Performance Controller

"However beautiful the strategy, you should occasionally look at the results"...WC Print

Here is something to ponder. The Corporate Executive Board Company, says five years ago, less than 25% of business leaders rated their IT function’s effective to deliver the capabilities they needed. They go on to say in 2010 the number has not changed.

IT functions have strived tirelessly to understand demand, set priorities, deliver effectively, and capture value, yet the results still disappoint. Business and IT leaders alike feel they should be getting more—more efficiency, more innovation, and more value—from technology.

In their recently published study of the IT role its findings cover  5 levels of shift.

1. Shift 1: Information Over Process

2. Shift 2: IT Embedded in Business Services

3. Shift 3: Externalized Service Delivery

4. Shift 4: Greater Business Partner Responsibility

5. Shift 5: Diminished Standalone IT Role

At a practical level, in my work in business intelligence and information, I find so many business enabling discussions these days hinge on good information. This invariably leads to a discussion on the capability or lack thereof of IT, as the traditional owners, to deliver it. 

Being in the business end of business intelligence, I also observe the shift in the tasks to set up and coordinate information. As an activity that is now largely falling to the end user business functions like finance, marketing and operations with software vendors and specialist implementers working with them to make it all happen.

Like process applications that have long since been commoditized with highly advanced process packages, management information is now being delivered the same way. In large generalized database applications with configurable end users web tools for both administration and end user use now to deliver the information. There in is the issue for IT as they have become just environment managers with limited skill to be involved in the business strategically.

In many organizations I see significant investments that have occurred on complex systems, are, aside from being in use in the core process, scarcely understood technically by IT. The fact that IT defers the information based deployment task to market system vendors means they also devolve a once hallowed territory of process change management with it. So the argued best placed leaders on joining all the dots of the business processes, being IT, is now scarcely even aware.  

Among all the talk of engagement, alignment, and “being part of the business,” one assumption is never challenged—that for information technology to grow in strategic importance, so must the IT function.

But what if this is not the case?

What if a dedicated, standalone IT function is no longer the best option and the function’s resources and responsibilities were better located elsewhere?

What has occurred is vendors have become de-facto managers of change and are more often than the resident experts in inner workings of their client’s organizations. As cost pressures increase they have also becoming less tolerant and less willing to withstand the continuing conservative commodity based thinking of now quite limited in-house IT functions who try to hold onto power with things like the control of security. For this they are still needed to manage things networking and authentication although even that is changing. There is so much more to IT of course including redundancy standards and communications but the relentless shift continues to vendor services for IT and to cloud based computing for delivery of infrastructure management. With this being cut away from IT it is fast moving the direct control of the business functions who will naturally rely on end to end serviced IT models more and more.

Typically now applications all have their own infrastructures (servers etc.) with communication and hardware to fit the internet generally. And With major vendors are now spending huge sums investing in cloud infrastructure change is now inevitable and one-way from in-house IT. This totally new world of computing in the next few years will also see business knowledge based IT skills move to the  business to work in service based mode. As is the case with most small to medium sized business now who use low cost and even free service based models the big end of town businesses will also be fully outsourced to the service providers as a demand based service.

As to the timing and transition, the huge cloud based investment vendors like Microsoft and others speaks volumes. In the last three years the massive deployment of resources now sees Microsoft, for example, emerging as a high end hosting company. Of the 40,000 or so Microsoft based developers around the world it is estimated that 90% are currently focused on cloud based applications. This rapid move of the Microsoft business too, from traditional mass markets of desktop and database services to an infrastructure provider, will be seen very soon at all virtual levels

“The IT function of 2015 will bear little resemblance to its current state.  Many activities will devolve to business units, be consolidated with other central functions such as HR and Finance, or be externally sourced.  Fewer than 25% of employees currently within IT will remain, while CIOs face the choice of expanding to lead a business shared service group, or seeing their position shrink to managing technology delivery . . . This study argues that the changes will be rapid, permanent, and radical.  We have advocated for a decade that IT leaders become demand shapers, not order takers.  Similarly, we now recommend that IT leaders devote the time, energy, and resources to actively shape the coming transition.”

The quotes are taken from the paper that you can download here, entitled The Future of Corporate IT . Authors are The Corporate Executive Board, a consulting firm. This provides research and analysis to business executives and professionals around the world. In addition on my recommended reading list is a post by   Irving Wladawsky-Berger called IT in the Age of the Cloud In this he makes balanced comment of these issues.

 

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A popular myth in business and life is that it is only money that motivates. Consider why you go to learn to play a piano or join a speech club and why you find so many professionals doing more creatively work for others for free when their employer pays them for the same type of work.

End user tools such as Gmail plus backend server tools like Lynx and Apache are some of the world’s highest used technologies. These are examples of things that would have never happened were they not motivated to be created by something other than money.

It may be true that the more money works to get better results when the task being done involves mechanical skills based on a set of rules. Then the more you scale up the pay as the  reward the more likelihood there is for a better result.

However MIT and other studies conclusively find that once a task calls from even rudimentary cognitive skills, the results most often get worse when you use more pay as the incentive to get more results. Profit motive then gets unhinged from purpose and bad things start to happen.

This is discussed in this Royal Society for encouragement of Arts, Manufactures and Commerce (RSA) Animate Video – “Drive: The surprising truth about what motivates us”

This calls into question that if you reward something you get more of the behavior you want and if you punish something you get less.

The video that is has had extensive viewing since it was published on you Tube in April 2010.

This lively RSA Animate, adapted from Dan Pink’s talk at the RSA, illustrates the hidden truths behind what really motivates us at home and the workplace. www.theRSA.org

It bears no more comment except to say it may the best 10 minutes of essential information you can get to help you understand and pass your next creative leadership challenge.

 

Here also is the live version of Dan Pink’s RSA talk if you prefer to see him in action.

I wonder what others think?

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Who in their right mind would ever want to become a project manager?

It is a thankless task that puts you in the middle of someone who wants something to change to get a benefit and someone else who does not want to change because it involves unsettling what may be a comfortable state. For the latter too it may even mean they will lose a benefit they already have.

And then as you turn inside out and do cartwheels to get everyone moving to get it done you always get squeezed to give them more value under the same scope.

And if you take it then managing people, no matter what your style, the famous 4 stage process cannot be avoided. Forming Norming Storming and Performing stages are so important to be mindful of to make sure it gets done. They cannot be avoided and when it seems to be going pear shaped you need to know what stages your in and the skills needed to get it back on track .

Getting people committed to a well thought through plan is the first trick. Then keeping them boxed in and focused to get on with the work done is next. Then as the going gets tough and people try to slip out or change the game plan you need to sort out their issues so they have no choice but to perform like a team and get it all done. All that takes a bit of work.

In the end, regardless of the journey, bringing about to change to a state of being, so a process can be improved, is what project managers do. Once done the process manger tales over.

In business, it is said, the best project managers come from the business with support from IT. Or when projects are managed  by IT they must have a strong business presence. IT is clearer on managing and changing environments, so often have the best project manager skills and the mindset to take on that role. But the business cannot abstain and needs to have project leadership too. Either way they both need to be involved.

AND DONT FORGET THE USER.  LEAVE THEM OUT AND YOUR PROJECT IS DEAD. Many projects when abdicated by users to technical people will see it declared done once the technical stage is complete. That may even include some form of user sign off. But then getting the value falls to the beneficiaries who are stuck with the change. And that’s where they fail if they are not involved along the way.

Getting cooperation of people who need to change for a purpose and then making it happen is a tough job. Good luck to everyone who takes it on. The rewards are so much more than personal credit.

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A few weeks ago John Kogan posted for discussion on Linked-In 10 Best Practices for Accounts Payable.

John with an experienced CFO track record is someone who shares practical tips as part of his business. Especially if you are in business or responsible for any of the CFO functions. I recommend a look at what he has to say.

This got me thinking about how we pay our providers, so I took a look and found we waste a lot of time in process and have poor practices with potential to de-motivate, or even lose, our service providers who we rely on in our delivery capability.

I also found things like taking early discounts, returns great value with little or no effort. And improvements in approval processes can also let us see better where we waste money on things we don’t need.

It is all too easy for an AP processes with poor tracking processes to get it all wrong and pay more than we should or worse, pay twice. For example when there are issues on untracked invoices they can get lost in a too hard basket somewhere And then as people change jobs things go wrong. Gaps in systems and delays also open up opportunity for error and fraud. Vendors too learn very quickly how to walk their invoices thru an organization. So as copy invoices are sought to be processed, in the meantime the original may have also been cleared.

And as emailed PDF versions are now best practice originality checking is even more important.  And remember not everyone is supply chain integrated and has fully automated processes.

Using John Kogan’s example, which have I précised here, I suggest you examine your accounts payable process, as he says are in no particular order. 

1. Always pay from original invoices or double check copies. 

2. Before paying ensure tax info is correct. Fines can hurt

3. Have a policy on how invoice numbers are entered E.g  if there isn’t a number.

4. The person entering should be different from the person approving or signing the check.

5. Have all invoices first logged by accounting before sending out the approval(s) black hole.

6. Don’t batch enter. Do it individually so you have an audit trail.

7. All invoices to have the account coding on them and any notes about special handling.

8. Enter the billed amount then issue credit memo to provide an audit trail.

9. Send a new vendor welcome letter and include where to send invoices, and other info needed etc.  Vendors appreciate this and will ensure their payments aren’t held up.

10.  Watch to take advantage of discounts offered by vendors.  It can add up to a nice sum.

Getting linked with customer based supplier systems sees many providers hook their systems directly into the customer system and send invoices that way too. But for most in business, especially the small ones everywhere and also in some very large ones in Australia and Asia that I know, and where over 60% of global supply comes from, the process is still largely people based process dependant.  Mind you Asia is not backward and is highly wired.

To add to the ebb and flow of the discussion, subscription messages on my in-box set it blinking today with discussion updates and a bunch of great comments. You can see then if you are a member of the SuperCFO group.

It is a great discussion. but as many reading here will not have access, I have précised some of the discussion below along with authors links so you can communicate with them directly. I have also added some of my own responses which you can also challenge or add to what’s there. 

Click more so see these conversations

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As the downturns kicked in last year for a while it seemed the music may stop. But then someone said ” Play it again, Sam?”. In our company this has seen some rapid growth in e-demand for our services. This is especially so in support area as customers had deferred investments in favor of making things work a bit longer while things were tough.

As one who literally works daily in 3 continents and in as many languages, I am a fan of the idea that I can collaborative simply with pervasive communicational tools. These days we can also all use then at an easily affordable cost.

For me and my colleagues was are able to do this using our versions of Beam Me Up Scotty communicator to keep in touch on a far wider surface than the conventional quarter mile of traditional business. Hence as the demand has changed we are always in touch and  contactable with this capability we now continue to service long standing customers often without the need to even leave home.

For 15 years and more we have been able to connect in some way like this. Both informally and formally alliances and colleagues do business this way and more recently we also do it directly with customers.

Even as they move around when I turn on our computers each morning I have maintained a strong presence that has kept me in touch personally with key contacts and customers on a daily basis.  Daily habits are also subliminal as people come and go online with an in touch awareness that keeps us connected. And once trust is established we are generally all happy to be available to each other at any old time.

But of course the face to face activity will never be totally replaced. For example selling  is a contact process that requires continual reinforcement of trust, and capability. These  credibility assurances are vital to maintain ongoing connections. The ability to listen and anticipate needs is the real key that provides the quality in the dynamics of business. This cannot be done without physical presence so salesman and supply chain players must continue waking around. And without that best laid plans for automated process supply will also fail as competitors exploit any gaps that appear and move in on your patch.

That is why, even though systems give us great contact presence online now, we must never forget to call in on our suppliers and customers from time to time.

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Getting people to do new work and change needs skill. In business and especially large enterprises change takes more than skill. It also needs good teaming with binding cross functional management dialog processes.

Getting objectives clear from the top can be tricky, but the hard job comes getting buy-in and finding a way to align people to change and keep them there. Both are critical steps.

Then as things proceeds you need a good leader to manage the roadblocks and keep it on track. Having a champion is vital too but even champions can falter as threats emerge and cloud the issues and as luddites undermine.

It is said that people change so organizations get the value or benefit. It is not the reverse as many think. So getting commitment is vital to ensure stakeholders can see a win. With nothing to gain or lose for the people effected, change projects will inevitably fail.

When change is needed, bad habits are the most difficult to break even when obvious to all. Operations people will always do operations work first and in the way that works for them even though they may appear supportive of change. The reality is, if they don’t have something at stake to get them involved when it comes to show time, they will be busy.

In our organizations we often find a popular fountain of knowledge where we can get all the answers. This is usually sees one or two people in so called indispensible jobs who are like gold in the business. But unfortunately when it comes to change if they are not managed well they may become dinosaurs and actually hold progress back. Identify them is important. Dinosaurs, friendly or not, become intent and divisive to survive. Taking them out of their operational job and placing them in a important roles as subject matter experts in a change project is often a good strategy. If they join the team and focus well you are likely to have a great outcomes all round.

At the organizational level to be successful you must find a way to engage and make change a continuous process. Selling is such a process that does that and works well when people buy. So when embarking on change we must consider selling and communications as a key ongoing part of projects.

Here is a useful perspective from change-management.com

Individual change management

Organizations don’t change, individuals do. No matter how large of a project you are taking on, the success of that project ultimately lies with each employee doing their work differently, multiplied across all of the employees impacted by the change. Effective change management requires an understanding for and appreciation of how one person makes a change successfully. Without an individual perspective, we are left with activities but no idea of the goal or outcome that we are trying to achieve.

Organizational change management

While change happens one person at a time, there are processes and tools that can be used to facilitate this change. Tools like communication and training are often the only activities when no structured approach is applied. When there is an organizational change management perspective, a process emerges for how to scale change management activities and how to use the complete set of tools available for project leaders and business managers.

This next graphic illustrates some linkages of organization process with individual behavioral aspects important for change .

Substring activity aside, delivering or selling change to others and/or responding to change forced on us by market competitiveness is at the very heart of what management and markets are all about. Making it all work requires attention to all these areas and more.

What drives a change is often a need to be able to respond faster to market pressure or simply grow the sales to achieve a stated business ambition.  Hence aging core systems and processes may first need replacing to allow ongoing improvement. As stagnant systems fast reach their used by date, resistance to change is often the highest, as people hang on to their comfort zones.

Like selling, long cycles are not good and invariably fail. And to a salesman, getting and maintaining total commitment with no way back, is the first and last step to shore up against risk to ensure a success. In change projects it is the same so work is best competed in small stages so success can be declared and continuous improvement resumed quickly.

But its not done there. To make it stick you then need the added energy to exploit the value in the new state with the old state now completely gone.

 

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Here is a video we did for internal discussion:

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In my mail today I got something that made me think a lot about how estabished business regresses over time, as its processes take over and make a casualty quality of customer service.

A 75 Year Old Lady rings her local NHS   hospital and this conversation follows:

‘Hello I’d like some information on a patient, Mrs Tiptree.

She was admitted last week with chest pains and I just want to know if her condition has deteriorated, stabilised or improved?’

‘Do you know which ward she is in?’
‘Yes, ward P, room 2B’
‘I’ll just put you through to the nurse station.’
‘Hello, ward P, how can I help?’

‘I would just like some information on a patient, Mrs Tiptree, I was wondering if her condition had deteriorated, stabilised or improved?’

‘I’ll just check her notes. I’m pleased to say that Mrs Tiptree’s conditioned has improved. She has regained her appetite, her temperature has steadied and after some routine checks tonight, she should be well enough to go home tomorrow.’

‘Oh that’s wonderful news, I’m so happy, thank you ever so much!’

‘You seem very relieved, are you a close friend or relative?’

‘No, I’m Mrs Tiptree in room 2b.

Nobody tells you f**k all in here ‘

Does this sound familiar? More to the point and tragically, this is not only about the much maligned British National Heath Service. Just take a look around you. It is quite endemic in many businesses.

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With the die now cast for the outcomes of the United Nations agreement in Copenhagen on Dec 7th to 18th 2009,  Incoming COP15 president, Connie Hedegaard, says Failure in Copenhagen is not an option. And complexity is no excuse for complacency. There will be unlikely to be a chance again if we miss this one or postpone. To build up again the pressure to get world leaders to deliver will be impossible, so it must be done. Getting the text right and removing the square brackets to make the issues and political choices clear is the work to be done.

But  just weeks before the international conference, the United Nations signaled it was scaling back expectations of reaching agreement on a new treaty to slow global warming. Janos Pasztor, director of the secretary-general’s Climate Change Support Team, was reported last week as saying.

“it’s hard to say how far the conference will be able to go” because the U.S. Congress has not agreed on a climate bill, and industrialized nations have not agreed on targets to reduce their carbon dioxide emissions or funding to help developing countries limit their discharges.

Some years ago. I had the pleasure to meet Tony Mowbray Tony is one of those rare history making achievers along with Kay Cottee and Francis Chichester, who sailed solo around the world.

Tony’s autographed print of his log book sits on my bookshelf to serve as a model for achievement. What makes athletes like Tony unique, is their ability to deal with complex and rapidly changing issues and make decisions for both their short and long term survival.

In 1998 Tony was one of the survivors of the ill fated Sydney to Hobart Yacht race that claimed many lives. The deteriorating climate that saw those sailors lost is high in the minds of world leaders.

Next month in Copenhagen these people will try to agree on a plan to mange the causes of climate change that threatens the very survival of the human race. This will update the expiring Kyoto protocol agreement of 1997.

Ralph Eastman’s Carbon Constrained World Reality report on March 13th on my discussion with Stian Reklev. Stian is Managing Editor of the specialist online newspaper Point Carbon. He is also an often sought after expert on the subject himself. At the time  Stian captured for me the essence what Copenhagen is all about: Namely getting agreement on 1. Emission caps 2, Who picks up the bill and 3. Adaption

Since Kyoto, there has developed more controversy on the climate issue as people learn more. Vested interests have also become stronger and more entrenched. The ability to agree and decide on a direction is vital for the next generation’s survival. But it is equally difficult to achieve. Deciding is quite unlike the lone sailor whose mission is clear. He or she can process information with speed to make very clear decisions, having prepared for all types of risks in advance. But the collective inputs to a climate management, sees interests not in all in agreement. Positions to maintain calm waters status quo, may even prevail, when it is clear to so many there is a storm  coming.

Convinced by the physical evidence, the change activists want carbon limits raised. Just re-running the 2005 documentary “An Inconvenient truth” still cannot be ignored despite opposing denouncement. And reading the daily papers tells you facts that continue to reinforce concern. This week in the New York Times it leads with a headline “Seas Grow Less Effective at Absorbing Emissions”

Governments over the last 10 years since Kyoto, have invested greatly in programs for carbon reduction schemes across the globe. This has created an industry with things like the carbon market initiatives. Hence a balance of interest groups now exist.

Not surprising, is disagreement by many scientists, whose counter arguments are often convincing. Well summarized facts and figures often lead them to say we need more proof before taking action. But what if they are wrong?

While advocates for constraint seek agreement and ways to keep the issue in the public face, the irony is much of the power still rests with those who oppose. They produce the life-giving energy we all rely on and can influence to offer us a stream alternative information. This means if Copenhagen fails they may just keep on sailing unchecked while they search of a solution at some time in the future; Which by then it may be too late.

As “Upton Sinclair” American writer and social change advocate in the early 20th century said “it is difficult to get  people to understand something when their salary depends on not understanding it” This can of course be true of all sides.

So the issues are complex and burdened with well placed facts. figures and modeled outcomes and delivered through highly credible people who argue there is no evidence to support the climate deterioration. Or if so, then there is no evidence it is caused by human activity.

Interesting too is the timing of a headline about a Hacked E-Mail Is New Fodder for Climate Dispute. On Tuesday a British University was reported as being hacked

A NYT report I read cited several scientists pressing the case that global warming is true.

The report also says, “Some of the correspondence recently hacked in a UK University portrays scientists as feeling under siege by the skeptics’ camp and worried that any stray comment or data glitch could be turned against them”.

Other quotes from this same report go on to say “evidence pointing to a growing human contribution to global warming is so widely accepted that the hacked material is unlikely to erode the overall argument”.

The New York Times confirmed the authors or recipients of hacked email messages . The revelations are bound to inflame the public debate as hundreds of negotiators prepare to negotiate an international climate accord at meetings in Copenhagen month, and at least one scientist speculated that the timing was not coincidental.

So what do yachts and their sailors have to do with all this. Some time ago I wrote to my bother, a media professional, to seek his engagement in the debate. I also sought his opinion on climate change and how we should address it.  His edited response refers that 1998 yacht race was in context, I thought it worthy of sharing:

People can throw their hands in the air and jump on either side with that one. Global Warming and Ice Age indeed! Either way, the consequences aren’t all that palatable.

The meteorological details will always be difficult. And what modeling?

I am reminded of a three international atmospheric 3D models used to predict the weather for the 1998 Sydney to Hobart yachts. This extraordinary work deals with complex and dynamic detail but on this occasion none were right.

What was remarkable was the work a privateer who also modeled the interacting vortices, and sea temperatures etc., in the Tasman Sea and Bass Straight, being the race regions.

His radioed warning to the yachts of his prediction of a gale force wind of 90 knots, was life saving to those who got the message. They knew to sail out of the developing storm. Others, who turned back to land for safety, met steep-ling waves, which for many were fatal.

So if it’s so hard to model the climate in the space of a single day, how hard is it to model it over centuries? There is of course some convenient history to work with from the past, including that ironically stored in the Antarctic ice.

Maddening isn’t it?

Regardless of the arguments a Carbon Constrained World Reality just makes sense. But the September 2009 Bangkok UN conference of world leaders and advocates, staged to position for a smooth agreement at Copenhagen, was not encouraging.

If it needs to be said that ffailure in Copenhagen is not an option, clearly this it  seems it may be. So the text of arguments must be convincing and hit the mark well so delay is not in the conclusion.

As for Tony Mowbray, giving up was not an option when he faced adversity on his lonely voyage. So is the Copenhagen goal, It is too important.

Those leaders attending Copenhagen, who are determined to make the difference, and Connie Hedegaard, who heads it all up have a daunting task to meet the goals, I can only repeat what Tony Mowbray said to me when he autographed his log book for me:

“Go get ‘em!”

 

To be continued:

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 Poor decisions are most often caused by lack of understanding, not lack of data. But another challenge is unquestioned acceptance of the business processes being measured.  At times many appear very logical, but are often obscured by the very data itself.

I notice when managers look at unacceptable results, they often do one of two things. Me too!! They either pick up the phone to call someone to ask for more information on why. Or they  pick up the mouse to dig deeper for the reason.  Once the answer comes,  corrective decisions are made. This tram line management style is a norm and the bias of most Performance Management systems. It works well to make sure the process,  the “tram”, stays on the tracks.  But many fail to follow the learning rule that to improve you need to look around at things nearby that may be obvious.

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In sales situations the quality of the competitive product is not always the issue. Varied solutions options and quality of offerings all too often compete in the same race for the buyer’s prize money.

In this complex marketplace, where snake oil salesmen are always about for the pickings, winning deals requires good fit and positioning, good timing,  and a highly informed understanding of the prospects performance requirements.

But regardless of approach a difficult responsibility of selling is to ensure prospects are fully informed about what they are buying. This is amplified as procurement processes look to fine print to transfer consequential risks to vendors. Even more telling on Vendors promises is linking them to KPI measures to give  Buyers very sharp fangs to strike back fiercely. Then beware any vendor whose product or service promises fall short of buyer’s supply chain expectations.

Vendor lined KPIs aside, due diligence in sales needs high attention for other reasons.

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With limited time available in the quest for productivity, we multi task. Or do we? If this is not true what is it that we do?

Multi-tasking I just learned it  is a myth. Something you do when you drive home and then wonder who drove.

This week I was challenged as I juggled my priorities and my personal life.  Having already reduced my to-do list to something sensible, it still looked foreboding.

To make it worse,  the unforeseen political agenda in Thailand where I have done business this month has thrown normality into chaos. Plus,  my daughter just announced she was arriving early to  visit me this week from her India trip, before we then head home to Australia together next week .

So it was time to step up my skill in multi tasking.  But before I did I decided to do some research on just what that was.

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Being flexible to take advantage of opportunity is not one of the stronger attitudes of people. In the end we are creatures of habit which is what organizations rely on, to have us do our work.

But as the markets have been changing and work place thinking reassesses its investments, options for those willing to change are now considerable, especially for people with real skill now in demand.

As one of my colleagues said to me recently,  “Having a job  sure beats working.” What he meant was,  those who avoid dole queues and the anxiety of the job search, are those who can adapt.

In organizations it is no different. Getting into different work may be as simple as using the skills we have another way. Using things like software as a service and cloud services for outsourcing to get results quickly are now reality. They are being used for such things as sales and supply chain management widely and now are starting to surface in previously hallowed areas like confidential business analytics. But even this is outside the square for so many people like Mr. Duck

 

But think about it.  Even the  outsource worker has  caught on to how to work on a remote VPN access; And is also doing well in this new world, as many companies still struggle with an outdated mentality that will leave them behind, as others set up new tents .

Talented people and organization that are also smart  enough to see the opportunity are going there and winning.

 This reminds  me of the good old story of Mr.Duck . It goes something like this.

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We make decisions all day every day. At times we do this on automatic pilot. At other times the process is much more deliberate. We are mentally more engaged and weigh up the pros and cons.

No doubt we also take risks every day. Some would say the simple act of getting out of bed in the morning involves risk, although it is equally true that staying in bed incurs risk as well.  You might just miss the bus and the opportunity just passes you by.

Perhaps we simply do not think about the risks involved in our day to day activities and it is only scenarios that involve making decisions whilst at the same time as taking risks that really get us to sit up and pay attention.  Just thinking about taking a risk has implications of hazards or chance of bad consequences.

Some risk taking might better thought of as rash or reckless beahviour.   Young people are believed to be more likely to take risks perhaps through experimentation, excess alcohol, drug use and partying too hard.   Although we all know of young people who come through unscathed so  perhaps the stereotype of youth as reckless is not entirely justified.  We may need to consider if assessing risk is a skill that can be acquired. Perhaps some are more likley to pay attention to warning signals?

Do we ever consider the term risk as something that might have some reasonable outcomes rather than carrying with it the notion of excess and loss?   Is there such a thing as a reasonable risk? This notion certainly lives in the business world.  To be  empowered to take reasonable risk is suggested as a pathway to profit.   If there is reasonable risk how do we determine what this is?  And given there is unreasonable risk what are unacceptable levels of loss or harm?

There are many questions raised when considering decision making in the face of risk. We might want to think about  how much of a role our emotions play in decision making?  Do you listen to you gut feeling or try to overide this with a logical analysis? Alternatively we might want to develop some creative ways of thinking about risk.

Perhaps the  decision making models that researchers use  can help witb some understanding of the processes you encounter with the practical day to day circumstances you find yourself in?

And of course does an optimism about finding your way through the maze get safely home?

Your thougths on these issues are welcomed. Certainly the dialogue we have will be interesting.  I look forward to some lively discussion.

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In my monthly reading review for February, I raised some issues about climate change. The key points of this I now restate in summary:

A conference, in Dec 2009 in Copenhagen of around 170  countries as parties of the United Nations Framework Convention on Climate Change ((UNFCCC), , will meet for the last time on government level, before a climate agreement is to be renewed. Early agreement is needed there so countries can get the treaty through their domestic legislation in time for 2013 start.

To resolve obstacles to understanding further what this conference is all about, I did some more research and sought opinion of people with expertise in this area. One such specialist, Stian Reklev at the Point Carbon subscriber service, gave PerformanceController some very useful information. It especially clarified not only the issues that will be dealt with at Copenhagen, but in fact what it is all about.

Mr. Reklev had a very clear understanding of the main discussion points for Copenhagen. He also said "these are proving terribly difficult to get consensus on"

The points are:

1. Emission caps.

Under Kyoto, only countries defined as developed countries have actual targets. 30-something countries have emission obligations in the 2008-2012 period they must stick to: 26 of the EU countries, plus Japan, Canada (who’ll miss theirs and they don’t care), Australia, NZ, Norway, Switzerland, Russia and Ukraine. Plus Monaco and San Marino. Belarus is trying to get into this group.

When Kyoto was negotiated in 1997 it was agreed that it would be unfair to restrict the development of poor countries by slapping emission caps on them. However, some of them have developed a lot since then and are now huge emitters. China, India, South Korea, Mexico, Brazil and South Africa in particular. Developing countries now emit more than half the world’s greenhouse gases (although in historical context they are still not responsible for the climate change crisis itself, and counted per capita they are still small emitters compared to rich countries).

So for now, rich countries want poor countries to take on mandatory emission obligations. Not as strict as their own targets, but mandatory ones in some way. Obviously, China, India etc are still reluctant to risk their economic growth by doing so, and argue that they should not take on mandatory caps as long as rich countries struggle to comply with their Kyoto targets.

For the US and Australia, for example, it seems difficult to take on stringent targets while their biggest competitors (especially. China) can continued increasing their emissions unabated. (Australia has now ratified Kyoto, but they have an extremely easy target).

Meanwhile, knowing that the targets under Kyoto is not at all enough to stop climate change, poor countries say rich countries must take on much stronger targets. The US emits more than 20 tonnes CO2 equivalent per capita. The corresponding number for China is 5, for India 1.5. They keep pointing their fingers at the west, demanding more action.

2. Who picks up the bill?

Everyone knows that if the world is to avoid climate change, developing countries must achieve sustainable growth. A huge amount of clean technology must be transferred from rich to poor countries. Many, but not all, agree that it is reasonable that rich countries pay for a significant amount of this (considering they made the mess in the first place, plus they can afford it).

What they’re trying to do now is find a technology transfer mechanism that everyone is pleased with. That is very difficult: everyone wants to pay as little as possible.

3. Adaptation.

While mitigation continues to be a hugely important issue, most scientists agree that some climate change will occur regardless. Africa and Asia are predicted to suffer the most of this (Vietnam will be absolutely devastated). You probably know about the sinking pacific islands.

So what developing countries are trying to do now is to raise more money for adaptation measures. Again, as soon as money is involved, things get very complicated.

So that is what the big discussions is to be about in Copenhagen this year.

And as I eluded to in my earlier post, The US President Obama will play a completely different role than Bush. That of course does not ensure a success. The issue of concern is they will manage to agree on something, but will it be anything really good.

In the meantime, developed countries will increasingly cap emissions at home. Most of them are prepared to pledge deeper emission cuts if a good international treaty is in place, but even without one they will go ahead and do something.

The EU has an emissions trading scheme (ETS) in place, and keeps lowering caps for the 12,500 participants. Australia will get one next year, NZ has plans (that are under review by parliament now).

The US is expected to pass an ETS bill some time the next two years. In the meantime, ten northeastern states have already launched a regional ETS. Similar programs are being developed among western states and in the Midwest.

So the carbon-constrained world is coming, even though some countries may choose to slack up a little during the recession. The question is if there is enough guts out there to make regulations that are meaningful.

For us Aussies we need to consider if the Australian government’s target (5-15 per cent cut in emissions from 2000 levels by 2020) all a bit useless. It will cost a fair bit but is significantly below what scientists say is necessary to avoid climate change. So what’s the point in putting in place legislation that isn’t going to do the job?

To be continued…

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With my colleagues at  Sherwood Group Consulting, our sponsor, we attended a seminar about a “Carbon Footprint and Labeling” project.

The project  now in it formative stage is jointly lead by the EU Commission users and Thailand-EC Cooperation Facility Program.

The meeting advised on how the project would proceed and some of the issues it would deal with including measurement standards, setting guidelines for labels  making recommendations for use and certification control.

This is initiative will draw on expertise and experience on already well advance constraints being exercised  in carbon aware markets and especially approaches taken by many large multi-nationals, including those in the food industries.

Speakers were:

Assoc Prof Vudtechai kapilakanchana – President Kasetsart University Thailand

Samuel Cantell – First secretary of delegation of European Commission to Thailand

Assoc Prof Dr ShabbirH – Gheewala JGSEE Thailand

Mr Stephen Reeson – UK Food and Drink Federation

Mr Claver Kanyarukoki  -Inst Nat Research France

Dr Alumudena Hopsido – University of Santiago de Compostela Spain

They all provided compelling reason for Carbon labeling and provided methodologies and approaches to costing. One of the bottlenecks highlighted by Mr Reeson was a general lack of good data for analysis and footprint measuring capability.

Either the data was not recorded, or too much data was housed without proper storage and data mining techniques. This lead to lower confidence when quantifying carbon emission with questionable accuracy of the the total life cycle footprint counts.

Many as is the project team, looking at ways to solve this issue with systematic multi-dimensional data capturing and warehousing together with analyzing capability using pre-built LCA/SFA modeling that is needed, regardless of the front end to do the calculation.

There’s is also a plethora of so called calculators out there already that are mostly hooks to entice traffic to a site. Even Google has a carbon footprint calculator, gadget which does simple weighted calculations based on data you need enter to see a result as it then takes you to the authors’  propriety site.

One innovation we have been investigating with some experts in France is, using simple BI tools to set up variable multi-dimensional model. Builds and testing in our laboratory, so  far,  have given us very satisfactory results to see if it may be quite easily used to determined and manage LCA hotspots and for labeling certification.

The areas of carbon measurement and labeling is quite new in Asia so Performance Controller will continue to work with our our sponsor and others to report progress as is relevant. We also plan to establish as Carbon Footprint category and a register of experts people can contact in this web site.

More on that as we progress.

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A guarantee of survival in 2009, is not necessarily a strong order book. The risk it brings can tear the heart out of a business. CFO’s work is not just about managing cash and costs. It is also to get business through tough times.

Equally involving is working with the front line to give them confidence that new and recurring business will be worthwhile. CFO’s must now spend quality time on risk management planning.

Large orders can be a concern with things like exchange rates and supply uncertain. Trying to get a long range view on these is not easy to ensure that margin isn’t lost on volatile currencies or delays.  CFO’s need to be assertively active to help moderate customers and suppliers, who have become intolerant of even the most reasoned arguments.

Business Credit indemnity is also tighter and risks have now shifted. Insurers are rejecting applications as they press for more information, and then charge for re-submissions. Additional guarantees are also being demanded for deliveries schedules keep within to insured limits.  As a result the CFO’s finance teams are required to provide increasing support for sales and purchasing functions.

With Bankers now high risk attentive, facilities and covenants administration vigilance is crucial.  Breaches or tardiness, even just on reporting timeliness, could mean that life line facilities could be withdrawn. At minimum, this may give bankers an excuse to re-price.

Additional facilities for acquisitions or investments will most likely be priced higher, so CFO’s should be sure to shop around and give thought to planning other financing options. They should also beware of “restructuring” advisers whose motivation is getting administration fees.

The insurance market is also more difficult. Underwriters are insisting on more information. Reverting to checking amalgamations of cover is being used for a pricing edge. Things like risk points on product liability between manufacturer and distributor are being painstakingly scrutinized. And previous cursory checks are now being strengthened or extended to things such as professional indemnity cover of contracted technical experts.

Looking just at risks with customers and taking cover on getting paid is also now not enough. It is equally as important to assess suppliers to ensure supply chain integrity. In doing this credit information may be out of date, so monitoring submission dates, utilizing associations and networks, check-listings and swapping information with colleagues can reduce risks of the unexpected.

In summary the CFO has an onerous task to ensure future financial viability of the company’s ongoing business. A duty of care to involve all C-Level executives in a regular  run through of the business risk profile and mitigation strategies.  Vital for this in business now  is well understood assessment processes, transparent & well monitored metrics and an embedded always-alert risk management culture.

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The post, Cargo Cut Provides Jobs, in January summarises a challenge by Charles Caro to a concept that job search firms have similar cargo cult magic that brings jobs.

Even Blind Freddy knows job creation is driven by the economics of supply and demand with multipliers like investment gearing up and creating money to feed this. But, as Eastman’s further research found, Cargo Cult worship and beliefs still exist. So maybe Charles Caro is making a stronger of more significant point .

More importantly in our highly mobile and transient commercial world, is learning about getting the job done. Especially so now with fewer around as many multipliers have been going into reverse gear since late 2008.

Another view is with the Baby Boomer generation fast moving out of the picture of influence the new breeds must take charge. Debt Squeezed Baby Bust Generation X, with Free Agents Spoiled Brat Generation Y and now the Under-20s ‘i-Generation’ all have it in front of them .

But it seems many are confused about this and have been for some time. Perhaps a new subject in grade schools called: “Getting a job.”  will fix that.  But or now I fear Cargo cults jobs, when you can get one, may still prevail.

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A question posted in a network blog this week by Charles Caro, Founder – Community Commerce Centers Initiative , asks: 

How would you compare the job search process with a cargo cult?

I looked it up and a “cargo” cult it seems is focused on obtaining the material wealth from more advanced cultures through magical thinking.

Caro’s cargo cult explanation. summarized here, sets up his question:

Cargo cult” activity during World War II occurred when Japanese then later Allied air forces used Islands scattered across the Pacific Ocean. The local populations had little knowledge of the outside world, and saw the arrivals and their equipment as magical. After they had gone the local populations used a form of sympathetic magic in an attempt to bring more cargo to the islands.

The Islanders felt that replicating the planes and moving pieces of paper around, in a special way on a table, would cause more cargo to arrive from the sky.

Caro, then parallels this to the job seeking market and then asks those involved in the business of “helping” people with their “job search”, “What makes your brand of sympathetic magic work?”.Caro’s cynicism is supported well by David Marshall, a Singapore freelance and now semi retired Legal consultant and regular insightful respondent. His follow up was this great one liner:  “The idea of valuable employees falling from the sky at random is delightful”.

Both authors are well worth a read

 Post Script: For those further interested in anthropology, and the evolutionally studies of mankind. I found this interesting video. It  suggests that a strong practicing cargo cult culture still exists in the mountains near Port Moresby in New Guinea.

Maybe they run a Job Search agency too Charles?

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As we morph more to a demand responsive services economy, products software and process fuse. This makes software ubiquitous and therefore of less Intrinsic value on its own.

As the market itself continues to change and reshape at a great rate this makes investment in ideas quickly redundant as it finds even smarter and more integrated ways to deliver product and services.

This post relates to a web discussion question, “What is the future of Intellectual Property rights in the New Economy?

With delivery and logistics capability now global and supply chains and services unrelenting in their goal to get flatter, the demand is for merged software innovation and knowledge products to be delivered as services.

As this occurs and products mature, brand sensitivity of the respective parts is diminishing with barriers to entry lowered. For example engines for web services are no longer visible and hence have a different value on their own with much more plug and play procurement choices. Open platform integration products and open source software projects to resolve business problems are also changing the value and positioning of intellectual property.

With services moving more into the mass market of business and consumer bases process itself, it cannot be protected by conventions, intellectual property rights patenting or related copy right laws.

And as knowledge products mature and become part of common practices relying on licensing and the law to guard them is less effective and less relevant. To protect its investments in innovation, business leaders, developers and inventors need to look to re-engineering other barriers.

Selling of Knowledge based products is now be seen to be moving akin to the way most omnipresent industry is. For example, the motor vehicle Industry now has shared reproduction, supplying to separately branded product. This in turn is delivered in an end to end service model replacing the “Acquire and Maintain” model. This shift sees much of the end product delivered as a cycle based operating product based on fully serviced rights of use rather than ownership. In large industries such transport and logistics it even goes a step further as these outsource service providers have and continue taking this to the next level.

In the end like market itself, which will continue to change at a great rate, natural mechanisms such as speed to market, process maturing and brand loyalty, comparative advantage and quickly achieving critical mass usage will become the only real mechanisms for protection of ideas.

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Most people believe simple is best practice . But I also believe we often get it wrong when we describe our product and services.

Software vendors by nature to survive must be leaders of best practice, but they often talk in riddles and high fluting assumptive terms about basic processes and activity. I was drawn to an article I read at Technology Evaluation.com by Sherry Fox This is good read about enigmatic terms used by the software vendors.  My contribution here adds my perspective to her opinions.

Like processes I believe simple is best to describe product and services.  A colleague once said to me, “I had looked your  web site and for the life of me, I could not figure out what that you guys do.”

I was thankful for the feedback but that bombshell sent me immediately to have it changed. And it was easy too, we just cut all the crap.

In her article Sherry Fox talks about software vendors who call their product “Solutions”. That drives me crazy too and I sell and recommend their software for them in my consulting practice. They really make their life hard and puts buyers and consultants offside as we  have to sort out for ourselves the confusing product names and acronyms, badly positioned sales mumbo jumbo and filter out the meaningless non-information, to try to see what they really have to offer. Of course it is all part of the game to look impressive while also keeping the competitor confused.

I like Sherry carpenter’s tool example of the hammer, to drive a nail. It is clearly a tool not a solution. In another spectrum to resolve a war conflict a government  can use the army and that is are not a solution either. It is a tool of war or defence. Equally to negotiate for the same end uses a diplomatic tool.

Software is software, no-more no-less, so why not just call it that. Of course we all agree it is not just technology but includes people with skills to set it up and train us how to use it. And to put it into a process requires consulting for implementation and change management, which can add to the effort. But in the end what we finish with is still just a software tool.

A spreadsheet is an office tool and no one calls it a solution. Operational, accounting, work-flow, client, project budgeting, collaboration, presentation, communication asset and human management reporting and so on you can go, they are all software tools to do a job. Analytical, mathematical, scientific, educational, etc in every walk of life and function of business you will find software. As I rattle them off I can see synergy to combine some or all into enterprise level tools that provide structure rules and a place of work for many elements of business and operational process.

Like any invention or idea software is invented and used to solve problems of many origins. But there is no way it can presume to be a solution. It is still just a tool. When enterprise software vendors talk about solutions I think of problems and I turn off. If I have something to do I use a tool to do it. If I have a problem I figure what to do to fix it. Then I use a tool.

Even the end game, the result, may depend on my approach. and the tool, the solution used or for the outcome I want to deliver the benefit I want may vary. (Sorry Ms Jane Ordinary, I still need the business case.)

And I don’t always just have a problem. I many just have something to do like a strategic change or tactical move for an opportunity. For that I plan an approach then we get the tools and resources I need, to get outcome I seek. In the process we look at choices and choose. This could have many solutions as we proceed.

So the real test of what software is shows up when I ask the question. “If I need to get a result would I asked the software company get it for me”. Of course not. I would ask an expert to look at the choices. Then set up a team to go and see if there is a software tool (not a solution) that can fit our culture and we can learn to use it to get what we seek.

What Software Vendors have is one piece of the process. So they confuse me too talking about all of these aspects in the same terms of as a “Solution”.

Like Ms Jane Ordinary I am just your average  Jo C who likes to use the best tools to get the best result. And assembling solutions is just a step in the process to get there.

By the way if my business colleagues, knew I was a Solutions Salesman they may figure I had an important job but would would be unlikely to call me. On the other hand if they knew I sold business performance management software they would know what I had to offer and may suggest it as a choice to their bosses to create a solution for a business problem.

My advice to Software Vendors is drop all the bull. As much as I say this to  my fellow software salesmen I am going to take it my own advice myself too to make it easy on everyone and just call a spade a spade.

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