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Human Capital

May 4, 2011 By in Agile Development, Employees, Leadership, Management, Motivation Tags: , , , , , , , , , , , , , Leave a comment

As large organizations continue to delayer and eliminate middle management more and more responsibility is being transferred downwards across the organization. It never ceases to amaze me to observe the rigorous criteria organization’s enforce to ensure the ROI on capital expenditure. In comparison how much are most companies are willing to invest for training in their front-line management or key players who manage the most valuable capital of all, human capital? My experience has been not nearly enough…..

For most organizations their workforce is their best opportunity to deliver an extraordinary customer experience to provide that all important and often elusive competitive advantage. Think about it, I know of organizations where any capital request over $10,000 must be reviewed by a committee of C-Suite executives. This meeting alone must cost at least a couple of thousand dollars to the company. Executives typically review a pitch from senior managers on why the investment is worthwhile. This same company has developers that make an average of $80,000 in various locations across North America but cannot find the budget to regularly invest in management training. You could buy a very nice BMW or Mercedes for the kind of money their employees are paid! Are we focused on the return of the right assets?

This may offend some people but company’s deserve a similar return on their investment in terms of high performance from staff on premier salaries. The fact is we are now competing in a global environment. If company’s don’t get the results from employees making three or four times as much as a developer somewhere else it can make sense to outsource to cheaper locations. This is why front-line management serve such a vital role for both their employees and their employers. We need to help our employees be the best that they can be to remain competitive, enjoy their jobs and make a meaningful contribution to their organizations and fellow employees. And make no mistake, for the companies that can afford to pay a truly engaged, well-trained, experienced and talented developer working on a high performing team locally, they will typically receive higher quality software faster and more predictably.

I am fortunate that the company I work for has a generous tuition reimbursement policy. What a great opportunity for employees and managers at Sage. It is vital that everyone takes the initiative to upgrade their skills on a regular basis to remain relevant in today’s workforce. It never ceases to amaze me how many people still believe that the company owes them a job even after the great recession. The onus is on the employee and the employer to invest in each other for future success. Employers who don’t invest in their staff are unable to respond to new market opportunities as quickly as they like. Their core competency becomes a core rigidity. Employees with the latest skills have more employment security as they are more valuable to the market. What happens if no one invests. You have employees who can’t move because they won’t make the same money somewhere else but are not able to improve at the rate needed to keep the company competitive in the market. In the end, everyone loses.

That said, it’s undoubtedly tough at the top, the middle and the bottom of most organizations hierarchy’s these days. Many people’s span of control has broadened considerably due to reorganizations over the past few years. For the most part this is wonderful. Daniel Pink suggests that autonomy, mastery and purpose are three critical elements in maximizing satisfaction and productivity at work in his wonderful book “Drive“. (If you have ten minutes to spare I highly recommend you watch this excellent video explaining his ideas in more detail.)

Empowerment is wonderful. It is incredibly powerful but can be dangerous if not used wisely. Empowerment has changed the nature of the relationship between employees and managers fundamentally. When employees\people taste autonomy and are given the freedom to choose the best way to proceed this often can bring out the very best in them. With power comes responsibility though which is often overlooked. Many senior talented employees now find themselves in “unofficial” leadership roles as well. It seems to me that these new leaders are often intimidated by their new responsibility and don’t quite understand how to act sometimes. This may sound critical. That is not my intent. We need to invest in more leadership training for these new leaders as well. In many ways they are just as influential as the frontline managers. If managers are trying to change the culture or change direction in a project and the unofficial leaders are not on board managers lose the “war” when they are not in the room.  It is very tempting to try to manage this by “staying” in the room. This actually makes matters even worse…..

Challenging but exciting times. Are you continuing to upgrade your skills for the next set of challenges and opportunities? Are you ready to take advantage of them? Is your organization?

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Buckets of stuff

February 13, 2011 By in Management, Strategy Tags: , , , , , , , 3 Comments

Where to spend your R&D $'sI had the good fortune to attend the first Product Camp in Vancouver this Saturday. I was delighted that Sage was a sponsor for this event.  We have a pretty low profile in BC considering we are one of the largest technology employers in the province. The quality of presentations was a little mixed but I will definitely sign up again next year. For me the pick of the bunch was a session I attended on categorizing R&D spend by a VP of Product Management at McKesson.  This post is my interpretation\understanding of some of the key ideas in the presentation “Buckets of Stuff.“

The two key hypothesis from the presentation were:

1. If you can effectively explain how much money the R&D work will cost you are far more likely to secure the funding you need to be successful.

2. To maximize the productivity of your R&D spend you have to a solid understanding of how much of your money you spend in various categories.

He identified several key categories you need to know about:

Really new stuff

This is the amount of your R&D revenue spend that you allocate to work on innovation or new products. His example was that Apple may not spend more as a % of total revenues on R&D than their competition.  They do spend a much higher % of their R&D budget on new product development though. The result, a series of innovative and user-friendly products that helped them become the largest tech company in the world. The corollary of course, is that if companies don’t spend enough on innovation or new product development they risk losing access to new exciting growth markets that constantly emerge in the hyper competitive technology world.

Stuff to keep your existing user base

This is the amount of your R&D revenue spend that companies allocate to keep your existing customers. For example, a key strength of Sage is our massive install base of 2.3 million small and medium size customers in North America. We need to make sure we continue to deliver new features in strategic products. For customers on sunset products we need to deliver robust and easy to use migration tools to strategic products.

Stuff to keep selling your existing products

The SMB business solutions software market like many others is becoming increasingly competitive. We need to invest in compelling new features in strategic products in our portfolio to attract new customers. A great example of this is the new Connected Service Strategy currently being evangelized by senior Sage leaders. These new services up in the cloud allow customers to maintain control and leverage the deep functionality of our on-premise desktop applications like Sage Accpac. The first of many connected services for Sage Accpac is Sage credit card processing is scheduled for release imminently.

Taxes

What most people outside of R&D do not realize is the amount of money and resources (taxes) required to compete in the market. Great examples of these “taxes” include operating systems upgrades or compliance issues. Once Windows 7 is released the perfectly reasonable expectation of our customers is that Sage will deliver products to run on this platform (amongst several others). This is more expensive particularly in terms of QA testing resources than most realize. QA can never test all aspects of a mature product on any operating system. A comprehensive audit is required to ensure the product performs at an acceptable level and is not released with a plethora of bugs that would undermine the brands promise of superior quality. After the financial meltdown of 2008 there has been an unprecedented surge in regulatory requirements which keeps customers on software assurance contracts but is also becoming increasingly expensive to maintain in terms of R&D resources.

Integration\OEM stuff

This can often be another form of stealth tax for R&D organizations. For a variety of reasons many integrations or OEM products do not deliver the revenue projections promised. The net result is that costs continue to be incurred to maintain this “stuff”  in future releases without the revenue to support them. R&D departments face a prisoner’s dilemma type challenge. R&D leadership must often choose to absorb the cost of ensuring quality of this “stuff” meets the quality of the core product because the “other player” does not have the incentive or technical capacity to do so OR take the hit to the brand and accept lower quality. (I don’t mean to suggest this applies to all OEM\integration products)

My personal conclusions

  1. The stereotype that many folks in R&D are trapped in the inward looking “not developed here syndrome” exists for a reason. It is often true. It is often not though. We (R&D) don’t do a good enough job of surfacing the “taxes” and hidden costs in our work when we have legitimate concerns.  The more R&D pay in taxes the less resources we have available to go after the high growth opportunities.
  2. R&D folks need to move past the “entitlement” mentality as well. We are not owed a job. Our focus must be to deliver value to the business that pay our salaries. A great way to do this is to understand our company’s strategy and upgrade our skills to maximize our productivity. ( Staying relevant in the technical labor job market happens to be a huge bonus incentive as well!)
  3. We need to do a better job of highlighting the opportunity cost of technical and quality debt. R&D’s ability to rapidly respond to market pressure is severely restricted the more debt we are carrying.  A principal developer recently sent me a blog called Bad Code isn’t technical debt, it’s an unhedged call option which explains this concept well.
  4. We need to work closely with and support PM identify the really attractive opportunities that will bring in the big bucks. R&D developing products in isolation without a clear understanding of the potential profit is a recipe for self-destruction. No profit opportunity, no R&D budget to justify…….

New CEO pays a visit

January 16, 2011 By in Employees, mba, Meetings Tags: , , , , , , , , , , , Leave a comment

I often avoid writing about my work at Sage to ensure I have the freedom to speak my mind on this blog. Serendipity invites me to try a different approach this week. Pascal Houllion from France; our recently appointed CEO of Sage North America came to visit our office in Richmond. His visit coincided with my first cultural intelligence class in my MBA program. I was fascinated that almost everyone I spoke to who met him used the words “different culture” when sharing their perceptions of Pascal’s comments and interactions with him.

For example,  he appears to have strong views on the work environment. I have seen pictures of the Sage offices in Dublin and Paris. It seems to me the offices are designed to foster collaboration and an egalitarian environment. Both are very open, with low cube walls while very few managers have offices. Introducing similar changes in North America would definitely shake things up if implemented. Office size and location are considered by many as a sign of greater rank and influence in the company while employees typically prefer higher cube walls for privacy to work uninterrupted.

In meetings I was told Pascal was  a “straight shooter”, willing to share his first instincts on the issue at hand with whatever information was available to him. I find this approach refreshing.  This style has its risks though from a cultural perspective. Last year I blogged that the perception of what our CTO had requested often appeared different from what he intended when I had the opportunity to ask him questions directly. It took me several years to adjust to the communication style in North America. My experience is that open dialogue is typically reserved for smaller group meetings and that hierarchy is taken much more seriously in North America than Ireland. Discussions with, or opinions expressed by senior executives are sometimes interpreted as decisions by employees. This can have significant consequences in terms of morale and productivity if a decision is questionable. (Even though many times a decision was not made!)

One other very positive perception that emerged was  that management experience and qualitative feedback will play an increasing role in decisions going forward. This works well for me! Data is important, a key tool in a manager’s toolbox for sure. An excellent book “Made to stick” makes the point that we need much more than data to deliver a message that resonates and inspires a team to action though. We need a compelling message that is easily understood to make the idea sticky with the target audience.

Many who met Pascal got the sense that big changes are in store for our business over the next few years. I sincerely hope so. This comment could easily be interpreted as a criticism of the local leadership. It is not. Sage North America has made huge progress in the past few years. Finally, some tough decisions have been taken from a portfolio perspective in the mid-market business division.  Indeed at the 2010 Sage Insights conference the executive team themselves acknowledged that our investment in R&D had probably been spread across too many products in key-note presentations. I once read our plethora of product offerings described as similar to a ransom note by a former leader in the company to an industry analyst!  My point is simply that many times it takes someone outside of the organization to highlight dysfunctional aspects of a culture or emotional attachments to a product line and position to do something about them. Laurie Schultz, our General Manager has proven she had the courage to make the tough decisions in Sage’s mid-market portfolio. We need a similar approach and new growth strategy for our entire business that customers, employees, partners and shareholders can buy into.

I read an interesting post from Wayne Schultz recently about our latest re-org in Sage North America. Wayne made a good point that it typically takes a year or so for a new leader to ramp up on the business. He wrote “Maybe Pascal will jump right in and begin leading without any need to study the North America operations – but I wouldn’t bet on it.” I will go out on a limb and place a different bet. He will! Everyone I spoke to in Richmond is very impressed with our new CEO’s knowledge of the SMB market. I am confident Pascal will exceed Wayne’s expectations!

I would be delighted if Pascal can exceed employee’s expectations as well. Sage’s ability to deliver an Extraordinary Customer Experience requires a highly motivated and engaged workforce. An interesting article in Business Week discussed a study of 61,000 employees by the Corporate Leadership Council. The data showed that one out of four employees was disengaged.  One of the main causes of this disengagement is directly linked to the massive change employees have experienced when it comes to their Employment Value Proposition (EVP)—or the value that employees gain by working for a particular organization. EVP has trended downwards across the western world due to reasons such as layoffs, organizational restructurings, and shifts in managers. An interesting and scary thought from the article was “the reality is that the anticipation of future organizational change is more detrimental to EVP than the change they have already gone through“. Sacré bleu!  Here we go again but change we must! Our future depends on it.

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2011 Targets

January 9, 2011 By in Building teams, Employees, Motivation, Personal Tags: , , , , , , , 1 Comment

Personal:

  • Spend more quality time with Min Chi
  • Learn to be a great dad
  • Spend more time with my family back in Ireland
  • Reconnect with some old friends

Blog:

  • 10,000 hits
  • 50 personal posts
  • 2 guest posts
  • 25 comments

QuakeAware:

  • Setup a non profit organization
  • 25,000 downloads of the App
  • Redesign the website
  • Expand into at least one US city
  • Explore open source model for global presence

Professional:

  • Build 2 high-performing agile R&D teams
  • Bring out one hidden talent or maximize a known one for every employee I work with
  • Become a better presenter
  • Attend networking events monthly
  • Raise my performance on R&D management team

Health:

  • Eat better
  • Loosen up – stretch more
  • Drop 15lbs
  • Vary my exercise more
  • Play soccer this summer

Study:

  • Complete MBA with 4.0 GPA average
  • Write an excellent business plan for my final project
  • Write one more plan by the end of the year for practice
  • Attend BC New Venture Series this summer

2010 in review

January 2, 2011 By in Uncategorized Leave a comment

The stats helper monkeys at WordPress.com mulled over how this blog did in 2010, and here’s a high level summary of its overall blog health:

Healthy blog!

The Blog-Health-o-Meter™ reads Fresher than ever.

Crunchy numbers

Featured image

A Boeing 747-400 passenger jet can hold 416 passengers. This blog was viewed about 2,600 times in 2010. That’s about 6 full 747s.

 

In 2010, there were 25 new posts, growing the total archive of this blog to 29 posts. There were 53 pictures uploaded, taking up a total of 5mb. That’s about 1 pictures per week.

The busiest day of the year was March 7th with 55 views. The most popular post that day was Hire in haste. Repent at leisure..

Where did they come from?

The top referring sites in 2010 were twitter.com, smist08.wordpress.com, lmodules.com, WordPress Dashboard, and linkedin.com.

Some visitors came searching, mostly for donal de paor, tuckman’s model, donal de paor blog, advisor, and trusted advisor.

Attractions in 2010

These are the posts and pages that got the most views in 2010.

1

Hire in haste. Repent at leisure. March 2010

2

About me November 2009
9 comments

3

Do you understand your company’s strategy? May 2010
1 comment

4

Videos March 2010

5

What motivates you? February 2010

Culture change

November 21, 2010 By in Agile Development, Building teams, Employees, Management, Motivation Tags: , , , , , , , , , Leave a comment

I have been fortunate to work with many teams over the years in a variety of functions including Customer Support, Operations, Project Management and most recently R&D. The most exciting time in a team’s turnaround is when they start to sense the possibilities of what high performance could really look like. It’s intangible but very real. I got that feeling this week in Accpac R&D after the management team hosted a week-long internal conference for our department to discuss agile best practises and how we plan to organize ourselves for our next project.

In hindsight we provided insufficient training to our staff when we originally transitioned to Agile. This cost us dearly in terms of effectiveness and productivity. As I have mentioned before agile is really a set of principles and best practices rather than a rigorous methodology. The focus is always on self-improvement or Kaizen to use the Japanese term. With this in mind, we have acknowledged our mistakes and adjusted accordingly. The management team has invested heavily in training for our staff in 2010. For example, over 50 employees have become certified ScrumMasters; 30 have become certified Product Owner’s this year. Training is scheduled to help staff better test in Agile in December. Most importantly we will ensure that regular training opportunities are available to staff as part of operational rhythm in 2011. Everyone’s hard work, energy and commitment have ensured that the team’s understanding of agile has risen to a new level and provided a solid foundation for future learning.

Funding training opportunities sounds great but what is the ROI for the company and the employee? Put another way, why is training so critical for change management? Have you ever heard of “competence compulsion?” At work, we are all compelled to act and to make sense of every situation in a way that ensures we appear competent to ourselves, and we appear competent to others. Unfortunately, when we are learning, we can appear less than competent. An important premise in Agile is that the team are self-managing and empowered. It is a big ask to expect employees to lead effectively when most have only experienced working in a command and control environment as subordinates. The change is even more difficult when they everyone is unsure of their new roles and the “right way” to proceed. Needless to say management found the new environment ambiguous and challenging as well and struggled to provide employees the support they desired in the transition.

Training is often expensive in terms of money and time. It can be hard to justify pulling key resources off a project (especially when you are behind schedule) to take training. My experience has been that management and employee’s commitment has paid off and the payback has been huge in our department in 2010. For example, armed with new insight and confidence 20 staff recently attended the local Agile Vancouver conference. These folks (many of whom are key change agents) subsequently played an important role in bringing back many excellent suggestions to the team. Although management organized many supporting events the focus of last week was really on the employees. Employees presented their insights and ideas many of us were not familiar with. They offered personal recommendations on how we should organize ourselves. Different opinions and ideas were debated by the department together. The quality of conversation and level of engagement seemed unimaginable not so long ago.

I believe the team has acquired a new core foundation of knowledge (in Agile). This has enabled many to unleash their potential and seek out more advanced ideas to further improve individually and collectively. There is a palpable desire for change and demand from employees for more say in how our R&D organization is run. Energy is higher than I have ever seen it. There is a culture change taking place. I am proud to be a part of it and support the team in any way I can. This is what management is all about!

Mixed messages in business

November 9, 2010 By in Employees, Leadership, Management, Motivation, Uncategorized Tags: , , , , , , , 1 Comment

 Organizational life becomes more complex as you rise through the ranks in management. New stakeholders are constantly introduced into the mix. Company strategy needs to constantly evolve. For example, a new technology can disrupt the business environment and threaten a previously robust business model. We work in constant flux these days. One area where I really struggled earlier in my career was “translating” the mixed messages that seem rampant in corporate life. How many times have you left a meeting where many in the the audience don’t understand the message communicated? Even worse sometimes it seems evident the company is not moving towards the publicized lofty principles or values. Why is this not discussed?

Many times the people who get ahead are those willing to see past their organizations failings and try to make things better. Some become overly political to get ahead. Others give up. Their negative sentiment becomes a self-fulfilling prophecy. Bold aspirations are rarely met so why even bother goes the thinking? Even worse, some actively block their peers that really are trying to change things for the better. Employees become cynical when they see values or objectives heavily promoted one day only to be sacrificed at the altar of expediency and commercial reality shortly afterward. The problem worsens when these sacrifices become the norm and confirm cynical employee’s  prejudices. Mixed messages are very challenging to defend as a manager.

In a recent conversation with fellow students in my MBA program we devised a list of some mixed messages we have experienced in our careers to date. Here is the list in no particular order.

Provide an estimate: You made a commitment.

Quality is Number 1: We must hit the release date no matter what.

I don’t care about the numbers: Lots of (senior) eyeballs are looking at these reports.

Accelerate the project: We will invest in outsourced teams unfamiliar with the product to do this.

The team decides: Except when public commitments are announced on their behalf.  

We need to involve frontline managers in strategy:  Frontline management can’t make basic operational decisions around merit increases, hiring or firing.

Get the issues out on the table: Don’t make your superiors look bad.

The company is profitable: We need to reinvent ourselves or face terminal decline.

We are all one team: Company politics dictate that…

It is vital everyone understands the company’s strategy: Employees can’t be trusted with confidential information.

We have a pay for performance culture: There is practically no difference in merit increases for high performers compared to other employees.

We need to hear creative ideas: There is no capacity available to implement your new ideas.

The company cannot afford to pay merit increases: The company continues to increase dividend payments to shareholders.

We are one big team. We must defend ourselves against opponents determined to kill our project.

We need everyone on the same page: Don’t share updates that will mess with the “plan”.

This new system will make us more efficient: We need to hire more people because the system is so difficult to use.

Delivering an amazing customer experience is our competitive advantage: There is no bandwidth to correct existing defects reported by our customers.

Can you remain positive, see positive intent in an ambiguous and complex environment ? Can you make sense of these competing tensions in business to your employees and peers? Can you remain authentic, be courageous and respectful? Can you avoid being fired or avoid corporate landmines? If you can answer yes to most of these questions you could enjoy a very rewarding career in management.

Any other mixed messages that you can think of?

I recently found out I got demoted

September 6, 2010 By in Interviews, Management, Meetings, Personal development, Uncategorized Tags: , , , , , , , , , , 4 Comments

They say perception is reality. This is often true but not always. I was amused to discover that some of our business partners thought I had been demoted when I attended TPAC recently. For those of you who don’t know, TPAC is a small and therefore unusually intimate (professionally) conference for third-party developers who build add-on solutions for the Accpac. The conference is unique from a Sage employee and partner perspective as we get to spend much more time than any other event with each other. I made a name for myself with some of the attendees a few years ago when I introduced a program called Controlled Release into the Accpac channel.

As the new Release Manager my job was to liaison between R&D and internal\external stakeholders. At the time  partners and customers were reluctant to install new releases early for fear of quality issues. Many partners prefer to have the product be released for six months to a year before they encourage their customers to implement it. The idea is that by then most of the big issues are discovered and addressed in the software by then. The Controlled Release program was designed to address this concern by pre-releasing the software to a select group of partners and customers for 6-8 weeks before general availability. We proved the software was release ready, corrected minor issues uncovered and then heavily promoted the live reference sites to prove that quality was there. It was a simple idea that we (Accpac R&D & our partners) executed well. The program was very successful in raising confidence in the product.

I was invited at the last-minute to join the partners on a cruise of the Fraser river one evening after the conference. People typically tend to relax after a few drinks. That night was no exception. Mixing business with pleasure makes it so much easier to get to know people and ultimately develop better business relationships. There are some real characters in the Accpac partner community. Don de Beer is certainly one of them! He says what he thinks. I find this refreshing. Don was convinced I had been demoted. He was curious  and determined to find out what I had done to lose my high-profile job. At first I thought he was joking. When he asked others in our group what they thought the consensus seemed to be that I had been demoted.  I was amazed and amused. (I wonder how I would have reacted if I really had been demoted.) Several pointed questions were asked. I did my best to answer them politely and truthfully. I spent around half an hour trying to convince Don I moved out of choice. Honestly, I don’t think I succeeded. Hopefully this post will do the job!

The Release manager role was a very high-profile role which I enjoyed. Although some partners viewed my transfer as a demotion: from an internal perspective a functional manager with reports is typically considered more important in the company hierarchy than a project manager. That’s not why I moved though. My experience is that too many people are only interested in their functional areas. This often leads to silos, turf wars, inefficient procedures and lower productivity. I enjoy “connecting the dots” and looking at our performance from an organizational perspective. I realized I had a great opportunity to learn more about the software development life cycle if I became a QA manager. I love managing people. I have an excellent track record building high performance teams in Customer Support. I wanted to test myself and see if I could replicate my success in R&D. My boss at the time was also transferred to QA. I enjoy working for him. I decided to join him in QA.

Eventually I would like to move to the business side. I think solid experience in R&D will be a huge advantage later in my career. As most readers of my blog know I am taking an MBA at Segal Graduate Business School to prepare myself for this transition. My ability to move to senior positions has probably been limited because I have moved across different departments in the short run. I have not done a very good job of negotiating raises when I have switched positions either. In the longer term I think the broader experience I have gained will prepare me for more senior leadership roles. At a minimum I have more employment options having proven the ability to successfully transfer skills across various roles and departments. My career decisions may not always make sense to others. I am prepared to take risks and know where I want to go though. I am the captain of my career….

Where have all the leaders gone?

August 28, 2010 By in Employees, Leadership, Management Tags: , , , Leave a comment

I had promised to discuss the New Venture BC seminar series I attended earlier this year in my last post. I decided to write about a very interesting conversation I had this week with a colleague instead. This person used to be passionate about the company we work for. Sadly frustration has made way to apathy now. I can assure readers this problem is not limited to where I work. Employee engagement remains a huge problem for most companies. A recent article in BusinessWeek suggests that employee engagement is at all time low in the US. Most employees no longer fear losing their jobs. The emotional attachment and loyalty many employees used to have for their employers and leaders is gone.

The HR leadership council has published excellent reports this year supported by qualitative data to highlight the problem. For a less robust analysis of the problem but a far more interesting read you can check out an online site called glassdoor.com. The site invites employees to rate their company and share salary information. For potential candidates you can check out previous candidates comments on interviews and how some employees really feel about their company. There is a lot of angry people venting about the perceived failures of their employers. Take  the time to read more and you will find a lot of very insightful and more balanced comments as well. As an MBA student it is very interesting to compare what we read in textbooks with feedback on the site. For example, I frequently read about the fantastic work culture at SouthWest airlines. This was reflected in the feedback on the site even in challenging times.  Other companies, fare less well…..

A couple of interesting trends are evident when I compared large competitors to the company I work for.

  1. Many employees have had their cheese moved. A lot don’t like it!
  2. Companies trying to reinvent themselves to survive have struggled to communicate their strategy in a way that resonates with their employees.
  3. Many outsiders brought in to implement the new visions are clearly resented at these organizations.
  4. Due to downsizing, there are fewer leaders accessible to employees to discuss challenges candidly in a personal way.

There was more interesting feedback of course. I’ll focus on the points above for now. These trends are indicative of a pretty treacherous operating environment for leaders. How can they reconnect with their disillusioned workforces? The colleague I mentioned earlier has little faith in leaders any more. I understand the frustration. I see things differently though. Put yourself in an executive’s shoes for a moment. Presumably many know they are not trusted. Most executives probably have more responsibility after the layoffs of the past few years.  They are under huge pressure to deliver or face the chop themselves.  Many are leading business transformation initiatives. This means they have many urgent, complex and strategic problems to solve.  As a result they have less time to deal with employee morale and engagement which is silently killing productivity. To make matters worse companies operate in a tough economy which severely restricts their ability to reward high performance. That is a “sticky wicket” as the English would say.

My colleague had several good points though. It seems to me many leaders needlessly lose credibility when their actions don’t align with their words. For example, it is fine to talk about “walking the halls” and more personal contact. Is this really possible any longer for more some senior executives who are constantly on the road? New expectations could be set and communicated to reflect the new reality. Even more importantly, replacement local leaders must be identified and available to hear employees concerns and perspectives. A local leadership team prepared to speak to the company strategy on a regular basis could be an excellent start to rebuild a local employee culture. Social media has shown a pull communication strategy is likely a more successful approach to build a community. Make attendance optional. Employees interested will go. They will share their perspective with colleagues not inclined to attend but curious to know what is going on in the company.  A small group genuinely interested in the topics at hand offers a far enjoyable and productive meeting for all concerned. These small groups are the linchpins company’s need to re-energize the base.

I have also seen leaders implement successful tactics where I work that could be of interest to readers. The corporate intranet is much more relevant than before. An “Ask the Executive” feature was added which has been a great way to foster open communication. For now it is limited to a Q&A format with no comments possible. Apparently this feature will roll out shortly which will raise communication to a new level.  There is no easy answer to the leadership problems executives face at the moment. Executives are  not the enemy. They are chronically overloaded. Most are doing their best and willing to do the right thing. It’s tough at the top!

On a side note, it is important to know I have not followed this advice many times over the years. Hopefully, I am wiser as I get older. :)

Is there a market in the gap?

August 23, 2010 By in Entrepreneurship, mba, QuakeAware, self-employed Tags: , , 2 Comments

I was flattered to be asked to review a business plan for a potential online venture back in Ireland recently. It’s rewarding to know that some people are interested in what I write. Without going into details the guys core idea is to leverage crowd sourcing much like Innocentive in the US. Their mission is to connect bright people with businesses that need creative solutions to their problems. They identified a niche in the Irish market and created a business plan. Now it’s time to execute. Good for them! I wish I was that smart and ambitious when I was in my twenties.

I suggested they consider the following points as they move their venture forward. The text in italics is my direct response to them. The comments later are some general thoughts and personal experience on the topic.

1.       It sounds like your biggest “threat” is non-consumption. How is your target market surviving so far without your product? The QuakeAware team is taking a well deserved break to avoid burnout. We are faced with a similar challenge. Most agree our smart phone app is a cool idea. The fact is everyone has survived so far without it though. What is the “hook” you have to really capture the attention and imagination of non-consumers?

2.       It’s not clear to me how you plan to monetize your product (Online advertising, subscription etc ) Similar to point 1 it’s one thing to have a good idea. It’s quite another to persuade others to pay for it. Music is a great example. While many people are willing to pay for great music online through iTunes I believe far more people will download music illegally for free. Many of us love good music.  Why pay for something you don’t have to though? (I am not making a moral judgment. My intent is to highlight a business reality that is severely impacting profits in the music industry)

3.       How do you protect yourself against imitation? Branding is one way of course but new entrants typically lack the money or time to build a brand quickly. If your product is  manufactured your costs will need to be negligible to compete effectively with the Chinese. If your product or service is in software and you are successful it won’t be long before many “me too” products are competing against you. If you were your competitor trying to steal market share, what strategies would you consider?

4.       If you prove the market and gain a sizeable user base how will you compete when a larger competitor enters? They will have deeper pockets, more resources and a better brand. Many larger firms will let newer entrants prove a market before deciding to enter. Some will try to acquire their competitors. Others will simply engage in nasty price wars to drive out the small competition. It will be even worse if they don’t come. That means there really is no market in the gap after all.

5.      What barriers to entry are there? If none, how long can you generate a decent profit? In short, no barriers to entry means the chance to make high margins is not very long.

6.       Do you have a target niche you plan to go after first? Govt, industry and research is quite broad. What does your perfect customer look like? I read a fantastic book called “Crossing the chasm” by Geoffrey Moore. A key point in his research is that entrepreneurs need to be very selective and pick a niche they can dominate before attempting to compete in other markets. Attempting to please everybody may bring in more revenue in the short run but really hurts your ability to develop a sustainable competitive advantage over time. It takes a lot of discipline to research and then limit your enterprise to a narrow niche in the short run. 

In my next post I’ll share some key learning’s from New Venture’s BC seminar series I attended earlier this year. The series was dedicated to start-ups from the investor perspective.

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