Is much easier to achieve a long term objetive if you break it into short term goals. There’s a big difference in arriving to your office with the pressure of increasing your revenues in 20% than arriving to your office with a list of 5 simple tasks you have to perform in order to drive the company 2% closer to its objetive. Right?
It’s great having a long term vision. You have to have it, but that’s something to be defined by the C level since they are in charge of the company vision.
Once that the future is clear enough it’s time to complete the blank spaces that drives the company from point A to Point B with the available resources. It’s important to point out that when I talk about available resources, I mean that you have to plan how to get from A to B without increasing the quantity of the resources or investment, means current people, current technology, current information, etc. If you, at least, don’t try, you wont be producing a stretch in your company’s structure. Then you wont learn and you wont become more efficient.
The stretch it’s really useful to kick you out of the confort zone and will lead you to find new ways of generating efficiencies. More money wont make you more efficient, it will actually do the opposite. Money can be used for two things:
- Investment: Investing today, for an expected better future.
- Confort: Not investing it today, but using it for improving your current situation.
So basically the money is a confort driver, that has to be associated with the “time” variable. One can say “A bird in the hand is worth two in the bush”, but that’s not the way an entrepreneur mind works. I can’t imagine Steve Jobs, Sergey Brin, Bill Gates saying something close to that.
Going ahead with the point, it’s key to generate smalls improvements without modifying your current company structure. Be prepared for pain, but you know “no pain, no gain”.
Breaking apart the system into subsystems: Another point we need to know before starting a Micro Conversion process is what Systems and a Subsystems are. A system is a set of parts interacting together with a common objetive.
So is the biggest set of parts that we can take that has a very specific objetive to get accomplished in our case the “Company” (or holding). Some parts of the systems can behave as systems itself with their own inputs, operations and outputs towards a particular goal (and not objective). The following is an example of the break down procedure (a very simplified one) for a Micro Conversions project.
1. Level 1: GM.
Input -> Information + Money.
Operation -> Market decisions.
Output -> More money.
2. Level 2: Chevy, Buick, GMC and Cadillac.
Input -> Raw material + Information + Processes + R&D.
Operation -> Vehicles.
Output -> More money.
So basically this subsystem is reaching a goal that helps the organization as a whole reach a bigger objetive.
3. Level 3: Marketing Department at Chevy.
Input -> Market Information + Money.
Operation -> Communication + persuasiveness.
Output -> Demand.
Through this activity the marketing department is generating demand, that will generate sells that will help the subsystem Chevy to achieve its goal, ergo, helping the system GM achieving its Objetive.
4. Level 4: Digital Marketing Department.
Input -> Traffic.
Operation -> persuasiveness.
Output -> Demand.
The digital marketing department generates demand on the digital arena. Through this it helps the subsystem Marketing Department to achieve its goal, helping the subsystem Chevy achieving its goal, ergo, driving the System GM to its Objective.
Level 5: Customize your car and run race with it app.
Input -> Gamers.
Operation -> Select car, customize it, try it in a race track, race with others online, etc.
Output -> Engaged gamer.
From all the engaged gamers a share will be interested in getting a car in a period of not more than a year. From those, some of them will finally become part of the Chevy demand (all this has to be supported with information, something very simple but extremely important, otherwise this worth nothing. Remember to check this post about metric connectors), helping the Digital Marketing subsystem generating demand, which helps the Marketing department generating demand, which helps Chevy Generate more money, driving GM to increase its value.
As you see it’s (or at least it HAS to be) a very straight relationship between an specific conversion action and how that specific conversion impacts in the entire system (company).
Why don’t just measure the specific conversion? The problem with defining the conversions without analyzing the relationship with the bottom line is that we can be chasing a conversion that wont drive your company closer to its objetive. We have to be very carefully on choosing the right conversions, otherwise we will finishing measuring everything as a conversion. Micro conversion activities are not about measuring everything, but about simplifying the process of bringing the company closer to its objetive by chasing very specific activities that if they get done, will impact on the bottom line.