Kone Elevator Case

Considering the seven insights for smarter execution and Alain Piguets efforts at Kone, what did he do right and what could he have done better?

Smarter Execution	Did Right	Could Have Done Better
Focus First
Pick the best team
Set the course
Play to win
Think it through
Get all onboard
Follow through

AUGUST 2006. Alain Piguet, head of customer relationship management (CRM) at KONE, was preparing for a steering group meeting the following week. After six months in charge of the CRM initiative, he was summarizing the key learnings from the pilot that the company had conducted between May and July that year. Although the company had started looking into CRM vendor solutions in early 2005, it was only when senior management identified "customer focus as a strategic priority towards the end of 2005 that CRM received more attention. An agreement with a CRM vendor had been finalized in April 2006. In order to pursue its strategic priorities, KONE was transforming itself to be a more globally market-driven company. Throughout the later part of 2005, this led to a number of customer initiatives such as customer segmentation, new customer processes and e-business tools as well as the decision to implement a CRM solution. In 2006 KONE was the only company in the industry to consider globally implementing a CRM solution in 42 countries. Charged by the senior management team to deliver the CRM initiative, Alain had worked hard with a select number of "frontline" operational units to deliver a world-class CRM solution. At the upcoming meeting, the steering group - consisting of one member of the senior management team plus business representatives from the country organizations as well as functional representatives would decide on whether to roll out the piloted CRM system organization-wide. What would they say? Business Overview KONE was one of the world's leading elevator and escalator companies. It provided its customers with industry-leading elevators and escalators and with innovative solutions for their maintenance and modernization. In 2006 KONE had annual net sales of 3.6 billion and approximately 29,000 employees. The annual size of the market for elevator installation, maintenance, repair and modernization was estimated at more than 32 billion. The corresponding escalator market was approximately 2 billion. KONE had operations in all key markets through some 800 service centers worldwide. In 2006 KONE's share of the global elevator and escalator market was approximately 11%. The Initiative The CRM initiative was part of the customer focus must-win battle (MWB) that had been established at the corporate level. The goal was for KONE to be more profitable than its competitors and to reach No. 3 in the market. Alain was part of the customer focus team and he and an IT expert were the two team members charged with implementing CRM. As Alain said: The target of CRM is to improve relationships with customers, improve customer loyalty, help the sales people to sell better and more and increase sales efficiency. Normally it would have been best to implement the CRM solution once the redefined processes of dealing with customers were in place because once you have trained on new processes then you can provide them with an IT solution and they would know how this solution provides value with regard to customer processes. One of the challenges is that we are doing this in parallel. After some preliminary work, the CRM project team decided to conduct a three-month pilot with three countries the USA, Ireland and the Netherlands, with a total of 120 users. As Alain said: The goal of the pilot was to receive the green light for roll-out of the CRM solution in the "frontlines (FLs). We were not piloting the customer processes; it was much more to test whether the pilot countries accepted the solution, if the solutions worked well, if the end user was happy with the solution and saw that it would bring some benefit. We expect most of the users to use CRM on a daily or weekly basis to prepare their business, appointments and projects. This is a good metric to see if the tool is fully used by our sales people. The team had difficulty benchmarking the success of this initiative against other companies as there were different ways of measuring end-user adoption within companies outside of the industry. It was therefore difficult to assess what was a good or poor level. The team got some feedback from the CRM vendor and some benchmarks from other industries, but ultimately, they had to define their own targets. When they had decided that user adoption would be the success measure, the team put together an implementation plan which included the selection of the three pilot countries. Alain said: We wanted three frontlines (countries) that represent the diversity in terms of size and continents (one in the US, two in Europe), and also in terms of legacy systems in place. We have 42 frontlines that are pretty different (e.g. 10 users in Cyprus vs. 500 in France) and not many volunteered to participate in the pilot. Two of the pilot countries were running with SAP as a back-office solution and the other country was a non-SAP country. In each pilot country a number of functions were affected by the initiative, including IT, marketing, different Bus and, most importantly, sales. The main challenge was to get the key sales people to accept a global tool. In recent years, they had tried to have tools customized according to their local needs. As Alain said: In the pilot, we really involved sales. We invited some sales people from cach pilot country to help us design the solution for getting consensus on the common way of using the CRM tool. We did it like that to make sure that afterwards it would he well accepted by the sales people. In each country, the project was driven by a local CRM team with sales people involved and not only marketing in charge. Sales people were trained on customer processes to make sure they understood the bigger picture on the CRM tool. Although the pilot was short, it was reviewed day by day by the team. In addition, there was a CRM steering meeting every month. Ten different stakeholders from the two most important BUs, three people to represent the country organizations, a member of the executive management team and IT were present. As Alain said: It was very important to make sure that these people were involved in the feedback and the validation of the next steps. It is a key project and has huge visibility in the organization. It has really been emphasized and communicated at all levels in the organization - by our president in cach communication letter to the executive board and at all the meetings where the managing directors from some country organizations were involved. As Alain summarized the results, he noted: As Alain summarized the results, he noted: We did not want to measure the business benefit from the system because we knew that with CRM you would have to wait iwo or three years. So it was clear that we did not want the pilot to assess whether CRM was useful for KONE. We knew that we wanted to implement the CRM solution, so the pilot was to test whether the vendor we had chosen was OK and if the solution was comfortable for the end user and helped them run their daily sales activities. We wanted to measure the trend among the 120 users. We also have the results from a web survey of the users: 80% are comfortable with the solution and 90% say that it will help them gain more business. In the roll-out, the application will have to be frezen so that countries cannot change the fields. A large number of people are going to be impacted: marketing in each country organization - roughly 120 people; sales people, sales managers, sales directors = 2,200 people; top management in each business = 150 to 200 peuple, and corporate users and sales area people = 100 people. So a total of roughly 2,700 users. The main target of the company is to implement between September 2006 and July 2007. If we allow for customization, the risk is that with 42 countries we will not be globally aligned. We expect the roll-out to be completed in 6 to 12 months. Because of the speed of the roll-out, we can't go to every country, so we need to have a standardized implementation approach. We need to provide a training package based on the three pilot countries and then it is up to the other countries to train the users there. We can translate this package into different languages during the roll-out