A holiday card to the industry - 2007

12/24/2007

People, process, and technology.

It's a simple formula that describes what makes any business operate. For decades, those who shape business thinking have ranked them as follows:

1. Businesses are collections of processes.
   
   
2. Businesses hire people to perform roles in those processes.
   
   
3. Businesses use technology to automate processes or process steps.

Process is the centerpiece, or it is so long as you ignore all of the logic and accumulating evidence that says it isn't so.

It can't be. No matter how well-designed its processes and how superior its technology, a business with disaffected, unmotivated, apathetic employees ... led poorly by definition ... will fail.

Nothing can overcome the wrong people.

Great employees, in contrast, will get the job done whether there is a process in place or not, let alone whether it's a good process. They will get the job done with substandard technology. They will get it done, even when company management puts barrier after barrier in their path.

Business consultants call these employees "heroes." Succeeding through heroics isn't supposed to be good business.

And it isn't, because relying on heroism is like relying on luck. Eventually, luck runs out. Eventually, too, heroes fail to beat the odds that are stacked against them.

Many in business, when they use the term "hero," do not mean it as a compliment. This makes no sense. Men and women succeed through heroics because they must, not because they choose to: With better processes, technology, leadership and support, extraordinary effort might be less necessary. Until then it's the source of business success.

Great employees succeed no matter what. Bad employees fail no matter what. Most employees create superior results with the right leadership but don't insist on it: Badly led, they become apathetic losers.

With the right leadership most employees succeed. Without it most employees don't. It's true of leaders but not of technology or process.

Then there are customers. It's a rare business that succeeds without them. Supposedly, they no longer feel any loyalty.

So let's look at baseball. Some teams have fanatically loyal fans -- teams like the Boston Red Sox and New York Yankees, who have been known to win from time to time, but also teams like the Chicago Cubs, who, if they fail to win the World Series next year will have achieved a full century without one.

Something these teams have in common: They have never threatened to leave for economically warmer climes or better stadia. They have, instead, maintained a steady, warm bond with their fans, who enthusiastically return the favor.

Some businesses that are not baseball teams also sustain loyal customers. Once upon a time there was, for example, the Green Mill, a "three/two" joint (that is, it served weak beer) on the corner of Grand and Hamline in St. Paul.

The Mill was the center of my social life. It was more than that -- it was the center of a community. Less sanitary than Cheers (but then, isn't any worthwhile bar when you're young?) it was the place everybody knew my name.

Everyone knew Galvin's name as well. I recall an occasion when Galvin cashed a check at the Mill. Bikko, who tended bar at this fine establishment (and was known to buy a round from time to time), asked if the address on the check was correct. Galvin affirmed that this was so.

Bikko took a second look. "Hey, this is our address!" he said. Galvin affirmed that this was so as well.

"Makes sense to me," Bikko remarked as he handed Galvin two tens and a five.

The Green Mill is now a classy, faux-potted-plant-laden chain of gourmet Italian restaurants. It has strong process that creates great product -- Chicago-style deep dish pizza and gourmet beer. But nobody knows my name, nor wants to.

I might go there for a meal once every year or two.

The Green Mill of my youth didn't become a community through process or technology. It didn't do so through product quality either: The beer was thin and the pizza was, so far as we could tell, cardboard covered with cheese.

I was there every night. It was home, because Bikko behind the bar and Schultzy at the tables were our hosts and our friends.

If it matters, research confirms that customer loyalty comes from loyal, committed, enthusiastic employees more than it comes from any other factor, and that business success comes from loyal customers more than it comes from any other single factor.

The research isn't really necessary, of course -- all that's needed is a moment's reflection.

It isn't the technology. It isn't the processes. It isn't even the products.

It is, happily enough, the people.

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Copyright and other stuff -- The great KJR link point

[Yet] Another helpless desk

12/17/2007

In the beginning was Deming.

Deming introduced measurement to industry in the 1950s. A statistician, he relied on sophisticated multivariate techniques. He encouraged those who didn't understand sampling theory, analysis of variance and multiple regression to stay away and let the experts handle the data collection and math.

American industry ignored Deming and his theories -- I can't help but suspect America's enduring cultural distrust of the intellectual -- but Japan did not, turning itself from a defeated military power to a fierce economic superpower in the process.

As a culture we are nothing if not adaptable, and so "metrics" happened in (to?) America. Sadly, we aren't so adaptable that we were willing to actually learn, for example, statistics.

Which might explain why most of the metrics stories I hear are horror stories, not successes.

I'll be the first to admit to flaws in my sample. I'm sure it is non-stationary, biased, suffers from heteroskedasticity and perhaps the heartbreak of psoriasis as well. I'm nonetheless confident in this conclusion: Call centers are the most mis-measured function in business, and IT Service Desks are the most mis-measured type of call center. Which brings us to this week's anonymously provided tale of woe:

At the Help Desk where I currently work, they like to measure First Call Resolve (FCR).

What I am finding out from longtime tech support people is they like to game the metrics. Here's how it works:

First, the system defaults every call to Resolved whether it really is or not.

If a user never calls back to say "That didn't fix it", you get a freebie. If, on the other hand, the user does call back to say, "Yep, that fixed it," and the tech on the line documents the call in the system notes, you just lost an FCR. Why? Because you weren't the LAST person to talk to the user. Yep, the last person to talk to the user on a call gets the FCR. It's as if the relief pitcher who comes in with two outs in the ninth, a five-run lead and the bases empty gets credit for the win.

So potentially someone else could make you look bad, just by creating the last entry in a call log. And after five days, a ticket goes from Resolved to Closed and there's nothing you can do about it.

You always open a ticket on a new call, find out what the issue is, then decide if it's your queue or not. If not, you transfer it. However, the queue you transfer to will never get an FCR on that call even if they solve it immediately. Why? Two people have talked to the user, that's why.

Some tech guys get around that by opening up their own ticket and documenting it for an FCR, leaving your ticket out to hang. And that can ding YOU just as badly since it's been presumed you abandoned it. If you get a call where no one handles it but they actually need to call outside of tech support to, say, Financial Ops, you document it but those calls are not counted as FCR. They are deducted from your score.

Strangely enough, some of us were talking about this the other day -- about how to increase FCR legitimately. Some of them had researched suspicious FCR standings (which are posted for individuals) and found that some of the lumps were posting gratuitous FCR calls (in other words, fake calls). You could tell by the shortness of the ticket and the vague incorrect answers that were in the notes.

The best way to find the lumps? Not the FCR metrics -- they're worthless. Instead, just ask the other techs. Most tech people are fairly honest in appraising their fellow co-workers. It's not that we don't like them. It's idiotic management playing games with our stats.

So, like the plaque says, "Be careful what you measure. You'll get it.

The culprit here is clear: Simplemindedness.

A Help Desk is neither simple nor solitary. It's one part of a system that should: Work on what's most important first; resolve incidents quickly; and prevent recurrences.

Assessing the system's outputs isn't all that challenging. Assessing the engineers and technicians who create the outputs is tougher.

They have to resolve what they can, properly refer what they can't, accurately document their work, and escalate underlying systemic defects. That requires: Intelligence, judgment, technical skill, diligence, and collaboration. It's a multivariate situation.

Just ask Deming.

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Copyright and other stuff -- The great KJR link point

Once in awhile it's done right

12/10/2007

Asked if the study of creation could provide any insights as to the nature of its Creator, the great biologist J. B. S. Haldane replied that clearly the Creator has " ... an inordinate fondness for beetles."

Coleopterans account for about a quarter of all animal species on this earth. Mammals, in contrast, contribute about a quarter of a percent of all species. Don't feel bad. By other measures I'm sure we human beings are more important.

Humans dominate all other species (except, perhaps, for some viruses and bacteria, along with ants, spiders and the aforementioned beetles) because of our ability to think: To make tools, to plan, to transfer skills and knowledge to our progeny.

That's how humans dominate other species. Individual humans dominate other humans through their social skills. These two facts explain most of human history: We win through intelligence. I win through what Daniel Goleman calls "emotional intelligence."

This is why most businesses fail to learn from their successes, as explained in detail in the last several editions of Keep the Joint Running: Learning from success is good for the company but not necessarily for those who run the company.

Emotional intelligence is a vital quality for effective leaders. The problem arises when they decide to value emotional intelligence more than tangible skills, knowledge and logical decision-making in the organizations they lead. It's how organizations start down the sad path to what my business partner calls "mediocracy."

It needn't be so. As evidence I submit this tale from a regular KJR correspondent:

I recently finished a six month job rotation as manager of our Service Desk (formerly "Helpless Desk" according to our users).

The prior manager measured performance on a strict count of tickets handled, weighted by priority. Since we can't reward by dollars (union shop), we use perks like window cubes, preferred schedules, and first choice on vacations as incentives.

The top performer for the 13 quarters prior to my arrival was an individual who I really didn't see doing anything. The quarter ended and he was again the top man. I decided to find his secret to success in an effort to raise everyone else's game. So I started analyzing his tickets.

His method was simple. Every single call he took was labeled Critical. If he took a ticket originally handled by someone else, he upgraded it. If he got repeat calls from the same user with the same problem, each was a new ticket. He closed out every ticket within two hours, regardless of whether the problem was handled or not. We measured volume, so he delivered volume.

However, when he trained someone new, he always preached completion, follow-up, and thorough documentation -- in short, how the job really should be done. He gamed the metric both ways (boost my numbers, lower your numbers). And we rewarded him for it.

I changed the rules and the measures. Those answering the phones started with the question "Is this a problem we have worked on before?" and reopened the old ticket instead of writing a new one. They wrote all tickets and graded their priority. They assigned the tickets and those handling them did not have authority to change the priority. I measured who got things fixed "once and for all" rather than incident volume.

Lo and behold, the top performer fell immediately into the bottom 10%. In the next quarterly survey of our effectiveness, users rated service 20% higher than ever previously. I was offered the position permanently (and declined it).

Our "top" performer left due to "absenteeism problems."

I left my successor a plaque that read "Be careful what you measure. You'll get it." (It's from one of your columns on metrics -- credit where it's due.)

My successor went even further. He rewards the people who identify patterns of problems and solve them, for individual recognition. He did away with the perk system in preference to a team system. His metrics are number of tickets, number of reopens, time from receipt of call to start of work, and customer satisfaction.

He also tracks the number of calls received to prevent gaming the first number by not writing tickets. The desk is way up in satisfaction, and he definitely is on the right track.

Oh, and he still uses the manual written by the former top performer to train people.

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Copyright and other stuff -- The great KJR link point

Learning in the wrong direction

12/3/2007

Can an organization learn?

In response to the last two columns, which talked about the barriers to organizational learning and how to overcome them, a subscriber challenged me on this point. Learning, he said, is something people do, not organizations.

I agree, organizations aren't just people, only bigger. As has been pointed out in KJR more than once, they're a different type of creature than human beings, with different motivations and patterns of behavior (see What corporations and spleens have in common Keep the Joint Running 5/5/2003).

Can organizations learn? As is usually the case, the answer depends on how you define "learn." Since my scientific training is in sociobiology, I define it operationally: To learn is to change behavior in an adaptive way based on experience.

If that's the definition, the answer is an unequivocal "yes" -- organizations do change their behavior based on what they experience. They learn through changes in the behavior of their executives, managers and staff, just as animals learn through changes in the behavior of individual neurons. The difference: Executives, managers and staff can prevent the organization from learning if it isn't in their best interests.

To illustrate the point, here is a case study, sent in by a subscriber who really, really needs to remain anonymous:

The company I worked for had several divisions. I was a member of the smallest and we were led by a rogue Product Manager who thought we should write software the clients loved and could understand intuitively.

So we sat with clients, visited their offices to watch them work, etc. Our software won design awards, gained more than 50% market share in its space, and our engineers got standing ovations at user conferences.

At our annual company meeting the CFO would go over "the numbers" broken out by division which was fine when our division was tiny but as we grew people began to realize that we generated several times as much revenue per person as the other division -- we had 1/10 the total resources generating 1/3 the quarterly revenue.

Then it got childish. The "numbers" were no longer broken out by division. There was grumbling about special people making more money in "that" division when everyone was working "hard." The divisional portion of the yearly bonus was discontinued in favor of an overall company performance bonus.

But lo and behold, the success continued. At the peak a division containing 1/10 of all resources serviced 40% of all clients, and generated more than half the new software sales revenue vs. all other divisions combined. That factor of 10 revenue generation ratio was just too much and we soon found our core members redeployed to other projects, new mandates to use code libraries and architecture based on the other divisions' products, etc.

The moral of the story is that we succeeded for the customer for awhile, as evidenced by our developer-to-customer-support ratio (2 to 1) vs the other divisions (1 to 4) and support-to-customer ratio (1 per 700 vs 1 per 40).

But we failed in the long run because we couldn't bring the rest of the company along. Our success generated jealousy and animosity in the VP level office suites and since we were so small (1/10 the VP's) politically we never stood a chance. Once the high and mighty hit on the excuse above we got squashed like a bug.

The company was sold a few years later to a large software accumulator and is now being milked for its support fees. Which as you notice is great when you have a buggy, hard to use product with proprietary data and you charge high support and maintenance fees. But when customers don't need support because their old version works just fine that model breaks down.

The end result was the mass exodus of the best and brightest and now only a handful of the original group remain. All of us are now seeking to recapture that 5-6 year golden era before we were told to do less well so as not to offend our co-workers.

Truth is definitely weirder than fiction.

If this were fiction -- say, an episode of House -- we'd put these symptoms on a whiteboard and figure out what disease explains them all. My diagnosis: Weak leadership.

A strong CEO would have created an environment that recognized and emulated success, building it into the corporation's structure, compensation, and culture. A strong CEO would have recognized that in business, "fair" doesn't mean equality. It means meritocracy.

This CEO opted for "mediocracy" instead.

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Copyright and other stuff -- The great KJR link point

Creating a learning organization

11/26/2007

Last week's column set some readers' teeth on edge (Why Johnny Corporation can't learn, Keep the Joint Running, 11/19/2007). The issue was its negative tone.

The column explained why corporations rarely learn from their mistakes and even more rarely learn from their successes. "Don't bring us problems -- bring us solutions," was the gist of the complaints.

Fair enough, so long as we all agree that unless you understand the underlying dynamics of a problem you're unlikely to find a solution.

Solutions to these two problems are especially tough to implement because doing so calls for challenging some very popular business beliefs and practices. In particular, companies that truly want to be "learning organizations" will have to thoroughly and deeply re-think their approach to accountability, to metrics, and to compensation.

The first, and possibly most important step you can take is to give up one of the most cherished notions in American pop business culture -- the need to hold people accountable. KJR has covered this subject before (see The dark side of accountability, 11/3/2003).

Among the many disadvantages of a hold-people-accountable business culture is that it pretty much guarantees that anyone associated with a mistake will do everything possible to hide it -- to sweep it under the rug, bury it in a quarry, or put sawdust in the crankcase and call it a mint-condition classic.

Or, if there's no way to hide the mistake, they'll find some poor schnook to serve as a scapegoat. Root cause analysis? The root cause is that this schnook here caused the problem.

Think anyone will admit to a mistake under these circumstances? Of course not.

So Lesson One in creating a learning organization is to create a culture of responsibility. That means consistently praising everyone who identifies mistakes and takes the lead in fixing them, without ever paying the least bit of attention to who made the mistake in the first place.

The next place to look is metrics. Last week's column pointed out that when your metrics define failure as success and vice versa, they guarantee you'll repeat and extend your mistakes because you always get what you measure.

The best metrics assess your progress toward real, meaningful goals. They aren't proxies or indexes, and they don't assess intermediate results.

To illustrate, imagine three police departments. The first measures success by the ratio of arrests it makes to crimes committed. The crime rate goes up, not down, because the city's peace officers are insufficiently concerned about determining who actually committed each crime, and even less concerned about making sure the evidence they present isn't thrown out because of irregularities.

The second police department, headed by wiser leaders, measures the ratio of convictions to crimes. Much better. For the most part, its officers take care to arrest only those who seem to be guilty.

Much better, but still not as good as the third police department, which measures its success in terms of overall public safety.

Which is why Lesson Two in creating a learning organization is to choose your goals wisely and measure them carefully. Doing so points you in the right direction and makes sure you know success and failure when you see them.

Lesson Three is simply stated but difficult to put into practice: Align compensation. It's particularly important if you want to learn from success.

This isn't a matter of rewards and motivation, because compensation, properly understood, isn't about rewards and motivation. It's about the most tangible form of communication a company has -- what it pays for. To understand this point, compare these two phrases: "Here's what we want you to do," and "Here's what we're paying you to do."

The latter packs a much stronger punch, don't you think?

Aligning compensation means defining acceptable performance as delivering results and strong performance as delivering repeatable results. Exceptional performance? That means repeating the results of others, not having them repeat yours.

Whether the subject is reusable software modules, successful business practices, or borrowing another employee's PowerPoint deck, if you want a company that learns from its successes you had better provide the highest compensation to those employees who find those successes and learn from them.

Even this is dangerous, by the way. Because if you aren't careful you'll stifle innovation along the way.

It has to be that way. Learning from success means you don't reinvent the wheel.

Innovation means you do.

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Copyright and other stuff -- The great KJR link point

De-verticalization and other random ideas

11/12/2007

Apple creates brilliant user interfaces.

Macs are much cooler than Windows PCs. If OS/X is a Lexus, Windows is a Chevy Lumina. (Linux on the desktop, is, by extension, an AMC Pacer.)

The iPhone is so cool most people think it does something my Treo doesn't, although they aren't sure exactly what. So why can't it fast-forward my music?

But this isn't a column about user interfaces. I'm not really sure what it is about. Let's keep going.

Maybe it's about technology. We just mentioned the ultimate in cool. Now let's look at something very hot: Software as a Service (SaaS).

SaaS is hot. I can't get over the nagging feeling that it's hot only because the IT trade press acts more like a bunch of cheerleaders who can't dance very well than like journalistic enterprises.

Dale Vile of Freeform Dynamics, writing in The Register -- one of the few exceptions to this complaint -- points out how poorly SaaS has been accepted in real-world (as opposed to press-released) enterprises. Other than SalesForce.com, where is it? (See Rewriting the SaaS laws for more).

eWeek is more optimistic (10 Things You Should Know about SaaS, no byline, Gartner, AMR Research and Forrester cited as sources). Interestingly, while it says only 20% of all SaaS implementations are CRM (read SalesForce.com), everything else in its report is about SalesForce.com. I wonder why.

No, actually I don't.

As Vile points out, SaaS is an excellent choice for narrowly focused solutions that don't require a high transaction volume, tailored configuration, or significant integration with other systems.

Situations, in other words, that are also solved easily with shrink-wrapped software.

Deep down I know SalesForce.com must provide something important to the enterprise that it couldn't get with Act! or Goldmine. I just don't know what, other than redirecting service desk calls from those annoyingly demanding salespeople to an outside vendor.

Huh. That can't have been the topic either. I don't have anything else to say about SaaS that I haven't said before (Trend, fad, or blah blah blah? Keep the Joint Running 2/13/2006). Let's try a former hot trend: Internet telephone services.

A couple of years ago, before the patent infringement suits, Vonage and Skype were hot.

(Definitely not the point, but a thought I feel like sharing: I'm going to apply for a business methods patent. The business method is applying for patents on obvious and pre-existing ideas, then filing hundreds of nuisance suits to become rich for no apparent reason. With the patent I'll sue anyone who files nuisance suits based on stupidly awarded patents.)

Where was I? Internet telephone services. Hot or not, they are interesting. Not for their technology, but for taking de-verticalization to the consumer sector.

Once upon a time, telecommunications was completely verticalized. AT&T wasn't just a monopoly. It was a seven-layer monopoly. It owned the entire protocol stack, from the physical layer (the wires) all the way to the application layer (telephony).

Then came Carterphone and MCI. They didn't just break the monopoly. They also de-verticalized telecom. MCI provided only the network layer. Carterphone provided only the application layer. (Some companies -- aggregators (also called "aggravators") -- service only the invoicing layer.)

Internet telephone services do for consumers what PBX vendors did for the business marketplace years ago. They separate the network from the telephony applications.

In doing so they have achieved something else that's even more notable: They make it possible to buy telephone service from a retailer.

Which brings us to the point of this column (hey, it has one after all!) -- a prediction: Vonage and its competitors represent the end of the line for the cellular networks. It will take a decade or more, but it will happen, because cellular providers aren't retailers. They're telecommunications companies.

Choose any cellular provider. Go to its website. Try to figure out what you'll have to spend. Look at your cellular bill. Try to figure out if it's right.

Now go to any of the Internet telephone company websites and figure out what you'll spend and what you'll get for it. Something miraculous will happen -- you'll find you can. The Internet telephone companies think like retailers.

We'll still have to wait a decade or more because we won't have a ubiquitious WiFi mesh until then. The rule is old but it's still valid: Innovation is fast, but infrastructure is slow.

Once we do have ubiquitous WiFi, we'll be able to take our WiFi Internet telephones with us. Then we'll use them instead of our cell phones to become distracted while driving so we can crash our AMC Pacers into a tree without noticing.

Much better.

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Copyright and other stuff -- The great KJR link point

cruelty to animals

http://s78.photobucket.com/albums/j86/jtbrush/?action=view&current=IMG_0001.jpg

Taking the measure of IT professionals

11/5/2007

Take everything you think you know about employee compensation. Put it all aside (other than the last two editions of Keep the Joint Running). Read two books: Robert Austin's Measuring and Managing Performance in Organizations and Alfie Kohn's Punished by Rewards.

You'll realize that the two assumptions on which most modern compensation systems are built -- that managers can objectively measure employee performance, and that compensation systems should use those measures to create incentives for stronger performance -- are pretty much worthless.

I devoted a column to Austin's book (Can metrics be saved? Keep the Joint Running, 11/7/2005). But while I've mentioned Kohn in my books, I was surprised to discover I'd never once mentioned him in Keep the Joint Running.

I don't entirely agree with Kohn. In particular I don't agree with his rejection of praise as a leadership tool. Still, his core insight -- that compensation-as-incentive amounts to bribing employees to perform -- is what first drove me to re-think the whole subject.

Credit where it's due.

We've spent two weeks on how to structure compensation. Underneath it all is this chain of logic:
Motivating employees is something business leaders are supposed to do. The best you can hope for from your compensation system is to avoid demotivating them.
To avoid demotivating employees, compensation systems have to be fair and perceived as fair.
To be perceived as fair, compensation systems have to have clear, strong connections to both marketplace value and employee performance.
To connect to employee performance, managers must know how to assess it. Not measure it. Assess it.
In business, some employees have jobs whose performance is easy to quantify -- factory workers, for example, who process some number of widgets per hour with some (presumably smaller) number of defects.

That some employees have jobs whose performance is easy to quantify has led to the strange conclusion that all of them do. Managers who haven't fully quantified them just haven't been clever enough to manage the task.

That isn't the case. In particular, the list of IT jobs where performance can be quantifiably and objectively measured is quite short. In most shops it's entirely empty.

Stop trying to objectively measure the performance of IT staff. It isn't going to happen any time soon, and when it does it will mean we've degraded the profession to the status of an assembly line. Assess staff performance instead, recognizing that many dimensions of the job have fuzzy boundaries and subjective qualities.

Here are some ideas for what you might look for:

What each employee accomplished. Keep a list for each employee, which should include the accomplishments of teams to which they belonged. Encourage employees to keep their own lists, too. If you're leading with maximum effectiveness, you won't know everything employees achieve.

What they didn't accomplish. You want self-starters. Employees who are such self-starters that they disregard the work you assign to them, though, shouldn't be rated as highly as those who get it done. Botched and ignored assignments matter.

How their performance in quantifiable tasks compares to their colleagues. Many responsibilities aren't quantifiable. Some are. For example: Some developers plow through their share of the maintenance and enhancements queue faster than the rest, with higher levels of end-user satisfaction and fewer bugs. Value this.

The extent to which they pitched in. Sometimes there's dirt on the floor. You want whoever notices it to grab a broom and dustpan and take care of it. Stuff needs doing. You can't list it all in advance, put it on job descriptions, partition it all out, and schedule it.

How well they supported their colleagues. "Team" is an overused word. It's a team when its members align to a common purpose, trust each other, communicate well, and help each other out. You want this. Some employees do more to make it happen than others.

Good judgment. Some employees make better choices than others. The worse ones might do so deliberately through malicious obedience, or because they just can't figure it out. Regardless of the reason, employees with good judgment are more valuable than the ones who need everything spelled out thoroughly enough that their job is just painting by numbers.

Measuring the performance of IT professionals is an infinitely complex task. Assessing it, on the other hand, is not. You have to take on just three responsibilities.

The first is to know what you value. The second is to communicate it.

The third is to pay attention so you know if you're getting it.

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Copyright and other stuff -- The great KJR link point

Comp logic

10/29/2007

If it makes you feel better, compensation has improved.

I'm not talking about the amount. I'm talking about how it's administered.

Not that long ago, many companies gave men raises when they got married. Women's careers stalled under the same circumstances.

The logic was impeccable: Married men needed more money to support their households. Married women, on the other hand, no longer needed as much. After all, they had husbands to support them.

The world does sometimes get better. Achieving perfection is another matter. If you expect it, you're sure to be disappointed, especially where compensation is concerned.

This, and other thoughts, occurred to me as I read my correspondence from last week's column on fair compensation (Poor Joe Keep the Joint Running 10/22/2007). What other thoughts? Glad you asked.

Why not base pay on value? Most employees think their pay is and should be based on the value they contribute.

It's a reasonable thought. That value is why companies employ people in the first place (for more, see The 70% solution IS Survival Guide InfoWorld 3/4/1996).

Here's the problem: Whenever a company bases compensation on anything other than what the market will bear, it faces one of two situations. Either it can get the same value for less by replacing its employees with less expensive alternatives, or its employees will leave for better paying employers.

Basing pay on value is inherently unstable.

There's another problem with value-based pay: Measuring the value. When you're dealing with the sales force it's easy. They sell. What they sell has a known margin. Do the math. No problem.

For just about anyone else, the connection between their work and the value they deliver can't be turned into a number that will make much sense. The value is there. Measuring it unambiguously isn't a problem any of us are likely to solve any time soon.

Can you really give a $75,000 employee a $20,000 annual bonus? No, you probably can't. The problem is that every year you employ this computation, you're assuming the employee will stay another ten years. Some employees will; many won't. If that sort of longevity is typical in your company, annual bonuses this large might not be a bad idea. If it isn't, don't fret.

First of all, unless your company is a truly awful place to work, the average employee turnover in IT is unlikely to exceed 20%, which means the average duration of employment is at least five years. That still allows more than $10,000, which isn't bad at all.

There's another alternative, too, at least in publicly held or soon-to-be publicly held companies: stock options, vested over ten years. It's true that the accounting for stock options has become controversial. The basic idea remains sound. Vesting options over ten years eliminates the risk of basing compensation on the assumption of ten years while getting much less, and in addition creates a financial incentive for employees to stay with the company.

In fact, you can give a smaller option grant and vest it over five years, especially if your company has a reasonable track record of stock price increases, because it's the employee's expectation of value that matters most.

Not a bad set of outcomes.

Pay for performance? Great. One question: How do you measure performance? This is the magic question, whether you recognize performance with variable compensation or prefer to use simple raises.

As a manager you have to have a way to assess ... not measure, assess ... how well employees are doing their jobs. The distinction between measurement and assessment is vital.

When you measure -- when you establish clear, objective criteria regarding how well each employee accomplished the goals, objectives and responsibilities you've established -- you face a hazard: You get what you measure. That means anything you mis-measure employees will get wrong, when you measure the wrong things you'll get the wrong results, and anything you don't measure you won't get. Especially, what you don't measure you won't get.

Think of what you ask employees to do, all the time, in addition to their formal responsibilities: Participate in ad hoc committees; take the initiative when something needs doing that you don't know about; and help each other out when one gets stuck and another knows the solution; to name just three typical examples.

If you assess employee performance, these will count in their favor. If, instead, you measure it, when you ask you'll get a predictable, and entirely deserved response:

"Why would I want to do that?"

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Copyright and other stuff -- The great KJR link point

Poor Joe

10/22/2007

Poor Joe Torre.

George Steinbrenner's offer would allow most Americans to retire in comfort after a single year of work. Add the incentive payment for success and their children could retire too.

Torre was, he said, "insulted" Steinbrenner wanted to connect his pay to his performance. (He didn't, of course, phrase it quite that way.)

Not that I'm siding with Steinbrenner. I have a firm policy: When rich people negotiate, I don't choose sides. Joe, George, anyone else in this position: Don't tell me how unfair the other party was. Don't tell me about the other side's greed. Don't tell me you're insulted, hurt, generous, undemanding, or anything else.

Stop complaining in public -- it's undignified, serves no purpose, and annoys everyone. You negotiated and didn't get what you wanted. Grow up and shut up. Nobody cares.

While we're at it ... could we have less complaining about what players earn? They might not do anything important. They might look more like employees than executives or investors. They did, on the other hand, work very hard to reach the top of their craft, and negotiated well. Not my business either.

Ridiculing Accenture for choosing Tiger Woods as its non sequitorial celebrity symbol is, on the other hand, just fine.

Getting back to compensation, it's a dental subject for executives -- necessary, but not today, thanks. Compensation is to employee relations what service levels are to IT/Business relations. Just as the only uptime business users find truly satisfactory is Always, the only compensation employees will ever find truly satisfactory is More.

It's the American way.

This is as good as it gets: Compensation that is fair, easy to understand, consistent with your priorities, and not a performance disincentive. To achieve this, build it from four building blocks: The base (what you pay for showing up), promotions, variable compensation, and spot bonuses. Each has a different role to play:

Base: For each employee there's a theoretically perfect base. That's the magic number where the employee has no economic incentive to leave and you don't have an economic incentive to find a replacement.

Earth being a stochastic realm, the "perfect" theoretical wage is more of a blur than a point, but that's okay. Replace "no economic incentive" with "more inconvenient than it's worth" and you're close enough.

The base has nothing to do with performance or value, only the labor market. Adjust each position's range every year according to what the market dictates. Adjust each employee's position within that range, based on increased knowledge, ability and skills.

Promotions: When an employee demonstrates the ability to perform a more demanding job, someone else will pay them to do so. It's time for a promotion -- a different role, which means a different range, and a different position in the range. Fail to promote and you're no longer near the theoretically perfect base rate.

Variable compensation: This is the magic buzzword for the annual bonus. It's called "variable" compensation because it varies each year depending on how each individual employee performed that year.

Variable compensation is a good news/better news situation. The good news: You can make variable compensation enough to be meaningful -- something you can't do with wage adjustments.

When you recognize performance by giving an employee a raise, you might manage a 7% increase for a top performer. For a $75,000-a-year employee, that means $40 a week more cash than average workers get who receive the standard 3% inflationary increase. Big deal.

That's how it looks to the employee. This one raise will cost the company $25,000, (assuming the employee stays ten years and discounting the cash flows) whether or not the employee continues to be a top performer.

Instead of a raise, give your top performer the same 3% inflationary wage increase you give everyone else ... and a $20,000 bonus. Even after taxes that translates to something like $12,000 in cash. That's serious money to most employees (the good news), and it saves the company $5,000 (the better news).

Spot bonuses: If an employee goes above and beyond, it's an event, and it deserves recognition. Write a check, and do it right away. Reserve spot bonuses for exceptional contributions, not merely for successes. Otherwise they'll become entitlements -- ignored when they happen, resented when they don't.

Fair compensation isn't all that hard to do. In principle. The details -- figuring out the market range for each position, and where to place each employee in that range -- are where it's hard.

But of course, the details are always what's hard.

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Copyright and other stuff -- The great KJR link point

theVent ajc2007Oct24

As you get closer to retirement and realize all the great possibilities, then these small health problems start to pop up. It's like a race for your ship to come in before the dock rots.

[I represent that remark, the pup says, coughing and wheezing while his nose runs.]

Jacques Brel is alive and well and bitching and whining in ATL via Paris

Why couldn't the Alliance/Hertz have done the whole show in French? It would have been unoffensive -- well mostly so. The bit with the red flag was crap without words.

Or drop the words entirely -- perhaps use oohs aahs and falalas.

Oh yes! I wonder what Peter Schickele would have thought of the higher female voice. Pretty voice but you couldn't hear her if another voice was present, esp the lower female voice. Somewhat like his concerto for lute and bagpipe. Or was that P D Q Bach's?

Of course this was all fine because the uncomfortable chairs covered with thin cushions made one forget the pain in one's brain.

Who says all terrorists are turban-headed camel-jockeys? Certainly we can add a bad slice of the French to this, starting w/JB.

what part of NO don't you understand, the N or the O

[name of guilty party suppressed] wrote on 10/17/2007 4:45:04 PM

For those of you who haven't heard [fellow employee]'s father passed away last week. Even though he has requested that we don't send cards [bold added by editor] I think it would be nice to let him know that he is in our thoughts and prayers. I have a sympathy card at my desk if you would like to sign it.

Thank you,
[name of guilty party suppressed]
Administrative Assistant Sr.

Project auctioneering

10/15/2007

The free market is a versatile tool for allocating resources.

So versatile that many consider it a panacea that solves all problems -- not only in the public marketplace but also in business governance.

Transfer pricing (the practice formerly known as "charge-backs") is just one example. Having an "invisible hand" make the complicated decisions required for properly allocating internally delivered services is tempting -- much easier than making them through careful analysis and consensus building.

Sadly, free markets have their limitations ("externalities" in EconSpeak) -- among them delayed-feedback-induced chaos, the "Tragedy of the Commons" (see Laissez-faire Internetism IS Survival Guide, InfoWorld, 3/25/2006 for descriptions of both), monopolies and cartels, network effects, and the Jeffersonian notion of usufruct.

My friend Carlton Vogt pointed me to another -- an economic conundrum called the dollar auction. Here's how it works, as described by Professor Oliver R. Goodenough (Professor Goodenough's article is about public policy -- you've been warned):

I'm going to auction off a dollar bill. Every subscriber to this column can bid. The only difference between this auction and eBay is that the runner-up also pays.

So if someone else wins with a $0.50 cent bid and you were the runner up with a $0.45 bid, you'd send me 45 cents, the winner would send me 50 cents, and I'd send the winner the dollar bill.

Not wanting to spend $0.45 for nothing, you keep bidding, to $0.95. You're the high bidder. The runner up is at $0.90 and has a choice: Lose $0.90, or up the bid to a dollar and break even. At which point your $0.95 cent bid is the runner up. But, you reason, a bid of $1.05 would cut your loss from the full 95 cents to just a nickel.

There is no logical end to this sequence -- once you start, you're trapped in the logic of ever-escalating investment whose sole goal is to cut your losses.

The dollar auction closely resembles the logic behind investing more time, money and effort in challenged business projects. It goes like this: "We've sunk so much money into this that pulling the plug would be political suicide. We're better off biting the bullet and seeing the project through." In dollar auction terms, it's preferring to lose another dime instead of the entire last bid.

Sometimes, but not always, this logic makes sense -- the extreme case is a project that needs one more week of funding. A business would be foolish to refuse it, simply because the project team missed the deadline.

The challenge governance committees face is recognizing the difference between dollar-auction situations and projects that deserve additional investment. Here are some indicators that you're looking at a dollar auction:

• Goals: They no longer make business sense. Times change, situations change, projects stretch out. The idea has become obsolete, without ever having had a chance to be state of the art.
  
• Scope: When a project team has re-chartered itself with broader and more ambitious goals or deliverables, very often it's because the team is failing to meet its deadlines. The broadened scope gives it breathing room.
  
• Plan: Look for holes -- single tasks that will take a month or more to complete, tasks that have been 80% complete for more than two weeks, or worst of all, daily improvisation with no plan at all.
  
• Optimism: The project manager uses the word "hope" to describe any part of the plan. "Hope" is the work-breakdown-structure equivalent of the famous Sidney Harris cartoon physicist whose mathematical proof included the step, "... and then a miracle happens."
  
• No demo: If, by the time the question comes up, the project team can't show working technology in action, it's likely the technology will never work.
  
• Testing: If the project seems to be stuck in the testing phase ... if the bug list isn't shrinking on a weekly basis ... the code, to use the technical term, "sucks."
  
• Team: Project teams have to be fully committed to the project's goals. This means project teams are required to lose their objectivity, and believe, deep inside, that the project will succeed. So if the project team recommends shutting things down, the situation has to be seriously awful.

No one indicator is definitive. The rating system:

1 or 2: Fix the issues, and go forward.

3 or 4: Worry, and conduct an external review before proceeding any further.

5 or more: The request for additional funding is a dollar auction, and the project is a zombie -- the walking dead. Put it out of its misery.

Then burn the specs, just to be sure.

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Copyright and other stuff -- The great KJR link point

Still not tax deductable

10/8/2007

Thoughts from an Oregon vacation:

Experts experience a different world (1): In Sideways, Miles and Maya (Paul Giamatti and Virginia Madsen) have a deep, touching conversation about Pinot Noir. They sipped their wine and envisioned the work of growing the grapes, the weather, the scenery, the vintner's technique ... entire vicarious lives.

I experienced flavor.

Relevant IT insight: When non-technical managers overhear a conversation between two engineers and have no idea what's being said, many shake their heads and roll their eyes. They should be delighted.

Experts experience a different world (2): When you tour wineries you mostly taste young wines -- in our case, 2006 vintages. A young Pinot Noir really doesn't taste very good to a palette as unsophisticated as mine.

A wine connoisseur can taste a 2006 Pinot Noir and predict when it will be ready to drink and what it will taste like ... and enjoy the future flavor now. Great vintners taste the grapes and know how to create that flavor.

Relevant IT insight: By the end of the design phase of any systems effort, at least one person in IT, and another in each affected area of the business, must be able to envision the experience of using the future system. Otherwise, while the new system might meet all requirements and specifications, it will still be a mess.

What you like and what you should ask for aren't always the same: My wife and I generally prefer red wines. As most of the wines were quite young, the whites were far more enjoyable.

Relevant IT insight: When making management choices, what you like doesn't matter at all. Base your choices on what the situation calls for. Anything else is your ego at work.

You can't optimize for everything: Joe and Shari Lobenstein -- the proprietors of Loebenhaus, our wine country Bed and Breakfast (highly recommended) -- also grow a small grape crop. Joe invited us to taste his Riesling and Pinot Noir grapes, which were ready to harvest.

The flavor was astonishing compared to supermarket grapes. So were the seeds, which make up a lot of these grapes.

It's too bad, but you can't get the flavor without the seeds.

Relevant IT insight: IT optimization also involves trade-offs. Move to a higher-bandwidth technology and you might find you've increased latency to unacceptable levels. Adopt a highly scalable process and you'll likely find you've increased overhead costs, reducing your flexibility.
And so on.

The outside view tells you little about the inside view: You can only taste so much wine, so we spent an afternoon at the Evergreen Aviation & Space Museum, the final resting place of Howard Hughes' legendary "Spruce Goose."

From the outside it looks like a very big airplane. When you enter and look the length of it, enormous looks small in comparison.

Relevance to IT: For business management, the experience is features and functionality. For business users, the experience is the user interface. Both are important. Neither provides useful information about what a system looks like from the inside.

But you already knew that.

Sometimes, what you get is better than what you'd planned: One of the exhibits was a Boeing B17G Flying Fortress -- the workhorse bomber of World War II.

Bill Jarvis, the volunteer who showed us around the B17, piloted 30 missions over Germany in WWII, starting when he was 18-and-a-half years old.

On Bill's last mission the Germans finally shot him down. He crash-landed in a sugar beet field in Luxemburg. Allied troops immediately took the entire crew prisoner, not sure if they were really Americans or were Germans trained to infiltrate.

After weeks of imprisonment and interrogation, Bill finally had enough. He told the MPs, in terms that weren't uncertain and were laced with every cuss word he could think of, that he was going to see the General and they'd just have to shoot him if they wanted to stop him.

When he swore at the General in similar terms, the General concluded he had to be an American -- no German could have had such a colorful vocabulary -- and freed Bill and his crew.

Bill's story is too long for this space, so you'll just have to visit him at Evergreen. He says about half of it is true, but he can't recall which half.

We'd planned to admire airplanes. Our best experience was talking to a World War II pilot.

Relevance to IT: In the end, technology and process are never as interesting or as important as the people who use them.

But you already knew that, too.

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Copyright and other stuff -- The great KJR link point

More business archetypes

10/1/2007

One of my regular correspondents -- a career military officer and a man I respect, had this to say about one of the executive archetypes I described in last week's column (Jung at heart, Keep the Joint Running, 9/24/2007) -- the General:

Do you think that actual military generals all think as you describe, or are you describing only generals in the business world?

... your picture of "The General" may be colored by those who are in the news: the political appointees, the frankly combat-only commanders, the high-level spokesmen (or mouthpieces), and the occasional battle hero. They're the exception to the majority, workaday military generals.

... the good generals dislike war and battles. They're ready to fight them if necessary, but would rather not. They see it as a messy, usually losing, business for all concerned. They'd rather bargain and maneuver than fight. They choose their battles carefully, and when they do fight, it's for their troops, not necessarily against anyone or anything else.

To clarify: I was writing about the business archetype -- executives who see business as war. While I have no survey data to support this, I doubt many business "Generals" have the military training and experience to know what real war looks like.

Speaking of archetypes whose correspondence to the actual day-to-day work might be strained just a bit, here are some more archetypical paths to the executive suite.

Sales Rep: Like the Visionary, the Sales Rep has bought into a big idea. Unlike the Visionary, the Sales Rep isn't a deep thinker.

For Sales Reps, the one big idea is what matters. They sell it to everyone they meet, with boundless energy and enthusiasm, unifying their organizations and creating demand. They take operations for granted, though, as unimportant detail.

Kindergartner: Kindergartners learned a long time ago how to get what they want. It's what they do and they're good at it.

Kindergartners know when to whine, when to complain, when to bully, and when to throw a tantrum. That they are being childish would never occur to them. Those who are more mature think, "Fighting them isn't worth it, and would bring me down to their level." And so Kindergartners rise in the organization, acquiring reputations for getting things done when really, they're merely getting their way.

Psychopath: To the Psychopath, all other human beings are things -- objects. The Psychopath is as charming as the Salesman, as ruthless as the General (the archetype, that is), and as self-centered as the Kindergartner.

What is particularly strange about Psychopaths is that while they are devoid of empathy they understand human emotions at a deep enough level to use them to manipulate everyone around them.

Protégé: The Protégé's primary skill is persuading someone higher in the hierarchy to become a mentor. In exchange for the Protégé's admiration, the mentor provides introductions, opportunities, and protection.

And yet, Protégés often think they are high achievers.

The Heir is a particularly annoying sub-type of the Protégé. The Heir is the person who, to borrow a phrase from Jim Hightower, was "... born on third base and thought he hit a triple."

Conductor: The Conductor leads the orchestra.

The only instrument the Conductor wields is the baton, and it makes no sound. If you're in the audience you know that somehow the Conductor still has something to do with the quality of the performance: The same orchestra with a different Conductor sounds quite different, even though the musicians were the same musicians and achieved their virtuosity on their own.

In the world of business, Conductors start by conducting small ensembles. Those responsible for the music hear the quality of performance under their baton and put them in front of larger groups of musicians.

Conductors succeed when those in charge care about the music and understand how it happens.

Mechanic: The Mechanic looks for what's wrong and fixes it. Then, he or she looks for something else to fix. If there's nothing wrong, Mechanics will find fix something anyway.

Mechanics are wonderful executives when a turnaround is required. They look at the world straight and don't pretend the funny noise the right front wheel is making is normal.

The problem with Mechanics is that once they fix the organization they have no idea where to drive it. That isn't what they do.

What to make of this: There are as many paths to the executive suite as there are executive archetypes. If you aspire to executive rank, recognizing which situations your natural tendencies fit best -- and where they can limit you -- will help you get there.

Unless you're a Kindergartner. If that's the case:

Grow up.

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Copyright and other stuff -- The great KJR link point

Jung at heart

9/24/2007

Work hard and keep your nose clean.

That's good advice if you want a sweaty proboscis. For career advancement, hard work and an unsoiled schnoz give you a stable place to stand while you get your bearings and plan your strategy. At best. At their worst they stereotype you as cannon fodder -- trustworthy, reliable, and useful, but ultimately disposable.

Unless you work for a well-run company. If you do, a reputation for integrity and going the extra mile or three is the best way I know to rise to executive ranks.

Which brings us to this week's question: Lots of people would like to achieve executive rank. Many are smarter and more talented than the relatively few who succeed. What's the difference?

Since there are as many answers as there are types of executive, answering the question requires a list of the various types of executive you're likely to find (and, perhaps, be). Did I say types? Think of these as archetypes -- styles of leadership in a pure form. Real executives blend one or more of the archetypes that follow:

Visionary: The Visionary has, or has adopted, a new idea and wants passionately to turn it into reality.

The Visionary's best path to the executive ranks is entrepreneurship. Excellent at selling their vision, Visionaries build a business around themselves, surrounded by managers and employees who buy into the vision, and the possibility of making it happen.

Visionaries are usually better at defining what has to happen than at making it happen. The successful ones, through luck or skill, have a second-in-commands to do that.

More don't. The world has no shortage of unfulfilled visions.

General: Generals view every situation as a battlefield, and everyone else as a soldier or officer who is with them or against them. As a result, Generals are likely to be ruthless. Winning is the measure of all things.

Some are Generalissimos -- in charge. Generalissimos are often better at achieving and holding onto power than at leading a successful organization. Among the reasons: Generalissimos see everyone in the world as being either friend or foe and treat every foe as a threat to be neutralized. All that's required to be classified as "foe" is to disagree.

Other generals accept civilian leadership -- perhaps from a visionary -- and see their role as making sure their side wins.

The best generals are excellent strategists, tacticians, and logicians, and recognize the value of smart, well-trained, disciplined men and women throughout their organization.

The worst fight unnecessary battles because fighting battles is what they know how to do.

And because winning battles builds loyalty among the troops, whether or not the battle was worth fighting.

Head Coach: Head coaches have a lot in common with generals. Highly competitive, they build organizations that are good at winning, and know how to choose winning strategies and tactics.

Head coaches share a limitation with generals -- they see the world as a zero-sum game, where if they want to win, someone else has to lose. Head coaches are, however, less ruthless than generals. They are more likely to recognize and accept the rules of the game, and know that losing a game doesn't mean losing a season.

The best aspect of Head Coaches is that, as is the case in football and basketball, they recognize that they aren't the stars. The worst is their fondness for illustrating every conversational point with a sports metaphor.

Prairie Chickens: Every spring, male prairie chickens congregate in acre-or-so areas called "leks." In each lek they carve out small territories and do the prairie chicken dance to attract females. The male in the center of the lek is most successful. Females ignore those at the periphery entirely.

The center males aren't, as you might think, the meanest, toughest prairie chickens around. My former colleague in ethology, Henry McDermott, proved this through years of careful observation: Those male prairie chickens that don't die from disease or being eaten move closer to the center by taking the territories of the dear departed.

Many corporate executives achieve high rank in much the same way [particularly where I work!]: They avoid failure rather than achieve success, drifting upward by filling the holes left by bolder executives who slipped up and were asked to vacate the premises.

Visionaries, generals, head coaches and prairie chickens. See yourself anywhere on the list?

If you don't, never fear. You still have a chance. Seven, really.

That's how many C-archetypes are left - assuming I don't think of any more.

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Copyright and other stuff -- The great KJR link point

got rain?

Lake Lanier sinking to a 50-year low?
As level drops, Atlanta faces the fact that its main water supply is no longer a sure thing.

my reply:

I have found a way to drive my water usage to one unit per month -- I recycle water to flush toilets. The grey water from the washing machine and dish washer plus all sinks except the one with the food disposal is good for flushing toilets.

Can also be used for spot watering in the yard.

I also have built walls in yard to retain all runoff and divert runoff from neighbor's yard to water my trees. I am hoping that HD Lanscaping stores will have the wall building stones on sale as they are closing. And some non-grass ground cover.

Associated with this is extensive use of mulch around all plants.

"Free" water is available if you use you brain and muscles.

I try to give full meaning to the word "conservative."

Current events and you

9/17/2007

And now for one of those current events columns you like so much -- you know, the ones that use "lessons for IT" as a pretext for spouting off (the last for awhile, too -- I promise!):

Topic #1: Global Warming. If you're interested in the politicization of global warming, read The Truth About Denial, (Sharon Begley Newsweek 2007Aug13). It reveals how, over more than twenty years, companies in the energy industry created and disseminated disinformation on the subject -- funding think-tanks, phony grassroots organizations, and pay-for-publication schemes that turned fringe scientists into freelance writers rather than researchers.

If the distinction isn't clear: Research grants require scientists to investigate a topic, not to reach a predetermined conclusion.

Lesson for IT: Yes, there is a lesson for IT -- a real one. An ExxonMobile-funded think-tank offered scientists a paltry $10,000 to write global-warming-denial papers earlier this year. Much more than $10K changes hands when technology vendors subscribe to services from the various IT research firms. Connect the dots.

Topic #2: Funding infrastructure maintenance. Earlier columns on the subject led quite a few readers to suggest there is plenty of money. The problem, they said, is setting the right priorities.

Subtopic A -- Priorities: Those complaining about bad priorities were right on the money, as it were. According to Funding for bridges served with side of pork, (Kevin Diaz StarTribune 2007Sep13) pork exceeded kosher spending in the Senate's transportation appropriations bill by a factor of 1.5 to 1. "Pork served with side of funding for bridges," would have been a more suitable headline.

Lesson for IT: Businesses spend on pork, too. Even barely profitable businesses frequently "invest" in pet projects (earmarks, if you will) whose only value is scratching the itch of an influential executive. If you work in a company that funds lots of earmarks, lobbying for your share is a required skill. Playing this game is bad enough. Losing is worse.

Subtopic B -- Is there enough money? The recent Senate appropriations bill allocated $2.5 billion. That's roughly a quarter of what will be needed annually for the next 20 years, according to the best estimates I've read.

This year's projected federal deficit is $200 billion, not including the government's considerable off-book spending. It's the smallest since 2001. Unless you think there is enough waste to eliminate this deficit we need a serious redefinition of "enough."

Lesson for IT: Business leaders often make the same argument to IT -- "your budget is enough if you just set better priorities."

It isn't only government that's often governed by wishful thinking coupled with rationalization. I recently heard an off-the-record account of a company that turned down IT's request for funding to protect it against data loss. After a bunch of highly sensitive data went missing, guess what the CIO heard? Hint: It wasn't, "I guess we should have funded your request."

Subtopic C -- Asymmetric investment: The cost of overbuilding a bridge is the cost. The cost of under-building a bridge is, as Bill Beery explained in a perceptive letter, the cost of replacing the bridge.

On the other hand, as was pointed out in this space in Cottonwood now or hardwood too late? (Keep the Joint Running 2003Apr28), sometimes a cheap solution is the right answer, as it gets you to business benefit faster. The logic: Get the benefit enough sooner and it more than pays for the cost of rebuilding a better system later on.

Lesson for IT: You can't strike the right balance between investment in infrastructure and investment in immediate business functionality by applying a simplistic rule. Too little infrastructure means business functionality becomes unnecessarily expensive, unwieldy and fragile. Too much infrastructure and the business becomes slow, stodgy, and top-heavy.

Topic #3: Second-guessing can be more important than guessing: Sometimes, forecasting matters less than accurately forecasting the forecast. Commodities traders, for example, don't need to forecast the weather. They need to forecast what the weather bureau will forecast, as former meteorologist and commodities-trading-company employee Steve Kauffman points out. That's because the weather bureau's forecasts drive commodities prices, so accurate forecasts of those forecasts turn into highly profitable trades.

Lesson for IT: CIOs who are good at forecasting the forecast will know whether to spend early or spend late. If you expect a bad year, spend early so they can't take your budget away from you. If, on the other hand, you expect a good year, spend early, because you can ask for more budget later on.

Oh, wait ...

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Copyright and other stuff -- The great KJR link point

the tag file

Computer Associates - CA -

Superior Software by Acquisition -
Binyamin Dissen bdissen at dissensoftware dot com

The causes of greatness

9/10/2007

Depending on the business expert I'm listening to and the day of the week, I know three truths:

1. Good employees who work together as a team outperform great employees who don't.

2. Good employees with great processes outperform great employees with bad processes.

3. If an employee is irreplaceable you should immediately fire that employee.

From first-hand observation I know that when it comes to Information Technology organizations:

• Great employees can and do overcome bad processes.

• Great employees can and do overcome lousy managers.

• Great employees can and do pull along mediocre teams.

• Making one or two great hires is the most critical step in turning around an underperforming organization.

• Well-designed processes can be pretty useful, too.

Which is to say, if you want an organization that works, you'll get more leverage from hiring great employees than from any other single effort you can undertake.

Great employees can overcome organizational deficiencies to deliver useful results. They can't, by themselves deliver a great organization. That takes a lot more.

The question of what makes a great organization tick is rife with superficial thinking. The usual approach is what you might call the "Tom Peters Fallacy":

1. Find a great organization.

2. Identify a trait in that organization you like.

3. Decide that this trait is what makes that organization great.

4. Declare that this trait is the panacea for all other organizations.

As far as I can determine, there is no one characteristic that by itself can make an organization great.

Well, okay -- there is one: excellent leadership. That only works because I define "excellent leadership" as "Doing everything required to build a great organization," thereby begging the question.

So ... what is required to make an organization great, as opposed to simply functioning?

Leadership: A great organization does start with strong leadership, in a non-question-begging way. If there's no direction -- no focus, no goals, no plan, no definition of excellence, no clearly stated expectations for employees to live up to; no alignment of purpose and standards -- the employees will keep things going, but not much more than that.

Great employees: Not every employee has to be a superstar, although all must be competent. Great organizations do need enough top-notch performers to demonstrate that high standards are achievable, not theoretical.

Focus on achievement: The definition of "great employee" has been diluted through too many managers reading about "emotional intelligence." Employees who are focused on getting along will concentrate on how irritating their colleagues are. Employees who are focused on achievement will value their colleagues' contributions and ignore their eccentricities.

Teamwork: Just as the definition of "great employee" can't ignore the importance of serious technical ability, it also can't ignore the importance of working and playing well with others, and of providing leadership in the trenches.
Willingness to innovate: This is IT we're talking about. Information technology. The field where if you can buy it, it is obsolete by definition. IT organizations and everyone who works in them must be willing to try new technologies, processes and practices ... and even more important must be driven to constantly find improvements to the ones already in production ... or they stagnate.

Willingness to not innovate: "State of the art" means "doesn't work right yet." Most of the time, the work required of IT is best achieved by extending what you have, not by chasing whatever is being hyped in this year's press releases, aided and abetted by publications hungry for advertising revenue.

Evidence-based decision-making: Great organizations make decisions through the use of evidence and logic, not wishful thinking and listening to one's intestines.

You'll note the usual buzzwords are notably absent. Governance, ITIL, CMM and all the other processes and practices (I used to call them Processes and processes) that are supposed to lead to inexorable success don't, in fact, lead to excellence.

Excellent IT organizations do have them. Even more important, they are kept in their proper place -- as useful tools that help employees be as effective as possible.

The best woodworkers have band saws, coping saws, lathes and routers in their workshops, and not just hammers and chisels, but their tools aren't what make them the best.

Great IT organizations are the same. They practice good governance; follow consistent application maintenance, enhancement, design and testing methodologies; adhere to clearly defined change control procedures; and otherwise avoid making things up as they go along.

Their processes and practices are important. They are, however, merely the signs of a great IT organization.

They are not its cause.
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Copyright and other stuff -- The great KJR link point

The great KJR link point

Have a subject you'd like the author to cover in KJR or Advice Line? Drop him a line and let him know. What - you think he has all the good ideas himself? Bob Lewis is president of IT Catalysts, Inc. ( http://www.itcatalysts.com/ ) an independent consultancy specializing in IT effectiveness and strategic alignment. Contact him at rdlewis@issurvivor.com.

Don't leave him sitting here in a vacuum!

If you think he's full of beans, let him know. The address is Letters@ISSurvivor.com. Or, if you need advice, ask for it at Advice@ISSurvivor.com.

He sometimes use reader letters in his columns. The rules:

• In your letter, let him know if and how he can use it (as is, sanitized, or don't be ridiculous - you'll be found out and run out of town).
  
• Also let him know if you'd prefer to remain completely anonymous, or whether he may give you credit by name.
  
• All letters and responses are the property of IS Survivor Publishing, division of IT Catalysts, Inc.

Copyright 2007, IS Survivor Publishing, all rights reserved.

If you like this article, why not let a friend enjoy it, too? It's fine with the author, and in fact he'd be flattered. All he asks is that you send the whole thing, including this notice. But don't be shy ... if you think they'd like it, don't you think they should see it? But only those people - you wouldn't want him to get a reputation as a spammer, would you?

To Subscribe, visit http://www.issurvivor.com/registerKJR.asp

the future is now - you have been warned

The Globally Integrated Enterprise - Samuel J. Palmisano is Chair of the Board, President, and Chief Executive Officer of IBM Foreign affairs 2006May/June

Fine NOLA whine

We're tied up in between whether this is going to be a red state or a blue state. You have a Democratic governor and a Republican president and there is all sorts of tension there and it's slowed things down tremendously. - New Orleans Mayor C. Ray Nagin 2007Aug explaining the sluggish recovery of NOLA q.Jacqueline Adams CNN

Fine whine is meant to be shared

More bridge lessons

Fun for fun and profit

8/20/2007

Buddhist Monks Brawl At Sri Lanka Peace Protest.

No, that didn't come from the Weekly World News (WWN). It really happened. Not to pick on Buddhists, but this really happened too: According to Newsweek, the Chinese government has passed a law making unauthorized reincarnation illegal in Tibet.

With real news like this it's a wonder even the Onion can survive. Sad to say, even if WWN had maintained its magical work environment (CIOs Learn Leadership Insights from Elvis KJR, 8/13/2007) and the quality reportage of its heyday -- stories like Saddam and Osama Adopt Shaved Ape Baby (part of its ongoing coverage of Saddam Hussein and Osama bin Laden's secret marriage) -- it might not have survived reality's onslaught.

For working IT managers, a more interesting question is how fun can survive reality's onslaught. Reconciling it with leanness and meanness -- the epitome of virtuous management in modern business -- is an intriguing challenge.

Let's imagine you work in an evidence-driven business -- one where the executives who make strategic business decisions use data and logic to do so. In a company like this, how might you make a business case for fun? How, that is, would you go about tabulating the costs and benefits that would let you compute the internal rate of return on the company's investment in it?

The starting point is the usual starting point: Defining fun. The dictionary definition -- "what provides amusement or enjoyment," isn't bad, but to reassure your executives you'll want to clarify that your goal isn't to amuse your employees. It's to create an enjoyable environment -- one that isn't grim. One in which, among other things, it's okay for them to amuse each other.

The next question is benefit: What the business will get out of its investment in fun.

Recall that there are three categories of business benefit: Revenue enhancement, cost reduction, and risk management. Fun can contribute to all three of these.

Revenue enhancement is the biggest opportunity. Every time anyone has investigated the subject, customer satisfaction correlated more strongly with employee morale than with any other single factor in business. Even the most skeptical executive will agree that customer satisfaction translates to increased customer retention, increased walletshare, and an increased likelihood that satisfied customers will say good things about your company to their friends -- all revenue enhancers.

It's possible that someone might challenge the connection between a more enjoyable work environment and improved morale. If you encounter skepticism on this level ... RUN!!! Your company has been taken over by Pod People!!!

Cost reduction is next. Fun's contribution to cost reduction is harder to demonstrate in tangible terms, but it is no less real.

In some work environments the employees are zombified. Dull-eyed and uncaring, they go through the motions and the motions themselves take twice as long as they should. The math is easy: If every motion takes twice as long as it should, the amount of output each employee creates in a unit of time is half what it could be. Energized, motivated employees are the cure.

And that's the smaller benefit. The larger: For most positions, replacing a departing employee costs about one year's salary. Another factor: Not all employees contribute equally, and the best employees are the ones most able to find a better place to work.

Create an enjoyable work environment and the company will reduce unwanted turnover, especially among its best employees. That saves a lot of money.

And now, risk management: As every security professional knows, disaffected employees are the single greatest risk most companies face. Mathematically, the risk is the probability of one disaffected employee doing something nasty multiplied by the number of disaffected employees. Creating an enjoyable work environment reduces this number, lowering the overall risk.

Those are the most obvious business benefits. What will it cost to create those benefits?

Here's one expense: If the company's work environment is unpleasant, it's because of the managers who place no value on employee morale. Replacing them won't be cheap (a year's salary each -- remember?).

Other than that, fun is free. There's no net cost from the time employees spend amusing each other. That simply replaces the time now lost to grumbling. Nor does fun require any capital investment. "All" that's required is a change in attitude on the part of the company's managers.

My bet: Most would welcome the opportunity. They just need permission.

That just might be the saddest statement in the history of Keep the Joint Running.
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Copyright and other stuff -- The great KJR link point

My computer ate my homework - the truth about LAX

Your tax dollars at work - not

CIOs Learn Leadership Insights from Elvis

If you're looking for a headline that encapsulates what's wrong with American journalism, look no further than

Jobs: Windows is hell (Computerworld 2007May31).

What Jobs actually said, in a conversation with Walter Mossberg, was,

We've got cards and letters from lots of people that say iTunes is their favorite app on Windows.

He then wisecracked,

It's like giving a glass of ice water to somebody in hell.

If Steve Jobs got a bad sunburn and I described him as being

red as a lobster,

I guess Computerworld could then run the headline,

Lewis: Jobs is a crustacean.

And now, American journalism is about to become even worse. The publication most likely to run the headline

Steve Jobs is a Crustacean!

will soon be a memory. On August 27th the Weekly World News (WWN) will publish its final edition.

That's right: The publication that described the travails of Bat Boy, and the horrific scene that unfolded when a Crazed Dieter Mistakes Dwarf for Chicken, will no longer break stories like Hillary Clinton's love affair with P'lod, the space alien.

What went wrong? To understand, you first have to understand what went right.

It started when the National Enquirer bought new color presses. Rather than leave the old ones idle, the Enquirer's then owner, former CIA agent, Generoso Pope, founded WWN to cover stories that were too hot for the Enquirer.

WWN ticked along until a character named Eddie Clontz took over as managing editor.

He created magic.

No, not the magic of headlines like Heaven Photographed by Hubble Telescope. That magic came from WWN's editorial staff. What Clontz created was one of those magical work environments that allows brilliance to flourish.

In WWN's case, "brilliance" had a special meaning. It was brilliance nonetheless -- what other word would you use to describe a story like Plane Missing Since 1939 Lands with Skeleton at the Controls?

Those who wrote for WWN in its heyday uniformly described it as a phenomenal work environment -- the sort of place where, as one writer put it,

There were days when I would leave work with my stomach and my face hurting from laughing all day at the ideas being kicked around.

Very few of us have had the opportunity to work in that sort of environment. I know many people, though, who remember a particular work team with singular fondness. The exact chemistry differs from one account to the next, but they all have one characteristic in common: Superb chemistry among everyone on the work team.

Few leaders manage to create this sort of atmosphere. Clontz was one. William M. Gaines, the original publisher of Mad magazine was, by all accounts, another. Both kept things loose. Both, it appears, knew how to keep small frictions from growing into big frictions. How? Their shared strategy was to keep the atmosphere fun.

There are other strategies that also work -- shared dedication to an important mission, for example. Still, don't sell fun short. It has a lot going for it.

What happened at WWN was that ... I'm not making this up ... a guy named David Pecker bought American Media, which owns WWN. He replaced Clontz and much of his crew with a new team, composed mostly of comedy writers. They maintained the formula, but lost the magic.

What can you learn from this sad tale?

Business leaders take over successful work teams from time to time. It might be because they were hired to do so, or because of a merger or acquisition. Whatever the reason, if you find yourself in this circumstance, remember that your watchword is finesse, not authority.

Before you do anything to "place your stamp" on the organization, first spend at least a month learning the magic -- learning all of the interpersonal dynamics that have made the team successful. Then spend another month or two to integrate yourself into the magic.

Later on you might have to make changes. That's okay -- you're allowed to, and often have to. If you first become part of the magic, you'll be less likely to wreck it when you do.

Peter Carlson wrote the WWN's obituary in the Washington Post. It's my source for the facts in this week's column. It's a beautiful piece of writing, so it's only fair to give Peter the final word.

Reporters loved the Weekly World News,

he wrote.

Many fantasized about working for it and casting aside the tired old conventions of journalism, such as printing facts.

Isn't it worth trying to create an environment that allows employees to turn their fantasies ... their work-related fantasies ... into reality?

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Copyright and other stuff -- The great KJR link point

Fine whine is meant to be shared

Of risk, bridges and business 2007Aug6

SFB in public sector

Dear Jeff Mullis (R-Chickamauga)

Let me get this clear. You are not a State Senator from TN. You are not a US Senator from TN. You are State Senator from GA. Ok so you are the chair of the GA Senate's Transportation Committee so thinking about airports is on your plate. And your district is up near TN.

Are you a SFB? Where is your allegiance?

What about an airport in GA? What could the Republican Party do to attract more votes outside of the ATL suburbs? How about an airport south of the city where development is a bit sparse, not north of metro ATL where things are booming?

Let's blue sky:

Draw a line between Macon and Columbus. Go halfway between and a bit north. Lots of agricultual land with not enough water -- those of us in metro and to the north want it. Buy land. Build an airport.

ATL wants to build a new terminal for $1.5 billion. Probably could do this new airport for about that much. S GA wants development and could use roads. Build high speed roads to Macon and Columbus. Build high speed rail to ATL. Put it underground for security.

What do you have?

If weather causes a problem at ATL, you have a place to send planes without diverting them to places not connected to ATL.

Congestion reliever for ATL -- notice how long planes wait on runways at ATL.

Lots of jobs in places where the government has long said it wants to increase jobs.

Good connections between the metro area and two other centers of population -- within GA.

I'll wager if you and your comrades under the golden Dome can surface your heads you can come up with more advantages.

the voting Republican but fed up with stupidity pup

p.s. Maybe we need a new political party -- the Progressive Conservative Party -- its motto:

I'm not with stupid

What is the background?

• It is an easily observed phenomenon that some people have s--- for brains (sfb). Several celebutants who have crashed and burned lately come immediately to mind. You don't need links to their stories. Go to People or its ilk.
  
  
• When you have invested over a decade in a job and you mostly enjoy working at the company, you start to take ownership in it. You not only want it to exceed, you want it to excel.
  
  This company uses immense amounts of technology in providing the services to its clients -- some of the biggest and most powerful corporations in the world. Its technology is best of breed.
  
  
• I have decades of experience of working with computer technology. A goodly portion of that time has been working with information presentation.

So where is this all going?

We have an elaborate system for managing projects. One of the collateral results is some documentation of what changes were made to our software.

We have a group whose mission is to document everything for clients. They do a good job. There is some internal documentation. But there is all that information between ears of the techno-workers.

Some of that stuff makes its way into emails. Because there are no tools for storing and organizing information on an ad hoc basis, most people use the email system (Lotus Notes) for storing this information. Because, like all people in this kind of environment, we don't have enough time to keep our electronic plates clean, there is a buildup of e-dross and e-lint -- flotsam and jetsam of the electronic age.

The solution?

Some SFB has decided to enforce a one year retention policy on email. To do this as efficiently as possible less than 8 weeks notice was given.

Sampling the planning of my co-workers, the headline in the Wall Street Journal should read

Company jettisons intellectual property - disdains backup

[I'm out of time for this post. More later.]

So what set me off?

I am at work. A few minutes ago I got up and walked past a co-worker. She is a 2/3 level supervisor.

I think the minimum courtesy at work is to say "Good morning/afternoon/evening/night" the first time you see a person each shift. And do it with a smile. Smiles add beauty to the face. They say

I care enough about you to give you my best!

What she gave me was a mild version of the look. If you have (or have had) a mother, or a wife, or a girl friend, you have seen the look. The fiercest of them can pierce steel.

I know we are reorganizing the company and confusion is reigning supreme. But lighten up! Get with the program! Treat your co-workers as human at all time!