dancingmango

A couple of weeks ago the share price of BP plummeted because the CEO “did a Ratner” and criticised the company. Essentially he was criticising his company for being inefficient. “There is massive duplication and lack of clarity of who does what”. Yet is this so uncommon? Spend some time in most FTSE 100 company and I’m sure you’ll soon discover duplication, inefficiency and waste. It seems to be the consequence of scale; a growing company gets organised around business units and these inevitably become inwardly focussed and support a silo mentality. These silos soon cease to have a single minded focus upon the stakeholder that matters most, the customer, and instead focus upon the good of themselves.

For example, the organisation may have a number of different products. These are organised into product lines with each product having its own targets. The product lines then start competing against each other; it is not in the product managers interest to consider anything outside increasing the profitability of her own product line. So if this means cannibalising the market share from other product lines so be it. Her bonus depends upon the success of her products.

Undoubtedly she needs IT support. Here comes more inefficiency. Whilst a similar technology may be used by another part of the business, it does not entirely meet her requirements. So a new product is built. Throw in outsourcing and inefficiencies are abound. It is not in the interests of the vendor to strive for simplicity. (Read PG’s excellent analysis of the problem with outsourcing IT).

Then you’ve got “channel” The Web Team, the Mobile Services team, Telephony, Retail Stores… Again, each has their own P&L and targets, each competing against each other. The talk may be of a seamless cross channel experience, but when the staff in the Stores are remunerated based upon sales they make, what is the incentive to direct the customer to the website to complete the transaction? Better loose the sale than do that.

Once a product has been sold it requires support - another bunch of stakeholders with their own (muffled) agenda. Customer acquisition is more costly than customer retention, yet the focus is usually upon the former, regardless of how wasteful this may be.

And what of the “Gold” team, looking after our “best” (read most profitable) customers. Another bunch of stakeholders with their own priorities, requirements and bottom line. All different parts of the organisation competing against each other. It’s not a team effort with a common goal (maximising customer and shareholder value), it’s a battle lining business unit against business unit with a common enemy of IT.

Is there an answer to organisational inefficiencies? There’s a solution to everything if you’ve got enough time and money. But for a start I’d love to know of a company that has scaled and has maintained a true focus upon the customer. That doesn’t internally compete for their customers share of wallet. That is transparent and shares knowledge effectively, where duplication is unknown. That uses IT strategically to support the business meet its common goals. An organisation that remunerates according to total value earned regardless of where it was fulfilled. An organisation that, regardless of the fluff in the annual report really does deliver value for the shareholder and customer, and waste is the common enemy.

We like to classify things, put them in homes. Information Architects design controlled vocabularies and taxonomies; ultimately labelling where things should go. Things may live in more than one place; we may use a faceted classification, but essentially that is a roadmap to the same unique, indivisible place. On the web this typically means an unintelligible URL. And that is just not nice. So you want a Robbie Williams CD (not that I’m sure why you’d want such a thing) - your journey may take you down any route:

Adult contemporary > Male Vocalists
Popular artists > Q-T
Pop > Dance Pop
British acts > Male Vocalists
Award winners > Brits > 2005

Whatever the route, chances are they’ll take you to the same page; “robbiewilliams.htm” with a unique URL (more likely than not it will be a dogs dinner of characters and symbols thrown up by the content management system).

The drawback of each journey terminating at the same place is it lacks context. For example, a music store might have a campaign around specific artists. They may choose a different flavour to the branding in the campaign, a different look and feel. The “Brits” pages are different to the “Dance pop” pages. But as soon as the user is directed to a specific record they will served up the standard artist page. Any context of the journey in a breadcrumb will be lost (or in Amazon repeated to show where the product “lives” according to the different classification hierarchies).

Yet what if the product’s classification was truly faceted was not indivisible but lived wherever it was sought? Should the URL of “Robbie Williams” not be how the user has found it, the URL becoming the breadcrumb?

store.com/popular artists/Q-T/robbie.htm
store.com/britishacts/solo/male/robbie.htm
store.com/awardwinners/brits/robbie.htm
Store.com/search/robbie.htm
store.com/tags/robbie/robbie.htm

The page may be (almost) the same, served up (mashed /meshed up) with the context in which it was sought. Related links would be specific to the URL rather than generic (other Brits awards winner in the Brits context, other male vocalists in that context). Yes, there maybe multiple versions of the same page on the site, but from a findability perspective this is little different to a conventional faceted classification system.

OK, this is all well and good, but doesn’t it hinder search engine optimisation? Well no, Google handles duplicate content quite nicely thank you very much. So bring on the tidy URLs and content living nowhere and everywhere.

Should “the business” care about IT? Should an investment bank trader know anything about XML, or a marketer know anything about SQL? Probably not. Even less so should they be talking to their IT colleagues of their requirements in these terms. The business should speak to IT in a language of value driven requirements rather than implementation detail. What is the outcome you need or want, not how you think IT should deliver or implement it.

Yet in many organisations (especially where IT has historically had a track record of failure), the business has taken a greater interest in IT delivery. They start talking the language of the techie. When this starts to happen business operations no longer see the clarity of their business. They see systems. In an investment bank setting: the trade is booked in Zeus, settlements are handled by Minotaur, payments by Socrates. Corporate actions are handled in Hades. Depending upon the geographic region, client management might be handled by Tomsys, Dicksys or Harrysys. You ask a business person what do they do and they talk in terms of systems. Getting down to the underlying requirements of what they actually want to do is hard. Innovation and creative thinking are hard because they always return to what the limitations of the current systems are. They focus upon the requirement for a Reconciliation System rather than asking why there needs to be any reconciliation in the first place.

So here’s a suggestion. Act dumb. Forget everything you know about the way you do things and go back to first principles. How would things be if we were starting from scratch? How would you describe your business intent (not the what you do now, rather what outcomes you really want to achieve) in simple terms to a complete novice. I doubt the word “system” would come into the description.

Tortoise Subversion is a simple and elegant tool for version controlling files. It is generally used on software development projects; it would be interesting to know how widespread it’s use is outside IT. For example, marketeers are enthusiastic PowerPoint users. When collaborating on documents they will generally share them via email, changing the file name with each revision, (e.g. salesdeck-0.1.ppt salesdeck-0.2.ppt until it is finished with salesdeck-1.0.ppt. But inevitably a 1.1 or 2.0 will rear it’s ugly head before it goes out).

Some organisations use rather heavyweight intranets / document management systems such as Sharepoint; could this be over-engineering when a lightweight tool such as Subversion could do the job almost just as well. This thought was recently confirmed when we were demonstrating how we would be sharing files using Subversion to our stakeholders. I demonstrated creating and checking in a document, and then showed someone else working on it, all from the familiar starting point of Windows Explorer. One of the guys from the business who’d never seen this before was incredulous. “And we’ve just spent $$$$$ on installing SharePoint. Why did no-one suggest this?!” Good question. As was “oh, by the way, Tortoise Subversion is free”, but it didn’t seem appropriate to say that at the time!

So, “Although there’s some dispute as to the average life span of a CIO, it’s generally held to be in the neighborhood of 21 to 24 months. [pdf]”.  Think about that tenure.  That’s just enough time for the new CIO to get through the first 100 days of viewing the landscape, seeing the mistakes of his predesessor, deciding on a new direction, getting a new bunch of vendors / integration partners in and seeing a major project be delivered.

Delivered?  Well probably not delivered to the full satisfaction of all stakeholders, but it is a “delivery” all the same.  And it’ll be recorded as a success on his resume.

Onwards and upwards the CIO goes (to repeat his experience at a slightly larger and more prestigious firm).  He’d been there almost two years - good time to leave actually.  Just before it starts to become clear that the project has not really delivered the benefits the business was expecting and actually there are a whole bunch of issues outstanding. That stuff is left for the next CIO to embark on his 100 days of viewing the landscape, seeing the mistakes of his predecessor, deciding on a new direction, getting a new bunch of vendors / integration partners in…

My Great grandfather worked in a bank. He probably witnessed the introduction of the adding machine. Even then his work life would have revolved around the quill and ink; double entry book keeping, maintaining the accounts in journals and ledgers. In those days they were real journals and ledgers. And in balancing the books he would be reconciling data from one paper record to another.

Almost 100 years later and I recently found myself working for a bank… And I’m talking to people whose work lives, like my Great Grandfather’s, revolve around journals and ledgers. Only now their adding machines and the books have been replaced by systems.

Yet 100 years later their jobs remain similar to my Great Grandfathers. They are still reconciling data from one paper record to another. But it is no longer the journals themselves they are reconciling; now they are reconciling printouts of excel spreadsheets.

If IT was supposed to automate banking processes, take away “human error” and do away with reconciliation differences, IT professionals have failed to deliver on the promise. Indeed they’ve made things worse. The books may balance in one system, but add a few more systems, across the globe then things go a bit 1910. Manual reconciliation is still someone’s day job. It’s a sad fact that banking hasn’t really moved on in all that time.

ThoughtWorker’s blogs are aggregated on Thoughtblogs. At a high level, they can be divided into two categories:

1. The written word, sometimes with photos and illustrations included
2. The (techie) written word, with a few intelligible sentences followed by blocks and blocks of code.

I enjoy the former, but I’ll confess the latter is usually gibberish to me. So what joy it is to read a blog that describes code, that is eminently understandable. Behaviour Driven Design that Dan talks about not only makes sense, it is also understandable to someone like me who is not a code polyglot. My last blog was critical about the Business finding themselves talking the same language as IT… how refreshing it is to see code talking the language of the Business.

Should “the business” care about IT? Should an investment bank trader know anything about XML, or a marketeer know anything about SQL? Probably not. Even less so should they be talking to their IT colleagues of their requirements in these terms. The business should speak to IT in a language of value driven requirements rather than implementation detail. Yet in many organisations (where IT has historically had a track record of failure), the business has taken a greater interest in IT delivery. They start talking the language of the techie. When this starts to happen business operations no longer see the clarity of their business. They see systems. In an investment bank setting: the trade is booked in Zeus. Settlements are handled by Minotaur, payments by Socrates. Corporate actions are handled in Hades. Depending upon the geographic region, client management might be handled by Tomsys, Dicksys or Harrysys. You ask a business person what do they do and they talk in terms of systems. Getting down to the underlying requirements of what they actually want to do is hard. Innovation and creative thinking are hard because we always return to what the limitations of the current systems are. Why there is a requirement for a Reconciliation System rather than asking why there needs to be any reconciliation in the first place.

So here’s a suggestion. Act dumb. Forget everything you know about the way you do things and go back to first principles. How would things be if we were starting from scratch. How would you describe your business intent (not the what you do now, rather what would you do) if you had to explain it to a novice who was starting a competitive business to put your business out of business. I doubt the word system would come into the description.

The humble potato is not worth a lot. The farm gate price for a 150g spud is negligible. How do you add value? How do you turn a worthless Maris Piper into a valuable commodity?

Potato crisps (chips) are a great example of a low value product being turned into high value one.

But that’s the easy part. The real value add is further transforming the product without fundamentally changing it. Innovation through packaging and marketing, making a basic product appear more desirable. Appealing to higher sensations beyond just satisfaction; differentiating the same basic product into an up-scaled, up-market luxury item. The same item that customers will happily pay more for.

The retail price for a 50g bag of Walkers Salt and Vinegar crisps at my local One Stop is 35p. The price of the Sensations bag is 47p. (For reference the retail price of a 50g potato - is 5p). Now I’m no crisp expert, but I’d guess that the incremental cost for adding a couple of new ingredients to the flavour is marginal. There’s some sunk cost in product development- creating the new flavours and developing the new brand, but this is little effort compared to the benefits that will be accrued.

But that is not the end of the story. Focussing upon the experience of the Sensations product, Walkers see an opportunity to change the packaging - to increase the bag size. Now their basic Sensations product is a whopping 150g bag that retails at £1.35.

Sometimes it is easy to focus upon just delivering the basic package, to just satisfy the customer. Is there anything you can do on your project to transform delivering the hygiene of customer satisfaction, to selling a compelling value-added experience?

This is a good way to assess where you are going in life.  It’s not so much what you’ve done, it’s more about what you’ve achieved.  Great, so you’ve written a marketing plan, you are an expert in Java, .net and Ruby on Rails.  But what have you actually achieved?  What did that marketing plan result in delivering?  Who did you delight with the applications you built in Java, .net or Ruby on Rails?  What value have you personally contributed to the world?  What would your epitaph be?