Silicon Valley Innovation Institute in Palo Alto

The SVII gets together every month. This month there was a panel discussion on broadband. It was interesting to see the direction broadband was taking  but even more interesting to see and hear how people were reacting to the idea of unlimited bandwidth.

But first some numbers from the panelists:

• 4G will deliver better than wired broadband speeds eventually but the infrastructure isn’t there
• 120 million people in the US have access to 4G
• There are 4 billion cell phones world wide and 1.5 billion personal computers in the world today
• It is estimated that there will be 20 billion mobile devices by 2015
• It took 125 years to get to 1 billion land-line phone users, 20 years to get to 1 billion cell phone users and took only 3 more years to get to 2 billion cell phone users

Two main themes emerged from this panel. Firstly the effect that unlimited broadband would have on our society and second the different perspective of digital-natives from digital-migrants (to be explained shortly).

One speaker, Ray Abrishami from the WiMax Forum, was convinced that always-on, unlimited broadband was a bad idea. He suggested that language would suffer (lol), social interaction would cease, culture would collapse and economies would fail as increasing numbers of the population saw their device as their companion and they eschewed human contact. This nightmare scenario was increasingly likely, he said, as we lose the ability to manufacture wealth from goods and services and try, instead, to create wealth from ephemera such as games and social media which have no intrinsic value.

Not surprisingly, from a tech crowd like this, he was pretty much alone in his opinion. Indeed one person in the audience pointed out that they would use all the bandwidth they could get their hands on for streaming HD movies and music. Another person commented that without online gaming, online gambling and online porn we would not have made the investment in the infrastructure we have today and we would not all be benefiting from the huge amount of bandwidth we already have.

The economist and digital historian on the panel, Professor Alexander J. Field from Santa Clara University, took a more sanguine approach. He pointed out that it is our children who were born into the digital world, the digital-natives, who are adapting the technology to address world issues that had been previously intractable. While the evidence is clear that we are much less productive when we allow interrupts from email, chat, texts and even phone calls while we are working, the digital-natives take it all in their stride and are still productive. This is because they are harnessing the technology and exploiting it making them more productive than someone who is more reticent in its use. Indeed his main point was that technology brings productivity booms though there is often a lag between the inventing and the exploiting.

And for those of us who are digital-migrants, those of us who have learned to let go of analog technologies (vinyl records, wired-phones and over-the-air broadcasts), we are benefiting from the from the digital-natives embrace of all things new and shiny. If not in the productivity and wealth they are creating but also in what they are teaching us to do with technology. It is not uncommon for our children to give us “hand-me-ups” of their old (12 to 18 months) phones, PC’s and MP3 players as they move to the next cool gadget.

There is no doubt that with always-on, unlimited bandwidth the digital-natives will make full use of the capacity and will do extraordinary things with it. They will shape the future. We should encourage them to do so and accept their leadership. In our society, the Empowering Change we must facilitate is one where success is rewarded, failure is stigma-free and new is embraced.

How would you solve this problem?

The point here is that there is an awful lot of preparation, planning, research and design that goes into solving any business problem. Time that has to be spent but not time involved in building the solution.

Time-to-market is the strongest driver in business today. Many of my clients are the largest banks and insurance companies in the world. When a competitor comes out with a new product or service many of my clients have days at best, and weeks at worst, to come up with a competitive response fully supported with a technological solution.

The problem with traditional IT projects is that they require a minimum of set up time before anything gets done. And there is a lot of post-development activity too. All of this fixed overhead delays getting the solution into the hands of the business. I call this minimum overhead a business’s I2Q. Let’s look at this picture.

Everything we have done over the past 3 decades has been about reducing the time from the Idea (“I1″) to the Implementation (“I2″). If we think about some of the things we’ve done they include:

• Off-shoring – 5 developers in India for the price of one at home giving 5-times the productivity … or so the theory goes
• Packages – every possible piece of functionality you could possibly ever want – just turn off the parts you don’t use … a task that is nearly as long and expensive as writing from scratch
• CASE (Computer Aided Software Engineering) tools – paint your application and let the “smarts” write the code … great for simple order entry systems but anything more is just as complicated to write as cutting custom code and you have to learn a new language and environment and the final implementation is not very efficient
• SOA (Service Oriented Architectures) – write the basic building blocks of code that represent the business functionality and allow them to be combined and re-combined over time as the business problem changes … except that the reuse promise is not being delivered and these services often end up being one-use custom code

So what is your I2Q? How can you calculate it? There is a formula:

• Q = 100 / (1 + It + Iw)

Where:

• Q is the quotient
• It is the AVERAGE implementation time a project takes – what is the goal time length of ICT projects
• Iw is the AVERAGE waiting time before a project can be started – you can calculate this by taking the length of the backlog in years and divide by 2.

So a company with an average project time of 6 months and an average project waiting time of 18 months would have:

• Q = 100 / (1 + .5 + 1.5) = 100 / 3 = 33.3%

And a company with an average project time of 4 weeks and an average wait time of 4 weeks would have:

• Q = 100 / (1 + .08 + .08) = 100 / 1.16 = 86%

So the drive towards 100% is the goal. What can we do to get there?

5 Strategies for improving your I2Q?

Clearly we can either shorten the project time-frames and/or the time projects languish in the queue. But how can we do this without adding significantly to the cost structure?

1. Make projects smaller – smaller projects are less complex, require little or no setup time, can be tracked more accurately, add less retraining overhead and can get solutions in the hands of the business quicker
2. Let Pareto rule: 80% of what you need in 20% of the time – focus on the main theme of the requirement, do not worry about corner cases, use this as an opportunity to eliminate exception processes, put the effort into the most likely path through the process
3. Develop solutions with co-located teams – communication from desk-to-desk not email, chat and conference calls: close proximity accelerates projects – empower the team to solve the problem the way they see fit – just hold their feet to the fire on delivering
4. Empower business to develop their own solutions – train the business to use modern technologies for rapid application development that require no programming like the new category of BPM (Business Process Management) tools that are as easy to use as MS Excel and MS Visio
5. Don’t use technology when process, organizational or cultural solutions might solve the problem just as well – software is not always the answer

And which solution solved the problem with the slow lifts? The last team to present had the cheapest, quickest to implement and most foolproof solution. They put mirrors on the lift doors. When you’re looking at yourself time passes quickly. Sometimes technology is not the answer.

The Empowering Change that comes from thinking about the overheads in delivering software is that we learn to treat ourselves as we treat the business: as a place where we can eliminate waste from our processes.

The start of a lifetime business partnership or just a one deal?

When customers come to visit us I am always interested to know why they choose our venue over theirs. Usually they just want to get out of the office and today is Friday after all. Today’s visitors were here for an altogether different reason. They wanted to see how “real” we were.

You can tell a lot by being in someone’s office. You see how busy they are, how they interact with team members, bosses, employees. You get an impression of how they organize themselves and what their organizational status is relative to others. And we learn all of this, as Malcolm Gladwell pointed out, in a the “Blink” of an eye.

During our 3 hour meeting a very interesting topic came up. We were discussing our corporate philosophy of “never let a customer fail”, which was handed down to us from a former CEO Michael Capellas, and we were describing how we view our customers as business partners. As an organization we strive to develop an intimate relationship with our customers and learn, in detail, about their business operations so we can better support them with our products and services over a long period of time. We do this because customers are hard to get and easy to lose; but most of all because, in our business model, 80% of the revenue we get comes in the years after the initial sale.

Our visitors thanked us for trying to be better business partners but asked us not to try too hard!

Their practice, they told us, is to engage with vendors in short 1, 2 or 3 years bursts. They do this because their own corporate strategy changes dramatically and regularly and any period of time over a couple of years is utterly unpredictable. Any products and services they may be using today may no longer be relevant 1, 2 or 3 years down the line.

They also know that their suppliers’ strategies will evolve over time and may not necessarily meet their needs in the future. Competing solutions will come along that will streamline how they do business and they want to be agile enough to be able to abandon one set of technologies in favor of another. And they want to be able to do this without feeling tied to a vendor out of some misplaced sense of loyalty.

“It is”, as they put it “just business”.

Now this is a remarkable corporate philosophy. Normally we try to control our suppliers and force them to meet our prices and specifications and time-frames in exchange for long term contracts and guaranteed annual revenues. But here this client is saying, we will pay whatever you ask that is reasonable, we will exploit your technology as long as we think it suits our purpose and when it doesn’t we will pick something else.

What is in it for the client? Well it means that know something better is going to come along eventually and they run their business on the basis that when it does they will not hesitate to embrace it. They are immune to ROI (Return On Investment) calculations that extend out to 10 years because they can barely see beyond 10 months. If you want to sell something to them you better have a pretty great case for delivering value fast: out-of-the-box in fact! And they know their business competitors are likely to stick with older technologies because it is very hard to sell replacing something your implemented less than 24-months earlier. This gives them a very significant competitive advantage.

To have all of this ingrained into the corporate culture is nothing short of remarkable.

And what about the vendors? We all need to understand that if we get kicked out and replaced by the latest technology or product or service, it wasn’t anything personal. When we’re negotiating we can ask for reasonable prices for our stuff and we do not have to discount in the hope of getting the revenue back in the long term: because there will likely not be a long term. We also know that if we are the incumbent supplier for more than a couple of years our competitors are still behind us technologically: and we also know if we get replaced we need to bring our stuff up to date fast as the competitors passed us!

How would you deal with this kind of customer? Would you have the confidence to say “if I lose this customer it is because the market changed and I didn’t – and I better do something about that quick”? How many of these kinds of customers do you have today and you don’t know it?

Could you be this kind of customer? Are you able to have an emotionless relationship with the people who provide you with goods and services so that you can say to them “what you provide is what I need today and when I find something better I will move to it”? How many of your suppliers do you keep because they are personal friends, how many suppliers do you ignore because they simply compete with your friends?

If you are in business to make a living you have to choose what is right for the business, not what is right for your friends and family. Next time you choose a business partner, a customer or a supplier ask yourself “am I attached to the value they bring or the am I attached to them?”

After my visitors left today I was ready to Empower Change in my organization and liberate our own thinking about what it is to be a customer and what it is to be a supplier. I am revisiting all of the partners I work with and asking “are you doing the best for my business?” It is going to be very interesting.

The not so hidden cost of doing business in Europe

The European Union of 27 member states, home to the Euro, soon to be the world’s most important currency, with free trade enshrined in its constitution has one serious handicap to pan-European business: roaming charges!

How is it that as I travel across the United States I do not pay roaming charges from “sea to shining sea”, nor in any of the US territories from the Virgin Islands in the Atlantic to the Marianas in the Pacific. But if I live in Dundalk and go to the Sainsbury’s in Newry and my kids phone me to remind me to get Wine Gums those Wine Gums end up costing me 4 times as much due to roaming charges.

When I travel in mainland Europe for one week my monthly cell phone bill increases 500%. Recently one hour long conference call, to an 0800 number no less, cost me over £50.

The European Telecoms Commission have made a great start with the capping of roaming and data charges as of the 1st of July. But it is not enough. I hear pleas from business people all the time that is is becoming a significant source of cost – unless you are O2, T-Mobile, BT and the like in which case it is a significant source of revenue – and is exactly the kind of thing that the European Union was meant to stamp out to ensure free trade amongst the member states.

According to the EU, “In economic terms, the telecoms sector is one of Europe’s most important, with annual turnover of around €290 billion, and around 4% of the jobs in the Union.” They claim that “The price of telecoms services have fallen, on average, by around 30% in the past decade” but that has not been my experience.

For all of us I know we’d just like to eliminate roaming across the island of Ireland but I want you think bigger. This is a pan-European problem. I was reading Seth Godin’s blog today and he said a simple thing: “When using an axe to split logs, it’s awfully tempting to aim at the top of the log … the best approach is to focus on splitting the bottom of the log. Split the bottom and the top takes care of itself.” Maybe roaming should be eliminated globally.

We own the airwaves: why do we  continue to pay more to use them when we are not at home? We need to Empower Change in the European Union and eliminate this cost of doing business.

Incoming! Requirements from everywhere, every day.

Yesterday I was interviewed by the trade press about Requirements Management. Of all the areas in IT today this is the one that is in most serious need of attention. For decades we have failed so enormously in this area and tried to fix the problem downstream instead of focusing on getting requirements right. I think we need a radical rethink of how requirements are gathered, recorded, managed and used.

Here are five ideas on how we can revamp how we do requirements that won’t cost much to implement and which will deliver giant benefits to the organization:

1. Pictures not words
2. Prioritized lists
3. Public lists
4. Pick the waterline
5. Practice agile requirements

1: A picture paints a thousand words
The English language is so inadequate in explaining what we want. We can take thousands of words to explain in precision what we mean, look at any piece of legislation, yet Bread had it nailed in 1971 with their song “If [a picture paints a thousand words]“. So why don’t we follow their lead and move to requirements in pictures. After all what we are going to deliver is, for the most part, a visual experience.

So I welcome the arrival of prototyping and simulation technologies that enable business analysts and even users to draw facsimile applications and experiment with them. However there is much more to the application than the user experience.

What about the business rules, the flow of work through, the data model? All of these carry valuable information about the solution that needs to be created. We need to move to a new standard for documenting business systems, a standard that incorporates all the function and non-functional requirement and that is entirely, or as much as is possible, pictorial. And I’d like to see it start with a baseline of our current systems.

In fact as we have seen the massive growth in workflow tools being introduced into businesses we are steadily developing the most comprehensive documentation of business in history. While we see this as an essential part of managing the business we should be looking to take this as the de facto ”truth” about how the business works. And if it is not the truth we must work to ensure that it rapidly becomes so.

Using our BPM tool to document the business is a delightful unexpected consequence and for any business teetering on the the decision this is the one benefit that will repay itself over and over again over time.

From the baseline that is our current BPM model we can now engage in a conversation with the business about where they want to evolve their business and we can do it in a pictorial language that is concise and precise.

2: Sink or swim by prioritization
We gather hundreds or requirements every day from the users. We document them and we categorize them and we validate them. But the most important thing we can do is prioritize them.

My first boss once said to me “There can only be one priority one” which was profound and obvious at the same time. Unfortunately he was prone to follow this with “and here they are!”

Prioritization can be can be controversial. Once we have an ordinal list someone’s requirement is going to be above someone else’s and below another’s. However, instead of IT being the villain and deciding which requirements get done, the business users can now engage in a conversation about relative value of the requirements and negotiate amongst themselves on the order. This leaves IT to act as adviser and technical guide organizing and optimizing the list for development efficiency (but not at the expense of business need).

A more engaged business, a more informed business user means better quality of debate and better outcome for the system and the organization in the end.

3: Publish and empower
So now we have a prioritized list but where is it? It should be in the hands of the users. In fact every requirement must have a business sponsor who is notified every time that requirement is changed, updated in any way.

And these requirements need to be out in the public (at least internal public if you get my drift) domain. If everyone in the organization can see how the requirements are prioritized they can contribute to the debate.

It is important for users to mention when the requirement is wrong but if they can’t see them how can they do that? It is critical that they mention things like “this is a legislative change” or “marketing are starting the TV campaign in September” that affect the prioritization. Remember IT tends to work the list in priority order so it is critical to empower all the stakeholders to tell everything they know about the requirement especially information that affects its priority.

And when those users edit the requirements the stakeholders need to know. The owner of the requirement needs to approve the change, the architect, designer, developer and tester working from those requirements need to know too.

There is no reason why requirement can’t change while there are in motion, being developed, but equally there is no reason why the change necessarily makes it into the code. Each situation needs to be taken on its merits. The essential point here is the requirements tie stakeholders, business and IT, together with anyone and everyone involved in the requirements, users, customers, suppliers, etc. Keeping this information siloed only makes the problems worse.

Just a word about crowd sourcing. This is a technique for gaining a collective opinion on which are the highest priority requirements. The process is simple – let the people vote. Adding voting capability to a requirements management system makes it possible for interesting consensuses to emerge that might not occur if a lone manager makes the prioritization decisions.

4: Sink or swim by the waterline
When have our prioritized list, and it is in a place where all stakeholders can access it we, as IT, need to add a waterline. A line which says, above this line are the requirements we have the resources to do, below this line are the requirements that will have to wait.

The waterline is added by taking the initial estimates in the requirements and comparing them to the IT resources assigned for this project.

Now we can see why prioritization is essential. Math will take you below or above the waterline. Not some capricious or suspicious invisible process. When the waterline appears everyone below the surface starts to improve the quality of argument about the requirements and suddenly they get much better.

Once again it is the business that is determining the priorities and therefore which requirements don’t make the cut. Of course, from time to time, the “must haves” are going to go below the surface. What happens now is that it suddenly becomes obvious that we are either over-thinking this project, or overloading it or, perhaps, IT needs more resources. How much more compelling is it for the business units to agitate on behalf of IT for more project funding?

The waterline is a wonderful discipline that is easy to implement, that everyone understands and that takes IT out of the decisions and once again places us in adviser position.

5: Can we do requirements in an agile manner?
We certainly can. As the foregoing (or is that four-going?) ideas show we can turn to automation to  improve how we manage requirements and move the ownership and decision making process to the business.

Given that the business is as eager to see requirements definition improve as much as IT is: it is equally true that the business does not like the months of interviewing just as IT hates it too. So can we apply the disciplines we are evolving in agile software development to requirements gathering?

When we have an informed user community we can start to ask them to give us their needs in priority order. We can then start to work on those priorities much earlier in the lifecycle.

Then we can go and get the next set of priorities and work on those.

Of course requirements change, as we’ve said, and when they do it is a lot better to be able to insert updated ones into the next wave of priorities and wait a few weeks for the update to appear as opposed to a few months (or years!).

So agile requirements go hand-in-hand with agile development and agile testing.

Summary
If there is one theme here it is that empowerment of stakeholders involved in requirements. Empowered users make better decisions as long as they realize that with that empowerment comes accountability. So when you decide to Empower Change in your organization’s requirements management processes remember that when it comes to requirements: change is not as expensive as ignorance.

Empower business units to innovate by giving them the means to control and access their data

Disruptive innovation sounds like a contradiction. It is a way of thinking that changes how we see technology. It makes us rethink how we apply tried and trusted practices and it usually shatters our assumptions, lowers costs and increases revenue … oh yes, and terrifies competitors.

This week I want to talk about data. To misquote Samuel Taylor Coleridge: “data, data everywhere and no one stops to think”. The Ancient Mariner was surrounded by water he could not drink: we are surrounded by data we do not exploit to the fullest. There are three opportunities with data and each, in its own way, is highly disruptive:

Whose data is it? This is not so much a question about where the data came from (though that in itself is a worthy subject for a blog post) but who owns the data? We have developed a very secretive mentality about data, and for good reason. Much of the information stored on servers today is confidential, often subject to regulatory restrictions and sometimes personal in nature. But what about the business data?

Let’s think about an example: imagine that your computer systems maintained your inventory levels for the raw materials of your business. You would use this information to plan when to order more supplies. It would trigger your negotiation process with your various suppliers and you’d place an order with the one offering the best price/service/quality/delivery characteristics. Then a month or so later you’d do it all again.

Disruptive innovation: what would happen if you let your suppliers have access to your inventory of raw materials? They would now be able to predict when you were about to reorder and, instead could come to you with their price before you ask for it. In fact they could manage their inventory based on the rate of consumption of your inventory. This means they could get better prices from their suppliers and pass this along to you. They could also use the data offer to top up your inventory with lower volume but at high volume discounts when they were cash strapped and did not want to wait until the end of the quarter for your order. Everyone wins. Why is our inventory level a secret from our suppliers?

Who controls the access to the data? Usually ICT does: but why? Surely the data belongs to the business and ICT are the custodians and control access on behalf of the business. The business should determine who has access and the business should specify what access they want. ICT should provide that in a form that can be easily consumed by business users.

Let’s think about an example: Why don’t we let marketing do programming? Well this is a silly question really. Of course marketing can’t do programming! ICT does programming and marketing does … well no one is really sure what marketing does; we just know they run the website. But the website is made by programming HTML (etc). So why can’t marketing have access to all the business systems for incorporating directly into the website? If you, or someone in your marketing organization, wants to let people order your products and services from the web why not let them?

Disruptive innovation: It is their data, their systems and their business. ICT has to get out of the mindset that says they own all software development. Patently that is not true. Have you seen the kind of spreadsheets the business is using today? A disruptive innovation is one that empowers the business to exploit technology without asking for permission, what Alan Davidson of Google called “innovation without permission”. This empowerment means that the business can solve some of their business issues through empowering technology provided by ICT without getting an ICT project spun up.

What is the next killer app? Most business users are very familiar with using Microsoft Excel. In fact they excel at it (sorry – just too easy). The problem with almost every spreadsheet is that the data it contains is static, it is a snapshot in time of the data as was. Invariably some person dedicates their life to keeping the data up to date by copying it from some existing business system. The next killer-app is one that allows MS Excel to feed off live business data. So as you look at the spreadsheet the numbers are moving in real time! So where is this app?

Let’s think about an example: Next time you present your figures to the bank manager, or the board, or your shareholders ask yourself this, “Are data that are a month old good enough for this audience?” If the answer is “no” think about how you could present live information, up to the second, to your audience. Think about all of those government studies that are decades old that we use to make investment and funding decisions upon. If only we see the current situation as it is happening. Paul Ottellini, CEO of Intel, said that the next thing to be obsolete will be “Ignorance”.

Disruptive innovation: demand that all data that is displayed in every situation represent the current situation. Prohibit users from copying data and showing a moment in time to make their decisions. get users used to the idea of numbers that move, trend up and down, have seasonal, even hourly variations. Unless you can feel the heart beating in your organization you will never know how it really works. Once you a plotting the patterns you can see how the changes you make, the decisions you make, affect your business. When the bank manager asks you what your income show him that it just grew by 2% as he was asking about it. Now that would impress the heck out of me.

Putting control of, access to and a way to consume data in the hands of business people is Empowering Change that lets them run their business. Our job in ICT is to make this possible and to do it in a way that is secure, scalable and compliant: but it is our job to make it happen.

Making a point to the graduating class

In high schools everywhere the graduating class elect a valedictorian to speak on the class’s behalf about their dreams and aspirations for their future. It is a great honor, it often changes the chosen speaker in quite profound ways, and often starts them on a journey of leadership. maybe you were your schools valedictorian? Whilst many of these speeches follow familiar themes, world peace, elimination of disease and hunger, the one thing they always come back to is living up to your potential. Though less well known in the UK, the Latin phrase Carpe Diem, “seize the day”, finds itself in almost all of these graduation speeches. Everyone expects it, some even count occurrences as a drinking game (!), but few hear it.

In the last few days, in one of those strange, serendipitous confluences of incidents that all line up to tell us something we needed to hear I have been reminded of what it means to be an entrepreneur. I’ve been rereading, actually listening to, Malcolm Gladwell’s Outliers book about what it takes to be a leader. At the same time as I have been traveling I have been keeping up with TED.org podcasts and a thought provoking one from Cameron Herold on teaching kids to be entrepreneurs was in my queue. My daughter is applying for a job and the interview has required her to prepare a 15 minute presentation on Picasso: when I saw her briefly at the weekend she was busy preparing. I met with two very successful entrepreneurs last week: one was setting up a service to train CEO’s to overturn thinking in their companies, the other debating if email is really the answer and wondering if there is a better email than email. And for myself I have been thinking about what is next in tech too in preparation for a talk I am giving tonight at the St. Louis Cardinals baseball game.

All of these threads have led me to the obvious conclusion that we have to have goals, ambitions, dreams but also to the not so obvious conclusion that those who achieve them, those who succeed are those that seize the day. It may be simplistic to say this, but if you want something badly enough you have to work to get it.

For those of you who are feeling daunted by the impossibility of getting your dream started I’d like to tell you the 10 most important things I have learned along the way.

1. Dream big: the thing about dreams that we achieve is that it makes us stop achieving. Let your reach exceed your grasp, always be striving for more
2. Choose: procrastination kills dreams. You have to make decisions in business so start making them now. The more you practice making decisions the easier it will become. Each time you are faced with a choice:  ask yourself “Which option brings me closer to my dream?”
3. Accept failures: you are going to make some bad choices, far fewer than the brilliant ones you make – you’ll have to trust me on this, but you are going to have failures. Learn from them, analyze them, dissect them. Being on a winning team is fun but you never learn anything. Losing from time to time gives you something to work on – so work on it.
4. Trust your gut: if your employee, your partner, your accountant says everything is “OK” but you don’t think it is – trust your gut. Get them to prove it to you. And if you’re still not convinced go with your gut. You are the boss – you get the right to make the decisions, even the wrong decisions.
5. Hire the right people: there is no more important skill than this. Get good people. Hire people who are smarter than you, who are different from you, who will challenge and question you. Hire people who do not need to me managed, who share your beliefs about customers, service, quality. First impressions matter – so trust your gut again.
6. Empower your people: your employees are the key to your success. You can’t do it all. Trust them, enable them to take more responsibility, to improve the business. Let them become entrepreneurs inside your business.
7. Reward your people: when they do good work, praise them. Reward them when times are good and they’ll stick with you, at reduced pay, when times are bad. Recognition costs nothing but changes how a person feels about themselves. In your newsletter single out the great job done by the kid in the warehouse – he’ll take it home and show his mum and his girlfriend – and he’ll come back next day and work even smarter.
8. Set clear expectations: don’t accept what you can’t accept. If you hate lateness – make it clear before day 1. If you hate untidiness – make it clear. Don’t think you can’t ask for the things you expect. But always remember you have to hold yourself to the same standards or higher.
9. Deal with it now: if it isn’t right deal with it now. If you have to terminate someone do it now. If you have to redo some work for a client – do it now. Make it clear to everyone that you have high standards and that if they are not met you deal with them there and then. No recriminations, no blame, just an opportunity to get it right and for everyone to learn.
10. Have fun: and never forget the reason you are doing this is – whatever that reason is. Come to work smiling and go home smiling.

And if you can do all of this, the remarkable change you will find in yourself, the Empowering Change you are creating for you, will bring you to a point, a few decades from now, when you’ll be able to say I achieved something, I seized the day and made a difference.

The next leaders of our world

When someone says “in the roaring 1920′s” we can immediately relate to the era of speakeasies, dancing the Charleston and silent movies. My question is though: what was the decade before that called? I ask because we will soon be at the end of the same decade in this century and it needs a label. Not just “roaring” moniker for the decade of 9/11, 7/7, Iraq, Afghanistan, Wall Street crash, Saville Report, Bhutto and the thousands of other events that have shaped this decade but what do we call the decade of 1901 to 1910 and 2001 to 2010? In the absence of anyone stepping up I’ve picked “naught-ies”. I tried the “oughts” and “zeroes” but they didn’t seem right to me.

And what has been happening quietly in the “naughties”? In September 2000 a generation of young people entered their secondary education: that same group graduated from university this spring. In 2003 MySpace entered their world, 2004 Facebook, 2005 Bebo, 2006 Twitter, iPhone 2007: this generation of young people, the “millennials”, have integrated into the fabric of their world a digital 7 by 24 experience that extends their presence across the globe and connects them to everything in real-time. For them this is not magic, not technology, not new, it is not even cool any more: it just is. It just is what it has always been for them.

These young entrepreneurs, scientists, engineers, farmers, doctors, artists, philosophers, teachers, athletes, politicians, designers, technologists, historians, geographers fundamentally see the world as an integrated whole free from borders and restrictions. They expect to be able to answer any question in seconds from the palm of their hands. They don’t need to know anything: they just need to Google. They expect things to work together, they expect technology to be free, they adopt technology easily, they are not loyal to any brand, they are socially responsible, they get the work/life balance and they play World of Warcraft every week with their friends.

And they are your new labour-force. They do not see you are their employer: they see you as their collaborator. They are working for you to find an outlet for their creativity, a place where they can problem solve, somewhere they can express themselves and be innovative. They do not accept anything as a fundamental rule, all rules are meant to be tested and then bent, twisted and even broken if it means doing something better. They fail frequently and they enjoy failing for the lessons it teaches. They learn fast and adopt the latest ideas and technologies even though they know they are not always ready and reliable. Speed is essential to them, documentation is not. Delivering something that works for most people quick is better than delivering a perfect solution months from now. They’d rather be late delivering something cool rather than something business-like and on time. They do not settle for good enough: they want to delight. They love change. They revel in challenges.

So how do you exploit them? You embrace them. You create a culture that allows people to do lots of “R” in search of the “D” in R&D. You encourage them to experiment and if they fail you congratulate them on eliminating one more bad idea and encourage them to learn from the experience and try again. You make it clear that it is OK to challenge long held beliefs and you make it clear that you reserve the right to make the final decisions. You learn to say “OK let’s try that” and never say “That won’t work because …”.

As we move into the next decade, which I’ve dubbed to the “teenies”, the millennial labour-force is ready to change everything in your business. Are you ready allow them to take you to the next level and start Empowering Change in them?

The Eurofighter, Typhoon, designed to meet the needs of all European air forces

Colonel John Boyd, USAF, left us with two interesting legacies. He was the most successful combat pilot in history and yet never shot anyone down. And he developed the OODA Loop theory for air-to-air combat which fundamentally describes how modern businesses must survive.

Known as “40 second Boyd” because he could shoot down any opponent in under 40 seconds when starting from a tactically disadvantaged position. He learned his skills by watching hundreds of hours of film from the gun-cameras mounted in Korean war era MiGs and F-86 Sabres. He created the OODA loop as a tactical approach to winning air battles based on the idea that the pilot that reacted fastest, indeed the pilot that continued to react the fastest, would always win.

The OODA loop, observe, orient, decide, and act, says that combat, and sport, and business requires that we are constantly trying to take advantage of the ever changing situation before the opponent does.

• Observe: use your senses and systems to collect data
• Orient: analyze the data and form an opinion
• Decide: what to do based on your opinion
• Act: and implement your plan

And then do it all again, and again. As you act you immediately change the situation so now you must observe, orient, decide and act on the new circumstances. What this means is that while your competitor is reacting to your changed tactics you are already planning and executing your next one, and the one after that. Maintaining this continual OODA cadence is very difficult but it is the key difference between companies that compete successfully and win markets and those that merely compete.

Following an OODA approach to competing demands that you have the senses and the systems to collect the data you need to make the right business decisions. You started your business because your gut told you that this would be a profitable, fun and worthwhile enterprise. Do not ignore your gut: it got you where you are and you need to keep checking in with it. However the speed of business demands that we have empirical data to support our instincts. Just as we know we are driving at 30 mph because our senses tell us we still check the speedometer when we see a police car to be sure. In the same way when we run our business we instinctively know what we need to do but when a competitive threat looms we need data to tell us what the effect the threat is having and what effect our response is making.

When we look at the computer systems we invest in for our business we, invariably, focus on systems to run the business. I want to encourage you to think about this: how many speeding tickets would you get if you didn’t have a speedometer and relied soley on your instinct for speed? Have you ever speeded up to 30 mph when you pass a police car? I didn’t think so.

A business priority must be to put in place mechanisms to report on Key Performance Indicators (KPI’s) that give you immediate feedback on how your business is faring. And we are not talking about feedback once a year from the auditor or once a month from the bookkeeper but feedback at least once a day that shows you exactly where you stand. For example you might have a DSO (Days Sales Outstanding – the average number of days before you are paid) of 30. If you could see that on a daily basis you could tell if it is drifting to 35, 45, 60 and do something about it rather than find yourself in a cash-flow crunch. And while you are stepping up your collection process, getting the money you need to advertise and invest, your competitors are still oblivious to the fact that their customers are becoming tardy payers.

So as you think about what you need for your business consider that real-time insight to how the business is performing may be just as important as a new fork-lift or a new lathe or new premises. And may be more so. Data is the essential ingredient to Empowering Change.

Turn technology into a competitive advantage

For more than six decades now we have been using technology, specifically computer-based technology, to drive costs out of the business. Quaint hardly describes those now sepia pictures of serried hoards of clerks, stamping, signing and sorting multi-part documents in vast open-plan offices. Typewriters on every desk but phones only on the manager’s. And over the last 60 years we have slowly replaced those jobs with technology solutions and those people have moved their skills into different fields. Maybe you are one of them.

Today there is not much automation that is left to be done. Indeed most people in the computer business spend their time trying to replace the systems they put in 10 or 20 years ago  and we are even replacing systems we put in only one or two years ago. And we are doing this now because we are desperately trying to drive cost out of IT.

With the way the economy has been for the past 10 years everyone is completely focused on cost containment.

But that is not the only way to keep increasing the margins in your business. Mr. Micawber once reflected; “Annual income £20, annual expenditure £19 19s 6d, result happiness. Annual income £20, annual expenditure £20 0s 6d, result misery.” Profit is the difference between income and expenditure. We have already driven out all the significant and unnecessary expenditure we can: the pips are squeaking, there is no more juice in the lemon!

Businesses that can turn technology to their commercial advantage will be the Glaxo’s, the BP’s, the British Airways, the Sainsbury’s of the future. It used to be, in 1935, that if you made it to the Fortune list of top companies you’d be on that list for 90 years. Today companies on the list last only 15 years there on average.

Look at FaceBook, Microsoft bought by a 1.5% stake for $250mn, or Amazon, worth over $50bn, these are companies that could not exist without technology to create markets,  create products and deliver revenues.

So what does this mean for your business? Look to turn technology into a way of creating new revenue.

Maybe you can deliver your product and services to your customers through technology that gets it there faster, cheaper, safer. Do kids want to go shopping in the High Street? No, they want to surf the web, from their iPhone and get a package on their doorstep the next day. And kids have a lot of money these days.

Can technology help you understand your customers better? Help you with detecting trends, buying behavior? Can technology help you discover why customers don’t buy from you? Or why they start to buy and then stop.

Is the customer experience with your company better because of technology or worse? What can you do to make your customers become your best sales team because your technology makes them love doing business with you? What can you do to make your competitors look un-cool, out of date, not in tune with the customer?

If you have an idea for changing your business model does your technology allow you make those changes? Or does it hold back and force you to do things the old way? Can you model what effect your ideas might have if you implement them? Or do you have jump and hope?

How do you know that you are being successful? Does your technology tell you, give you feedback on how you are running your business? Does your technology monitor your competitors?

There are as many ways of turning technology into a competitive advantage as there are business people with ideas.

In this series of postings I want to explore ideas on how we start to use technology to drive sales, how we enable business owners to run their businesses proactively and how we Empower Change that increases the margins in your business.

Tell me how you turn technology into a competitive advantage.