpose is to regularly touch base with the customer; understand the current business environment – and understand what opportunities present in the usage of your services within the client. Often measured on account growth, support the top accounts to become better advocates & references, account retention and reduction of churn.

A role I highly encourage any company to think about. If you are a business leader today, and do not think about the experience you deliver for your customers. Rethink.

But I want to take a step back, as I said customers are “a top priority”. There is another much more important priority.

As you move forward with your lifecycle management strategy; aligning customers to the experience of working with your company – one element becomes a critical factor. Motivated staff. I too often see high scale VPs or CEOs who target the “old school” of people management, and our HR departments today have become “hidden resources” or “human resistance”. Recruitment, motivation and talent development is outsourced to the “expert” and HR has become a cleaning agency for the remaining tasks. You need to rethink.

As your customers meet your employees – demotivated, without purpose and a sight to their carrier progression – the same employees you try to align to your new “customer experience economy” will service. And trust me;

People deal with people

This is why I want to encourage you to rebrand your HR – insource your capabilities and look to implement the Human Success Manager (HSM) role. The HSM acts the same way as the CSM, but targeting your internal organization. Measured on employee growth, support the top performers to become better advocates & references, talent retention and reduction of churn in staff. Rethink the old skip-level engagement system; your weekly 1:1 which turn into coffee updates on the football match. Your teams of HSMs would have a target to grow talent, retain the motivation and move your people to the next stage.

Think about what would happen if you develop your employees and they leave for a better carrier; branding your company as a strong and great place to work. And then consider the opposite. You do not development and they stay.

Your creditors are your biggest responsibility. Your investors are your biggest concern. Shareholder value is your biggest focus. Your employees are your best asset.

Cloud – understand your perspective

It has been 13 years since I heard the cloud term the first time. 10 years since I saw the first real cloud business model evolve. You would have to expect cloud was a defacto in the IT industry.

However, in working with various people in my line of work, I still face a lot of people who believe cloud “is just a delivery model”. I understand their reasons for this view – but I am surprised on the lack of insight to the financial elements of the cloud business models.

The cloud is a business model. Period.

Why? Because the distribution channel, the financial model and the supply chain changes rapidly. Above all – the organization changes. Existing vendors, practices and partners often hand on to the old form of IT distribution models. Moving your practice to a customer experience economy is though. It requires significant investments, and a new organization.

To understand that the cloud is, I would urge that you look at the following perspective:

  • C. Customer. Everything in cloud is about the customer, and the customer experience. For any process, design, product, offering, role, person, investment – consider where the customer interface exist. Cloud is not a delivery model.
  • L. Learn. Legacy. It is easy to built a new cloud business. You start from a clean slate – and you do not have to change any organization, change culture and adopt to the required innovation. Yet – 80% of the IT market is still established companies. Your second task as moving to the cloud, is to “re-learn” and “re-educate” yourself on the organization, on your customer base and channel partners and vendors. My recommendation; interview them. It is a great experience to meet clients and explain you wish to learn from them on how you can improve.
  • O. Opportunity. Organization. when I consult business’ on the cloud opportunity, and follow them over years, one thing always happen. A small spike of light turn into a fire. Once people open the chapter of the cloud book, the organization change and start to form differently. People automatically start innovating the offerings, products and processes. The cloud is about the opportunity, organization and innovation. As a leader you will need to instill this behavior in the culture and the DNA.
  • U. Understand. Uniform. Understand the gaps, issues, constraints and problems that pop up. Anything that presents itself as a problem can be turned into an opportunity. Trust me. If anything seems difficult – consider how you differentiate against your industry peers.
  • D. Delivery. Yes. Cloud is a different delivery model. Very different. However as you start your cloud journey, do not start with the delivery model. You need to align the customer into the context, and you need to learn the difference about the delivery model in the cloud space. Driving public or private cloud offerings, you still need to supply billing, support, transaction, deployment and adoption services. The experience of any customer in these 5 areas is crucial. Consider wisely what should be self service capabilities, what should be high touch people handled – or what gaps you have in your existing organization or business process map. Customers will pick up on this, if not optimal.

In summary – cloud begins with the customer and ends with the delivery model. I hope this serve to your inspiration how to get going.

Apps, Cloud, Saas? But show me the money!

Let me state a fact: I have a lot of interesting discussions with independent software vendors (ISVs) every week. New, existing and competitive ones. I love it – it is the best part of my job, and has been the best part of the last 8 years of my carrier.

Over the years I build a competency of connecting ISV to new business models, transforming their business model and helping them focus on one thing: scale and superiority. Main goal for them all – are to make money whilst they sleep. Who wouldn’t? 🙂

However, there is one question constantly being open, and ISVs tend to be cautious about the new endeavors of the cloud – how do I make money? It is without any doubt a good question, and I am a strong believer of “seeing is believing” – “cash is king” and “build to scale”. Let me bring proof:

SAP Challenges Oracle With $3.4 Billion SuccessFactors Purchase

In 2001; a bright Dane – Lars Dalgaard moved his family to the US after acquiring a business going bad. Lars reinvented the business model and re-launched SuccessFactors. SuccessFactors was a small cloud/SaaS type solution targeting mid-market customers with a HR software solution. The idea behind the platform was simply to drive the HRM on a subscription base. Over the cause of 10 years, the platform grew from simple HR management to become a strong enterprise offering; now driving Business Execution Software in the cloud. And boy oh boy that was a strong move.

Cloud introduces a change in the adoption of software. With the outsourced software management, you also benefit of the change in buying persona. What SuccessFactors did as second to none, was to enter directly the CEO or Boards of Directors as the platform was considered a true business management tool. It was not an IT solution; nor a productivity tool as Word, Outlook or Excel. Simply put- Lars built the recipe for success embracing all aspects of the cloud.

So the money?

$3.4 Billon is a lot of money. The second conversation I always have with ISVs are; “how do I make millions of customers”, as the great long tail story is perceived as the only business model. You need to build Facebook all over – or do you? 3.500 customers were all it took. $0.97 million per customer account; but do not believe SAP bought SuccessFactors due to the customer base. I previously discussed reasons for acquisitions, and simply put – I believe SAP did the barging of the century.

And simply put – remember that SuccessFactors was listed on the New York stock exchange. In other words, Lars did the income model; TWICE.

SuccessFactors should us a lot of new faces in the cloud:

  • You do not have to build the business from 1 employee and up. Buying bad managed old school companies can be the footprint of your cloud enterprise.
  • Long tail is interesting, but not limited to the success of your SaaS company. If you earned $0.97 million per customer, consider your cost of acquisition per customer vs. income.
  • Changing the buying persona will accelerator the adoption of your software. My rule of thumb is to serve both trenches – IT and business at once!
  • Building a niece players, will leave our in any uncontested business space. Simply put – you will be setup for a lot of exit opportunities!

Closing off, I simply challenge you to take a review of your business and build the next SuccessFactors.