Saturday, November 29, 2008

Interesting bit of Self Assessment


If you write a blog and you want to see what it tell you about your personality, check this out: Site

ISTJ - The Duty Fulfillers
The responsible and hardworking type. They are especially attuned to the details of life and are careful about getting the facts right. Conservative by nature they are often reluctant to take any risks whatsoever. 

The Duty Fulfillers are happy to be let alone and to be able to work int heir own pace. They know what they have to do and how to do it. 

The site is interesting, but I don't know what they mean about not taking risks.  Now if you'll excuse me, I'm going to put on my hiking boots, grab an umbrella and take the garbage out.

Wednesday, November 26, 2008

What should you look for in a project?


Many projects fail and many projects are going to be dropped.  Many of us will be handed projects we have to manage, good bad or otherwise, others will scramble to find work, so this question maybe pointless.  But it's not a pointless question, I think it's the most important question to ask.

Three elements determine a projects success more than anything else:
  1. What is the project going to do?
  2. Why is the project doing it?
  3. How will the project be done?
PMI and Agile and other approaches dwell on the "how" element of project management.  This area is important, the devil is in the details.  However, I believe the other two elements: 'what is being done' and 'why is it being done', will tell you more about a projects chances of success than 'how it's being done'.

What are we trying to do?  
Is the project going to increase sales?  Is it going to improve productivity?  Is there enough real value in the outcome to justify the costs and keep people focused when the environment changes.

If you're wondering about this, think of it this way: If our company's stock price (or sales) fall by over 50%, is what we're doing compelling enough to continue the project?  If the answer is anything other than an unambigious "yes", think long and hard about whether you really want to devote large parts of your life and energy to a fantasy.  

My old boss drilled into my head that the difference between hallucination and vision is whether its worth the effort. [Editor: Funny, your dates give that reason for dumping you.]

Why is the project being done?  
If it's some managers pet project, even if that manager is the CEO, the chances of it's successful completion drop dramatically.  If the devil is in the details, god is in the "why".  If the "why" is compelling enough, almost any project will find a way to succeed.

There are two really compelling whys:
  1. The project will increase sales.
  2. The project will decrease costs.
If one or both of those goals are intuitive, obvious and achievable, the projects chances of success are excellent.

I'm all infavor of understanding the "how", but if you can pick which projects you work on, think about the "what" and they "why" too.

Tuesday, November 11, 2008

Understand the Long Term Effects of Decisions

Many times people get so focused on what is happening day to day that they miss the larger, slower moving things.  If you are going to intelligently make long-term decisions, make sure you understand the long-term direction of the business you work in and the industry that it works in. [Editor: You don't really want to ask that question, do you?]

Today Michael Lewis has a wonderful article explaining how decisions made by John Gutfreund, the Sr Partner and CEO of Salomon Brothers, changed finance.  

When investment banks were private partnerships, the partners who ran the firm were risking their own money.  Their interest were aligned and they balanced the opportunity to make a profit with controlling the risks their traders were taking.  When Salomon and then the other investment banks IPO'd, it absolved partners/CEOs/directors from having to understand the risks by transfer that risk to stockholders.  People running the firms kept the profits, while the investors and ultimately the goverment held the risks.   

Now, there are no investment banks and Wall St is essentially dead.  The article is a wonderful and humorous description.  Michael Lewis became famous with Liars Poker and he continues the tale with this article.

http://tinyurl.com/EndWallSt

It's a wonderful article relating how a CDS is similar to Fantasy Football, how Steve Eisman worked out the perverse logic that subprime loans were going to be the ultimate undoing of the financial system while sitting in a conference for subprime brokers, and includes the delicious line: "You can’t really tell someone that you asked him to lunch to let him know that you don’t think of him as evil."

It's a wonderful example of looking at how people didn't look at the direction of the industry they worked in, the companies they worked for or what was happening in the world.  As the world changes over the next few years, these will be important questions you want to ask.  If firms like Goldman Sachs, Merrill Lynch, AIG and others can be brought to their knees, how are you and your firm and your firm's marketspace doing?

Photoillustration by: Ji Lee

Friday, November 7, 2008

Beware the Medusa Effect

Many people are aware of part of the Medusa story, that she was so hideous that looking at her would turn men into stone and the Greek hero Perseus used his shield and only looked at her reflection to kill her.  However, many people are not aware of the first part of the story.  

Medusa was not born ugly, in fact she was mythically beautiful with many suitors chasing her.  So great was their desire to be a part of her life, that they would sacrifice everything.  Possibly, what turned men to stone was what that life entailed, not her looks.  

What if Medusa wasn't ugly but rather so desireable that she would lead people to give up everything else?  What if the myth of her being hideous was more the reflection of what happened to the suitors who were so enraptured?  

How many people become so enraptured with ambition and work that they neglect everything else?  Friends are work friends, discussions are work discussions, thoughts are work thoughts with all that that entails.  Couldn't the internal work struggles make people inpenetrible like stone to others?  The Greek myth doesn't mention how long it takes to turn to stone.  

I have moved to twenty different cities, states and countries in pursuit of Medusa, I mean ambition.  How much of a stonifing effect has it had on me?

Have you felt the Medusa effect?

Wednesday, October 29, 2008

God is in the Why


The old saying goes that "god is in the details."  That might be.  Success is often made or lost in how the details are handled.  However, if you want to align and do what they need to do to all arrive in the same place, god is in the why.  If you want people aligned, they better see the same why, they better be singing from the same hymm book.

A child asks why something happens, why something was done, why people came together.  It's when everyone can honestly answer the question as it uniquely applies to them and find the direction that takes everyone to the same place, that you get alignment.

You cannot supply every answer, convince every skeptic or solve every problem necessary to make a project succeed.  If everyone knows the why and it relates to them, they'll come up with the right answers without you.

If you want alignment and success, god is in the why.

Photo Credit: escapista

Wednesday, October 22, 2008

Who is Contributing?


Who is adding to your teams success and who is just along for the ride? Are the free riders really free? There is a rule of thumb in the IT industry that each employee costs $250K. Whether you agree with that number or not, using some metric like that forces you to confront a cold hard reality. Each person on your team costs you $4,800. Almost $1,000 a day. Are they adding that kind of value? Are you?

Tuesday, October 21, 2008

Bird in the Bush


Warren Buffett used an investing analogy many years ago in one of his Shareholder Letter's that is relevant to people making business decisions.  Aesop's question of whether a bird in the hand is worth two in the bush.  Or if this is too theoritical for you, ask if a brunett in a convertible is worth five names in a phonebook. [Editor: How would you know?]

To answer Aesop's question, one has to decide how much more valuable the birds in the bush are relative to the one in your hand?  How difficult will the be to get them out?  Are there other benefits to gaining the bush?  How long will it take to get those benefits?

How often do business question come back to this?  If I invest in this project, will it improve my business?  How will I know?  How will the people working on the team know?

If you can articulate those answers with everyone on your team, aren't you much closer to aligning your team towards achieving those goals?

With all the tools available to us, how often are these basic questions ever asked or answered?

Now, where is that phonebook? 

Photo Credit: Olive Eyel

Monday, October 20, 2008

Economies of Scale vs Alignment

Is it easier to align five people or five hundred?  There's an old Dilbert cartoon which discusses how to determine the IQ of a meeting.  Start with 100 and then subtract 5 for every person added. [Editor: I subtract 10 for you.]

Everytime someone is added, complexity is added.  Agreement, understanding, shared vision, the ability to communicate effectively all become more difficult as more people are added.  If less is so obviously more, why do we continually add people?

Economies of Scale
The industrial revolution and the 20th century demonstrated the benefits of economies of scale.  It costs $3,000 to make 100 of Adam Smith's pins, however it only costs $4,000 to make 1,000 pins.  The price for each pin goes from $30 to $4.  

Where fixed costs are high and you have to build factories and assembly lines and have marketing departments and sales teams, economies of scale make a lot of sense.  Is that the world we face?

Less is More
In a world where you can outsource manufacturing, marketing, legal and accounting functions and focus only on the real areas you know, do you need the extra departments?  Do you need the headachs finding, hiring, training and aligning all those people?

Thursday, October 16, 2008

4. The Credit Crisis: For Project Managers - What should you Expect?

Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks. - Warren Buffett

There is no point in denying that change is in the air.  You can prepare yourself so that you’re in the best position where you are, but that is a short term outlook.  You also want to think about the business where you are and the environment it operates in.  How will that business and environment be effected by a recession?  Those are the long term questions to ask.

This is part 4 of 4 looking at the credit crisis:

  1. The Credit Crisis: What Does it Mean for You and Your Company? - This will look at what’s currently happening and what it means.
  2. The Credit Crisis: Why It Is Important? - A Little History - To get some context, we’ll look at why companies were set up and why investors, like Carl Icahn are so outraged.  Understanding this is important to recognizing good opportunities.
  3. The Credit Crisis: For Project Managers - What Does It Mean? - What are some things as project managers you should be doing.
  4. The Credit Crisis: For Project Managers - What should you Expect? - What are things to look for and think about.

What are you looking for?

  • Would you like to travel and experience new cultures?
  • Is job security critical to you?
  • Do you need to stay in a particular location?
  • What are your financial needs (not wants)?

Are the answers aligned with your current job?

If you are looking to travel and experience different cultures, this is an excellent time to do so.  The sun always shines somewhere.  Dubai is booming, Singapore and Hong Kong are growing and for people with skills, China is growing.  This is an excellent time to explore opportunities.

If job security is critical to you, look at the business and it’s environment.  Is the overall environment secure? Growing? Filled with competitors?  Much as we’d like to believe our own individual abilities will trump these things, you’ll swim much faster with the current than fighting against it.

Do you need to stay in a particular location?  Then find the businesses doing the best in that location.  Cultivate relationships with people in those businesses.  Join a PMI chapter, Toastmasters, some other professional group or the Rotary Club.  All these organizations are designed to help you network.  Network yourself into the best positioned company where you want to be.

What are your financial needs?  Know what your monthly expenses are and make a budget.  You are as independent as you are financially independent.  You can make yourself financially independent.  This change has made everyone think about tightening their belt, take advantage and fill your bank account too.

Know what your requirements are and think where you’ll want to be in three to five years.  No one knows how long the credit crisis will last or the economic slowdown or the recession or whatever you want to call it.  However, it’s a good bet that if you make plans that get you where you want to be three to five years from now and you execute them (you are a project manager, right?), you will succeed, how ever long the bad times last.

Think.

Wednesday, October 15, 2008

3. The Credit Crisis: For Project Managers - What Does It Mean?

"Times change, we change with them.” - Latin Proverb

In 1983, US companies spent $32 billion on IT, which accounted for 9.8% of their total investment in fixed assets that year.  By 2006, spending had risen almost tenfold, to $294 billion, and IT accounted for 21.1% of new fixed assets purchased that year in the US, according to Harvard’sAndrew McAfee.

Much of this growth has come from projects and been led by project managers.  The credit crisis marks a change.  If you want to lead and benefit, think about some of the changes likely to come and how to position yourself to take advantage of them.

This is part 3 of 4 looking at the credit crisis:

  1. The Credit Crisis: What Does it Mean for You and Your Company? - This will look at what’s currently happening and what it means.
  2. The Credit Crisis: Why It Is Important? - A Little History - To get some context, we’ll look at why companies were set up and why investors, like Carl Icahn are so outraged.  Understanding this is important to recognizing good opportunities.
  3. The Credit Crisis: For Project Managers - What Does It Mean? - What are some things as project managers you should be doing.
  4. The Credit Crisis: For Project Managers - What should you Expect? - What are things to look for and think about.

What does the Credit Crisis Mean?

The credit crisis is simply the event that woke everyone up.  There are several issues: financial, corporate governance, excessive supply, globalization and a host of others that could have caused the re-evaluation.  Now that the re-evaluation has started, there are a couple areas that will be effected.  Spending, corporate governance or transparency and excessive supply.  Look for your opportunities to excel in the areas relevant to your firm and you will be a hero.
Spending
Estimates have S&P 500 forward earnings for 2009 decreasing by 20%.  It’s a good bet internal budgets will decrease by even more.  Expect that budgets to be cut.  There will be fewer projects and less money. Position yourself to succeed by thinking about:

  • What will projects costs be?  Be able to show how you arrived at those costs and what interim measures can be taken to measure progress.  Think EVM - Earned Value Management or other measures that can be checked by people with no understanding of the project.
  • What will the ROI (Return on Investment) for the project be?  Demonstrate that the project must be done by showing the risks of not doing it.
  • People with strictly financial concerns will scrutinize projects looking for ways to cut costs.  Help them see how a project is progressing in cost and benefit ways.
  • Where can thresholds or gates be set up to evaluate the projects progress by people who are not savvy about what the project is doing.  If you can schedule gates where progress can be evaluated as a way of controlling costs, you’re helping those who are being evaluated on how money is spent.
  • What external contracts will the project require?  How much will those contracts cost to execute?  How much has it cost other businesses to execute similar contracts?  Can those contracts be written so that the vendor succeeds or fails based upon whether the project succeeds or fails?
  • What are mitigation plans if the project has to be ended?
  • If a project has to be ended, how can you, as a leader, effectively end it? (You’ll make yourself a hero if you can set up gates and show how a project can be shut down if it’s not meeting its targets.)

Corporate Governance

“The collapse of Lehman Brothers, with it’s massive losses for shareholders and employees and near catastrophic market consequences, obviously reflects an abject failure of management in risk oversight. - Carl Icahn Oct 13, 2008

There is a second element that hasn’t received as much attention, transparency and corporate governance.  Shareholders who have lost money in other companies want to be sure they will not lose money again.  Activist investors are going to demand accountability from boards, executives and through them, all of management.

Look at some of the resources on Corporate Governance.  Zebablog offers many insights.  Be able to speak intelligently about corporate governance and know where you can research items specific to your area.  There is limited knowledge in this area.  That limited knowledge is a huge opportunity for you.  Take the opportunity, learn and lead.  SOX is not the same as corporate governance.  Governance and transparency are going to become more critical, why don’t you take advantage of this?

Finally, there are long term considerations.  Where is your company?  Where is your company going?  Can it adjust to the changes occurring in the world?  Can you?

Many people don’t want to think about these things.  You should.  Thinking about what’s happening and things to keep your eyes open for, are what we’ll cover in the fourth entry, The Credit Crisis: For Project Managers - What should you Expect?

Are there other things you’ve seen that might be beneficial to think about?

Photo Credit: Christoph Niemann

Tuesday, October 14, 2008

2. The Credit Crisis: Why is it Important? A Little History


History is a guide to navigation in perilous times. History is who we are and why we are the way we are.     - David C. McCullough

This is the part 2 of 4 looking at the credit crisis:

  1. The Credit Crisis: What Does it Mean for You and Your Company? - This will look at what’s currently happening and what it means.
  2. The Credit Crisis: Why It Is Important? - A Little History - To get some context, we’ll look at why companies were set up and why investors, like Carl Icahn are so outraged.
  3. The Credit Crisis: For Project Managers - What Does It Mean? - What are some things as project managers you should be doing.
  4. The Credit Crisis: For Project Managers - What should you Expect? - What are things to look for and think about.

A little background on business
To get some insight to this, let’s think about why businesses were really founded. The modern corporation came started in Britain in the early seventeenth century, when some very intelligent and presumably humble nobleman noticed that there’s no correlation between intelligence and wealth. In fact, there may even be an inverse correlation, but I’ll resist the urge to rant about Paris Hilton and spare you my other Hiltonesque urges. [Editor: Please do.]

What these noblemen realized was that if they gave up a portion of their capital and entrusted it to an organized group of intelligent, motivated and hungry workers, they could make themselves much wealthier. A side benefit to this was the incredible improvement in the standard of living for those working for them. This is the genesis of the modern corporation.

Why is this important? What these noblemen and now women realized was that they had to set up the appropriate structures and oversight so the intelligent, motivated and hungry workers didn’t keep all the profits for themselves.  Corporations were created for the benefit of the owners, not to make the workers wealthy.

What Does This Have to do with My Business?  Remember AIG

AIG stockholders, the people who own the company, invested in the expectation that they would earn returns, instead lost over 95% of their money.  While the details haven’t all come out, it appear AIG Financial Products, a 377 person unit brought down the 18th largest company in the world.

“Since 2001, compensation at the small unit ranged from $423 million to $616 million each year”, according to corporate filings.  AIG Financial Products took positions that were much more risky than their executives realized, they walked away with huge paychecks and their liabilities lead to AIG’s downfall.

“Debts are easy to fix, but liabilities the nightmare!”

Where was the transparency?  How come no one knew how much risk they had put the company under?  How much will this cost?  What will our returns be?  These are not only historical questions, these are questions you are likely to have to answer in this next budgeting cycle.

Know that these questions are coming.  Be ready to answer them and you will be a star.  That is what we will look at next in part 3: The Credit Crisis: For Project Managers - What Does It Mean?

Monday, October 13, 2008

1. The Credit Crisis: What Does it Mean for You and Your Company?


One of the biggest problems we face today is the egregious mismanagement and reckless incompetence of many American corporate boards which utterly fail to do their primary job of holding managements accountable.

Carl Icahn, Oct 7, 2008

Don’t Be an Ostrich
Many people watch what is happening on Wall St hoping they will not be affected. Sooner or later, it will affect you. Rather than avoiding the issue and burying your head in the sand, let’s understand what’s happening, what it means and what you can do to get ahead of the curve.

We will do this in four posts:

  1. The Credit Crisis: What Does it Mean for You and Your Company? - This will look at what’s currently happening and what it means.
  2. The Credit Crisis: Why It Is Important? - A Little History - To get some context, we’ll look at why companies were set up and why investors, like Carl Icahn are so outraged.  Understanding this is important to recognizing good opportunities.
  3. The Credit Crisis: For Project Managers - What Does It Mean? - What are some things as project managers you should be doing.
  4. The Credit Crisis: For Project Managers - What should you Expect? - What are things to look for and think about.

What’s Happening on Wall St?


A couple of things about this clip.  In addition to its humorously irreverent and more accurate than you might think description; it is also over a year old.  The credit crisis is not new.  It has been brewing for awhile and its resolution will take awhile.

Expect to Feel the Pain
Even if you’re not in financial services, expect to feel the pain. Consider that as of Friday Oct 8th 2008, US stock markets are down over 42%.  $8.2 Trillion dollars has been lost.  If there are 300M Americans, each is out $28,000. [Editor: This is worse than a divorce.  I lost half my money and I still have to put up with you!]

More concerning is that this is a credit crisis, not an equity crisis.  The stock market crash is the symptom, not the cause.  I won’t go into the details [Editor: Please don’t], but the cause is the credit crisis - banks unwillingness to lend to other banks and now businesses.

How this will work out is the real question.  Uncertainty leads to questions of confidence. How will the uncertainty be resolved? Transparency. What’s visible can be dealt with, it’s what isn’t currently visible that will drive people to want to know more.

Who will want to Know?
For public companies, executives and the board of directors will want to know.  Hence the Carl Icahn quote.  Consider this:

NEW YORK, Sept 15 (Reuters) - Shareholders sued Merrill Lynch & Co Inc Chief Executive John Thain and the company’s board of directors on Monday over the proposed buyout by Bank of America Corp, claiming the terms of the deal are unfair [to shareholders]. (Full Story)

What is important is that the suit is filed personally against John Thain and the board of directors. They are personally liable. The suit claims John Thain and the board “have clear and material conflicts of interest and are acting to better their own interests at the expense of Merrill public shareholders.”  There will not be enough D&O (Directors and Officers) Insurance to satisfy investors after all the money that’s been lost.

Nothing like the fear of a class action lawsuit to persuade you to get more transparency in your business.  Where is money going, how is it being spent, what returns are we getting from projects we invest in?

Private companies will answer similar questions from their own investors and executives. Furthermore, suppliers will want to be sure firms can pay. Vendors will want to be sure they can deliver. Banks will want to know how funds are being used.

We are heading into budgeting season.  Expect Ronald Reagan’s “Trust, but verify” to accompany the belt tightening.  Whether you call it transparency or regulatory oversight or SOX or corporate governance or [Editor: the following line was deleted, you can’t use that language.]; executives, directors and investors will want to know more.

Why Are Investors Like Icahn Using This Moment To Demand Change?
In addition to the reasons stated above, but there are historical reasons for wanting transparency. Understanding this will provide you insight to take advantage of the opportunities which will arise.  We will take that up in our second post: 2. The Credit Crisis: Why It Is Important - A Little History.

Have you started seeing changes?

Friday, October 10, 2008

Understanding the world and aligning your expectations


I'm sure you've talked about what's happening on Wall St.  Very few firms will be spared and if you work in project management, it's very unlikely you'll avoid all the problems.  As this chart from Sequoia Capital's presentation show, tech spending is heavily influenced by S&P 500 Earnings.

I've been doing a lot of work and I'm very excited that next week I'll be doing a series of posts for Silicon Valley Project Management on what the credit crisis means for people working in project management and in companies in general.

The outline is:
  1. The Credit Crisis: What Does it Mean for Your Business - This will look at what's currently happening and what it might mean for your firm.
  2. The Credit Crisis: Why It Is Important - A Little History - To try and get some context, we'll look at a little history of why firms were set up and why investors, like Carl Icahn are so outraged.
  3. The Credit Crisis: For Project Managers - What Does It Mean? - What are some things as project managers you should be doing.
  4. The Credit Crisis: For Project Managers - What should you Expect? - What are things to look for and think about.
I will be republishing it here a day after it publishes on SVProjectManagement.  Predictions are difficult, especially about the future.  I'd love to know your thoughts.

Andy

Tuesday, September 30, 2008

Age Old Warning about Miss Aligned Interests

Humpty-Dumpty sat on the wall.
Humpty-Dumpty had a great fall.
All the kings horses 
And all the kings men,
Couldn't put Humpty together again.

I worked on Wall St and have deep emotions for the people who work there.  However, Wall St always had a problem in that it was all about money and profit justified anything.

Are your hopes and dreams aligned with the company where you work?  It's very easy to point fingers and accuse people of doing horrible or foolish things, but what about the things your doing?  Could you stand up to the same scrutiny?

Get angry and demand answers about the incompetence that passed for leadership on Wall St, but then think hard about your own leadership, your own company and your own actions.  If you had had the same temptations, you might have done the same things.

Consider Wall St an example of the failings of leadership, because with all the kings horses and all the kings men and huge sums of money wasted [Editor: Steady], we will not put Humpty together again.

Monday, September 29, 2008

Leaders Intentionally Blind


But I’d shut my eyes in the sentry-box, so I didn’t see nothin’ wrong.

- Rudyard Kipling

There's plenty of evidence that leadership has failed in many financial institutions and the costs are going to be horrendous.  If a leader chooses not to see, hear or speak about evil, whatever the excuses of complexity are, nothing else can be aligned.

One could argue that financial instruments had become so complex that it was not practical for leaders to understand and be savvy about what was happening.  If that is the case, then they are no longer leaders.  Other, possibly more accurate terms, spring to mind, but we will not go down that path.

It is very popular to talk about people as being leaders.  Somehow it seems this word has some semantic coolness about it that everyone wants to be associated with.  There's another "L" word which somehow seems more accurate - lemmings.  

It is frequently pointed out, lemmings as a whole, have a lousy reputation, but no lemming has ever been singled out for their foolishness, neither has one ever been identified as a leader.

Next time people are bandying around the title "Leader", ask yourself if they are truly a leader or simply the lead lemming?  Then ask if you really want to align yourself with where they are going?


Photo Credit: Mr Rad

Thursday, September 25, 2008

The Misunderstood Story of King Midas


Many people are familar with the story of King Midas.  The old miser who wanted money so badly he asked the gods to make everything he touched turn to gold.  Unfortunately the lesson of Midas is often misunderstood.

Was the lesson about the perils of arvice and greed?  No, not really.

The gods didn't punnish the miser for being greedy, they punnished him for not understanding the real value of money.  Money or gold, in and of itself, is not worth anything.  You can't eat it, build with it, write with it or anything else.  It's value comes from its ability to be exchanged for things which are truely valuable: food, water, houses etc.  

It was only upon being granted his wish that Midas realized the true value of gold.

Do you want money or the valuable things money enables you to buy?

Have you aligned yourself to get money or things that are truly valuable?

Photo Credit: DigitalMoneyWorld

Monday, September 22, 2008

How to Determine a Leader’s Effectiveness?


When we talked before about our different levels, bricklayers, coaches, division heads and league commissioners, the question comes up, how to determine if they are effective?  Many times people study different factors.  In Built to Last, the eight factors one should look at are: strategy, execution, culture, structure talent, leadership, innovation, mergers and partnerships were used to determine if companies were going to last.

In Search for Excellence there were also eight factors: a bias for action, staying close to the customer, autonomy and entrepreneurship, productivity through people, hands on – value driven, stick to the knitting, simple form – lean staff, simultaneous loose-tight properties. [Editor: What do you know about any of these?]

All of these are excellent measure and they tell us something about the business, but they are like a thermometer with different parameters: temperature, barometric pressure, humidity etc.  They give us a lot of insight into the weather or ways to measure a company, however, no amount of studying a thermometer is going to change the weather. Likewise, someone taking the lead in the introduction of a new order of things, is so consumed by the daily details and so effected by the changing environment in which they work, that knowledge of these things doesn't predict effectiveness. 

Being familiar with these things might make someone more effective or it might make them less effective. The major determinant is going to be the influences of the outside environment. Environmental conditions (weather, altitude etc.) will affect brick laying more than strategy, past experience or culture. Whether we call someone a manager or a leader and the degree to which these ideas have an effect at different levels of the organization is an interesting question, but will it determine their effectiveness?

Beyond a certain point, do you think studying the aspects of a thermometer make you a better weatherman?  How much does one need to know about the parameters of leadership to lead?

Tuesday, September 16, 2008

How Do You Define and Align Expectations at Different Levels in an Organization?

If you're a brick layer, it's very easy to determine who the best brick layer is. Count the bricks. Some smart, clever brick layer may come up with a more effective way to lay bricks.  That’s wonderful and they may become a lead brick layer and be deemed a "leader". 

If we want to improve things, we might decide that it's a good idea to have someone coach a team of brick layers. We might say that a coach should work with 11 brick layers to find ways to make them all more effective. Determining the most effective coach is pretty easy. Count the total number of bricks laid by each team. You'll find that some coaches are more effective than others. 

Experience and brick laying skills are probably important to the coach.  If the coach has previously worked as a brick layer, it's reasonable to assume they'll be more empathetic and effective. Good coaches will also have different ways of organizing their teams, different methods of laying bricks, different attitudes towards laying bricks, etc. Clever coaches will use different techniques to maximize their teams.  If you’re laying bricks in the mountains you might want different types of people than if you’re laying bricks in a dessert.  Still, it’s pretty easy to measure a coach’s effectiveness. 

Now, let's say that we want to create a larger organization. We might have a division. A division consists to 10 teams of brick layers. In order to resolve disputes and make things more organized, we might say that we have a division head. This is necessary because everyone is trying to improve so there are competitions between our brick laying teams. [Editor: teams from the Big-10 seem particularly skilled at laying bricks…]

Now, the skills necessary to be an effective division head are not necessarily the same skills necessary to be a good brick layer or even a good coach. Also, complicating the issue, how do you measure who is an effective division head? Looking at the total number of brick laid might be effective, but they are pretty far removed from the brick laying process and the things they handle on a day-to-day basis are probably not similar to the brick layers or the coaches. 

If we elevate this one more level and create a league, the problem becomes even more obvious. The league is composed of 10 divisions. Some of these divisions are in the mountains, others are in the dessert and others have to deal with great lakes and snow storms. The types of bricks that each division can get are different just as laying bricks at 2,000 feet above sea level presents different challenges from laying bricks in the dessert, which is completely different from laying bricks in the middle of a Wisconsin winter. 

How do we determine if our league commissioner is effective? A brick layer or a coach may have innovative ideas and it's easy to asses their effectiveness. But determining the effectiveness of a division or league commissioner is more problematic. 

How would you approach this?

Friday, September 12, 2008

Is it the Environment or the Actions which Make You Successful?


If you want something to be successful, do you create the environment or pull the trigger? If you are going to have a successful project, the correct environment needs to be created. Pulling the trigger is nice and that is what people will notice, but success depends upon preparation. That preparation is rarely noticed. The most aggressive actions in the wrong environment end up looking silly.

Think about it this way, do forest fires occur when someone carelessly throws away a match? Well maybe. If you throw away a lit match in a green forest with rain falling all around you, it's very unlikely a forest fire will result. If it is in the middle of a heat wave with the grass burnt brown and hot Santa Ana winds blowing at night, a roaring forest fire may result. What is critical is the environmental conditions in which the match was thrown.

It's the old line about the straw that broke the camels back. Straw is essentially weightless, but under the right conditions, it can wreck havoc. Maybe those conditions are an overloaded camel or some other environmental situation.

If you want tremendous results, look at the environment, the necessary preparation to succeed within that environment, get the preparations underway and then at the right time, pull the trigger.

Thursday, September 11, 2008

Have You Prepared Yourself for the Opportunity to be Lucky?

Someone once said that luck is the intersection between preparation and opportunity. If you prepare yourself and hit on the right opportunity, you have made yourself lucky. Congratulations, you are participating in a good life. You should be happy and your friends should be happy for you.

If you want to create something, doesn't it take more than luck? You need an idea for what you want to create. You need a plan and to know what the plan will require and whether it's feasible.

If you have a feasible plan, you need to find the missing pieces. When you find the people with the correct preparation to complete your plan; you need to articulate it in such a way that, it is in their best interest to make your plan succeed. They need to see your plan as their opportunity to make themselves lucky.

If the plan requires capital or assistance to be successful, then everyone needs to see how it benefits them to have your plan succeed. They all need to provide input to fill in the missing pieces so the plan has the best chance of success.

Finally, you must have enough time. It takes time to come up with an idea, make it feasible, find the right participants, get meaningful assistance, refine the plan and then execute it successfully. All of these things are important, but they all start with you. Have you prepared yourself for the opportunity to be lucky?

Photo Credit: Eric Lafforgue

Wednesday, September 10, 2008

What Makes a Project Succeed? The Project or the Management?

What is it that makes a project succeed? Is it the methodologies, the risk analysis, the reporting, the communications ability and talents of the managers or is it the project? This question came up as a result of a discussion about a story that Richard Feynman told, explaining what he called Cargo Cult Science. The story goes as follows:

In the South Seas, there is a cult of people. During the war they saw airplanes land with lots of materials, and they want the same thing to happen now. So they've arranged to make things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas - he's the controller - and they wait for the airplanes to land. They're doing everything right. The form is perfect. But it doesn't work. No airplanes land. So I call these things Cargo Cult Science, because they follow all the apparent precepts and forms of scientific investigation, but they're missing something essential, because the planes don't land.

How many project are really important or are there times we're waiting for planes to land?

Photo Credit: escapista

Monday, September 8, 2008

What does the take over of Fannie and Freddy Mac mean?


Sometimes its worth looking at what's happening in the larger world and think about what it means for you. With the US Government announcing the nationalization of Phoney and Fraudie, [Editor: Fannie Mae and Freddie Mac, thank you] think about what this means to you in your working life.

Through most of US capitalistic history, housing prices were about 3 to 4 times after tax income. This is not exactly true, but if you think about how much one can afford to pay on loans, it's reasonable.

If you consider that the average household income in the US is around $44K, the median is about $43K, to make the math easy, lets go with a pretax income of $45K. assume that around 33% will be paid in taxes, so the take home income will be $30K, or an after income of $2,500 per month.

The average home price in 2004 was about $264K, the median household price was about $221K. To make the math easy, let's go with a house price of $250K. On a 30 year, 6% interest loan, the monthly payment would be about $1,500. That means the average household is paying about 60% of their after tax income in house payments. Not sustainable.

For comparison purposes, if we look at the average house price in 1989, it was $120K, the average household income was $30K, so the median, after tax take home pay was $1,675. With an average monthly payment of $720, after taxes, homeowners paid 43% of their income for their house. Still high, but there have been a lot of assumptions made, so it's probably closer to 35%, but it's really only for comparison purposes.

As a point of reference in 2004, average rent price was about $650 per month, or about 26% of monthly, after tax income.

Now, let's just say, for the sake of argument, that someone makes the reasonable assumption that they don't want to pay more than 1/3 of their after tax income to own a home. That means that someone earning $45K doesn't want to pay more than $825 per month. On our same 30 year, 6% interest loan, that means the average home price would be about $138K.

Compare this amount to the average home price in 2004 of $264K, and you've got to think house prices can drop drop another 50%. In places like California, it could be even worse, considering the median income is $54K and the median home price is $514K.

If housing prices drop that much, how much will other assets fall? What will this mean for you?

Data information:

Home prices 1989:
http://www.census.gov/const/uspriceann.pdf

Real median income 2004: http://www.census.gov/Press-Release/www/releases/archives/income_wealth/005647.html

Real median income 1989:
http://www.demographia.com/db-stateinc2000.htm

Rental price information:
http://www.census.gov/prod/2004pubs/H150-03.pdf

Average home sales price in 2004:
http://usgovinfo.about.com/od/consumerawareness/a/avghomeprice04.htm

Average and median prices of homes between 1963 and 2007:
http://www.census.gov/const/uspriceann.pdf

Tuesday, September 2, 2008

Top 10 Posts


In the interests of shameless self promotion, here are the top ten posts as decided by the highest number of pageviews.

  1. Project Management Excuse List Part II
  2. Project Communications and the Terror of the Troubled Project
  3. How to Engage People
  4. How Do You Engage People?
  5. Do Surpluses of Information Lead to Deficits of Attention?
  6. Aligning People or Letting Them Align
  7. Does PMI (Project Management Institute) find Value in Project Management?
  8. Tips for Project Management Success
  9. Does Technology Create Transparency or Mirages?
  10. Should You Manage People or the Environment?

Are You a Tribal Leader?

How does a manager get their power? Maybe it's organizational, maybe it's access to information, but if you're on a project team to initiate something in a company, it comes from the people on your team. Do you understand the stages and dynamics of the team interactions?

Dave Logan has a great book out discussing different team stages and their dynamics. I consider Dave a friend with great insights. [Editor: Yea and you've also deluded yourself into thinking Natalie Portman would be your friend.]

Working with BNET, Dave's released a video describing these stages.

Briefly, the Five Stages are:
1. Life sucks.
2. My life sucks. [Editor: Working with you, that's me!]
3. I'm great.
4. We're great.
5. Life's great.

Check out the video and buy the book. You and your teams will be more successful.

Sunday, August 31, 2008

Poker and Project Management

These two are at the opposite end of the spectrum. PM is about planning, critical paths and resource allocation. It is logical, analytical and linear. Poker is about intuition, betting big when opportunity’s ripe, reading situations and constantly readjusting.

Knowing how to do both is critical. Poker shows you a lot about someone. How they manage their emotions, act when the cards fall their way, act when they’re back is up against a wall. In PM parlance, how they manage risk and success.

More importantly, you see how people react under pressure, inside and outside their circles of competence. Intuition benefits you within your circle of competence. In friendly games, dealing and calling the game circulates. You can’t always play your game, but you can pick which games, which situations and how much you bet.

If you really only know five-card stud, you’re best off betting conservatively in Omaha or Pirate’s Booty, but then going big when the situation is right in five-card stud. Sticking with what you know gives your intuition its edge.

You’ll never win if you don’t play, but you won’t win consistently if you don’t play smart. Poker compresses all of life’s lessons into a brief, pressure packed situation. Is there a better way to learn about people?

How many PMs play poker with the team? Isn’t that what you’re doing on a project?

Photo credit: Wiseacre_Photo

Thursday, August 28, 2008

Should You Manage People or the Environment?


Fish do not notice the water in which they swim.

Every company has a culture. There are myths and stories that are told which reflect the company culture. Its hard to define, its difficult to see and it affects every decision, project and action a company takes.

Is it easier for a fish to swim with the current or against it? Does the pounding rain, rocking waves and conflicting currents lead to curious and creative fish or small, protectionist and defensive fish?

Should you try and manage the fish or will you do better managing the environment?


Photo Credit: Olive Eyel

Wednesday, August 27, 2008

Aligning People or Letting them Align Part IV

Bill Miller and I have been talking about whether it is better to align people or let them align. You can read the other three parts here, here and here. Its been a great discussion, to make it clearer, I'd like to reframe my response. I always hate it when girlfriends do this to me, so I'm apologizing up front. [Editor: No need to apologize, I've been suggesting girls do that to you for years and it's benefited me tremendously.]

A little background on business
To get some insight to this, let's think about why businesses were really founded. The modern corporation came into being in Britain in the early seventeenth century, when some very intelligent and presumably humble nobleman noticed that there’s no correlation between intelligence and wealth. In fact, there may even be an inverse correlation, but I’ll resist the urge to rant about Paris Hilton and spare you my other Hilton-esque urges. [Editor: Please do.]

What these noblemen realized was that if they gave up a portion of their capital and entrusted it to an organized group of intelligent, motivated and hungry workers selected from the masses, they could make themselves much wealthier. A side benefit to this was the incredible improvement in the standard of living for those working for them. This is the genesis of the modern corporation.

Why is this important? What these noblemen and now women realized was that they had to set up the appropriate structures so the intelligent, motivated and hungry workers had proper direction and incentives to make the business successful and them wealthier.

Project Structures
Should teams self-organize? Absolutely. As a project goes along, the team needs the freedom to realign itself to meet the demands of the project. What an effective manager does is define the structures within which to project will operate to deliver what the business needs. If the project team has the correct direction and incentives, they will align themselves and the project has a better chance of success.

Does this make sense?

Photo Credit: Eric Lafforgue

Tuesday, August 26, 2008

Project Management Excuse List Part II


Welcome to our new and revised excuse list. People suggested many excellent excuses, some of which even I haven't used. The idea of this list, is that rather than long winded excuses being given in meetings, people can simply give numbers.

Project Manager 1: "We're working hard, but we've got 2 and 19 holding us up."
Project Manager 2: "We are in good shape, but we're being hurt by 8, 22 and 30."

You get the point. Suggestions are always welcome.

Numbered Excuse List
  1. We've got scope creep. I don't know where it came from, but have you seen this cool little widget we've added...
  2. How come we never have enough money? Honest, if I could just get this one other tool...
  3. The requirements weren't defined. Why do I have to keep going to all these meetings, I mean, I've already started coding...
  4. The requirements keep changing. Every time I talk to someone, they want something different. It's not worth writing them down...
  5. There's a bug in the (Pick one or more: vendors, downstream app, upstream app, operating system, monitoring system, security... our software)
  6. The new software we bought doesn't work the way we want. It looked so easy when the sales...
  7. We haven't heard back from the software vendor, we filed the report (Pick one: weeks ago, months ago, yesterday... 5 minutes before coming to this meeting)
  8. The project manager from company XXX isn't here today, all the problems are with XXX...
  9. Testing found something we hadn't expected, it will (Pick one: double, triple...)
  10. There's a holiday in XXX's country. They won't be back before Monday. There's nothing we can do until...
  11. We couldn't reach Betty-the-business-analyst or (insert name here), we're stuck until...
  12. The Development, Testing, QA, Production environments aren't the same, the sysadmins are looking at it, they should be done...
  13. Management doesn't understand the problem, if they would just take more time...
  14. Management is too involved, why won't they just let us do our job...
  15. The project sponsor isn't helping us. We sent them an email two weeks or 5 minutes ago and haven't heard anything...
  16. The project sponsor keeps meddling in what we're doing. Every time we turn around, they're asking us questions
  17. Huh? That was due today?
  18. There's a huge boa constrictor in the garage. Looks like there's no way we can get the car out.
  19. My laptop caught a virus, and I lost (fill in the appropriate amount) of work.
  20. The time and location differences between the work group members can still cause some delay problems but the work quality is outstanding with our new collaboration systems.
  21. Sorry, I just got bogged down with my being too busy on too many projects.
  22. You mean it's not there already, let me have my assistant call Fedex and see where the papers are.
  23. We are having email problems, can you resend all emails you sent me for the last 3 months?
  24. The aliens came back and took me away. [Editor: I wish they'd take you.]
  25. The dog at my car.
  26. I am on my way. [Actually I have not yet left home/office].
  27. My cell battery went off, and I was delayed while charging it.
  28. It took longer to sleep than anticipated.
  29. xxx (someone high up) asked me to work on xxx.
  30. I am checking one last time to make sure it is perfect.
  31. xxx (reviewer) needs to see it one more time.
  32. I'm in jail, can you bail me out so I won't be late?
  33. It was more work than I thought
  34. Don't pay the ransom, I've escaped.
  35. Sorry, I accidentally killed the Lead last night.

Photo Credit: Mike Willis

Saturday, August 23, 2008

Aligning People or Letting them Align Part III

Bill Miller, confound him, asked an excellent question. Normally I avoid people asking excellent questions, but as he paid me the compliment of commenting on what I wrote, [Editor: and I made sound intelligent] I felt obligated to respond. And it is an excellent question.

What is the essence of self organization as opposed to their being organized?
The crucial question is responsibility. If a group organizes itself, the group is responsible for the outcome. If someone else organizes the group, the organizer is responsible the outcome.

If ten kids get together to play basketball, then they choose teams, call plays and evaluate the results. If a coach organizes a team, schedules the practices and calls the plays, then the coach is responsible.

Accepting Responsibility Versus Diffusing It
If three people get together and start a company to implement a new idea for running projects, they are responsible for developing the products, the methodologies and finding the customers. If their products and services work, customers continue working with them and the company grows. If their approach doesn't work, the company goes out of business. Those three people and the others who join them are responsible. (This is how CAP was born)

If a company decides that it wants to implement a new program, it picks three people and tells them to implement it. The first thing those people do (if their smart) is ask for more money, more people and more time. In this situation, it is in the three peoples' best interest to make the program as large, as expensive and as time consuming as possible. If they are smart, they diffuse responsibility, but accept credit.

What Advantage do Entrepreneurs Have?
An entrepreneur and the people starting a company take responsibility for making it succeed. People taking a job are responsible to do what someone else organized for them to do.

Are both important? Absolutely.
Which one is likely to effectively produce defined products and services?
Which one is likely to produce innovative products and services?
Which one are you looking for?

Friday, August 22, 2008

Does Technology Create Transparency or Mirages?

Many companies implement huge IT packages to get better visibility into what's happening and to (presumably) get more control, but this begs the question, does technology give you better transparency? Theoretically, it should and even could. Practically, technology may create mirages more effectively than a desert.

Why Does Technology Create Mirages?
Transparency comes from corporate strategies that value transparency. Technology effectively supports that approach if it exists or it obfuscates if one is not careful. If the departments and groups implementing the technology want people to know what they are doing, then you'll get a lot of transparency. If the departments and groups do not think it is in their best interest to have people know what they are doing, technology will not help; in fact, it will probably show you a corporate mirage. [Editor: Sort of like I help you look intelligent.]

Just like in the picture above, the peaceful and attractive house with bushes around it reflected in the lake is a mirage, sophisticated managers can manipulate technology to show whatever it most benefits them to present. Technology is not a magical elixir.

How can Technology Provide Transparency and Control?
If there is:
  • Clear thinking about the business objectives
  • Products and services that customers value
  • Business models that support the required infrastructure to deliver those products and services and create reasonable profit margins
  • Appropriate incentives to motivate employees to deliver those products and services
If those things exist, there will be transparency and control will not be a problem. Technology enhances the processes and systems a business uses to do its work. So, will adding technology enhance your transparency or create corporate mirages?

Photo Credit: mbz

Thursday, August 21, 2008

Project Management Excuse List

Have you ever sat in a status meeting and thought, "I've heard that excuse before, and that one and that one too..."? Normally I'm very patient, calm and thoughtful. [Editor: Huh???] But this is it. Enough with the excuses. If you have to reuse the same excuses, in the name of efficiency, can we please just use numbers instead of long winded explanations?

In the interests of status reporting efficiency, please use the following list of excuses when you've said you'll have no problem completing something, which will now be late.

I've ordered the list according to how much I'd like to strangle the person giving them to me. You'll notice that I've grouped some of them that are inverse of each other, this is because if you hear one excuse, you'll often hear the other just a little later.

If you have additions, please let me know. As a public service, I'm offering this as a way to improve status meetings. Instead of long winded excuses, they can just say, "I've got 2, 9 and 11" and then the next [Editor: the remainder of the sentence was deleted in the interests of professionalism.]

Numbered Excuse List
  1. We've got scope creep. I don't know where it came from, but have you seen this cool little widget we've added...
  2. How come we never have enough money? Honest, if I could just get this one other tool...
  3. The requirements weren't defined. Why do I have to keep going to all these meetings, I mean, I've already started coding...
  4. The requirements keep changing. Every time I talk to someone, they want something different. It's not worth writing them down...
  5. There's a bug in the (Pick one or more: vendors, downstream app, upstream app, operating system, monitoring system, security... our software)
  6. The new software we bought doesn't work the way we want. It looked so easy when the sales...
  7. We haven't heard back from the software vendor, we filed the report (Pick one: weeks ago, months ago, yesterday... 5 minutes before coming to this meeting)
  8. The project manager from company XXX isn't here today, all the problems are with XXX...
  9. Testing found something we hadn't expected, it will (Pick one: double, triple...)
  10. There's a holiday in XXX's country. They won't be back before Monday. There's nothing we can do until...
  11. We couldn't reach Betty-the-business-analyst or (insert name here), we're stuck until...
  12. The Development, Testing, QA, Production environments aren't the same, the sysadmins are looking at it, they should be done...
  13. Management doesn't understand the problem, if they would just take more time...
  14. Management is too involved, why won't they just let us do our job...
  15. The project sponsor isn't helping us. We sent them an email two weeks or 5 minutes ago and haven't heard anything...
  16. The project sponsor keeps meddling in what we're doing. Every time we turn around, they're asking us questions...
In the interests of project managers everywhere, if you have other well worn excuses, please let me know and I'll add it to the list. [Editor: I have one. Number 17. Brainless author]

Wednesday, August 20, 2008

Aligning People or Letting them Align Part II

Bill Miller made an interesting suggestion about self organizing teams. As kids playing baseball, the first decision was often who would be the two team captains. Those captains then picked the teams. Sometimes they were the two best players or more often the two players most able to help their team win. As kids, we knew what was important to win.

An interesting circle of dependencies. The kids picked the captains and the captains picked the teams. Almost an implicit contract. The group gave the captain the right to organize the team, but if the team didn't win, but they had to win to be captain in the future.

Captains changed. Sometimes one person was a captain for one sport, but not for another. Sometimes frustration over past performances lead to minor mutinies. [Editor: That will be fine, thank you.] Sometimes new leaders emerged as time went on. What's important is that the process was self regulating. If the captain helped the team win, they continued as captain.

Can Business be Self Regulating?
There are obviously differences between ten year olds playing baseball and business, though I suspect there are not as many as one might hope. How different would it be if the workers picked the manager? If the people working on a project were responsible for identifying the person most likely to make the project succeed, who would they pick? And why?

Often times in business executives picks a manager or team lead and then charge that person with assembling a team. What if the team were selected first and that teams first responsibility was to pick the team lead?

Have you heard of people taking this approach? How did it work out?

Monday, August 18, 2008

Do You Align People or Let Them Align?

People are inherently self organizing. Who did you make friends with when you were a kid on the block? When you went to school, there were many kids in school, but there were a couple who became your friends. Why?

Are you organizing your teams so the become more efficient and effective, like the swimmer on the US relay team? Or are you hampering the very creativity needed for great advancement? Not sure? Think about how insurance or stock exchanges came about.

Why is it Called a Stock Exchange?
In 1680 Jonathan Mills opened a coffee house on Exchange Alley in London. It started attracting like-minded individual who would buy and sell stocks and commodities. By 1698, John Castaing had started posting prices. Taking the street name, Exchanges were born.

A Second Example, Lloyd's
Likewise, around 1688 Edward Lloyd opened his coffeehouse, Lloyd's. It attracted merchants and ship owners. By 1692 it moved to Lombard St and was later incorporated as a society, and insurance was born.

Why Organize the Self Organizing?
If kids can organize a football game all on their own, why inflict organization? Because organized teams beat sandlot teams. Companies are organized to clarify roles and responsibilities. Accounting and Finance are different from sales. Likewise project teams are organized to ensure the right people are in the right roles with the right responsibilities. [Editor: Can't my responsibility be to roll you under?]

In your company and projects', are you organizing to amplify peoples' abilities so the team succeeds and wins the gold?

Wednesday, August 13, 2008

What do you Pay Attention to? VED Analysis


If a surplus of information leads to a deficit of attention, how do you decide what to pay attention to? In the world of projects and corporate communications, consider using the benefits of VED Analysis to separate what is Vital from what is Essential from what is Desirable.

VED Analysis
VED analysis comes from the world of evaluating what medicines are stocked, especially where trade-off have to be made and lives are at stake. It is a system of setting priorities and drugs are classified according to their health impact.

In the world of projects, where there are limited resources and steering committees or project leadership teams need to evaluate alternate approaches, what about using VED Analysis to classify options by considering what their outcomes would be? If the suggestion out lead to an outcome that is vital, how should that be compared to an outcome that is essential or desirable?

Would changing your analysis simplify the evaluation process?

Photo credit: Joe Shlabotnik

Monday, August 11, 2008

How do You Engage People?

Gartner analyst Adam Sarner released a report and and published a Forbes article on what this means for marketers and businesses trying to engage customers. Jeremiah Owyang also had very insightful comments about engaging people in online communities.

If you are going to use Online Communities to improve your corporate productivity, its important to understand the ideas because some of the challenges are a little different as are some of the opportunities.

Gartner's The Four Levels of Engagement:
  • Up to 3 percent of individuals will be creators, providing original content and can be advocates that promote your product and services.
  • Between 3 percent and 10 percent of individuals will be contributors, essentially followers, who add to the conversation, but don't initiate it. They can recommend products and services as customers move through a buying process, looking for purchasing advice.
  • Between 10 percent and 20 percent of individuals will be opportunists, who can further contributions regarding purchasing decisions. Opportunists can "add value" to a conversation that's taking place, while walking through a considered purchase.
  • Approximately 80 percent of individuals will be lurkers (and all users start as such), essentially spectators, who reap the rewards of online community input, but only absorb what is being communicated. However, they can implicitly contribute and validate indirectly reporting the value from the rest of the community.
The Challenges
The biggest challenge is the number of people participating on internal online communities. If you have a potential customer community of tens-, hundreds of thousand or millions of customers, having 3% creators, 3 to 10% contributors, 10 to 20% opportunists is probably survivable. The large numbers of potentials mean that you'll get enough members contributing to make a difference.

If you have a team of 50 people who are distributed around the world and you want them to participate, 3% participation is pretty scary. [Editor: actually, it's your participation that's pretty scary.]

The Opportunity
The opportunity really lays in creating a way for the lurkers to participate. Prediction markets, polls, questions and answers must be aligned in ways that get meaningful input from a broader group without requiring large investments of time.

The goal of two to three minutes a week should be the first step in engaging lurkers. You must track when they have engaged and acknowledge it. The immediate recognition of a lurkers new engagement will be key to engaging them further. Their engagement must be meaningful and productive if companies are going to derive value from online communities.

People participate and engage in a community because they feel recognized and that they are a part of something larger than themselves. For businesses this offers a great advantage. Projects engage people in the business and intelligent use of online communities increase focus and productivity.

Photo credit: jeremiah_owyang

Sunday, August 10, 2008

Scope: Less is More

Craig Brown and Kevin and Julian are having an intelligent and thoughtful discussion on product vs project scope. Never one to keep an opinion to myself, I couldn't help but offer my own. I have an opinion on everything, which is not necessarily beneficial. An ex-girlfriend claimed she dumped me because I'd argue with her about whether dirt is brown... [Editor: There were other reasons she dumped you, we decided that one hurt your ego the least.]

Scope
Scope is one of the great issues with corporate projects and one of the advantages a start-up has. I don't think the problem is a product or project perspective, but rather a WIMBY perspective.

Many people are familiar with George Carlin's NIMBY (Not In My Back Yard), but fewer are familiar with WIMBY (Wanted In My Back Yard).

In corporations, often times projects get funded because different executives/managers can get things they want included in the scope. The project is sold by inclusion, be it to the product or project scope. In either case, because funding can be expanded to meet additional requirements, which need to be added to get buy-in from key executives/managers, the project or product get too big. They suffer from WIMBY

Start-up Advantage
An entrepreneur can only build what they can pay for. I didn't recognize this benefit until I realized one of the advantage a start-up has is limited resources. I can't get more funding without selling what I already have and then doing what the customer wants. Because I have to pay for additions out of sales, my own pocket or consulting arrangements, what we develop has to be simple and clearly present the value we are offering.

Less is more.
[Editor: Your ex doesn't think so...]

Photo credit: Mingfong