Happy New Year to all readers of the CFOKnowledge blog. I hope that you have all had a good start to 2015. What better way to commence a new blogging year than with a blog from Gary Cokins, who so kindly contributed much to our site in 2014. In a kind of “future-retrospective” Gary takes us to a time long after most of us will have long-finished our own working lives…
By Gary Cokins, Founder of Analytics-Based Performance Management LLC
Total Immersion Corpcast – Looking Back at Your Job 50 Years From Now
The year is 2060, and today is the long-awaited day when our company’s time capsule, sealed back in the dark days of 2015, was finally opened. In the capsule we found, as you might expect, a treasure trove of old products, quaint logos and uniforms, and faded photographs of employees. But we also found some fascinating documents of the period: budgets, strategic plans, performance reports, and, perhaps most interesting of all, letters written by executive managers and addressed to the managers who would be responsible for guiding the company’s performance in 2060.
We asked our team leaders to respond to their predecessors’ letters in their daily meta-net sensecasts. Here are some of their responses:
Maia Bischoff, Chief Value Creation Officer (in 2015, this role was Chief Financial Officer): “My poor predecessor CFO…! She must have been pulling her hair out every day in frustration. My interpretation of her letter to me is that she was primarily worried about getting her external compliance financial reporting right so she and her C-suite team wouldn’t end up in jail. For us today, the universal accounting rules from the Global Accounting Federation (created in 2023, thank goodness, to clean up that IFRS reporting mess) are all automated and directly integrated to every legal enterprise on the planet. And with our single global currency — the yeneurodollarrupee — foreign currency translations are a relic from the past.
Financial reporting is effortless and incorruptible. My staff rarely spends a minute thinking about the ‘how-to’ of financial valuations for investors and government regulators. Our attention and energy is almost exclusively focused on internal managerial accounting and analysis for economic value creation for our stockholders, achieved by quasi-optimal decision-making prescriptive analytics software tools used by all of our employees.
Also, our job is much simpler since the shrinkage of that behemoth, economic-bubble-creating-and-bursting financial sector that mushroomed at the beginning of this century, with its exorbitant and unjustified high salaries. Banking today is like the buggy-whip manufacturing industry of 1910. Now companies compete on products and services, resulting in real, not artificial, economic wealth creation that banks can no longer drain from the real economy.”
Jamal O’Keefe, Zen Innovation Officer (responding to our 2015 Vice President of Research and Development): “My predecessor’s staff had more fun than our innovation team today. Back then it was a wild time of discovery. Continuous innovation had become the prerequisite entry-ticket to compete, similar to what quality control had become in the 1980s. Today, although constant innovation remains an absolute given requirement, every competitor in every industry is near parity in their rate of innovation. It’s not the competitive edge it once was.
Our learning and knowledge systems fused with our predictive analytics are essential, or we would fail. To be sure, our new depth-intuition techniques and insight incubation processes show great promise. But since the shift to customer relationship optimization as our company’s key driver, my staff’s work of creating new products, services and processes has become largely routine. It’s like a marathon run without a finish line.”
Donna Pugliese, Chief Customer Acquisition Officer (in 2015, Chief Marketing Officer): “Judging from the letter to me from the CMO back then, I’d say he wasn’t actually doing marketing — he was just throwing money at any prospective customer that had a heartbeat. My older staff members still refer to it as “spray-and-pray” advertising.
The letter claimed the company had improved the “targeting” of customers in its marketing campaigns. But his marketing plan reminds me of those wooden contraptions in the Middle Ages that lobbed boulders against castle walls. Occasionally they had an impact.
My predecessor would be impressed by our laser-like customer intelligence and marketing spend optimization tools. We not only identify and acquire new customers based on maximum potential financial return through our communication channels (all compliant with the Global Citizen Privacy Pact), but we also ensure that our growth rate is in perfect harmony with our asset and employee capacity addition plans. We acquire only the highest rank-ordered net profit lift lifetime value customer leads. For us, customers are investments — like the components of a stock portfolio — and we’ve solved the optimization challenge of converting customer equity to shareholder wealth creation. My predecessor appears clueless that such a relationship even existed.”
Andrew T. Huntingdon III, Chief Customer Relationship Officer (in 2015, Vice President of Sales): “My predecessor wasn’t selling; he was bribing. No, I’m not talking about illegal bribes like those we remember from the Great Corruption era of the late 2040s. I mean wasting the shareholders’ potential for higher wealth by offering ridiculously huge price discounts, deals and giveaways.
He’d be impressed by how we optimize our time and spending today with finely tailored, minutely differentiated services for each of our 2,700 customer micro-segments. We never wastefully overspend on our most loyal customers, nor do we underspend on marginally less loyal customers who might otherwise defect to our competitors.
In the 2030s, we learned the painful lesson that customer retention, while a key lever to shareholder wealth creation, is not enough. You have to refine retention — you have to retain the correct type of customer and then grow high-profit-margin sales from that base. We realized that in almost all industries, products and standard service lines had become commodities, neutralizing any competitive advantage. Differentiating services for different types of customers had to become a science.
The turning point came when we made a true commitment to two sales growth principles: First, nurture customer relationships. Second, use thought leadership to bring customers new ideas and innovations that help them to achieve their own strategic objectives and to better serve their customers.”
(Note: The capsule also contained a letter from the Director of Information Technologies. As we all know, this function became obsolete in the 2050s when the company implemented a software program that prioritizes and fulfills requests made directly by the line managers. The letter also refers to another rather obscure job title: CIO. One of our young new hires has posted a meta-net enquiry ‘What was a CIO?’ — to which an older worker responded, ‘Career Is Over.’ ”)
Interested in learning more? Plug into part 2 of this Total Immersion Corpcast to experience more Time-Capsule revelations.
About the Author: Gary Cokins, CPIM
Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in enterprise and corporate performance management (EPM/CPM) systems. He is the founder of Analytics-Based Performance Management LLC www.garycokins.com . He began his career in industry with a Fortune 100 company in CFO and operations roles. Then 15 years in consulting with Deloitte, KPMG, and EDS (now part of HP). From 1997 until 2013 Gary was a Principal Consultant with SAS, a business analytics software vendor. His most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics and Predictive Business Analytics.
firstname.lastname@example.org; phone +919 720 2718
Linkedin.com contact: http://www.linkedin.com/pub/gary-cokins/0/15a/949.