-1- STRICTLY CONFIDENTIAL Name: Christopher Geerdts Student no: GRDCHR001 Date: March 5, 2007 Course: EMBA 7 Executive MBA Dissertation Modular Individual Assignment CUSTOMER CENTRIC TRANSFORMATION IN THE TELECOMMUNICATIONS INDUSTRY – THE CASE OF MTN SOUTH AFRICA Presented to The Graduate School of Business University of Cape Town In partial fulfilment of the Executive MBA By Christopher Geerdts For Tom Ryan NOT FOR RELEASE INTO PUBLIC DOMAIN
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Resistance to change – current practices still working
Least Cost Operator
initiative
Future marketsChanging nature of
customers
412
3
Diversity
Customer Management
Programme
Old mindset
Transformation(Inhibitors)
History
Customer Executive
Local InternationalNeed: complex
Product set
Need: serviceorientation
Need: lower Operating
costs
Need: differen-tiated value propositions
Figure 2 : Rich Picture: MTN and the Need for Transformation
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I will now discuss these potential responses and then describe MTN actual initiatives (to-
date) in order to determine whether or not they are adequate to meet the new challenges
of the marketplace and to better understand what form an organisation would need to take
in order to respond adequately. I argue that these initiatives have been insufficient for the
new environment and that implementation of any one approach, or combinations of the
four approaches, requires a fundamental internal transformation.
2.2.1. Customer Acquisition
The first response is to develop more sophisticated acquisition programmes. The most
important element is to segment the market (beyond the old, basic “corporate” versus
“consumer” split), and then target each segment with a specific, relevant value
proposition. A new segmentation must find niches ranging from the high value markets –
which are approaching saturation but offer more profitable customers, to the low value
markets – which have high numbers of low-revenue customers. Components of the value
proposition such as price are easily duplicated by competitors, whilst other important
elements, such as customer experience (mentioned in the previous section), are difficult
to conceive, implement and maintain. Creating an emerging market customer proposition
requires the lowering of the operational cost structure and establishment of appropriate
channels.
MTN previously (in 2003) developed a segmentation model, but found it difficult to
implement. It has now developed a second model and is busy developing multiple value
propositions in conjunction with an international consulting firm. The problem with this
development is that it is far from being imbedded into the organisation. Implementing
such a model is complex and has organisation-wide implications. Therefore it requires
strong commitment by leadership and good coordination across the organisation, to
succeed. There is currently no integration between the business units, and no process and
planning alignment beyond those developing the pricing and products. The segmentation
model is not shared with the Service Providers because they are competing for the same
customers and also selling competitors’ products.
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2.2.2. Customer Retention
As any market saturates and customer acquisition becomes more difficult, retention gains
prominence. Customer retention is reputedly less expensive than acquisition (Reichheld.
1996. p 45) (Hope and Hope. 1997. p 111), although it is not cheap. A predictable,
orchestrated and comprehensive customer experience is a sine qua non of customer
loyalty.
MTN has promoted loyalty for its very-high-value customers through a loyalty
programme, where they are offered higher service levels and more frequent handset
upgrades. However, this programme has lacked consistency – one of the very pre-
requisites for engendering loyalty – and is launched and presented differently each year.
There was no emerging evidence that the loyalty programme was increasing retention of
targeted, high-value customers, compared to the comparable base not on the programme.
For the wider customer base, retention has only recently become a highly-visible issue
with the introduction of Mobile Number Portability in November 2006. MTN has not
undertaken an analysis of the financial drivers of retention. A customer experience
programme is planned for 2007, but (as of March 2007) there is no detail within the plan.
Service Providers have their own retention plans. Their concern is not so much with their
customers staying on the MTN network as with their customers staying with them.
Orchestrating a customer experience through independent third parties is difficult, and
particularly so (as I discuss in Section 2.5) when there is mistrust and poor
communication.
2.2.3. Growing Revenue per Customer
As absolute customer numbers level off, the most obvious way to continue growth is to
increase the monthly revenue per customer (this is known in the cellular industry as
ARPU – average revenue per user). Growth is achieved by launching new products, and
finding and promoting new uses for cell phones.
MTN has a tradition of robust product delivery with a number of local and global firsts.
Product development is key to usage stimulation. However in the past few years there
have been very few products that have had a material impact on ARPU and the product
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development process itself has been flawed. In fact, at an MTN planning meeting I
attended on 14 December 2006, this was flagged for urgent attention, with the roadmap
for 2007 described as vague, unrealistic and lacking the endorsement of the business units.
2.2.4. Finding New Markets
A final key response is to find new markets. This can be achieved through innovation,
through developing either new product types or entirely new market segments. In the case
of cellular, it is typically found by acquiring new licences in new countries, particularly
in developing countries, where new licences are still being issued, and there is still low
penetration and hence significant opportunity for growth of traditional cellular services.
MTN has a proud history of innovation which earned it an early reputation in the global
GSM community – especially for its early global short messaging services. It has also
excelled in areas such as vehicle tracking. The most recent significant innovation was
MTN Banking, where the SIM card represents the primary banking interactions
mechanism (rather than an adjunct) with the customer able to actually register a new
account on-line. MTN is still capable of launching market innovations. However these
have limited market impact – they are not the market-changing innovations that were
seen in the past with products such as prepaid.
In terms of finding new geographical markets, MTN is a market leader in the emerging
market – winning 11 licences individually and a further 10 through a company
acquisition. The growth potential of these 21 countries is significant. As a group-level
acquisition, this is outside the scope of this research. This growth does, however, place
MTN SA under even more pressure because its financial metrics lag the group
benchmarks and it cannot compete with other group operations for investment capital.
Failure to compete compromises its ability to fund growth and carries the threat of the
operation being sold even if it appears successful in its own right.
New market opportunities in South Africa itself are most likely to be found in either the
emerging market, or in wireless data and voice convergence. MTN has no clear master-
plan to either explore these opportunities or mitigate new competitive threats.
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2.3. Attempts at Transformation
It is clear from this description of MTN’s performance in terms of the four key responses,
that even though MTN South Africa is growing as a company, part of a world-leading
group, and showing exceptional returns, it is failing to respond adequately to significant
threats in its environment. Many of the environmental changes require a higher level of
customer responsiveness, and the four types of responses in turn require a higher
knowledge of, insight into, and attention to the customer.
Transformation initiatives have clearly not succeeded in terms of the above outcomes. It
is nevertheless important to understand the main ways in which MTN has tried to
transform itself to be better equipped to respond appropriately. One needs to understand
how each initiative has contributed to overall change, so that future interventions can
learn from failed initiatives, and build on what has been successful.
2.3.1. Process Audits
The first explicit performance improvement project was the drive for quality
accreditation. Focusing on two areas which impact the customer – the call centre and the
actual network. MTN became the first cellular operator in Africa (Gibbs. 2004. p 159) to
achieve ISO 9001 (International Standards Organisation) grading for its network (1997)
and ISO 9002 accreditation for its call centre (1999). ISO 9000 standards are
international standards for the auditing and accreditation of quality management systems.
This project was initiated at a time when MTN had grown rapidly and there were
inadequate systems in place to cope with the expansion. ISO introduced much-needed
review of processes and procedures and forced the call centre to review its activities in a
more standardised and less ad-hoc way. It also provided an opportunity for tangible
differentiation in the market and is an expressed requirement by banks of their suppliers.
However, the weekly call centre statistics (November 2006) show that it is still not
uncommon to wait 15 - 30 minutes for an operator when calling the customer care line.
The most recent 9001 network audit report in July 2006 confirmed ongoing accreditation
(SABS. 2006. p 2) but expressed deep concern (ibid. p 3) that “management and
improvement of the system … is not what it should be.” The report expresses concern
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that the documentation is “outdated and irrelevant” (ibid. p 3) and that management no
longer appears to be using the ethos behind this standard as the driving force in the
organisation. Rather than becoming part of the core drive of management, guiding MTN
towards transformation, the initiative was simply an audit exercise which has itself been
sidelined and is in need of attention.
MTN has seen attempts to improve project management, product management and
process mapping, with supporting software, training and external audits of these activities
against ‘best practice’. These actions seldom make a significant difference to the delivery
of customer value. An example of failed attempt to improve values is given in the handset
procurement case study (Appendix H: Handset Procurement ).
2.3.2. Branding and Marketing Initiatives
As stated in Section 2.1, MTN has from the start had a significant brand marketing
budget. A customer satisfaction index was established in 2001. In 2004 a comprehensive
brand strategy for the group was implemented, which improved the brand rating. This
was aligned with brand tracking, mystery shopping, customer satisfaction surveys and
advertising tracking and focus groups. Externally researched indices were also tracked,
such as the South African Satisfaction Index for Telecommunications (Barnhoorn. 2006).
Brand is obviously important in cellular, and MTN needs to spend to ensure its brand is
at least as visible as its main competitors. Market research to track branding is also
important. Mystery shopping is an important component of the management of customer
experience. However, individual scores are level for brand and are declining for customer
satisfaction and for mystery shopping. Initiatives such as brand promotion, product
development and overall customer experience management seem to be disjoint and not
part of a sustained transformation programme.
2.3.3. Customer Management
An audit tool for assessing customer management, known as CMAT™ (Customer
Management Assessment Tool) was introduced in 2003 for execution on a group-wide
drive, sponsored directly by MTN’s Chief Executive Officer, to differentiate specifically
on customer service. The assessment exercise has since expanded into a deeper,
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‘customer centricity’ project known as ‘Customer Management’ which was recently
endorsed by MTN’s Chief Operating Officer as a top priority for Southern Africa.
CMAT™ is described in Appendix C and researched in Section 6.3. The local consultants
undertaking this were introduced into MTN by the Managing Director and have enjoyed
high profile. The score has improved over the years. However the 2006 assessment
scoring revealed that MTN SA had achieved only half of the increment targeted for the
year and was still well below the top quartile benchmark organisations.
The first attempt to use the CMAT™ principles to effect widespread change was a
specific initiative run from the Managing Director’s office in 2004. The plans was to ‘fast
track’ improvements in customer service and move the customer satisfaction index score
from 74% to 90% within the year. The project included a national internal road show on
brand and values. The Call Centre received substantial focus and Customer Services
Representatives were told that they were the most important people in the organisation.
Many of these ‘important’ people have now been transferred into an outsource company,
and customer service is still regularly on the management agenda as a crisis which has
not yet been solved.
The MTN Group has now adopted CMAT™ as its standard measurement tool across its
21 operations (with one or two countries still to enter the programme). A group-level
executive coordinates improvements across operations. An example of such coordination
is encouragement of best practice through appointment of a champion on various aspects
of customer management. Another is to use an intranet to share information. The best
practice model is limited because high-scoring countries are often those with the simplest
operating models. For example, MTN Nigeria has strong control of its distribution chain
and minimal legacy systems and partnerships. It is easier to manage the customer
experience when there are fewer third parties and legacy systems to manage. The higher
score does not imply that the person managing the programme has more experience or
can assist in a more complex market.
At the time of writing there was no evidence that previous programmes have led to
sustained customer service improvements or differentiated MTN from competitors. In
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fact, MTN scores lower than competitors on all the metrics used (and mentioned earlier
in this section).
2.3.4. Restructuring
The business units recently emerged from an extensive restructuring, designed at
considerable expense with inputs from international and local consultants. The goal was
to create a significantly more customer-centric, agile and responsive organisation, which
was positioned for growth, efficiency and competitiveness in an increasingly difficult
environment. New functional units were either business units or shared services.
Although some form of restructuring occurs at least once per year at MTN, the recent
formal structural change was more fundamental. The cost and impact on the organisation
was substantial. Changes commenced in September 2005 and are not yet finalized. Many
individuals have yet to be allocated formal new positions and there are gaps in
responsibilities which have yet to be resolved. Whilst it is difficult to determine whether
the organisation has benefited or not, there is certainly consensus that the significant
expected benefits have not been realised.
The business units were designed to enjoy a high degree of autonomy, to empower them
to translate their focus on sales and the customer into organisational changes. However in
reality the business units are compromised by three factors as follows:-
Firstly, the strongest directives within the organisation remain financial targets. An
example of this is that decisions about monthly sales incentive funding is made by
finance and then issued to the business units without interaction about market conditions.
Secondly, there are strong and influential personalities within the shared service
departments who continue to dictate processes and requirements which conflict with
those of the sales unit. This is well illustrated through a viable systems diagnosis (in
Chapter 8) which shows the autopoeitic nature of these services.
Thirdly, there is still a strong remnant of the old mindset amongst certain individuals. As
an example, the brand review process is specified by brand managers and the business
units must comply. This involves pre-set weekly meetings. In fewer than 50% of the
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cases is it practical to have such a meeting and therefore the review adds little customer
value.
2.3.5. Customer Services Executive
An executive was appointed in October 2006 specifically to champion customer
centricity at MTN South Africa and reporting directly to the Managing Director. This
appointment underpins the commitment of the organisation to becoming customer centric.
It is too early to tell what the outcome of this appointment will be. However, as at the end
of the 2006 financial year, the Customer Service Executive had no approved budget for
the requested staff, the consultancy fees required to assist her with analysis, the funds to
make some of the smaller changes already identified and the costs of facilitating an
organisational forum.
2.3.6. Cost Cutting
A desire to cut costs is generally present in maturing industries, commencing with
discretionary costs and then looking deeper into staff rationalisation and tightened capital
expenditure policies.
Cost-cutting is more visible than customer centricity initiatives because it is easier to
determine and measure targets and the impact on the share price is immediate.
Cellular operators with multi-national presence invariably cut costs by centralising
procurement and standardising on underlying platforms. A well publicised example is the
One Vodafone project, where Vodafone Group Plc announced publicly its plan to save
over ₤ 2.4 billion across its operations in this way (Halford. 2005. Slide 3).
MTN has a group wide initiative called the ‘Least Cost Operator’ initiative. Best practice
is shared between country operations, whilst cost-cutting targets are imposed on each
country operation based on both within-group and across-industry benchmark metrics are
imposed. Targets include both operating and capital costs, since investment analysts track
industry-specific performance metrics based on both of these.
The cost-cutting is regarded as customer centric because it is argued that network
infrastructure capital expenditure efficiency allows one to provide coverage to a wider
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number of communities, and operational cost efficiency allows one to chase emerging
market customers, with a lower monthly spend.
Whilst cost-cutting does put pressure on the organisation to become more efficient, my
experience in our business unit is that it has also led to a far greater focus on financial
results. Much time is spent arguing the numbers and determining how to achieve them or
work around them. Much attention is given to freezing and reducing head count, as well
as how to circumvent restrictions imposed. Customer centricity and cost-cutting compete
for management time and focus. This is inward looking, with little discussion around the
link to customer experience or delivery of value. An example is the outsourcing of staff-
intensive functions (at the same or higher cost than running these in-house) to reduce
head count. Another example is delaying capital expenditure on radio upgrades, resulting
in a poorer customer experience and pushing up coverage complaints.
MTN focuses on margin rather than profit. It determines its required margins and then
determines the outputs needed to achieve those margins are achievable. This point does
not equate to the maximum profit point.
One issue which is vexing to MTN is that commissions to Service Providers constitute a
significant component of the total customer price (over 25%) and these margins are hard
to reduce, being cast in long term contracts.
2.4. The Challenge of Customer-Centric Transformation
It was determined in Chapter 1 that MTN’s environment was changing rapidly, with
significant threats imminent. It then became clear early in this chapter that MTN’s market
response was well intended but simply inadequate, and that management attempts at
customer-centric transformation are not rapid and decisive enough to meet the threats. It
is therefore important to understand more clearly what type of organisation would be best
suited to respond to current and prospective customers in the new environment, the core
of the problem with the organisation in its current state, and what key interventions
would bring about the desired change.
I have developed a Rich Picture in Figure 3 (below) which provides a graphic depiction
of the environment, stakeholders, perspectives, issues and related dynamics. A few of
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these have been described, whilst the remainder will be discussed in the rest of this
section.
Situation - Rich Picture
MTN
Changing Environment
We want more profit and less spend!
We will monitor your
performance closely with our
BSC metricBe more ‘customer centric’
CUSTOMERVALUE
MD’s promotion of CMAT
Com
ple
x &fa
st c
han
gin
g
Now restructured intoBusiness Units
Direction of
TelecomsIn South
Africa
$
MTN Staff
We want to be customer centric but our main
drivers are “MD’s orders”
and KPI’s
New entrantsCompetitor activities
New technologiesDe-regulation
We are also your customer.
Treat us right and also give
us big commissions else we simply sell your competitor’s
products
We want our needs met at the right specs, place,
price (etc)
Our needs are changing
We are all different
ResellerBusiness Unit
Issue: Value proposition not clear
Issue : New structure but old
mindset
Suppliers
Business Processes:
Under review. Vast room for
Improvement. Internal and external
Experiences ‘horrendous’!
We understand markets in
other countriesWe can be part of your
customer centricity planning.
Our agenda is to sell more of
our products to you
Individual staff members
Resellers
End Customers
Senior Management
Currently little longTerm planning
Figure 3 : Rich Picture - Reseller Business Unit Customer Centricity Situation
A detailed stakeholder analysis of MTN was recently completed (Geerdts. 2006c.
Appendix C) to determine areas where MTN fell short in meeting the needs of
stakeholders. In terms of potential and likelihood of impact, the short-list of high scoring
groups were shareholders, employees, government, suppliers, customers, Service
Providers and activist groups. This work is now extended for this research by considering
how stakeholders see MTN (how it is an asset for them), and how they would gain or lose
if MTN were to become more customer centric. The key findings of this analysis are
tabulated in Table 1, below.
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Stakeholder The Assets they see in MTN How they Gain (Lose) from Customer
Centric Transformation
Customers Provider of communications service for personal needs (for example communication, social contact, self-expression, security, business, information, entertainment)
Gain from better value, better service.
New, better ways to meet their needs
Shareholders Financial return on shares purchased
The means to transform a country
Gain from better revenue
(Perceive loss to short term profits)
Managers (employees in senior management)
Source of financial, self-actualisation (and career) and social needs
Source of power
In reality they gain from doing more meaningful work and improving the financial situation of the company.
In terms of perception they may see it as simply more work in an activity of dubious value
Employees Source of financial, self-actualisation (and career) and social needs
Gain from more meaningful work, more successful company
(Old mindset: Perceive loss from the effect of changes)
Government Means to provide universal service & gain political goodwill; tax revenue
Gain from more satisfied customer-voters
Suppliers Sales revenue; reference company Gain if their products were genuinely adding value; gain by showcasing MTN to other networks
(More demands will be placed on them)
Consumer interest groups
Typically want more value and better service at lower cost
Their cause will be promoted if they are representative. (Their relevance will decline as MTN becomes more responsive
Service Providers MTN provides them with underlying service off which they make money and build a customer base
Gain through increased sales.
(Lose if MTN wants a more direct relationship with the customer)
A more detailed analysis of specific stakeholders in Table 2, below, reveals the identified
stakeholders and their understood positions relative to customer centricity. The positions
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are categorised as supportive, nonsupportive, marginal and mixed blessing. The
respective responses (involve, monitor, defend and collaborate) are shown in Table 2:
Supportive/Involve: A few staff within RBU Other channels within RBU Key staff in the RBU Helpdesk Group of high-usage customers with whom I have direct contact IT shared service Ericsson South Africa (supplier)
Mixed Blessing/Collaborate: Staff within RBU Helpdesk Service Provider B Service Provider C Network shared services MD, RBU Executive, Board Members (supports CMAT™ but not necessarily the initiatives proposed in this document) Central Marketing Department
Sta
keh
old
er P
ote
nti
al
for
Co
op
erati
on
->
(in
crea
sin
g)
Marginal/Monitor: Project and Business Optimisation office Suppliers X, Y Service Provider D (may themselves be customer centric but not participating in MTN initiatives)
Nonsupportive/Defend: Key staff within Strategy and Product shared services Service Provider I (work to move at least to Mixed Blessing) Disgruntled customers with whom I have contact Service Provider A Other business units
Stakeholder Potential for Threat -> (increasing)
Table 2 : Response Strategies for Key Stakeholders
Beyond customers, shareholders, and government regulators (whose needs have already
been discussed), a number of significant stakeholders warrant further analysis. These are
consumer activist groups, managers, employees, and suppliers.
Consumer activist groups arose as a reaction to poor service and customer value, and as
MTN becomes customer centric, involvement should shift from reactive interaction with
‘protest’ consumer groups, to proactive interaction with selected ‘special interest’ groups.
However in the shorter term MTN can expect engagement on a frequent basis with
consumer groups as long as increasing consumer expectations go unmet.
Managers’ performance is measured by Balanced Scorecard key performance indicators,
except that they are not ‘balanced’ in the sense that they combine the tangible and
intangible assets into an aligned strategy (Kaplan and Norton. 2000. p 5). They are rather
almost entirely financially-focused, with the CMAT™, customer satisfaction and staff
satisfaction targets included almost as competing priorities. The stringent and competing
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targets create levels of stress which are very evident when interacting with these
managers.
This inherent stress is exacerbated because MTN cannot accurately be described as a
learning or adaptive organisation. This is a reflection on management style and prevailing
culture. I will support this statement with the data I have gathered, in Chapter 8.
Employees (including managers) are undoubtedly important stakeholders who impact
customer experience and the delivery of customer value directly, and especially so in this,
a service industry. It is particularly important to understand what impacts employee
support and empowerment. The recent restructuring and other internal events have had a
demoralizing, disempowering impact on staff.
For many employees at MTN, customer centricity is a very new mindset and there is
much ‘old thinking’ and associated baggage to contend with. It is also a complex concept,
so that someone who offers good personal customer service may not necessarily be
customer centric if their customer contact plan is not related to returns on their activities.
Staff in the shared services functions are still in transition to the new structure. They need
to buy into the customer centricity mindset and plans and also be integrated into planning
and delivery. Since processes are not generally made explicit (let alone documented),
these staff are often not aware of how their contributions ultimately add value.
Many suppliers are multinationals themselves and have organisational knowledge on
customer centricity. They are also in various stages of transition. ‘Equity’ suppliers can
also offer new insights into the local market.
Service Providers have a unique role in this and are therefore discussed in more detail.
2.5. The Independent Cellular Service Provider – a Unique Challenge
The South African service provider model was established by the government regulator
and based on the model in the United Kingdom at the time. Under the model, MTN
operates as a wholesaler of cellular services, and Service Providers retail the services to
end customers. Indeed, Service Providers own the billing relationship and must perform
customer acquisition, credit vetting, bill presentation and primary support. Debt risk is
with the Service Provider.
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The relationship between MTN and the Service Providers has not been easy. In the days
after MTN launched its services, there were a number of Service Providers - 12 at one
stage (Gibbs. 2004. p 45) - and their role was seen as crucial to build up subscriber
numbers. Indeed, they delivered on these numbers and made an important contribution to
the rapid uptake of GSM in South Africa.
Over time the providers have consolidated so that MTN now has only five Service
Providers. MTN Service Provider is the in-house provider, a wholly-owned subsidiary of
MTN Group accounting for sixty percent of postpaid sales. Nashua Mobile, Altech
Autopage Cellular, iTalk Cellular and Orion Telecoms are Independent Cellular Service
Providers who offer services from the three cellular operators as well as broadband
network providers.
As the market has matured, and MTN has taken a more hands-on approach to distribution,
question have arisen about the value the Service Providers add, especially relative to the
high margins they were demanding (in some cases exceeding 25%), over and above the
connection incentives.
The world trend is now towards direct sales channels, as they allow better brand and cost
control. MTN South Africa is the only one of 21 operators in the MTN Group which
distributes through the Service Provider model. In addition, the model is used only for
postpaid customers. Prepaid customers have direct relationships with MTN. One can
argue that if the service provider model were to be replaced by direct sales, at realistic
margins, prices could become more competitive and the customer experience could be
better managed.
However, the Service Providers are both powerful and effective. Nashua Mobile is owned
by the Reunert Group, and Altech Autopage Cellular is owned by Altech. Both parent
companies are in the top-forty index (Alsi 40) of the Johannesburg Stock Exchange.
Their combined subscriber base accounts for forty percent of the postpaid market and
includes some significant corporate accounts and high value customers. Their base
continues to grow well. Independent partners potentially bring diversity to distribution in
terms of target segments, sales techniques and approaches, and brand. It is significant that
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Service Providers are successfully selling cellular services regardless of which operator’s
services they sell, so it is a case of working with them or losing out on their sales.
The tension between MTN and its Service Providers is substantial. It is fuelled by
competition for customer acquisition (with direct channels), competition for customer
ownership and ongoing tension about the commission structure. This has also resulted in
mistrust on both sides and as a consequence there is little mutual sharing of information
and strategic plans. For example, there is no joint planning around product requirements
or product launches. Typically their involvement begins when they are notified (between
1 day and 30 days prior to the event) that a new product will be launched! An information
pack is supplied and training is sometimes provided for sales staff in the main regions.
2.6. Summary
It is now clear that customer centric transformation needs to occur more rapidly than it
has been to date and that certain organisational interventions are required to direct and
expedite the transformation, informed by factors which include the environment,
organisational legacy, stakeholder issues and responses. There needs to be more
understanding of the specific drivers and inhibitors of change as well as the interaction of
these factors. Developing this model will be the focus of the next chapter.
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3. Customer Centricity – How to Make it Work
It is important to develop a hypothetical model showing the inhibitors and drivers of
customer centric transformation for MTN, as well as their interactions. This model will
enable appropriate interventions to be designed, implemented and tested in a learning
cycle. Without this model and approach, interventions will continue to be ad hoc and true
transformation will be compromised.
The outputs from the initial Scenario Learning process described in Appendix E brought
into focus the fundamental need for MTN to transform. Regardless of which scenario was
adopted, the common themes of market saturation, increased competition and complexity,
and the opportunities or options available were similar. Wider reading was undertaken to
verify marketplace trends and to generalise MTN’s experience so as to assist with theory
development: market and regulatory conditions were compared with those of mobile
network operators globally, and market trends were compared with general retail trends.
This analysis reflects in Chapter 1.
These inputs also fed into a ‘mess analysis’. The interactive planning method is
specifically designed for such an analysis, with a Rich Picture and Stakeholder Analysis
being standard tools for this and other methodologies in the interpretive paradigm
(Chapter 4). The exercise is described in Appendix E, with the results of these exercises
covered in Chapters 1 and 2.
The MTN Culture Audit results, shown graphically in Section 6.7.2 reveal significant
problems with MTN’s culture, both across-the-board and with respect to direct, customer
centric indicators.
I examined two models of the drivers of Customer Centricity. The first is a model
developed previously (Geerdts. 2005c. Section B) and reproduced in Appendix D. It
shows two primary loops – the short term operational loop and the longer term innovation
loop. Both of these are learning and adaptation loops. They show the importance of
understanding customer value and understanding shareholder value in driving customer
centricity. This is supported by the second model, which I derived from CMAT™
elements using an inter-relationship diagraph (Appendix C) and building the causal
relationships. It shows the need to develop organisational capability.
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A preliminary behaviour-over-time analysis is shown in Figure 4 (below) and illustrates
the effect of the identified drivers and inhibitors I have identified in this and the previous
chapters.
Behaviour over Time Chart of RBU’s Customer Centricity – Including Force Field Analysis
2007 Time
Organis’nal
Capability
Tension and
Mistrust with
Channel
Time 2010+Time
Level o
f C
usto
me
r C
en
tric
ity
Understanding of
Customer Value
Learning and
Adaptation
Competition with
‘least cost’ initiativeInability to
deliver
Understanding of
Shareholder Value
Inappropriate
Culture
Figure 4 : Behaviour over time of Customer Centricity
In reviewing the four market responses (in Section 2.2), it was clear that MTN was aware
of the need for customer centric transformation. However, the transformation initiatives
undertaken appeared to be sporadic and isolated, with no integration or follow through.
There was no clear underlying strategy. In fact there were examples of when cost-cutting
objectives competed with customer centric requirements. A more specific inhibitor of
customer centricity identified was therefore Ambiguity of Strategic Intention.
Another problem identified was the ability to deliver. Although four market responses
were required, none of these was effectively implemented. Restructuring has not resolved
the delivery issues. Cost cutting has undermined delivery – especially because there is
inadequate understanding of the link between delivery requirements and resource
allocation. Of particular concern were the processes which deliver value to the customer
and this inhibitor is more specifically identified as Problems with Customer-facing
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Processes. These are the problems that fuel consumer activism – especially around
customer complaints.
The causal relationship between these variables is shown in the inter-relationship
diagraph in Appendix B. From these, I obtain the causal loop diagram (CLD) in Figure 5
(below):-
Problems withcustomer-facing
processesOperationalInefficiencies
Partner(channel)
conflicts andmistrust
Ambiguity ofStrategic Intention
(competingpurposes -
customer centricityand least cost
operator
O
Problems withOrganisational
Culture
O
Ignorance ofCustomer
CustomerCentricity
OO
Figure 5 : Concern Causal Loop Diagram for Customer Centricity
This CLD postulates that the key problems to overcome are ambiguity of purpose
(strategic intention), channel conflict (with Service Providers) and inefficiencies with the
current processes. With ambiguity in purpose, the quality of planning will be affected
because customer centric initiatives will be vulnerable to being undermined by short-term,
financial-only concerns. As Schwaninger (2005. p 50) says, the higher strategic levels
need to be functioning effectively to empower the lower (operational) level to function
effectively (also see diagram in Appendix D.2).
The value proposition will not be as relevant (being devised based on inappropriate
criteria) and the delivery will be compromised because implementation may be
‘sabotaged’. An example could be senior management (as previously shown in the Rich
Picture in Figure 3) who are important to the execution of plans but are driven by a
narrow set of indicators, or simply adopt ‘checklists’ to tick off, without focusing on what
actually needs to be done, or by thinking short term and ignoring longer term impacts.
These problems impact shareholder value, which further reinforces the ambiguity of
purpose (after a delay). This behaviour will occur (for instance with shareholders) when
they respond to lower profits by focusing more on cutting costs, rather than increasing
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centricity. The behaviour may not hold under extreme conditions, when they are forced to
reconsider their business model more fundamentally. On the other hand, their focus on
customer centricity would be clearer if profits were shown to go up due to increased
centricity.
Channel conflicts mean that the tension between MTN and the Service Providers, driven
by competition over brand, customer ownership and discounts, leads to mistrust and
reduces the level of co-planning, leading to further inefficiencies, and a compromise to
customer service. Problems with culture lead to mistrust, because employees are not sure,
for example, whether they are supposed to treat Service Providers as competitors or as
allies?
Inefficient processes tend to waste valuable human and other resources and focus on the
wrong objectives and outputs, without having inbuilt mechanisms for improving
themselves, adapting to changing needs. Ignorance of the Customer always leads to
operational inefficiencies because customer needs are not accurately met. If a product or
service is under-specified, then the operation is wasteful because it is producing
something customers do not want. Over-specification, on the other hand, leads to wasted
resources being used to produce functionality or quality which the customer does
specifically want.
In Chapter 2 I addressed employees as stakeholders and the low morale currently
experienced. Staff are experiencing the change and uncertainty of a deep and drawn out
and inconclusive restructuring, with the threats associated with cost cutting and head
count reduction. They are not sure of the direction MTN is taking and subjected to the
impact of different initiatives. Caught in this vicious cycle, employees are faced with
ambiguous intent, inefficient and frustrating processes and conflict with the very partners
with whom they should be working closely. They are not able to enjoy the fulfillment of
knowing they are giving of their best in a leading organisation
The model shows that the current situation, for the reasons mentioned, is not really able
to deliver customer value effectively and that this is already impacting on shareholder
value. As the market and customers change and become more demanding, the inherent
problems will be exacerbated and compromise the very viability of MTN.
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Clearly the model needs to be amended to show plausible intervention which will clarify
purpose and reduce conflicts in the channel, so that the underlying customer-centricity
model can function as intended and improve centricity. Further entry points will also
need to be investigated, to break this cycle. Doing this will create a virtuous cycle where
customer centricity reaps the appropriate benefits so that it is further encouraged.
An important sub-diagram shows the relationship between shareholder value, customer
value and customer centricity.
Customer value is the principal driver of shareholder value, with employee value being
one of the drivers of customer value. I argue the relationship between customer centricity
and shareholder value in Geerdts (2005a. Section E): Customer centricity is the extent to
which one builds and develops one’s business around understanding and delivering on
the needs of customers (delivering customer value accurately and efficiently). By
definition, an organisation which is more customer centric can deliver greater customer
value. Because the organisation is focusing on efficient delivery, shareholder value will
also increase. Customer value will lead to increased sales and potentially improved (or
less compromised) margins, creating shareholder value.
Customer centricity loops back to drive strategic intent. Because it is defined as the
profitable creation of customer value, customer centricity only occurs when shareholder
value increases. Customer centricity therefore has at least a financial impact, and
therefore drives strategic intent. There could possible be other reasons for this driver,
such as management satisfaction or a brand association with customer centricity.
Customer Centricity
Shareholder Value
Customer Value
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3.1. Research Question
If MTN is to thrive in the future, steps must be taken to drive the key transformation to
customer centricity and remove the inhibitors blocking this transformation. This paper
addresses what interventions are required with the following research question:
“What interventions will transform MTN into a customer centric organisation so that it is
better positioned to maximise opportunities in its complex and fast-changing
environment?”
This involves examining and analysing various sources of information and developing a
theory which will allow interventions aimed at transforming MTN into an organisation
able to maximise the benefits for key stakeholders. By answering this question, I will be
able to address the concern described in the causal-loop model in Figure 5 and effect the
customer centric transformation that is vital to the long term viability of MTN.
If these challenges are not met and transformation is either inadequate or too slow, jobs
will be lost, share prices will fall and the supplier ecosystem will be impacted. If
challenges are overcome, the industry will grow and also become more relevant to the
needs of customers. The challenges are many and complex and include challenges
deriving from the stakeholders themselves.
In order to fulfil the ‘customer champion’ role effectively, I will need to define the role
more clearly, understand customer value and shareholder value (and determine a clear
link between the two), develop a clear view on what needs to be done and how, and
thereby understand how to manage the transformation. In doing this, I can draw on
CMAT™, as well as my own management models, and alternative models I encounter.
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4. Research Framework
To steal ideas from one person is plagiarism-to steal from many is research.
- Steven Wright
I will now build a research framework which can answer my research question on
customer centric transformation in such a way that I can build and develop a theory
which contributes to the wider body of theoretical knowledge but also addresses the
unique situation currently being researched. An important requirement is that my
knowledge must be actionable. To be actionable in a management context, knowledge is
best expressed in terms of essential variables and the causal relationships between them.
The causality must be transparent and be testable in a management context. The required
behaviour of these variables must be clear if they are to achieve the intended results
(UCT. 2006c. Slide 9).
I build this framework on four cornerstones – Critical Systems Thinking, Grounded
Theory, Action Research Learning, and Triangulation. In this Chapter I will motivate and
describe each of these, and then show how I used these cornerstones in practice to gather
and test my data.
I first give a motivation for and overview of Critical Systems Thinking (Jackson. 2003),
to explain why I have chosen a holistic, rather than reductionist approach. I describe the
four major paradigms which exist within systems thinking, and the process of selecting
those most pertinent to my question. The second cornerstone is the Grounded Theory
approach of Glaser and Strauss (1967) and I show why it is best suited to my research
requirements, as a predominantly qualitative approach. I augment this with Layder’s
Research Map (1993) to ensure the range of interaction levels (micro to macro) is
systematically covered. The third cornerstone is Action Research Learning (including the
Learning Cycle and Small Wins), which I show to be particularly useful in ongoing
management practice. I use the concept of Triangulation as the ‘glue’ which binds
together my different research activities, results and perspectives.
I describe and motivate the specific methodologies and tools used in accordance with my
framework, to gather and process data: systems thinking methodologies and tools,
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interviews, literature reviews and survey results. I conclude with a ‘triangulation
checklist’ of whether I have swept enough approaches, paradigms and perspectives into
the research.
4.1. Critical Systems Thinking as a Foundation for Customer Centricity
Jackson (2006) shows the benefits of Systems Thinking to handle complexity, change
and diversity – the very problems that prompted this research when other solutions
appear inadequate. He first explains why so many solutions that are sold to managers to
solve such problems have been unsuccessful: “these simple, quick-fix panaceas fail
because they are not holistic or creative enough. They focus on parts of problem
situations rather than the whole, they take little account of the interactions between parts,
and they pander to the notion that there is one best solution that fits all circumstances”
(ibid. p 1). Jackson’s examples of panaceas tried include ‘knowledge management’ and
‘customer relationship management’ (ibid. p 3), concepts which I show in my
documentation review occur frequently in customer centricity literature.
The consequence of looking at parts of the organisation and not the whole is that this
misses the ‘crucial interactions between the parts’ (ibid. p 3). This can lead to unintended
consequences in other parts of the organisation. The overall result may be a slight
improvement or no improvement – it may even be worse than before. In the context of
the cellular industry, it is interesting to note Chapman’s observation (2002. p 20), that
one of the key drivers of increased interaction which is making organisational systems
harder to understand and predict is in fact electronic communications!
Jackson also maintains that these “fads also stifle creativity” (ibid. p 3) by limiting the
choice of available solutions and viewpoints by which to look at the problem.
Jackson goes on to list the benefits of critical systems thinking, and his approach to this
(which he calls ‘creative holism’). Holism refers to the holistic rather than reductionist
approach, and creative refers to the combined and judicious use of multiple paradigms,
perspectives and tools to solve a problem.
Jackson describes holism as follows: “Holism puts the study of wholes before that of the
parts. It does not, therefore, try to break organisations … down into parts in order to
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understand them and intervene in them. It concentrates its attention instead at the
organisational level and on ensuring that the parts are related properly together and are
functioning well to serve the purposes of the whole” (ibid. p 4). He maintains that “as the
world has grown more complex and it proves impossible or counter-productive to try to
break systems down into parts, holism deserves a place as an equal and complementary
partner to reductionism” (ibid. p 4). This complementary position is the one I have also
taken.
The benefits of holism are that it can develop and make use of analogies from other
disciplines. An example of particular relevance for customer centricity is the thinking
about biological organisms in relation to their environments, leading to the concept of
‘open systems’ to help conceptualise organisation-environment relationships (ibid. p 4).
Environmental responsiveness was identified as a key issue in Chapter 1. Another benefit
given (ibid. p 4) relates to process and structure – where holism has the ability to consider
these together, including their interdependence. This benefit may apply to the situation
being researched, where processual and structural changes have both been attempted
(Section 2.3), without clear success.
A third benefit of holism is the self awareness it provides theorists and practitioners in the
sense that they can make explicit their assumptions. The first important assumption is the
boundary decision one makes about what is in the system being studied, and what is out.
There are many different options available. In my example, some texts refer to customer-
centricity (or orientation), whilst others refer to ‘market-orientation'. The boundary
decisions in this case are whether or not to include customers, suppliers, competitors,
distributors and other market forces. Other examples of assumptions are the paradigm
that one is using (I will suggest a few later in this document), the perspectives being used
and which stakeholders are being considered.
I have drawn on Jackson’s work because of his specific contribution in looking at
‘systems of systems’ or Systems Thinking itself taken as a whole. Many authors have
made significant contributions to Systems Thinking. For a chronology of the main
contributions since the 1930’s, organised by ‘traditions’, see Umpleby and Dent (1999. p
103). These and other contributions fall within the high-level framework Jackson has
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suggested form the basis of Critical Systems Thinking. With this approach, the systems
thinking practitioner chooses which of the available systems thinking paradigms is best
suited to a particular problem, and which methodologies, methods and tools within that
paradigm are most appropriate. According to Jackson (2006. p 5-6) the critical element
derives from selecting the approach and making explicit why this approach is most
appropriate. The creative element derives from choosing multiple approaches to solving
the same problem. The last step allows participants to choose from a range of possible
solutions, rather than being restricted in thinking. It also often allows multiple views of
the actual problem, therefore reducing the danger of committing a very significant error,
described by Mitroff as “solving the wrong problem precisely” (1998. p 15).
These benefits go some way to explain why Jackson (2003. p 13) would claim that “the
systems language has proven itself more suitable for getting to grips with real-world
management problems than that of any other single discipline”.
In Table 3 (below) I have collated information from various chapters of Jackson (2003) to
describe his four paradigms. These paradigms are named in the first column. Each
paradigm highlights certain important aspects of a situation and by viewing the same
situation through each lens in turn, one derives different insights which may be obscured
when using the other lenses.
The second column of the table indicates the emphasis of the paradigm, the managerial
ends it lends itself to, and what aspects are highlighted. The third column assists one in
categorising a particular concept, methodology or theory according to the paradigm
within which it was developed.
This table provides a crucial element of my research strategy, because when I am clear
which paradigms best match my research problem, I can focus on authors, methodologies
and tools which relate to that paradigm (details which I provide later in this Chapter).
Para-
digm
(Lens)
Aspects of a situation that are highlighted when viewing it through this lens. (Main emphasis of approach and managerial end it lends itself to)
The primary characteristics a
concept, methodology or theory must
have in order for it to be categorised
as belonging to each paradigm
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Para-
digm
(Lens)
Aspects of a situation that are highlighted when viewing it through this lens. (Main emphasis of approach and managerial end it lends itself to)
The primary characteristics a
concept, methodology or theory must
have in order for it to be categorised as belonging to each paradigm
‘Fu
nct
ion
ali
st’
Improving goal seeking and ensuring viability
“Functioning well” – ranging from optimising to organisational design
Evaluates: Efficiency (of use of resources), efficacy (use of means in realising goals), adaptation and survival
Managers increasing control and eliminating inefficiency and disorder
Aimed at goal seeking, viability, efficiency, adaptation and survival
Helps improve a system by scientific exploration of the parts, their inter-relationship with each other and the environment
Metaphors: machine, organism, brain, flux and transformation
‘In
terp
reti
ve’
Exploring stakeholder purposes and the
actions which derive from how they ‘interpret’
their situations
Understand the different meanings of people, see where they overlap & therefore lead to ‘shared, purposeful activity’ (Jackson. 2003. p 39)
This approach guides managers in developing an appropriate shared corporate culture
Evaluates: Effectiveness (are we achieving what we want to achieve); elegance (of proposals, in the perception of stakeholders)
Can lead to participative involvement in decision-making which gains commitment to these decisions
Seeks to understand who the stakeholders in a social system are, understand their interpretations of the situation and their purposes so as to promote a level of overlap
Metaphors: culture and political system
‘Em
an
cip
ato
ry’
Ensuring Fairness
Aimed at ‘emancipating’ oppressed individuals and groups (both organisations and society)
Highlights any form of discrimination, eg class, status, sex, race, disability, sexual orientation, age
Asks self-critical (ethical) questions about the analysis or intervention and particularly about those affected by it
Evaluates : empowerment (ability of stakeholders to contribute and act) and emancipation (of disadvantaged groups)
Suspicious of authority – tries to reveal forms of power and domination that it sees as being illegitimately employed
Critical of status quo- wants a radical reformation
Metaphors: psychic prison, instruments of domination
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Para-
digm
(Lens)
Aspects of a situation that are highlighted when viewing it through this lens. (Main emphasis of approach and managerial end it lends itself to)
The primary characteristics a
concept, methodology or theory must
have in order for it to be categorised as belonging to each paradigm
‘Po
stm
od
ern
’
Promoting Diversity in problem resolution
Evaluates:
• Exception: “What otherwise marginalised viewpoints have we managed to bring to the fore?” (Jackson. 2003. p 27). What underlying discourses are dominating and need to be challenged or what dominating systems have to be broken down so that suppressed voices can have their say (ibid. p 27) (This analysis is both more subtle and more radical than in the emancipatory approach (ibid. p 271)
• Emotion : Does the action that is now being proposed feel appropriate and good in the local circumstances in which we are acting (ibid. p27). This is a response to the possibility a situation many be so complex that a ‘grand narrative’ is probably in vain (ibid. pp 257-259), and local action is more feasible
Awareness of the difficulties of the previous 3 lenses, suggesting a deeper critical analysis of the processes of rationalisation and argumentation in society
Looking for creativity and new ways of communicating and approaching this
Seeks diversity: experiment with different modes of pluralism (ibid. p 263) at all levels - in clients, methods, modes of representation and facilitative processes (Jackson. 2003. p 273)
Opposes the ‘modernist’ rationality (of other 3 paradigms) and ‘totalising’ theory - attempts to provide comprehensive explanations of how organisations function. Emphasis on having fun (a carnival metaphor), learn from bringing conflict to the surface
Encourages mixing different perspectives, accepting contradiction, recognising and affirming difference and diversity, taking an open and flexible stance and responding to the characteristics of the moment (ibid. p 261)
Deal with significant complexity, multi-agency settings; look for local solutions rather than universal solutions; deconstruct situations (texts) to determine the underlying dynamics (such as the power-information dynamic) (ibid. p 273)
Asks about knowledge systems dynamics to uncover the underlying ‘formative system’ (ibid. p 265)
Table 3 : Systems Thinking Paradigms
Jackson’s metamodel for critical systems thinking (Jackson. 2006) embraces the range of
systems thinking approaches on two important axes. One axis relates to the range from
unitary (single stakeholder) approaches to pluralistic (multi-stakeholder) approaches. It
also extends to coercive systems, where power differentials and dynamics between
stakeholders are significant. On the other axis, the rows indicate whether the system
being reviewed is simple or complex. A simple system would have a single goal and
consist of few elements, with low interaction between the elements. A complex system
may have multiple or less-defined goals, many elements, and high interaction between
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the elements. Table 4 (below) shows how the paradigms mentioned above relate to each
other within this metamodel, or system of systems thinking (Jackson, 2003, p 24):-
Participants
Unitary Pluralist Coercive
Simple Emancipatory
Paradigm
Syst
ems
Complex
Functionalist
Paradigm
Interpretive
Paradigm Postmodern Paradigm
Table 4 : Classification of System Types
In Figure 5 : Concern Causal Loop Diagram for Customer Centricity (p 44), I hypothesise
what the drivers and inhibitors of customer centricity are, as well as their key interactions.
This initial analysis allows me to determine which paradigms are best suited to my
concern. I have chosen to use more than one paradigm, in keeping with the concept of
creative holism described earlier in this Chapter, ensuring that at any one time I
consciously stay within the selected paradigm. There is inevitably some overlap, however,
that merely reinforces the results. I will now motivate for my choices:-
It was identified that delivery is important to customer centricity and problems with
delivery are an inhibitor. Lack of co-planning, ignorance of the customer and strategic
intent are also included. These all justify analysis within the Functionalist Paradigm,
which addresses some of the important issues raised, of viability, efficiency, efficacy and
control. However, this paradigm is not able to identify or address elements of the problem
relating to culture, mistrust between the intermediary partners and competing
commitments. The Interpretive Paradigm is concerned with alignment of purpose in
multi-stakeholder environments. The Emancipatory Paradigm examines the power
dynamics within a multi-stakeholder environment. An important principle in Critical
Systems Thinking is the use of multiple paradigms. I did not identify aspects of the
problem which call for use of this ‘lens’, but I can benefit from the specific contribution
of this Paradigm as part of the ethical post-evaluation of my intervention (which I
undertake in Chapter 9). This process was iterative, in that I was able to go back and
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correct my research processes based on feedback provided. Given the emphasis of this
analysis on ‘affected parties’, I chose the Customer as the most important stakeholder to
review, although employees and Service Providers were included.
4.2. Grounded Theory (GT)
Grounded Theory (GT) has variously been referred to as a method (Struebert and
Carpenter. 1999. p 1), methodology and philosophy (Strauss. 1994). The key idea
(adapted for my context) is that one asks a research question in a social setting which
involves human interaction. The theory, grounded in the data from the setting, emerges
from a specific process followed (which I will now describe) and explains the significant
variation demonstrated in the data (ibid. 1999. p 1). It is suited for situations such as mine
where: there is a naturalistic (rather than controlled) setting; there is a need for more
detail on the specifics of the problem (a general theory being too oversimplified to be
specific to the case being researched); and the details of the result need to be such that it
can be actionable) (ibid. 1999. p 1).
The focus of GT is on qualitative research. Strauss (1994) recollects that the book he co-
authored with Glaser (1967) was published as a formal alternative to the quantitative,
positivist thinking prevailing at the time (the early 1960’s). It is now one of many
qualitative methodologies, but an important one. It does support the use of quantitative
data insofar as that data supports the research process it proposes (Strauss. 1994).
The naturalistic setting is my organisational environment. The theory is ‘grounded’ in
that setting and the phenomena observed in that setting. The qualitative aspects observed
relate largely to human interactions (practice, behaviours, beliefs and attitudes)(Struebert
& Carpenter. 1999. p 1).
The intention is to develop a partial theory. - a micro theory, in a micro social context
(ibid. p 2). In my case, this theory would provide the basis for acting in a particular
situation – the management intervention required for the customer centric transformation
of MTN. This is as opposed to a grand theory, which is complex and attempts to explain
a broad area within a discipline, or a substantive theory on a particular topic (ibid. p 2).
However, I do intend for my theory to be congruent with such theories, by testing what
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has emerged from my work with what I find in the literature. In doing so, I aim to move
from my ‘working hypothesis’ towards a formal theory.
The theory must explain most of the variation in the data. The theory is evaluated
primarily for its fit, relevance, workability and modifiability (Glaser. 1998. p 18), or
alternatively, its fit, understanding, generality and control (Strauss & Corbin. 1990).
There is less emphasis on proving validity than would be the case for (say) a grand theory,
although I do undertake a post-review of validity in Chapter 9 (Evaluation).
A specific process is used to allow the theory to emerge from the data (Struebert &
Carpenter. 1999. pp 4-8). It requires a tentative but clear initial research question, in order
to ensure focus. It then involves gathering data, then analyzing comments, behaviour and
other inputs for the underlying basic social processes, to develop a first level of coding.
The processes are crucial inputs, they are abstract concepts, rather than simply
descriptions of what has happened (Struebert & Carpenter. 1999. p 2). Similar codes are
then grouped together to develop a second level of coding, and the relationships within
this coding develop a core variable (the variable that explains what drives the variation).
This process is open to the data (rather than based on pre-conceived theories), flexible
and iterative, including refinement of the tentative research question and further research
(sampling or literature review) to test or develop emerging insights (ibid. p 3). In this way,
the theory remains ‘grounded’. Strauss (1994) maintained (even after GT has enjoyed
almost 30 years of growth and refinement) that the essence of the methodology is the
drive towards theorizing through the coding, comparisons (emerging findings against
established theory) and theoretical sampling (finding more samples to test the emerging
theories).
The data is potentially gathered from interviews, field notes, documents, journals,
participation, literature reviews (Struebert & Carpenter. 1999. p 2) and selective literature
sampling (ibid. 1999. p 7). I describe my own data gathering approach in Chapter 5.
4.2.1. Research Map
Layder (1993) provides a useful research map to situate research in social contexts such
as management. This map complements Grounded Theory by ensuring that interactions
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and drivers at all appropriate levels are consciously considered. I have summarised his
map in Table 5 (below). The influence of each level should be noted, as well as the
interactions between the levels.
Research Element Research Focus
CONTEXT Macro social organisation
SETTING Organisational context
SITUATED ACTIVITY Social Activity. Face-to-face activity involving symbolic communication. Focus on emergent meanings, definitions, understandings of the situation as these interact with settings (above) and individuals (below)
HIS
TO
RY
SELF Self identity and individual’s social experience. The unique psychobiography of the individual interacting with the above sectors.
Table 5: Research Map (adapted from Layder. 1993)
My research problem has elements of ‘context’ and of ‘self’: I described in Chapter 1 the
overall context (the elements of MTN’s environment) and my immediate requirement to
determine a way forward, as the manager given the mandate to drive customer centricity
in my business unit. Further data at this level can derive from both my own annotated
experiences and from interviews with stakeholders. For this purpose I chose to interview
MTN staff. I have also been able to access transcripts of other stakeholders (Service
Providers) who have been asked about their experiences with MTN. Although the use of
transcripts limits my ability to interact and to determine non-verbal cues, it allows
respondents to be more frank and open than they may otherwise have been.
Given the level at which my research question is positioned, I expected most of the
learning to derive from my focusing on the organisational ‘setting’ and the ‘situated
activity’. I take this into consideration when detailing the sources I have used in the next
Chapter.
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4.3. Action Research Learning (ARL)
Action Research Learning (ARL) is essentially a problem-solving approach, based on the
three components suggested in the name: research refers to the diagnosis of a problem
and the development of an appropriate organisational theory (Cooperrider & Srivastva.
1987. p 131); action refers to the direct use of the theory to intervene to address the
problem (ibid. p 131) and learning implies the use of a learning cycle (UCT. 2005c. Slide
6)
The actual mechanism is as follows: From the context of one’s situation, one identifies
and defines a problem. One then researches available, relevant data and develops a theory
(or model, or hypothesis) about what the problem is, how to solve it and what the likely
outcome will be. This is tested against evidence derived from the data. One then takes
action based on this theory, and compares the actual result with the result predicted. One
then refines one’s theory based on this difference, and this represents the learning. The
cycle then repeats (UCT. 2005c. Slide 18).
This approach is suited to management because it supports practical intervention based
on sound theory. The theory is continuously adapted as knowledge is gained and as
situations change. The approach is used in other elements of this dissertation – the small
wins (which I discuss in the next paragraph), soft systems theory (which I will discuss
later in this section), lean thinking (which I cover in my literature review in Chapter 6),
and the dissertation as a whole, which I apply to my problem of transformation at MTN.
4.4. Triangulation
A common concept in the qualitative research literature is triangulation. The concept is a
metaphor based on the survey technique of fixing the location of an object by intersecting
the location readings from two reference points (Srivastava & Teo. 2006. p 204). This
can refer to the combination of a qualitative and quantitative approach. Srivastave and
Teo attribute the use of the term and underlying ‘multi-method’ approach to Campbell
and Fiske (1959). A number of authors refer back to Denzin (1970). The thinking is that
the use of different methods reduces the possible error attributed to one specific method.
However, in a recent work, Denzin & Lincoln (2003. p 4 – 6) compare the ‘triangle’
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image with a crystal (multi-faceted), a quilt, montage, a creative performance or the work
of a bricoleur. The underlying idea is more of telling the same story from different points
of view (ibid. p 6). Whereas critical systems thinking uses different paradigms, and
different methodologies within a paradigm, so Denzin’s ‘revised triangulation’ model
encourages a range of research tools, but to widen, rather than narrow the result. Brannen
(2005, p 176) suggests in a more formal way that four outcomes are possible:
corroboration (when the results of different techniques are ‘the same’); elaboration (a
qualitative result exemplifies a qualitative result); complementarity (the results differ, but
can together lead to insights) and contradiction (when the results conflict).
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5. Data Gathering
The most appropriate data gathering and analysis methodologies, methods and tools must
now be selected to best meet the objectives of the research framework. This first requires
a clear understanding of the field of customer centricity and the salient issues in the
literature. Then, I have selected within Critical Systems Thinking the paradigmatic
‘lenses’ to use, and need to now choose the methodologies which best apply to those.
Grounded Theory calls for a qualitative core approach, using a wide range of data
gathering approaches (including quantitative) to test and shape the emerging theory.
Action Research Learning seeks a cycle of interventions in the situation, and analysis of
results.
5.1. Literature Review
My initial literature research was at the tertiary level, in order for me to gain an overview
of the field of ‘customer centricity’ – the history, the key elements and the authors who
appear to be most respected and trusted. This is the basis, for example, for my
introduction to Chapter 6 (p 74) on the history and background of customer centricity. I
show in Chapter 8 how it also informed the formation of the research question. I have
supplemented this with secondary sources to explore and test elements of the core
proposition, as they unfolded. As an example, when ‘culture’ arose as an element, I
brought in additional reading on alignment of culture and capability. I have included
reading of secondary sources specifically to support particular claims.
5.2. Critical Systems Thinking
Proposed methodologies are categorised according to the paradigms from Table 4 with
which they are most closely associated, to give Table 6. Note that a few methodologies
may apply in more than one category.
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Participants
Unitary Pluralist Coercive
Sim
ple
Lean Thinking
CMAT™
Sy
stem
s
Com
ple
x Viable Systems
Diagnosis (VSM)
Soft Systems Methodology
Interactive Planning (with Scenario Learning)
Strategic assumption surfacing and testing
Critical Systems
Heuristics
Table 6 : Classification of Research Methodologies and Tools Used
A well established and powerful methodology within the Functionalist Paradigm is
Viable Systems Diagnosis (Jackson. 2003. p 85). Three core methodologies available
within the Interpretive Paradigm are Interactive Planning (ibid. p 157), Strategic
Assumption Surfacing and Testing (ibid. p 137), and Soft Systems Methodology (ibid. p
181). Critical Systems Heuristics is well established within the Emancipatory Paradigm
(ibid. p 213) because it provides a practical methodology for dealing with essentially
normative content. In the discussion which follows, I need to better understand these, test
whether Lean Thinking should be included as a research approach, and test whether
CMAT™ qualifies as a true, systems thinking tool.
5.2.1. Viable Systems Diagnosis VSD)
Viable Systems Diagnosis (VSD) was developed by Beer as a tool for understanding an
organisation from a cybernetic point of view – particularly with respect to viability
(Espejo and Gill. 2002. p 1). It is based on the premise of the viable systems model
(VSM), that an organisational system is viable if it can address its complex and changing
environment by exhibiting the following important characteristics (ibid. p 2):-
1. Single Loop Learning. This implies that it has the mechanisms to take corrective
action to respond to the environment, or a change in the environment.
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2. Double Loop Learning. This implies that it can anticipate the direction in which
environmental change is going and adapt the organisation itself to prepare for
those changes.
3. Requisite Variety. This implies that the organisation contains enough variety to
detect and effectively respond to the variety of the environment in terms of
different states the environment can assume which are relevant to the organisation.
Alternatively it must be able to attenuate the variety of environmental stimuli or
amplify its responses to compensate adequately.
Viability is achieved (and the three requirements listed above are met) if the organisation
has five key systems functioning – implementation, coordination, control, intelligence
and policy. By mapping out these functions according to the espoused purpose of the
organisation (in this case customer centricity), one can perform the diagnosis and identify
salient problem areas requiring further analysis. The model is best understood when
shown graphically as I have for MTN South Africa (Figure 9, p 105). This is another way
of expressing the goals of customer centric transformation. It is particularly relevant
given the need for a cellular company to target and support an ever-increasing number of
target segments and niche markets.
5.2.2. Lean Thinking
As Toyota Motor Corporation prepares to become the world’s largest vehicle
manufacturer in 2007 (BBC. 2007), through its continuing year-on-year growth, it is
fitting to consider the reasons for their success. There are numerous articles and books
explaining what is known as the Toyota Production System (TPS), the design of which is
attributed mainly to Taichi Ohno (Spear and Bowen. 1999. p 103). The success of the
approach in manufacturing is well known. “Toyota is one of the world’s most storied
companies, drawing the attention of journalists, researchers and executives seeking to
benchmark its famous production system” (Spear. 2004. p 79).
Although Lean is often seen as a technique or set of tools, I concur with Bhasin et al
(2006) that it is a ‘philosophy’. Seddon’s claim (2003. p 22) that it is a systems thinking
approach is supported by a United Kingdom government report (OFDM. 2005. p 17).
This partly explains Bhasin’s conclusion that lean implementations fail because managers
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think of it as a set of techniques rather than a systemic intervention, “a cocktail of factors
are needed for lean success: not only is it necessary to implement most of the technical
tools but an organisation’s culture needs transforming too. Furthermore, the alterations
need to be implemented throughout an organisation’s value chain. Lean has a major
strategic significance, through its implementation procedure, human resource
management implications [and] general approach to the supplier base” (2006. p 1).
Jackson concurs that this is a systems thinking approach (2006b) but one which is limited
in application to unitary situations.
Lean Thinking is explored further in Section 6.4. Two related action research projects are
also introduced in Chapter 8.
5.2.3. CMAT™
I have included this tool because MTN has mandated its use across the 21 countries in
MTN Group and over a number of years. It is clearly relevant to customer centricity and
it is aimed at producing actionable knowledge. The proponents regard it as a ’systems
thinking’ tool. Woodcock and Starkey, for example, claim that “large companies should
look at managing customers in a systemic way. Rather than focusing mostly on cost,
revenue and profit, they should focus on the systemic measures of which profit is a
critical output” (2004. p 4). It is certainly ‘systems-wide’ in that it assesses activities in
all the areas believed to impact on customer centricity. What it does not do is measure the
interactions of the parts. Nor does it abstract to determine an understanding of the system
as a whole. Analysis of the key measurables indicated places it within the Functionalist
Paradigm. My research objective is to explore CMAT™ from available literature,
determine its relevance to the research question and (in that context) analyse the 2005 and
2006 MTN SA assessment results.
5.2.4. Soft Systems Methodology (SSM)
Soft systems methodology falls within the Interpretive Paradigm. Traditional systems
thinking assumed that a system had a single purpose and that it could learn by acquiring
knowledge. In such a ‘hard’ system, natural science was useful for examining causal
relationships. However these two assumptions did not hold with human systems
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(including organisations) where the people or groups involved had their own individual
purposes which affected causality (Checkland and Scholes. 2001. p 2). In these systems
experience seemed a more appropriate concept than knowledge because meaning was
open to personal interpretation (ibid. p 3). Checkland developed a formal methodology
(‘soft’ systems methodology) to deal with such cases.
According to Jackson (2003. p 208), the benefits of SSM are that one can explore
purposes within a diverse group, can begin to resolve a ‘mess’ without having established
clear goals, can open up new solutions and can assist in the design of support systems (by
giving a clear understanding of the activity that the system should be supporting). SSM
has contributed powerful methods (such as ‘rich pictures’) which enrich other
methodologies. It is recommended for use in a team, but can also be used by a manager
as an internalized, conceptual too (ibid. p 208).
SSM is used to ameliorate a ‘mess’ caused essentially by competing (or unclear)
purposes within the group of significant stakeholders involved in a situation. The
objective is for these stakeholders to follow the specified process together to develop a
level of common understanding of the range of likely purposes from the points of view of
these stakeholders.
SSM is a variation of Action Research Learning, and is therefore ideally implemented as
a learning cycle (Checkland & Scholes. 2001. p 3). It begins with specification of a
problem within a situation, develops a theoretical model in which the problem is ‘solved’,
and then aims to implement the solution in the given situation.
Jackson (2003. pp 191-196) describes the suggested methodology, which typically beings
with the creation of a rich picture in which the major perspectives, issues, processes and
other situational information is captured pictorially. The rich picture provides the basis
for a development of a systems model depicting the reality. The group works on the
solution in terms of design of a conceptual model, and then determines how to apply this
solution back in the real world. Purpose is captured in terms of root definitions, where the
system being reviewed is examined from the point of view of each significant stakeholder
in turn. At the core of each definition is a transformation process. The process of
developing root definitions should lead to greater understanding of the purposes, and this
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activity is itself often repeated in a learning cycle before implementation begins
(Checkland & Scholes. 2001. A8).
The application of SSM to a ‘mess’ within the MTN context is described in Appendix H.
5.2.5. Interactive Planning
The relevance of this methodology was that it was “specifically designed to cope with the
‘messes’ that arise from the increased complexity, change and diversity that managers
have to confront.” (Jackson. 2003. p 157). It is aimed at creating an organisation capable
of continuously adapting. It is based on three principles (ibid. pp 161-162): participation
states that participants learn more from engaging in the process of planning itself than
from the end result; continuity emphasises the need for frequent or continuous planning
because plans are always outdated; and holism requires that plans be both coordinated
(with other units at the same level) and integrated (with units at different levels).
The approach consists of five phases (UCT. 2006a. Slide 4), aimed at moving an
organisation from where it is today, towards an idealised future state. The first phase
involves ‘formulation of the mess’. This can make use of a rich picture (as was described
in the previous section on SSM). The key idea is to determine and project current trends
so as to point out the undesired likely situation the organisation will find itself in if it
continues as it is without any interventions. The next phase involves determining an
idealised end state – what has to be transformed in order to achieve this preferred future.
Scenario Learning (discussed in the next sub-section) is ideal for the purpose of
supporting these first two phases. I apply the ‘formulation of the mess’, combined with
Scenario Learning to this Dissertation in Appendix E.
The next phases of interactive planning (ibid. Slides 9-11) are Means Planning
(considering alternative means in terms of efficiency and effectiveness, Resource
Planning (considering the financial, human and other resources required for execution of
the plan) and finally the actual implementation and control (bearing in mind this is an
ongoing iterative, learning process). Small wins are one means of implementation.
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5.2.6. Scenario Learning
Scenario Learning is an ideal complement to interactive planning. It allows a
management team to develop a common understanding about the most likely possible
futures (Fahey and Randall. 1998) and then develop optimal strategies for these various
futures. It is largely a learning process (Illbury & Sunter. 2001. p 42) which enables
participants to engage with and ‘experience’ various possible futures in advance (and
learn from these experiences) so that they are better prepared for events as they do unfold.
Other relevant benefits of Scenario Learning (Schwartz. 1996. p 7) are to challenge
mindsets, surface issues not previously on the agenda, challenge the existing strategy,
identify areas requiring contingency plans)
For this research I have used my own adapted process for Scenario Learning which I used
and refined in developing an ‘emerging market’ model and at an executive breakaway
(Geerdts, 2005c). Using Millett’s distinction (2003. p 19) between intuitive and analytical
scenario planning, the process followed is more ‘intuitive’ because the objective is high
level and concerned with direction rather than detail. Appendix E provides further detail
on the exercise undertaken and result.
The likely futures established were the basis for Chapter 1 and suggested appropriate
responses were the foundation for Chapter 2. I tested attributes of MTN (in its current
state) against those futures and responses to identify areas of concern in Chapter 3. The
scenarios also informed selection of the intervention proposed in Chapter 7 (from a range
of alternatives).
5.2.7. Strategic Assumption Surfacing and Testing (SAST)
Another tool for exploring purposes is SAST, which is used “where differences of
opinion over which strategy to pursue prevent decisive action being taken” (UCT. 2006b.
Slide 1). An example from MTN is whether to pursue a primarily customer centric or
least cost approach. The result from a SAST exercise to treat this difference is given in
Chapter 8.
The principle behind SAST is that each person has limited understanding, but that the
SAST methodology can make constructive use of differences between people to guide an
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organisation into new policy directions. Participation is important to ensure that opposing
viewpoints (and the experience they represent) are integrated as contributions (UCT.
2006b. Slide 4).
The methodology is as follows (Jackson. 2003. pp 142 – 143): Conflicting policies are
first raised in an adversarial manner (backed up with relevant data) so as to encourage a
dialectical debate. Assumptions underlying policy positions are made explicit (surfaced)
and analysed in terms of the importance and certainty of each. During the debate, groups
can modify their assumptions based on new knowledge. Synthesis then involves
agreement on a common set of assumptions, from which new, higher-order policies are
developed.
5.2.8. Critical Systems Heuristics
As shown in Table 6, this methodology is best described within the Emancipatory
Paradigm. It consists of a set of 12 ‘boundary’ questions which assist in assessing the
fairness of an intervention to stakeholders, particularly the parties affected by the
intervention (Jackson, 2003. p 218). The questions can be asked twice (‘What is ?” and
“What ought to be?”). The questions are important, because they add academic rigour to
a discussion on ‘fairness’ by placing it within a formal methodological framework. This
is the means for addressing a normative issue by applying a rational process (ibid. p 218).
The name indicates that it is self-critical, placed within Systems Thinking, and Heuristic
(the process does not provide a ready answer, but helps the questioner to converge on an
improved solution iteratively). I have used this approach to assist in my ethical evaluation
of this dissertation (in Chapter 9) and the set of questions is therefore listed there.
5.3. Grounded Theory – Data Gathering
As discussed in Chapter 4, data gathering techniques are required which allow
observations of the social system, and test emerging theory through theoretical sampling.
Use of techniques within the range of methodologies proposed, support triangulation
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5.3.1. Literature Review and Sampling
The next chapter reviews the literature on customer centricity, followed by specific topics
which represent the literature sampling that was used to test and explore the emerging
theory.
5.3.2. Interviews
I have used five types of interview – self interview, expert interview, commissioned
interviews, open interviews and sampling interviews.
5.3.2.1 Self Interview / Participant Observation
Formalized self-interrogation accessed personal knowledge and experience of MTN.
Executive MBA module assignments provided the basis for this – including position
papers on each of the six modules, organisational context, reflective papers, documented
interventions, specific analyses and action research learning documentation. Position
papers included post-evaluation to guard against or sample issues of personal bias.
5.3.2.2 Open Interviews
Open questions in the initial interviews enabled me as the interviewer to be open to
unanticipated directions that responses took, and to explore these directions I had not
anticipated in my planning. I then included specific questions to ensure that emerging
hypotheses were tested or probed. I requested second interviews where necessary. This
testing of emerging hypotheses is a crucial component of GT (Strauss, 1994). I selected
participants from a cross section of backgrounds: two trade marketers (one new to the
organisation); a programme manager; a financial analyst (working on subscriber
analysis); a new business development manager and a call centre supervisor.
I used the interview guidelines and ethical frameworks suggested by Booth et al (2003. p
87) – informing interviewees of the reason for the interview, and respecting their
anonymity. If I refer to individuals, it is by title.
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5.3.2.3 Expert Interview
Booth et al (2003. p 86) refer to experts as potential references. I have used one expert
whom I believed was close enough to my research question to provide specific advice,
and that was the ‘customer centricity executive’ at MTN.
5.3.2.4 Commissioned Interviews
Within the context of my responsibility as customer champion and the account
management theoretical framework (a literature sample that I describe in Chapter 6, on p
88), I commissioned research in 2006 into the nature of the relationship between MTN
and its Service Providers. I was the owner of the research project (and signed off on the
questions), but consulted with the channel managers, research manager and the project
manager of Markinor (the chosen research company). The key account managers selected
the individuals within their accounts (Service Providers) they deemed most influential
and who have the most contact with MTN (senior executives, sales and operational
managers). Interviews were conducted with all who accepted the invitation. The response
rate was 81% (35 surveys out of 43 respondents surveyed). Questions were shaped within
the same key account management framework (product, process and interaction, and how
MTN helped Service Providers to meet their objectives with their customers). The survey
was qualitative, but used ranking (to establish priorities).
I was able to access the detailed breakdown of responses as well as the actual transcripts
(where permission was given), which enabled me to complement Markinor’s feedback
(2006) with my own detailed analysis.
An area I had identified in Chapter 3, as a problem requiring further exploration was the
relationship (described in Chapter 2) between MTN and the Service Providers. The
breakdown of trust led to difficulty in working together. Having a third party conduct the
survey enabled me to gather data to test the quality of this relationship and to determine
the specific problem areas in a way which would have been impossible had I conducted
these personally.
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5.3.3. Quantitative Data
Organisational culture was identified in Chapter 3 as an inhibitor of customer centricity,
and since it is a complex topic for additional research, I searched for additional primary
and secondary data to support my own observations. Fortunately I could access results
from two existing surveys applied to MTN staff. The first was the result of a Myers
Briggs Type Indicator® instrument which had been applied to management. The second
was the result of a ‘culture audit’ survey.
5.3.3.1 Myers Briggs Type Indicator® (MBTI)
MBTI is a psychometric test which indicates a person’s personality preferences along 4
theoretical polarities (Jessup. 2002). It is used to assist people to understand themselves
and to make more sense of their differences with others and can assist people in better
understanding the concepts of diversity. A fundamental principle is that there are no
better or worse preferences (Jessup. 2002. p 505).
I has found this tool useful when previously employed by a non-profit organisation in
1989 and have since encountered a number of strong adherents and opponents. According
to Jessop (2002. p 503), about three million people take the official version of this
instrument each year, and there is a substantial body of research around its application.
Some regard it as unreliable and the most common reason offered to me is around the
reliability of using the test to determine the specific type (their skeptism supported by
their variability in selecting categories when applying the test). During the literature
survey in the next Chapter, I need to better understand this instrument and its use in
management to help me to better determine the value of the data to which I have access.
5.3.3.2 MTN Culture Audit
MTN performs an annual audit, conducted by an independent company (ISR. 2006) each
year, and benchmarked against their comparative surveys of other companies by industry
and by country. The benchmark includes hundreds of thousands of employees across
dozens of countries. Dimension covered include customer focus, leadership, and values,
amongst others. During the literature survey in the next Chapter, I need to develop
context to help me to better determine the value of this data.
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5.4. Action Research Learning
5.4.1. Small Wins
Small Wins is a concept developed by Weick (1984. p 40) as a technique to effect social
change. The objective is pro-actively to manage a learning cycle process in a controlled
way so as to reinforce both learning and change in a desired wider direction. As Weick
says, “A small win is a concrete, complete, implemented outcome of moderate
importance. By itself, one small win may seem unimportant. A series of wins at small but
significant tasks, however, reveals a pattern that may attract allies, deter opponents, and
lower resistance to subsequent proposals.” (1984. p 40).
This approach can be used by managers to exploit controllable opportunities to produce
results, whilst building their competency. In order to achieve these objectives, the
problem-solving process needs to be subject to certain conditions (UCT. 2005b): It must
be controllable (fall within the authority, capability and capacity of the manager);
opportunistic (really add demonstrable value to the situation and stand-alone (it can add
value directly without being dependent on other outcomes. It must signal strategic intent
and effect movement in a strategic direction, and it must address the situation at a
detailed level.
I conducted three Small Win exercises. The first Small Win related to the use of Lean
Thinking to improve production and delivery of MTN’s community payphones (Geerdts.
2005d). The second and third were two successive cycles of improvement in the MTN
call centre. These related to the use of Lean Thinking adapted for the service industry
(Geerdts. 2006d).
5.4.2. Appreciative Inquiry (Research)
Appreciative Inquiry sees action research problem-solving approaches as limiting
because they invoke unhelpful human responses such as criticism and defensiveness.
Further, by focusing on “closing the deficit gap” (Barge. 2003. p 126) between what is
required and what is now, they limit creativity and innovation (Cooperrider & Srivastva.
1987. p 129). Instead, Appreciative Inquiry focuses on the power of positive emotion,
maintaining that “the foundation for affirmative change is fostering conversation that
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inquires into the life-generating experiences, core values, and moments of excellence in
organisational life” (Barge. 2003. p 124). One means of implementation of Appreciative
Inquiry is the 4D cycle (UCT. 2006d. Slide 1), Discovery (appreciating the best of what
is), Dreaming (envisioning the impact of what might be), Designing (co-constructing the
ideal – what might be) and [Achieving one’s] Destiny (sustaining the process, learning
and becoming empowered).
I used the Appreciative Inquiry cycle as a tool to probe my Marketing Team’s
understanding of MTN’s culture, what they would like to see it becoming and how they
would like to contribute to that change (Geerdts. 2006d).
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5.5. Triangulation Checklist
The use of multiple approaches can occur at many levels, and I conclude this Chapter by
tabulating (Table 7 below) the use of triangulation at various levels as a check of whether
I have used this technique adequately to sweep in enough perspectives and cross-check
for methodological errors or omission of important inputs.
Level Choices
Paradigms Functional, Interpretive, Emancipatory
Research Approaches Qualitative, Quantitative
Grounded Theory (with Research Mapping to
ensure levels)
Action Research Learning
Triangulation
Methodologies and Philosophies Functionalist: Lean Thinking, CMAT
Interpretive: Interactive Planning (including
Scenario Learning), Soft Systems Methodology,
SAST
Small Wins. Appreciative Inquiry
Data Sources Literature review, literature sampling.
Quantitative results from MTN audits
Interviews: self, expert, commissioned, open,
sampling interviews
Table 7 : Checklist of Triangulation at Different Levels
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6. Literature Review
"There is only one valid definition of business: to create a customer. ... It is the
customer who determines what a business is."
The remarkable thing about Peter Drucker’s statement (above) was not its powerful truth
but that it dates back to 1954 (p 37). One would have expected greater changes to have
taken place a full 53 years later!
At its core, customer centricity is about designing business around the customer.
According to Drucker, this is not a strategic decision to make, it is the essence. As
Maucher, the CEO of Nestlé, stressed during a panel discussion in 1996, customer focus
is a necessary precondition for doing business and not something special to strive for
(cited in Brännback. 1999. p. 1).
Within that context, this section draws on the literature to develop a view on customer
centricity, including a history of the development of the concept the benefits of
improving customer centricity; and ideas on how to achieve it. I will show how well
critical systems thinking incorporates the concepts as well as giving guidance on how to
achieve it, and how Lean Thinking is a particularly useful framework for MTN’s
situation. This will pave the way for a more tailored solution to MTN’s concerns in the
next Chapter.
Emerging theory needs to be tested and developed. When this requires literature sampling,
the results of the sample are consolidated into this Chapter for reference.
6.1. What Customer Centricity Is
The most succinct way of describing customer centricity (or ‘being market-driven) is to
choose an existing definition, such as that offered by Day (1998. p 8) and then to unpack
the meaning behind some of the words used:-
“The deeper meaning of being market-driven is a superior ability to understand, attract
and retain valuable customers.”
The key phrases are ‘ability’, ‘customers, ‘understand’, ‘customers’, ‘attract and retain’
and ‘valuable.
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Ability is important because customer centricity remains a mere wish unless the
organisation has the ability to actually deliver. I will show that the difficulty in
developing this capability is one of the primary reasons why customer centricity remains
a management issue. It is the subject of much of the literature and the reason why I
suggest the importance of systems thinking in my research answer.
Customers include both current customers and future customers, including those in
current markets as well as potential, future markets. This broader definition is important
to shift an organisation from the limiting tradition of planning only for current customers
and on current products (Day. 1998. p 6).
Understanding (customers) is the necessary starting point and means more than simply
knowing what customers want and how they behave. There are deeper issues (ibid. p 5),
such as determining latent needs and detecting unhappiness with current products that
may not have been expressed. In addition, it means appreciating the changing values of
customers.
Attracting (customers), as Drucker’s original focus, this goes without saying.
Retaining (customers) is recognition of the increasing emphasis on retention over
acquisition, and the need to understand the drivers of loyalty (ibid. p 9). I have mentioned
this as a key area in which MTN needs to responds.
Valuable (customers). The important issue behind this is knowing which customers to
attract and retain, and which to avoid, based on their economic contribution (ibid. p 8).
6.2. History
Burgess maintains that ‘customer centricity’ began with the William Hutt’s ardent
championing of “consumers’ sovereignty” as far back as 1928 (Burgess. 2003. p 158) and
that Hutt is the ‘father of marketing’.
A number of texts peg the origin of customer centricity on Drucker’s famous quote that I
have used (Brännback. 1999. p 3 and p 10)(Bund. 2006. p 10). However his book’s
contribution goes beyond a simple quote, with three key insights. The first is to view the
business from the perspective of the customer and customer experience (Drucker. 1954. p
39). The second is to view the provision of this experience as a holistic endeavour on the
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part of the organisation (ibid. p 34). The third, associated insight is to regard marketing as
an organisational activity and not the specialised activity of one department (ibid. p 34).
These are holistic, customer-centric insights to which later key authors reviewed did not
appear to contribute significantly.
Brännback (1999. p 3) describes Edmund McCarthy as the next important contributor,
introducing a ‘marketing-oriented’ concept in 1960. His contribution was to promote and
develop the concept of marketing to encourage organisations to shift their thinking from
production-orientation to marketing-orientation. According to Brännback, his concept
had three important elements - customer orientation, integrated company effort and a
profit goal rather than just a sales goal.
McCarthy also popularised the concept of ‘marketing mix’ with the celebrated ‘4-Ps’ of
price, promotion, product and place. The actual concept was introduced by Neil Borden
(Dennis 2004. p 5). McCarthy added conceptual depth and rigour to the marketing
discipline (and had substantial impact in this regard), but some contend that his approach
contributed to reinforcing functional division within organisations (Wikipedia. 2006)
rather than leading to an organisation-wide integrated marketing approach (as McCarthy
intended).
McCarthy’s ‘4-Ps’ model was so successful that it became entrenched for decades. It is
easily taught, and appears in every textbook (Grönroos. 1997. p 321). The concept of
pricing, promotion and distribution have even formed part of the American Marketing
Association’s definition of Marketing since 1985 Grönroos (1994, p 322). As Wikipedia
(2006) points out, McCarthy’s marketing mix list is marketer-centric (from the point of
view of the marketer and not the customer) and manufacturing based (suited more for
selling packaged goods) and alternative lists have been suggested which are customer
centric and appropriate for the service industry. I support the stronger criticism, such as
that supplied by Grönroos (1994, p322) that the concept of a marketing mix is simply a
marketing tool, not an entire approach. He bemoans the fact that it quickly became the
“unchallenged basic theory of marketing, so totally overpowering previous models and
approaches” (p 1). He discussed how other emerging approaches, such as the organic
functionalist approach advocated by Wroe Alderson in 1950 as well as other systems-
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oriented approaches from the 1960’s were not aired. Grönroos’ commentary provides a
useful challenge to the easily-made assumption that because marketing mix is widely
taught, it is the best (or a sufficient) approach to marketing.
Brännback (1999. p 4) lists Philip Kotler as the next influential contributor. He once
again emphasized the need for an integrated approach to marketing (as had all the
previous contributors I have mentioned). He showed how previous approaches had led to
marketers strategising about how to sell products, whereas he proposed starting with
customers and strategising about how to meet their needs.
Grönroos was one of the early proponents of what was called ‘relationship marketing’.
This may sound like a simple change of jargon, but to the adherents, it is a substantial
paradigm shift from the McCarthy-based thinking I have just described. The central
concept is the need to build and manage customer relationships Grönroos (1994, p322).
Marketing is explicitly described as interactive with the customer, rather than a set of
actions performed on the customer.
In this paradigm, the old marketing department concept is seen as problematic in the
sense that it devolves responsibility to the marketing function, rather than ensuring it is
shared across an organisation: “The psychological effect on the rest of the organisation of
a separate marketing department is, in the long run, often devastating to the development
of a customer orientation or market orientation in a firm” (ibid. p 325).
Relationship marketing is seen as more appropriate to today’s environment, which is
more networked, is more service oriented and places a higher premium on retention than
in the past.
The concept of relationship marketing has burgeoned. A helpful review of hundreds of
customer relationship management (CRM) articles was undertaken by Ngai (2005).
These articles appear to cover the comprehensive range of CRM topics, from strategy and
planning through to detailed implementation at the information technology level and
widening the topic range to such areas as e-commerce. Ngai divides the literature into
five broad focus areas (not categories): CRM, Marketing, Sales, Service and Support and
Information Technology/Information Systems (ibid. p. 585). He gives an exhaustive
breakdown of books by topic (ibid. pp. 589 – 590).
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Burgess (2005) and Day both espouse the concept of market orientation, which Burgess
distinguishes (2005. Slide 12) from marketing orientation (a focus on the marketing
function) or customer orientation (a more narrow orientation). He believes that market
orientation concerns a mastery of his three ‘I’s, insight, intent, and interaction. “Insight
calls for a comprehensive understanding of sources of demand, sources of supply and
methods of effective management. It requires an understanding of customers, competitors
and substitutes throughout the value chain. Firms with insight understand the factors that
influence their customers’ behaviours. Intent concerns the development of organisational
competencies that encourage contribution to a constantly changing strategic process of
response to customer and industry trends. It encourages internal communication,
contribution, sustainability, striving, responsibility, belongingness, stewardship, good
citizenship and responsible business ethics. Interaction means an emphasis on external
communications in the supply chain and on demand chain relations. It requires crafting
systems that provide the necessary information to calculate the revenue and cost streams
for every customer, the innovativeness to find new, appropriate, and organic distribution
and logistics solutions, and the ability to build and manage novel alliances to serve
widened markets currently considered to be sub-economic.” (Burgess. 2003. pp 174-175).
The final significant change in marketing emanates from the changes outlined in Chapter
1. Key developments included the rise of the on-line age, increased importance of brand
and consumer empowerment and increased access to information. These have given rise
to an industry of people analyzing and communicating future market trends, new ways to
market and new ways of defining the market which are no longer geo-spatial. For
example, marketing literature views even a narrow topic such as the relationship between
the consumer and handset as a new topic for wider marketing research – examining a new
marketing world where each person has access to a private, permanently-online device,
and where the identity and position of the user is known to the network (Watson. 2002. p.
338). Although the content of these new marketing modes is important, there are too
many trends, modes and fads to track and evaluate, and the basic underlying requirements
for a customer centric organisation, able to understand and respond to market
requirements becomes even more important.
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Although Brännback traces the shift in marketing thinking over time which has been
represented here, from what he calls the ‘production-oriented era’ to a ‘customer-oriented
era’, there still seems to be remarkably little shift in fundamental organisational
behaviour. At least there is some progress since Drucker’s original dictum, 50 years ago.
6.3. Introduction to CMAT™
In the eyes of MTN Senior Management, customer centricity is synonymous with
CMAT™ (Customer Management Assessment tool), an assessment tool developed by
QCi Ltd, a consulting firm based in the United Kingdom, to give a multi-dimensional
‘customer centricity’ score. The same assessment is applied across a wide range of
industries and within industries in different countries. Results are expressed as percentage
scores and as industry percentiles. Other organisations in South Africa using this
assessment tool are Volkswagen South Africa (used in 2003), and Woolworths Holdings
(communication with the respective representatives). MTN uses this to undertake an
annual audit across the Group (21 countries). This enables each country to track its
progress over time, and also to benchmark against other operations in the group. One
reason for its importance is that the annual audit is mandated by the Board. Therefore
there is considerable attention given to the score and concomitant preparation.
I have described the scoring dimensions as described in their website literature (QCi
Assessment Ltd) in Appendix C.
Two foundation which CMAT™ claims, tie in closely with other aspects of this literature
review – systems thinking and customer management and these are explored further.
6.3.1. Systems Thinking in CMAT™
QCi claims that the tool is ‘systemic’ (Woodcock. 2005. p 5). “Large companies should
look at managing customers in a systemic way. Rather than focusing mostly on cost,
revenue and profit, they should focus on the systemic measures of which profit is a
critical output.” (Woodcock. 2005. p 5).
A related concept in CMAT™ is ‘line of sight’ which refers to establishing customer
targets and then aligning the organisation to achieve them, as Woodcock explains, “The
measures start with business performance and then cascade into customer behaviour,
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customer commitment, customer experience, employee engagement and corporate
infrastructure. Only by measuring up and down this line will boards of large companies
be certain that their companies are aligned to deliver excellent customer management and
therefore business performance” (ibid. Introduction to Chapter 5).
6.3.2. Customer Management
Starkey et al (2002. pp 378 - 380) promote the term “customer management” (developed
by QCi Consulting) in preference over other definitions such as “relationship marketing”
for a few reasons, the most immediate being the observation that not all customers want a
‘relationship’. Customer management therefore includes a detailed prior assessment of
how desirable a relationship is in terms value derived from both sides. It is possible that
the customer management concept is unique, partly because of its holistic approach. It
includes all five areas mentioned by Ngai (above) and involves a wide range of activities.
A key exercise proposed is to develop different acquisition, growth and retention
strategies for different customer bands, based on criteria such as their profitability. This
introduces a strong financial underpinning to Customer Management, because this
exercise introduces efficiencies by proactively linking the cost-to-serve of customers to
their revenue contributions.
This latter concept is developed by a number of authors under terms such as customer
Lifetime Value (LTV), the present value of future profits from customers (Schmidt and
Webber. 1998. p 132). Understanding this value is seen as key to maximising one’s
‘customer capital’ (Hope and Hope. 1997. p 111), a change in mindset because looking
after customers (as capital, or as assets with a future value) is then seen as an investment,
rather than an expense (Cannie. 1994. p 13).
6.3.3. Customer Management Case Study – Malaysia
The summarised results of the following, published case study gives a clear overview of
what CMAT™ is looking for in an assessment. An early version of the standard
CMAT™ assessment was used and applied to 34 organisations in the banking, insurance,
oil and automotive industries (Starkey et al. 2002. p 381). The results of Malaysia were
compared with international findings and found to be similar. They showed a general
‘inward focus’ with little understanding of what the value proposition was, how it fared
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against competitors and how well the customer experience matched against the intended
proposition, less so by segment or value band. There is little understanding of a customer
life cycle, minimal understanding of the link between customer churn and the related
value, or reasons for leaving. Few companies use key performance indicators and there is
minimal use of complaints as an opportunity. There is strong use of communications to
build brand and to target customers, but very little follow-through effort. Another finding
of interest was the gap between what top management thought was happening, and what
is actually happening. I compared these with the findings of Woodcock (2005) and found
that many of the shortcomings mentioned above are considered general.
6.4. Lean Thinking
In the book Lean Thinking, Womack and Jones detail the essential elements of the Lean
philosophy which developed from the research of the Toyota Production System.
The traditional Lean approach (Womack, 2003), advocated a systematic set of steps in a
continuous cycle as per Figure 6, below:-
Value
Define value from the
customer’s perspective
Pull
Ensure the flow of
value is pulled by the
customer
Perfection
Define the ideal or
perfect value stream
Value Stream
Define the steps
required to deliver this
value
Flow
Line up the steps to
create swift, even flow
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Figure 6 : The Lean Improvement Cycle
A continuous cycle is envisaged which starts with a clear definition of what value is, but
seen from the perspective of the customer. This is the important step which establishes
the customer centric orientation of this approach. The concept of delivering value is
distinguished from providing a product or a service.
The next step in the process is to define the value stream in terms of steps are required to
deliver the defined value. Each step is evaluated in terms of the objective of delivering
value. Steps which do not add value are said to create waste. Elimination of waste is a
major concern of Lean.
The next step is to line the value-creating steps up so as to create swift, even flow of
value-creation. This is in contrast to batch processing, with stops and starts and
stockpiling of inventory between processes. The process of defining the steps and
aligning them to create flow is known as value stream mapping. It is the subject of books,
such as “Learning to See” (Rother. 2003), which focus on the methods of doing the
mapping, and are designed to help participants to see flow, value and waste. Seeing is
important because it enables all who participate to contribute to ongoing improvements.
A crucial principle of Lean is embodied in the next step of determining pull. The
principle is that the flow of value must be pulled through the system by customer demand.
This is in contrast to the traditional process of pushing of goods into the market. Running
a promotion (for example) is a push process which requires promotional pricing (thus
reducing potential profit), costly stock storage and can potential stock shortage or stock
surplus.
The final step is to define perfection in terms of what an ideal value stream would look
like, as the basis for setting objectives. The cycle is then repeated, leading to an endless,
responsive process of re-defining customer value and improving the value stream.
This cycle creates a simple but effective picture of a customer centric process which is
continuously improving and adapting to its environment, and including a holistic process
of end-to-end mapping of value according to customer requirements.
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6.4.1. Lean Solutions
Womack’s recent book (2005) takes lean thinking further, into the realm of sales and
retail, with a focus on joint-participation by companies and customers into problem
solving (the problem being the selection and purchase process of the customer, followed
by integration of the solution into their lives). Womack (2005. pp 48 – 56) sees the key
problems for customers (in the developed world) as being mobility, information
management, communication, entertainment, shelter, health, financial management and
personal logistics. All but two of these are clearly areas where the cellular industry can
add value. This is particularly relevant as solutions become more complex (e.g.
purchasing, installing and using a wireless data card). The book establishes consumption
principles: “Solve my problem completely, don’t waste my time, provide exactly what I
want, exactly where I want, exactly when I want” (ibid. p 43). It focuses on distribution,
new pricing models and has a section on call centres and their involvement in the
integration part of the cycle. It includes fresh ways to best solve customer problems, with
relevant case studies such as the Xerox call centre.
The key principle is to determine the customer’s problem solving processes and match
the provisioning processes to these as closely as possible.
The key steps in this process were: searching for the products needed; buying and
receiving; installing; integrating; maintaining and repairing; upgrading; and recycling and
replacing.
The challenge of the book is to align one’s business to meeting the customer’s problem
solving requirements – an over-riding customer centric philosophy.
This approach explains why the form Mystery Shopping conducted by MTN at the
moment as part of the branding and marketing initiatives (see Section 2.3.2) has
limitations - it asks questions based on an assumption of what customers want, whereas it
is only truly effective if it can be verified what the actual demands of the customer are
(Seddon. 2003. p 30).
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6.4.2. Lean in Service
Those people (including myself) who saw the benefits of Lean in manufacturing,
experienced difficulty applying the principles to the service industry (of which MTN is a
part).
The difficulty arises because whereas lean manufacturing tries to optimise a narrow set of
production process and reduce variety, lean service tries to accommodate a large number
of processes in a high variety environment which result from the unique requirements of
each customer.
Seddon (2003. pp 113 – 114) offers insights into how this might be achieved. His
recommended improvement cycle is similar to a standard learning cycle. This cycle is
fundamentally ‘customer centric’ in that it begins squarely with customer demand, and
enables the experience of customer requirements to be fed into the organisation.
Seddon (2003. p 25) refers to two key service areas, both of which relate directly to my
own areas of responsibility. The first is customer support (call centres) and the second is
sales.
6.4.3. Lean in Culture and Management
A fundamental precept of lean thinking is continuous improvement. This is imbedded in
the philosophy of the Toyota Production System (Spear and Bowen. 1999. p 97). The
effectiveness of process improvement is dependent on the ‘operating system’ of the
organisation. Toyota’s success, in particular, has been ascribed to the way in which the
improvement philosophy is imbedded into the very fabric of the organisation. Whereas
small wins are possible by following the thinking, substantive wins require changes to
dimensions such as the approach of each employee, the management style, the work
layout and even the types of conversations (Spear and Bowen. 1999. p 104 – 106)
An area where this is particularly important is the working together of different
organisational functional units within the organisation. Lean supply chains think of the
pull of value by the customer, and therefore eliminate or traverse functional units to
create a single, value-adding process flow.
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One insight from Lean Thinking is the shift in thinking from an organisational value
chain to an enterprise value chain (Womack and Jones. 2003. p 275). For MTN this
would imply working with Service Providers to plan end-to-end delivery of value to
customers across the combined MTN/Service Provider interface.
6.5. What Customer Centricity is Not
Day (1998. pp 2-4) gives an excellent idea of three organisational approaches which are
definitely not customer centricity.
The first approach is self-centredness (Day. 1998. p 2). The symptoms are a company
which is bad at capturing and sharing market signals. The sales force is largely in charge
of customer relations and contracts and in a sense have a ‘monopoly’ on customer inputs
which they use to their advantage. The only other insights come from the market research
function. On the other hand, senior managers spend very little time in the field and are
therefore shielded from customer complaints and unaware of changing requirements and
emerging opportunities.
With such companies, competitive advantage typically comes from the company
controlling assets or achieving functional excellence. There is typically, though a lack of
integrating logic to tie the ‘pockets of excellence’ together.
A frequent symptom of inward looking companies is an emphasis on managing short-
term earnings dominates over long-run concerns about erosion of market position or
diminishing technological advantages. Cost cutting is essential for competitiveness, but is
a problem when longer-term customer requirements are sacrificed or when “across-the-
board cost cutting is done without recognition of the long-run consequences for the
customer, or that other costs may rise to compensate for an ill-advised cut.” (Day. 1998.p
3). An example Day gives is when reducing customer service creates more work for the
sales force who then spend too much time solving problems rather than creating business.
An important nuance is the different between sales and customer-centric marketing. Day
(1998. p 3) uses the example of IBM sales teams, who “understood individual customers
and their business needs for the purpose of crafting persuasive sales presentations, but not
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in order to identify emerging requirements for the purpose of helping the other functions
to better understand the customer.”
Day (1998. p 4) calls the second approach which is not customer-centricity, customer
compulsion. He identifies three common problems. Firstly, individuals within the
organisation may go out and get customer information, but the organisation does not have
the disciplines to process them – selecting markets, filtering and prioritising. Secondly,
each initiative may be valuable on its own, but there is no systemic view. The total
offering lacks coherence – may lengthen response times and increase organisational
conflict. Thirdly, there is a mistaken belief that “every customer is worth pursuing and
should be given whatever they want”. The problem with this belief is that it does not
optimise profitability (as I will shown when discussing the REAP model in the CMAT™
discussion on the How To chapter later in this section). Customers also learn to exploit
this response, by playing organisations off against their competition. This puts pressure
on pricing.
The ultimate problem with this approach is that it appears to be customer centric but is
not. Managers feel as though they gave the concept their best shot, but it didn’t work, and
they become disillusioned with the general concept of customer centricity.
The third category of non-customer centric companies is the skeptics. They believe that
they know enough about the market to justify not gaining deeper understanding and that
this approach is warranted in their specific context – believing (for example) that current
business performance indicates their existing approach is working.
A subtle variation on this approach ironically comes from good intentions – the desire to
be at the forefront of innovation. The belief is that customer research does not lead to
these innovations because customers as ‘rear view mirrors’, choosing what they like from
what is already on the market and therefore endorsing safe, bland offerings. Therefore the
investment in time and resources to run focus groups and surveys is not warranted.
Day (1998. p 6) traces the belief to assertions such as those made by Gary Hamel that
customers are unable to envision breakthrough products and services. Day indicates that
evidence has shown problems arising from focus groups and similar research because
customers tend to choose the familiar, customer requirements are often contradictory,
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there is little confidence in subject decision because they are not making decisions with
their own money and because customer are often asked to rate prototypes of new
technologies which are still a bit clunky and clumsy so obviously cannot compare well
with working current technologies.
The reason why this observation is important is because it helps to highlight what
customer centricity actually is. Firstly, it involves developing a much deeper
understanding of the customer than just a response to a product (I have covered this
earlier in this Chapter, under ‘Understanding’ on page 75). Secondly, understanding
needs to include current and prospective customers.
Finally, there are organisation which believe they are technology driven and therefore do
not need to be market driven. They do not see that there needs to be a complementary
approach. For a start, they need to be awake to non-customers who are busy using
emerging, disruptive technologies which will eventually undermine their business.
One element that does not make an organisation customer centric is the rhetoric of its
leadership, even those which believe they are customer centric. “Although slogans may
be useful as reminders … they reflect only the surface meaning of an organisation that is
tightly aligned to its present and prospective markets. To complement my earlier
definition provided by Day (1998. p 8), “The deeper meaning of being market-driven is a
superior ability to understand, attract and retain valuable customers”.
6.6. Theoretical Sampling
The following literature and research results were the results of the theoretic sampling –
obtaining data to test or develop emerging theory.
6.6.1. Customer Complaints Management
Zairi (2000) gives an overview of the importance of complaints management as a tool in
achieving customer service excellence. The benefits are given as a channel for receiving
feedback (and therefore for putting into action improvement plans), a tool for preventing
complacency and harnessing internal competencies, a mechanism for performance
measurement and determining where to allocate resources, a mirror for gauging internal
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performance against competition and benchmarks and a useful general exercise for
customer understanding (ibid. pp 331-332)
Boeing Airlift and Tanker is used as a case study (ibid. p 332). What is relevant is their
setting service standards with their customer (something MTN is currently
contemplating), using teams to respond to complaints, maintaining logs of complaints
and correlating this information with other measures.
National Roads and Motorists Association (Australia) has a set of 14 principles and a
three-level model for complaints handling. The principles including equipping staff to
deal with complaints, measurement, reducing transfers (from one contact person to
another), proper documentation to the customer, prompt and effective responses,
attempting to fix the underlying processes and learning from complaints.
The learnings from the article (ibid. p 333) are to recognise the strategic importance, to
have a systematic approach, to equip people to handle complaints, to introduce
appropriate measurement, and to minimise ‘blame and reprimand’ practices. These are
the learnings that have led me to include this article – how case studies of successful
implementations inevitably allude (consciously or otherwise) to a requirement for a
systemic intervention.
The message for senior managers (ibid. p 334) is to develop a true vision for customer
care, to develop smart information infrastructures, to define clearly what is required, to
develop the correct culture of improvement (not blame), and to manage through a
process-based approach.
6.6.2. Service Provider Relationships (Key Account Management Theory)
Key Account Management is about understanding the customer processes and looking
at integration of the supply chain to “address the concerns of the customer’s
customers” - Millman and Wilson (1999. p 334).
This literature was accessed after determining through initial research the significance of
the Service Provider interface to increased customer centricity.
The RBU relates with its Service Providers primarily through its key account managers.
Millman and Wilson define key account management (KAM) in a way which positions it
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well within my customer centric investigation: “a process of customer management in
business-to-business markets” (1999. p 329). The essential purpose is to enable a
company to have more control over its own destiny and stabilise the interface with
strategic (business) customers.
The authors maintain that “there is widespread acceptance of the need to introduce
processes that facilitate buyer/seller interaction and collaboration, along the way towards
developing a customer-facing organisation” (ibid. p 329). However they also indicate that
defining these processes has been a problem for companies – even those considered
industry leaders.
Critical success factors are listed. The first is the support of senior management. This
demonstrates commitment in the eyes of the account manager as well as the customer.
Account managers must build deep networks into the customer.
The capability to deliver must back the relationship with strong capacity to deliver
solutions (technology and product capability) and understand how to use what is
available to solve problems, but also be open to suggestions from the customers. In areas
where a company has no clear differentiator, working together on problem solving
becomes the differentiator.
The problems can be seen as a hierarchy of product (most frequent – quality, supply,
suitability), process (incorporating value adds into their own transformation processes –
compatibility of inbound logistics with their internal processes) and facilitation (adapting
systems, processes and attitudes) need.
Product is associated with early-KAM stages and often leads to a pre-occupation with
pricing, process is mid-KAM and leads to a focus on cost. A facilitation focus matures
the relationship into partnership and synergy possibilities and shifts the focus to value
and growth (relationship).
KAM is about relationship management more than relationship development. There needs
to be a clear distinction about which customer interaction should be defined by generic
processes to allow customised processes for key customers.
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6.7. Research on Culture
6.7.1. Introduction to Culture Sub-Section
Dooley points out that managers considering ‘culture’ enter a “fuzzy world of purposeful
thought and feeling, action and meaning that shapes what life is like within an
organization but that is very difficult to capture and define” (1997. p 2). Since these are
“holistic, qualitative elements our complex, collective lives” (ibid. p 2), cultural
intervention needs to be part of a systemic change (ibid. p 13). This finding vindicates the
choice of critical systems thinking in addressing cultural issues.
Research on culture yielded a wide range of definitions and understandings. Research
focus was therefore informed by results which were already available and concepts which
emerged from the Grounded Theory process and required exploration. The importance of
culture to Lean Thinking (in particular, the concept of continuous improvement) was
already covered in the respective section.
It is expedient to begin this sub-section with a working definition of ‘culture’ which is
compatible with a systemic approach. A context-specific definition can then evolve from
that in this and the next Chapter. Schein defines culture as “a pattern of shared basic
assumptions that the group learned as it solved its problems of external adaptation and
internal integration, that has worked well enough to be considered valid and, therefore, to
be taught to new members as the correct way to perceive, think, and feel in relation to
these problems. (Schein. 1992. p. 12).
6.7.2. MTN Global Culture Audit
It was disheartening to see the results of MTN’s 2006 annual culture audit, circulated on
2006-12-15. This is the internal audit of the staff ‘satisfaction’. Almost every index has
declined, with the average down from 59% to 54%. This is well lower than the SA
benchmark (across industries) of 66% and below the global norm for telecommunications
companies, of 58%.
I have interpreted these results as a graph (Figure 7, below), which shows the decline
from the 2005 results (first column) to the 2006 results (second column) and compared
with the South African and the global telecommunications sector benchmarks (third and
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fourth columns respectively). All of the dimensions of the survey relate in some way to
customer centricity, but customer focus (the opinion that employees have of the degree to
which there is a focus on the customer) scored 62%, down 4% from 2006, slightly lower
than the global telecommunications norm of 65%, and substantially lower than the SA
norm of 76%.
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Figure 7 : 2006 Staff Opinion Survey against 2005 and other bencharks
The figures are disheartening because of the strong dependence of customer centricity on
the capability and attitudes of employees, especially those who interact with customers
daily.
6.7.3. Aligning Capability to Strategic Intent
ISR (who conducts the MTN Global Culture Audit) sees the importance of culture in
terms of alignment between an organisation’s business strategy and organisation culture.
“Alignment is achieved when the shared beliefs, values, and ways of working within an
organization drive the realization of the strategy’s goals and objectives” (ISR 2006a). The
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culture qualities need to be commensurate with its chosen strategic direction. For
example, if a company is focusing on efficiency in the call centre, the four capabilities
they propose are: involvement (involvement of supervisors and managers in solving
problems); coordination and teamwork; work tools and conditions; and established
priorities (ISR. 2006b). On the other hand, a company wishing to become more customer
centric needs to demonstrate the following capabilities: leadership; knowledge of
customers; looking for better ways to serve customers; strong belief in products and
services quality; career development; performance management; local flexibility and
empowerment; supportive service environment; values (especially customer centric
values) and respect; keeping employees informed and positive working relations (ISR.
2006c).
6.7.4. Alternatives to a Culture Audit
The audit conducted by MTN is useful in confirming that intervention is necessary. In
comparing the current and ideal it can constitute a gap analysis to determine remedial
action. However it does not go far enough in diagnosing the problem or contributing to a
fix. Rather, as Seel (2001) maintains, the act of involving people in the audit is part of the
change process, and a preferred way is to describe culture by “participative inquiry rather
than external diagnosis” (ibid. p 2), the reason being that culture is already and will be an
“emergent result of the conversations and negotiations between the members of an
organisation”.
The approach by Stellerman and Fink (2003) appears to be a combination approach,
using a consultant-based tool to undertake a formal participative diagnostic in three areas.
The approach requires mapping out the current and desired state in the realms of
(cognitive) competence (direction and approach to problem solving), social culture
(communication, involvement and influence) and performance culture (performance,
decisions, initiative and getting results)(ibid. p 7). The assessment of the culture is in
terms of three criteria – fit with the demands of the outside world, how motivated and
satisfied staff are with the culture, and consistency across the organisation. The initial
study allows a normative-level assessment of the causality of certain cultural aspects (ibid.
p 16), followed by a strategic-level linking desired changes into organisational planning,
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followed by an operational plan to communicate and discuss specific interventions (ibid.
p 18).
Seel’s alternative to the ‘consultant expert’ approach, is a set of exercises including the
use of metaphors and drawing up a set of simple rules, based on his interpretation of
complex adaptive systems (Seel. 2001. p 6). His promise is that “as our culture is made
explicit we will inevitably start to change and the more people who are involved in the
process of discovery and description, the faster the change will occur” (ibid. p 10).
This suggested cultural diagnosis exercise was undertaken as an Appreciative Inquiry
cycle with RBU’s marketing team, including selected questions, the exercise of setting
rules, and comparing MTN’s espoused values both with what the Marketing Team
wanted to see (a more customer centric approach), what its actual experience was and
what could be shifted. The results are in Geerdts (2007d), with highlights reproduced in
Appendix F. The process of establishing culture in this way resulted in the development
of a shared model of culture (depicted as a causal-loop diagram) from which direct
interventions were proposed and acted on. This very act was able to shift the actual sub-
culture in the group from a passive mode (experiencing culture) towards a more active
(influencing culture) and involved mode.
6.7.5. Value Based Management
Value-based management sees management achieving its strategic objectives by
managing the culture (values, norms and belief systems) of an organisation.
An example of a company which actively endorses value based management and has
shown tangible benefits is ANZ (the Australia and New Zealand Banking Group), a
financial institution which decided in 1997 to manage primarily with values (Afnan-
Holmes. 2006. Slides 28 – 34). In 2000, a survey showed that the most important value
was cost reduction, followed by profit and then shareholder value. Accountability was
fifth and customer focus was seventh. Customer focus moved to fourth in 2001, second in
2002 and first place in 2003. Accountability also moved up, to third place in 2003. Cost
reduction moved only slightly, down to second place in 2003, but profit moved down to
sixth place, and shareholder value to ninth place. During that period, became one of the
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top five most efficient banks in the world and enjoyed an average compound growth rate
since 1998 of 54% (Barrett. 2005a. p 4).
According to Barrett (2005b. p 1) more companies are becoming values-driven and they
are becoming the most successful. He believes that shared values are increasing the
ability of organisations to act collectively and therefore be effective, increasing the
performance of these organisations. Management can believe that they can influence
values, they can increase employee engagement in these processes and they can impact
organisational performance.
6.7.6. Link Planning Requirements to Environment
Jennings and Disney (2006) indicate that strategic management planning is pervasive,
being used (for example) by 89% of companies sampled in Europe and the USA.
Strategic planning is regarded as having 3 components – formulation, evaluating and
selecting strategic alternatives, and implementation and control.
These three components together serve numerous purposes within an organisation such as
control, communication and stimulation of innovation (Jenning and Disney. 2006. p 599).
What is very interesting are the claimed “associations [which have been established]
between the range of planning processes and a range of environmental and organisational
characteristics”. This is not surprising as planning includes both describing the
environment; organisation and developing a strategy in response.
Table 8 (2006, p 600) is an important framework for positioning a cellular operator,
bearing in mind that the associations between the environment and planning process are
more strongly linked to managers’ perceptions than to objective measures (of complexity
or uncertainty). The shaded cells represent my view on MTN’s current position.
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Characteristic Results
Manager’s Perceptions of the
Organisation’s Environment
More complex More frequent review of plans, shorter horizons, more pervasive planning activity and formality, more flexible, more frequent review, applied to more decision areas, applied to more planning stages, more formal planning
More unstable More flexibility and more planning, more delegation, less formality
More uncertain Requires greater planning activity, comprehensiveness and planning flexibility, less formality, greater delegation of planning, shorter time horizon
Competitiveness Shorter planning horizons and greater involvement of top management to promote ‘anticipation’ of environmental conditions
as well as from a number of perspectives (financial, marketing, technical, traditional,
organisational, personal, collaborative etc) and using a range of tools, including Ackoff’s
mess analysis and viable system diagnosis. This provides a rich and clear background for
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the Concern to be developed. Out of the wide range of possible Concerns arising, the one
chosen is the most key to me in the development of my management practice, as well as
to my organisation because it is a specific responsibility of mine and essential to the long
term viability of the organisation. The organisation does not fully appear to appreciate the
importance to their future and it is my intention to use the outcome of this paper to be
able to better articulate the relevance.
The Concern includes a strong justification as to why it is significant and should warrant
attention. The extreme consequences of not dealing with the Concern are clear from the
causal loop diagram itself – diminishing Customer Centricity, leading to the inability of
the organisation to deal adequately with its environment, and ultimately its demise as
other, more responsive organisations take hold in the market.
Utility
The Answer has focused on addressing the central issue in the Question directly,
providing a model which fully and directly addresses the Question.
The interventions listed in the Answer are plausible because the CLD used in the Answer
establishes the direct links between the Concerns and the Answer. The Question in turn
captures the essence of the CLD in the Concern.
A number of variables are of interest given the strong interaction between different
factors and an organisation. The key drivers selected for the answer represent the most
fundamental core of contributions to the Answer, and are so systemically intertwined that
it is key that they are all included and their relationships to each other are maintained.
The fundamental mechanisms and many other aspects of the Answer can be generalised
in order to provide Utility to situations outside the specific case. The interventions
discussed are easily portable to the other companies in South Africa, especially those
with similar situations outside the organisation but sharing the type of environment - eg
with a complex, rapid changing, regulated but competitive, technology driven, mass
market environment. It would be easily portable to other telecommunications or utility
environments and (to an extent) to other retail environments with strong emerging market
potential and where indirect partners features strongly in the distribution.
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Ethics
This evaluation takes the traditional form (the integrated ethics framework below, and
then includes a critical systems heuristics format appropriate to the subject matter.
The integrated framework of Velasquez (1998. pp 128-129) is a comprehensive guide to
framing ethical questions. It considers the impact of actions in terms of maximisation of
social benefits and minimisation of social injuries, the identification of those who will be
affected and the consistency of actions with their moral rights, the just distribution of
benefits and burdens resulting from proposed actions, and the level of care exhibited. The
findings are summarised in Table 11, using the framework suggested by Fisher (2004. p
55), and looking at stakeholders hierarchically – from a narrow to a broad context.
Utilitarian Examines the new welfare produced for all stakeholders - the greatest good for the greatest number.
Rights Emphasises the rights and duties of stakeholders
Justice Focuses on fair processes and an equitable distribution of the benefits and the burdens imposed by the action or policy on the stakeholders
The Employee Transformation of the company to become more customer centric is essential for company growth and survival. My suggestions will lead to more motivated, fulfilled staff able to realise their potential more closely. Staff who care about delivering customer value will benefit from greater scope to be more proactive and involved
This allows staff the opportunity to take on more responsibility, to become more fully human (by better recognising their integration into a wider society and associated responsibilities). It promotes the ‘rights’ of employees to more fulfilling work, with more attention to the values that are important to them.
Employees neither benefit nor are compromised by this model, but are given the opportunity to participate in building a more customer-centric organisation. Managers are better empowered to respond proactively and to share their knowledge and ability with appropriate staff.
Shareholders Attention to customer centricity will benefit shareholders in the long run. Without this type of intervention, their shares would eventually be meaningless. Investors get maximum benefit when customer value delivery is maximised.
A challenge to shareholders is issued to give up some short term benefits to position the organisation to pursue longer term objectives with benefits for themselves as well as other key stakeholders.
Shareholders are challenged to give up some of their immediate access to wealth in order to pursue longer term organisational (and societal) objectives. The model does not address specific shareholder issues such as black economic empowerment.
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Suppliers and
Partners
(Service Providers)
The model provides benefits to partners who are competitive and customer centric and prepared to work together for transformation. This is necessarily at the expense (to a degree) of those not prepared to change.
The new model gives greater recognition to the rights of smaller partners to a fair deal and an opportunity to access the marketplace.
The enhanced model provides greater fairness to suppliers and partners compared to the previous model.
End Customers End customers benefit when staff are more equipped and empowered to understand and respond to their needs and are more motivated.
The organisation will be able to better service customers (as is their right).
There is increased focus on the requirements of the wider (emerging) market. This provides equitable access without compromising current customers.
Society Society (and key special interest groups within) will be engaged more fully as stakeholders. MTN will proactively contribute to addressing the currently large inequities and social problems.
If variations of this model were used by other companies, the rights of citizens in general would be promoted.
The higher overall penetration targets (including specific targeting of emerging markets) are in line with the expectations of society for fairness and justice. They drive economic growth which benefits all, and facilitate greater personal and community empowerment.
Table 11 : Ethical Analysis
Ethics : Critical Systems Heuristics Analysis
An alternative ethical evaluation was undertaken within the Emancipatory Paradigm,
using the methodology explained in Section 5.2.8. The results are in Table 12, below:-
Who ought to be the client of the model?
The primary client is the end-customer because the initiative strives for greater customer centricity. At the same time clients are both shareholders and partners because a link is seen between customer and other stakeholder value.
In this regard I have made a boundary decision to increase the scope from customer/shareholder to include others in the value chain.
What ought to be the purpose of my model
The purpose of the model ought to be to increase the customer centricity of MTN and partners (the enterprise) so that it can deliver greater value to its stakeholders.
In the model I have adapted my research problem specifically to address this purpose.
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What ought to be the model’s measure of success.
The success should be, and is determined by the degree to which my organisation and its participating partners can transform to become more customer centric (ie able to offer greater customer value whilst also delivering greater shareholder value)
Who ought to be the decision taker
The top managers/selected shareholders in reality are the decision takers as they should be. Staff should have more role in decisions – especially customer facing staff
What resources and constraints of the system ought to be controlled by the decision taker
Each participating organisation controls its own resources and dictates constraints to an extent. Some of the larger partners (especially retailers) have more control than some of the smaller partners
What resources and condi-tions ought to be part of the system’s environment.
Within the framework created by the model the company’s control of these is appropriate as the activities are an extended part of operations
Who ought to be involved as designer
Investors and managers, as they are stewards of these resources, with stakeholders being involved in specific projects which emanate from engagement (although the model does not have a way of stipulating this)
Who should be considered an expert.Playing what role?
The model does not address the use and role of experts in detail, beyond engaging shareholders.
Who ought to be the guarantor
The end customers are ultimately the guarantors as they are able to walk away from the products.
Who ought to be among the witnesses?
The stakeholder analysis indicated a range of stakeholders (who would also be witnesses) but has thus far been cursory. The model does provide for more detailed analysis and tools to determine if witnesses are being omitted that should be a part.
In what ways ought the affected be given the chance of emancipation.
Emancipation is well considered within the emancipatory paradigm which is part of the core of this paper.
On what worldview ought this to be based.
Various worldviews were proposed for different constituencies. The dominant worldview is customer centricity – based on a belief that a business can improve viability and returns by focusing its business and processes around improved customer management.
Table 12 : Critical Systems Heuristics Analysis
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The learning from this Dissertation has well exceeded expectations. It has provided a
context to review-for-meaning a significant volume of diverse but relevant management
material. The process followed has ensured a profound integration of this varied
information, both in relation to itself and to my management context. The focus on rigour
in research has awakened the ‘social researcher’ mindset which I expect to deepen the
reflexive component of my management practice. I have already noticed a heightened
awareness of the need to add robustness and rigour to strategic work documents and
presentations.
The work has provided me with a profound understanding of customer centricity which
in practical terms gives me a significant edge in influencing MTN’s transformation path.
For example, I am able to make a strong, considered case for the introduction of Lean
Thinking into MTN’s procedures and am able to propose specific interventions at the
level of culture. Without such in-depth consideration of the problem, it would potentially
be difficult to sustain such interventions with confidence and momentum.
In terms of contribution to the body of management knowledge, the successful promotion
of Lean Thinking into the service industry is exciting and could potentially have the same
magnitude of impact as previously in the manufacturing industry, increasing efficiencies
whilst also creating more meaningful work for thousands of employees in the service
industry. Showing leadership in the service industry could catalyse the development of
truly customer-centric service or retail organisations in South Africa.
One cannot reflect on the contents of this Dissertation without awakening a deeper sense
of inspiration and commitment to the transformation of MTN and other large
organisations to a greater customer centricity. If humans and organisations must co-exist,
then surely organisations must transform to truly serve humans. If that results in greater
viability and profit – all the better.
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References
Afnan-Holmes, T. “The Values of Organisational Life”. 2006. Presentation at UCT
Graduate School of Business to EMBA 7 class, in May 2006.
Barge, K.”Working With Appreciation in Managerial Practice”. Academy of
Clarify strategic intent, work on learning culture, implement lean processes
Customer Value
(customer
perceived value)
The benefit (less costs) that customers perceive they are deriving from consuming a specific product or service (or from having an ongoing relationship with a particular organisation)
The value that customers see themselves as deriving exclusively from using MTN services
The principle way to acquire or retain customers is to offer them value
Ensure the organisation has the ability to understand what value is in the eyes of the customer, and deliver that value
(Enterprise)
Shareholder
Value
Return on shareholder investment, seen as higher share price or as dividends, looking at the shareholders of all the organisations in the value chain
Return on shareholder investment for MTN and for its Service Providers
This is the primary motivation of the shareholders in supporting a specific strategic direction
Customer centric transformation
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Variable Used Sense Reference Why How
Customer Centric
Strategic
Intention
The intention at strategic management level to create a customer centric organisation
The intention by MTN senior management to create a customer centric organisation
Necessary for the survival and growth of the organisation.
Develop a deliberate, focused and resourced plan to transform the organisation to become more customer centric (culture, information, value-stream alignment)
Appropriateness
of
Organisational
Culture
The extent to which the organisation’s culture (norms, values, language, artifacts and rituals, shared attitudes) supports customer centricity
The extent to which MTN’s culture supports customer centricity
Culture determines behaviour, types of information sharing and levels of employee empowerment.
Senior management should align culture to strategic intent, lead by example in displaying appropriate behaviour, communicate what is required
Lean Thinking A philosophy centred on improving delivery of customer value through process management and continuous improvement, and continuous flow of value, based on learnings from Toyota
The use of Lean Thinking in a service environment
Can improve the delivery of value whilst reducing costs
Determine customer value, manage the supporting processes, arrange them to ensure smooth flow and work on perfecting them, in a continuous improvement cycle
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Variable Used Sense Reference Why How
Partner Relationships
The extent to which one works together with one’s partners at the strategic level
Co-planning and sharing of strategic information to ensure a cross-enterprise delivery of value
Provide the level of cooperation needed to deliver a combined value proposition
Co-develop strategies and share information and resources. Built trust and cooperation
Channel
Competition
The level at which distributors compete with each other to own the customer and to maximise their channel discounts
Competition between MTN and its Service Providers regarding who owns the customer (and database) and the discounts offered
Breeds mistrust and hinders the channel organisations’ ability to strategise and work together
(To reduce): both parties agree on the over-riding need to work together to ensure the survival, competitiveness and growth of all parties
Operational
Efficiency
The ratio of outputs of the operation to potential outputs (delivering at full capacity would be 100% efficiency)
The extent to which MTN’s delivery, development and support processes are delivering on their objectives (against what they could be delivering)
Helps to increase the benefit to customers whilst reducing costs
Implement Lean Thinking
Customer
Understanding
The degree to which one understands the needs, behaviour and profitability of customers
The degree to which MTN understands profitability of its customers and (in order of priority) what to offer these customers
Essential for knowing how to acquire and retain profitable customers
Ensure the intention to understand customers is there and the means are created to collect and integrate information
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Variable Used Sense Reference Why How
Co-Planning Two (or more) organisations spanning the same value-stream, planning together to create a common ‘enterprise wide’ strategy
MTN and its Service Providers developing an ‘enterprise wide’ strategy for the distribution of its services
Essential to achieve the level of efficiencies and competitiveness to survive
Agree on the need to work closely together. Hold joint sessions, using appropriate co-planning tools
Coopetition Two organisations that are in competition with one another, also co-planning and cooperating
MTN and its Service Providers competing in the retail channel but also cooperating and co-planning in their respective value chains
It the areas where the organisations rely on each other, this is essential to achieve the level of efficiencies and competitiveness to survive
Engage in cooperation and co-planning (as described above)
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Appendix B : DEVELOPMENT OF RESEARCH PROBLEM MODEL
The following process develops the drivers and inhibitors discussed in Chapter 3 and
including the field force analysis in Figure 4 into a basic systems-based model
hypothesizing the problems with customer Centric transformation at MTN:-
Figure 11 : Inter-Relationship Diagraph based on Drivers and Inhibitors of Customer Centricity
Drivers:
Ambiguity of Strategic Intention
Problems with Organisational Culture
Problems with customer facing processes
Partner channel conflicts and mistrust
Outcomes
Operational Inefficiencies
Customer Centricity
Intermediate:
Ignorance of customer
Problems with Organisational Culture
Ambiguity of Strategic Intention
Partner channel conflicts and mistrust
Ignorance of Customer
Problems with customer facing processes
Customer Centricity
2 in 4 out
1 in 5 out
2 in 4 out
1 in 6 out 5 in 1 out Operational Inefficiencies
3 in 3 out
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Appendix C : CMAT™ and Systems Thinking
CMAT™ is an audit technique and each category of measurements provides ‘levels of’.
It also asserts that these categories are shown by research to be true drivers of customer
centricity. The following process develops these variables into a basic systems-based
model hypothesizing the drivers of Customer Centricity:-
Figure 12 : Inter-Relationship Diagraph based on CMAT™ Variables
Figure 13 : CMAT Causal Loop Diagram based on the Diagraph in Figure 12
Value Prop
Customer Manage-ment Plan
People & Org
Infra- structure
Analysis & Planning
Customer Experience
Measurement
Monitoring of External environment
Customer Centricity
Value Proposition
Customer Management Plan
People & Organisation
Infrastructure
Analysis and Planning
Customer Experience
Measurement
6 in 1 out
1 in 6 out
3 in 4 out
1 in 6 out 1 in 6 out Monitoring of External environment
6 in 1 out
5 in 2 out
5 in 2 out
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I have condensed the description of each variable directly from the audit report given to
MTN at the end of 2005. (Details on CMAT™ are found at the licensor website,
http://www.qci.co.uk, and clicking on CMAT™ Assessment):-
1. Analysis and Planning
This section audits an organisation's Customer Management strategy development and
customer analysis capabilities. It seeks a deep understanding of the nature and value of
existing customers, supported by a robust strategy for managing them and clear plans of
the type of management activity to be implemented for different types of customers. It
includes strategy and business case development, customer value analysis; customer and
prospect segmentation and lifetime value.
2. The Proposition
This section covers the organisation's depth of understanding of the needs that it is
addressing in its customers and its identification of those needs that drive the most
important interactions that it has with its customers. It then covers the way that an overall
value proposition is developed to accurately address these needs (possibly with variations
to reflect different values and types of customer) and then the clarity and differentiation
of the value proposition, and its communication and integration with brand development.
3. People and Organisation
To an extent the staff and channels in a service organisation ARE the value proposition.
This covers the organisational and leadership framework within which Customer
Management sits, the competency development activity of the organisation and the way
that it measures, motivates and rewards its people, the clarity of strategy and quality of
management processes that the organisation has around its outsourcing of Customer
Management functions. It also includes leadership and culture, organisational structure
for Customer Management, competency frameworks, training plans and activity,
measures frameworks, staff recognition and reward, outsourcing strategy and supplier
management.
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4. Customer Information
This covers the way that the organisation builds and then manages its customer
information resources in order to provide more personalised transactions and to improve
segmentation analysis. This will often include a mix of internally generated information
in areas such as transactions and interactions and externally sourced information. The
section looks at the way the information is managed and particularly at the provisions in
place to ensure that it is kept secure and only used within the limitations of privacy
regulation that applies to the organisation. The section also looks at the organisation's
ability to extend its information management activity into the less structured information
that every organisation captures on its customers. Capabilities audited include data feed
management, list management, information planning, data quality standards, privacy
regulation compliance, data security and tacit knowledge management. A customer
information plan is recommended to documentation the intentions and how they related
to the organisational business plan.
5. Technology Support
This covers the ability of the organisation's customer management technology to deploy
its customer information in a way that enables it to be used effectively. It also covers the
constant review processes that are necessary to ensure that the technology deployed is
meeting the needs and expectations of customers. It includes access to the customer
database, exploitation and integration of new technology, , technical architecture and new
technology planning.
6. Process Management
What CMAT™ is assessing overall is essentially the Customer Management processes in
place within the organisation. This section is about the process of managing all these
processes in a co-coordinated way, ensuring that processes are consistent, comprehensive
and continually improving. Specifically, the section covers process documentation,
process checking, continuous improvement and radical change.
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7. Acquisition
This covers the targeting of good quality new or previous customers and management of
the relationship with them from their first expression of interest through to their
conversion to a customer. It includes the management of enquiries and sales leads as,
measures to prevent low value or high risk prospects being converted into customers,
prospect targeting, integration of sales targeting and campaign targeting, enquiry capture
and qualification, sales lead distribution and reporting, sales conversion and winback
activity.
8. Retention
This section covers the earliest retention activity in the form of welcoming right through
to the last attempts to retain customers just before an organisation loses them. It includes
the delivery of core basic service as a means of retaining customers as well as the use of
specifically developed customer retention programmes. It also covers the management of
dissatisfaction in order to reduce customer attrition in this area. It includes customer
welcoming, information capture, building customer understanding, complaint
management, customer exit management and understanding the cost versus benefit of
customers by value band.
9. Efficiency
This section covers the active management of the cost-to-serve of customers throughout
their lifecycle. It includes control of proposition creep, activity-based costing, cost to
serve management and accounting for the cost of poor quality.
10. Penetration
This covers development of greater value from existing customers by cross-selling and
up-selling to large numbers of customers where this is relevant and also the individual
value development of major customers where an organisation has these. It includes use of
lead products, customer development strategies and key account development.
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11. Measuring the Effect
This section covers the measurement of customer management at the most strategic level
and also the (tactical) measurement of individual campaigns, media and channels. It
includes customer management key performance indicators, measures cascade, campaign
effectiveness measurement and channel effectiveness.
12. The Customer Experience
This section covers the mechanisms in place to manage the customer experience, and the
organisation's understanding of customer satisfaction and loyalty. It particularly focuses
on how close staff and managers can get to experiencing their organisation as real
customers. It includes customer experience blueprints, channel consistency, satisfaction
research, mystery shopping and experiencing the organisation.
13. External Environment
This section covers the organisation's collection, analysis and communication of
competitor information and customer management benchmarking. It also covers the
organisation's willingness to share learning with non-competing organisations.
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Appendix D : Other Possible Approaches
D.1. Customer Value Model
D.2. Schwaninger’s Organisational Fitness Model
(Schwaninger. 2005. p 50).
Causal Loop Diagram
(Geerdts. 2006a)(Reproduced) Arrows all indicate “+ “or S drivers unless indicated with a “- “
Each variable refers to a ‘level of’
(create conditions
for)
Customer Value Creation
Alignment of products, services and processes
Financial
Performance
(effic- iency)
Alignment of operations
Change & Complexity in Environment
Responsiveness to value change signals
Responsiveness to specification change signals
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Appendix E : Formulation of the Mess
The objective of this activity was to use Scenario Learning and then Interactive Planning
to hypothesize the practical problem that is producing the concern. The particular
component of Interactive Planning of relevance is called “Formulating the Mess”.
Scenario Learning assists in determining expected future environments .One then
examines the organisation’s current attributes and behaviour within its current
environment and identifies how these relate to threats and opportunities in the expected
future environment.
The value of this Appendix is to provide some of the background working and indicate
the details of the procedure. The following notes explain the contents of this Appendix:-
1. Results of the exercise which contribute to the flow of the Dissertation’s logic and
argument were transferred to the relevant chapter in the body of the Dissertation.
They are merely referenced in this Appendix.
2. The Scenario Learning was completed as a team exercise by RBU Marketing. I used
the outputs from this (in particular the four scenarios) as inputs to the Interactive
Planning. Scenario Learning was compressed into a one-day workshop (on 12 July
2006), using the adapted process developed and tested in Geerdts (2005b). The
objective was to assess RBU readiness for future events. The time frame for the
scenario is the end of 2010 – allowing the MTN-sponsored Soccer World Cup to be
interwoven into at least one Scenario!
3. I completed this Interactive Planning formulation myself as a formal way of
interrogating my own knowledge of the organisation for this Dissertation, although it
has the additional value when completed as a team of sharing meaning.
E.1. Scenario Learning
In Geerdts (2005b) I detail the method for eliciting the context for Scenario Learning
(Rich Picture, Business Idea diagram, PESTLE analysis and ‘rules of the game’ analysis).
The Business Idea diagram is first developed to achieve a common ‘definition’ of the
business which will then be evaluated against the scenarios. The importance of clarifying
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and depicting the distinctive competencies and the key factors is emphasised because
these are particularly subject to scrutiny under the scenarios.
The Rich Picture provides a diagrammatic environment for developing the plots of the
scenarios. The Rich Picture from this analysis, subsequently used in the Interactive
Planning is now Figure 3 in Section 2.6, captures most of the elements of the system.
The relevant results of the environmental (political, economic, social and technical
analysis) exercise provide the basis for Chapter 1, 2 and 3. This includes an analysis of
the strengths, weaknesses, opportunities and threats of the model against the environment.
The ‘rules of the game’ analysis included the regulatory environment as well as the
limitations of the service provider model (both issues covered in Chapter 2), including the
application to the latter of the ‘business rule’ in the spirit of Illbury and Sunter (2001. p
69) - the need to strive for win-win business outcomes.
The Scenario Learning exercise developed on the core value creation streams which are
shown in Figure 14 (below).
Reseller Business UnitBusiness Idea
Supplier InputsValue
TransformationOutputs Customer
NWG
Bill-
ing• Current ability to bill
wholesale or retail
• Standard VAS
• Current packages
• Core radio n/w
services
• Core fixed services
• Financial switching
capability
• Design and Management of Branded User Experience
• Development of Solutions (relevant, flexible, timeous development of new products and pricing)
• Bill Presentation (accurate, clear, timeous)
• Responsive relationships• Knowledge Transfer• Relevant Agreements• Growth and return• Service level performance standards
Reason to prioritise MTN as partner
• Market leading comms services
• Compelling bulk services
Cu
stom
er
inter
face
Su
b
scriber
• Market leading comms services
• Compelling branded experience
Pa
rtner
interfa
ce
• Independent Cellular Service Providers (ICSPs)
• Wireless Data Providers (WDPs)
• Wireless Applications Service Providers (WASPs)
• Prepaid Resellers
• International Carriers ( Roaming )• Underserved Area Licencees (USALs)• Mobile Virtual Network Operators (MVNOs)• Advanced Applications Providers
(AAPs)(Telemetry)
Figure 14 : RBU Business Idea
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E.1.1. Key Uncertainties
In Geerdts (2005b) I give a thorough treatment of how to elicit, agree on and use key
uncertainties, their role in scenarios and understanding different levels of certainty.
The ten key uncertainties chosen are ranked against axes of degree of uncertainty vs
impact and the most important two uncertainties identified (Figure 15):-
Competitor customer
centric focus
HIV/AIDSDirection
Wimax takesoff (>30 share)
R/$ up > 50%
Civil War in Zimbabwe
VoiP growth > 25% P.A.
Impact
Cert
ain
ty
Selection of 2 Key Uncertainties
Boundary of most important uncertainties
4 Scenarios built around 2 major uncertainties,
but capturing 2x outcomes of all 10 variables
HostileTakeover
Regulator strictlegislation
Cell use found to be cancerous
EconomicRecession
- 50 %
Figure 15 : Ranking of Key Uncertainties
The two most important key uncertainties determined were as follows:
1. Whether the South African economy would enjoy growth or recession,
2. Whether or not voice-over-internet would take off (a growth rate of 25% per annum
being considered of consequence). The impact of this is that it cannibalises traditional
voice margins
The two uncertainties, with two outcomes for each, result in four main scenarios. Each
has a different End State, depending on the choice of outcome. The remaining
uncertainties were included in the scenarios, with semi-random outcomes (as shown in
Table 13 below):-
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Variables / Scenarios 1 2 3 4
Economy Growth Recession Growth Recession
Voice over internet protocol growth exceeds 25%
<10% pa <10% pa >25% pa >25% pa
Major Competitor Adopts Customer Centricity Drive
Yes No Yes No
R weakens against US $ (2010 vs 2006)
>50% >50% <20% <20%
Hostile Takeover of MTN Group No Yes Yes No
Regional instability Yes No Yes No
Cell phone use conclusive results out
No finding Cancerous Not cancerous
Cancerous
HIV/Aids Worse Better Better Worse
Regulator clamps down heavily and effectively on network operator pricing
No Yes No Yes
New wireless technology share of new market growth
>30% <10% >30% <10%
Table 13 : Scenario Uncertainty Allocation
E 1.2. The Plot and Logic
The key issue in Scenario Learning is that each of these end state descriptions must be
plausible. For this initial exercise the participants were new to the concept of Scenario
Learning. The distinction between predicting the future and projecting became clear
when it was explained that each end-state scenario must be equally plausible in order to
gain the decision-making benefit.
For this Dissertation, I simply used the above End States as the framework within which
to complete the Interactive Planning desired future state, and the data gathering from the
RBU Marketing Scenario Learning therefore ends at this point.
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E 1.3. Four Scenarios
The four scenarios, based on the four key end-state outcomes, were as follows:-
“Double Check” Scenario: Global confidence in Southern Africa is undermined by
mounting regional instability, with growing land tensions, an uncontrolled HIV/AIDS
pandemic and the outbreak of civil war in Zimbabwe. The Rand slides considerably
against major foreign currencies. The SA economy continues to grow apace during this
period though, with the currency slump driving exports.
The government regulator’s threatened intervention in cellular pricing continues to be
delayed, but the greater threat comes from the popularity of a new wireless standard
which enables new competitors to cover considerable parts of South Africa at far lower
costs. Virgin Mobile begins to ramp up its marketing of its differentiated customer
service, encouraging MTN’s main competitor to takes an aggressive, public customer
centric stance, benefiting from the pilot projects of its holding company with CMAT™ in
Australia and Ireland. These represent a significant new and traditional competitive threat
at once (the ‘double check’ in Chess).
“Chinese Checkers” Scenario: The Rand’s slide to over R11 against the US$ makes
MTN a cheap asset. China Mobile has long been eyeing MTN and in 2009 purchases a
majority stake, partly with a view to maximizing benefits from MTN’s global 2010
Soccer World Cup sponsorship. The acquisition is partly driven by the sharp global
economic slowdown, which affects both Chinese and South African markets. China
Mobile needs to look for new growth opportunities. MTN now loses its ‘proudly South
African’ differentiator. However there benefit from China Mobile in the form of access to
capital, pure economies of scale, purchasing power, supplier partnerships and experience
in many different market types (the potential for a double jump or triple jump in the game
of Checkers, to really extend into new market areas).
Although technologies competing with GSM fail to take hold, researchers unveil new and
convincing evidence linking cell phone use to brain tumours. Consumer activist groups
are quick to capitalise on this to call for stricter legislation labeling handset radiation and
removing cellular base stations. The government regulator holds hearings on this, but also
introduces its tough, long-awaited regulations aimed at reducing cellular pricing.
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“New Boardgame” Scenario: South Africa continue to enjoy strong economic growth, a
stable rand and improved control of its HIV/AIDS pandemic. This is in spite of growing
regional tension, with Zimbabwe degenerating into civil war.
Telefonica purchases a majority stake in MTN Group in order to expand its emerging
market footprint from South America. This enables a rich mix of lessons on what works
in different markets, but also diverts energy internally into aligning cultures. The
competitor responds to Telefonica’s market entry, and takes the opportunity (whilst there
is internal uncertainty within MTN) to take an aggressive, public customer centric stance,
benefiting from the pilot projects of its holding company with CMAT™ in Australia and
Ireland.
The government regulator withdraws punitive legislation on pricing, giving cellular
market a reprieve. Customers respond by making voice-over-internet calls to take
advantage of the lower data call costs. This increased data usage also boosts a competing
data technology, which starts to flourish and provides widespread coverage. High-end
users not only make fewer traditional voice calls, but also start to migrate to the
competing technology. This as extensive international research finally shows reasonably
conclusively that there is no link between cell phone use and brain tumours.
With a new owner, new technologies and behaviours, and increased competition in
‘customer centricity’, a new value proposition is required, and this will need deep
insights into customer needs and behaviours.
“Castle” Scenario: Although the region is stable and the Rand is holding out, the
HIV/AIDS crisis gains prominence as the Zuma government responses prove inadequate
and contribute to South Africa’ slide into a recession. The recession helps MTN by
staving off investment by competitors in new technologies. However it does encourage
cash-strapped individuals and businesses to resort increasingly to cheaper voice calls
using the plentiful voice-over-internet technologies (to MTN’s detriment). Government
introduces legislation aimed at dramatically reducing telecommunications pricing, in a
bid to lower communication costs for business and so attract foreign business. Research
also now conclusively links cell phone use to brain tumours and this fuels increased
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activism over consumer rights (labeling handsets with radiation levels) and
environmental issues (placing of base stations).
E 1.4. Standard Scenario Learning Process
The adapted Scenario Learning process (Geerdts. 2005b) details the need to create a plot
which shows the logical steps and cause-effect sequence between the present and the end
state, using the stakeholders, issues and external factors from the Rich Picture as players
and objects in the plot. The end state and intermediate steps must be plausible. This is
important because it highlights pre-cursors to an event. Awareness of these sensitises
decision-makers to assist ongoing decision making.
E 1.5. Strategy Selection
The strategic fit of the business needs to be assessed against each scenario and a strategy
formulated which best suits to a scenario. Interactive Planning provides tools for detailing
this planning. The Dissertation itself provides an alternative strategy formulation
component (Chapters 4 through to 8). However, scenarios are important in determining
the final choice (Chapter 8) and evaluating this choice (Chapter 9).
Each strategy is tested against the following criteria: cost-benefit, cultural fit, strategic fit
and robustness of the model in dealing with each of the other scenarios. Figure 16 shows
how this can be depicted.
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Figure 16 : Strategy Comparison Against Scenarios
In this example Strategy D would be selected and then ‘tweaked’ with components of the
alternative strategies, and in some cases used to hedge against different possible
outcomes. The final strategy would be Strategy D’ (D – improved). Current strategy is
then compared with Strategy E.
Evaluation is important because it gives the team greater confidence in this process to
ensure future buy-in and helps them to be more aware of their learning. It is important to
complete the workshop with at least a comparison of the original and revised plans, to
highlight the changes made (the learnings).
In this case, the key learning was the elevation in the relative importance of customer
centricity activities relative to planning around revenues and costs.
E.2. Interactive Planning
E.2.1 Systems Analysis (what the organisation is and where it is now)
The Rich Picture from this analysis, now Figure 3 in Section 2.6 (on page 41), captures
most of the elements of the system and most of analysis of the Rich Picture has also been
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transferred into Chapter 1 and 2 – the core elements being an organisation that is used to
a high-growth, seller’s market but is now in a new environment of fewer ‘easy pickings’
and more intensive competition, complexity and change. The major players in the system
are included in the picture and discussed in Chapter 2.
Gagnon’s view of retail in 2010 (2005) gives an additional scenario of what could happen
in the external environment and indicates that the market is already pulling in two
directions – the low-cost and the niche/branded markets, with reducing ‘middle ground’.
As detailed in the previous analysis, the organisation is continuing as it is without a
profound consideration for the need to change.
The Stakeholder Analysis is a principle tool in this analysis. Table 1 : Stakeholder
Interests vis-à-vis Customer Centricity and Table 2 : Response Strategies for Key
Stakeholders. This work has been transferred to Section 2.4.
One of the key obstructions is the simultaneous chasing of financial goals (cost cutting
and reduced investment) at the same time as trying to introduce customer-centric
programmes (any change requires investment and incurs costs, and more so if the change
required is substantial).
The method of change is also in question: the concept of taking a single consulting firm’s
toolkit and mandating that it should be used without the visible and ongoing commitment
of the leadership.
E.2.3. Reference Projections (what will happen if there are no major changes in the
organisation’s behaviour) and Reference Scenario (A comprehensive picture of the
future state of the organisation if there are no significant changes in what it is doing
or how it is doing it, in its environment)
As now included in the main document, declining competitiveness and the reduced
market size will lead to cost-cutting, layoffs of staff and layoffs in the entire eco-system
of the supplier industry. The company will try to change more quickly, but it will be too
late to avoid much of the damage and it will battle to do the ‘surgery’ that it requires
whilst remaining effective. It will lose market share (which is not easily regained) and
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will have to cut costs to stay competitive, losing margins (if it has not increased
efficiencies sufficiently) and losing value which is also not easily regained. The
government regulator will exacerbate MTN’s problems by intervening to cut prices and
improve access to the market by new players.
The market will become increasingly biased towards lower costs (still requiring value but
not prepared to pay more than the cheapest supplier’s price) and suppliers will become
specialists at low-cost production. The other bias will be towards unique, branded or
niche goods which will attract a premium but require thorough market understanding.
Since MTN is not geared up for either, it will face a shrinking market.
Change will be attempted but (at current rates) will be too slow to have a significant
enough effect and value will be lost.
The uncertainties are represented in the four scenarios. In all cases, the current growth
rates of 17% p.a. will level off as the market nears saturation (See Chapter 1). If there is
an economic downswing (Scenarios 2, 4), the rate of leveling will be exacerbated.
Competitors will vie more strongly for current and new customers. These include Virgin
Mobile, which differentiates on its ability to win away customers and retain them. If the
main competitor moves strongly to adopt a customer-centric approach (Scenario 2, 4),
then MTN is vulnerable to loss of higher value customers.
The Scenarios highlight loss to other technologies (Wimax) and cannibalization from
voice-over-internet. These will erode MTN’s margins unless alternatives are found or
new value streams created.
A hostile takeover by one of the large international players is likely, especially if value is
being eroded through poor planning. In such a case, without a customer centric approach,
MTN is vulnerable to further cost cutting and restructuring
In addition, the RBU mode of interaction with resellers is in transition from a reasonably
straightforward and traditional, homogeneous model involving a narrow product set, to a
more complex model, as shown in Table 14 (below).
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Market
Type
Description of resellers and
products/solutions
Market Profitability and Maturity End-Customer
Relationship
Opportunity
Tra
dit
ion
al
Classic, primarily voice packages sold through Service Providers (Nashua, Autopage etc).
Very significant revenue, good margins.
New (emerging market) subscribers at reducing average spend.
Data, content and applications revenue small but growing (at lower margins) and significant upside
Fully branded products and services to consumers and corporates.
Ad
van
ced
Data
Enterprise solutions sold through Internet Service Providers
Telemetry sold through security or fleet management companies.
Reasonable revenue from an established base. Growing with good upside. Tight margins.
Ranges from co-offered solutions to white label.
Carr
ier-
to-c
arr
ier Virtual network operators offer
their own branded, end-customer solutions (potentially based on any underlying network service)
Not yet developed. Potential high volume, lower margin sales
Minimal
Table 14 : Increasing Product Complexity
Descending the table one finds more complex solutions and commercial models, less
chartered territory and less direct relationship with the end customer. The table is
simplified since real partners do not fit easily into boxes, especially with increasing
complexity driven by internationalisation, and convergence in the telecommunications,
broadcasting and computer industries. Relationship models are also complex - resellers
may be at once customers, competitors or joint venture partners. Since the RBU has no
direct sales force it can potentially use partners to move quickly into a new business and
therefore create a new role within MTN in developing new business and markets.
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Appendix F : Cultural Appreciative Inquiry
An Appreciated Inquiry was conducted as per the Research Methodology described in
Section 5.4.2. The results are detailed (Geerdts. 2006d), with key elements of the exercise
repeated below.
The first step of this inquiry (the outputs of the first meeting held) is tabled below
because it also provides context to the exercise.
Potential for improvement of ‘people and organisation’ factors (culture) was identified by
the team (based on the model derived from CMAT™), as shown in the analysis of the
model, below:-
We are trying to create an empowering and facilitating environment for
us to best achieve our objectives (including the effective delivery of
the value proposition to customers)
What are we trying to achieve? What is our purpose for this improvement? How does it relate to our values/ mission/ vision?This is a new team with a chance to create something exciting in this
space.
What is the scope of the opportunity?Included – people, learning and culture components relating to the
marketing team of the business unit and its experience of the ‘cultural’
context.
Day-to-day, operational, issues.
What 's included? What 's excluded?There were several possible next steps from the CVP development
(SW#1). The one selected was to work on the human resource
components of the model (shown in a later slide). Since the model
was first developed, and with the starting of a new team, this
component has gained prominence.
What is the opportunity for improvement we are considering? Why was this chosen?We are trying to create an empowering and facilitating environment for
us to best achieve our objectives (including the effective delivery of
the value proposition to customers)
What are we trying to achieve? What is our purpose for this improvement? How does it relate to our values/ mission/ vision?This is a new team with a chance to create something exciting in this
space.
What is the scope of the opportunity?Included – people, learning and culture components relating to the
marketing team of the business unit and its experience of the ‘cultural’
context.
Day-to-day, operational, issues.
What 's included? What 's excluded?There were several possible next steps from the CVP development
(SW#1). The one selected was to work on the human resource
components of the model (shown in a later slide). Since the model
was first developed, and with the starting of a new team, this
component has gained prominence.
What is the opportunity for improvement we are considering? Why was this chosen?
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Desired Desired Desired Desired I mprovement forI mprovement forI mprovement forI mprovement forof Customer Cent r icit y of Customer Cent r icit y of Customer Cent r icit y of Customer Cent r icit y ???? People People People People &&&& OrgOrgOrgOrg
Value Prop
Customer Manage-ment Plan
People & Org
Infra- structure
Analysis & Planning
Customer Experience
Measurement
Monitoring of External environment
Customer Centricity
We agreed on this second driver to tackle.
Debate whether the value prop should drive ‘people and org’ directly?Value proposition (this was started in SW#1
Customer management and experience – longer term exercise
Customer centricity – this was the desired outcome
By the third meeting, the team had developed a model (with required interventions as
numbered) as follows:-
(5)DEVELOPVISION
(5)DEVELOPVISION
RISKTAKING
RISKRISK
TAKINGTAKING
VISIONFOCUS
VISIONFOCUS
PASSIONATEINSPIRATION
PASSIONATEINSPIRATION
PERFORMANCEORIENTATION
PERFORMANCEORIENTATION
CONTINUOUSIMPROVEMEMT
CONTINUOUSIMPROVEMEMT
INTEGRITYINTEGRITY
(2)Product
Continuousprocesses
(2)Product
Continuousprocesses
(3)
DepartmentalProcess
(3)Departmental
Process
(4)Reseller
SatisfactionIndex
(4)Reseller
SatisfactionIndex
+ CHANGES(Big changes)
+ CHANGES(Big changes)
Bureaucracy Bureaucracy Bureaucracy
TEAM SPIRIT
TEAM TEAM
SPIRITSPIRIT
CUSTOMER
IS KINGCUSTOMER
IS KING
(1)Quick Wins
(1)
Quick Wins
+
-
+
+
+
- -
Meeting #3 : Interventions Numbered
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At the fourth meeting, Seel’s concept of capturing complexity within a short list of rules
was used (as per the Figure below):-
Meet ing # 4: Ground Rules Meet ing # 4: Ground Rules Meet ing # 4: Ground Rules Meet ing # 4: Ground Rules ????Long List , Short ListLong List , Short ListLong List , Short ListLong List , Short List
‘Long’ List of Ground ‘Rules• Communicate Effectively
• Develop clear procedures• Have a road map• Prioritise activities• Empower each other• Coach each other
• Mentor each other• Treat each other with respect• Acknowledge good work• Share knowledge and contacts• Move out of comfort zone (self
challenge)• Try new things• Be wide awake, aware, mindful• Network• See internal customers• Build external relationships• Be strong on deadlines and
commitments• Have an agenda for meetings• Be punctual
Short List (Design underlying chaos)
1. Try new things
2. Network (and communicate)
3. Respect and support each other
4. Build effective
processes
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Appendix G : Investigating the Usefulness of the Myers Briggs
Type Indicator®
G.1. What the Myers Briggs Type Indicator® (MBTI) Determines
MBTI is a psychometric test which indicates a person’s personality preferences along 4
theoretical polarities (Jessup. 2002). It is used to assist people to understand themselves
and to make more sense of their differences with others and can assist people in better
understanding the concepts of diversity. A fundamental principle is that there are no
better or worse preferences (Jessup. 2002. p 505).
The first polarity indicates whether a person has a focus and gains energy from the inner
world of ideas or the external environment (and people). It is easy to see at a basic level
how this would impact one’s work and management style. The next polarity determines
how a person gathers information (either directly from the five senses and focusing on the
present or through derived patterns and a bigger picture, focusing on the future). Again
the application to the world of work is clear, for example when dealing with facts, or with
strategic development). The third polarity deals with decision-making, with one polarity
relying more heavily on logic and the other basing decisions on values. The final polarity
relates to how one uses the previous two and the effective result is that one preference is
for making decisions and keeping to them, with the other being to gather more
information and postponing decisions.
The combination of four preferences results in sixteen possible personality types.
Individuals can learn about themselves in terms of these final categories, taking each of
the polarities in turn, or looking at pairs of polarities. In addition there is a concept of
dominance (Jessup. 2002. pp 505 – 506) which help a person to understand which one
polarity (out of the second and third categories) is dominant, which one is auxiliary, and
which one emerges in times of stress.
G.2. Role of MBTI in Understanding Management and Management Change
Jessup (2002). pp 502 – 511) looks at the MBTI preferences of employees and their
responses to organisational change. She provides general suggestions. For example, she
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suggests that during change, people should be allowed to work with their dominant
functions. As an example, internally-focused people will want to work through change at
their own pace and having time alone, whereas externally-focused people may prefer a
group process, and express their feelings. One personality type prefers being given ‘the
bigger picture’ around a change (the rationale and vision) whereas another will be more
comfortable when given detail. Jessup also claim (2002. p 506) that a team will
contribute more to change if all four dominant functions are present. Jessup also suggests
that problem solving is enhanced by encouraging this diversity, as well as by helping
people to understand their own development needs (usually growing the areas where they
are less familiar). She draws attention to the ‘inferior function’ that people resort to under
the type of stress that change can bring about. She advises awareness of personality
differences in both planned and unplanned change (p 510).
Jennings (2006. p 598) studied the link between the MBTI preferences of managers and
their strategic management styles. He reinforced the above information, although
indicated that the context (the type of planning required, as already tabulated above) was
more important than the style as a determinant.
G.3. Usefulness of MBTI
The usefulness of MBTI depends on its relevance and validity. There are questions about
the validity of the test (personal discussions over time) which relate to the difficulty of
scoring individuals from different cultures or in different life stages. Trompenaar’s
(2007) is more critical, he believes that the underlying assumption that polarities are
irreconcilable opposites is itself flawed.
These issues need to be compared against the objectives when using the tool. Since my
objective is to gain potential insights and surface issues requiring further research, I
propose using the test to illustrate diversity of preference and to show the predominance
of certain types in my business environment. I believe MBTI is appropriate for these
objectives whereas under more stringent conditions it may not be.
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Appendix H: Handset Procurement & Soft Systems Methodology
It is common cause, backed up by both personal observation during store visits and MTN
research over the year, that the availability and pricing of specific handsets is a key driver
of customer acquisition. Customers frequently enter a shop with the intention of
purchasing a specific handset and select a particular network based on the availability and
pricing of that handset. It therefore stands to reason that supply chain management is
extremely important – offering the right handset at a competitive price and with high
availability.
At the start of 2006, the procurement process for Service Providers was a cause for
concern. Each Service Provider would make a forecast to MTN’s procurement division
which would then order from the supplier based on the aggregated forecasts but adjusted
up or down to what seemed like a ‘reasonable’ number. The delivery time and costs
would then be relayed back to the Service Provider but would be adjusted depending on
availability and exchange rates. Once the units arrived, they were allocated to Service
Providers on a pro rata basis. If Procurement had under-ordered against forecast, each
Service Provider would get fewer than ordered and availability in retail outlets might
suffer. If Procurement had over-ordered, or Service Providers decided to take fewer than
they had forecast, the warehouse ended up with potentially obsolete stock.
Since Service Provider often ended up with less stock than ordered, they tended to over-
forecast to compensate. Procurement in turn would anticipate over-forecasting, and
attenuate the orders. When this resulted in Service Providers obtaining too little stock, the
vicious cycle repeated. This is a similar problem to that mentioned by Seddon (2003. p
182), citing Senge (1993), in which executives simulate the roles of producer, wholesaler
and retailer in a retail distribution simulation game developed by MIT, called “The Beer
Game”. Time delays in the ordering and fulfillment lead to distribution becoming
unstable when the players fail to work together because they do not view the three
functions as part of a single-enterprise system.
During early 2006, RBU highlighted the need to improve the process for procuring and
distributing handsets as a priority, because it affected the end-customer experience, and
was inefficient.
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RBU suggested an improved, direct-ordering system but could not get Procurement’s
agreement to implement the system. In spite of the significant impact on revenue, costs
and the customer experience and after a year of discussions, project management and
inter-departmental workshops, there were only minimal changes
This examples shows how a large organisation can understand a customer requirement
and even understand the impact on its own sales and yet not be able to effect the
necessary transformation. The problem appeared to be one of interpretation of the system
and its purpose. The pluralistic approach of soft-systems methodology (as discussed in
Section 5.2.4) was deployed to develop a common understanding of the purposes of the
various parties (handset suppliers, Procurement, RBU and Service Providers). The
following analysis was undertaken by RBU Marketing in July 2006.
The process typically begins with the unstructured form of the problem (the narrative
above). The problem is explored in more detail, often through a Rich Picture, as in Figure
17 (below).
Figure 17: Rich Picture of Handset Distribution
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The next step is to create root definitions, which define the transformation process in
terms of each of the main stakeholders, as below:-
Clients
Customers
Actors Transformation Worldview Owner Environment
Retail customers
Retailer, Service Provider, MTN, handset vendor
Ensure handset required by customer is available in store
If the right handset is available at the best price, I will take out a contract