Stocks and Flows, in Brexit and CRM | Trends
You could not have picked a better place for a career in the last two decades than CRM. In one way or another it is the heart of the digital disruption (a term I have issues with), or the modernization of business.
CRM was the first front office system to help organize significant staff doing important but far from routinized things for the business. You could rely on back office apps to organize various aspects of production, but the front office was the Wild West before CRM.
The back office had computer-optimized production, printouts and charts tracking everything. Six Sigma and other regimens helped ensure we made the best use of our raw materials and finished products.
Meanwhile, the front office was drowning in data and thirsty for information. Paper files, handwritten lists and Rolodexes were all we had to help manage how a business made money.
A recent Tom Friedman
column in The New York Times, dissecting why Brexit is not simply a bad idea but a retrograde one, gave all this greater resonance.
Friedman makes the valid point that we no longer live in a world of stocks — physical things we hold onto — but one of flows, or things that depend on information and that change constantly.
All of the digitization of the last two decades, much of it originating in CRM, has made us more oriented toward getting and replenishing information than making and selling products. The existence of subscriptions makes us keenly aware that tomorrow might not be like today. That makes us highly interdependent; we share information rather than hoarding it or products.
Friedman quotes John Hagel, co-leader of Deloitte’s Center for the Edge, saying that over many years, business has been
“organized around stocks of knowledge as the basis for value creation. The key to creating economic value has been to acquire some proprietary knowledge stocks, aggressively protect those knowledge stocks and then efficiently extract the economic value from those knowledge stocks and deliver them to the market. The challenge in a more rapidly changing world is that knowledge stocks depreciate at an accelerating rate. In this kind of world, the key source of economic value shifts from stocks to flows.”
Best Information Wins
Isn’t that what CRM has been enabling? Capturing data, enhancing and cleaning it, and adding to it until there is a pile of actionable information that can be used not just to sell better but to market more accurately and provide timelier service? That’s us.
A while ago, I ran across an article in Harvard Business Review that I will never forget and may never find again since I don’t know the title or who wrote it. No matter. The thesis was that there are no long-term differentiators any more.
Customers and vendors all have access to the same Internet and can find things like competitive financing, enhancements to supply chains, and more customers easily. Everyone competes with everyone, and the winners are usually those with the best information who are able to act with precision and dispatch in the moment.
So rather than having one or more competitive differentiators — better warehouse, supply chains, financing, etc. — we compete on the speed and agility afforded us by our systems. It’s not just in business where you see this agile model holding court. In my mind, you can’t get further from business and profitability than philanthropy, and I see the same things there.
For example, the Salesforce Philanthropy Cloud has adapted the same orientation toward flows to the world of doing good. Perhaps philanthropy is the best example of my thesis, because so many nonprofits exist on shoestrings and have reach that extends only as far as their databases. In modern parlance, perhaps we could say that most philanthropies historically have been stock-bound.
However, a product like Philanthropy Cloud is all about the flows of information. Information flows within the community and to volunteers and donors. It also flows within organizations, as employees and others debate which causes resonate with them and decide how to donate their time and money. In philanthropy, especially, it’s far more important to understand information flows than even the state of a fund raiser.
My Two Bits
In business today we’re all trying to leverage accelerating information flows. CRM got the ball rolling, but the concept overflowed its boundaries a while ago. Today, even in our personal lives, we’re leveraging technology to help us manage the incoming information tide.
Friedman’s column struck me as a double warning because it says succinctly that we have become interdependent. Walling ourselves off nationally from information sources, a la Brexit, or failing to adopt new information-sharing tools in business will lead to the same failure.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.