Technology Innovation Investment – is now the time to listen to Warren ?

Posted on : 27-09-2011 | By : john.vincent | In : General News

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Warren Buffet famously said “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”.  Just one of a number of gems from the “Sage of Omaha” that provide an interesting insight into the philosophy of one of the greatest investors of all time.  Of course, this quote was made a number of years ago now and todays volatility has seen investors heading in droves for relative safe havens such as Gold ( or sticking it under the mattress… ).

Let’s leave the market investments up to the so called experts.  However, what about if we apply similar thinking to how organisations, not only in Financial Services, are thinking about their technology investment ?  The newswires are full of stories of layoffs and belt-tightening, but is this the whole story ?

Of course, Investment Banks for many years have considered their support staff in similar terms as their trading activities, with a “Buy”, “Sell” and “Hold” approach, thus creating a constantly fluctuating resource baseline.  However, the ratios of front office to back office staff has been changing over recent years with the increased commoditisation of technology and use of managed services or best-shore operational delivery.  So from this more efficient base, what about using the current market conditions to advantage and invest for the future ?

Let’s make a small leap of faith in that growth will return…we won’t speculate when, or to what level, but as with any man-made system, it almost certainly will.  When that happens organisations will revert to a ( controlled ) investment in people for discretionary technology and operational projects that had previously been “delayed” and be in 1) catch up and 2) competition mode again.

However, we would expect that the more savvy CxO’s are actually using this period to invest in order to position their organisations for both a controlled upturn and to take advantage of Technology Innovation.  It is easy to stick purely to an efficiency track, inwardly restock the war chest and wait for the economy to grow.  It is easy.  Some leaders may disagree, but cutting technology costs in a downward market does not illicit a collective gasp of awe and amazement, particularly not when in many cases the “waistline” was carrying a few extra pounds.  The techniques are well known and not intellectually earth shattering.

But what about Innovation and using Technology to drive competitive advantage ?  Some might say that now isn’t the time.  They will say that the focus should be on control, managing risk, dealing with regulation, the implications of ring-fencing, building an agile workforce strategy etc… and they are right.  All those are important ( even more so given recent risk management exposures ).   But it is also a time for position Technolgy Innovation against what will be a very new emerging landscape.

A recent survey by McKinsey showed that half of the respondents thought that Innovation was rarely scaled and not enough ideas reached the commercialisation stage.

First of all, what do we mean by Innovation ?  It can be very different depending on your viewpoint and context.  For some it will be synonymous with the more tangible aspects of technology, such as hardware, software, networking, mobility, algorithmics etc…  For others it might be process efficiencies and new delivery models or maybe using social media to execute trades based on Twitter sentiments or connecting to consumers via Facebook.  Is providing access to corporate information via an iPad2 Innovation ?  Some will say yes, others disagree arguing it is simply tech refresh.

Let’s assume that the definition is clear for you.  Then what ?  On the basis that you subscribe to our take on Mr Buffets theory, how do you proceed ?  We spoke recently with a CxO who had held a series of Innovation workshops internally and generated over 100 ideas.  This was great to hear given the backdrop described ( and we hope that these have progressed ! ).  However, we feel it is important to have a structured approach to managing Innovation within the enterprise.

  1. Ownership – it is vital that there is a clear owner for Technology Innovation within the organisation.  This person should be responsible for harvesting ideas in a structured way, with open and transparent communication as appropriate.  It is also important that innovation ideas are “harvested” not only from within the organisation, but also that time is taken to engage with new technology companies and external advisors with a fresh viewpoint.
  2. Governance – each idea should be treated with the same rigour as other technology initiatives.  Technology Innovations should go through the usual project lifecycle phases, ultimately forming a clear portfolio, subject to process and investment scrutiny.  The governance of the portfolio should have clear business alignment and sponsorship.
  3. Incubation – whilst the portfolio of Technology Innovation projects is constantly changing, those that are deemed worthy of further investigation should be incubated appropriately.  Effectively the organisation should treat these initiatives as separately funded projects, with the corporate governance and gated funding that external entrepreneurs would expect from angel investment vehicles.

At Broadgate we are launching a service in early 2012 to help organisations on both sides drive Technology Innovation ( click here if you would like to find out more ).

In the meantime, we’ll finish with another of Warrens famous quotes : “Someone’s sitting in the shade today because someone planted a tree a long time ago.” – no explanation needed…

The virtual workforce for the virtual company – The People Cloud

Posted on : 25-09-2011 | By : richard.gale | In : Cloud

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Many companies now embrace working from home and there can be several drivers for this, motivation of the workforce, flexibility, geographical factors and the basic cost of an office desk. A major factor in allowing the growth of this has been technology and communications improvements.

Now companies are moving to the next stage, utilising the technology to revolutionise business sectors allowing organisations to grow and thrive where a few years ago they couldn’t even exist.

We are monitoring and have worked with a number of these fledging organisations and are encouraged by the game changing world they are bringing to their clients whilst forcing the incumbents to think and improve their businesses.

Arise – A virtual call centre

The growth in call centres, the subsequent migration to off shore centres and the falling rates of customer satisfaction has been well documented elsewhere. Aspire (www.aspire.com) is a fast growing virtual call centre organisation that, through the use of clever technology, allows organisations to have a flexible, cost effective solution to changes in demand for their support & customer units whilst also providing an on-shore service. In addition the workforce has complete control over the hours and times they work encouraging many more people back into the workplace.

  •  Clients can switch on demand whenever they like with a same country workforce with knowledge of their industry
  • Workers can work when they like for however long they want. There is no commuting or time wasted allowing work really to fit around home life
  • Technology is integral to this firm – in addition to training all the team need are a computer and internet connection

Aspire – A virtual legal firm

The Economist recently published an article (http://www.economist.com/node/21525907) outlining the success of Aspire (www.aspire.com) – a Washington DC based law firm that invested heavily to create a usable and productive virtual workplace, allowed lawyers to work the hours they wanted and most importantly provided fixed price quotes for their clients. This provided certainty for the users, enabled a wider net for the workforce (including highly qualified and experienced parents of young children) and by the separation of the selling/support from the legal work allowed the laywers to focus on what they knew – the law.

  • Technology enabled the organisation to exist (multiple millions of dollars were invested before the company started trading)
  • This same technology allowed and encouraged part-time/flexible working whilst delivering the clients results
  • Data capture and analysis from previous work to allow fixed priced deals to be offered with small amounts of error

Flexforce Professionals – a virtual staffing firm

This company (www.flexforceprofressionals.com) shows how to get value from highly capable, skilled people that may not be available to work full-time (and more) at conventional firms. Parents cannot or do not want to be committed to careers which require extended days in the office or travelling. Flexforce was founded by three working mothers highlights the value for clients of using this ‘missing’ talent. Its clients get a highly skilled and motivated workforce and their team can work alongside family commitments with a high degree of flexibility.

The cloud should not just be seen as a computing concept – the workforce can now be in the cloud too – the power of switching on additional call centre, legal and many other services are already there and will be a significant part of the next stage of evolution of business and technology.

 

Earning and sustaining trust between clients and partners

Posted on : 12-09-2011 | By : john.vincent | In : General News

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Recently a CTO colleague ran a very interesting poll of colleagues around the theme of technology change with the question, “What should CXOs most look for in a partner?”read more ).  Of the 5 categories, ranked equal first alongside Implementation and Execution was Demonstration of Trust and Integrity, with 43%.  It is this theme that I’d like to explore.

To be truly considered a trusted advisor to clients and colleagues the status has be both earned and sustained.   At the optimal level, it is a symbiotic relationship between CXO and partner i.e. “A relationship of mutual benefit or dependence”.  So many times we see this relationship distorted or the balance skewed, such as contracts where the partner either “buys the deal” or has commercials tied down to a level that they cannot deliver to.  Familiar ?  Or global partner agreements driven from a success in one business domain which is then “shoe-horned” into a non fit for purpose world.  Seen that ?

The Trust equation talks about it being the sum of Credibility, Reliability and Intimacy divided ( or diluted ) by Self Orientation.  It is a good general measure.  Without going into the mechanics and metrics, let’s look at the constituent parts.

Credibility: this area is most commonly achieved in a relatively moderate amount of time.  The quantitative aspects, or believability, can be established through demonstrating technical capability and advice, or checked through references etc…  The softer side, such as honesty, is more related to comfort and rapport.  In the survey it is also strongly related to Integrity.   In the CXO – Partner relationship this can be eroded through traits such as over exaggeration, anticipating needs rather than listening to the problems and promising, or over stating, capability which doesn’t exist.  I saw a colleague a few months ago who had moved from the client to the supply side – she was very unhappy at the practice of claiming non-existent service capability and subsequently resigned.

Reliability: it is taken as given that partners should be reliable, demonstrate consistent behaviours and be dependable.  Right ?  However, the CXO vocabulary is littered with anecdotes of partnership agreements gone bad.  We hear a lot of talk of the “A Team” at the outset being swapped for the “C Team” during execution.  Or surprise that the bread-and-butter services of some of the big partner firms turn out to be far from expectations or developed “on the job”.  And remember it’s not uni-directional.  Reliability also applies to the client side in the relationship.  For and effective and efficient model there are obligations on both sides.  Reliability applies all round in areas such as communications, timeliness, clarity and consistency.

Intimacy:  managing change in today’s climate has never been more difficult.  CXO’s should seek trusted partners that they can engage with on a different level to drive often challenging agendas.  In a true partnership, both sides should be open to explore solutions without keeping important information in the “back pocket”.  This includes being clear in the blockers and issues on both sides, whether that is internal client constraints, desires, commercial goals etc… as well as limitations or short falls in on the delivery partner side.  Difficult, yes ?  But if the personal things relating to the engagement get shared it can bring an emotional closeness to benefit all.  Of course, this takes more time in terms of the trust equation.

Self Orientation: this is the main source of dilution in demonstrating trust.  Partners who have a tendency to jump straight to a solution without listening, claim the higher intellectual ground, fail to grasp a CXO’s motivations or are openly more interested in themselves or “the deal” will quickly destroy any of the good parts of the equation.  We’ve all sat in front of partners where it is clear that they are “winging” an answer on the basis that time back at the office will allow for a veneer of credibility to be placed over the proposal.  Also, an over willingness to drop in a catalogue of high profile names or organisations  where they have had market leading proposition or success can be another example of excessive self orientation.  Really…Let’s take a look at some of those in more detail…can we see the Case Studies ?…talk to the CIO ?

The demonstration of Trust and Integrity in the CXO – Partner relationship is very important.  The old “safety net” practice doesn’t stand up to scrutiny anymore.  I am not surprised by the results of the survey and hope that we at Broadgate can continue to keep at the forefront.