Tuesday, June 20, 2017
Attending this conference around analytics, marketing and understanding the customer behavior using segmentation as a discipline, almost all the speakers talked about targeting improvements as the segment sizes got smaller. Complexity of algorithms and the availability of hardware resources on the cloud as well as lower cost of acquisition has made it possible to churn data – a lot more data – than it was possible not too long ago. Marketing effectiveness is waking up and is moving away from the conventional world.
Companies that engage customers directly and those with high volumes of transactions have already begun to garner benefits from these technologies. Even others with a few degrees of separation between the brand and the consumer are exploring alternative strategies and business benefits. Almost every conference also has a mandatory presentation from a research house. The analyst on stage is expected to shower thought leadership on the audience; it is a rare occurrence when they actually make any practical sense.
One such session started with anecdotes of individual attention to the consumer in the pre-technology days and predicted the return of individualization in the near term. Given enough data points, oodles of hardware and highly optimized algorithms around machine superintelligence (the next level after deep learning according to the speaker), the engine will be able to segment the large volume of data into buckets of one, i.e. identify and predict behavior and thus target individuals and capture wallet share.
It has been an aspiration of software and solution builders to use technology to predict the future; we have all seen demand forecasts and revenue predictors with Sales & Operations Planning, most of which hovered in the 70 percent range with a swing of 10 percent on either side. Definitely better than the binary state of tossing a coin or 50 percent, these solutions removed error rates when 70 percent was off target to 70 being on target ! Predictive analytics has had better success than fortune tellers on accuracy levels.
Artificial intelligence at some levels is already influencing our behaviors with our every keystroke and click being recorded by some websites and mobile apps whose terms and conditions we hardly read and comprehend. Changing privacy policies and updates render our choices ineffective with every update leaving us exposed and vulnerable. Data privacy coupled with sieve like security allows the good, the bad and the ugly equal opportunity to use our digital footprint to coerce and nudge us to buy at one end and pay up on the other end.
Enterprises mired in Paleolithic technology, archaic mindsets and rusted skills are struggling to deploy and use such solutions effectively ethically, at times veering away from virtue. Consultants and technology providers are effectively creating Fear Uncertainty & Doubt with a promise to bring the Holy Grail to them. Despite their inability to deliver any credible design or strategy, many large consulting companies continue to rake in the moolah; CXOs and Promoters are shy of accepting they have been taken for a ride.
On the sides of the conference a conversation thread discussed the waste of precious resources and lost time with one of the premier consulting companies. The angst of the CMO was palpable, the drinks brought together a few other victims of the same company whose voluminous reports were gathering dust in their cupboards. Common sorrows bring feelings of brotherhood that only misery can keep together; they found light at the end of the tunnel with success that one of them had with a frugal startup solution.
Nano-segmented Earth’s billions, does provide individual as the atomic unit who can be observed and experimented upon to identify triggers that work. As the number of attributes rise, effectiveness improves, but we have known this for a long time and that contemporary solutions did not have the ability to provide the actionable insights in a timeframe that makes the action relevant. Lack of data integrity and clean data rendered analytics ineffective; algorithms did not know how to overcome these limitations.
The future of consumerism, customer behavior, segmentation, marketing, engagement, targeting, influencing, shadowing, nudging, bombarding, and swamping the hapless customer is closer than we think. Look around your behavior across life stages, daily innocuous decisions, and how they are being shaped by invisible forces. As an enterprise there are too many choices and options; the company with better quality data, compute and algorithms will be the winner albeit with a short window until competition catches up.
As an individual I am worried that have limited choices !
Tuesday, June 06, 2017
Evolution never stops, at least for the CIO who has been pushed around with ever changing technology and business paradigms. In the early days the push was to automate internal processes and then the focus shifted to the external world – suppliers, distributors, customers, basically the entire ecosystem. IT did a good job embracing mainframes, client server, browser, mobile, and everything in between. As technology invaded our lives, democratization led to expectations moving to business roles and innovation.
CIOs obliged by taking on additional roles based on their expertise, passion and organizational need to infuse loads of technology into parts of the company for operational efficiency or leadership position in the industry. They helped finance, sales and marketing, supply chain, human resources, legal and compliance, customer engagement, facilities and administration, everyone who asked for technology input, they received a helping hand from IT and the CIO even when the industry kept throwing new disruptions.
If you are not on the internet, you will be dead; if you don’t implement datawarehousing there is no way information will be meaningful; cloud computing is changing the world; social media is necessary for us to invest in – our customers are there; the smartphone revolution is changing the way our end customers engage, we should be on their phone; mobile wallets, digital payments, what about artificial intelligence and chatbots or machine learning; heard that deep learning is the new snake oil which we should invest in…
Connect into the innovation network, drive change, manage expectations, service level agreements moving up with time, outsource what is not critical, manage multi-vendor deliverables, cross-functional projects, and run an efficient department. Every fad raised a bogie which needed to be addressed; every publication and conference also discussed various aspects of how technology will impact the business or change the industry or kill existing businesses with disintermediation. The plate of the CIO overflows and how !
But wait, manufacturing automation took a quiet journey towards implementing PLCs and SCADA; they did not involve the IT folks, they bought their own equipment with automation capabilities, bundled with computing infrastructure, uninterrupted power supply, interface using basic protocols with the machines which evolved slower than the rest of IT. Lagging behind, they survived Y2K and other scares with minimal impact; cheap compute power and algorithms to analyze machine data suddenly catapulted Operational Technology into the forefront.
There are benefits with analysis of machine data, it helps reduce downtime, improve productivity and lower cost of maintenance and operation. Longer life for the machines impacts capital required for renewal of plant and machinery; it made sense to get the IT folks into the room and leverage the humungous data. IT accommodated the new use cases by providing the requisite support to their new customer. Resultant benefits are large enough to raise attention and elevate the need to a strategic level requiring investments.
Many CIOs have taken this in their stride adding to their portfolio of capabilities and services, opening up a new avenue of technological benefit especially since past investments were quite rudimentary and value of data was unknown. Advent of Internet of Things and the ability to create correlations has changed the nature of the beast. Operational Technology is now mainstream and requires skills that IT has had for some time now. CIOs are happily taking on the new thereby adding one more feather to their cap.
It is a matter of time that across other functions like supply chain too, the data gathered through warehouses, vehicular movement, transit points, and traceability with serialization, all will add to the desire and ability. For the CIO this is a great opportunity to spread his/her circle of influence and provide enterprise value. For those who do not or are unable to, they shall probably be marginalized and find themselves struggling to stay relevant. OT combined with IT will drive the business of the future, it is up to the CIO to take advantage.
Wednesday, May 24, 2017
A recent but fading cyber incident exposed technology vulnerabilities that were always known and ticked off as acceptable risk by almost every enterprise. It was all about deferring necessary change with lower spends; for some it was about inability to change because vendor or supplier or support provider did not offer an upgrade thus necessitating a change which would have raised the budget. Unfortunately in this case the risk materialized into a disaster of which the impact would take a long time to understand.
It was unsurprising to see friend, foe, acquaintance, partner, bystander, everyone shed differences and come together to tackle the situation and problem; for many survival was at stake, for others an opportunity to make a fast buck. Either way they flocked together commiserating the unfortunate and talking about safety steps they took that fended off the enemy. It did not matter if their good fortune was a result of their actions or providence of their inaction or ignorant apathy, for now they were the heroes and survivors.
Flashback to an earlier incident of similar nature: In a large enterprise an ERT (Emergency Response Team) meeting was called to discuss the threat as it spread and anticipation of more to come with an accidental recess. The CXO collective gushed forth with their assessment of the widespread damage and impact to the market, revenue, and the world at large. It gave them an excuse for future quarterly results should the numbers not make the cut. Soon they ran out of things to say and there was silence in the room when everyone turned to the CIO.
The CIO stood up and gave the gathering the good and the bad news; good news that almost 99% of the enterprise survived the attack. He paused for the applause to subside and then continued to the bad news that the systems impacted had critical machine data now unrecoverable and it impacted regulatory compliance. No pin dropped to break the eerie lack of sound as the Head of Risk and Compliance (R&C) stood up and asked the CIO to clarify the specifics of the damage, which plant, which product, which market ?
CXOs no longer needed an excuse, the resultant impact was real and they had a tough situation at hand considering the last audit management response clearly stated a budget for upgrade of the impacted systems. Not too long ago Finance had at the last minute stayed the upgrade/replacement with a view to depict a better quarter. R&C Head was tasked to declare the news to the Board and CEO while the CFO agreed to not hold back further budgets which even remotely impacted any regulatory compliance.
Never let a good crisis go to waste, so said a well-known statesman well before most of us were born or for that matter technology overtook our lives. Our team did exactly the same; between the CIO and Head R&C, they garnered budget required to take care of future eventualities. Rest of the CXOs used the opportunity to justify the suboptimal performance, the company took a hit larger than most others in the industry. Things came back to normal and life moved on, the lessons catalogued and filed for posterity.
Less than 24 hours had passed since the news broke of the disaster that hit far and wide; the same team barring a few who had moved on, met again to assess the damage. This time the news was scarier, spread wider, impact larger, and the world was unable to contain the losses. This time faces were grim and little small talk precluded the meeting; the CEOs presence too added to the gravity of the event. The impact was not dissimilar to the past, it appeared that remediation sanctioned did not change the fortunes of the company.
Livid and frustrated the CEO wanted heads to roll; how can we make the same mistake twice ? He sensed the fear and waited for the CIO and Head R&C to finish before seeking the perpetrators of the current situation. No guesses for who the sword fell upon, it was swift and no explanations were sought, none given. Money flowed to solve the problem, lessons learned catalogued once again, the impact fortunately not allowed to be used as an excuse for any future adverse performance by any of the functions.
It is a rare enterprise that imbibes learning without finding scapegoats; make yours one !
Monday, May 08, 2017
Everyone hates passwords but uses them as a necessity to protect corporate digital assets, personal information, and financial assets. Complexity level has increased with time and so has the ability to crack them. This resulted in multi-factor authentication with various means, the most popular being OTP (One Time Password) delivered to the mobile phone as a SMS. The insecure delivery channel susceptible to MITM (Man In The Middle) attacks poses challenges to almost all communication including the OTP as recently discovered with SS7 vulnerability.
Appification offers alternatives claiming higher grade secure solutions to solve the problem by consuming some of the available solutions; adoption has been slow and efficacy dependent on device features and action from the consumer. The slow pace of change in the ability to rise to the security challenge has resulted in multiple breaches, financial and reputation loss. As a result there is an attempt to raise the bar and deploy biometric solutions as the final measure of security which is perceived to be difficult to replicate.
In the early days of science fiction and world of espionage the highest level of security depicted was biometric control; starting with fingerprints to hand scan, facial patterns, voice recognition, and finally iris scan. These were immutable and secure that saved the protagonist or defeated the antagonist in movies. With imagination overtaking reality, these were also compromised with recorded voice, lifted fingerprints and face masks; real world mimics fiction in many ways and replay attacks overcome security barriers.
Ingenuity to stupidity and everything in between has played a role in creating the fragile walls around physical and digital assets that need protection. Governments are capturing biometric data for basic identity creation and management of citizen services; enterprises capture fingerprints and more – largely for access to physical premises and attendance recording. Within an enterprise all the data gets replicated across servers and locations to seamlessly allow access and convenience to employees and partners.
Enterprise security has faced challenges with data protection and leakages – intentional or by error and omission. Widespread use of biometric data now raises concerns for individuals when the data is dispersed across multiple access points for authentication by the enterprise. Should the information be compromised, the repercussions for individuals can be far and wide. Masquerading and false identities from the data now used with Government services leads to seriously scary scenarios for individuals and more.
Fingerprint data is the most commonly used form factor and we have just 10 of these unique identities available to us. While they can be altered to some extent with cuts and or abrasions, they cannot be changed; and therein lies the challenge for individuals who are now being asked to provide their bio-identities across the board with no recourse, stored, retrieved and used to verify the person. Widespread use poses significant risk, their propagation on channels – secure or otherwise increasing the attack surface.
What are the alternatives ? Do we need additional factors of authorization for use of biometric data ? Do we need federated identities which subsume other forms of identity to create better alternatives ? Identity based cryptography and encryption has been a theoretical solution to the problem though not much headway has been made in this direction due to underlying complexity and the large set of identities to be provided in the now hyper connected digital world where the need goes beyond human identities.
Use cases explode with IoT and other devices – all of which need unique identifiers and private keys; the resultant solution however fails if the Private Key Generator is compromised or subject to quantum computer attacks. M2M communication is on an exponential growth path requiring a different level of thinking to solve the problem. Limitations of current PKI (Public Key Infrastructure) are well known and need to be addressed for a viable alternative to succeed and overcome the growing problem.
Coming back to biometric authentication and authorization, it is imperative that it be used in an encapsulated form without transmission or storage of the data. Individual consumers too need to be educated and made aware of the fallacies of the current structure; enterprises should review the capture and use across the enterprise to safeguard interests of their employees. After all once the data is compromised, there is little that a person can do with his fingerprint identity and that is a scary place to be.
PS: Happened to meet with a startup which claims to have solved the problem; more as I get to the bottom of this !
Monday, April 24, 2017
Most of us have read the 3 envelope parable on corporate challenges and careers; for those who have not, an abridged version. A newbie leader is given 3 envelopes by the outgoing incumbent to be opened only in cases of dire trouble. He opens the first one when challenged in a management meeting and confronts the wisdom: Blame predecessor ! A year passes when again he is in trouble; the second envelope ? Restructure, create new strategy. Survive ! Final envelope’s turn comes after a gap which reads: Create three envelopes !
Corporate world is full of pseudo professionals who survive and at times thrive with their mastery of jargon, leaning on others, taking away credit from own team, agreeing to their immediate managers, sucking up to those who matter and finally using vendors to give them dope that makes them look good. The malaise is a lot more in the technology world that invents acronyms, jargon, and new fads with regularity confusing even technophiles; tech vendors are happy to provide spinal support in return for business.
The masqueraders can be seen at most conferences and seminars nodding intelligently at speakers and asking questions; they flock together and stay away from the intellectuals. They are not to be confused with the incompetent who shy away from any public appearance who only focus on internal politics and their survival depends on the first or second envelopes at different times with different folks within the company; their survival is also reliant on finding a godfather or some capable team members.
Pareto’s principle applies here too but inversely; the majority are able to get away with their pretenses and a small segment gets caught often shunted out by bell curve distribution. At senior levels the collateral damage is high to the enterprise, setback in business or industry at times difficult to overcome; weeding out such ineffectives takes time and effort which most companies are reluctant to invest. It also reflects badly on their ability to hire talented good people or separate cheese from chalk !
Take the case of this large enterprise which hired – let’s call her Suzy – to a senior position; she had come through the interviews well with help from an insider who coached her on what to say. Nothing wrong with that, everyone seeks whatever help they can to ace an interview for a position that they want badly enough. Such was the situation for Suzy too as she had been force exited from her past company post restructuring, a fact that remains undisclosed. She chatted her way through to securing the position.
Her inherited team compared her behavior, expertise, skills, knowledge, connects in the industry, understanding of the industry, personal traits, leadership qualities, desire to connect with them, essentially sizing her up as a leader who will influence their future. The comparison by the team with the earlier person was obvious and natural, the results however not in her favor; she recognized the fact and created an impregnable veil shutting off any discussion. The team knew the disadvantageous position thus prevailing.
The team toiled harder only to be cut off from credits scored by their work, giving them no visibility nor allowing any of them to interact with decision makers lest they expose the insecurities of their leader. Any attempts to bypass the straightjacketed process were met with reprimands and promise of future retributions. The iron lady brushed aside her rusty demeanor allowing those who made up her coterie to gain favors at the expense of the others with resultant attrition in the inherited team as collateral damage.
It was a matter of time that Suzy will reach the third envelope stage, except that she had been able to demonstrate progress for now with the first (envelope) being pulled out like a trump card whenever something was not as expected. It was a matter of time that management took cognizance of the fact that the past was distant and she had had enough time to change it. It was a matter of time that the Board recognized there has been no significant initiatives from her stable despite the rising costs and industry moving at a faster clip.
Different enterprises wake up to eventualities at different stages of their progression; when growth and profitability is above target, no one really cares for the deadwood, they are too busy celebrating. Search for termites starts when everything is not hunky dory or when a new leader takes over reins and has no history, baggage or axe to grind. Eventually the overdue surgery takes place cleansing the system to restart; then there are companies who are reluctant to take tough decisions, they embrace mediocrity for long.
Monday, April 17, 2017
Midlife crisis hits in many ways; the feelings it brings include and not limited to – confidence crisis, loss of direction or drifting, introspection and wallowing in self-pity on opportunities not captured and mistakes made, jealousy of more successful peers and younger generation, withdrawal into a shell, overtly aggressive behavior, and a feeling of loneliness to name some. At times like this there is a tendency to reach out to friends and family to seek their opinion which normally results in more confusion and inaction.
He had faced a similar situation almost a decade back, a little early to be called midlife crisis but that is how he described it. A life event triggered him to leave a well settled corporate life and move to another location closer to the family elders who needed the support. Not financially wanting, he took his time to evaluate options and took a leadership role in a small company which was beginning to gain traction with customers thus shedding the label of a startup and moving to being a growth phase company.
He (let’s call him X) fitted in well into the ecosystem and took up the challenge with vigor of a younger man; the team he built loved him for the fact that he had grown from the trenches and was ready to walk with them whenever they wanted his support. He balanced professionalism with human touch, customer friendliness and the ability to support the team when they needed. They revered him for the guidance and insights that helped them grow too in their individual roles as the company gained momentum.
Growth brought management changes, fresh investors, geographical expansion, global aspirations, and associated trials and tribulations. The new leadership team had different goals, objectives, and aspirations for the company and people; they brought in excitement of potential glory the company should aim for, stretch required by the team, a new culture that divided the teams into those who loved the new vision and those skeptical of the direction. Neither had a choice but to follow the new and hope it succeeds.
In the restructuring of the company few decided to find alternative pastures aligned to their shade of green; those who stayed back did so in the anticipation of a better future. Promises were made across the board, go-to-market strategies changed, product vision altered, and customers informed of a better future with the glory the company planned to achieve. X empathized with the founding team with whom he had grown the company, but found the new roadmap clearer and better than the existence of the past.
The new energy kept the team going for a while; quarters passed by, visions of peaks of achievement started fading and murmurs of discomfort could be heard in hushed voices. Timelines for promises made were extended as they attempted to build some euphoria with news of potentially fresh investments and high value customers. Closer to the top, X though uncomfortable did not feel the need to ring alarm bells and kept going. He kept the business afloat with a steady trickle which was earlier frowned upon as irrelevant.
Quarters transitioned into years with natural attrition shrinking the company a little more than natural; the morale of the team reached new ebbs as the powers that be kept the charade going – happy days will be here again soon ! X was in a quandary on own stretched patience and the lack of outcomes and not much to pacify the team. The growth never came, the money remained elusive, and soon it was evident that the golden era was a grand illusion, the new leadership team had failed the company and its believers.
Frustrated and a decade older, X ruminated over the lost years which he had invested; while he had enjoyed the early years contributing, he was unable to breakthrough the maze created as a result of leadership changes. He sought advice on next steps and career moves from a few he trusted and respected; one such conversation was candid and hard hitting, necessary to break the impasse waiting for good times to come. At the end of the mentoring session, X was free of negativity and clear about the future.
Milestones have shifted every time, outcomes have been mysteriously missing; the new leadership team has no credibility to promise or deliver. Cut your losses, stay focused on what matters to you and move on. The world has a lot to offer to high professionals who know what they can achieve; break out and find a new world which you deserve. Cut the emotional bond and take a rationale decision, go and create a better future for yourself and family. The Mentor had seen X struggle in the last few years and wished him well.
The future belongs to those who dare.
Monday, April 10, 2017
The company had faced challenges due to change in leadership positions often due to bad hires across positions; decisions were made based on bravado and far-fetched stories that even the naïve would find hard to believe. The pseudo leaders in turn hired a coterie that would make them look good in meetings and talk about the glorious past that remained unverified. The rot at the top soon started bringing results commensurate to the collective intelligence applied to the problems and opportunities at hand.
In a growing market loss of market share and dive in profitability for a steady business could not remain unexplained for too long; the growth agenda and strategy that was outlined with help of big management consultants was quickly challenged by equity analysts while the shareholders listened to the stories with unease. Nepotism running rife through the ranks led to collapse of meritocracy – some becoming victims of their high professionalism and others weeded out as they individually threatened the collective brainpower.
The stock price which had tasted peaks with the induction of the new team started a slow and steady slide shaking up the promoters and the Board, to sit up, take notice and do something about it. Failure of cronyism resulted in tumbling one after another like ninepins but not before they had shaken the foundations of a company that had withstood market uncertainty and thrived in the long history of the industry. Few of the inept skillfully hid themselves from scrutiny and survived the expungement of undesirables.
One such survivor was the CIO who successfully portrayed herself as a critical resource and managed to save her band of followers too. She misrepresented past ties distancing herself from those out of favor; those under her patronage followed the leader saving their skin as the rest of the team watched in amazement. They rode on hard work of few good people, quick to claim credit while ensuring that no voice was raised or heard against their tribe as they strengthened their feeble position step by step.
Taking control of the situation the Patriarch emerged out of retirement and hired fresh management team to take over the shambles, revive and restore the rightful place in the market. Staying out of sight during the initial reviews and analysis, she slowly emerged from the shadows to stay out of the limelight lest her highest level of competency fall short of the rising baseline. The enterprise trundled along recovering some lost territory but struggling in the absence of accurate and timely information from the transactional and reporting systems.
Under the spotlight she promised to create business intelligence strategy to help the company in taking better and effective decisions. The task being beyond her intellectual capacity, she felt prudent to hire a big name consulting company to formulate a plan that would save her skin and earn some brownie points. Budget for the exercise was sanctioned and the consultant brought on board; as they got started an unaligned team mate who was the mainstay of existing business and financial reporting quit.
A specialist was brought in by the consulting company who understood the industry as well as the technology adoption curve for similar enterprises. Within no time he had captured the current state of transactional, financial, sales, and other functional reporting, which was quite basic. He evaluated the tools and technologies, inventory of licenses available, and called a meeting with the CIO and her team to discuss the future roadmap, vision and direction, and get an insider view of the challenges and opportunities.
She started off well, but…: I want to outsource the entire analytics and operations while my team can focus on what matters to the business. My team lead has quit recently and due to that there is a void that needs to be filled. You know we implemented this new ERP system last year and then we also invested in this big name BI tool, the implementation of which is still going on, and my BI lead has quit. I want a strategy for which report should be served from the ERP system and which one should come from the BI system.
The consultant did not know whether to repeat the question or accept the answer at face value; as he mulled over the response, the silence was broken by the CIO again: Why are you confused ? We developed over 200 reports in the ERP system, but hardly any are in use; most users want a data dump and then use it in spreadsheets. The management is upset as the inability of the investments to deliver; which is why I need your help to understand which reports we should retain and which we can move to the new system !
The next day the consulting company withdrew from the engagement !
Monday, April 03, 2017
The fine balance between managing growth and profitability and differences between enterprise and startups
Established enterprises are mostly like sloths who move at their own pace when reacting to any kind of market or environmental changes (there are exceptions to every rule and there are some to this one too). Many get there eventually due to the resilience in the business and the sheer size that keeps the momentum going in their favor. Some suffer short-term impact and brush it aside as a learning; in rare cases if the company loses direction or has a significant impact, they become prey to the opportunist predator or break into pieces.
We grew 15% last year, the market grew 12%, so we are doing good; this year the forecast for the industry is 13%, let’s target 16% growth. Our profitability is good and in line with industry numbers, we benchmark favorably. Enterprises are predominantly organized in silos, each chasing respective targets on profitability and growth which are derived from past performance. Rarely a division or Business Unit thinks of breakthrough performance; the entrepreneurial spirit is rarely seen amongst enterprise managers.
Checks and Balances matter a lot to the Board, Management and Leadership of enterprises; they live and swear by ratios and manage balance sheets. Targets are set, budgets managed, numbers scrutinized, long weekly and monthly reviews held to make sure that everything is working as expected, no surprises. Staid growth married to acceptable profitability ensures that numbers match quarter on quarter. Aberrations if any require painful explanations and root cause analysis only to be repeated ever so often.
Despite the world having seen many black swan events in the last decade or so, enterprises continue to live in their world consciously immune to potential threats. So when disruption occurs from unknown sources not factored into annual operating plans and strategic business plans Management teams scurry into offsite meetings to evaluate, synthesize the information, and arrive at counterstrategies. Alternately a big name consultant is hired to review the impact of disruptive forces and advise the management on recourse.
On the other hand startups enjoy the advantage of no historical data and thus they dream audacious and hairy goals; they want to change the world with their version of solution, product or business model; create new markets, beat big incumbents, or at least launch a flange attack to gnaw at market share. Most of them are driven by young entrepreneurs wanting to emulate peer success; their prime focus remains growth, at times driven by easy money at their disposal or their extreme risk appetite and nothing to lose attitude.
Technology driven startups have low entry barriers that allows for me-too ventures with irrational euphoria. Flash in the pan success emboldens the space until it gets crowded with spectacular failures, at times taking an entire ecosystem or micro-segment of the industry with them. Despite large amounts of fold ups, they continue to mushroom with reduced cycles to merger or demise. Some of these have been in hyperlocal services, aggregation of services, hyperlocal logistics, home ordering, and many more.
The moot question is why are enterprises unable to launch such blitzkrieg and capture the mind and imagination of their customers ? Why are they so obsessed with numbers and ratios ? Exceptions aside, majority of startups are long way off from making money while they continue to invest in market expansion; exceptions aside, majority of enterprises have not been able to replicate the success of the technology driven pure play companies; they continue to be at different ends of the spectrum in their results.
Experiments with Design Thinking and Inside Out innovation models have not been able to live up to expectations in the enterprise. Lateral shifts, hiring fancy titled self-proclaimed experts like Chief Digital Officers and the like have boomeranged. Politics and power struggles have seen the demise of many good initiatives with CXOs squabbling about credit and pushing the blame. The exceptions have grown with focused attention and faith in their business models as well as the teams who shepherded the successes.
Reality is that conventional wisdom and progress over the years brings in a certain way of working to enterprises that defines them; they find it difficult to give up their winning formula and move on to a new paradigm. Reality is also that startups with no baggage find it easy to let go and learn from their failures; at times they are also naïve in their thinking and repeat mistakes. A crossover between the startup and the enterprise culture would probably be a recipe for success or disaster of major proportions.
Which one will it be ?
Monday, March 27, 2017
We like what we have seen so far and the initial proof of concept reinforces that this solution will work well for us. The use cases are quite clear and we can work on prioritizing the four models that we have discussed and finalized. The pipeline of additional opportunities and use cases can be confirmed in the coming days; the teams should work to define these in the near term. You can work with IT and Procurement to complete the infrastructure requirements and the terms of reference. How quickly can it be deployed ?
The vendor loved the diktat like a dream come true; they had invested significant time and effort on their first big potential customer, the scale up opportunity validated their product vision. Business team pushing the deployment added to the excitement with the senior team members throwing their weight behind closure on both sides. The solution provided a significant boost to the digital thrust that the enterprise had embarked upon based on the vision of the Board; it also challenged existing legacy and conventional solutions.
Off went the mini delegation to the IT team designated by the CIO for the prestigious project; they completed their planning for the infrastructure, data integration, impact to other processes and systems, deployment and scale up. Dependence on other groups and vendors were acknowledged and their timelines incorporated into the project plan. The extended timeline did not please any of the stakeholders but was accepted as the most realistic plan which could be executed without any further delay or disruption.
Sequentially the process moved to Procurement, the last stage gate before the project starts rolling. True to reputation and their KPIs, they started with the contract, inclusions and exclusions, licensing models, and outcomes that the solution would deliver. Each tenet was discussed, debated, demands going from unreasonable to giving up some ground, as time rolled by, much to the chagrin of business who wanted the new technology to leapfrog competition with a differentiated offering that would take time to catch up.
The final step to get off the ground – financial negotiation – introduced a new element into the mix, the Finance team because the values were quite large and the vendor as yet small unknown entity. They started from the beginning to discuss what, why, when, who and asked for alternatives against which the solution was benchmarked. Other software that the company had bought were not as expensive, so why is this one ? How much is the discount over list price ? Are we really the first customer in this segment ?
It took some effort to get them moving towards closure; the business head and the CIO, both pushed hard to retain the early adopter advantage in their industry; there were others who were talking and that is where they risked leadership position. With the criticality that time represented, the Board nudged the team to expedite the decision; chastised suitably, the teams closed the deal grudgingly at a value that they believed was higher than what they would have agreed to if they had the time at their disposal to negotiate.
With time lost in the process, suddenly everyone wanted the solution implemented yesterday; the CIO hustled the team to take up the work on priority, the vendor allotted their best resources to the project, and business provided program management and domain expertise. Ancillary vendors were pressurized to deliver in unreasonable time, most obliged so as to not attract the ire of one of their premier customers; the solution was ready and began to churn out changed business outcomes that pushed competition to the edge.
Support from the Board and leadership team ensured that the rigor to monitor did not falter and the promise of deliverables was kept. The Board acknowledged the initiative and associated results, the support provided by the IT team as well as the leadership demonstrated by the Business Head. It was a case of good governance winning with results that mattered. Doubters if any did not raise their concerns or pollute the environment that was committed to putting their best effort to succeed, truly a team effort.
Today, business has taken over the reins of technology led transformation not wanting to leave their future in the hands of technologists. They are taking control and shaping their destiny in the ever changing and disruptive world of digital innovation. Every new technology threatens to challenge conventional business models and legacy systems which constrain agile movement to counter new startups who have nothing to lose. Acquisitions make up for the lost opportunities at a significantly higher cost.
Stay hungry !
Monday, March 20, 2017
I was at a conference where an animated, heated, passionate discussion was happening between members representing the technology players’ leadership team and some customers. It was quite obvious that there was a difference of opinion leading to a disagreement on the subject. There were multiple points of view which added to the liveliness of the debate. The conference organized by an independent organization was on one of the currently hot technologies – artificial intelligence and its manifestation in the form of bots.
The Structure of words determine segmentation methodology and parsing for semantic analysis, tasks that can now be done with higher accuracy though complete sentences require additional facts and external world knowledge. For written text in a chat session, the bot is able to hold fort quite successfully when addressing well-defined tasks and decision trees. Many online portals and businesses have already deployed chat bots to supplement agents who step in when the bot is unable to parse and respond to a question.
Eliza was seen as a breakthrough, so are personal assistants who respond to and act upon simple tasks using basic language parsing tools. While the technology is nascent, attempts to make computers chat with humans have been around for over half a century. Current experiments indicate that they can be purposed for specific tasks. Excitement revolves around automated interactions to improve efficiency and reduce cost in comparison to current models of humans talking to customers for customer support issues.
The Natural Language Processing (NLP) journey that began with SHRDLU has improved significantly with Machine Learning and Deep Learning. The ability to pass the Turing Test (the test investigates whether people can detect if they are talking to machines or humans) is still some time away, though we are getting closer to the milestone. Though some may claim that Eugene passed the test a couple of years back, many do not agree with the results. Artificial Intelligence barrier is yet to be crossed convincingly.
As bots mature and they are evolving fast, their ability to manage specific tasks is already giving organizations the benefit of consistent responses to basic and mundane queries; use cases around query and response of HR systems on leave balances, tax options, and others have been successfully deployed. Externally airlines and hospitality industry have taken the lead while inside our homes personal assistants are making an appearance; the biggest driver however has been the smartphone listening, responding and taking actions.
Call centers and IVR systems continue to drive customers crazy with long decision trees and stupid obvious questions; wait times add to the woes of the frustrated customer. Offshore call centers did reduce the cost but faced backlash on other social impact it created. Bots promise to take up the challenge and address the customer with agility and surprisingly improved outcomes. The rich repository of information and past interactions helps the rules engine train effectively and take decisions objectively.
As the cost of deployment continues to fall with mass development and niche players, companies are slowly embracing this revolution. Which brings to fore the point that will they be able to replace humans in call centers as the bot learns and graduates to the next level of interactions ? Recent times have seen the rise of hullabaloo about jobless growth and the disappearance of low end jobs to be replaced by machines; as the gap to the Turing Test reduces, the probability that they can starts staring us in the face.
The job loss is indeed going to impact destinations that build their business models around calls and low end business process outsourcing (BPO). Many existing players have already started upgrading skills as well as retrain staff for other roles; enterprises will ruthlessly choose efficiency over distant loss of employment even if it involves initial high investment. Are there options available to current players ? It is a race against time for incumbents to move up the value chain or become irrelevant to their customers.
Unless, unless they embellish their services with bots and attack their own business before someone else does. A handful of providers with strong technology backing from within or their parent companies are beginning to offer value added services using bots thereby changing their customer acquisition and retention strategies aligned to the new reality. They are using their rich knowledge repository to train the technology solution towards addressing existing and new problems thus opening up opportunities.
A system is as good as the people who build it; in the end it will be humans who will continue to create the differentiator !
Monday, March 13, 2017
Rummaging through my archives I came across a presentation I had made in a large IT conference fifteen years back to the date. The subject line had me wondering if I had made a fool of myself in the gathering considering that the topic was not my core expertise, though I was a bit enamored by the discipline. Memory is kind and there is no recollection of being booed off stage or being in an uncomfortable position. The presumptuous title of the presentation was “How to protect your enterprise from being hacked”!
Organizations get hacked for many reasons, though most of the hacks in recent times were attributable to human error, lapse in controls, malice towards existing or ex-coworkers or bosses and finally social engineering resulting in compromised data which allowed nefarious elements to gain access and control of information assets for potential future misuse. There were also few brute force attacks as well as skilled hackers who could break the firewall and other technologies that protect the digital ecosystem.
The past decade and half has seen exponential growth in devices connecting to the internet; what started as basic email on mobile, extranets and the surge with the dotcom bubble has grown beyond the predictions of all kind of futurists and consultants surviving the blips due to dot bust and many years later the subprime crisis. M2M, IoT and connected consumer devices have already added to the exposed digital fabric available, vulnerable to attacks as well as errors and omissions by people who configure and monitor.
Back then before the turn of the century reported security incidents were a handful; current reality is 10X of that and for clarity these are reported numbers. Guestimates on the actual number portray a similar multiplier on the reported number. The difference lies in BYOD which has removed the mobile end user compute from purview of the enterprise subduing the number. Smartphones and Tablets, wireless hotspots, public internet kiosks and free terminals at airports, all have helped in accessing information anytime, anywhere.
For IT organizations threat vectors multiplied sending them on a quest for better security and balancing the demand and need for access to corporate systems. Controls and checks soon became bureaucratic with everyone wanting to connect as a result of undue corporate pressures. The number of breaches continues to rise with IT security playing catchup. MDM anyone ? Locked USB ports, containerized phones, IRM enabled documents, the world has changed while we continue to stay exposed with cookies/mobile app trackers.
Globally, Governments have giving a thrust to digital e-governance and citizen services; identities and records of interactions with Government, tax filing, health records, bank statements, what have you, almost everything is digitized across most countries with varied degrees of information security policies, processes and technology. Access via mobiles and apps is the base expectation which needs to be fulfilled; feature phones too have been enabled using USSD (Unstructured Supplementary Service Data) which can be compromised.
Interestingly time to uncover a breach has now increased from weeks to many months and in rare cases more than a year; this rise is despite availability of plethora of solutions. Software is getting bulkier, crammed with features; integration with other solutions is now the norm exposing solutions with potentially unfixed or insecure APIs (application programming interface) from third parties. Unfortunately security wrappers and multi-factor authentication make solutions unwieldy or complex to end users.
Fifteen years back the discussion was about security policies, management endorsement and budget allocation; it was about protection from insiders – disgruntled employees and contractors. One of the key elements of an information security strategy was education of involved stakeholders, their responsibilities, dos and don’ts. Today is still about security policies, more controlled that clearly separate the personal from enterprise; earlier digital access was controlled by hierarchy and exception, today exceptions to the rule for business is the norm.
I wish I could give a presentation today with the same confidence and aplomb that I did decade and a half back; technology has swamped our lives with blurring boundaries between technology at work and personal use. The continuum with high dependence on devices and tether to the internet for almost everything, logs our daily activities in the background only to be used against us. Enterprises struggle to create a balance between storing data on the cloud and enterprise vaults only to discover that neither are safe.
Reality is that most of your data is out there available for pennies to whosoever wants it whether you like it or not !
Monday, March 06, 2017
The need was dire, the staff wanting and IT team willing, but the company management for some reason did not take a decision to approve the project. Almost everyone in the industry had the tools required for the tasks, it was basic hygiene to say the least; growth despite not having the tools set in a belief that they did not need them. When a new IT head came onboard, he was pushed into a corner to take up the cause on behalf of the Sales & Marketing team and try his luck in getting approval for the investment.
It is not that they did not have any technology solution running; they were among the early ones to deploy laptops for majority of their teams though the solution they were using required replacement yesterday. Everyone had given up on the solution which was supported by a small time vendor who had built it about a score of years back and had continued to patch it just enough to keep it alive and going; rumor had it that he was related to someone at the top. The newbie decided to take a shot and worked to gather the data meticulously to support his case for change.
He stepped out into the field to first-hand experience the angst and pain, validate the hearsay and the extent of change required. Spending time with the young and the experienced, walking the streets, having a cup of coffee on the streets, quickly the empathy built and he heard stories of long hours spent, favoritism and management apathy, the dam had broken – he was flooded with their emotion. He was informed that it is probably the first time in a decade that any CXO had descended to the trenches.
Upset but in a controlled way he presented the facts to the group in the Boardroom seeking their flirting eyes to make contact and press for a decision. Outlining the stark reality he appealed to the Management to wake up and face the reality of slowly diminishing market share. The S&M head added his weight and sought resolution to the long standing impasse. He did manage to get a conditional approval, the condition surprisingly to involve the Finance team in the evaluation ! Finance for a S&M solution ?
So they set together a team to formulate the functional selection criteria – more of an aspirational list of functionality in comparison to current reality and in-line with external reality. The options were known and well understood, so the run through happened quickly, the recommendation based on market leadership and ease of use and deployment. The Finance team reviewed the cost against current outflow and found it to be higher, unwilling to take into consideration the better capability, efficiency gain and superior technology.
Escalation to the CFO brought in a new dimension to benchmark with global systems; the team turned around the evaluation in record time and presented the same. A fashion parade followed with lofty claims and global metrics, some of which did not matter, but in the end based on extraneous factors the CFO declared the evaluation closed and selected a global solution with a much higher budgetary allocation and timeline. This was finally presented to the Management as the best course of action.
The decision disconnected from reality was shot down, the CFO smarting the turndown attempted to gain an upper hand by taking the popular choice and setting unreasonable demands on time, functionality and cost. The IT Head and the S&M team could see through the charade; no one however dared to raise the red flag and to whom ? Despite this adversity, the project started in earnest, everyone giving it their best effort; usage increased as the new was far superior to the old and offered succor to the underserved.
Fault had to be found in the unwelcome success, and the Finance team did by challenging the data, the authenticity of inputs, denying the outcome, the project started losing credibility. Repeating a lie consistently sowed the seeds of doubt and put to rest an initiative that could have succeeded overcoming all challenges. They reverted back to the old faithful shoe with holes, hobbling back to their painful existence and journey. An opportunity to regain market leadership was lost in egoist behavior and lack of protest.
One step forward, two steps back; a year and more spent in the entire exercise, precious time and resources allotted for a naught, the loser was the enterprise in the war of the old versus the new, misplaced metrics for business and project that would have brought in business transformation. Many years later the organization has continued to remain under the shadow of the failed venture, the will broken, confidence missing, and the experience bitter. The CFO and IT Head have moved on leaving behind a case study !
Monday, February 27, 2017
The review meeting was getting hot and interesting; the function head was being questioned on the lack of leadership and ability to influence business units to follow defined standards; after all he had defined the standards and formulated implementation guidelines. Then why was he not able to get the business to follow them ? Weren’t the standards touted as industry benchmark, leading edge best practices, and emerging technologies that would put the group in leadership position locally and among the best globally ?
Matrix organizations have interesting group dynamics; there is functional reporting normally a dotted line to the department head and a straight line reporting typically to business unit in a diversified business group or geographical unit like a country head in a multinational company. In almost all cases the straight line drives the agenda for the person with the dotted line is left to drive synergies, cost optimization, standards, governance models, and the unified agenda across business units/countries.
For the newly inducted CIO it was not the first time working in a matrix structure, his earlier avatar had clearly defined boundaries for each role. At every node of the matrix the accountabilities were commensurate to the authority vested and influence expected. He had thrived in the position that helped bring value to both sides; his managers – straight line and dotted – acknowledged the contribution and maturity. Teams within his span of control as well as the matrix into which he reported enjoyed good relationships.
He took the role for its larger span of control, a different industry and domain, the challenge and the opportunities the new role presented and off course monetary value. Overall it appeared to be a great jump from his prior assignment which had reached a plateau. Reality hit him hard on his head when he met his peers and collective boss – the CEO in the first management meeting. The structure was unique to him and the dynamics hitherto unknown, made his skin crawl on his ability to create professional success.
Each group function head played two roles: the first to set strategy, direction and define standards that the group was expected to follow. This part was easy for most of the CXOs and function heads who were knowledgeable and well recognized as high performers in the industry. The group of experts thus depended on the partner ecosystem to help them craft the solutions and processes that were expected to be followed by business units; implementation was also left to the respective business unit functional heads.
Business functional teams were not obligated to follow directives or policies defined by the group; they could almost get away with anarchy. Matrix reporting had created a structure that the straight line manager could override the dotted or define alternate path for his business unit. It would appear to be a ceremonial position with a lot of responsibility but no authority to control outcomes, a fact that did not surface during the interview. Results were expected from the titular heads to ensure that the group has synergies and commonality.
The specific case really did not matter, it required a different structure and approach to solve the problem at hand. The Group CIO reasoned it out with the Group CEO and other peers in the room to highlight limitations the structure imposed; he also pointed out cases where mandates were followed, the group heads had ensured that respective members were subservient or underqualified thus open to listening and following diktats. The problem it created was larger than the current issue being discussed with suboptimal talent.
Making some sense to those present, the CIO pushed forth the agenda to unify the team; while the structure could be amended over a period of time, he gained acceptance to the idea and way of working. Step by step he worked on the antagonists to the idea, nudging, pushing, helping them win, he brought them to neutral ground within 6 months. A surge of activity followed with the group now harmonized and working with agility and synergizing effort, they reduced individual budget allocations and time to market.
Is the model replicable ? The answer is yes though requiring significant effort beyond normal for the leader to bring everyone to common and shared objectives. Instances can be found widespread of failure to capitalize on such an opportunity, accepting destiny and remaining an Advisor whose knowledge and expertise stays underleveraged by enterprises. Power struggles are always detrimental to progress, it would serve leaders and corporations well to recognize these before they become a malaise for the company.
Monday, February 20, 2017
It was a difficult project to begin with and starting from the business team and the solution providers and the implementation team were all cautious in their predictions of success. In this part of the world it was the first time that such an audacious project was been executed; there were a handful of global precedents and they too had seen significant challenges in achieving successful adoption by the business. The team attempting the feat was a collection of disparate skills which added to the challenge, they had no choice.
The project was conceptualized by the CEO – it could have been termed as his pet project – who painted a dream that few could visualize. He was convinced that if he did pull it off it would be a benchmark in an industry that was beset with delays, cost overruns and quality issues. His man Friday and close confidant was put on the job to find people willing to take the risk and become part of the team. Thus empowered, man Friday reached out far and wide to enroll an eclectic group which had created unreasonable success in the past.
Naysayers many, they warned citing instances of failures of mammoth proportions; any normal person would have probably been dissuaded, but the assorted team had never said no to any danger – perceived or real. Their confidence in attempting the journey was akin to the first team that successfully climbed virgin peaks. Internal pessimists decided to go along with a detached passion while the optimists decided to take on the project of their lives to partake in the glory should the summit be achieved.
So the project got off to a tentative start with the bunch of experts with no prior experience but loads of attitude, commitment and willingness to explore uncharted territories. They broke down the problem into micro steps which appeared achievable even by rookies. A monitoring system was put in place to carefully analyze every step, sign-off, and celebrate every step that took them forward. Challenges were scrutinized and alternatives tested with speed until they found the solution that fit the mosaic.
Stumbling through the journey the team slowly aligned to the task at hand; each individual contributor came from high ground of past success with associated ego and a winning formula that worked for them. The CEO stayed glued to the ground taking stock frequently, pushing the team to drop their differences and doubts. It took effort for them to arrive at common ground, but they did in their loyalty to the CEO and the challenge the project represented, a peak unconquered, a path untrodden, a batch un-lapelled.
Collectively the group now functioned like a well-oiled machine; the journey seemed easier than it did at the beginning, the road smoother and the target achievable. The CEO continued to charge the team showcasing their success to one and all while plaudits were showered on his audacious vision. As the finish line showed up on the horizon it brought many doubters back wanting to bask in the derived glory; their disconnect from the project visible, their faces clearly plastic in their celebration of imminent achievement.
Study conducted by Standish Group for over two decades clearly outlines the first and foremost reason for project failure as lack of Management focus; this project had more than a fair share of management oversight, in fact at times the group wished that they would be left alone to work. The CEO though overpowering in his demeanor, he knew when to back off and when to push. The end result was for everyone to see and learn from; the industry celebrated his success and many attempted to emulate it.
On another part of the world another enterprise in the same industry with the same set of internal and external challenges decided to pursue the safe path which was the norm. They too started their journey around the same time with resources available unwilling to take undue risks. The CEO – an able man – believed that his will shall be done, delegated the responsibility with an occasional tab on progress. Hearing of success in the other project he berated his team and their inability to complete simple tasks.
Leadership is not just about defining the vision and charging the team to execute; effective leadership requires a lot more, a connect to the ground, knowing when to push, when to back off, finding the right resources, and empowering them while keeping different personalities together. Leadership is not vested only with the CEO or a title holder, it can be practiced by anyone who is charged with a cause and willing to take a stand. Are you ready to get into discomfort zone to try something new ?
Monday, February 13, 2017
A: Much feared and revered he had iconic status in the industry; a hermit who was rarely seen in any public forum, stories were abound on his persona. Everyone knew he was a workaholic for who spending 12-14 hours at workplace was normal; he was famously notorious for midnight meetings and negotiations in the wee hours. Stories spread on his passionate work style and commitment to the enterprise, he was not a role model but inspired a generation of workers; he was synonymous with the company he worked in.
He made few friends with his ruthless style, it was difficult to find people who could say that they knew him as a person. Little was known of his antecedents or when he would give way to the next level of leadership. Commanding respect he was enigma that the industry had not been able to solve. 80 hour work weeks can be punishing even to the fittest, it finally did take its toll leaving him incapacitated for a while; understanding mortality, he hired a trusted lieutenant who modelled himself in his shadow.
Providence or coincidence, the teammate fell to pressure faster with serious medical condition which was rare for someone that young; but by this time the superman was back in full force thus taking up the slack. Over time their collective success elevated them into role models with many attempting to emulate their success little realizing the price they had paid to rise to the summit. They had sacrificed their personal lives in favor of their careers – families that were well provided for but emotionally disconnected.
B: Envied by many his steady climb did not go unnoticed; well read, articulate and opinionated in a good way, he was always ready to help his peers. He was a prominent speaker across conferences and events – people loved his views and thoughts which were at times audacious but pragmatic enough to be followed. Rarely one to put in long hours excluding exigencies, he did not expect his team to burn the midnight oil, but work to a plan with efficiency which he demonstrated and expected of his vendors too.
His team revered him and trusted him to keep the flag flying high and pass on credit where due; he coached them and encouraged them to take calculated risks – ready to take the brunt of failed experiments. Vendors loved him for shooting straight, his candid talk and fair approach to value realization on a sale while negotiating to build relationships with shared success. Always open to case studies and references it made him a beacon for every company that he worked in and industry that he adopted.
His family could be seen beaming at his success openly in family gatherings as well as industry events which added to his persona. He dissuaded people from imitating him, his mannerisms or style; but he created many leaders from within his team who grew to prominence in the industry – some also acknowledging the role their mentor played in their success. Shortcomings if any stayed hidden or overpowered by his professional success and the fact that he was always available to Management Trainee or CEO alike.
The contrast between A and B appears to be extreme and exaggerated; their approach to work and life are quite divergent. Professionally both created success that set benchmark in their respective industries, both were sought after by the industry, both loved and thrived in the attention showered by big and small. Their paths crossed many times with each acknowledging the other; they knew about the differences between their approaches, neither commented on them and the industry took them for what they represented.
While A continued to stay invested in his professional life beyond the normal retirement age, B got off the corporate treadmill early to enjoy the fruits of labor and started his entrepreneurial journey. Many years passed by with A now taking a backseat and B fading away from the scene; providence arranged their meeting which brought them face to face again. His reputation had stayed firm even when A had taken a backseat in most matters; the meeting never took formal overtones with mutual respect demanding a different setting.
The transaction happened quickly, the relationship built on a strong foundation stood the test of time. For B it was a validation of the seeds he had sown carefully over the years – of treating people with respect irrespective of rank and position, of helping without expecting anything in return, of being the spokesperson when none ventured, of being a good human being. Life goes round in circles; invest in people and relationships, the returns over the long run are worth a lot more than you can imagine.
Monday, February 06, 2017
My first tryst with cost happened a little more than a decade back when the company reins were taken over by the CFO; he replaced a young charismatic CEO who found greener grass elsewhere. The first review meeting conducted by the CFO with score of year of experience announced an initiative to control costs – something he had harped about in the past but was overruled. His predecessor always worked on the numerator (revenue) and not the denominator (cost) when looking at profits and ratios.
Many years later I was facing a sense of déjà vu in another company when the new management which had initially created high costs now under pressure from shareholders started an initiative to cut costs. Fast forward to current business environment when everyone is uncertain of global trends and policies that potentially impact parts of business and resultant revenue and profits – quite a few are preparing to cut costs to sustain impact if any to short-term and long-term operations and business strategies.
Why not cut the flab or get rid of deadwood that the organization may have collected on the way. In almost all such cases of cost containment, it is typically a new set of Managers who initiate the exercise wanting to sculpt the company in a specific way getting rid of legacy. The other interesting fact is that almost all such cases a big name super expensive consulting company – coincidentally the same one in all cases that I have seen – is hired to suggest ways and means to reduce cost. So what’s new in cost cutting ?
Predictably it starts with hiring freeze, HR makes a list of low performers (exception Finance team) travel freeze for everyone except the Management; the inner circle gets discretionary approvals, everyone else is expected to use Audio/Videoconferencing. Cookies and biscuits disappear from meetings, packaged bottled water is replaced by refilled water bottles, control on printing with introduction of network printers, deferred training and development budgets, and last but not the least a cut in IT operating budgets and new projects.
Frugality in times of plenty is a virtue practiced by a few and they stay immune to variability in the market conditions. Working for one such company we celebrated our most profitable year when everyone was struggling with costs in the year of black swans. If that is not part of the organizational DNA, operating expenses should ideally be reviewed periodically and not necessarily wait for a formal cost control exercise. The challenge lies with some types of costs which do not lend themselves to reduction without an impact.
So when as a CIO I was asked to cut cost by 20%, it created an interesting predicament; can I cut manpower supporting business as usual ? Should I get rid of my Project Managers who have delivered successfully in the past ? Shall I ask the support partner to reduce onsite manpower without impacting SLA ? Can I cut network bandwidth across and hope that the business will not notice the resultant impact ? Annual Maintenance Costs are locked in with COTS and hardware vendors, no not much scope there.
Can hardware refresh be deferred ? For desktops and laptops potentially by few quarters, the server upgrades cannot if the transaction volume continues organic growth. New projects can be deferred or pushed into functional P&L, after all if they want the new solutions, they will find a way to justify. In both cases IT took a similar approach to cost cuts with partial success; reduction in operating expenses was marginal since the contracts were already optimized by Purchase and Finance, the deferred capital investment made up for the shortfall.
Decades apart the rest of the company dithered and murmurs of unrest were heard across the companies. The big consultant bill horrified the employees who had seen their friends depart and morale go south across functions. The net resultant saving was something they could have achieved by involving the staff across levels invoking their emotional connect towards their adopted company. The leadership team declared success gloating in the derived glory to gift themselves an exotic international offsite as a reward.
So much for cost savings which were believed to be necessary for survival of the company (read the management team). Mature leaders do not take conventional wisdom at face value, they internalize the opportunity and seek collaboration across layers for sure shot success. E.g. the frugal company that beat profits in a lean year by calling upon all employees to contribute; it enrolled every CXO to the cause not by setting targets, but appealing to help the company and how they did ? It remains a benchmark for the company !
Cost does not need to be a 4 letter word !
Tuesday, January 31, 2017
The new CXO (John) had no handover or parallel working with his predecessor; there was no handover document or any evidence of work done and in progress. The incumbent (Bob) did not know that he was going until the end of the day on a weekend when he was told not to come from next Monday. It was a first time experience for the newcomer who had a few changes in his career. Not that the company had precedence of taking such action against senior people, the circumstances were material enough to precipitate such an action.
But let’s set the context first: It was a top 10 company in its industry, visible and perceived market leader in some segments; proud of its legacy and people, they had set some benchmarks. Calculated risks was a part of the DNA to maintain leadership in the market, the company had hired Bob to take the innovation agenda forward; on his part, he was a veteran and subject matter expert having spent many decades in his chosen industry and field of specialization and acknowledged as a steady dependable performer.
Under his charge the company took on a few innovative projects that on success would leapfrog them in the industry; while the element of risk was low to moderate, the management accepted the same and pushed ahead with endorsing the effort. Bob welcomed the opportunity and set forth to execute with the cross-functional team, the vendor a past acquaintance with reasonable credibility. A few months delayed, the project went live with much fanfare and received mixed reviews from the sales team – the primary users.
Cracks began appearing quickly which led to tactical fixes and then the blame game started; the users blamed Bob’s team that they did not understand the ground reality and build castles in the air; they in turn blamed the developer for making assumptions with no domain expertise to back it up. The developers blamed the customer for changing the brief in every meeting and the cycle repeated itself with every iteration. The matter was escalated to respective CEOs who met but disagreed on every aspect unwilling to take the blame.
Heat turned high on Bob who had chosen the vendor while he fruitlessly attempted to mediate to find an amicable solution. Lawyers on both sides fine combed the contract to find an upper hand; both ended up litigating unwilling to step down from high moral ground. The size and proportion of the project and its failure had an adverse impact on company performance; the CEO was chastised for allowing such an event to occur. The company needed to set an example for the imbroglio, and the fall guy ended up being Bob.
John was handed the project as his key task to recover lost ground and ensure that the deliverables are aligned to the requirements of the sales team. Past success with sales projects gave confidence to John in getting started on the right note. He met the sales teams, created empathy, won them over and created a democratic governance process for vendor selection. It was important to John to keep all stakeholders engaged and feeling wanted in the new avatar of the much maligned project which had taken Bob as collateral damage.
During his interactions, John unearthed and unraveled the story slowly putting the pieces together with surprise, trepidation and decided to keep circling back with his team and the CEO to ensure that he hears alarm bells early enough to take corrective action. Not that the project had a smooth run, it did see its share of bickering and debate, John needed a lot of patience and assertiveness to keep everyone on track. The cautious approach worked well and the project unfurled successfully with bouquets following for John and the team.
John did not allow the ghosts of the past haunt him beyond the cautionary approach for this project; he was also pushed into closing the litigation and creating a settlement with the antagonist of the past. The intellectual property thus created was important to the company and the vendor very well knew this and leveraged it in their favor. The good news was that the vendor gave up all rights to the IP, the bad news was that it cost the company a lot more than the total cost of the old and the new projects combined to close the case.
What options did John have in such a situation ? He was tasked to resolve a conflict, he did reach resolution at a cost. He completed the project satisfactorily which was expected in the second attempt. The price paid rankled the company for a long time and the CEO did not let the dead stay buried with references to history. John would smile at these references and move the agenda to another subject. While he was not directly responsible for the failure and its consequences, it hurt that his profession was tainted.
Monday, January 23, 2017
A: When he took on the new role in the highly visible company, he knew that he will have to put in some effort to fill in the gap left by his predecessor; the company was one of the pioneers in their industry and had taken good steps towards retaining their leadership position. The new CIO with impeccable pedigree was excited to take on the new assignment that was expected to bring great opportunities to excel. He launched into the new company full of enthusiasm and quickly aligned the team to his ethos and way of working.
As he settled into the position, work done over the last year began to show signs of fruition; the industry wanted to write about the success, publish case studies, requests for which were redirected to project owners to engage and provide the requisite details. At the same time he pushed the pace of innovation and work thus propelling the enterprise into newer waters, claiming success often. Skillfully he continued to sidestep requests for sound bites, media coverage and interviews where his contributions were limited to shepherding.
In management meetings he requested his colleagues to help in maintaining continuity and present along with him; he also brought along teammates to provide on-the-ground view of reality. The latter he practiced for new projects too with the rationale that the team best presented practical challenges and real life issues while he fully owned the project and was responsible and accountable for challenges if any. He wanted to instill a sense of pride to the team members as they presented to the powers that be.
Z: She came on board as the incumbent left to pursue entrepreneurial interests; she did not know the industry, a reality not different from the one faced by the CIO in A. Her new company too had a large number of initiatives that had progressed well and were in various stages of completion. The team aligned to her way of working – quite different from their earlier experiences. Coming from an unrelated industry where she had spent her entire professional life, her uncommunicative stance evoked paparazzi curiosity.
She shunned the external media and also cast an unfriendly eye on her team almost putting to stop completely any connect with the world outside – a diagrammatically opposite of the recent past. She was unable to make significant headway with new initiatives with her team with her demeanor and ability to gain the trust of her team. Reciprocally she trusted no one and played the lone ranger, preferring to attend meetings alone, which initially surprised the team until they realized the reason for the behavior.
In her desire to prove her mettle and look good in the eyes of the management, she purposely painted a bleak picture of the past casting aspersions on the team ability as well as the departed leader whose position she now occupied. Positioning herself as the manna from heaven to the rescue of the enterprise, she almost convinced her audience that the situation was grim and she will overcome the challenges with grim determination and hard work and a bit of help from the team who let this happen in the first place.
She created a false sense of urgency and fear to paint a picture au contraire and then step by step proceeded to take credit for remediating the situation. Wherever her team completed a task or achieved a milestone, she dramatized the event and presented to the management projecting herself as indispensable and critical. As a result she alienated a large part of her team in her own insecurities who slowly started departing for greener pastures. Remember the maxim ? People join companies, they leave their bosses !
Between A and Z, they represent two ends of the spectrum: one focused on team and works to empower them and help their confidence; the other self-centered, stifling the team, their work and achievements. Most will choose to be on the side of A and profess that the behaviors outlined are what they practice with their teams. At the other end Z by virtue of the inability to lead has taken the extreme step of isolating herself and living a self-created bubble which can burst anytime leaving her pantomime exposed.
Success is rarely illegitimate, it has many fathers; people do see through facades eventually, be prepared to face the consequences when it happens.
Monday, January 16, 2017
When I wrote about the un-happenings for 2017 – technologies that will not live up to expectations, it triggered a chain of messages to create a list for hardware trends; many dig hardware, beautiful to look at, touch, feel, status symbol for some and necessity for many. Consumer hardware is evolving rapidly with quick replacements annually or at least every two years, a vicious cycle. On the enterprise front, the detachment from hardware has been slow and steady since the advent of Cloud Computing and literally Everything as a Service.
At the turn of the century what started as Application Service Providers (ASP) transformed and spawned multiple avatars: Infrastructure, Platform, Applications, and Storage as a Service followed by the Network. Not satisfied, then came Software Defined Storage, Network, Data Center and as a combo they became Software Defined Everything ! Enterprise Hardware has thus been disrupted time and again taking advantage of refresh cycles – a trend that started with desktop/laptop refresh with desktop virtualization, now creating an Infrastructure Identity crisis.
Every road warrior’s primary device has been shrinking from the laptop to the tablet to smartphone to phablets and now hybrid devices – the tablet and laptop rolled into one. The future may probably do away this need too with smartphones packing in increasing power rivalling mid-range portable computers; connect the phone to a large screen and keyboard/mouse combo via Bluetooth and you are ready to roll. Foldable keyboards have been around for a while, the advent of foldable screens will bring the next disruption.
Public WIFI services are expanding footprint globally almost to the extent of becoming ubiquitously present; security solutions are evolving to protect the nomads from being attacked as long as they follow some basic discipline. Virtual private networks across the public infrastructure and hotspots is not too far behind; some providers already offer the ability to create a segmented private secure network on their services. It is a matter of time that enterprises will no longer need to deploy WIFI solutions on campus.
Bigger trends can be seen in the immersive solutions with hardware in our lives enabled by startups and large enterprise offerings. VR is already getting embedded into smartphones, number of sensors increasing and making their presence felt on personal devices (apart from the phone the fitness band, shoes, clothing, personal accessories like rings and more to come) and surroundings – doors, restaurant tables, chairs, look around and you will find some more which are not top of the mind like air-conditioners.
Personal Digital Assistants are no longer quaint devices (remember Casio and HP ?), they are AI powered voice interactive devices and now taking the shape of Personal Robots. Notwithstanding they ordering the entire store for you based on your wishes or sending the data to the provider’s cloud, the good part is their use in healthcare to provide critical care to infants and the infirm. The combination of sensors, big data, and Artificial Intelligence is the next big wave that will bring new opportunities and threats.
From banned and restricted deployment on commercial scale, the drone has bounced back as a personal companion satiating narcissist behaviors with selfies to guarding cattle and services in open air restaurants. Use cases for enterprises are still sketchy with experiments to explore how they can be integrated into the mainstream. Can they evolve into transformer (like in the movies by the same name) like capabilities to improve upon industrial robots or replace policemen in sensitive areas for surveillance or defense ?
That 3D printing is changing manufacturing would be presumptuous at this time; the promise to change is definitely on the horizon. It is freeing up manufacturing capacity from small batches of spares or customized merchandise thus allowing for improved utilization of capacity. Automobile companies are already beginning to bring this technology to the workshop, the healthcare industry is experimenting aggressively with various appendages and parts with higher precision thus bringing better outcomes to patients.
To round it off, finally with or without physical data centers – owned or outsourced, every enterprise will require massive amounts of storage and compute power to leverage all the sensors, social media, and transactional data. Big data is getting bigger and so is the ability to process it with innovations in analytics, and this requires significantly higher scale in comparison to what enterprises have experienced; I believe that the Cloud will offer succor to the needy who recognize this and want to leverage this opportunity.
Visible or not, hardware will drive opportunity that will be leveraged using software to disrupt the conventional ! Be prepared.