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Beware of Corporate Disease
Dr. Michael Treacy, chief strategist and cofounder of GEN3 Partners, advised attendees to beware of the "twin diseases of IT," which he identified as the enterprise disease and the process disease.
Posted Aug 28, 2003
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Armed with material from his new book, Double Digit Growth: How Great Companies Achieve It--No Matter What, Dr. Michael Treacy, chief strategist and cofounder of GEN3 Partners, delivered his keynote address at the New York DCI CRM Conference and Expo. Dr. Treacy advised attendees to beware of the "twin diseases of IT," which he identifies as the enterprise disease and the process disease. The enterprise disease, Dr. Treacy said, is a "curious desire on behalf of IT to create improvements in organizational capabilities with one specific benefit: a compulsive desire for neatness, to do everything right." This drive for exactness can be fruitless, according to Dr. Treacy, Organizations should push back and ask the IT project leader the following types of questions: What's [the CRM solution] doing for me today on my sales call? And, what will this do for my client and me for this month? "The answer," he said, "gets a little murky." The answers are murky because IT executives were not in the power position to drive business until 1997, Dr. Treacy said. At that time the focus of IT departments was to get all systems up to date for the highly publicized Y2K computer time bomb. "From there, we pushed a lot of technology that had, at best, questionable business benefits," he said. Then the Internet set in, making promises predicated on a ridiculous set of assumptions. "We get to 2001 and the system that was supposed to give us a neat, integrated infrastructure hasn't paid off." The reason these solutions haven't paid off is because organizations haven't focused on the individuals either using the CRM system or being touched by the system, he pointed out. "If enterprise needs dominate over specific account needs, your CRM system will fail. You have to ask yourself, To what extent does CRM deliver specific benefits to people using the system? We should focus on the people that touch specific accounts. All this other stuff is about compulsive neatness, which certain people should go see a psychiatrist about," Dr. Treacy said. The second corporate disease, the process disease, is a belief that common (if not centralized) processes, designed top-down, will beat experience and judgment nine times out of 10. Dr. Treacy stated bluntly, "It's bull!"
"So why do we care about CRM? We believe that faster growth can be achieved with focused improvements in shared and managed client information and disciplined process management," he said. "What do we know about growth? Damn little!" To further prove his point he cited AT&T as an example. "AT&T spent $100 billion on acquisitions and ended up with a smaller firm," he noted. "That's difficult to do! These are the icons of American management. They don't have a senior team that knows how to grow. They're missing a disciplined, thoughtful process of how to grow a business. Dr. Treacy outlined a few rules to help keep businesses on the right track: Influence clients to do business with you; show up where growth is going to happen; identify early on where the next big growth areas will be; leverage core capabilities to create a new space for growth; and be willing to invest in unrelated markets to generate new lines of business.
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