Category: management

  • Google and the workplace

    Google and the workplace

    Over the years Google has attracted attention for its employment practices, particularly for its quirky interview questions which challenged many a genius.

    It turns out those brainteasers have proved to be less than effective, as has the interminable interview process that saw job candidates endure dozens of meetings before being offered a role at the company.

    A recent New York Times interview with Laszlo Bock, senior vice president of people operations at Google, discusses some of the company’s employment experiences along with some of the ways the organisation manages staff.

    What’s notable is Bock’s findings on Google’s gruelling interview process with its brain teaser questions;

    We looked at tens of thousands of interviews, and everyone who had done the interviews and what they scored the candidate, and how that person ultimately performed in their job. We found zero relationship.

    The New York Times interview is particularly interesting as it reveals much of Google’s legendary employment criteria – particularly that of hiring only graduates with high university marks – turned out to be effectively useless.

    Most telling though is what Bock found about managers and leadership;

    We’ve actually made it harder to be a bad manager. If you go back to somebody and say, “Look, you’re an eighth-percentile people manager at Google. This is what people say.” They might say, “Well, you know, I’m actually better than that.” And then I’ll say, “That’s how you feel. But these are the facts that people are reporting about how they experience you.”

    You don’t actually have to do that much more. Because for most people, just knowing that information causes them to change their conduct.

    Who would have thought that accountability would make people behave better and more effectively?

    Despite Google’s learning on hiring and management, things still go wrong. Business Insider’s Nicholas Carson has a wonderful story on the difficulties at restaurant review site Zagats which was taken over by the search engine giant and absorbed into their maps and geolocation divison.

    The problems at Zagats though owe more to a cultural mismatch, as Carson writes;

    It’s about the collision between the wealthy dream world of the technology industry and the scratch-and-claw meager existence of freelance writers.

    One of the notable things about the current dot com boom is the contempt technologists and entrepreneurs have for content creators.
    In the Silicon Valley view of the world founders and coders deserve to be generously paid but artists, musicians and writers should be thankful for the exposure they get and the odd dime thrown their way.
    Google’s struggles with Zagats also exposes another problem with the tech industry’s hiring practices – that of ‘permatemps’ who never get on the payroll and have few benefits and no security. For years this was a problem at Microsoft and it remains a common practice today.
    The story of Google’s evolution in hiring practices and HR policies is something all managers should read as it describes the risks of relying on gut feelings and the importance of workplace accountability.

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  • The PC industry’s search for new directions

    The PC industry’s search for new directions

    All Things D reported over the weekend that Microsoft executives are fretting over a major restructure being planned by CEO Steve Ballmer. This is part of the fundamental changes challenging the entire PC industry.

    Ballmer is dealing with massive changes in Microsoft’s core business as PC sales decline with customers moving to smartphones, tablet computers and cloud computing so finding new markets is a priority for the company’s board and senior management.

    The same problems are facing all the major players in the PC industry and it’s the main reason why Dell is in the throes of a battle to take their business private, what’s fascinating is the different ways these companies are responding to these changes.

    In Dell’s case the company’s looking at becoming “an Enterprise Solutions and Services (ESS) focused business” – essentially copying what IBM did a decade ago in moving from hardware and focusing on consulting and services to large corporations.

    Microsoft on the other hand sees the future in devices and cloud computing with Ballmer telling shareholders last year that becoming a “devices and services company” is the future.

    It’s important to recognize a fundamental shift underway in our business and the areas of technology that we believe will drive the greatest opportunity in the future.

    In Ballmer’s view those opportunities lie in cloud computing services and devices like the Windows Surface tablet computer and the smartphones, products which Dell struggled with during the 2000s.

    These are two very different directions and it illustrates just how the major players in the PC industry are searching for new business models as the old one collapses.

    How many of them successfully make the transition will be for history to examine; it’s easy to see Microsoft surviving given its massive financial reserves and market power, although nothing can be taken for granted as we could have said the same about Kodak twenty years ago.

    Dell on the other hand is far weaker being smaller with a narrower product base and currently has the management distraction of competing buyout offers. Dell’s survival is far from certain.

    Others, like HP, seem to be slipping into obscurity as management flip-flops from one scheme to another. The takeover of EDS as part of HP’s move into enterprise consulting does not seem to have gone well and the company is wallowing.

    What we’re seeing is the rapid disruption of an industry that itself was the disruptor not so long ago. It reminds us that even the corporated giants of today are as vulnerable as the stagecoach companies of yesteryear in the face of rapid change.

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  • Michael Dell’s struggle to transform his business

    Michael Dell’s struggle to transform his business

    Michael Dell continues to press on with his buy out bid for the computer manufacturing giant he created with a presentation to shareholders stating his case why Dell Computers would have a better future as a private company.

    Dell’s assertion is the company has to move from being a PC manufacturer to a Enterprise Solutions and Services business (ESS) as computer manufacturing margins collapse in the face of a changing market and more nimble, low cost, competitors.

    What’s telling in Dell’s presentation is just how fast these changes have happened, here’s some key bullet points from the slide deck.

    • Dell’s transformation from a PC-focused business to an Enterprise Solutions and Services (ESS) -focused business is critical to its future success, especially as the PC market is changing faster than anticipated.
    • The transition to the “New Dell” is highly dependent on challenged “Core Dell”performance.
    • The speed of transformation is critical, yet “Core Dell” operating income is declining faster than the growth of “New Dell” operating income.
    • Dell’s rate of transformation is being outpaced by the rapid market shift to cloud.

    The market is shifting quickly against Dell’s core PC manufacturing and sales business and the company’s founder is under no illusions just how serious the problem is.

    Should Michael Dell succeed, the challenge in transforming his business is going to be immense – Dell Computing was one of the 1990s businesses that reinvented both the PC industry and the vast, precise logistics chain that supports it.

    It was PC companies like Dell and Gateway who showed the dot com industry how to deliver goods quickly and profitably to customers around the world. Businesses like Amazon built their models upon the sophisticated logistics systems and relationships the computer manufacturers created.

    A lesson though for all of those companies that followed Dell and Gateway is that those supply chains may turn around and bite you in the future, as Michael says in his presentation;

    Within the PC market, Dell faces increasingly aggressive competition from low cost competitors around the world and shifts in product demand to segments where Dell has historically been weaker.

    Those low cost competitors were many of Dell’s suppliers as over time the company’s Chinese manufacturers, Filipino call centres and Malaysian assemblers have developed the management skills to compete with the US retailers rather than just be their contractors.

    Something that’s being missed in the debate about globalisation at present is that its not just low value work that can be done offshore – increasingly sales, marketing and legal are moving offshore along with programmers and engineers. Now the same thing is happening with management.

    The same thing is also happening with corporations as Asian giants like Samsung, Huawei, Wipro and others displace US and European incumbents.

    Dell Computing has been a much a victim of that move as it has been of the decline in the PC market which means its more than one battle Michael Dell has to fight.

    It may well be that Dell can survive, but we shouldn’t underestimate just how great the challenge is as the company faces major changes to its markets and the global economy.

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  • How tech savvy are our corporate CEOs?

    How tech savvy are our corporate CEOs?

    Yesterday I asked are executives out of touch with IT industry trends.

    To figure out the answer to that question, I had a look at the backgrounds of the ASX20‘s CEOs. It’s difficult to draw a conclusion from the results.

    ASX 20  CEO backgrounds
    Company CEO Industry background Degree
    AMP Craig Dunn Financial services BComm
    ANZ Bank Michael Smith Financial services Economist
    BHP Billiton Andrew MacKenzie Mining Phd in Chemistry
    Brambles Tom Gorman Finance Economist
    Commonwealth Bank Ian Narev Consulting Law Degree
    CSL Brian McNamee Medicine surgeon
    Macquarie Group Ltd Nicholas Moore Investment banking lawyer
    National Australia Bank Ltd Cameron Clyne investment banking arts/economics
    Newcrest Mining Ltd Greg Robinson finance BSci Geology
    Origin Energy Grant A. King Energy industry Civil Engineer
    QBE Insurance Group Ltd John Neal finance
    Rio Tinto Ltd Sam Walsh mining BComm
    Santos Ltd David Knox Oil and Gas BEng (mech)
    Suncorp Group Ltd Patrick Snowball Finance industry Law, LLD
    Telstra Corp Ltd David Thodey IT/Telecoms BA (anthropology)
    Wesfarmers Ltd Richard Goyder Diversified industrial BComm
    Westfield Group Peter & Stephen Lowy Investment banking BComm
    Westpac Banking Corp Gail Kelly Financial services BA
    Woodside Petroleum Ltd Peter J Coleman? Oil and Gas BEng
    Woolworths Ltd Grant O’Brien Retail Accountant

    What stands out from the list is the dominance of executives from a financial services and commerce background, although that’s hardly surprising given the weight of the banking sector in the Australian stock market.

    An encouraging trend in the mining sector, the other sector highly represented in the index, is how the industry’s CEOs tend to be from a scientific or Engineering background.

    Coming from a science background would tend to indicate the CEOs are probably more across technology trends than we’d think, although the compositions of the boards would probably tell us a little more about the net saviness of the corprorate sector.

    That might be an exercise for the weekend.

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  • Doing social media right

    Doing social media right

    After last week’s Associated Press hack and the stock exchange fallout, regulators are struggling with implications of social media and informed markets.

    In a speech delivered last week the Australian Securities and Investments Commission’s Deputy Chair Belinda Gibson and Commissioner John Price gave some refreshing commonsense views on how businesses should handle public information.

    The continuous disclosure advice given by Price and Gibson is aimed at meeting the requirements of Australian corporate law, but it’s actually good social media advice.

    • Having delegations in place for who has authority to speak on behalf of the company – whether in response to an ASX ‘price query’ or ‘aware’ letter, or when they become aware of information that needs to be released to the market, perhaps in response to speculation.
    • Ensuring that there is a designated contact person to liaise with the ASX, who has the requisite organisational knowledge and is contactable by ASX.
    • Have a clear rapid response plan and ensure all board members and senior executives are fully appraised of it. Give it a practice run every so often – a stress test of sorts.
    • Have a plan for when you will consider a trading halt appropriate.
    • Have a ‘Request for trading halt’ letter template ready for use.
    • Have guidelines for determining what is ‘material’ information for disclosure, tailored to your company.
    • Prepare a draft announcement where you are doing a deal that will
    • likely require an announcement at some time, and a stop-gap one in case of a leak

    Having a nominated contact person with requisite organisational knowledge is possibly the most important point for any organisation.

    Even if you think social media is just people posting what they had for lunch or sharing cute cat pictures, it isn’t going away and those Twitter feeds and Facebook pages are now considered official communications channels.

    The intern running your social media is now your company’s official spokesperson. Are you comfortable with this?

    A good example of where this can go wrong is the Australian Prime Minister’s Press Office where an immature staff member has been put in charge of posting messages. The results aren’t pretty.

    prime-ministers-office-twitter-feed

    The funny thing is the Prime Minister’s office would never dream of some dill getting up and saying this sort of thing on her behalf, yet allows an inexperienced, loose cannon put this sort of material in writing on the public internet.

    Here’s Twenty Rules for Politicians using the Internet.

    On a more mature level, the ASIC executives also have some good advice on writing for social media.

    Don’t assume that the reader is sophisticated or leave readers to read between the lines. Companies need to highlight key information and tell it plainly.
    While the ASIC speech is aimed at the specific problems of complying with company law and listing requirements, it’s a worthwhile guide for any organisation needing to manage its online presence.
    Don’t be like the Prime Minister’s office, understand that an organisation’s social media presence is an official channel and treat it with the respect it deserves.

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