Velocity Made Good » Leveraging Learning

Appirio Acquires VMG

2011-04-11T15:08:50Z

It is with great pleasure and pride that I announce that VMG has been acquired by Appirio. Appirio has been a strong partner to VMG since VMG’s founding, and this is a natural evolution of the growing partnership between our two organizations. We are proud to join the amazing Appirio team as it concurrently delivers on the promise and capabilities of the cloud and transforms the services industry in and for the entire technology market.

Just a few short years ago I sat with the VMG leadership team and sketched out our vision for the future of VMG. We designed our angle of attack for growing a business built on the precept that the cloud changes everything, and thus the people adopting that change need to be enabled in the simplest way possible. Since then, we have had the opportunity to work with over 40 unique clients on almost a hundred engagements. We have pioneered innovative and holistic approaches to user adoption and customer success. We have helped some of the leading companies in the world transform their models, methods, and results for customer success, partner readiness, and user adoption. We have leveraged both the newest in social media and the most proven and scalable in traditional enterprise training to create new and more nimble approaches to delivering customer success.

We now have the honor of joining the Appirio team, and continuing to innovate every day on a larger and more diverse business footprint. We are excited to marry VMG’s innovation in accelerating user adoption of the cloud with Appirio’s expertise in accelerating enterprise adoption of the cloud. Given our complementary and highly related business goals and models, we could not think of a more perfect match. We look forward to working together to bring the promise of the cloud to the enterprise.

For more information, please see this post by Chris Barbin, CEO of Appirio.

Social Media Enriching MLK Day

2011-01-17T21:09:37Z

It's easy to find people decrying social media as the end of traditional culture. (Never mind that they're ranting on their blog to an audience that wouldn't exist without social media...)

But today on Martin Luther King Jr. Day, I'm experiencing the opposite going on. This is a holiday that a couple years ago would have passed me by without much thought other than noticing that many of my clients had the day off. But today, I've seen a dozen friends post quotes from Dr. King. They've caused me to think and reflect on his inspiring example, how far we've come, and how far we still have to go.

Because of Facebook, I've had a deeper connection to this holiday than I have in years. While social media can certainly be a force to accelerate cultural change, so too, it can be a way to help us reflect and reconnect with our history.

Realigning Technology for Success

2010-11-29T19:48:12Z

In my last post, I talked about how traditional consulting, implementation, training, and support organizations are starting to realign around a more unified "customer success" team. Unfortunately, the technology to support these teams has not made this same realignment.

Siloed Technology

The technology systems that support these folks in their jobs fall into the same silos.

The Training People have a Learning Management System
The Technical Support People have a Help Desk System
The Consulting People have a Knowledge Base

(In my experience the Implementation People are often neglected here. Maybe someone puts together an (already outdated) implementation checklist document. Maybe they have an impossible to navigate wiki.)

The main problem here is that the current model focuses on the systems. Not on the user. When the role of the user crosses many of the old silos, confusion and frustration are the result.

None of these systems is connected to the others.
All of them have separate, usually redundant, sometimes contradictory content.
The likelihood of a user finding what they needs across the various systems becomes pretty grim.

The Need for Personalization and Context

What these users really need is something to bring it all together. In this scenario, the focus is on the user, not the old siloed systems. Something that can bridge across these various silos to pull everything that they need into a single context, personalized for their needs.

We need to pull together the right knowledge resources, social interaction, and other functionality.
We need to let them access it in the right context for the task at hand: maybe a community portal, maybe inside a CRM/ERP or other application, maybe in their email inbox, maybe on their mobile device.
And we need to present it in a way that emphasizes what's important to their particular needs and provides other options as secondary.

First Steps

Here at VMG we've been starting to work with our clients on first steps toward this vision. We're really excited about the possibilities and will have a lot more to say about this in the next few months. Say tuned!

Realigning around Success

2010-11-22T15:19:06Z

We're starting to see a major realignment of how enterprises work with their customers: from a siloed model where uncoordinated groups deal with the customer at various points along their life cycle, to a single coordinated team that can provide whatever a customer needs at any time.

Siloed Organizations

We're all familiar with the current set of silos:

People who do Consulting
People who do Implementation
People who do Training
People who do Technical Support

They define themselves around a particular kind of interaction that happens at a particular point along the customer life cycle.

Focusing on "Success"

But more and more we're seeing these silos breaking down. We're seeing integrated teams that do bits of all of this. The focus is changing from "I do Training" or "I do Technical Support" to "I do whatever it takes to make my customer successful." This change in alignment is showing up in job titles like "Customer Success Manager" and "VP of Customer Success" and we're definitely seeing Software as a Service companies leading the charge.

As of this morning, a Google search on "customer success manager"(with the quotes) gave me 677,000 results. I scanned the first 10 pages and it's mostly job listings for a Who's Who of SaaS companies: Lithium, Eloqua, SocialText, Yammer, and our clients Spigit, Appirio and Salesforce.com.

A couple other quick searches shows Jobster lists 1,921 "customer success" jobs and Business Week lists 1,000+.

Why the realignment?

SaaS companies are making the shift to Customer Success for financial, practical, and philosophical reasons.

On the financial side, customer success is critical to driving financial success. SaaS companies have month-to-month subscriptions with their customers and switching costs that are much lower than for traditional enterprise software. Successful customers renew and grow their business. Unsuccessful customers walk away. Any SaaS company who is not making their customers immediately successful is quickly dead.

On the practical side, many of these companies are just not able to staff for a bunch of separate specialized teams. According to IDC, 33% of the $13.2 billion generated by SaaS companies in 2009 came from companies under 100 people. They're often hiring as fast as they can to meet customer demand. People drawn to these fast growing startups tend to have a flexible "do whatever it takes" mindset. So putting these people on a single team with a mission of "make customers successful" just feels natural to these companies.

On the philosophical side, these companies believe that this is a better way. In many cases they were founded by people coming out of large software companies who have seen the difficulties that a fragmented approach to their customer interactions can take. Simplicity is a mantra for SaaS companies. So, of course it should apply to how they deal with their customers: just make sure they're successful.

Success beyond Saas

While we're finding this Success-focued model well established in most of the SaaS companies we work with, we're starting to see it in larger traditional technology companies as well. We haven't seen any wholesale realignments, but we're seeing the signs of change. Companies are starting to question the traditional silos and are starting to facilitate communication across the borders. People are starting to notice that 3 different groups create almost the same content. The Customer Success Manager job title is beginning to pop up in new places.

I think over the next several years we're going to see this realignment spread further and further. And I can't wait to help!

The “Death” of an Industry: A Rant about LMSs

2010-11-03T01:04:06Z

I love it when a technology company sponsors a debate about whether the tech domain in which they participate is still relevant. Is the LMS dead? Oh no, not if it morphs itself into a social networking tool for the ages! It’s a bit like the tech equivalent of Madonna reinventing herself. Or at least, it hopes it is. The problem is that you can’t just slap a trunk onto a donkey and call it an elephant. And why would you even want to? It bastardizes both beasts and plays to the lowest common denominator approach to technology in an era when the SaaS business model makes a best-of-breed integrated approach not only feasible, but likely cheaper and easier as well.

The truth is, the LMS is still relevant. If only it would stop trying to be more than it is, and get back to its core value proposition of being an administrative tool for offering and tracking courses. A lot of businesses still need to do that, offer and track courses, but many are realizing that they don’t need hundreds of features to get it done; they just need the right features at the right price. Meanwhile, a lot of LMS companies have gone so far down the feature-bloat path to differentiation that there’s no turning back. Never mind that LMS’s are increasingly commoditized, that the big players are nearly always a case of over-medicating, and that they are hardly ever price competitive. So instead of getting back to basics (remove functionality? lower prices? are you mad?) they try to “evolve” even more. Throw in some ratings and comments and a micro-blogging capability and viola! Enterprise social learning!

I am being way too harsh. Presumably, the leadership teams at the LMS companies see that enterprise learning itself is evolving and are realizing that their technology must as well. Presumably, they are mapping their best path to fulfilling this emergent market need, without throwing the baby out with the bath water. Presumably, they are re-architecting their technology to become the critical tool for a people-centric, networked organization; the place where people live to get their jobs done, rather than the place where people are forced to go to tick a box and prove that they have been “trained.” How much of a stretch could that be, after all? But there I go again. Being way too harsh. Or am I?

Is the LMS dead? Not yet. But it sure seems to be imploding.

When Infrastructure Gets Sexy: Redefining “Back to Basics”

2010-09-14T09:42:25Z

Infrastructure gets sexy

President Obama recently announced a major infrastructure initiative to improve our highways ,bridges, rails, and runways. One would think that a well-maintained infrastructure would be a given for a global economic super power like the United States. Yet a report card of America’s infrastructure readily shows that it is in desperate need of repairs. Items built well in the moment have felt the effects of time and lack of maintenance. It’s time, according to Obama, to address this issue, and while we’re at it, to expand the mandate of our federal highway system to encompass mass transit options, and investments in environmental sustainability. And so, in proposing we do something about these basic tools of our society, Obama proposes to simultaneously reinvest in our infrastructure (with shades of Roosevelt’s New Deal) while also managing to reinvent it.

Infrastructure + training = even sexier?

Meanwhile, at VMG, we have recently seen a rise in similar initiatives in the corporate training space. Over the course of a two week period, we have been asked to submit proposals on four separate initiatives all focused on optimizing and improving basic training infrastructure: processes, tools, templates, packaged offerings. All four requests came from fortune 500 companies, and all but one from the technology sector. Why the sudden interest in this? “Get our house in order” is certainly not new or disruptive – is it merely coincidence or is there some sort of market undercurrent driving this pattern? And why now? You would think that large enterprise class training organizations with hundreds of employees and global end “customers” (trainees) in the thousands would have had to solve for this long before.

And, in all four cases, they have solved for this long before. But like the U.S. civil infrastructure, the passage of time, along with recent economic and market shifts, have revealed the inadequacy of the current corporate training infrastructure. Like many bridges across the nation, the operations of many enterprise training orgs have not been properly maintained, and many are “structurally or functionally obsolete.” And they may not even realize it.

The cloud effect: displacing more than just IT infrastructure

A recent article about Appirio discusses how their cloud services are displacing traditional SIs, citing their nimbleness and disruptive innovation as key reasons. While I love a good David and Goliath story as much as anyone (especially when VMG’s partner is the protagonist), this article may be a bit on the provocative side, if not a tad overstated. (Accenture is certainly not going to go out of business any time soon.) That being said, there is something very powerful in being new, leveraging the latest technologies, and not being burdened with processes and perspectives that have become institutionalized, simply because they are traditional. Not to mention small, relatively speaking. It’s easy to have a light footprint when everything you do can be based on tribal knowledge. But as my friend and colleague Jon wrote last week, what works when you’re small doesn’t always scale, and simply being big, doesn’t always work.

Nevertheless, I can’t help but wonder how much the shift to the cloud is having a ripple effect on training orgs, especially for fortune 500 technology companies. I suspect the shift to the cloud may be pulling training infrastructure and processes back into play for two distinct reasons: first, the agility of cloud companies means the giants have to improve their own agility, especially if they’re competing in or against the cloud (and if they’re not yet, they probably should be). Training orgs that have built their processes around year-long or longer release cycles will find they have some serious reengineering to do if their company makes a play in the cloud space and expects training to now keep up with quarterly or more frequent releases. And second, cloud companies have an ethos of questioning, if not outright eschewing, corporate basics that traditional enterprises take as a given. If I can run my business without servers, can I run it without an HR department? Cloud companies may not even have a training organization or traditional training tools, opting instead for training partners and portals. As they are increasingly shrinking (or choosing not to grow) their own training infrastructure, leveraging their own technologies as training tools, or their user base as content creators, their larger counterparts are left with a lumbering infrastructure that is nowhere near optimized for this kind of playing field.

Redefining “back to basics”

So. What’s a technology giant to do? And this brings us back to basics. As incremental as it may seem, revisiting process and tools and infrastructure is not counter-intuitive. When you have 30,000 plus people to train, and a portfolio of courses in the hundreds or even thousands, turning on a dime is easier said than done. That being said, revisiting processes and reinventing processes are not mutually exclusive. Chances are there is a percentage of that portfolio that should still be developed and maintained over a longer cycle, using processes and tools that could be simplified, standardized, or both, and another percentage that has a short shelf-life and is ripe for reinvention.

Just as Obama tells us we need to shore up our crumbling civil infrastructure while simultaneously broadening our vision of what infrastructure encompasses, so enterprise training organizations need to address their process issues while also expanding their definition of what training is along with how it gets created, delivered and maintained.

Ode to SaaS Training

2010-08-19T19:19:09Z

As the summer sun starts to fade, blogs give way to iambic pentameter, and serious themes bow to whimsy... (With sincere apologies to The Bard.)

Shall I compare thee to a new release?
Thou art more fickle and more volatile
Rough launch doth shake the chances to increase
Renewals and subscriptions for a while.

Sometime too fast the features do update
And oft’ its relevance too soon doth stale
And obsolescence looms as training’s fate
Lest tips and updates users do regale;

But thy eternal function shall not fade
Nor lose possession of discrete design
Nor shall whole new courseware need be made
When business model and training do align.

So long as learning portals are available
So long can user learning be attainable.

The 4 Cs of Extended Enterprise Learning and Performance

2010-05-25T22:15:58Z

At VMG we spend a lot of time thinking about what drives enterprise learning and performance. Although each of our clients and partners has unique problems to solve, each solution we create contains some mix of the following four elements:

Let’s look at each of these, starting at the bottom.

Control

Corporate training has long been about control: You must complete this course. You must pass this certification. No, you may not see that particular content. We will track your activities to document our compliance.

In the extended enterprise, since you do not control the paychecks of your audience, you also have inherently less control of their activities. While control is still important in extended enterprise learning, it plays a smaller role and involves a lot more carrots and a lot less sticks.

Content

Corporate training has also been long concerned with content, traditionally in the form of courses, but more and more incorporating a much wider set of content types: blogs, microblogs, wikis, videos, games, etc. But even as the types of content have expanded, the sources of content have remained largely internal employees, big publishers, or a small number of vetted experts.

In the extended enterprise the source of content widens considerably to include partners and customers who can often be more expert than your own employees, particularly around niche topics.

Also, where the corporate world has minimal tolerance of “content for content’s sake”, the extended enterprise has none at all. Content only has value in terms of what it lets me accomplish. Now.

Collaboration

Marketing folks may want to build communities so that people feel good about their products, but here we’re talking about tools that let people collaborate to solve real productivity problems.

Collaboration is certainly a hot topic throughout the corporate learning world, but in the extended enterprise (where you have employees, partners, and customers all talking with one another) the complexity around managing access and authority grows exponentially.

Context

Providing context for the learner has become the most important element in a growing majority of learning and performance initiatives. Unfortunately, it’s also the one at which learning professionals usually do the worst job. I see examples every day of companies with LMSs and portals overflowing with content and learners who have no idea where to start.

In the internal corporate training world we approach this problem by doing things like aligning content to job roles and competency models. Maybe this is a good place to start when we control those job roles and hire to those competencies, but this gets shaky in the partner world and totally breaks down when we’re talking about customers.

Taxonomies, user generated tags, ratings, reviews, personalized recommendations: all of these things help, but few of these features appear in the systems currently used to manage learning. (Or, if they appear, it’s often in a bolted-on, check-the-box kind of implementation rather than truly integrated throughout the system.)

Providing this element of context needs to be a major focus for innovation in the learning and performance improvement world. There are some early consumer-focused Web 3.0 products that are starting to point the way. I’m pretty excited by how we can take those ideas and apply them to learning.

Cloud/SaaS Knowledge Ecosystem: The Players

2010-05-13T16:22:47Z

I’ve spent the past couple of days with some of the VMG team brainstorming about the opportunities we see in the Cloud/SasS market and how we want to approach them. One of the first things we did was to map out what that ecosystem looks like and how the knowledge flows between the different types of entities. Here’s a simplified view of that map:

In this post I’ll just give an intro to the types of players (the circles). Note that these categories represent roles as opposed to company types. Some companies will only fit one of these roles, but in this fast-moving, emerging space many companies play multiple roles. (I’ll tackle the flow of knowledge (the arrows) in a later post.)

Cloud Infrastructure Providers

Furthest upstream are the infrastructure and platform providers, including Amazon Web Services, Microsoft Azure, Google, Salesforce.com’s Force.com and upcoming VMforce platforms as well as several smaller Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) companies.

IaaS companies provide raw computing power, storage, and network bandwidth available in the shared public cloud or as a “private cloud”. PaaS companies build on that to provide software development platforms (e.g. Force.com) and ready-to-go building blocks of functionality (e.g. Amazon Payments) that make it easy to build SaaS applications.

SaaS Application Providers

Where IaaS and PaaS is all about the building blocks, Software as a Service (SaaS) providers deliver the complete applications that let corporate and consumer customers do real work (or play in some cases).

There are some big players that everyone knows, like Salesforce.com in CRM or Google Apps (and now Microsoft) providing office productivity tools. But there are also hundreds of smaller providers creating more focused applications for a particular niche. For example, our client Spigit provides collaboration tools to help companies manage innovation and our client Convio helps non-profits to manage their fundraising efforts.

Sales and Implementation Partners

The Cloud/SaaS world is VERY big on partnering. These are companies that are founded on the concept of focusing on a small set of core competencies and getting others to fill in the gaps.

At the top end, Google Apps is selling implementations of 50,000 users, but providing no implementation services. That’s right: none. They stay focused on their core competency of building the Google Apps to be the best it can be and rely 100% on partners to provide the services around that platform.

At the low end, even small $10 million per year SaaS companies rely heavily on partners, both for capacity and competency. On the capacity side many of these companies are growing very rapidly (and often irregularly) and partners can help increase capacity and even out the bumps.

Training is a great example on the competency-driven side. SaaS companies know that they need to train their customers, but realize that they don’t have much expertise in how to do so. They don’t have a training department and explicitly don’t want one. (Our partner Appirio regularly talks about never owning a server. Why would they want to own a training department??) They’re thrilled to partner with us and leverage our core competency.
They’re thrilled to partner with us and just have the problem go away.

End Customers

Finally there are the end customers using the SaaS applications. (Actually that’s not always final, since in some cases the application facilitates interaction between the customer and their customers.)

I’ll save diving into the needs of these folks for another post, but as a preview will just point out that there’s a lot of arrows coming into that circle.

The Secrets of SaaS Training: Monetization

2010-09-03T17:53:45Z

This is the third entry in a three part series on The Secrets of SaaS Training. The first two parts addressed designing SaaS training, and delivering SaaS training.

Monetizing SaaS training

Many SaaS companies don’t even think in terms of monetizing customer training. They are product companies that typically have little to no interest in being in the services business, beyond what is minimally required to get customers up and running. Training then, even more than at traditional software companies, is an afterthought, often seen as a cost of doing business: customers buying products need to know how to use them, so training, in some form, must be delivered. This often equates to a high-end implementation consultant spending an extra day or two onsite “training” users or doing an informal train-the-trainer session (typically with a client administrator), and then leaving the customer to sink or swim on their own. This is sub-optimal not just for customers, but for the SaaS company as well. SaaS companies don’t like tying up their product experts in this way when they could instead have them off implementing at other customer sites. However, most young, high-growth SaaS companies don’t have dedicated training personnel, so options are limited. Yet, in an industry where clients vote with their dollars on a monthly basis, this kind of scattershot approach to training can put product revenue at risk. No product company can afford for their software to be shelf-ware, and SaaS companies essentially have one-twelfth of the time to drive adoption as traditional software vendors.

So the first key to monetizing SaaS training is simply realizing that, done well, customer training is in actuality a unique opportunity to drive adoption, customer satisfaction, and, ultimately, subscription renewals. This is a good start, but not enough. Moving training from being a cost of doing business to being an important cost of doing business offers a reason for a more thoughtful approach, but not the means. What’s really needed is a way to move beyond cost of business and into line of business – and the SaaS market and business model is perfect for doing exactly that.

Defining the revenue model

When training is sold, it is most often sold as a cost per class, either on a participant basis or at a group rate. This is booked as services revenue, which typically isn’t recognized until the services are complete. That is, until after the total number of people who have been contracted to be trained, have been trained. Instead, SaaS training should be sold as a subscription, at an incremental cost per user added to the product subscription costs. In this way, it becomes a ratable, annuity based revenue stream. Let’s take a look at how this would work.

Structuring a subscription training offering

When selling training as a subscription offering, you first need to identify what is included in the subscription. If following best practices for SaaS training design and delivery outlined in my earlier posts, this would be a blended offering that would likely include:

Instructor led training (ILT): Specify the number of ILT hours to be provided by user type (end user, admin, etc.) This could be delivered as either in person training or webinars. Alternately, specify the exact classes that would be included.
Portal access: Describe what this includes. Access to a baseline portal should be included in all subscriptions. There may be upsell opportunities for additional content, aligned to the way product functionality is sold and delivered. (That is, if the product offers a snap-in module with extra capabilities that is sold separately, the portal should also be designed and priced to snap in relevant content when implemented.)
“Office hours”: Define how many scheduled but agenda-less webinars will be provide on a per month or per quarter basis where people can drop in and ask any questions they want of an expert resource. This can be structured as dedicated to the client, or as “open enrollment” where multiple clients can participate, if interested.
Update training: Specify both how often additional content will be delivered and how it will be delivered. You might just roll it into the portal by assuring content is kept fresh and relevant, or you may offer monthly or quarterly webinars on functionality deltas. The latter can also be offered as either dedicated or “open enrollment.”

As you think through what all to include in a training subscription, realize that you can structure and price this as a tiered offering as well:

Baseline: All content provided will be built using a generic configuration and implementation of the application.
Mid-tier: Baseline, generic materials will be redone using the client configuration and implementation. (The training design and content remains the same, but the materials are recreated using the client’s build. If following SaaS design best practices, this would primarily impact the “how to” demos.)
Premium: Includes everything offered at the mid tier, plus additional custom built materials, defined as needed.

Finally, graduated, volume discounts should apply, just as it would for product subscription rates. Anything different or extra (such as completely changing the design or approach to training) should be sold as custom work for hire, scoped as you would any other training development and delivery offering.

Optimizing operations for cost savings

Once you know how to offer and sell training as a line of business, you need to think about how you want to staff for it. As discussed above, most SaaS companies want to excel in the product world, not in the services space. To do that, avoid building out a whole infrastructure in an area that is tangential to your core focus. Instead, find a training partner that earns your confidence, and structure a managed services relationship around shared risk and rewards. Leverage their expertise as a snap-on service that is virtually plug and play with your SaaS business model so that your investment in training becomes essentially the cost of sales. Then stay focused on continuing to provide the best SaaS application in your field, confident that you can take it to market with highly effective and constantly relevant training that will help drive user adoption and subscription renewals.