Monday May 12, 2008

We're all off to sunny Spain!

I am off to Barcelona to represent Sun at Gartner's Spring ITexpo in Barcelona. Given Barcelona's historic role as the centre of the world's ever largest Anarchist party, I wonder if the presentation "The future of Government is No Government" is knowledgeable irony, or ignorant co-incidence.

I remarked the other day that Terminal One at Heathrow is a much better place for BA having left it, however, they still use it for their Iberia ticket shares (as well as some other european ticket share flights.) So...hoorah, two hours late taking off, one hour late landing, hmm... don't tell me the airlines over estimate their journey times to allow them some leeway on the compulsory compensations they need to pay. We were told that the replacement co-pilot had been delayed arriving at the plane; there wern't enough buses. Meanwhile in Barcelona, despite the long walk to pick up my baggage, I was off the airport estate in 25 minutes, and checked into the hotel 15 minutes later.

Wednesday Feb 27, 2008

On to the Technology

Today is plenary day. Our guest keynote speaker is Steve Nunn from the Open Group. The Open Group is a standards consortium, who own both TOGAF & UNIX brands. Interestingly they also have personal accreditation schemes, including IT Architect, based on TOGAF, and Technologist. I wonder how that matches up to the BCS Chartered/Fellow/Member scheme. The Open Group is obviously a global brand, in a way that BCS is not, despite its ambitions. Steve gave us an overview of the activities of the open group and its membership and membership benefits.

The Open Group will also run accreditation schemes for their member/customers.

tags:

All together now

Today is plenary day. Our guest keynote speaker is Steve Nunn from the Open Group. The Open Group is a standards consortium, who own both TOGAF & UNIX brands. Sun have just upgraded their membership of the  Open Group  to platimum sponsorship. Interestingly they also have personal accreditation schemes, including IT Architect and Technologist. I wonder how that matches up to the BCS Chartered/Fellow/Member scheme. The Open Group is obviously global, in a way that BCS is not, despite its ambitions.

The Open Group will also run accreditation schemes for their member/customers.This could be very interesting.

tags:

Friday Nov 10, 2006

Geeks & Suits

I made a video last week with Dan Berg and Chris Gerhard, where I played a fiercely independent investigative journalist, seeking the truth out of a corporate suit. (Yeah Right!) Chris and I did however ask Dan some questions about the re-invigorated talent management programmes (sic) that he is responsible for. To show inclusiveness, Chris and I both wore our normal clothes to work, so I dressed in a business suit and Chris was in an opensolaris T-Shirt. Geek & Suit!

Interestingly, the following day Management Today, published the highlights of a poll on the state of Business/IT alignment jointly funded by the Chartered Institute of Management and the BCS. This also suggests a them and us attitude still exists. The author, Rhymer Rigby suggests that the epitome of the split can be found in Douglas Coupland's latest book jPod, set in a Games Company where the marketing manager is at war with the development staff over their next best thing! This opposite position is counterposed by Nicholas Carr, who has turned his Harvard Business Review Article into a book called "Does IT  matter?". He of course has the view that it doesn't, so the suits will always despise the techies because they cost too much and do stuff that doesn't matter. Having started with a stupid and false polarity, a more careful reading of the results suggests that things are a bit more evenly balanced and that due to the increasing maturity of the IT world and its penetration into the schools and consumer leisure markets, together with increasing access to business education, the stovepipes are not as rigid as our fictional & polemic authors would have us believe. (Although in the UK, knowing something, and certainly being qualified in or about business is not necessarily a requirement for a business career.)

I need to see if the results are available with industry breakdowns. It is my view that the sedimentation process impacts IT investment strategies as does the competitive dynamic of industry. Fifteen years ago, manufacturing companies were buying and building "Just in Time" ERP systems. Today, they are only available as packages. Just in Time is not commodity, but the competitive baseline to play the game; the software functionality of ERP is no longer competitive advantage. There remains many businesses where they do compete through the ownership or onward rental of software and or by their ability to innovate and adapt. (I'm not really talking about ASP's here, but content providers.

None of these are commodity and the geeks are required to invent and sustain the software. The world is our future!  

tags:

Thursday Jun 15, 2006

Devil take the Hindmost

I've been considering the film about Enron that I saw last week. They had this constant competitive improvement performance management scheme where an arbitrarily designated % of the work force are deemed to be underperforming and fired. (Not even offered an improvement opportunity there, so illegal in the UK). You can't always judge an ideas worth by its advocates............, but in this case, the idea is poor and the management that promolgated it was also poor.

tags: ""

Thursday Dec 01, 2005

Friends rewarded for innovating

Fantastic News! Company-I, one of Sun's long term partner organisations has just won the CBI's "Innovator of the Year" award. So congratulations to Mark Pennycook & all his team that have built the company to the point it can win this major prize. The prize for the Innovator is given for, going to extreme lengths to create a “buzz” in the workplace, radically reconfiguring their internal processes, having a track record of improvement and innovation and embracing modern practices.

I used to work more closely with these people when I ran Sun's City Consulting team and several of the Company-I staff were in that team full time. The exchange of ideas between and collective learning of the two organisations and their people made Sun's City eco-system a fun place to work where learning new things was easy, and perhaps achieving the “buzz” that the CBI were looking for. We did some neat things together, much of which became the platform for their success today and last Wednesday.

Mark was also one of the correspondents in Wine & Wisdom on this blog. The Company-I press release is here... and the CBI page is here....

tags: ""

Monday May 02, 2005

When is a risk, not a risk?

Rowing with project management colleagues again. Why do all three of future, uncertain or detrimental have to be present as part of a risk? When is a risk, not a risk?

It should be obvious, if its not futuristic, its history : its an event. If its not uncertain, its not a risk, its going to happen and if its detrimental its a fore-seeable cost. If its beneficial, its not a risk. Furthermore, after a long and heated conversation with some of my colleagues, only project risks should be born by the project P&L. Business risks should be born by business budgets. All this implies that risk must be financially evaluated.

The fact a film shoot might take longer than planned is an effort estimation variance, the fact that weather causes budget over-runs is a risk, the possibility that the revenue's of the finished film may cause a loss sufficient to jeopardise the producer's financial viability is a business risk, which project risk techniques are unlikely to militate.

It seems to me that evaluating the probability that a risk occurs and the financial cost of a risk occurring, are the key first steps to managing a risk. Otherwise, you're left bleating in the wind that the project is too risky and neither you, nor anyone else can help. It is not sufficient to identify the risk.

My previous thoughts are here....

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Saturday Feb 26, 2005

Solutions or Service

One of Sun's internal debates is what "Solutions" are. Currently in my mind there seems to be ambiguity between a Solutions or Utility proposition, and what Sun seeks to organise around. Bob Macritchie (EVP Global Sales) opened the conference with a presentation on Sun's sales model. He spoke in balanced terms between solutions (consultancy/project) and programme (commodity/utility) (See here....). He was clear that he wanted GEM (geographic organisations) autonomy, presumably using both loose and tight controls, but he did describe them as billing engines. This does not imply a lot of faith in their intellectual property generation but it may have been a throw-away remark. The model is fine, certainly of value to our customers and probably fun to work in. His slides contained enough material to suggest that he believes that the establishment & proving of value can be monetised as can transitional i.e. project service. On the other side, he clearly sees the Client Solutions practices as driving product and hence "wrapping" product sales. However since its my view that Sun sells data centres (& components) I can live with that (as if I'm successful so can he).

Its how to show people that considering their IT platform architecture and economics, in the context of data centre rather than applications platform that remains difficult.

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Friday Feb 25, 2005

Predicting Outage

Mike Harding (Sun Preventive (sic) Services) presented on his groups new offerings.

The highlight for me was his very dramatic illustration that standard availability metrics i.e. Four or Five Nines are historic and cannot be changed, in order to manage, leading indicators are needed which is why Sun has developed the Operational Risk Index (ORI). This may not be new to some of you, but it is to me despite Richard Morgan's attempts to keep me up to date.

Mike also had a very dramatic illustration of risk dimensions, differentiating between probability and severity (or cost). Interestingly the bulk of the audience chose to minimise probability not cost.

Thursday Feb 03, 2005

Consulting. Profession or Trade?

Over the Xmas break, I had fun by reading Elizabeth Edersheim's "McKinsey's Marvin Bower"1, a biography of the de-facto founder of "McKinsey & Co.". He not only cofounded McKinsey & Co., but also arguably founded "Management Consultancy" as a profession.

Bower, originally trained as a lawyer (in the late 1930s?) and joined a legal firm in his home town. Unusually, he had taken a postgraduate year at Harvard Business School. Management science was in its infancy at the time, but Bower's law firm found use for his business skills. Bower's personal apprenticeship in business practice was in a truly professional partnership organisation.

It fascinated me to learn that Bower bought2 McKinsey & Co. back out of a merger in order to set it on its path. The author argues that the founding principles were for long term success and a professional commitment to client integrity. McKinsey always call their customers Clients. It is the need to defend professional integrity that led to governance policies of restricting share ownership to senior staff ( like partnerships) and restricting the proportion a single 'partner' could own. These two reforms were designed to ensure that any conflict of interest between McKinsey & Co.'s clients and owners was minimised, and that the leadership scalability of partner led organisations remained available to the firm. These governance structures cost Bower a lot of money, but despite this, it is what happened.

The McKinsey policy in the early days was to only undertake work on a fixed price basis. At the time, this is what professional organisations (including lawyers) did but it had the additional advantage that while discussing terms, both client and consultant discussed value. The minute the terms of the discussion move to day (or hourly) rates, clients, customers and prospects want to discuss effort and margin.

Also, Bower insisted that all engagements were sponsored by the client CEO. Today, those of us not in the McKinsey ecosphere might like to believe this is/was arrogance and a need to put excessive consulting fees in a strategic perspective. However Edersheim argues that it was a desire to build a reputation of success. The nature of management consultancy advice is such that unless the CEO is listening and engaged, it won't be acted on. Management Consultancy success is based on giving advice that is accepted and seen to work. Its about making "Every Client, a reference".

For more detail, and the words and belief of someone who saw it from the inside you should read this book yourself.

1.    "McKinsey's Marvin Bower", Edersheim, John Wiley & Sons, Inc ISBN 0-471-65285-7

2.    Not by himself.


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Friday Jan 14, 2005

About:Risk

I was preparing a project proposal before christmas and we were trying to define what a risk was (Again!). Some mediocre (if the cap fits......) project managers think to improve their credibility by saying risk every other word. I offer you (& them) the following, although its not original,

"A risk is an event that is futuristic, uncertain and detrimental.

Its a new FUD!

One important corollory (for which I thank Andy Murray recently of WPM) is that effort estimation variance is not a risk, since its not uncertain. - You will be wrong!

Tuesday Sep 07, 2004

Maximising Creativity

For various reasons, I decided to see if one of the early people motivation theories was still currently in use. This is the "Theory X, Theory Y" model. It was first stated in the "Human Side of Enterprise" by Douglas McGregor, published in 1960. This is listed on Amazon as out of print, but they do quote a price and shipment date, and has been reviewed in the last year by Sheila Ale. The top "Google, search site" offers http://www.businessballs.com, which holds an article about the Theory XY model here....

The model poses two forms of management behaviour, one is hard arse (X), the other enabling (Y). Theory X can be characterised as a directorial approach based upon a deep cynicism about staff (or people), which is described in the businessballs article, as based upon the view that people don't want to work and have to be "forced" to do so. Theory Y was first described to me as "if you look after your people, they'll look after you". Again quoting the businessballs article "The capacity to use a high degree of imagination, ingenuity and creativity in solving organisational problems is widely, not narrowly, distributed in the population".

I find it interesting in that once one reduces Theory X to its minimal components, it comes as no surprise that only underachieving enterprises permit Theory X to be the dominant management culture. Belief in your staff leads to competitive performance, it is this which is the essential part of the theory. For top performance, believe in, enable and liberate your people; we no longer live in a production line economy.

Monday Aug 16, 2004

More about managing the Professional Services Firm

Mike Habek after reading my last article, kindly sent me a copy of Geoffrey Moore's article "Just Shoot Me!", which was published in Under the Buzz, Nov 2002. The article is subtitled "Managing the Services Function inside a Products Company.

Moore believes that the service functions of product companies are trapped inside a life cycle inimicable to optimal service strategies, but that by understanding the cyclical nature of these factors, management can build valuable and valued service delivery companies.

The first thing Moore does is construct a model that places the product business model within a life cycle. The business model needs to evolve in order for the company to succeed throughout the product's life cycle, and the business model requires differing types and quantity of service to support or effect the sale. The product life cycle exists within a technology adoption cycle. Moore identifies six business models, the project , the solutions , the product , consumables, subscription and outsourcing/utility models1 within the product life cycle.

The project model is appropriate for early adopters and Moore states,

"At the onset of a new technology,.....early customers are ..willing to fund specific instances of this infrastructure..to gain competitive advantage. The model is 20% tools and products, 80% custom labor (sic), so it is expensive and time consuming, but it is also highly differentiating to the customer. Consulting service providers are the key leaders ....they can enjoy high margins on revenues.

It's also a fact that it's the people that make it happen, without them, the product will not be sold. the reference cases won't be created and the market impetus for mass adoption won't occur. In order to compete in the project phase of the product life cycle, service providers need to optimise themselves. Their sales culture and execution, and leadership needs to orientated around recruiting, maintaining and motivated the best talent to allow the company to win this sort of business. Salesmanship tends to be "consultative", and the talent leverage (See Maister &/or Levy) aimed at delivering projects to customers looking for competitive advantage. Moore uses the example of Amazon & Cisco's development of e-commerce infrastructures as examples of significant project model opportunities. So was Sun's development of the "Architecture.com" mass consumer portal technology for the mobile telco sector.

It is an essential part of the model that the market metamorphoses into a more mature state. The project sponsor's and consulting supplier's competitors both look to catchup and the intellectual property moves from the minds of the projects consultants and architects to the application ISVs. This phase of the life cycle Moore refers to as the solutions model. Customers are looking to negate the bleeding edge adopter's competitive advantage but also leverage high reliability & lower cost. Consulting firms still play an important role in solutions model delivery, but the stage is shared with the applications vendors2,3. For a products company, this remains a development phase of the market.

The market will again mutate and pass through the product phase, which is characterised by transactional efficiency, a consumables phase with high volume recurring product revenues with the amount of product revenue in the product revenue mix increasing to 100%, the mutations continue through competitive pressure and new services need to be offered to create a subscription model, as the company drives up its service income, the final (and in some cases alternative to subscription) is the outsource/utility business model, where product is cost and 100% of revenues is service.

Model

Product/
Service

Customers

Customer Value

Vendor Value

Project

20:80

Bleeding Edge

Competitive Advantage

High Margin, Value pricing

Solution

50:50

Early Adopters

1st Division Player

Leverage Re-Use

Product

80:20

Mass Market, knowledgeable buyers

Transactional Efficiency

High Revenue

Consumables

100:0

Mass Market, consumer buyers

Transactional Efficiency

recurring low value product revenue

Subscription

20:80

Mass Market, consumer buyers

Cost predictability

regular income based on value added services

Utility

0:100

Complex requirements

Transparent benefit acquisition

Market Supply

Moore's original article offers useful and compelling examples of product businesses in different stages of the life cycle, and more comprehensive definitions of each stage, together with the economic factors that lead to stage transition. This is supplemented by some interesting and varied examples of how product companies create added value services to their product offerings, frequently offering a inter-company partnering dimension.

The constraint identified by Moore is that if a service provider optimises for a specific business model and market, then Maister's three goals of Service, Satisfaction & Success, can be met, but because the service entities of product companies are not allowed to specialise; they need to meet the product companies full life cycle needs. Moore suggests that a captive's charter might be as follows, a quote again from his article,

  • Be competitive at the front end in project effectiveness
  • Be competitive at the back end in transactional efficiency
  • But don't compete so hard that we alienate our service providers
  • Be a revenue source, often in a big way and
  • Be highly profitable with good utilization
  • But find a way to support whatever the sales force has sold
  • Oh, and help close top-tier prospects (no charge)
  • Oh, and help rescue flagship accounts in trouble (also gratis)

Moore argues that no single one of these goals is impossible, its the combination of all of them together that are. This is a reflection of Maister's arguments that one can't optimise for the delivery of all three of expertise, experience and efficiency. The captive service provider's can try and follow the product's life cycle and morph with the requirements of product sales, but the pendulum swing from project consultancy services to product installs (if that) through to utility supplier is massive change and organisations have investment gestation periods to make these changes. By the time that a product has matured to later stages in the life cycle, the consultants required to launch it, have been let go, and there is no-one left to make the sales of the products replacement. Sadly Moore does not illustrate this cycle of failure with any examples.

Moore does suggest that there is a way out. Its necessary to understanding the problem by applying the life cycle/business model analysis, deciding what to do and recognising that it can't all be done. This means that companies need to decide what they'll do directly, and what they'll partner to allow customers to acquire the services they need. Of course, partnering implies either market creation activity (like Microsoft) or channel harmony strategies. Each offering to each stage of the market should be managed separately and delivered into an environment where customer satisfaction is measured. Separate divisions, managers, goals and strategies will allow a services company to offer support to the product company throughout the life cycle.

I find Moore's service life cycle modelling both interesting and compelling and his proposals as to how to respond are quite sensible. Its not actually a great leap for Sun since Sun have over the last few years presented its direct service offerings in at least three forms, professional services, educational services and sustaining support4, although the lack of clarity of how to sell, and what customers will value could have been better managed. The Moore 'life cycle model' suggest insights into how Sun can do better by its customers and partners.

Sun's current organisational plans should mean that customers receive a clearer offer of value to them but the issue of maintaining project & solutions capability remains one of Sun's key challenges, as does the enablement of its partners to sell within all stages of the life cycle.


1.    The words used here are Moore's, Sun & others may be using the words differently, for a fuller understanding of what he means, read the original.

2.    I wonder what happens in the applications world where business requirements are so unique that developing a market is difficult . Mutation to the solutions market would be inhibited. The responses seem to be two fold: large project sponsors 'newco' their IT departments to monetise their software investment e.g. LIFFE market solutions or JP Morgan's "Arcordia" (RIP), or players in the project market work to develop continued differentiation and ensure that the requirement is only available through project model markets e.g. Logica's projects business.

3.    IT platform architects often describe infrastructure software componentry as an application.

4.    Sun has varied the services and organisational basis for sustaining support, using its solutions centre, field services and centre's of excellence in varying combinations to meet customer need.

Wednesday Jul 28, 2004

"Managing the Professional Services Firm"

After Professional Services

You may know that Sun is merging its pre-sales and post-sales technology consulting groups into a single organisation, to be known as "Client Services Organisation"1. This means merging divisions and groups variously known as "Technology Solutions Organisation", "Solutions Technology Group", "Technical Account Management" & "Professional Services".

The one essential read for anyone seeking to manage revenue, people or strategy in the new "Client Services Organisanation" is,

  • "Managing the Professional Services Firm"
    • David H. Maister - 1997 - Free Press Paperback, Simon & Schuster, available at Amazon

A Guru's thoughts!

The book structure groups the chapters into sections called "Basic Matters", "Client Matters", "People Matters", "Management Matters", "Partnership Matters", "Multisite Matters" & "Final Thoughts". In the book, one of the first things he does is define a generic mission statement for the professional services organisation,

To deliver outstanding client service; to provide fulfilling careers and professional satisfaction for our people; and to achieve financial success so that we can reward ourselves and grow.

which he summarises these as "service, satisfaction and success". At Sun we are of course a joint stick company so the definition of 'us' in the context of reward, includes our stock holders. Interestingly, the axiomatic location of the professional services firm as an arbitraguer of a skilled labour market and customer requirements is a dominant theme throughout the book. To Maister, supply side matters.

The book is a collection of articles and papers that he's published previously and while a number relate to 'Partnership' structured entities and how to govern and recognise partners, even these chapters provide useful insight into managing a people based service delivery firm. The history of the writing means that the book is easy to pick up and put down, and the stand alone nature of each chapter allows the book to act as a reference.

The first chapter is called "A Question of Balance", it explores the nature of professional service projects depending on "Brains, Grey Hair & Procedure", which borrowing from his terms in chapter 2, "The Professional Firm Life Cycle" can be better articulated as "Expertise, Experience or Efficiency". These types of projects require different quantities of senior to junior relationships (referred to as leverage), and management need to recognise that recruiting, motivating and retaining these differing types of people takes different social cultures and infrastructual investments. He also examines the nature of re-use in transforming knowledge from expertise, through experience to efficiency. This is common to all professional services firms but we need to recognise that Sun also has the option of transitioning our knowledge into product via "Customer Ready Systems" or our global R&D programme (sic). Actually Maister argues that professional services firms will have difficulty managing people to offer all of the 3Es, just as traditional industrial age firms have difficulty optimising for "operational efficiency" & "product excellence".

Adapting at Sun

While the essential value a project possesses may be a blend of the 3 E's, a customer will know that his project can be supplied by the market as only one. While the firm has three offers, customers will only buy one and that determines their price. Expertise is worth (and costs) more than experience, which itself is worth (and costs) more than efficiency. If a customer requires market experience, nothing (except their own stupidity, which we should not take advantage of 2) will make them pay the expertise premium. Sun has the advantage of strong inter-company partnerships, which allows us to leverage partner cultures and human investments. However should Sun's project service bid teams and management mismatch our offerings with the customer value requirement, our customers will go to a supplier offering the solution at a market price. Bid teams and management must evaluate the customer's buying value requirement in terms of expertise, experience and efficiency and match it. In the UK3, we can match the three E's against a form of offering and historically how Sun met these customer value requirements.

Value Offering Organisation
Expertise Consultancy EITAs, Solutions Architects Group & SEs
Experience Projects Professional Services
Efficiency Packages Professional Services & Sun PRO partners4

Obviously, today, only one organisational entity will meet the customer requirements, but that unit will need to meet the requirement to supply expertise, experience and efficiency, and offer consultancy, projects or packages. While decisions in bid teams may be more difficult, at least we should no longer have bid interests competing with each other any more. In order to succeed, management must create the ability to recruit, retain and motivate both expertise and experience and create the partner alliances and knowledge management systems to deliver efficiency offerings.

Maister's makes the point that professional services firm strategy is about choosing the nature & mix of the projects undertaken and so it actually has some say in the ratio of the 3E's required and hence the ratio of seniors to juniors required. This and the current financial targets gives the CSO some time to rebalance its project portfolio, but the two year head count freeze, means that our consultants have not been able to refresh themselves by bringing in (or promoting) new talent and that this is exacerbated by the growth of our original junior people to the point that they want, need and deserve promotion to senior positions themselves.

This schelrosis is counterpointed by Maister when he states that

"People do not join professional firms for jobs, but for careers.

The head count freeze, project services revenue flat lineing and the junior staff's capability growth have caused a problem. Sun's renewal strategy offers a way out as consulting and projects are used to penetrate our customers value horizons, prove the value of our products through offering customers project based solutions. Our key resource are our project architects, be they project managers, solutions architects, TDAs or technologists.

There is a way forward, but it'll take good management. Reading this book will help managers (and individual contributors) play their part. The pressures mean that we at Sun need to sort ourselves out quickly before our people solve the problem in other ways.

My Key Lessons

The key short term lesson for Sun is to recognise the customer's value requirements. Do they require expertise, experience or efficiency and to match the customer requirement with a suitable offering. The key long term lesson is that a successful project/consulting services business is based on service, satisfaction and success and mangers need to plan for all three. We mustn't forget, that for consulting services, "Supply side matters", and its probably impossible to optimise CSO for expertise, experience and efficiency.

The one lesson the book won't help, is teaching many of our account representatives the courage and technique to ask for money for labour.


I expect to return to this book in a later blog posting. I think we should explore what Maister has to say about utilisation and long term profitability and how practice leaders add value.

Foot Notes

  1. I'm a Brit, I'll spell english the english way! If COBOL allowed alternative spelling, Sun can. I'm still deeply upset that the tech. writing team for my Sun blueprints stuff insist in spelling 'programme' without the 'me'.
  2. Why not? Its not ethical, that should be enough but if you need more they'll find out and punish you.
  3. I say UK, this is because I know it well, some other countries have similar matrices, others don't.
  4. I'll write about our Interim Operations Management and Sun Service managed service offerings another day. It should be in the efficiency offerings.



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