Excelling at Customer Service

Customer services

Customer services (Photo credit: gordon2208)

“Excellence is not a skill. It is an attitude.”

Ralph Marston (1907 –  ) Professional Football Player in 1929

“If you want to give a great customer experience you have to align your culture and the way you reward staff. None of our customer facing staff has sales targets or sales bonuses — their rewards and bonuses are based purely on their customer satisfaction scores.”

Anthony Thomson, Chairman, Metro Bank

Quote courtesy of Institute of customer service

Life has a way of taking everything in its stride and I am often compelled to go through the related emotions. Sometimes, I marvel at the way life turns corners and obviously as human beings, we all have this uncanny ability to learn from mistakes and move on by not repeating those same mistakes. We learn, change and adapt.

Organisations are very similar to us (in theory) and are supposed to learn from their mistakes, change processes to reflect that and become ‘the ideal organisation.’ So, I have to ask myself then, ‘Why in today’s day and age, are we still dealing with organisations’ that are failing its customers, in terms of customer service?’

Obviously, during my life, I have had many good experiences of customer services and some pretty dire ones. The reason for writing this blog is that recently, I dealt with three organisations that should have excelled at customer service but in reality, they failed in their promise to provide even the basic levels of customer service. I have debated whether to play the ‘name and shame’ game but that just wouldn’t be me. So, instead, I have decided to write about how to provide excellent customer service.

According to a survey conducted in the U.S. and eleven other countries in 2010, by American Express Global Customer Service Barometer, Americans Will Spend 9% More with Companies That Provide Excellent Service

Although only a little more than a third of Americans (37%) believe that companies have increased their focus on providing quality service:

  • 27% feel businesses have not changed their attitude toward customer service.
  • 28% say that companies are now paying less attention to good service.

So, where do I start?

Let’s start with:

  1. Culture

According to Catherine Lovering, “Make the goal of providing excellent customer service a company-wide commitment. Put a customer-service policy in writing, and post it in a prominent place. Translate customer-service objectives into specific actions for employees to follow, such as: deliver prompt service, offer a polite demeanour, and make product information readily available.”

Inc.com says, “Start by hanging on the wall a set of core values, 10 or fewer principles that include customer service ideals, suggests Susan McCartney, Maggiotto’s colleague at the Buffalo SBDC. “Share them during the training, have employees sign them, and evaluate employees based on the values,” she says. “But don’t call them rules.”

Employee training on customer service precepts should be intensive: written materials, verbal instruction, mentors, and on-the-job demonstrations all ought to be part of the coursework, says McCartney.”

This theme continues in 10 Examples of Shockingly-Excellent Customer Service and  12 ways to dazzle your customers.

  1. Staff morale and motivation

Catherine Lovering says, “Treat your employees well, so they in turn will treat customers well. Employees will bring enthusiasm and a positive attitude to their job when they know they’re appreciated and respected. Recognize employees who continually provide good customer service and praise the entire staff for their efforts. Customer-service work can be emotionally draining unless the company involved is supportive and gains the loyalty of its employees.”

Inc.com says, “Companies renowned for their customer service — the online shoe retailer Zappos, for example — treat employees as they would have their employees treat their customers. “Employees take on more responsibility because they know they are appreciated and an important part of the team,” says the University of Missouri’s Proffer. “People who don’t feel like they’re part of the bigger picture, who feel like a small cog in a big machine, are not willing to go the extra mile.”

Not every business can afford to shower staff with generous pay and benefits, but not every business has to. Small companies, says McCartney, can show “intense interest” in employees, in their welfare, their families, and their future — what McCartney calls the family model. It’s also important to recognize an employee — publicly — for a job well done. Some companies also offer incentives for exceptional customer service, but if you can’t spare the cash, you might throw an office party or offer another token of appreciation. When he was a manager at cable provider Tele-Communications Inc., for instance, Proffer personally washed the cars of notable employees.”

  1. Knowledgeable staff

Staff need to know their products and services and that can only be achieved by a comprehensive induction and training programme for staff that not only includes products and services but also includes an initiation with an organisation’s processes and knowledge of the internal and external network of people who can help resolve issues and problems. A ‘can do attitude’ needs to be instilled in staff right at the outset while empowering customer service staff to engage in activities that resolve the problem while highlighting to management any processes that hinder resolution. That way employees are highlighting processes that hinder the delivery of excellent customer service while improving customer service delivery at the same time.

Inc.com says, “The best salespeople spend 80 percent of their time listening, not talking,” says Marc Willson, a retail and restaurant consultant for the Virginia SBDC network. Ask open-ended questions to elicit a customer’s needs and wants. ”

Further in the article, Proffer offers the The Five A’s. method, “It’s helpful to think of resolving a dispute as a five-step process called the Five A’s: Acknowledge the problem. Apologize, even if you think you’re right. Accept responsibility. Adjust the situation with a negotiation to fix the problem. Assure the customer that you will follow through.”

  1. Well trained staff

Training is paramount and well trained staff needs to help customers resolve their problems regardless of how much time they have spent resolving it (within reason). Many organisations tend to operate their measuring metrics for customer services advisors’ on calls closed rather than calls resolved. Well trained staff will have the ability to resolve calls and close them better than ill trained staff. Staff training should be reviewed periodically and refresher courses offered based around lessons learnt, processes improved and latest innovations in delivering better customer service.

Catherine Lovering in her article on customer service said, “Teach the staff stress-reduction methods and techniques in conflict resolution. Train staff to use language that promotes good customer service. Phrases such as “How can I help,” “I don’t know, but I will find out,” and “I will keep you updated” let customers know that their needs will be met. It also will demonstrate a willingness to find a solution to any problem and a commitment to communicate with the customer. This dedication will go a long way toward defusing dissatisfaction among clientele.”

She further adds, “Train staff to accept responsibility for errors and to apologize to upset customers. Good customer-service representatives must refrain from arguing with an upset customer and instead ask the customer what they can do to solve the problem. Advise employees to speak calmly to customers and to assure them that they’ll do what they can to help. Follow up with a clear resolution to the complaint.”

  1. Empowered staff

Catherine Lovering says, “Empower these staff members to not only deal well with upset customers on an emotional level but also to provide tangible benefits. For example, “Entrepreneur” magazine recommends giving employees the authority to give any dissatisfied customer a 10-percent discount.”

The emphasis should be on, “What can we do that will make the situation better for you? Add the wow factorFor example, one winner of The WOW! Awards is a restaurant in Leeds called Gueller’s. They keep a range of prescription spectacles, just in case customers forget their own and are having difficulty reading the menu.”

Give them something that will make them feel valuable. That could be a freebie, the ability to resolve their problem, following up the matter on their behalf and make them feel that their concerns have been heard and addressed (or will be addressed)

  1. Customer service, IT systems and process review – Capture, monitor and report

IT systems need to be setup according to effective measurement metrics. For example, it is not good enough to measure “How many calls did an agent take/close today?” An effective metric would be, “How many calls did an agent close today that was satisfactorily resolved for the customer?” Each call should also be followed up by the completion of customer satisfaction surveys and that opportunity utilised for creating other effective metrics and for highlighting process improvements.

Information Technology Infrastructure Library (ITIL) is used extensively within the IT industry and it can be modified to deliver excellent customer service. Karen Francis of Macanta consulting says, “My opinion is that we shouldn’t be too precious about what we use as long as it works for us. If an organisation is already using ITIL for the IT department and finds that it can be adapted for the non-IT departments, then why not do it.

ITIL may not cover things such as sales and marketing and HR, but if you already have effective and efficient processes for managing faults, problems, changes, inventory, capacity, business continuity, service levels and so on, why not use them for non-IT if they translate well?”

As a fan of Deming, I would like to add Danielle J Baker’s thoughts, “ITIL’s iterative approach and focus on continuous improvement is the basis of IT Service Management as defined by the ITIL set of best practices.

The following needs to be done prior to the installation of any IT system for customer service.

  1. Do we know what processes we have captured in existing systems?
  2. How do we go about capturing processes that are not captured by our existing systems?
  3. What processes can we improve, prior to using IT?

Use new innovative tools for interacting with customers, such as Desk.com (Or similar tool). According to Desk.com website, “Connect to your customers on Facebook and Twitter as easily as on traditional support channels like email, phone and web. Desk.com organizes all of your support in one place so you can respond efficiently wherever your customers reach out.”

One of their client’s, Bonobos said, “I was excited by the look and feel of Desk.com when I saw it. By lunchtime the next day we had switched over entirely.”

  1. Benchmark

As a big fan of benchmarking, I highly recommend benchmarking and covered this in my blog post, IT benchmarking

Catherine Lovering said, “Create customer service benchmarks for employees to meet, and reward the workers who meet and exceed them.”

  1. Customer service and relationship management

Catherine Lovering said, “Communicate with customers so you know what they want. Distribute surveys, request feedback, and make it easy for customers to let you know how they feel about their shopping experience. Add a personal touch to customer communication by answering comment letters with a note of thanks. Keep an eye on the competition to see how they implement customer-service policies, especially if it appears that those services are well-received by customers.”

Inc.com says, “The cost of acquiring a new customer is five times that of retaining an existing one.”

Contact with the organisation should be easy and should include an element of ‘self service’ via social media and an organisation’s own website. That could include, for example, a knowledge base or frequently asked questions (FAQ). This could be done by keeping track of the most common type of service desk requests and enabling access to them via these methods.

In her excellent article, 4 Steps to Overcome Being a Pain in the Ass Call Center that I would recommend reading (All 3 parts), Dr. Jodie Monger says, “According to W. Edwards Deming, the father of the quality evolution, “workforces are only responsible for 15% of mistakes, where the system desired by management is responsible for 85% of the unintended consequences. [1]”  In other words, 85% of a worker’s effectiveness is entirely out of his or her control!   It’s rather unfortunate that it is the 15% that is under workers’ control that call centers tend to focus on through quality monitoring efforts, Voice of the Customer programs, mystery shopping and the like.

A well-designed, well-executed quality program will provide a holistic view of your organization’s strengths and opportunities by answering ALL four of the vital questions:

  1. How are we—as an organization—doing at representing our company to its customers?
  2. What can we—as an organization—do to improve?
  3. How are you—as an individual agent—doing at representing our company to its customers?
  4. What can we—as a management team—do to help you improve?

Note that in accordance with Deming’s philosophy of systems and process management, only one of the four vital questions focuses on the activities of the worker.

What would your answers be?”

On that thought provoking question by Dr Judie Monger, I would like to end this blog and hope that this blog post contributes to even better customer service!

References and further Information:

10 Examples of Shockingly-Excellent Customer Service

12 ways to dazzle your customers

Why is Customer Service Still So Lousy?

Customer service frustration leads to lawsuit

Americans Will Spend 9% More With Companies That Provide Excellent Service

The high price of bad customer service

American Express – A story of customer service gone bad

Create a culture of excellent customer service

Institute of customer service

7 Secrets to Providing Excellent Customer Service

Providing Excellent Customer Service

Tips for excellent customer service

How to provide excellent customer service

How to deliver great customer service

How to provide excellent customer service

Salesforce.com Revolutionizes Customer Service for a Social and Mobile World with Desk.com

desk.com

Using ITIL for Non-IT Purposes

How ITIL Help Desk can help SMBs?

ITIL and Deming

Are you a Pain in the Ass Call Centre?

The Deming Centre for Quality, Productivity, and Competitiveness at Columbia Business School

Advertisements

Sergio Marchionne (CEO Fiat and Chrysler ) management style and CIOs

SERGIO MARCHIONNE

Image by SOCIALisBETTER via Flickr

“Things don’t have to change the world to be important.”

Steve Jobs (1955 – 2011) co-founder and CEO of Apple

Sergio Marchionne (1952 -) CEO Fiat and Chrysler

Today’s article is the eleventh in a series of articles (1st Steve Jobs, 2nd Michael Dell, 3rd Warren Buffet, 4th Bill Gates, 5th Larry Ellison, 6th Eric Schmidt, 7th CIOs and the ideal management style, 8th Louis V Gerstner, 9th late Steve Jobs and Tim Cook’s, and Richard Branson), analysing current and past leaders to ascertain how senior management including  Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders.

Sergio Marchionne (mar-key-OWN-ee) also won the 2011 Deming Cup (and other accolades) and regular readers will know that I am a big Deming fan and as such, I really wanted to find out more….

PS: CIO is a generic term and other analogous titles are Head of IT, IT Director, Director of IT etc.

The Management Style

Sergio Marchionne is a chartered accountant and barrister and holds a Bachelor of law (LLB) and MBA. Although he was born in Italy, he emigrated to Canada at 14 and his first job was with Deloitte and Touche. He has a pretty unconventional management style (According to European CEO, “His management style is to manage his companies. Not to control them.”) that he has used with great effect at various companies, in particular to turn around the fortunes at Fiat and Chrysler. According to Money CNN, “The principles of his management style are simple: He values merit over rank, excellence over mediocrity, competition over insularity, and accountability over promises. Marchionne presents himself like a ’60s intellectual from a Fellini movie, with his baggy sweaters, longish hair, and cigarettes. He rations his public appearances and gets movie star treatment wherever he shows up. Marchionne says his job as CEO is not to make business decisions — it is to push managers to be leaders. What other CEO can you think of who likes to characterize himself as a “simple, homeless, ever-wandering metal basher?”

Let’s see what CIOs and general management can learn from this ‘turnaround’ specialist. (In no particular order and a few other sources utilised):

1.When the going gets tough, investment in people always pays:

“We flattened the organization out. We reached out and brought people on the management team who had been buried underneath the classical hierarchy of corporate America,” says Marchionne. “They were given an opportunity to play. These are people who had been two or three layers down from the senior leadership.”-SM- Time Mag –America24

In another article by Money CNN, Sergio said, “The hardest job is getting personalities to mesh. Some people become dysfunctional — their egos become blown out. It is like having an evil spirit in the house.”

According to Money CNN, “Marchionne runs Chrysler with 26 direct reports, an unusually large number, because he believes it flattens the organization and leads to faster decision making. He demands complete openness, fast communication, and accountability. Marchionne arrived at Fiat from outside the auto industry, and doesn’t try to pass himself off as an expert. Instead, as he told the Harvard Business Review in 2008, “A lot of what I do is challenge assumptions — which often looks like you are asking stupid questions.”

In another article by Money CNN, “Marchionne hopes his round-the-clock zeal will become contagious inside the company. For the launch of the first new vehicle of his tenure, the all-new Jeep Grand Cherokee, Marchionne got deeply involved. Instead of laying off workers when the plant was revamped last fall, he kept them working, and they scrubbed the Jefferson North assembly plant in Detroit from top to bottom — it’s most thorough cleaning since it opened in 1991. When Marchionne showed up one Saturday to review their progress, the workers beamed, even more so when President Obama toured the plant a few weeks later and called it “this magnificent factory.”

The sign of a true leader is that he not only inspires and motivates but ensures that he is surrounded by the best talent, especially in the areas where he doesn’t excel. Sergio does this brilliantly by promoting the best talent and allowing them make their own decisions, coupled with clear, achievable targets. As an accountant he knows his figures and utilises that aspect to his advantage. Senior managers need to understand the importance of retaining and investing in people as displayed by Sergio.

2. Constant analysis:

“Once it’s execution, then you’ve got to look into your shorts and you’ve got to say to yourself, Do you actually have–do you–I mean I, as a person, do you have the wherewithal to get this done?”–SM- Time Mag –America24

One of the reasons for Sergio’s success is that he is constantly analysing his businesses to find out how further improvements can be made. He expects his managers to have their finger on the pulse of the business and failure is NOT an option.

3. Spotting opportunities:

According to European CEO, “We spit blood to clean up and restart Fiat. When I took over, there was a smell of death here,” Marchionne has said of the experience.

Marchionne refused to get bogged down in the engineering technicalities of running a car manufacturer. He took a more philosophical approach and modelled sales of the Fiat 500 on the iPod – when it broke into the UK’s top 10 selling vehicles in 2009, it became the car people didn’t think twice about buying. It became the iPod on wheels – practical, stylish and affordable.

Sergio was a big fan of Steve Jobs and used his philosophy with great effect in selling the Fiat 500. The Fiat 500 has not done so well in USA and it remains to be seen whether he can launch more cars akin to the iPod!

Certainly, like Steve Jobs, he needs to create an environment and culture that thrives on spotting opportunities.

4. Improve productivity: –

According to Forbes and Vecchio (Mediobanca analyst) “When Marchionne took over the company, he was literally firing one manager a day but there was a leadership problem and nobody wanted to take hard decisions. The communication from bottom to top in management was slow and wrong. He also changed that,” the analyst added. “He reduced the layers of management and gave his role a more direct view of what the business was doing. And of course his ego is very big and sometimes people who had clashes with him were basically fired. Looking at his style from outside it seems awful but he delivered.”

When profits are dwindling and an organisation is on the brink of producing losses, serious questions have to be asked of its management. Sergio, was quite right to question his management team and change the structure based to a performance related one (Based on meritocracy, as Deming envisaged). Something has to change, as in that situation if nothing changes, the organisation will cease to exist!

5. Success in general may be built on failure:

“I don’t think that people really understand what the implications would have been of a lack of decisiveness at that point in time,” says Marchionne. “It would have been a mess.”(Referring to the purchase of Chrysler) – SM- Time Mag –America24-.

Chrysler was on the verge of bankruptcy and decisions had to be made. Sergio did not shy away from such decisions and followed his instinct, just as Steve Jobs did (Sergio is a fan). The secret is to learn from your mistakes, put them behind you and move on.

6. Competitive advantage:

According to Money CNN, “Marchionne believes his competitive advantage is speed. By wiping out layers of management and making decisions more quickly, he’ll get closer to the market and bring out new models faster than his slower-moving rivals.

“They have access to me 24/7,” he says, and when they call or e-mail, he makes decisions in minutes — or seconds. While traveling, he stays in contact with one of his six BlackBerrys. “BlackBerrys are divine instruments,” he purrs.

Marchionne-style management is not for compromising types. He works all the time, subordinates say, and his wife has left Italy to live separately at their home in Switzerland (they have two boys). “The lifestyle I have today is the most abusive way to achieve a lasting impact,” he concedes.”

Sergio, clearly knows his own competitive advantage and he uses that with great effect for the benefit of his company. While other CEOs may reply to such emails a day or two later, he almost communicates with them in ‘real time.’ This allows the business to be very agile in terms of making crucial decisions. I covered this in my post, Leveraging IT for Competitive Advantage – Myth or Reality?

7. Succession planning and his reputation:

According to Money CNN, “Marchionne is trying to provide some clarity about his retirement plans. He’s announced that he plans to stay until 2015 or 2016, and that his successor will likely come from inside the company.”

Succession planning is paramount for businesses as without ‘nurturing’ successors businesses will run into difficulties and sometimes that can result in situations where the successor ‘fails’ to do his/her job effectively. So, while succession is paramount, so is the need to appoint the ‘most suitable’ candidate.’

8. Focus:

According to Money CNN, “ Marchionne takes an all-but-gleeful delight in reminding audiences about the deficiencies of the Western auto industry. He calls it a business of hand-me-downs and seldom let’s an opportunity go by to remind his audience that the autos have been “rigorously and methodically” destroying billions of dollars in shareholder value. He’s particularly critical of what he calls “M&A sprees” that have made automakers “into rambling ranch houses onto which one room after another was added — with no rational architecture uniting the whole.”

Senior management need to focus on the core activities of a business and shy away from getting involved in M&A’s that do not contribute or add value to that core perspective. In the car industry, failures have occurred when businesses have not produced cars that the public want to buy with features/quality that the public want to buy. Shy away from the projects that do not add value to the business but may just be a ‘nice have’ or appear to add value. Learn to say, ‘No’.

9. Successful innovation and success in general may be built on failure:

“What I look for in people is the ability to use that space intelligently, not to abuse the freedom,” he says. “It’s to remain absolutely focused on the objective but not to define the method of execution.”-SM – Time Mag –America24-.

Sergio did not have to buy Chrysler but he had the conviction that he could turn it around as he could innovate and launch cars that the public really wanted to buy. Some will inevitably fail but many will be huge successes. Many businesses lack of innovation is due to their fear of failures.

10. Earn respect:

“I told them, I said, ‘You’ve got more than money on the table,'” Marchionne recalls. “‘You’ve got me … You’ve got Fiat.'”–SM- Time Mag –America24

Prior to negotiating with the US administration, Sergio had already turned Fiat around and as such held the respect of Obama and his team and their belief that he could turn the ailing giant around. Unfortunately, such ‘respect’ can only be earned.

11. Quality management:

“Leadership is not a quantitative thing. People either smell it in you or they don’t,” says Marchionne. “People need to trust you that you’re going to pull them out and that they will follow you when you pull them out. If they don’t get that comfort, they’re going to drop you. This is true of organizations. It’s true of countries.”-SM- Time Mag –America24

12. Use numbers to season the points you serve — they’re not the main dish:

According to Money CNN, Sergio said, “I’ve always hit my numbers and will with Chrysler’s five-year profitability plan,” he told a group of dealers in June. “We told people we’d break even in 2010. We made an [operating] profit in the first quarter. It wasn’t a lot of money, but it’s black, and it is from selling cars. From what I can tell, we’ll do significantly better than zero this year.”

Sergio will drop references to his numbers but will not get carried away with them and only uses them ‘sparingly’ so that he can make convincing arguments while avoiding the detail.

13. Create and nurture ‘the correct culture.’ –

In a move that signalled where his heart is, earlier this year Marchionne became CEO of Chrysler Group. His office is on the fourth floor in the engineering department, not the executive penthouse, now sitting empty, where a chairman and three vice chairmen used to rule. “I don’t have an office of the chairman. Which is what used to run this joint,” he says, quickly adding, “with all due respect.”-SM- Time Mag –America24

Sergio wanted to break down the barriers between senior Management and employees and the ideal way to do this was to be closer to the action, i.e. the engineering department where cars were ‘visualised’ and eventually made.

14. Develop a Clear Vision–and Stick to It. –

“There were things that Fiat had, that I had, that if applied here could have pulled this out,” Marchionne explains. “I knew I could help technically. And I had a guy who was willing to fund it.”-SM-

A guy named Obama. (Time Mag –America24)

15. Be ‘shrewd’ and keep the team on its ‘toes.’ –

“It’s pretty intense, because he questions–and again, rightfully so–and there are times when you think you’re so prepared and ready and he’ll bring something completely that you weren’t thinking of,” says Laura Soave Time Mag –America24

This is a trait in common with other leaders, such as Bill Gates. Sergio, surrounds himself with smart people and ensures that when they present their information, they have investigated it thoroughly. Questioning the assumptions that they may have made, ensures that such information is ‘de-risked’ and provides a sound foundation for them to make progress.

More Info:

Fiat’s extreme makeover

Sergio Marchionne’s bad bet at Fiat

Columbia business school address by Sergio Marchionne – Recepient of Deming cup 2011

Columbia Business School’s Deming Centre

W. Edwards Deming Institute®

Steve Jobs (Chairman Apple) and Tim Cook’s (CEO Apple) management style and CIOs

Steve Jobs shows off iPhone 4 at the 2010 Worl...

Image via Wikipedia

UPDATED: 08/10/11 – This post is dedicated to one of my heroes and role models, Steve Jobs, 1955-2011, Thanks for the inspiration. May God bless you.

In February 2010, I posted the blogpost – Steve Jobs (CEO Apple) management style and CIOs that is currently my most successful blogpost. This post attracts so many people that the search, ‘apple management style’ will return this article as the number one post. That’s without any adwords!

With the arrival of Tim Cook as Apple’s new CEO, a lot has been written comparing the two. I actually debated about writing an article on Tim Cook’s management style as well and spent the last two week’s debating the direction to take. In the end, I decided that it would be best for me to re post the original blogpost in its entirety. That decision was made because so much has been written about Tim Cook (both in the past and currently) that it would be better to leave all my readers with some appropriate links to get an idea of Tim Cook’s management style.

The most interesting part from my point of view was that I found older articles, in many cases, better than the current articles as they were quite speculative and gave solid reasons for why Tim Cook should be chosen as Apple’s next CEO. In contrast, the current articles do not have to speculate anymore and as such just wrote about Apple’s new CEO supported by content mostly from a few years ago. Anyway, below is the full text of my previous blogpost (Just after the links), Steve Jobs (CEO Apple) management style and CIOs:

Tim Cook: my first-person impression of Apple’s new CEO by TUAW
Described as “relentless”, the New York Times profiles Tim Cook
The genius behind Steve – Could operations whiz Tim Cook run the company someday? by CNN
Tim Cook’s Challenge: Sorting Out Apple’s Chinese Supply Chain by Forbes
‘Operations Guy’ Tim Cook Gets Chance to Shine At Apple by CIO.com

This article is an article in a series of articles where I will analyse current and past leaders to ascertain how Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders. I have broken down Steve Job’s style into two distinct pieces. The management style and the presentation style.

PS: CIO is a generic term and other analogous titles are Head of IT, IT Director, Director of IT etc.

The Management Style

In an interview with Fortune, Steve Job’s (SJ) opened up about his management Style (In no particular order and a few other sources utilised):

1. SWOT analysis: As soon as you join/start a company as a CIO, make a list of strengths and weaknesses of yourself and your company on a piece of paper. Don’t hesitate in throwing bad apples out of the company.

2. Spotting opportunities: SJ – “We all had cellphones. We just hated them, they were so awful to use.”

The lesson that can be learnt is that within IT we need to spot opportunities for improvement. It is not enough, however, just to spot them, the onus is to spot them and then to create an environment to leverage that opportunity and to make it happen.

3. Improve productivity: – SJ – “We figure out what we want. So you can’t go out and ask people, you know, what the next big [thing.] There’s a great quote by Henry Ford, right? He said, ‘If I’d have asked my customers what they wanted, they would have told me “A faster horse.”

As a CIO, we need to ask ourselves, what can we do that will improve our customers or our own productivity? That could entail listening to your customers, horizon scanning or simply taking action on something that you feel would help you, your team/and/or customers.

4. Business/IT Strategy: SJ – “We do no market research. We don’t hire consultants.”

Sometimes it’s best to follow your instincts and to believe in yourself to do the right thing. Paralysis by analysis is often the cause that many organisations cannot do well. It’s as Nike says, Just do it!

5. Competitive advantage: SJ – “It is the intimate interaction between the operating system and the hardware that allows us to do that. That allows us to innovate at a much faster rate than if we had to wait for Microsoft, like Dell and HP and everybody else does.”

CIOs need to ask themselves how they can help the business through leveraging IT to create competitive advantage? I covered this a few weeks ago, in my post, Leveraging IT for Competitive Advantage – Myth or Reality?. Sometimes, it makes sense not to embrace open platforms, as Apple has created a significant competitive advantage, by keeping it’s hardware/software systems closed. CIOs need to make such decisions cautiously.

6. Succession planning and his reputation: SJ – “My job is to make the whole executive team good enough to be successors, so that’s what I try to do. My job is to not be easy on people. My job is to make them better. My job is to pull things together from different parts of the company and clear the ways and get the resources for the key projects.”

CIOs need to be facilitators and to bring people together working towards a common goal. It is also important to have succession planning in order that the business has continuity in the unfortunate event of a CIO not being able to provide management.

7. Focus: SJ – “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.”

A CIO needs to focus on the most important issues that are relevant to the business and to shy away from the issues/projects that do not add value to the business but may just be a ‘nice have’ or appear to add value. Learn to say, ‘No’.

8. Talent acquisition:They have to be really smart. But the real issue for me is, Are they going to fall in love with Apple?”

A CIO needs to trust their gut instinct, as one can only learn a certain amount in an interview. I think, the strategic fit, is a very good measure. How will a new hire fit into the culture of the company? Will they enjoy it here? Have they worked in a similar culture before? The danger is that the culture could be so alien to the new hire, that they find it difficult to adjust.

9. Know your business and innovate: SJ – “I put out an agenda — 80% is the same as it was the last week, and we just walk down it every single week.”

The CIO and the entire IT department need to know how the business operates, preferably, as intricately as possible. It is that complete overview that will allow innovative opportunities to present themselves.

10. Handling barriers and roadblocks: SJ – “And we pushed the reset button. We went through all of the zillions of models we’d made and ideas we’d had. And we ended up creating what you see here as the iPhone, which is dramatically better.”

CIOs need to know when to intervene. For example, in many cases that could mean stopping projects altogether to take stock of current situations or to change the direction. There is no shame in that as the project has to deliver the project’s core objective.

11. Customer conversion: SJ – “But if we put our store in a mall or on a street that they’re walking by, and we reduce that risk from a 20-minute drive to 20 footsteps, then they’re more likely to go in because there’s really no risk.”

CIOs need to help the businesses by utilising IT to create opportunities in attracting additional customers. They need to ask themselves, “How can we assist in taking the business to the consumer”?

12. When the going gets tough, investment in people always pays: SJ- “What I told our company was that we were just going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place — the last thing we were going to do is lay them off.”

I covered this, under mobility of management when I covered; can IT Management failure be caused by a deadly disease? Part II. CIOs need to understand the importance of retaining and investing in people as one of the business’s most important assets is yet again confirmed by another business leader. This means that they need to stand by that conviction and avoid losing people in economic downturns.

13. Successful innovation and success in general may be built on failure: SJ -. “Will this resonate and be something that you just can’t live without and love? We’ll see. I think it’s got a shot.”

Apple has proved that failure can lead to success and continues to innovate by investing in many technologies. Some will inevitably fail while others such as the iPod and iPhone will be huge successes. Many businesses lack of innovation is due to their fear of failures.

14. Earn respect: Steve Jobs can be a hard boss to work with but Jobs’ employees remain devoted. That’s because his autocracy is balanced by his famous charisma — he can make the task of designing a power supply feel like a mission from God. CIOs need to command respect from their employees and that is something that has to be earned!

I want to conclude this part by finishing off with a quote that shows us that even with his god like innovative powers, Steve Jobs remains human. “Steve proves that it’s OK to be an asshole,” says Guy Kawasaki, Apple’s former chief evangelist. “I can’t relate to the way he does things, but it’s not his problem. It’s mine. He just has a different OS.”

As Geoffrey Moore, author of Crossing the Chasm said. “He’s at the absolute epicentre digitisation of life. He’s totally in the zone.”

The Presentation Style

For the second part, I am reproducing an article written by Carmine Gallo in BusinessWeek for his new book, The Presentation Secrets of Steve Jobs: How to Be Insanely Great in Front of Any Audience. For this book he watched hours of Jobs’ keynotes. Here he identifies the five elements of every presentation by the Apple CEO. CIOs can improve their presentations by using these five elements.

1. A headline. Steve Jobs positions every product with a headline that fits well within a 140-character Twitter post. For example, Jobs described the MacBook Air as “the world’s thinnest notebook.” That phrase appeared on his presentation slides, the Apple Web site, and Apple’s press releases at the same time. What is the one thing you want people to know about your product? This headline must be consistent in all of your marketing and presentation material.

2. A villain. In every classic story, the hero fights the villain. In 1984, the villain, according to Apple, was IBM (IBM). Before Jobs introduced the famous 1984 television ad to the Apple sales team for the first time, he told a story of how IBM was bent on dominating the computer industry. “IBM wants it all and is aiming its guns on its last obstacle to industry control: Apple.” Today, the “villain” in Apple’s narrative is played by Microsoft (MSFT). One can argue that the popular “I’m a Mac” television ads are hero/villain vignettes. This idea of conquering a shared enemy is a powerful motivator and turns customers into evangelists.

3. A simple slide. Apple products are easy to use because of the elimination of clutter. The same approach applies to the slides in a Steve Jobs presentation. They are strikingly simple, visual, and yes, devoid of bullet points. Pictures are dominant. When Jobs introduced the MacBook Air, no words could replace a photo of a hand pulling the notebook computer out of an interoffice manila envelope. Think about it this way—the average PowerPoint slide has 40 words. In some presentations, Steve Jobs has a total of seven words in 10 slides. And why are you cluttering up your slides with too many words?

4. A demo. Neuroscientists have discovered that the brain gets bored easily. Steve Jobs doesn’t give you time to lose interest. Ten minutes into a presentation he’s often demonstrating a new product or feature and having fun doing it. When he introduced the iPhone at Macworld 2007, Jobs demonstrated how Google Maps (GOOG) worked on the device. He pulled up a list of Starbucks (SBUX) stores in the local area and said, “Let’s call one.” When someone answered, Jobs said: “I’d like to order 4,000 lattes to go, please. No, just kidding.”

5. A holy smokes moment. Every Steve Jobs presentation has one moment that neuroscientists call an “emotionally charged event.” The emotionally charged event is the equivalent of a mental post-it note that tells the brain, Remember this! For example, at Macworld 2007, Jobs could have opened the presentation by telling the audience that Apple was unveiling a new mobile phone that also played music, games, and video. Instead he built up the drama. “Today, we are introducing three revolutionary products. The first one is a widescreen iPod with touch controls. The second is a revolutionary mobile phone. And the third is a breakthrough Internet communications device…an iPod, a phone, an Internet communicator…an iPod, a phone, are you getting it? These are not three devices. This is one device!” The audience erupted in cheers because it was so unexpected, and very entertaining. By the way, the holy smokes moment on Sept. 9 had nothing to do with a product. It was Steve Jobs himself appearing onstage for the first time after undergoing a liver transplant.

One more thing…sell dreams. Charismatic speakers like Steve Jobs are driven by a nearly messianic zeal to create new experiences. When he launched the iPod in 2001, Jobs said, “In our own small way we’re going to make the world a better place.” Where most people saw the iPod as a music player, Jobs recognized its potential as a tool to enrich people’s lives. Cultivate a sense of mission. Passion, emotion, and enthusiasm are grossly underestimated ingredients in professional business communications, and yet, passion and emotion will motivate others. Steve Jobs once said that his goal was not to die the richest man in the cemetery. It was to go to bed at night thinking that he and his team had done something wonderful. Do something wonderful. Make your brand stand for something meaningful.

For more of Job’s techniques, flip through this slide show. Then catch a video interview with Carmine Gallo about how he researched his book.

The 6 Box Model – An Eco System for sustainable performance

“Thinking is the hardest work there is, which is probably the reason why so few engage in it.”

Henry Ford, industrialist, inventor (1863-1947)

There are so many new management techniques and tools published every year that it is often hard to select one that will actually work within an organisation. I recently came across the 6 box model (Created by Vlatka Hlupic, University of Westminister) and thought that it was a model that could easily be used by organisations that wanted to improve and sustain performance. Today’s business eco system is very different to the one that was prevalent, even quite recently as the early 80’s and 90’s. Professor Vlatka highlights that quite well, in the following slide:

Hlupic Slide

The 6 Box model identifies the main six key performance drivers required by organisations and how they are interlinked and rely on each other to deliver sustainable performance. Usually, when I come across business tools and techniques, the accompanying websites fail to deliver content that supports them. I was therefore quite pleasantly surprised by the 6 box model website that is a mine of information and contains a rich resource of content ranging from an article by professor Vlatka featured in Harvard Business Review that includes marked productivity improvement at both CSC and ANADIGICS. Please also view video on by Marcus Buckingham on ‘strengths’.

6BoxModel

Increasingly, Social Media has been used quite successfully by organisations to tap this resource already found within organisations and I covered this in my blog post, revised recently, ‘Organisations “Don’t get” social media’  . ‘Hlupic points to the example of HCL Technology, a software consultancy in India which developed its own Facebook-style application and used it to create a new business strategy. “Originally, 300 managers would put their strategy ideas to the CEO but with the social media application, they could put their ideas for new strategies to everyone in the global business, so 8,000 people could potentially comment. Everyone could contribute to the planning and everyone could really align themselves with the strategy and live and breath it,” she says. This all happened mid-recession and in the four years since, 70 per cent of all major deals closed by HCL were won against the big four global IT players, the number of customers has grown five-fold and employee attrition is down to 50 per cent. Revenues have also tripled over a four-year period and operating income has also tripled.’

6BoxModelCategories

I would like to conclude this article by requesting readers to read the article that I wrote in 2009 titled, ‘Can IT Management failure be caused by a deadly disease? Part II’  that discussed ‘Dr. Deming – The 5 Deadly Diseases 1984’ as that also discussed and emphasised the importance of employees and as the great man said,

“Unemployment is not inevitable but of bad management”- Dr Edward W Deming.

Eric Schmidt (Ex CEO and current Chairman – Google) management style and CIO

Image representing Eric Schmidt as depicted in...

Image via CrunchBase

“If you’re not making mistakes, then you’re not doing anything.”

John Wooden (1910 – 2010) Hall of Fame basketball coach of UCLA

Eric Schmidt (1955 – ) Google CEO and Chairman from 4th April 2011 onwards

Today’s article is the sixth in a series of articles (1st Steve Jobs, 2nd Michael Dell, 3rd Warren Buffet, 4th Bill Gates, 5th Larry Ellison), analysing current and past leaders to ascertain how Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders.

This article also follows my previous articles on Google, Microsoft Googles Apple in 2011, Google Apps – The myth, hype and reality, Weather bulletin – Google Cloud and icy Microsoft downpour and Used iphone under a palm tree where I met android and formed a symbian relationship with a blackberry

Eric Schmidt arrived at Google to help Google’s inexperienced founders; Sergey Brin and Larry Page. He has led Google to become a globally recognised company with approx 24000 employees. Recently, he has stepped down to become the chairman and to pass the leadership to Larry Page (on 4th April 2011). Over the years, he has mentored the young founders and believes that the time is now right for them to take the helm. For his efforts, he leaves with a golden shake of $100 million in equity and shares worth 9.1% of Google stock.

“As a CEO, Schmidt is more inclined to provoke than proclaim. “Google is run by its culture and not by me”, said Schmidt in 2009. In Google, when a key executive decision is reached, all interested parties are invited to the decision making process and are encouraged to share their opinions. Schmidt’s job is to oversee the whole procedure and make timely decisions. This bottoms-up way of decision making usually leads to a better buy in and a better decision.  Google allows employees to spend 20% of time on self-directed projects. To closely connect to Google’s frontline innovators, each week Schmidt and his senior associates spend up to six hours in dialogue with team members from across Google, who believe their projects have great potential. This unique management style has hatched a series of great products like Gmail and Google News.” Courtesy Vivian’s Tech Blog

PS: CIO is a generic term and other analogous titles are Head of IT, IT Director, Director of IT etc.

The Management Style

What can CIOs learn from Eric Schmidt’s management style? Let’s investigate while allowing you to decide.  (In no particular order and a few other sources utilised):

1. How do you run this company? – ES “It’s run in a strange way. We have a normal hierarchical structure. The company is organized ‘bottoms up’ from the standpoint of product creativity and ‘tops down’ from running the quarter and the financials and so forth. We encourage dissent, we encourage large group conversation, we encourage there to be somebody who’s opposed to the decision, and we work very, very hard to be not hierarchical in the way that decisions are made. Often if we can get a decision, we get the best decision if we have two decision makers, not once. We never make decisions in private; we always do them right in front of everybody.” Courtesy Marketplace

2. When the going gets tough, investment in people always pays: ES – “Getting the most out of knowledge workers will be the key to business success for the next quarter century. Here’s how we do it at Google.

At Google, we think business guru Peter Drucker well understood how to manage the new breed of “knowledge workers.” After all, Drucker invented the term in 1959. He says knowledge workers believe they are paid to be effective, not to work 9 to 5, and that smart businesses will “strip away everything that gets in their knowledge workers’ way.” Those that succeed will attract the best performers, securing “the single biggest factor for competitive advantage in the next 25 years.

At Google, we seek that advantage. The ongoing debate about whether big corporations are mismanaging knowledge workers is one we take very seriously, because those who don’t get it right will be gone. We’ve drawn on good ideas we’ve seen elsewhere and come up with a few of our own. What follows are ten key principles we use to make knowledge workers most effective. As in most technology companies, many of our employees are engineers, so we will focus on that particular group, but many of the policies apply to all sorts of knowledge workers.” – Courtesy 1000 Ventures

For more, read – Google’s ten golden rules for getting the most out of knowledge workers.

When Eric joined Novell, the company’s future was very much in doubt. He correctly recognized a culture of fear that pervaded the organization. Bright engineers with revolutionary ideas were reluctant to voice them for fear of being fired. The engineers however, complained vociferously amongst themselves leading to a culture of corporate cynicism. Recognizing this pervasive bellyaching, Eric asked two engineers he met on the company shuttle, to give him the names of the smartest
people they knew in the company. Eric met with each of them, and asked them in turn to identify the 10 smartest people they knew. In a few weeks, Eric had a list of 100 engineers he considered critical to Novell’s future. He met with each of them personally, encouraging them to take chances and follow their instincts. He removed the possibility of reprisals by their managers for voicing their opinions. This inspired the engineers and focused their efforts, resulting in innovative and improved products. These changes helped Novell transform itself from a loss of $78
million to a gain of $102 million”. – Courtesy Scribd.com

One person alone cannot handle everything. The secret is to surround yourself with employees that are smarter than yourself. These smart people will challenge organisations and force them to think differently. I covered this, under mobility of management when I covered; can IT Management failure be caused by a deadly disease? Part II. CIOs need to understand the importance of retaining and investing in people as one of the business’s most important assets is yet again confirmed by another business leader.

3. Business/IT Strategy: “At Google, Eric has stated the company’s goal as “…Organizing the world’s information making it universally accessible and useful”. An engineer working to index billions of web pages can easily identify with this laudable goal. As a practical matter the goal of making information universally accessible is a more
meaningful goal for the engineer, interested in making his mark on society, rather than a mundane goal of increasing Google’s revenues by $300 million dollars. Eric considers this transfer of ownership to be so important that while at Novell he created a quarterly in-house radio show modeled after NPR’s “Car Talk”. He even made tapes available for in-car listening.” – Courtesy Scribd.com

Sometimes it’s best to follow your instincts and to believe in yourself to do the right thing. Paralysis by analysis is often the cause that many organisations cannot do well. It’s as Nike says, Just do it!

4. Rating of employees’ performance: – In the past, I have reviewed many CEO’s management style but Eric Schmidt’s style is the closest fit to Deming’s ‘Annual rate of performance’ that I have yet come across.

“Eric management style is to let the team’s progress be reviewed by individuals the team respects. In most companies there exist a few individuals that are universally respected or at least more respected than everyone else.
These individuals have a way of articulating principles and have very good memories. Since they are considered impartial, teams are more open to receive feedback or decisions even if the decision goes against them. – Courtesy Scribd.com

5. Earn respect by ‘listening’: – ES “Listening to each other is core to our culture, and we don’t listen to each other just because we’re all so smart. We listen because everyone has good ideas, and because it’s a great way to show respect. And any company, at any point in its history, can start listening more.” Courtesy Andrew McAfee

6. Competitive advantage: This is an area of great interest, as currently, Google is the undisputed king of search but Microsoft’sa Bing is knocking on its doors. So, for the moment Google is able to keep its competitive advantage. The worry for Google has been the defection of key employees (who view Facebook as ‘cool and the place to be’) to companies such as Facebook. Social Media is an area where Google doesn’t really have a strong foothold and that is worrying for them while in the mobile arena, Android is not a huge money earner (albeit, earnings are approx $6 per user per year) when compared to Apple IOS. Google is in a battle with Apple, Microsoft and Facebook and it is ambiguous which markets Google ultimately wants to compete within.

CIOs need to ask themselves how they can help the business through leveraging IT to create competitive advantage. I covered this in my post, Leveraging IT for Competitive Advantage – Myth or Reality?

7. Talent acquisition – Hire ‘Action’ oriented employees: “I might have been mistaken, actually. Having your name and picture up on that big screen at End of Quarter may not be the biggest incentive. The thing that drives the right behavior at Google, more than anything else, more than all the other things combined, is gratitude. You can’t help but want to do your absolute best for Google; you feel like you owe it to them for taking such incredibly good care of you.” Source unknown, courtesy Oliver Thylmann

Google actively recruits recent Ph.D.’s and Ph.D. candidates. All 1,900 Google employees are researchers and developers in addition to their regular duties. Where other companies will keep their research departments and core businesses separate, Google places all their Ph.D.’s in the rank and file of the company. Workers at Google enjoy a company devoted to benefits (Stross, 2004). They also enjoy an informal company culture where employees have access to gyms, massages, pool and ping-pong tables, well stocked snack rooms and other recreational amenities (Google Culture, 2009). Courtesy Marty Andrade

A CIO needs to trust their gut instinct, as one can only learn a certain amount in an interview. I think, the strategic fit, is a very good measure. How will a new hire fit into the culture of the company? Will they enjoy it here? Have they worked in a similar culture before? The danger is that the culture could be so alien to the new hire, that they find it difficult to adjust.

Eric Schmidt has hired the smartest people who can ‘get the job done.’ Hire your friends and past colleagues, as they will have loyalty to you and as you know them personally, an informed decision can be made on whether they have what it takes to realise your ‘vision.’

8. Spotting opportunities and innovation: LE –  “innovation is the key to Google’s success, everything Schmidt does revolves around creating more innovation. Without it, Schmidt believes there is nothing to prevent another company from overtaking Google as the king of digital information.  Innovation is systematically encouraged at Google at all levels throughout the organization, including management. At Google, management follows the “70/20/10″ rule where seventy percent of their time is spent on core business projects, twenty percent is spent on projects related to the core business and ten percent is spent on projects unrelated to the core business (Battelle, 2005). Schmidt, in order to remain true to the 70/20/10 rule, actually divides these projects into different rooms and tracks his time spent in each of the rooms.” Courtesy Marty Andrade

For More Info:

The Daily Telegraph’s articles on Eric Schmidt

Google’s greatest innovation may be its management practice

Android OS is profitable, might generate $10 billion per year

Google CEO, Eric Schmidt: “We don’t have a 5 year plan.”

The New York Times: Eric E Schmidt

Google CEO, Eric Schmidt, will not talk about “Private conversations” with Apple about becoming CEO

21 steps to conquer your market(s)

Environmental Forces - influencing competitive...

Getting there first is not what it’s all about. What matters always is execution. Always.”

Facebook’s head of product, Chris Cox

There have been a lot of articles written in the past on the merits of being the second mover into an area of business , proceeding to become the market leader. Recently, the best product to succeed has been the iPhone.

I wanted to go behind the scenes and contribute by adding the fact that businesses do indeed succeed by being the second or third mover but success happens due to many factors. All of these factors or some of the ones that I will discuss amalgamate to create the success or competitive advantage/tipping point.

I have created a ‘second mover toolset’ for CEOs and senior management (In no particular order) that helps to create a synergy between business strategy, culture and employees (people).

1. Business/IT Strategy: Steve Jobs – SJ – “We do no market research. We don’t hire consultants.”

Sometimes it’s best to follow your instincts and to believe in yourself to do the right thing. Paralysis by analysis is often the cause that many organisations cannot do well. It’s as Nike says, Just do it!

2. SWOT analysis: As soon as you join/start a company as a CEO, make a list of strengths and weaknesses of yourself and your company on a piece of paper. Don’t hesitate in throwing bad apples out of the company.

3. Spotting opportunities: SJ – “We all had cellphones. We just hated them, they were so awful to use.”

The lesson that can be learnt is that CEOs need to spot opportunities for improvement. It is not enough, however, just to spot them, the onus is to spot them and then to create an environment to leverage that opportunity and to make it happen.

4. Focus: SJ – “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.”

A CEO needs to focus on the most important issues that are relevant to the business and to shy away from the issues/projects that do not add value to the business but may just be a ‘nice have’ or appear to add value. Learn to say, ‘No’.

5. Know your business and innovate: SJ – “I put out an agenda — 80% is the same as it was the last week, and we just walk down it every single week.”

The CEO and the entire business need to know how the business operates, preferably, as intricately as possible. It is that complete overview that will allow innovative opportunities to present themselves.

6. Handling barriers and roadblocks: SJ – “And we pushed the reset button. We went through all of the zillions of models we’d made and ideas we’d had. And we ended up creating what you see here as the iPhone, which is dramatically better.”

7. Customer conversion: SJ – “But if we put our store in a mall or on a street that they’re walking by, and we reduce that risk from a 20-minute drive to 20 footsteps, then they’re more likely to go in because there’s really no risk.”

CEOs need to help the business by helping to identify opportunities in attracting additional customers. They need to ask themselves, “How can we assist in taking the business to the consumer”?

8. When the going gets tough, investment in people always pays: SJ- “What I told our company was that we were just going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place — the last thing we were going to do is lay them off.”

I covered this, under mobility of management when I covered; can IT Management failure be caused by a deadly disease? Part II. CEOs need to understand the importance of retaining and investing in people as one of the business’s most important assets is yet again confirmed by another business leader. This means that they need to stand by that conviction and avoid losing people in economic downturns.

9. Successful innovation and success in general may be built on failure: SJ -. “Will this resonate and be something that you just can’t live without and love? We’ll see. I think it’s got a shot.”

Apple has proved that failure can lead to success and continues to innovate by investing in many technologies. Some will inevitably fail while others such as the iPod and iPhone will be huge successes. Many businesses lack of innovation is due to their fear of failures.

10. Family commitment: Michael Dell – MD “I think we make a priority to bring balance into our lives. To me, family is very important. So if you look at my schedule, one of the things I realized a long time ago is that there is a limit to how much productive work you can actually do in a given week. There’s also the happiness factor; if you want to do something for a long time and be really good at it, you’d better have a strategy that is sustainable and works within what’s going on in the rest of your life. For me that means that I’ve got to have time with my family; I’ve got to have time to exercise; I’ve got to have time to sleep; I’ve got to be able to take my kids to school.”

This is an aspect of life that I firmly believe in as well. Time cannot be turned around or replaced. It is very important that we spend time with spouses and spend time with our children. As they grow up we have to ensure that they become responsible and active citizens. A work/life balance is crucial and ensures that we work optimally.

11. Learning: MD – “Continuous learning is also important.”

All great leaders have made it a habit to constantly learn. MD visits the companies that impress him by paying them a visit to learn how to improve himself and Dell. Other leaders such as Bill Gates are very well read and read books to improve their knowledge. The knowledge of all great minds, past and current, is available. It is upon us to seek that knowledge.

12. Risk assessment and crisis management: Warren Buffet – WB ‘If there is any significant bad news, let me know early’. The team need to have confidence in the CEO, in order that ‘bad news’ events/issues/problems can be resolved prior to them mothballing to the ‘point of no return.’ ‘An investor needs to do very few things right as long as he or she avoids big mistakes.’

13. Business reputation: WB – ‘Look at the business you run as if it were the only asset of your family, one that must be operated for the next 50 years and can never be sold’. He adds that ‘We can afford to lose money – even a lot of money. We cannot afford to lose reputation – even a shred of reputation.’ CEOs need to understand that as witnessed by the recent BP oil spill crisis. It had a devastating effect on BP’s reputation, wiped millions off its share price, cost billions to settle claims and control the oil spill. Additionally, the irrecoverable loss of both human and marine life, coupled with the environmental damage leaves the oil giant in shambles.

14. Quality management: ”What I must understand is why someone will continue to get out of bed in the morning once they have all the money they could want,” Buffett says. ”Do they love the business, or do they love the money?” CEOs need to have a team that enjoys working within the associated line of business.

15. Trustworthiness and integrity: Developing characteristics such as trustworthiness and integrity, Buffett believes, is a matter of forming the right habits. “The chains of habit are too light to be noticed until they are too heavy to be broken,” he says. People who stray from these values often show up on Wall Street; they may initially even shine; but eventually they self-destruct. “That is sad, because it does not need to happen,” says Buffett. “You need integrity, intelligence and energy to succeed. Integrity is totally a matter of choice — and it is habit-forming.”

16. Develop a Clear Vision–and Stick to It. – From the beginning, Bill Gates dreamed of developing Microsoft into a corporate giant. For CEOs this is one of the most important traits that MUST be part of the toolbox.

CEOs need to clearly identify to themselves and communicate to the environment that they work in ‘the vision’ that they have set out to achieve. They then need to have the confidence to deliver that vision.

17. Hire ‘Action’ oriented employees. – CEOs usually have exposure to many different environments and come across many employees. Some will be better than others, while some will be outstanding. Gates has always hired the smartest people who can ‘get the job done.’

18. ‘Stop’ the ‘mad bureaucracy’ – I have mentioned this before in a post (can’t think of which one though) and it gets reiterated by Microsoft. As Matt said, ‘The plague of most big companies is bureaucracy and stupid rules. Thielen gives the example of an un-named high-tech company that sent a four-page memo to all of its employees on proper security badge procedure, including infinitesimal details on how and where to wear the badge.

To that, Thielen states, “Does Microsoft manage to avoid this type of inane garbage? By and large, yes.” Unlike most companies, Microsoft actually assumes its employees are smart. Rules at Microsoft are few and far between, and the ones that exist tend to make sense. Having only a few important, logical rules means that employees actually remember and follow them.

19. Annual rating of performance

This is an area of Dr Deming’s theories that I do not have to adjust for CEOs. The annual rating of performance is an arbitrary and unjust system that demoralises employees and nourishes short term performance. It has an added side effect as it annihilates team work and encourages fear.

This annual rating of salaried people is also called the Merit system, annual appraisal and management by objective – management by fear is a better term. This system works by rewarding employees for what they have done in the past year, i.e. performance pay. The effect is devastating as the employee must have something to show and this in turn nourishes short term performance and annihilates long term planning and team work. As each employee is encouraged, to show and prove their individual contribution to qualify for the performance pay, it stifles team working. Even if individuals are working productively as a team, inadvertently, they are identifying ways in which to use the team work to justify that all important, performance pay!

Dr Deming’s theory encourages teamwork in its true sense. Actively listen to other team members’ views and ideas and counter members’ weaknesses while using the strengths of the team. This is impossible under a merit rating.

Even more damaging is the fact that when ratings are given out they cannot be understand well enough by employees and as to why they were not rated high enough.

It would be better if this system was a lottery where at least there is a good reason not to understand better, as employees would not feel superior or inferior.

20. Mobility of management

The annual rating of performance encourages mobility of management. As employees are not getting a raise, they are not loyal anymore. This has a devastating effect on the business as people have no roots in the company and are not there long enough to understand the business well enough. Management requires good knowledge of the company, its problems, production and service capabilities and that takes a long time.

For example, if a project manager has just arrived at the business and does not understand its culture, overview of its IT systems, IT and business strategy and is made to work on an individual project, how can he/she understand the overall  impact of what it is they are delivering?

21. Use of visible figures only

Most businesses will use figures that are known, for example, service desk figures. This is because most business schools and graduate degrees encourage us to use these figures. The power is in knowing known, unknown and the unknowable.

Now, the question some of you may ask is that, if it is unknown, how could it be important? Well, we need to understand the multiplying effect of a happy customer and also the unhappy one. Understanding these figures is absolutely crucial for all departments, as just with the given example, if we can understand the multiplying effect, we can harness the effect and turn the unhappy customers into ambassadors within the business.

Choosing technology over customers

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

Warren Buffet (1930 – ) World’s most successful investor

I recently received a blog post from Software Advice on – Why the Technology Matters – An Analysis of Consona’s Acquisition of Compiere. That blog post made me think about my recent posts over the last few months on Cloud Computing and Google Apps etc in May, June, my blog post last year on ERP and this year’s – Leveraging IT for Competitive Advantage – Myth or Reality? The ERP blog post covered the recent acquisitions that had happened within the competitive ERP arena and Leveraging IT for Competitive Advantage – Myth or Reality? attempted to address whether competitive advantage could be realised through effective use of IT.

Now, as we all know from the blog post, Warren Buffet’s (World’s most successful investor) management style and CIOs, the technology business is not considered a viable investment by him as he admits that he doesn’t understand technology and considers technology too volatile.  So, when Don Fornes wrote that he thought Consona had acquisitioned Compiere ‘because the Compiere product is built on a very modern technology stack and is designed to run in a cloud computing environment’ it made sense.

This was also confirmed by a quote by Consona’s CTO, Steve Bailey, ‘Compiere is the world’s leading open-source ERP solution and the products are brilliantly architected. They run on a fully open-source stack (e.g., Java, Linux, JBOSS, Postgres), utilize a browser-based AJAX UI based on the Google Web Toolkit, and are fully operational either on premise or on a utility cloud platform like Amazon…’

Don went on to say, ‘While Consona has acquired a number of software companies based on this model, that doesn’t seem to be the strategy behind the Compiere deal. Compiere brings only 130 customers to Consona and I doubt Compiere’s open-source business model was generating big profits. Instead of buying customers and profits, Consona seems to be thinking ahead about how they can lead the market in the next generation of technology. The acquisition is more about growing organically – selling more Compiere systems – than it is about harvesting customer support contracts.’

‘Why is this all relevant to software buyers? Because there is a big shift underway from client/server systems installed “on premise” to cloud-based or software-as-a-service systems that are hosted in a secure data center and accessed through a web browser. Moreover, the open source movement is producing underlying technology that is not only free, but increasingly really good stuff. Software vendors that don’t make the transition will wither on the vine.’

‘To highlight the significance of this model, consider that a bunch of brilliant Google engineers built some cutting edge user interface technology (Google Web Toolkit) and open sourced it. Compiere turned around and used it in their products. Google did a big part of Compiere’s engineering for free…and will continue to do so. Now that’s efficient development.’

‘Compare that to an application software company that has to pay ongoing royalties to an infrastructure software company for the privilege of developing on its outdated database or development tools. The smart engineers long since left both companies so they could work on cooler projects at more modern software companies. The mediocre engineers that remain are having a hard time developing new features on old code. Sales are declining and customers are defecting (albeit slowly because it’s hard to switch).’

‘You don’t want to be that customer that is trying to defect but fears the switching costs. You want to be the delighted customer that loves their software because it works today and will work tomorrow, regardless of what new requirements emerge.’

As we are constantly bombarded by marketers and pushed towards cloud computing models, please remember that (as Marcela Cueli said in his article),

‘For a start, cloud computing is not a technology but a model of provision and marketing IT services that meet certain characteristics. Cloud is all about computer services, not products:

* The infrastructure is shared. Multiple clients share a common technology platform and even a single application instance.

* The services are accessed on demand in units that vary by service. Units can be, for example, user, capacity, transaction or any combination thereof.

* Services are scalable. From the user’s point of view, services are flexible; there are no limits to growth.

* The pricing model is by consumption. Instead of paying the fixed costs of a service sized to handle peak usage, you pay a variable cost per unit consumption (users, transactions, capacity, etc.) that is measured in time periods that can vary, such as hour or month.

* Services can be accessed from anywhere in the world by multiple devices. The cloud model leads to basically two different kinds of clouds: private and public. The public clouds are those that offer IT services to any customer over the Internet. Private clouds offer IT services to a predefined group of customers, with access through Internet or private networks. You might have also heard about internal and external clouds. The former are a subgroup of the private clouds, and provide services within the same company or corporate group. The latter may be public or private and provide services to other companies.’

To conclude, this is exactly what I have been discussing in my blog posts over the last year or so. Don’s thoughts are increasingly reflective of the technology blogosphere as technology writers’ such as Don and I understand the repercussions of the effects of cloud computing on traditional client/server models and associated revenue streams, licensing etc.

There are many facets that I have covered over the last year or so that lead companies to be in this vulnerable position where they have to resort to acquisitions to remain contenders within their marketplace. My blog posts mentioned earlier have considered these, so apart from the above posts, I will leave you with some other posts that should help companies and their management become successful.

What is Cloud Computing? Its Pros/Cons and making it work

Lawmakers question the security of cloud computing

Can IT Management failure be caused by a deadly disease? Part I

Can IT Management failure be caused by a deadly disease? Part II

I listened, you spoke but did we communicate?

IT benchmarking

The CIOs agenda and memberships

Challenges facing CIOs at the UK’s leading companies

 

How Toyota became the Werewolf

Akio Toyoda, President of Toyota Motor Corpora...

Image via Wikipedia

Akio Toyoda to testify in Washington: maybe he’s finally waking up to the fact that he runs a global company and has to behave that way. – Tweet by Michael Schuman, Correspondent Time magazine – 18/2/10

As most of us know (If you follow movies), there is some lead time involved before ‘The man’, turns into a Werewolf (only when there is a full moon). Well, Toyota (the werewolf) had known about the complaints ranging from unintended acceleration to brake failure in 2002 (US regulators informed 2004). Even Steve Wozniak, mentioned his Prius problems and indicated that the problem was software based in an interview in early February. The transitional phase had started for Toyota to become a werewolf. All Toyota had to wait for was nightfall. The dreaded night for the werewolf came in January and by the end of that night, the werewolf had killed an estimated 19 people in the US alone, recalled 8.5 million cars, sales had fallen by 16% in January alone and an inquiry launched into Toyota Corolla’s power steering problems. The Toyota that had won the Japanese quality award for 1980 had been consumed by the powerful werewolf that was now the largest car maker in the world since 2008.

The damage had been done! The werewolf awoke the following morning and realised that it had to remedy the situation. As we know, the remedies for werewolves are painful (not mentioning the silver bullet). As Japan sped up its car recall system, the US knew it could not live with a werewolf amongst its midst and congressman Edolphus Towns, told Toyoda in a letter that American drivers were “unsure as to what exactly the problem is, whether it is safe to drive their cars, or what they should do about it.” The latest news is that the werewolf’s representative (the boss himself) has agreed to attend the Congress hearing.

The werewolf is trying hard to fix its problems, including the infamous sticky accelerator problem – Click here – (excellent interactive graphical courtesy of the Guardian) with a brake-override system in all future models. The werewolf had hugely underestimated the problem as in the winter of 2008-09 it had reports of “stiff” pedals.

President Akio Toyoda, grandson of Toyota acknowledged on 17/2 for the first time that the firm had expanded too fast in its quest to increase profits and overtake General Motors as the world’s biggest carmaker, a feat it achieved two years ago, according to the Guardian website. He acknowledged in an opinion piece he wrote for The Washington Post recently that the company had “failed to connect the dots” between the sticky pedals in Europe, surfacing as early as December 2008, and those in the U.S. that culminated in the massive recalls. He also said, “The Company needed to improve sharing important quality and safety information across our global operations.” The werewolf believed it to be a “quality” not a “safety” issue. Steven C. McNeely. Manager, SMS , in his article, Lesson Learned from Toyota, argues that, “safety is an unspoken and unwritten quality expectation of our customers, and you cannot separate the two. You can have a quality product or service, as defined by the ISO standards, and still not have a safe product or service. Toyotas’ problem clearly accentuates this point”.

“Toyota managers did not respond to the early signals. That’s when they should have identified the root causes,” said Sharma, who teaches Toyota production methods to businesses. “If the Toyota brand no longer stands for quality, what does it stand for?” – Anand Sharma, chief executive of TBM Consulting Group, based in Durham, North Carolina, told The Associated Press

“Toyota drivers have gone from being customers of the company to being wards of the government,” says Jim Cain, senior vice president of Quell Group, a marketing-communications firm in Detroit, and a former Ford media-relations executive. ” according to Time.

“As far as we know, Toyota is still the best manufacturing company in the world when it comes to production management,” Michael A. Cusumano, professor at the MIT Sloan School of Management, the gas pedal and floor-mat defects were design errors in supplier parts, and the faulty braking in hybrid models was caused by a software glitch. They weren’t manufacturing errors, the kinds of defects workers at plants have been trained to pick out — a piece that doesn’t fit, a crack in a part, something that diverges from the design.

“Toyota has been exemplary at surfacing problems in the factory and stopping production before a crisis was reached,” said Jeffrey Liker, professor of Industrial and Operations Engineering at the University of Michigan, who has written books on the Toyota Way.

“Failure to follow all the principles of the Toyota Way led to this crisis. Now the Toyota Way is the only way out of it,” said Liker.

CIOs and IT Management can learn from the Toyota debacle. The most important question I had to ask myself when I heard of Toyota’s woes was a simple one. Do I unlearn everything about Just In Time (JIT), lean management, Total Quality Management (TQM) and ‘The Toyota Way’ and start over? I will leave that question open, for now!

The key lessons for CIOs are:

  1. Acknowledge and fix the problem with any process, system or project as soon as it is highlighted by stakeholders. Do not allow it to spiral out of control.
  2. Listen, listen, and listen again.
  3. Isolate the issue(s) and ensure that it is not a part of a much larger problem.
  4. Everybody within the company is an ambassador for the company, including the IT department. If the IT dept spot a non IT issue that affects the company, take 100% responsibility for it and get it addressed.
  5. Use social media (SM) channels such as LinkedIn, facebook and Twitter to monitor your user community by proactively listening, anticipating problems and getting involved with these communities.
  6. Do not hide/shy away from social media (SM) and use it to create competitive advantage.
  7. Brand reputation can be enhanced or irreparably damaged on SM. Be there to get your message across

Related Article on Toyota pay the price for not connecting the dots 

Steve Jobs (CEO Apple) management style and CIOs

Image representing iPhone as depicted in Crunc...

Image via CrunchBase

UPDATED: 08/10/11 – This post is dedicated to one of my heroes and role models, Steve Jobs, 1955-2011, Thanks for the inspiration. May God bless you.

Welcome to my most successful blogpost. This post attracts so many people that the search, ‘apple management style’ will return this article as the number one post. That’s without any adwords. Please read and leave comments.

This article is an article in a series of articles where I will analyse current and past leaders to ascertain how Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders. I have broken down Steve Job’s style into two distinct pieces. The management style and the presentation style.

PS: CIO is a generic term and other analogous titles are Head of IT, IT Director, Director of IT etc.

The Management Style

In an interview with Fortune, Steve Job’s (SJ) opened up about his management Style (In no particular order and a few other sources utilised):

1. SWOT analysis: As soon as you join/start a company as a CIO, make a list of strengths and weaknesses of yourself and your company on a piece of paper. Don’t hesitate in throwing bad apples out of the company.

2. Spotting opportunities: SJ – “We all had cellphones. We just hated them, they were so awful to use.”

The lesson that can be learnt is that within IT we need to spot opportunities for improvement. It is not enough, however, just to spot them, the onus is to spot them and then to create an environment to leverage that opportunity and to make it happen.

3. Improve productivity: – SJ – “We figure out what we want. So you can’t go out and ask people, you know, what the next big [thing.] There’s a great quote by Henry Ford, right? He said, ‘If I’d have asked my customers what they wanted, they would have told me “A faster horse.”

As a CIO, we need to ask ourselves, what can we do that will improve our customers or our own productivity? That could entail listening to your customers, horizon scanning or simply taking action on something that you feel would help you, your team/and/or customers.

4. Business/IT Strategy: SJ – “We do no market research. We don’t hire consultants.”

Sometimes it’s best to follow your instincts and to believe in yourself to do the right thing. Paralysis by analysis is often the cause that many organisations cannot do well. It’s as Nike says, Just do it!

5. Competitive advantage: SJ – “It is the intimate interaction between the operating system and the hardware that allows us to do that. That allows us to innovate at a much faster rate than if we had to wait for Microsoft, like Dell and HP and everybody else does.”

CIOs need to ask themselves how they can help the business through leveraging IT to create competitive advantage? I covered this a few weeks ago, in my post, Leveraging IT for Competitive Advantage – Myth or Reality?. Sometimes, it makes sense not to embrace open platforms, as Apple has created a significant competitive advantage, by keeping it’s hardware/software systems closed. CIOs need to make such decisions cautiously.

6. Succession planning and his reputation: SJ – “My job is to make the whole executive team good enough to be successors, so that’s what I try to do. My job is to not be easy on people. My job is to make them better. My job is to pull things together from different parts of the company and clear the ways and get the resources for the key projects.”

CIOs need to be facilitators and to bring people together working towards a common goal. It is also important to have succession planning in order that the business has continuity in the unfortunate event of a CIO not being able to provide management.

7. Focus: SJ – “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.”

A CIO needs to focus on the most important issues that are relevant to the business and to shy away from the issues/projects that do not add value to the business but may just be a ‘nice have’ or appear to add value. Learn to say, ‘No’.

8. Talent acquisition:They have to be really smart. But the real issue for me is, Are they going to fall in love with Apple?”

A CIO needs to trust their gut instinct, as one can only learn a certain amount in an interview. I think, the strategic fit, is a very good measure. How will a new hire fit into the culture of the company? Will they enjoy it here? Have they worked in a similar culture before? The danger is that the culture could be so alien to the new hire, that they find it difficult to adjust.

9. Know your business and innovate: SJ – “I put out an agenda — 80% is the same as it was the last week, and we just walk down it every single week.”

The CIO and the entire IT department need to know how the business operates, preferably, as intricately as possible. It is that complete overview that will allow innovative opportunities to present themselves.

10. Handling barriers and roadblocks: SJ – “And we pushed the reset button. We went through all of the zillions of models we’d made and ideas we’d had. And we ended up creating what you see here as the iPhone, which is dramatically better.”

CIOs need to know when to intervene. For example, in many cases that could mean stopping projects altogether to take stock of current situations or to change the direction. There is no shame in that as the project has to deliver the project’s core objective.

11. Customer conversion: SJ – “But if we put our store in a mall or on a street that they’re walking by, and we reduce that risk from a 20-minute drive to 20 footsteps, then they’re more likely to go in because there’s really no risk.”

CIOs need to help the businesses by utilising IT to create opportunities in attracting additional customers. They need to ask themselves, “How can we assist in taking the business to the consumer”?

12. When the going gets tough, investment in people always pays: SJ- “What I told our company was that we were just going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place — the last thing we were going to do is lay them off.”

I covered this, under mobility of management when I covered; can IT Management failure be caused by a deadly disease? Part II. CIOs need to understand the importance of retaining and investing in people as one of the business’s most important assets is yet again confirmed by another business leader. This means that they need to stand by that conviction and avoid losing people in economic downturns.

13. Successful innovation and success in general may be built on failure: SJ -. “Will this resonate and be something that you just can’t live without and love? We’ll see. I think it’s got a shot.”

Apple has proved that failure can lead to success and continues to innovate by investing in many technologies. Some will inevitably fail while others such as the iPod and iPhone will be huge successes. Many businesses lack of innovation is due to their fear of failures.

14. Earn respect: Steve Jobs can be a hard boss to work with but Jobs’ employees remain devoted. That’s because his autocracy is balanced by his famous charisma — he can make the task of designing a power supply feel like a mission from God. CIOs need to command respect from their employees and that is something that has to be earned!

I want to conclude this part by finishing off with a quote that shows us that even with his god like innovative powers, Steve Jobs remains human. “Steve proves that it’s OK to be an asshole,” says Guy Kawasaki, Apple’s former chief evangelist. “I can’t relate to the way he does things, but it’s not his problem. It’s mine. He just has a different OS.”

As Geoffrey Moore, author of Crossing the Chasm said. “He’s at the absolute epicentre digitisation of life. He’s totally in the zone.”

The Presentation Style

For the second part, I am reproducing an article written by Carmine Gallo in BusinessWeek for his new book, The Presentation Secrets of Steve Jobs: How to Be Insanely Great in Front of Any Audience. For this book he watched hours of Jobs’ keynotes. Here he identifies the five elements of every presentation by the Apple CEO. CIOs can improve their presentations by using these five elements.

1. A headline. Steve Jobs positions every product with a headline that fits well within a 140-character Twitter post. For example, Jobs described the MacBook Air as “the world’s thinnest notebook.” That phrase appeared on his presentation slides, the Apple Web site, and Apple’s press releases at the same time. What is the one thing you want people to know about your product? This headline must be consistent in all of your marketing and presentation material.

2. A villain. In every classic story, the hero fights the villain. In 1984, the villain, according to Apple, was IBM (IBM). Before Jobs introduced the famous 1984 television ad to the Apple sales team for the first time, he told a story of how IBM was bent on dominating the computer industry. “IBM wants it all and is aiming its guns on its last obstacle to industry control: Apple.” Today, the “villain” in Apple’s narrative is played by Microsoft (MSFT). One can argue that the popular “I’m a Mac” television ads are hero/villain vignettes. This idea of conquering a shared enemy is a powerful motivator and turns customers into evangelists.

3. A simple slide. Apple products are easy to use because of the elimination of clutter. The same approach applies to the slides in a Steve Jobs presentation. They are strikingly simple, visual, and yes, devoid of bullet points. Pictures are dominant. When Jobs introduced the MacBook Air, no words could replace a photo of a hand pulling the notebook computer out of an interoffice manila envelope. Think about it this way—the average PowerPoint slide has 40 words. In some presentations, Steve Jobs has a total of seven words in 10 slides. And why are you cluttering up your slides with too many words?

4. A demo. Neuroscientists have discovered that the brain gets bored easily. Steve Jobs doesn’t give you time to lose interest. Ten minutes into a presentation he’s often demonstrating a new product or feature and having fun doing it. When he introduced the iPhone at Macworld 2007, Jobs demonstrated how Google Maps (GOOG) worked on the device. He pulled up a list of Starbucks (SBUX) stores in the local area and said, “Let’s call one.” When someone answered, Jobs said: “I’d like to order 4,000 lattes to go, please. No, just kidding.”

5. A holy smokes moment. Every Steve Jobs presentation has one moment that neuroscientists call an “emotionally charged event.” The emotionally charged event is the equivalent of a mental post-it note that tells the brain, Remember this! For example, at Macworld 2007, Jobs could have opened the presentation by telling the audience that Apple was unveiling a new mobile phone that also played music, games, and video. Instead he built up the drama. “Today, we are introducing three revolutionary products. The first one is a widescreen iPod with touch controls. The second is a revolutionary mobile phone. And the third is a breakthrough Internet communications device…an iPod, a phone, an Internet communicator…an iPod, a phone, are you getting it? These are not three devices. This is one device!” The audience erupted in cheers because it was so unexpected, and very entertaining. By the way, the holy smokes moment on Sept. 9 had nothing to do with a product. It was Steve Jobs himself appearing onstage for the first time after undergoing a liver transplant.

One more thing…sell dreams. Charismatic speakers like Steve Jobs are driven by a nearly messianic zeal to create new experiences. When he launched the iPod in 2001, Jobs said, “In our own small way we’re going to make the world a better place.” Where most people saw the iPod as a music player, Jobs recognized its potential as a tool to enrich people’s lives. Cultivate a sense of mission. Passion, emotion, and enthusiasm are grossly underestimated ingredients in professional business communications, and yet, passion and emotion will motivate others. Steve Jobs once said that his goal was not to die the richest man in the cemetery. It was to go to bed at night thinking that he and his team had done something wonderful. Do something wonderful. Make your brand stand for something meaningful.

For more of Job’s techniques, flip through this slide show. Then catch a video interview with Carmine Gallo about how he researched his book.

Can IT Management failure be caused by a deadly disease? Part II

W. Edwards Deming

Image via Wikipedia

Dr Deming has always stood out in the crowd for me personally, as he continued to teach in what he had always believed in, even when he was doubted on his own home soil. This has always been a trait of most great leaders and in the true spirit of leadership, the knowledge and conviction he had developed for management was not held back but was applied with tremendous success in Japan. This was enough to create the ripple effect/tipping point for his teachings to be given credence back home in the US and Europe. A testimony to his success is the fact that at Toyota’s headquarters, his framed photograph has an even larger frame than the founder of Toyota, Kiichiro Toyoda.

Dr Deming originally developed, what he considered the five deadly diseases of western management (Two more were subsequently added, excessive medical care costs and excessive legal damage awards, not discussed in this post).

I agree with one of my readers, Thomas Keplar, who posted a comment a few days ago, “Lot of good idea’s in TQM, also a lot of areas that still must be understood that TQM will not provide answers other than as Ishakawa said “unless you have senior
management buy in, do not implement TQM”. It is a well known fact, comprehended by the recent credit crunch, management of the banks and the finance sector, that, businesses do not fail, management fail. As I go through this post, hold these two thoughts, as the importance of these two thoughts will become clarified.

“Unemployment is not inevitable but of bad management”- Dr Edward W Deming.

The five deadly diseases that cause IT management failure

1. Lack of constancy of purpose

This happens for three reasons. Firstly it happens, where the most senior IT position is a functional Head reporting into a board Director, for example, Head of IT reporting into a Finance Director. In this scenario, senior management, i.e. the CEO and the board, have not been able to communicate well enough to the Finance Director and hence the Head of IT, the business vision and the direction and/or there is a lack of planning for the future. In this situation, the information provided to the Head of IT, is second hand and as the information has been forwarded, the Head of IT, cannot understand the perceptions, background and discussion that may have led to that business vision and direction. This is management failure, in the making, as the board have failed to understand that IT should be represented directly at board level.

Secondly, it can happen where IT is represented directly at board level, the IT Director/CIO does understand the business vision and the direction but the board as a collective have no planning for the future and while they are looking after their, “cash cows”, they do not have the product of tomorrow.

The recent banking crisis is evidence of this happening. Although, explaining it is quite complicated and the way banking in general works reflects that as well, in a nutshell, the banks had, inadvertently, started to finance an expansion of lending by borrowing. IT Management, were not, in my opinion, privy to this information and as evidenced in the 90’s, rogue trader, Nick Leeson’s case (the achievements of these traders and their ability to circumvent systems and procedures).

Thirdly, as future products and innovation is stifled (Both by the business and within IT – Lack of innovation), the roadmap is unclear; processes and IT controls become inadequate and subsequently cause the failure of the business. If on the other hand, the future was planned effectively, for example, it would have been quite clear to the bank that this sort of lending was high risk. As such, it should have been reflected within banking IT systems and as a consequence would have been caught or captured by the intelligence built into the authorisation processes.

2. Emphasis on short-term profits

Again, there are two ways of looking at this. I will not go into the business aspects now but will start to deal with only how the second disease impacts IT departments.

This happens when IT departments either become quite insular or are lead to become insular as despite their attempts to, for example, attract additional funding for programmes of work that work towards longer term planning, they are stifled and are forced to think short term and are constantly, “fire fighting”. Innovation is frowned upon and newer innovative ways of using IT for competitive advantage cannot happen in this kind of environment.

This results in sacrificing the long term growth of the company for short term gains. The emphasis is on short term profits/dividends, no matter what. IT is contributing to anything it can do to raise the value of company stock, in the short term only.

3. Annual rating of performance

This is an area of Dr Deming’s theories that I do not have to adjust for IT. The annual rating of performance is an arbitrary and unjust system that demoralises employees and nourishes short term performance. It has an added side effect as it annihilates team work and encourages fear.

This annual rating of salaried people is also called the Merit system, annual appraisal and management by objective – management by fear is a better term. This system works by rewarding employees for what they have done in the past year, i.e. performance pay. The effect is devastating as the employee must have something to show and this in turn nourishes short term performance and annihilates long term planning and team work. As each employee is encouraged, to show and prove their individual contribution to qualify for the performance pay, it stifles team working. Even if individuals are working productively as a team, inadvertently, they are identifying ways in which to use the team work to justify that all important, performance pay!

Dr Deming’s theory encourages teamwork in its true sense. Actively listen to other team members’ views and ideas and counter members’ weaknesses while using the strengths of the team. This is impossible under a merit rating.

Even more damaging is the fact that when ratings are given out they cannot be understand well enough by employees and as to why they were not rated high enough.

It would be better if this system was a lottery where at least there is a good reason not to understand better, as employees would not feel superior or inferior.

4. Mobility of management

The annual rating of performance encourages mobility of management. As employees are not getting a raise, they are not loyal anymore. This has a devastating effect on the business as people have no roots in the company and are not there long enough to understand the business well enough. Management requires good knowledge of the company, its problems, production and service capabilities and that takes a long time.

For example, if a project manager has just arrived at the business and does not understand its culture, overview of its IT systems, IT and business strategy and is made to work on an individual project, how can he/she understand the overall  impact of what it is they are delivering?

5. Use of visible figures only

Finally, we arrive at disease number 5! Most IT departments will use figures that are known, for example, service desk figures. This is because most business schools and graduate degrees encourage us to use these figures. The power is in knowing known, unknown and the unknowable.

Now, the question some of you may ask is that, if it is unknown, how could it be important? Well, we need to understand the multiplying effect of a happy customer and also the unhappy one. Understanding these figures is absolutely crucial for IT departments, as just with the given example, if we can understand the multiplying effect, we can harness the effect and turn the unhappy customers into IT ambassadors within the business.

Final thoughts

As always, I look forward to your feedback, and encourage all my readers to post their opinions, both here and within the forums that I am a member of.

Do you have any areas of IT that you would like me to discuss? Please feel free to suggest any future posts by leaving your comments. I am currently compiling a list for future blogs.

For further information:

The W Edwards Deming Institute

Dr. Deming – The 5 Deadly Diseases 1984