Category: Vision and Leadership

Smartphones and 2013: What we really want

    Jim D

With CES 2013 starting this week, we will see a number of new features and product introductions particularly in the Android space. Some of the new features are questionable (Do we really want our smartphones to be projectors?).  But the further fragmentation (just within Android but also with the advent of Tizen (the Linux-based OS)) will drive feature innovation and differentiation faster. And to help with that differentiation is an updated list of features that I’d like to see in 2013!

1. Multiple Personalities: It would be great to be able to use one device for personal and for business – but seamlessly. Consider a phone where your office or business mobile number ring to your phone as well as your personal number. And when your boss calls, the appropriate ring, screen background, contacts, and everything else aligns with the number calling. You can switch back and forth between your business world and your personal world on your phone, just as you do, but with one device not two (or if you are using one device today, you get both numbers, and no mixing). Some versions of these phones are available today, but not on the best smartphones, and not in a fully finished mode.

2. Multiple SIMs: Multiple SIM phones – where two or more SIM cards are active at the same time, have been available in some form since 2000. These enables you to leverage two networks at once (or have a business phone on one network, and a personal phone on another), or more easily handle different networks when traveling (e.g., one network for domestic, one for Europe and one for Asia). When you landed in a new country, you could keep your primary SIM in your phone, purchase a low cost local SIM and voila! you would still receive calls on your primary number but could make local calls inexpensively on the local SIM. Today, there are low end phones in developing markets or China where these features are available — so why not have this in the high end smartphones in the developed world? Samsung may be cracking this barrier – there are reports of a dual SIM Samsung high end smartphone. Perhaps Apple will follow? This would be much to the dismay of the carriers as it is then easy to switch carriers (call by call) and lower your costs.

3. Better, perhaps seamless voice: Siri can be good in some situations but like all other voice apps currently on the market, the limitations are real. And the limitations are particularly evident when you most need to be hands-free — like when you are driving. With the continued improvement in processor speed and voice recognition software, we should see next generation voice recognition capability that makes it an ease to use voice rather than a chore.

4. The nano-smartphone companion: How many times have you been either exercising or on a fishing trip or out for night out or an elegant evening, and the last thing you want to do is bring along a large, potentially bulky smartphone that you might lose (or drop in the lake)? Why can’t you have a nano iPod that has the same number and contacts as your iPhone that works as a passable phone? Then you can leave the iPhone at home bring your music and a nano cell phone, and not worry all evening about losing it! Again, the manufacturers must work with the carriers to enable two devices with the same number to be on the network and for you to chose to which one the calls ring. But think of the convenience and possibilities of having multiple orchestrated devices, each tuned precisely to what and when you want to use them. Isn’t this what Apple does best?

5. Better power management: Even with the continued advances in battery life, nearly everyone encounters each month times when their use or their apps have completely drained the battery. Today’s data intensive apps can chew up battery life quickly without the user being aware. Why not alert the user to high usage (rather than wait until the battery is almost dead to alert), and enable the option for power saving mode. when this mode is selected the phone OS switches apps to low power mode unless the user overrides. This will keep power hog apps from draining the battery doing unimportant tasks. It will avoid a late afternoon or evening travail when you discover your phone is dead and yet you need it to make a call.

6. Socially and physically aware: While there are plenty of apps that create social networks and provide some physical awareness and some phone plans that enable you to know where a family member is by their device location, you still require a precise device/app/option selected that minimizes the possibility of casual interaction with your known acquaintances. Consider your linked in network and when you are traveling for business, it would be excellent to be able to chose to let your links know that you are walking through O’Hare, and for those associates that chose similarly, you would know that your colleague John is at gate B5, which you happen to be walking by, and you can stop and chat before you have to catch your flight. You can chose to be anonymous, or just aware to your friends or links, or for extroverts, publicly aware. Unfortunately, this would require a common ‘awareness’ standard and security for devices and social sites, which at this stage of the social media ‘Oklahoma land rush’, it is doubtful that cooperation required would occur.

7. Better ‘offline’ capabilities: Far too many apps today still require a constant internet connection to work. Even for those apps where it is used when offline mode is likely, many apps still require an internet connection – translation apps and London tube apps come to mind. Why can’t you download 90% of the translation requirements to your app while on your home wi-fi, and then, when in Paris, bring up the app to suffice for faster translation offline instead of using international data rates? (At which point a paid translator would be cheaper and much faster). Again, I wonder how much collusion (or lack of common sense) goes on to encourage nonsensical data usage versus designing ‘data-lite’ apps.

These are the seven features I would like to see in 2013. And while I am sure that there are phones or apps that do some of the features, I think it would be an advance to have the features mainstreamed on the latest and best smartphones. (Though I am still looking for a great translation app with good ‘offline’ capability, if you know of one, please recommend it!). What features would you like to see in the next generation of smartphones in 2013?

Best, Jim Ditmore

A Cloudy Future: SaaS and Balkanization of the Data Center

    Jim D

As I mentioned in my previous post, I will be exploring infrastructure trends, and in particular, cloud computing. But while cloud computing is getting most of the marketing press, there are two additional phenomena that are capturing as much if not more of the market: computer appliances and SaaS. I have just covered computer appliances in my preceding post and we will cover SaaS here. This will then set the stage for a comprehensive cloud discussion that will yield effective cloud strategies for IT leaders.

While SaaS started back in the 1960s with service bureaus, it was reborn with the advent of the Internet which made it much easier for client companies and their users to easily access the services. Salesforce.com is arguably one of the earliest and best examples of SaaS. It nows serves over 100,000 customers and 1 million subscribers with an entire ecosystem of software services and the ability to build custom extensions and applications above the base CRM and sales force functions.  SaaS has continued to see robust growth rates (up to 20%) and will exceed an estimated $14B in annual revenues per Gartner (out of a total industry of $300 to 400B). Growth can be attributed to several advantages:

  • startup costs are low and as you increase in scale the costs are variable based on your usage
  • you can quickly implement to a solid level of base functionality
  • you do not need a large staff of specialized experts to build and maintain your systems

SaaS is here to stay and will continue to grow smartly given its particular advantages and the typically greater margins for service providers. In fact, many traditional software providers are adding SaaS options to their services to enter into this higher margin area. As a consumer of software, perhaps that is the first tipoff for ‘buyer beware’ for SaaS: the high desire of the software industry to move consumers to SaaS from traditional perpetual license models.

What are the advantages of SaaS versus traditional offerings to a software firm? Instead of a potentially large upfront license payment and then much smaller maintenance payments, a SaaS provider receives ongoing strong payments that grow over time — a much more reliable revenue stream. And because they provide software and infrastructure, the total sale is higher. With enough of a base, the margins can actually be even greater than those for traditional software. And, best of all, it is harder for you customers to leave or switch to an alternate supplier. The end result is greater and more reliable revenue and margins, prompting a higher valuation for the software company (and the great desire to migrate customers to SaaS).

As a consumer of SaaS, these results as well as other service factors and business implications must be kept in mind before entering into the service contract. First, some consideration must be given to business criticality of the software. As a business you in essence have three alternatives means to encode your processes and knowledge: custom software, packaged software, and SaaS services. (There is also broader outsourcing but I omit that here). For peripheral services, such as payroll or finance, it is entirely appropriate to use packaged software or SaaS (e.g., ADP or Workday). Typically, there is no competitive advantage beyond having a competent payroll service that maintains confidentiality of employee data. ADP has been providing this type of service for decades to a plethora of companies. But when you begin to utilize SaaS for more core business functions then you have potential competitive risk for your business. Your rate of innovation and product improvement will be limited to a large degree to the rate of advance of the SaaS provider. Even with packaged software your IT team can apply significant extensions and customizations that enable substantial differentiation. This ability becomes minimized with SaaS. For small and medium sized companies these drawbacks likely do not outweigh the benefits of leveraging a ‘good’ platform with little upfront investment. But for a large company, a SaaS course can minimize your advantages over competition. For an excellent historical example, take the case of when I was at JPMC/BankOne and its use of the service provider First Data for credit card software. While First Data provided adequate capabilities and services, the service eventually turned into an anchor. As JPMC tried to drive a faster cycle of features and capabilities to distance itself from the competition, First Data lagged behind in its cycle time – in part because as a SaaS, it was maintaining a broad industry utility. Even worse, once a new feature was introduced for JPMC (and primarily funded by JPMC) it would be available 6 or 12 months later for the rest of the First Data customers. It was not possible to negotiate better exclusivity conditions nor was it in First Data’s interest to have divergent code bases and capabilities for its customers. After detailed analysis, and consideration of the scale economies mentioned below, the only way to achieve sustainable business advantages was to in-source a modern version of credit card services and then customize and build it out to achieve feature and product supremacy. This is then exactly what JPMC then did. While this may be the extreme example (where you are a top competitor in an industry), it represents the underlying limitations of using a SaaS service (in essence, a function utility) for key business capability. The ability to differentiate from competitors and win in the marketplace will be compromised.

Even services that appear to have minimal business criticality can have such impact. For example, if you decide to leverage SaaS for e-mail and chat capabilities, then how will you handle integration of presence (usually provided by email and chat utilities) into your call center apps or other business applications or deliver next generation collaboration capabilities across your workforce? Such an integration across a service provider, your applications, and multiple data centers now becomes more difficult (especially for performance sensitive applications like call center and CTI) to provide differentiating business functions versus comparable services within your data center that are easily accessible to your core applications.

Second, particularly in this time of greater risk awareness and regulation, consideration must be given to data and security. You must be carefully inspect the data protection and security measures of the SaaS provider. While you would certainly review security practices for any significant supplier, with a SaaS firm it is even more important as they will have your data on their premise. Further, it is possible that there is ‘intermingling’, where other customers of the SaaS data is stored in the same databases and access the same systems. Protections must be in place to prevent viewing or leaking of each company’s data. And there may be additional regulatory requirements regarding where and how data is stored (especially for customer or employee data) that you must ensure the SaaS also meets.

In addition to data protection measures, you should also ensure that you will always be able to access and extract your data. Since your data will be at the SaaS site and in their database format, your firm is at a disadvantage if their is a contract dispute or you wish to transfer services to another supplier or in-house. Thus, it is important to get safeguards as part of the original agreement that provide for such extract. Even better, a daily extract of the data of your data in a usable format back to your data center ensures you have access and control of your data. Or alternately, a data ‘escrow’ provision in the contract can ensure you can access your data.  Perhaps the best advice I have heard on this matter is ‘Don’t get into a SaaS arrangement until you know how you are going to get your data out’.

A third SaaS consideration for IT shops is the potential loss of scale and ‘balkanization’ of their data center due to cumulative SaaS decisions.  In other words, while a handful or even multiple SaaS alternatives may make sense when each is considered singly, the cumulative effect of dozens of such agreements will be to reduce the scalability of your internal team and undermine the IT economics. For example, if you have out-sourced 40 or 50% of your IT capacity to SaaS, then the remaining infrastructure must be substantially resized and will no longer operate at the same economic level as previous. This will then likely cause increased costs for the remaining internal applications. Realize that with this ‘balkanization’, your data and processing will then be executed in and spread out in many different data centers. This results in potential performance and operational issues as you try to manage a largely ‘out-sourced’ shop through many different service agreements. Moreover, as you try to subsequently integrate various components to achieve process or product or customer advantages you will find significant issues as you try to tie together multiple SaaS vendors (who are not interested in working with each other) with your remaining systems. Thus, the cumulative effects of multiple SaaS can be far-reaching beyond just the services being evaluated.

So, on the road to a cloud future, SaaS will be a part of nearly every company’s portfolio. There are a number of advantage to SaaS and on the market there are very good SaaS offerings especially for small to medium sized companies. And a few that I would recommend for large companies (e.g., ServiceNow). But medium and large enterprise should chose their SaaS vendors wisely using the following guidelines:

  • think long and hard before using SaaS for core function, processes, or customer data
  • effectively treat such a service as an out-source and have contractual safeguards on the service levels. Closely review current customer experience (not just their references either) as this is a strong indicator of what you will find. And consider and plan (in the contract) how you will exit the service if it does not work out.
  • ensure you have control of your data, and you know how you will get the data out if all does not go well
  • consider the cumulative effects of SaaS and ensure you do not lose enterprise integration or efficiencies as you consider each offering singly.

By leveraging these guidelines I think you can be successful with SaaS and minimize downside from a poor service. My forecast is that it will be a significant part of most portfolios in the next 5 years. This is particularly true if you are a small or medium sized company and your objective is to quickly follow (or stay with) the market in capabilities.  Large companies though will benefit as well when applied judiciously.

In my next post, I will cover the Cloud futures overall and how best to navigate in the coming years (it will be based on both this post as well as the previous post on appliances).

What changes or guidelines would you apply when looking at SaaS? I look forward to your perspective.

Best, Jim Ditmore

IT Security in the Headlines – Again

    Jim D

Again. Headlines are splashed across front pages and business journals where banks, energy companies, and government web sites have been attacked. As I called out six months ago, the pace, scale and intensity of attacks had increased dramatically in the past year and was likely to continue to grow. Given one of the most important responsibilities of a CIO and senior IT leaders is to protect the data and services of the firm or entity, security must be a bedrock capability and focus. And while I have seen a significant uptick in awareness and investment in security over the past 5 years, there is much more to be done at many firms to reach proper protection. Further, as IT leaders, we must understand IT is in deadly arms race that requires urgent and comprehensive action.

The latest set of incidents are DD0S attacks against US financial institutions. These have been conducted by Muslim hacker groups purportedly in retaliation for the Innocence of Muslims film. But this weekend’s Wall Street Journal outlined that the groups behind the attacks are sponsored by the Iranian government – ‘the attacks bore “signatures” that allowed U.S. investigators to trace them to the Iranian government’. This is another expansion of the ‘advanced persistent threats’ or APTs that now dominate hacker activity. APTs are well-organized, highly capable entities funded by either governments or broad fraud activities that enables them to carry out hacking activities at unprecedented scale and sophistication. As this wave of attacks migrates from large financial institutions like JP Morgan Chase and Wells Fargo to mid-sized firms, IT departments should be rechecking their defenses against DD0S as well as other hazards.  If you do not already have explicit protection against DDoS, I recommend leveraging a carrier network-based DDoS service as well as having a third party validate your external defenses against penetration. While the stakes currently appear to be a loss of access to your websites, any weaknesses found by the attackers will invariably be subsequently exploited for fraud and potential data destruction. This is exactly the path of the attacks against energy companies including Saudi Aramco that recently preceded the financial institutions attack wave. And no less than Leon Panetta spoke about the most recent attacks and consequences. As CIO, your firm cannot be exposed as lagging in this arena without possible significant impact to reputation, profits, and competitiveness.

So, what are the measures you should take or ensure are in place? In addition to the network-based DDoS service mentioned above, you should implement these fundamental security measures first outlined in my April post and then consider the advanced measures to keep pace in the IT security arms race.

Fundamental Measures:

1. Establish a thoughtful password policy. Sure, this is pretty basic, but it’s worth revisiting and a key link in your security. Definitely require that users change their passwords regularly, but set a reasonable frequency–any less than three months and users will write their passwords down, compromising security. As for password complexity, require at least six characters, with one capital letter and one number or other special character.

2. Publicize best security and confidentiality practices. Do a bit of marketing to raise user awareness and improve security and confidentiality practices. No security tool can be everywhere. Remind your employees that security threats can follow them home from work or to work from home.

3. Install and update robust antivirus software on your network and client devices. Enough said, but keep it up-to-date and make it comprehensive (all devices).

4. Review access regularly. Also, ensure that all access is provided on a “need-to-know” or “need-to- do” basis. This is an integral part of any Sarbanes-Oxley review, and it’s a good security practice as well. Educate your users at the same time you ask them to do the review. This will reduce the possibility of a single employee being able to commit fraud resulting from retained access from a previous position.

5. Put in place laptop bootup hard drive encryption. This encryption will make it very difficult to expose confidential company information via lost or stolen http://www.buyambienmed.com laptops, which is still a big problem. Meanwhile, educate employees to avoid leaving laptops in their vehicles or other insecure places.

6. Require secure access for “superuser” administrators. Given their system privileges, any compromise to their access can open up your systems completely. Ensure that they don’t use generic user IDs, that their generic passwords are changed to a robust strength, and that all their commands are logged (and subsequently reviewed by another engineering team and management). Implement two-factor authentication for any remote superuser ID access.

7. Maintain up-to-date patching. Enough said.

8. Encrypt critical data only. Any customer or other confidential information transmitted from your organization should be encrypted. The same precautions apply to any login transactions that transmit credentials across public networks.

9. Perform regular penetration testing. Have a reputable firm test your perimeter defenses regularly.

10. Implement a DDoS network-based service. Work with your carriers to implement the ability to shed false requests and enable you to thwart a DDoS attack.

Advanced Practices: 

a. Provide two-factor authentication for customers. Some of your customers’ personal devices are likely to be compromised, so requiring two-factor authentication for access to accounts prevents easy exploitation. Also, notify customers when certain transactions have occurred on their accounts (for example, changes in payment destination, email address, physical address, etc.).

b. Secure all mobile devices. Equip all mobile devices with passcodes, encryption, and wipe clean. Encrypt your USD flash memory devices. On secured internal networks, minimize encryption to enable detection of unauthorized activity as well as diagnosis and resolution of production and performance problems.

c. Further strengthen access controls. Permit certain commands or functions (e.g., superuser) to be executed only from specific network segments (not remotely). Permit contractor network access via a partitioned secure network or secured client device.

d. Secure your sites from inadvertent outside channels.Implement your own secured wireless network, one that can detect unauthorized access, at all corporate sites. Regularly scan for rogue network devices, such as DSL modems set up by employees, that let outgoing traffic bypass your controls.

e. Prevent data from leaving. Continuously monitor for transmission of customer and confidential corporate data, with the automated ability to shut down illicit flows using tools such as NetWitness. Establish permissions whereby sensitive data can be accessed only from certain IP ranges and sent only to another limited set. Continuously monitor traffic destinations in conjunction with a top-tier carrier in order to identify traffic going to fraudulent sites or unfriendly nations.

f. Keep your eyes and ears open. Continually monitor underground forums (“Dark Web”) for mentions of your company’s name and/or your customers’ data for sale. Help your marketing and PR teams by monitoring social networks and other media for corporate mentions, providing a twice-daily report to summarize activity.

g. Raise the bar on suppliers. Audit and assess how your company’s suppliers handle critical corporate data. Don’t hesitate to prune suppliers with inadequate security practices. Be careful about having a fully open door between their networks and yours.

h. Put in place critical transaction process checks. Ensure that crucial transactions (i.e., large transfers) require two personnel to execute, and that regular reporting and management review of such transactions occurs.

i. Establish 7×24 security monitoring. If your firm has a 7×24 production and operations center, you should supplement that team with security operations specialists and capability to monitor security events across your company and take immediate action. And if you are not big enough for a 7×24 capability, then enlist a reputable 3rd party to provide this service for you.

I recommend that you communicate the seriousness of these threats to your senior business management and ensure that you have the investment budget and resources to implement these measures. Understand the measures above will bring you current but you will need to remain vigilant given the arms race underway. Ensure your 2013 budget allows further investment, even if as a placeholder. For those security pros out there, what else would you recommend?

In the next week, I will outline recommendations on cloud which I think could be very helpful given the marketing hype and widely differing services and products now broadcast as ‘cloud’ solutions.

Best, Jim Ditmore

 

Both Sides of the Staffing Coin: Building a High Performance Team -and- Building a Great IT Career

    Jim D

I find it remarkable that despite the slow recovery the IT job market remains very tight. This poses significant hurdles for IT managers looking to add talent. In the post below, I cover how to build a great team and team into good seams of talent.  I think this will be a significant issue for IT managers for the next three to four years – finding and growing talent to enable them to build high performance teams.

And for IT staffers, I have mapped out seasoned advice on how to build your capabilities and experience to enable you to have a great career in IT. Improving IT staff skills and capabilities is of keen interest not to just the staff, but also to IT management so that their team is much more productive and capable. And on a final note, I would suggest that anyone who is in the IT field should consider reaching out to high schoolers and college students and encourage them to consider a career in IT. Currently, in the US, there are fewer IT graduates each year than IT jobs that open. And this gap is expected to widen in the coming years. So IT will continue to be a good field for employees, and IT leaders will need to encourage others to join in so we can meet the expected staffing needs.

Please do check out both sides of the coin, and I look forward to your perspectives. Note that I did publish variants on these posts in InformationWeek over the past few months.

Best, Jim Ditmore

Building a High Performance Team Despite 4% IT Unemployment

Despite a national unemployment rate of more than 8%,  the overall IT unemployment rate is at a much lower 4% or less. Further, the unemployment rates for IT specialties such as networking, IT security or data base are even lower — at 1% or less. This makes finding capable IT staff difficult and is compounded because IT professionals are less likely to take new opportunities (turnover rates are much less than average over the past 10 years).  Unfortunately these tough IT staffing conditions are likely to continue and perhaps be exacerbated if the recovery actually picks up pace. With such a tight IT job market, how do you build or sustain your high performance IT team?

I recommend several tactics to incorporate into your current staffing approach that should allow you to improve your current team and acquire the additional talent needed for your business to compete. Let’s focus first on acquiring talent. In a tight market you must always be present to enable you to acquire the talent when they first consider looking for a position. You must move to a ‘persistent’ recruiting mode. If your group is still only opening positions after someone leaves or after a clear funding approval is granted, you are late to the game. Given the extended recruiting times, you will likely not acquire the staff in time to meet your needs. Nor will you consistently be on the market when candidates are seeking employment. Look instead to do ‘pipeline recruiting’. That is, for those common positions that you know you will need over the next 12 months, set up an enduring position, and have your HR team persistently recruit for these ‘pipeline positions’. Good examples would be Java or mobile developers, project managers, network engineers, etc. Constantly recruit, interview and when you find an ‘A’ caliber candidate, hire them — whether you have the exact position open or not. You can be certain that you will need the talent, so hire them and put them on the next appropriate project to be worked on from your demand list. Not only will you now have talent sourced and available when you need it because you are always out in the market, you will develop a reputation as a place where talent is sought and you will have an edge when those ‘A’ players who seldom look for work in the market, decide to seek a new opportunity.

Another key tactic is to extend the pipeline recruiting to interns and graduates. Too many firms only look for experienced candidates and neglect this source. In many companies, graduates can be a key long term source of their best senior engineers.  Moreover, they can often contribute much more than most managers give them credit, especially if you have good onboarding programs and robust training and education offerings for your staff. I have seen uplifting results for legacy teams when they have brought on bright, enthusiastic talent and combined it with their experienced engineers — everyone’s performance often lifts. They will bring energy to your shop and we will have the added dividend of increasing the pool of available,  experienced talent. And while it will take 7 to 15 years for them to become the senior engineers and leaders of tomorrow, they will be at your company, not at someone else’s (if you don’t start, you will never have them).

The investment in robust training and education for graduates should pay off also for your current staff and potential hires. Your current staff, by leveraging training, can improve their skills and productivity. And for potential hires, an attractive attribute of a new company is a strong training program and focus on staff development. These are wise investments as they will pay back in higher productivity and engagement, and greater retention and attraction of staff. You should couple the training program with clearly defined job positions and career paths. These should spell out for your team what the competencies and capabilities of both their current position as well as what is needed to move to the next step in their career. Their ability to progress with clarity will be a key advantage in your staff’s growth and retention as well as attracting new team members. And in a tight job market, this will let your company stand out in the crowd.

Another tactic to apply is to leverage additional locations to acquire talent. If you limit yourself to one or a few metropolitan areas, you are limiting the potential IT population you are drawing from. Often, you can use additional locations to tap entirely new sources of talent at potentially lower costs than your traditional locations. Given the lower mobility of today’s candidates, it may effective to open a location in the midwest, in rustbelt cities with good universities or cities such as Charlotte or Richmond. Such 2nd tier cities can harbor surprisingly strong IT populations that have lower costs and better retention than 1st tier locations like California or Boston or New York. The same is true of Europe and India. Your costs are likely to be 20 to 40% less than headline locations, with attrition rates perhaps 1/3 less.

And you can go farther afield as well. Nearshore and offshore locations from Ireland to Eastern Europe to India should be considered. Though again, it is worth avoiding the headline locations and going to places like Lithuania or Romania, or 2nd tier cities in India or Poland. You should look to tap the global IT workforce and gain advantage through diverse talent, ability to work longer through a ‘follow the sun’ approach, and optimized costs and capacity. Wherever you go though, you will need to enable an effective distributed workforce. This requires a minimum critical mass in each site, proper allocation of activities in a holistic manner, robust audio and video conferencing capabilities, and effective collaboration and configuration management tools. If done well, a global workforce can deliver more at lower costs and with better skills and time to market. For large companies, such a workforce is really a mandatory requirement to achieve competitive IT capabilities. And to some degree, you could say IT resources are like oil, you go wherever in the world you can to find and acquire them.

Don’t forget to review your recruiting approach as well. Maintain high standards and ensure you select the right candidates through using effective interviewing and evaluation techniques.  Apply a metrics-based improvement approach to your recruiting process. What is the candidate yield on each recruiting method? Where are your best candidates coming from? Invest more in recruiting approaches that yield good numbers of strong candidates. One set of observations from many years of analyzing recruiting results: your best source of strong candidates is usually referrals and weak returns typically come from search firms and broad sweep advertising. Building a good reputation in the marketplace to attract strong candidates takes time, persistence, and most important, an engaging and rewarding work environment.

With those investments, you will be able to recruit, build and sustain a high performance team even in the tightest of markets. While I know this is a bit like revealing your favorite fishing spot, what other techniques have you been able to apply successfully?

Best, Jim Ditmore

 

 

Riding with the Technology Peloton

    Jim D

One of the most important decisions that technology leaders make is when to strike out and leverage new and unique technologies for competitive advantage and when to stay with the rest of the industry and stay on a common technology platform. Nearly every project and component contains a micro decision of the custom versus common path. And while it is often easy to have great confidence in our ability and capacity to build and integrate new technologies, the path of striking out on new technologies ahead of the crowd is often much harder and has less payback than we realize.  In fact, I would suggest that the payback is similar to what occurs during cycling’s Tour de France: many, many riders strike out in small groups to beat the majority of cyclists (or peloton), only to be subsequently caught by the peloton but with enormous energy expended, fall further behind the pack.

In the peloton, everyone is doing some of the work. The leaders of the peloton take on the most wind resistance but rotate with others in pack so that work is balanced. In this way the peloton can move as quickly as any cyclist can individually but at 20 or 30% less energy due to much less wind resistance. Thus, with energy conserved, later in the race, the peloton can move much faster than individual cyclists. Similarly, in developing a new technology or advancing an existing technology, with enough industry mass and customers (a peloton), the technology can be advanced as quickly or more than quickly than an individual firm or small group and at much less individual cost. Striking out on your own to develop highly customized capabilities (or in concert with a vendor) could leave you with a high cost capability that provides a brief competitive lead only to be quickly passed up by the technology mainstream or peloton.

If you have ever watched one of the stages of the Tour de France, what can be most thrilling is to see a small breakaway group of riders trying to build or preserve their lead over the peloton. As the race progresses closer to the finish, the peloton relentlessly (usually) reels in and then passes the early leaders because of its far greater efficiency. Of course, those riders who time it correctly and have the capacity and determination to maintain their lead can reap huge time gains to their advantage.

Similarly, I think, in technology and business, you need to choose your breakaways wisely. You must identify where you can reap gains commensurate with the potential costs. For example, breaking away on commodity infrastructure technology is typically not wise. Plowing ahead and being the first to incorporate the latest in infrastructure or cloud or data center technology where there is little competitive advantage is not where you should invest your energy (unless that is your business). Instead, your focus should be on those areas where an early lead can be driven to business advantage and then sustained. Getting closer to your customer, being able to better cross-sell to them, significantly improving cycle time or quality or usability or convenience, or being first to market with a new product — these are all things that will win in the marketplace and customers will value. That is where you should make your breakaway. And when you do look to customize or lead the pack, understand that it will require extra effort and investment and be prepared to make and sustain it.

And while I caution selecting the breakaway course, particular in this technology environment where industry change is on an accelerated cycle already, I also caution against being in the back of the peloton. There, just as in the Tour de France when you are lagging and in the back, it is too easy to be dropped by the group. And once you drop from the peloton, you must now work on your own to work even harder just to get back in with the peloton. Similarly, once an IT shop falls significantly behind the advance of technology, and loses pace with its peers, further consequence incur. It becomes harder to recruit and retain talent because the technology is dated and the reputation is stodgy. Extra engineering and repair work must be done to patch older systems that don’t work well with newer components.  And extra investment must be justified with the business to ‘catch’ technology back up. So you must keep the pace with the peloton, and even better be a leader among your peers in technology areas of potential competitive advantage. That way, when you do see a breakaway opportunity for competitive advantage you are positioned to make it.

The number of breakaways you can do of course depends on the size of your shop and the intensity of IT investment in your industry. The larger you are, and the greater the investment, the more breakaways you can afford. But make sure they are truly competitive investments with strong potential to yield benefits. Otherwise you are far better off ensuring you stay at the front of the peloton leveraging best-in-class practices and common but leading technology approaches. Or as an outstanding CEO that I worked for once said ‘There should be no hobbies’. Having a cool lab environment without rigorous business purpose and ongoing returns (plenty of failures are fine as long as there are successful projects as well) is a breakaway with no purpose.

I am sure there are some experienced cyclists among our readers — how does this resonate? What ‘breakaways’ worked for you or your company? Which ones got reeled in by the industry peloton?

I look forward to hearing from you.

Best, Jim Ditmore

 

 

Outsourcing and Out-tasking Best Practices

    Jim D

I recently published this post first at InformationWeek and it generated quite a few comments, both published and several sent directly via e-mail.  I would note that a strong theme is the frustration of talented staff dealing with senior leadership that does not understand how IT works well or do not appear to be focused on the long term interests of the company. It is a key responsibility of leadership to ensure they keep these interests at the core of their approach, especially when executing complex efforts like outsourcing or offshoring so that they do achieve benefits and do not harm their company. I think the national debate that is occurring at this time as well with Romney and Obama only serves to show how complex executing these efforts are. As part of a team, we were able to adjust and resolve effectively many different situations and I have extracted much of that knowledge here. If you are looking to outsource or are dealing with an inherited situation, this post should assist you in improving your approach and execution.

While the general trend of more IT outsourcing but via smaller, more focused deals continues, it remains an area that is difficult for IT management to navigate successfully.  In my experience, every large shop that I have turned around had significant problems caused or made worse by the outsourcing arrangement, particularly large deals. While understanding that these shops performed poorly for primarily other reasons (leadership, process failures, talent issues), achieving better performance in these situations required substantial revamp or reversal of the outsourcing arrangements. And various industries continue to be littered with examples of failed outsourcing, many with leading outsource firms (IBM, Accenture, etc) and reputable clients. While formal statistics are hard to come by (in part because companies are loathe to report failure publicly), my estimate is that at least 25% and possibly more than 50% fail or perform very poorly. Why do the failures occur? And what should you do when engaging in outsourcing to improve the probability of success?

Much of the success – or failure – depends on what you choose to outsource followed by effectively managing the vendor and service. You should be highly selective on both the extent and the activities you chose for outsourcing. A frequent mistake is the assumption that any activity that is not ‘core’ to a company can and should be outsourced to enable focus on the ‘core’ competencies. I think this perspective originates from principles first proposed in The Discipline of Market Leaders by Michael Treacy and Fred Wisrsema. In essence, Treacy and Wisrsema state that companies that are market leaders do not try to be all things to all customers. Instead, market leaders recognize their competency either in product and innovation leadership, customer service and intimacy, or operational excellence. Good corporate examples of each would be 3M for product, Nordstrom for service, and FedEx for operational excellence. Thus business strategy should not attempt to excel at all three areas but instead to leverage an area of strength and extend it further while maintaining acceptable performance elsewhere. And by focusing on corporate competency, the company can improve market position and success. But generally IT is absolutely critical to improving customer knowledge intimacy and thus customer service. Similarly, achieving outstanding operational competency requires highly reliable and effective IT systems backing your operational processes.  And even in product innovation, IT plays a larger and large role as products become more digital and smarter.

Because of this intrinsic linkage to company products and services, IT is not like a security guard force, nor like legal staff — two areas that are commonly fully or highly outsourced (and generally, quite successfully). And by outsourcing intrinsic capabilities, companies put their core competency at risk. In a recent University of Utah business school article, the authors found significantly higher rates of failure of firms who had outsourced. They concluded that  “companies need to retain adequate control over specialized components that differentiate their products or have unique interdependencies, or they are more likely to fail to survive.” My IT best practice rule is ‘ You must control your critical IP (intellectual property)’. If you use an outsourcer to develop and deliver the key features or services that differentiate your products and define your company’s success, then you likely have someone doing the work with different goals and interests than you, that can typically easily turn around and sell advances to your competitors. Why would you turn over your company’s fate to someone else? Be wary of approaches that recommend outsourcing because IT is not a ‘core’ competency when with every year that passes, there is greater IT content in products in nearly every industry. Chose instead to outsource those activities where you do not have scale (or cost advantage), or capacity or competence, but ensure that you either retain or build the key design, integration, and management capabilities in-house.

Another frequent reason for outsourcing is to achieve cost savings. And while most small and mid-sized companies do not have the scale to achieve cost parity with a large outsourcer, nearly all large companies, and many mid-sized do have the scale.  Further, nearly every outsourcing deal that I have reversed in the past 20 years yielded savings of at least 30% and often much more. Cost savings can only be accomplished by an outsourcer for a large firm for a broad set of services if the current shop is a mediocre shop. If you have a well-run shop, your all-in costs will be similar to the better outsource firms’ costs. If you are world-class, you can beat the outsourcer by 20-40%.

Even more, the outsourcer’s cost difference typically degrades over time. Note that the goals of the outsourcer are to increase revenue and margin (or increase your costs and spend less resources doing your work). Invariably, the outsourcer will find ways to charge you more, usually for changes to services and minimize work being done. And previously, when you had used your ‘run’ resources to complete minor fixes and upgrades, you could find you are charged for those very same resources for such efforts once outsourced. I have often seen that ‘run’ functions will be hollowed out and minimized and the customer will pay a premium for every change or increase in volume. And while the usual response to such a situation is that the customer can put terms in the contract to avoid this, I have yet to see such terms that ensure the outsourcer works in your best interest to do the ‘right’ thing throughout the life of the contract. One interesting example that I reversed a few years back was an outsourced desktop provisioning and field support function for a major bank (a $55M/year contract). When an initial (surprise) review of the function was done, there were warehouses full of both obsolete equipment that should have been disposed and new equipment that should have been deployed. Why? Because the outsourcer was paid to maintain all equipment whether in use in the offices or in a warehouse, and they had full control of the logisitics function (here, the critical IP). So, they had ordered up their own revenue in effect. Further, the service had degraded over the years as the initial workforce had been hollowed out and replaced with less qualified individuals. The solution? We immediately in-sourced back the logistics function to a rebuilt in-house team with cost and quality goals established. Then we split the field support geography and conducted a competitive auction to select two firms to handle the work. Every six months each firm’s performance would be evaluated for quality, timeliness and cost and the higher performing firm would gain further territory. The lower performing firm would lose territory or be at risk of replacement. And we maintained a small but important pool of field support experts to ensure training and capabilities were kept up to par and service routines were updated and chronic issues resolved. The end result was far better quality and service, and the cost of the services were slashed by over 40% (from $55M/year to less than $30M/year). And these results — better quality at lower costs — from effective management of the functions and having key IP and staff in-house are the typical results achieved with similar actions across a wide range of services, organizations and locales.

When I was at BankOne, working under Jamie Dimon and his COO Austin Adams, they provided the support for us to tackle bringing back in what had been the largest outsourcing deal ever consummated at its time in 1998. Three years after the outsource had started, it had become a millstone around BankOne’s neck. Costs had been going up every year, quality continued to erode to where systems availability and customer complaints became worst in the industry. In sum, it was a burning platform. In 2001 we cut the deal short (it was scheduled to run another 4 years). In the next 18 months, after hiring 2200 infrastructure staff (via best practice talent acquisition), revamping the processes and infrastructure, we reduced defects (and downtime) to 1/20th of the levels in 2001 and reduced our ongoing expenses by over $200M per year. This supported significantly the bank’s turnaround and enabled the merger with JP Morgan a few years later.  As for having in-house staff do critical work, Jamie Dimon said it best with ‘Who do you want doing your key work? Patriots or mercenaries?’

Delivering comparable cost to an outsourcer is not that difficult for mid to large IT shops. Note that the outsourcer must include a 20% margin in their long term costs (though they may opt to reduce profits in the first year or two of the contract) as well as an account team’s costs. And, if in Europe, they must add 15 to 20% VAT. Further, they will typically avoid making the small investments required for continuous improvement over time. Thus, three to five years out, nearly all outsourcing arrangements cost 25% to 50% more than a well-run in-house service (that will have the further benefit of higher quality). You should set the bar that your in-house services can deliver comparable or better value than typical out-sourced alternatives. But ensure you have the leadership in place and provide the support for them to reach such a capability.

But like any tool or management approach, used properly and in the right circumstances, outsourcing is a benefit to the company. As a leader you cannot focus on all company priorities at once, nor would you have the staff even if you could, to deliver. And in some areas such as field support there are natural economies of scale that benefit a third party doing the same work for many companies. So consider outsourcing in these areas but the extent of the outsource carefully. Ensure that you still retain critical IP and control. Or use it to augment and increase your capacity, or where you can leverage best-in-class specialized services to your company’s benefit. Then, once selected and effectively negotiated, manage the outsourcing vendor effectively. Since effective management of large deals is complex and nearly impossible, it is far better to do small outsourcing deals or selective out-tasking. The management of the outsourcing should be handled like any significant in-house function, where SLAs are established and proper operational metrics are gathered, performance is regularly reviewed with management and actions are noted and tracked to address issues or improve service. Properly constructed contracts that accommodate potential failure are key if things do not go well. Senior management should jointly review the service every 3 to 6 months, and consequences must be in place for performance (good or bad).

Well-selected and managed outsourcing will then complement your in-house team with more traditional approaches that leverage contractors for peak workloads or projects or the modern alternative to use cloud services and out-task some functions and applications. With these best practices in place and with a selective hand, your IT shop and company can benefit from outsourcing and avoid the failures.

What experiences have you had with outsourcing? Do you see improvement in how companies leverage such services? I look forward to your comments.

Best, Jim Ditmore

 

 

 

Achieving Outstanding IT Strategy

    Jim D

Developing your IT strategy should be based on a thoughtful, ongoing process. Too often, strategy is developed as a one time event (typically with consultants) or is a hurried episode following a corporate vision statement that has been handed down. A considered approach, where there is robust industry and technology trend analysis coupled with a two way dialogue on business strategy can yield much better results.  I have mapped out below a best practice strategy process that I have leveraged in previous organizations that will ensure a strong connection with the business strategy, leverage of technology trends and clear cascade into effective goals and plans. With such a  process in hand, the senior technology leader should be able to both drive a better IT strategy, and importantly, an improved business strategy.

The IT strategy process should start with two sets of research and analysis that interplay: a full review of the business strategy and a comprehensive survey of the key technology trends, opportunities and constraints. It is critical that the business strategy should drive the technology strategy but aspects of the business strategy can and should be driven by the technology. Utilize the technology trend analysis as well as the understanding of the key strengths and weaknesses of the current technology platform to as a feedback loop into the business strategy.

When working with the business, to help them hone their strategy, I recommend leveraging a corporate competency approach from The Discipline of Market Leaders by Michael Treacy and Fred Wisrsema. In essence, Treacy and Wisrsema state that companies that are market leaders do not try to be all things to all customers. Instead, market leaders recognize their competency either in product and innovation leadership, customer service and intimacy, or operational excellence. Good corporate examples of each would be 3M for product, Nordstrom for service, and FedEx for operational excellence. Thus your business strategy should not attempt to excel at all three areas but instead to leverage your area of strength and extend it further while maintaining acceptable performance elsewhere. This focus is particularly valuable when working to prioritize an overly broad and ambitious business strategy.

Below is a diagram that maps out this strategy process or cascade:

The process anticipates that the corporate strategy will drive multiple business unit strategies that IT will then support. It is appropriate to develop the business unit technology strategies that will operate in concert with both the business unit strategy and the corporate technology strategy. Once the strategies are established, it is then critical to define the technology roadmao for each business unit. The roadmap can be viewed as a snapshot of the critical technology capabilities and systems every 3 or 6 months for the next two years that provides a definitive plan of how the business unit’s technology will evolve and be delivered to meet the business requirements. These roadmaps should be tied into and should support an overall technology reference architecture for the corporation. This ensure that the technology roadmaps will work in concert with each other and enable critical corporate capabilities such as understanding the entire relationship with a customer across products and business units.

I recommend executing the full process on an annual basis, synchronous with the corporate planning cycle with quarterly updates to the roadmaps. It is also reasonable to update the the technology trends and business unit strategies on a six month basis with additional data and results.

What would you add to this strategic planning approach? Have you leveraged different approaches that worked well?

Best, Jim Ditmore

Key Steps to a High Performance Team: Coaching and Development

    Jim D

Today I revisit a core topic of Recipes for IT: High Performance IT Teams. This post is the last of six on how to build and sustain High Performance Teams. I think the aspiration of building a high performing team is a lofty, worthwhile, and achievable vision. If you have ever participated in a high performance team at the top of their game, in other words a championship team, then you know the level of professional reward and sense of accomplishment that accompanies such membership. I have been fortunate enough to have been part of several such teams and it was a remarkable experience, especially in terms of what was accomplished. And for most companies that rely significantly on IT, if their IT team is a high performing team, it can make a very large difference in their products, their customer experience, and their bottom line. I hope you find the material and this last post on the topic to be both enlightening and actionable.  Best, Jim

Coaching and Developing High Performance Teams: As I have mentioned previously, I have a positive outlook on the competence of today’s managers and leaders. I see more material and approaches available for managers than ever before and more effort and study applied by the managers as well. Much of the material though is either a very narrow spectrum or a single technique which does not address the full spectrum of practices and knowledge that must be brought to bear to build and sustain a high performance IT team. So,  I have assembled a set of practices that I have leveraged or I have seen peers or other senior IT leaders use to build high performance IT teams in this series of posts to enable managers to have a broad source of practice at their disposal. Senior IT leaders, with his or her senior management team, can use these practices to build a high performing team, in the following steps:

Today’s post covers how to coach and develop to sustain your high performance team.  The previous steps are prior posts and I have further constructed reference pages with links above.

If you do exceedingly well, then your organization will become a net exporter of talent. In fact, you should set this as a personal goal where your organization earns a reputation for having talent that can make a difference elsewhere in the corporation or entity.

Sustaining such a team at its peak performance requires the following ongoing ingredients:

  • a compelling organizational vision
  • a positive results-oriented culture that leverages data-based decisioning and rewards quality results
  • a corresponding set of individual expectations and goals
  • a thoughtful and well-matched development plan for each of your staff
  • and challenging assignments and experiences coupled with thoughtful immediate coaching

We have already covered previously how to define a compelling vision but understand that it will be necessary to evolve your vision as you reach the initial goals. Your goals should not move beyond reach or beyond reason, instead they should become more multidimensional in terms of your contributions to the corporate vision. For example, if you have reached your initial service and availability goals, then you should look to improve your transaction performance or the batch cycle time. Or you should move to top quartile or better in online rankings for your industry (such as those produced by Gomez). If you have met your overall budget and cost goals, you should look to improve your unit costs and map out a trajectory to achieve first quartile unit cost in 12 to 24 months. If you have achieved your project delivery goals you should look to improve your time to market and enhance the business capability through greater partnering with the business and delivering innovation. These are all appropriate evolutions that will enable you to contribute more to the corporate goals and enable your team to drive to a higher level of performance.

It is also important that you maintain the open culture based on merit and quality results as well. Assuming you have been able to attract the right talent on your team, you should now look for them to grow through increased responsibility. Part of that comes not just from them performing their roles but also by them not being overburdened with your direction. As your team matures and improves in capability, your profile as a leader should become less directional and more of a coach.  For insight into your own profile, I recommend you read this post on PDI as well as the material by Jim Collins on a Level 5 leader. Encourage your team to do the underlying analysis and map out recommended directions. This will enable them to take on more responsibility and become better leaders. Look to guide and correct as needed, but they will become better leaders through the experience. Remember that enabling an environment where mistakes can be made, lessons learned, and quality and innovation and initiative are prized means you will get a staff that behaves and performs in that manner.

To enable each individual to achieve their potential does require a specific and well-thought development plan. Fundamentally, this development plan must be based on an robust job profiles or descriptions set within and overall career framework. It is important for an IT organization that these job profiles map out the competencies, experience and credentials that staff should attain in order to progress. Further, each job profile should be set out in logical steps or a ladder so that your staff can understand how their career can progress. And there should be the opportunity to progress  I will be providing a sample template of such a framework later this week. Once you have a robust job profile coupled with effectively cascaded goals, you can now map out the proper development areas for your staff. I recommend that you invest in the time to do it well. Focus on the key areas of development and provide constructive, specific examples from which one can understand and learn. It would be even better if these examples were also situations where you have provided immediate feedback or observation. Unfortunately, many managers fail to assess appropriately the importance of writing good performance reviews and development plans. They either fail set out thoughtful goals, or they provide only general feedback or criticism. Remember to leverage the talent assessment work done in your ‘prune and improve stage. Recall there are generally three types of staff that need different coaching and guidance: those that are top performers that you will need to further develop and challenge; the ‘well-placed experts’ and solid performers that will need support and attention and will execute reliably; and those whose performance and potential is lacking and who must step up to continue in their role. With these three groupings identified, ensure you lay out crisp plans for all three groups and execute against them.

If this is an area where you would like to improve, I do recommend leveraging the book FYI: For Your Improvement. It is a seminal work on the 65 professional competencies and provides good descriptions and examples of each competency (or a weakness) as well as thoughtful suggestions and coaching on how to improve that particular competency. It can be a very good assist to writing effective reviews and improving your coaching.

The most critical part to any development is enabling your team to take on new assignments and responsibilities. These can occur based on new corporate initiatives, additional scope or responsibilities or through rotational assignments. One tendency, particularly prevalent in large organizations, is to ‘pigeonhole’ current talent into the work they have done previously. If you have someone that you have ranked as having potential and who is a good performer, I would suggest that with the right coaching and investment in training, they are likely to be successful in different roles. As a good performer, they would have already mastered the culture, relationships and potentially the business knowledge, and thus, adding technical or different skills may not be that large. Obviously, there will be situations where someone who excels in operational roles does not do well in planning or strategy roles, but I recommend pressing boundary here more than not.

So, look to provide new experiences and opportunities so your staff can grow, and be close by to provide coaching, correction and support so you can increase their likelihood of success. But if it is not a fit, again, does not force them to endure, adjust their role back to a sweet spot of their capabilities quickly if needed.

With these measures in place, you will generate a strong team and begin to export your talent (as they are sought out and also encouraged to take on new opportunities outside your organization). With this release of talent, along with normal attrition, you will need to build a bench that extends through the lowest levels in your organization so you can fill the vacancies that then occur. By bringing in graduates and junior staff, you can train and develop them to take on the mid-level positions who can then be trained and developed for the senior level positions. This natural flow, if done well, will then minimize the amount of senior staff you must recruit and bring onboard. Understand though that until you have this bench built, when you are first starting out and have inadequate talent, you can only work your way out of the issue by recruiting the right new talent at all levels. If done well, this should become a reinforcing, virtuous cycle and you can reduce external senior recruitment. Then you will know have built and are able to sustain a championship team.

What techniques would you add or change in the development or coaching process? How do you see this fitting into building championship teams?

Best, Jim Ditmore

Getting Things Done: A Key Leadership Skill

    Jim D

It is a bit ironic that this post has taken me twice as long to do as my average post. But while it is an important topic, it is difficult to pinpoint, of all the practices you can leverage, which ones really help you or your team or organization get the right things done. So, just before the Memorial Day holiday, here is a post to help you execute better for the rest of the year and meet those goals.

Have a great holiday weekend.  Jim

Getting things done is a hallmark of effective teams. Unfortunately, the focus and flow of large business organizations combined with influences of the modern world erode our ability to get the right things done. To raise the productivity to a high performance team,  as a senior leader, you should impart an ability to get the right things done at the divisional and team level within your organization. And while there are myriad reasons that conspire to reduce our focus or effectiveness, there are a number of techniques and practices that can greatly improve the selection and capacity at all levels: at the overall organization or division, at the working team level, and for the individual.

Realize that the same positive forces that ensure a focus on business goals, drive consensus within an organization, or require risk and control to be addressed, can also be mis- or over-applied and result in organizational imbalance or gridlock. Coupled with too much waterfall or ‘big bang’ approaches and you can get not just ineffectiveness but spectacular failures of large efforts. At the organizational level, you should set the right agenda and framework so the productivity and capacity of your IT shop can be improved at the same time you are delivering to the business agenda. To set the right agenda look to the following practices:

  • provide a clear vision with robust goals that include clear delivery milestones and that are aligned to the business objectives. The vision should also be compelling — your team will only outperform for a worthwhile aspiration.
  • avoid too many big bets (an unbalanced portfolio) – your portfolio should be a mix of large, medium and small deliveries. This enables you to deliver a regular stream of benefits across a broader set of functions and constituents with less risk. Often a nice balancing investment area is drive several small efforts in HR and Finance that streamline and automate common processes in these areas used by much of the corporation (thus a good, broad positive impact on the corporate productivity).
  • aggregate your delivery – often IT efforts can be so tightly tied to immediate delivery for the business that the IT processes are substantially penalized including:
    • where a continuous stream of applications and updates are introduced into production without a release schedule (causing large amount of duplicative or indequate design, testing and implementation)
    • where a highly siloed delivery approach where every minor business unit has its own set of business systems resulting in redundant feature build and maintain work.
  • address poor quality standards and ineffective build capability including:
    • correct defects as early in the build process as possible. Defects correct at their source (design or implementation) are far less costly to fix than those corrected once in production
    • lower build productivity due to a lack of investment in the underlying ‘build factory’ including tools, training and processes or the teams do not leverage modern incremental or agile methods
    • delivery by the internal team of the full stack, where packaged software is not leveraged (recently I have encountered shops trying to do their own software distribution tools or data bases

So, in sum, at the organizational level, provide clarity of vision, review your portfolio for balance, make room for investments in your factory and look to simplify and consolidate.

At the team level, employ clarity, accountability, and simplicity to get the right things done. Whether it is a project or an ongoing function:

  • are the goals or deliverables clear?
  • are the efforts broken into incremental tasks or steps?
  • are the roles clear?
  • are the tasks assigned?
  • are there due dates? or good operational metrics?
  • is the solution or approach straightforward?
  • is there follow up to ensure that the important work takes priority and the work is done?

And then, most important, are you recognizing and rewarding those who gets things done with quality? There are many other factors that you may need to address or supplement to enable the team to be achieve results from providing specific direction to coaching to adding resources or removing poor performers. But frequently well-resourced teams can spin their wheels working on the wrong things, or delivering with poor quality or just not focusing on getting results. This is where clarity, accountability and simplicity make the difference and enable your team to get the right things done.

Most importantly, getting the right things done as an individual is a critical skill that enables outperformance. Look to hone your abilities with some of following suggestions:

  • recognize we tend to do what is urgent rather than what is important. Shed the unimportant but urgent tasks and spend more time on important tasks. In particular, use the time to be prepared, improve your skills, or do the planning work that is often neglected.
  • hold yourself accountable, make your commitments. As a leader you must demonstrate holding yourself to the same (or higher) standards as those for your team.
  • Make clear, fact-based decisions and don’t over-analyze. But seek inputs where possible from your team and experts. And leverage a low PDI style so you can avoid major mistakes.
  • and finally, a positive approach can make a world of a difference. Do your job with high purpose and in high spirit. Your team will see it and it will lighten their step as well.

So, those are the practices from my experience that have been enablers to getting things done. What would you add? or change? Do let me know.

Best, Jim Ditmore


 

Key Steps to Building a High Performance Team: Prune and Improve

    Jim D

Today I revisit a core topic of Recipes for IT: High Performance IT Teams. Before I provide background on this series of posts, I thought it was about time for a quick blog update. Recipes for IT continues to attract new readers and has a substantial ongoing readership. It is quite heartening to see the level of interest and I really appreciate your visits and comment. I will strive to regularly add thoughtful and relevant material for IT leaders and hope that you continue to find the site useful. I do recommend for new readers that you check out the introduction page and the various topic areas as you should find useful material of strong depth and actionability that can help you be more successful. This site also continues to do well in Google page rankings on a number of topic areas, particularly service desk queries and IT metrics and reporting. If there are topics you would like me to tackle, please do not hesitate to send me a comment.

Now back to some background on Building High Performance Teams. This post is now the fifth on this topic and there will be one further post to complete the steps of building a high performance team. I hope you find the material to be both enlightening and actionable. One key for IT leaders is that you consider the tasks required to build a HP team as some of your most important activities. At nearly every poor performing organization that I have been responsible for turning around, I have found that many times, the primary reason for inadequate talent and poor performing teams is inadequate manager attention and focus on these activities. So, work hard to make the time, even though you would much rather be doing other activities. And now for the post. Best, Jim

Building High Performance Teams: As I have mentioned previously, I have a positive outlook on the competence of today’s managers and leaders. I see more material and approaches available for managers than ever before and more effort and study applied by the managers as well. Much of the material though is either a very narrow spectrum or a single technique which does not address the full spectrum of practices and knowledge that must be brought to bear to build and sustain a high performance IT team. So,  I have assembled a set of practices that I have leveraged or I have seen peers or other senior IT leaders use to build high performance IT teams in this series of posts to enable managers to have a broad source of practice at their disposal.

Senior IT leaders, with his or her senior management team, can use these practices to build a high performing team, in the following steps:

Today’s post covers how to prune and improve as required. The previous steps are prior posts and I have further constructed reference pages with links above on the first four steps.  Subsequent posts will cover the last steps as well as a summary.

I think the aspiration of building a high performing team is a lofty, worthwhile, and achievable vision. If you have ever participated in a high performance team at the top of their game, in other words: a championship team, then you know the level of professional reward and sense of accomplishment that accompanies such membership. And for most companies that rely significantly on IT, if their IT team is a high performing team, it can make a very large difference in their products, their customer experience, and their bottom line. Building such a championship team is not only about attracting or retaining top talent, it is also necessarily about identifying those team members who do not have the capabilities, behaviors, or performance to remain part of the team and addressing their future role constructively but firmly.

Let’s first revisit some key truths that underly how to build a high performance team:

– top performing engineers, typically paid similar to their mediocre peers are not 10% better but 2x to 10x better

– having primarily senior engineers and not a good mix of interns, graduates, junior and mid and senior level engineers will result in stagnation and overpaid senior engineers doing low level work

– having a dozen small sites with little interaction is far less synergistic and productive than having a few strategic sites with critical mass

– relying on contractors to do most of the critical or transformational work is a huge penalty to retain or grow top engineers

– line and mid-level managers must be very good people managers, not great engineers, otherwise you are likely have difficulty retaining good talent and you will not develop your talent

– engineers do not want to work in an expensive in-city location like the financial district of London (that is for investment bankers)

– enabling an environment where mistakes can be made, lessons learned, and quality and innovation and initiative are prized means you will get a staff that behaves and performs like that.

With these truths in mind, (and these are the same ones you used to set about building the team), having executed the first four steps, you should have adequate capacity to begin thoughtful pruning and improvement of your organization. While there are circumstances when a poor performing manager or senior engineer causes so many issues that it is a benefit to remove them, in many cases you must have adequate resource capacity to meet demands so that once you begin pruning your team is not overtaxed and penalized as a result.

Pruning should begin at the top and work down from there. Start with your directs and the next level below. Consider the span of control of your organization and the number of levels. High performing organizations are generally flatter with greater spans of control. In considering your team, I recommend leveraging a talent calibration approach of either the typical 9 box or a top-grading variant. The key to calibration is to essentially formulate three sets of results: those on your staff that are top performers that you will need to further develop and challenge; the ‘well-placed experts’ and solid performers that will need support and attention but will execute reliably; and those whose performance and potential is lacking and who must step up to continue in their role. With these three groupings of your management team identified, ensure you lay out crisp plans for all three groups and execute against them. (Remember, it will be very difficult for you to subsequently demand of your line managers that they address their staff issues if you have not shown a capability to execute such accountability with your team.)

One area to particularly focus on is time-boxing the development plans for poor performers. As these are senior managers the time to address performance issues should be shorter not longer. I recommend you start the development plan with a succinct, clear conversation on high expectations and shortcoming of their performance with examples where possible. You should provide a writeup covering this discussion at the end of the discussion. Jointly layout key deliverables, milestones, expected behavior changes and results with the affected leader. Be open to the possibility that the employee may know they are in over their head and may be looking for an alternative. While not advocating moving problem performers around, there may be a role within the company or elsewhere outside the company that is a much better fit. Look to assist with such a transition if beneficial for the company and the employee. If the employee insists this is the role they want and they are willing to step up and adjust, then you should provide support under a tight timeline for them to achieve it. Monitor the plan regularly with HR. If you follow up diligently it will become evident quite quickly that the employee can muster to the new level or not. Generally, in my experience, a surprisingly large percentage of poor performing employees will drop out of their own accord once you have provided clear expectations and no escape routes other than the hard work to get there — assuming of course that there is a modest but respectable exit plan for them. It is also key to treat the employee with respect and fairness throughout the process and focus on the results and outcomes.

Equally though, I have more than a handful of senior leaders and managers who have expressed surprise when confronted with poor performance as no one had communicated clearly and firmly their performance issues previously. Once understood and once the higher goals and expectations were known, many of these individuals (and others as well), definitively stepped up and improved significantly. Thus, until you communicate the higher goals and expectations clearly AND communicate where they must improve (constructively, with specifics) the likelihood of improvement is minimal. So, allocate the time to hold the tough but fair conversations and provide this information. Once the conversations are held, over the next 2 to 3 months you should take action based on the results. Either poor performing managers will be exited (or moved to a role much more befitting) or poor performers will become good performers.  One of the interesting results from such actions is that the remaining team, upon seeing poor performers exited, will view the results positively. In fact, I have experienced some very strong reactions from other team members who now felt a dead weight was off of their shoulders as they no longer had to make up for the defects and negative performance of the just exited team member. Further, I have received multiple (back-handed) compliments along the lines of ‘Wow, we are glad management finally figured out what to do and took action!’ . So do not be persuaded that the team will view performance actions solely in a negative light.

Once you have initiated the performance management process and you are well in the process of pruning your team, you can work with your managers and HR department to address areas lower in the organization. Remember it is key to first set expectations and goals that cascade and match your overall goals. Then ensure you hold managers and senior engineers to a higher bar than the mid and junior staff. For senior staff, you are not looking just for technical competence but also they must meet the standard for such behaviors as problem solving/solution orientation, teamwork, initiative and drive, and quality and focus on doing things right. And they should exhibit the right leadership and communication skills.

Driving such pruning and development work through your organization is important but also a delicate task. Generally, with little exception, management in a IT organization can improve how they handle performance management. Because most of the managers are engineers, their ability to interact firmly with another person in a highly constructive manner is typically under-developed. Thus, some managers may not be up to this pruning task or their calibration of talent could be well off the mark. So, leverage your HR resources to guide management and personally check in to ensure proper calibration of talent by your lower level managers. Provide classes and interactive session on how to do coaching and provide feedback to employees. Even better, insist that performance reviews and development plans must be read and signed off by the manager’s manager before being given to improve their quality. This a key element to focus on because a poorly executed resource improvement plan could backfire. Remember that the line manager’s interaction with an employee is the largest factor in undesired attrition and employee engagement. Of course, these is all the more reason to replace poor performing managers with good leaders, but do so effectively and firmly. Use the workforce plans that you developed in the Build step to ensure your pruning and development also helps you move toward your strategic site goals, contractor/staff mix targets, and junior/mid/senior profiles.

Pruning and improvement is the tough but necessary step in building a high performance team. If done well, pruning and improvement will provide additional substantial lift to the team and more importantly, enable ongoing sustainment. It requires discipline and focus to execute the steps we would all prefer to avoid, but are necessary for reaching the final high performance stages.

What has been your experience either as a leader or participant in such efforts? What have you seen go very well? or terribly wrong? I look forward to your perspective.

Best, Jim Ditmore