Tag: management

A business lesson from the Catholic Church

The election of Pope Francis shows why the Catholic church is such a successful business. Many of us could learn from them.

The Catholic church may be a two thousand year old institution with medieval beliefs and beset with scandal, but the clerics know how to handle business succession well.

Pope Benedict’s resignation was not only unexpected but also almost unprecedented with it being six hundred years since a pontiff quit before dying on the job.

In many organisations such an unexpected and rare event – dare one use the ‘black swan’ line – would create havoc, or at least paralysis. Instead the clerics handled the process smoothly.

This contrasts with the succession planning in many companies. In larger business even when the CEOs handover is planned, there’s a period of write downs and blood letting as the new leader stamps their authority.

Sometimes it gets very ugly indeed, particularly if the former CEO has been kicked upstairs onto the board.

In smaller businesses, there’s no succession planning at all. Many businesses die when the owner retires if there’s no buyer for the operation.

That shortage of buyers is a major problem for smaller business owners. Many baby boomers have planned their retirements around getting a good sale price for their businesses.

If they can’t get the sale price, the boomer small business owners work until they drop.

Which is what popes usually do.

It’s often said the Catholic Church is the biggest corporation on the planet. Given how smoothly their bureaucracy deals with succession planning, that’s not surprising.

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First we kill email, then Powerpoint

French company Atos intends to eliminate email, Powerpoint and meetings from their business. Few organisations are brave enough to follow them.

Two years ago French technology firm Atos raised eyebrows after announcing the company would go email free.

Atos CEO Thierry Breton said at the time,

We are producing data on a massive scale that is fast polluting our working environments and also encroaching into our personal lives. At [Atos] we are taking action now to reverse this trend, just as organizations took measures to reduce environmental pollution after the industrial revolution.

Eighteen months on, the Financial Times reports Thierry is well on the way to eliminate the office pollution that is email. Lee Timmons, one of Atos’ Vice Presidents, tells the paper,

“At the 2012 London Olympics, we were able to zero-email certify some processes – a first – and (we) look set to be email-free internally by the end of 2013,”

Now Atos is looking at eliminating other business distractions, notably Powerpoint presentations and meetings.

Eliminating inboxes, Powerpoint and meetings from the workplace seems a noble cause. Few organisations would be prepared to even consider this.

For many staff and managers, spending hours sorting email, attending pointless meetings and futzing around with over-elaborate Powerpoint presentations is how they justify their time.

It’s going to be interesting to see how Atos goes with thier objective of streamlining the workplace and how many other companies are prepared to copy them.

Man sending an email image courtesy of Bruno-Free at SXC.hu

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Leadership in a connected world

How do managers and executives lead in a connected world?

Managing a business or government agency as information pours into organisations is one of the great challenges for modern executives.

As part of the Australian Cisco Live event, a panel looked  at Public Sector Leadership in a Connected World, many of the issues discussed apply to private sector executives as they do to public sector managers.

Cisco’s Director of Global Public Sector Practice, Martin Stewart-Weeks, kicked off the panel with the observation that “we now live in a world where information has become completely unmanageable.”

Martin quoted from David Weinberg’s book Too Big To Know, Rethinking Knowledge Now That the Facts Aren’t the Facts, Experts Are Everywhere, and the Smartest Person in the Room Is the Room. The author has a good explanation of his book in this YouTube clip.

Trusting the community seems to be the biggest problem facing politicians and the public service, policy consultant Rod Glover puts the general distrust towards governments on the failure of leaders to consult over changes and decision.

Economist Nick Gruen and Australian Industry Group adviser Kate Pound echoed this problem in that a change of culture is needed among leaders towards the way information is controlled and managed.

Nick sees that culture changing while Rod thinks there will need to be demonstrated successes before risk adverse public service leaders will be prepared to adopt new ways of managing.

Kate’s view is that culture change will require a realignment of incentives which will make managers accountable for the delivery of services. She cites a situation where businesses are obligated to register online but the agency’s website doesn’t work.

So the problem is as much gathering the right data along with processing the information inside an agency. Both are challenges for organisations with rigid hierarchies and  information flows.

Information is no longer power — it’s how you use it. But the structures are still based around access and control of knowledge.

The big culture shift for politicians, public servants and corporate executives is we can no longer hoard information.

For managers in both the public and private sectors, the task is now to share information and trust the right people will use it well.

Paul travelled to Cisco Live courtesy of Cisco Systems

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Using big data to find the cupboard is bare

Yahoo! Chief Executive Marissa Mayer is an example of how modern managers are diving into big data to figure out what is going on in their company

Last week this blog discussed whether telecommuting was dead in light of Marissa Mayer’s banning of the practice at Yahoo.

While I don’t think telecommuting is dead, Marissa Mayer has a big problem figuring out exactly who is doing what at the company and abolishing remote working is one short term way of addressing the issue.

If Business Insider is to be believed, Yahoo!’s absent staff problem is bad.

After spending months frustrated at how empty Yahoo parking lots were, Mayer consulted Yahoo’s VPN logs to see if remote employees were checking in enough.

Mayer discovered they were not — and her decision was made.

Business Insider’s contention is that Mayer makes her decisions based on data analysis. At Google she drove designers mad by insisting on reviewing user reactions to different layouts and deciding based on the most popular results.
If this is true, then Marissa Mayer is the prototype of tomorrow’s top executives – the leaders in business by the end of this decade will be the ones who manage data well and can sift what matters out of the information deluge.
For all of us this is going to be a challenge with the probably the biggest task of all being able to identify which signals are worth paying attention to and which should be ignored.
Of course, all this assumes the data is good quality in the first place.
An assumption we’ve all made when talking about Big Data is that it’s about marketing – we made the same assumption about social media.
While Big Data is a good marketing tool, it’s just as useful in areas like manufacturing, logistics, credit evaluations and human resources. The latter is what Yahoo!’s staff are finding out.
In age of Big Data it may not pay to a slacker, but it’s going to be handy if you want to know what’s going on your business.

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Employment’s changing face

Is it management’s and white collar workers’ turn to deal with the change of contracting and business process outsourcing?

Last Thursday recruitment company Talent2 launched its 2013 Market Pulse Survey looking at the employment trends across the Asia Pacific.

According to the survey, things are looking good with 61% of businesses across the Asia Pacific forecasting growth and 45% expecting to hire more staff.

However there’s an interesting underlying theme to the good news, employment is changing in large organisations.

One of the give-aways is the fact that while nearly two-thirds of businesses expect to grow in 2013, less than half intend to increase staff. Businesses are doing more with less.

Part of this is because of increased automation. Despite the headlines, productivity is increasing in workplaces – particularly offices – as technology automates many business functions in fields like logistics and workforce management.

Another aspect driving the lack of employment is outsourcing, Talent2 say the proportion of Australians working as full time employees dipped below 75% in 2012 with a four percentage point drop over the year.

With more businesses contracting work out, one could expect the number of sole proprietors to be increasing. However this seems not to be the case.

The number of non-employing Australian businesses

According to the Australian Bureau of Statistics, the number of sole traders is barely moving – between 2006 and 2011 the number of “non-employing Australian businesses” only increased 5% while the population grew over 8%.

This implies the proportion of contractors in the workforce is actually shrinking.

Much of this is probably due to the work going offshore, particularly to Business Process Outsourcers (BPOs) in countries like the Philippines, Malaysia and Sri Lanka.

Saturday’s Australian Financial Review looked at what the BPOs are doing in the Philippines and they aren’t carrying out the call centre and basic clerical work that’s made up most of the outsourcing over the last twenty years. Now it’s management roles that are going offshore.

The bigger issue confronting Australians, however, is not call centre workers being relocated to the Philippines. It’s low- to mid-level professional jobs, being moved out of companies, accounting firms and law offices.

Legal outsourcing has been growing for a decade as large law firms have moved many of their para-legal and routine tasks offshore to countries where legal graduates are plentiful but work at lower rates than their western colleagues.

An interesting aspect in legal offshoring is that much of the work that was done by young lawyers has now gone to overseas contractors, which probably means there’s going to be a shortage of experienced legal practioners in the medium term. This is going to have profound consequences for law firms and their partners.

It’s also going to mean law and associated degrees are going to be less popular with school leavers as career prospects dwindle.

The biggest impact though is for managers – we’ve grown used to the assumption that management jobs stay at head office while the lower level jobs go to the lowest cost provider.

Now is those lowest cost providers are offering good quality management staff along with support desk and call centre staff.

During the restructurings of the 1980s and 90s, it was blue collar workers who were the most affected by change. Now it’s the turn of the office workers and managers.

It will be interesting to see how many of the people who thought they were secure in their roles deal with the uncertainty they now have. For some it’s going to be a tough decade.

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Smelling digital garbage

Excel spreadsheets lie at the core of business computing, but what happens when they go wrong?

Excel spreadsheets lie at the core of business computing, but what happens when they go wrong?

James Kwak writing in the Baseline Scenario blog describes how Excel spreadsheets have an important role in the banking industry and their key role in one of the industry’s most embarrassing recent scandals.

In the early days of the personal computer spreadsheets; it was company accountants and bookkeeping clerks who bought the early PCs into offices to help them do their jobs in the late 1980s .

From the accounts department, desktop computers spread through the businesses world and the PC industry took off.

Over time, Microsoft Excel displaced competitors like Excel 1-2-3 and the earliest spreadsheet of all, VisiCalc, and became the industry standard.

With the widespread adoption of Excel and millions of people creating spreadsheets to help do their jobs came a new set of unique business risks.

The weakness with Excel isn’t with the program itself, it’s that the formulas in many spreadsheets aren’t properly tested and often incorrect data is put into the wrong fields.

In his story Kwak cites the JP Morgan spreadsheets that miscalculated the firms Value-At-Risk (VAR) calculations for synthetic derivatives. The result was the London Whale debacle where traders were allowed to take positions – some would call them bets – exposing the bank to huge potential losses.

It turns out that faulty spreadsheets had a key role as traders cut and paste data between various spreadsheets and the formulas that made the calculations had basic errors.

That a bank would have such slapdash procedures is surprising but not shocking, almost every organisation has a similar setup and it gets worse as a project becomes more complex and bigger numbers become involved. The construction industry is particularly bad for this.

Often, a spreadsheet will show out a bunch of numbers which simply aren’t correct. Someone made a mistake entering some data or one of the formulas has an error.

The business risk lies in not picking up those errors, JP Morgan fell for this and probably every business has, thankfully to less disastrous results.

My own personal experience was with a major construction project in Thailand. One sheet of calculations had been missed and the entire budget for lights – not a trivial amount in a 35 storey five star hotel – hadn’t been included in the contractor’s price.

This confirmed in my mind that most competitive construction tenders are won by the contractor who made the most costly errors in calculating their price. Little has convinced me otherwise since.

In the computer industry there’s a saying that “garbage in equals garbage out” which is true. However if the computer program itself is flawed, then good data becomes garbage.

Excel’s real flaw is that it can make impressive looking garbage that appears credible if it isn’t checked and treated with suspicion. The responsibility lies with us to notice the smell when the computer spits out bad figures.

Spreadsheet image courtesy of mmagallan through sxc.hu

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Necessity, innovation and the birth of the web

The world wide web was born out of necessity. It’s inventor, Tim Berners-Lee, says the innovation has barely begun.

The man who invented the world wide web, Tim Berners-Lee spoke at the launch of the CSIRO’s Digital Productivity and Services Flagship in Sydney yesterday.

In telling about how the idea the idea of web, or Hyper Text Markup Language (HTML), came about Berners-Lee touched on some fundamental truths about innovation in big organisations.

In the 1990s the European Laboratory for Particle Physics (CERN) in Geneva had thousands of researchers bringing their own computers, it was an early version of what we now call the Bring Your Own Device (BYOD) policy.

“When they used their computers, they used their favourite computer running their favourite operating system. If they didn’t like what was available they wrote the software themselves,” said Tim. “Of course, none of these talked to each other.”

As a result sharing data was a nightmare as each scientist created documents using their own programs which often didn’t work on their colleagues’ computers.

Tim had the idea of standard language that would allow researchers to share information easily, although getting projects like this running in large bureaucratic organisations like CERN isn’t easy.

For getting HTML and the web running in CERN Tim gives credit to his boss, Mike Sendall, who supported him and his idea.

“If you’re wondering why innovation happens, one of the things is great bosses who let you do things on the side, Mike found an excuse to get a NeXT computer,” remembers Tim. “‘Why don’t you test it with your hypertext program?’ Mike said with a wink.”

There’s much talk about innovation in organisations, but without management support those ideas go nowhere, the story of the web is possibly the best example of what can happen when executives don’t just expect their workers to clock in, shut up and watch the clock.

One key point Tim made in his presentation was that it was twenty years after the Internet was invented before the web came along and another five years until the online world really took off.

We’re at that stage of development with the web now and with the development of the new HTML5 standard we’re going to see far more communication between machines.

Berners-Lee says “instead of having 1011 web pages communicating, we start to have 1011 computers talking to each other.”

These connections mean online innovation is only just beginning, we haven’t seen anything yet.

If you want your staff to stay quiet and watch the clock, that’s fine. But your clock might be figuring out how to do your job better than you can.

Tim Berners-Lee image courtesy of Tanaka on Flickr

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