Culture is one of those overloaded terms… So much so that, Alfred Kroeber and Clyde Kluckhohn have compiled a comprehensive 160+ definitions of culture in Culture: A critical review of concepts and definitions. Our current take on culture originates from Sir Edward Burnett Tylor’s all-inclusive definition of culture in 1874 .

“Culture or civilization, taken in its wide ethnographic sense, is that complex whole which includes knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by man as a member of society.”

— Sir Edward Burnett Tylor

Applying this to organizations,  I see culture as how we get things done in an organization that collectively makes us successful. With that, culture:

• is a learned behavior;
• is shaped by our values, goals and expected moral/ethical conducts;
• is spread thru social interaction — it adapts, evolves and changes;
• is complex — embodies tangible and intangible characteristics (beliefs, attitudes, habits, customs, tools, rules, rituals, …);
• can be broken down into simple traits (creative, innovative, agile, …). But, as with a recipe, knowing the list of ingredients does not translate to THE secret sauce.

Culture is built around what people think is important, and leaders establish and drive the culture of their organization. If you doubt that, check out Japan’s Cool Biz campaign, and how the Prime Minister Koizumi influenced the Japanese business dress code to help reduce electric consumption usage during summers.

Now, I have to reemphasize success in this definition, as without success there is no point to culture… Is there?!  I like this more extensive definition of culture:

A firm’s culture, “encompasses its history and accomplishments, its leaders’ ambitions and goals, its definition of and criteria for excellence, its attitude about clients and staff, its traditions and lore, its mood and energy, and its balance between art and business.”

Jean Valence, Symmes Maini & McKee Associates (original article)

Analyzing an organization’s cultural traits

Culture is unique — it is complex and operates as a system. This makes it a key differentiator and a competitive advantage. Its secret sauce is difficult to change and imitate. The fact that it is difficult to observe culture makes it harder to understand how it leads to success. But, it is possible to observe behaviors and identify traits in your culture, which are necessary for success. Here is a laundry-list of needed traits for today’s global, fast-paced environment: flexibility and agility; agile and adaptable; learning culture; startup mentality and entrepreneurship; empathy; collaboration every which way; …

Or, here is a look at cultural traits of design firms, based on my readings on IDEO and others. Note that the success of design firms depends on their ability to identify options, making choices, understanding constraints and addressing/executing them that leads to delivering great experiences. From that, key ingredients for a vibrant design firm culture include (but are not limited to):

• creatives — willingness and desire to step outside the box and experiment;
• learners — curiosity and a high degree of empathy driven by observation, experimentation and desire to share experiences;
• improvisers — eagernes and ability to deal with whatever;
• playfulness — whether it is bringing beginner’s mind to the task at hand, or just wanting to be different;
• agile structure — evolves and changes with the needs;
• way of thinking — set of tools, processes, etc. that enables creating new experiences and mindsets;

And, here is yet another way to look at culture from Business Insider with a look at 3 types of startup cultures by Nilofer Merchant: family, wealth and deep optimism.

In summary…

Your culture should enforce and feeds what makes you successful. It is a system that supports and nourishes itself. Here is a look at XPLANE’s culture map (and the annotated version at Flickr) that beautifully illustrates this concept. In the future posts, I’ll dive deeper into exploring this system….

Technorati Tags: culture, organizational culture, cultural traits

Here is a quick backgrounder on the issue. Adobe’s Flash Video (originally developed by Macromedia) is a container format that is used for delivering video over the Internet. Many popular sites use this format to embed video and other content on the Web, such as YouTube, Hulu, Facebook, and Flash-based online games. Through Adobe Flash Player and browser plug-ins, Flash-Video is made available to users. Putting it mildly, Apple has no plans to support Flash on its iPod/iPhone family of products, while Adobe continues to push for its adoption. Instead, Apple has been pushing the HTML5 standard with H.264. For those that are interested, check out the Daring Fireball‘s summary on the topic: Apple, Adobe, and Flash.

There are numerous examples of competing technologies: VHS vs. Betamax, Blu-Ray vs. HD DVD, GSM vs. CDMA, .Net vs. J2EE, various flavors of Unix and wireless standards, open vs. DRM, MP3 vs. AAC, AC vs. DC (no, not the music group but Tesla vs. Edison)… In many cases, competing technologies encourage innovation, arguably, sometimes at the cost of building a rich ecosystem. At the same time it is not uncommon for users to experience confusion over compatibility and interoperability, such as in the case with having too many multi-media formats and having to choose a player to match the video format. However, as a technology becomes more attractive, it will see a higher adoption rate, and increasing compatibility and interoperability with others as its ecosystem becomes richer.

This is all good, but as a technology company where do you put your money? As our computing infrastructure becomes more complex and interconnected, your customers are now looking for a total system experience: high-level of system performance and interoperability with others. With this, you need to not only control your technology but also influence and direct related technology decisions with your partners and competitors. To do this, you need to evaluate your technology strategy and decisions within the context of the purpose of your business, technology attractiveness and your ecosystem. 

The purpose of your business

“There is only one valid definition of business purpose: to create a customer.”

– Peter F. Drucker; The Essential Drucker

With this, Drucker continues and states that, “Because its purpose is to create a customer, the business enterprise has two — and only these two — basic functions: marketing and innovation.” Lets apply that thought process to Apple. In a previous article, I highlighted that …By owning hardware, software, online services and everything in between, Jobs successfully controls the end-to-end customer experience, and thereby delivers on his core value: products that work seamlessly together and seldom break down.

Given this clear focus, Apple’s position on Flash-Video (remember, Apple does not use Flash-Video in any content delivered from iTunes store) and its tight control over the App Store is not a surprise (preventing developers from impeding or disturbing Apple’s ecosystem), especially with the iTunes Music Store universe it has created for its customers. Contrast this to Western Digital with a purpose to help you collect, manage and use digital information. This drives their product design decisions, such in the case with their Western Digital WD TV Live Network-ready HD Media Player which supports the widest variety of formats possible. Having purchased both toys (AppleTV & WDTV), I enjoy the freedom and flexibility I get from WDTV with its open architecture, vs. the restriction placed by AppleTV. With that said, I appreciate the ecosystem of the iPhone and its apps, and how well it plays with my MacBook versus my previous Motorola Pebl.

The government can also influence which standards and technologies you need to provide. It is common for governments to take leadership in technology development and standard setting, such as with the Chinese government’s initiative of the AVS (Audio Video Standard) compression codec, a competitor to H.264/AVC. If the standard becomes commercially successful, it would not only put Chinese electronic companies on the map, but would also reduce their licensing/royalty payments significantly. Standards, regulations and policies enable governments to:

• regulate goods for the safety of their consumers;
• encourage prosperity of local economy (by licensing domestic standards vs. paying for foreign standards);
• push for compatibility and interoperability (domestic electricity and plug standards) which benefits consumers and producers;
• sponsor development of emerging technologies (such as green-tech).

In summary, your technology strategies, along with your core competencies, need to be aligned to support your business purpose. Perhaps Facebook’s recent announcement on their HipHop for PHP technology development is a good example of focusing on core competencies (in this case PHP development) and building/leading technologies to lead with that strength (transform PHP code to optimized C++ for better performance and scalability.) Through this alignment, you can evaluate relevant technologies and start outlining your strategic position for each: lead/follow, in-house development/outsource/acquire, invest/divest/migrate, …

Technology attractiveness

Understanding and evaluating along these different dimensions and factors would help determine not only the attractiveness of a given technology, but also the factors and trends to watch for as technology implementation progresses. Scenario analysis and what if? brainstorming will help determine trends and identify critical potential inflection points to watch for. Take H.264/AVC digital video coding standard’s license and Mozilla’s stance on embedding the technology. Recently MPEG LA extended its license term where it will not charge royalties for Internet Video that is free to end users till December 31, 2015. What would that mean for competing technologies like Ogg Theora?

History repeats itself, and it could provide guidance on trends that will influence the technology adoption. It is always easier to identify inflection points once the technology war is over. The Adult Entertainment Industry (AEI) was identified as the decision maker in the war between VHS and Betamax. With Sony’s refusal to work with the AEI, Betamax ultimately lost out. As a result, all eyes were on the AEI when next-gen hi-def competition started (Blu-Ray vs. HD DVD.)

Richness of the ecosystem

In simplistic terms, ecosystem encapsulates the concept of a community of things and the environment in which they live. In the world of technology and business, this community includes organizations and individuals such as producers, suppliers, competitors, and other stakeholders contributing goods, knowledge, and other deliverables. Here is an announcement from Microsoft that captures their focus on the IPTV ecosystem from 2007.

The richness of the ecosystem certainly adds to its attractiveness. Again, take the competition between Blu-Ray and HD DVD as an example. When AEI selected HD DVD for their format (mainly driven by production costs), many assumed the format wars were over. At least until the Sony Play Station came out with a Blu-Ray drive, and the owners started to request Blu-Ray DVDs from the AEI. This newly expanded market, coupled with the fact that support from more movie studios reduced Blu-Ray DVD production costs, resulted in the AEI’s move to Blu-Ray.

Richness of the ecosystem can certainly influence/change your technology directions as well. These changes can be driven by your competitors, as in the case with Amazon.com introducing DRM-free music downloads, which resulted in increased customer desire, driving Apple to also provide DRM-free music on iTunes store. The richness of an ecosystem also influences new product concepts, such as Apple building on the strength of iPod and launching iPhone/iTouch family of products.

Thoughts on reducing your development risk…

As I mentioned before, there is no silver bullet when it comes to knowing which technology(s) to invest in. However, you can be smart on how you develop your products/technologies. These include, but not limited to:

• Adapt agile development practices, so you can rapidly shift as your products, markets and customers change. Utilize technology roadmaps as a guidance, and manage migrations as things change.
• Get your customers involved through controlled beta testing, such as with the YouTube HTML5 Video Player.
• Spend time understanding your product requirements and your technology dependencies, and establish a loosely coupled system architecture to reduce dependency.
• Leverage external relationships to reduce development effort and share risks.
• Don’t depend on the if I build it, they will come philosophy of just building the technology. Rather, help its ecosystem flourish with complementary technologies and products.
• Continuously look for ways to build economies of scale and improve your learning curve.
• Be smart about the cost of technology (direct, indirect and hidden). But also take this a step further and analyze the cost to your customers (Sony’s Playstation 3 consumes significantly more electricity than its competitors.)
• As important as standards are, your customers’ performance and functionality requirements come first. So focus on your customers’ needs while designing systems that are compatible and interoperate with standards.

Technorati Tags: technology strategy, technology competition

I have been spending my free time by going back to my roots: engineering and software development. My time is spent acquainting myself with the Django platform, reading about product design, and coaching a FIRST LEGO® League (FLL) team with my husband for a robotics competition coming up in December. With that, in recent weeks, I have been playing with LEGO® MINDSTORMS® NXT, including turning my dining room into a robotics lab! I have to admit, I am new to this, since LEGO® was not part of my life when I was growing up. And although my son has been involved with LEGO for most of his life, I have only been an occasional sidekick, helping out when he needed it. I must say, I missed out, but now I’m working hard to make it up.

Though we are coaching 10-13 year-old boys, I noticed an amazing amount of similarity between playing with LEGOs and managing engineering projects. I hope you enjoy my observations, and please let me know if I left out anything.

Note that I find job titles personally challenging… Though I specifically mention engineering managers, for me this covers anyone that has the duties of managing a technology and product combination, along with the responsibilities of people management.

Generalist.. Specialist.. Aha! Specialized Generalist!

This topic deserves a more in-depth discussion, as it is an area I ponder about a lot. I am a technology generalist with a specialization in technology management and product development. Yet, I wonder if I should have a technology specialization area, but then question what I would have to let go in return…

An engineering manager needs to be a generalist for successful commercialization of technology and its products. By definition, her focus should be on integrating and bridging technology, business, people and executing the engineering development life cycle. Yet, to be successful in this integration role, the engineering manager also needs to have sufficient understanding of the technology, product and industry, i.e. specialization. In her role, she must:

• Be part of the team: speaking the same language;
• Lead the team: defining and building the new language, norms and culture;
• Have imagination and creativity for what is possible;
• Understand practicality for what is doable given constraints and resources;
• Have wisdom to understand where the risks and challenges are;
• Have knowledge to educate, promote and close gaps;
• Be fearless to jump in, explore and show the way;
• Have the power to inspire, motivate and drive results;
• Have the ability to distill all for effective (and efficient) tools and processes;

All this is necessary to be a good engineering manager. I lost count of the number hours I spent surfing through different robot designs, learning about the parts’ strengths and limitations, figuring out how to best navigate the NXT-G software, and just understanding what it means to build a decent robot through hands on exploration and prototyping. It all helps to build the next generation of engineers and hopefully successful performance at the competition.

Design for modularity and reliability

Anyone who is a LEGO fan won’t be surprised to hear that there is a real science behind how to design LEGO systems, how to build them for stability, reliability and strength. My 11-year-old son seems to have the knack for this! He seems to know all the different LEGO parts, how to best put them together, how to make them modular and yet still attractive.

FLL challenges require different contraptions to navigate and complete FLL missions within a set (short!) time limit. This challenges your critical thinking skills in how best to design and engineer your robot. With that, modularity and reliability of your design drives the repeatability and performance of your results. Through experience and lots and lots of prototyping and testing, you learn:

• about real-life constraints (ambient light, inertia, gravity…);
• reliability and repeatability is king queen!
• how to setup for easy real-time product reconfiguration;
• that nothing goes as planned. So test, test, and more test!

Empower… Motivate… Time manage!

Organizational behavior and motivation is a complex and broad topic. Interestingly enough, the challenge of how to effectively motivate doesn’t seem to depend on age…

FLL challenge is about kids and driven by kids. As coaches, our role is to inspire, empower and motivate for results, with hopes to grow future engineers. It is amazing to see how moving a robot utilizing a touch sensor for navigation can brighten a youngster’s day.

Encouraging creative and outside-of-the-box-thinking is a primary focus of the coaches. Our success depends on how well we read each child, and learn what motivates them into action. Believe me, each has their own degree of focus, from some being extremely short to others who would shame many adults. With that, managing time is our most important element. We walk a fine line between providing enough space to explore/empower and minimizing wasted time. There is nothing more powerful than showing kids what they can achieve through careful handholding and directing. As they say, the more things change, the more they stay the same…

Building a productive workforce

Time to market is the new reality. Yet, many factors affect productivity, which is the key driver in time to market:

• environment,
• skills and experiences,
• tools and processes,
• external resources,
• quality, …

As engineering managers, our job is to understand the possibilities, assess the risks, and close the gaps in any and all areas. We also need to understand what is under our control, and make peace with anything that is not. Turning my dining room into a robotics lab is my way of controlling the physical environment, to improve individual focus and increase team work.

However, tools and processes also directly affect individual creativity and productivity. Tools can have natural constraints (such as with the NXT-G development environment), and processes need to fit within the team culture and capabilities. Tailoring tasks to align each individual’s strengths, motivations and weaknesses is key to building a happy and productive workforce. And for this age, perhaps any age, when everything fails, showing, demonstrating and proving possibilities works to kick things into high gear.

Value of rich ecosystems

“Ecosystem” refers to the concept of a community working and functioning together as a unit with its developers, suppliers, customers, users, manufacturers, competitors, research groups, … Anyone who has ever evaluated a new technology, utilized the Open Source community or just Googled an unexplained error message from your operating system understands the importance of having a rich user community.

LEGO has a strong universal brand with a very active user community. Even with their strong control of LEGO brand, one can find LEGO part suppliers, such as with robotic sensors (though, this is still small when compared to Apple’s ecosystem). At the same time, their brand strength doesn’t carry to LEGO’s education division, such as with legoeducation.us. I recently ordered two different LEGO robotics education set. It was quite humorous to receive two sets of parts and storage trays, where one set’s trays came in a mid-size blue plastic LEGO storage container, and the other was just trays in a generic brown shipment box. In addition, annoyingly enough, I cannot get a container for these trays, as they’re slightly too big to fit into any containers sold by the company. Fortunately, none of their building bricks seem to have this type of incompatibility…

LEGO has a very rich user base: LEGO Club, numerous blogs, LEGO Engineering, MINDSTORMS Community NXT, FIRST Forums, … This rich set of resources and a large community to share with makes the LEGO experience useful, interesting and fun for anyone and at any level of expertise. Just think what it would mean to you, if you could nurture and reap the benefits of a rich ecosystem and the strong brand of your product.

Building LEGOs are easy…

And, fun! They demonstrate the challenges an engineering manager faces, including topics that I haven’t touched like rewards, dealing with disruptive  children employees, agile development processes, introducing new tools and technology to your teams, testing and product quality, … Though they may seem like toys, they are real engineering projects, requiring curiosity, ingenuity and a lot of persistence.

Wish us luck at the upcoming competition!

Technorati Tags: LEGO, FLL, engineering management

Don’t underestimate the significance of small distances. Our research shows that performance is noticeably lower for teams with people located in the same building but on different floors when compared with teams where all members are on the same floor.

Their research was focused on two areas: (1) When do virtual teams outperform colocated ones? and (2) how should companies manage dispersed teams? They identified that task-related team processes, including those that help coordinate work and ensure that each member is contributing fully, are most critical for the performance of dispersed teams. In addition, their research highlights the importance of promoting and emphasizing:

• Teamwork skills
• Self-leadership across the team
• Face-to-face meetings
• Global culture

In the past I wrote about my experiences in managing virtual teams, and best practices that worked for me when building high-performance teams regardless of spatial (geographical location), temporal (spanning different time zones), configurationally uneven (number of members differ) and culturally diverse separations. Below are the articles. Enjoy!

• 8 Rules for Building Globally Dispersed High Performance Teams
• Wisdom from the trenches: Managing geographically dispersed teams

Technorati Tags: managing virtual teams, MIT Sloan Management Review

Note: This article is written from the perspective of technology development and leading R&D teams.

Developing technology is a relatively simple task when compared to the challenge of getting it diffused and adopted throughout the intended ecosystem. Although there are others, understanding customer needs, wants and overall psychology is one of the big hurdles that has to be overcome for success. This journey starts at home with your Customer Support team. Yet, there tends to be a gap between R&D and Customer Support teams during the innovation process. Here are my experiences on where the gaps can occur and strategies that worked for me for closing (or, when needed, widening) them.

Prioritize Customer Support correctly

On the road to your product release, you may be tempted to prioritize Customer Support behind everything else. After all, what could be more important than schedule, cost, functionality, … Believe me, it will happen, I have been there. And everyone in the program team will agree to that prioritization…. However, for new products and innovations, it is the wrong decision. Innovation is about change. Your Customer Support team is there to help your customers manage that change effectively. By prioritizing Customer Support low, you are under valuing the role that they play in supporting and hand holding the users of your products.

Unfortunately the implications of this decision could go deeper than just a damaged relationship between two teams. If the Customer Support team does not have the knowledge to support your products, continuous customer escalations could impact your team’s morale, damage the product’s reputation, and impact schedules as resources are pulled to address various issues. So, perform a risk analysis of your product, and evaluate how challenging it may be for your customers. As optimistic as you are, remember Murphy will be there.

Get to know your extended family

Whether you call them partners or customers, customer support, field engineers, and your sales team are all part of your extended family and, in loose terms, are customers of R&D. They sit between you and your end-customer, managing the day to day relationship, activities and issues. If they don’t believe in your solution and your vision, they will not be able to sell it either.

Take your time. Get to know these partners. Learn to speak their language. Learn how to make them your eager customers, your cheerleaders. Definitely share the power and beauty of your technology and product. However, be ready to do that from their perspective using their language and reflecting on their experiences. Where possible, be ready to walk a mile in their shoes. Be prepared to learn a lot about your end customer through these experiences.

First impressions count

I have been a WordPress user and administrator since I started this site. Over the last few years, the WordPress team have done amazing work to improve the overall administrator experience during upgrades and infrastructure updates. Deployment, installation, upgrades and migrations may not sound sexy, but they go deep into your technology, product and architecture strategy. They also play into first impressions. Compare that to my Microsoft experience, where after 15 minutes of validating, acknowledging and thanking me for having a valid copy of Microsoft XP, the next product that they suggested I install started the exactly same cycle…….. Btw, did you catch Apple’s announcement on Mac OS X Snow Leopard: refined from installation to shutdown. First impressions count!

Make it timely

Documentation seems to be the arch-nemesis of technology developers. Yet, it is one of the time tested methods of knowledge transfer, especially in large corporations and virtual teams. Lack of documentation and support can make or break deals. Recently, I took a 3 week detour as I evaluated using Zope for a prototype idea. After giving my full attention, and trying to work around all the “lack of’s” (lack of working sample code, lack of newbie documentation, lack of knowledge on what functionality maps to which release version…) I moved on to Django. The difference is like night and day.

Knowledge transfer is one of those challenging areas that requires work. It doesn’t happen by itself! So, set up a methodology that makes sense for all parties involved. Establish a process to ensure right knowledge is being captured and communicated in the intended way. It can be as simple as an email snippet, a brown-bag discussion, or as formal as a documentation library managed by a volunteer librarian; i.e. an R&D engineer. Either way, make it work and make it timely.

Move in together

Good customer experience is key to your success. Achieving this can be quite a challenge during the early days of your product and technology. Sometimes you may need to ship your products with dedicated engineers, other times it might make sense to move in with Customer Support to ensure timely customer resolution and effective knowledge transfer. Some of my fond memories are from the time when I moved into a Customer Support team on a temporary assignment. I was leading a small, hand picked R&D team with the task to transition our technology and product knowledge to Customer Support.

This may sound extreme, however if the situation demands, it is the quickest way to turn things around, rebuild damaged relationships and gain internal support for your product and technology. It is important to note that if you are building a transition team, you need to ensure that:

1. You select bright and knowledgeable engineers from the actual pain points; i.e. where customers have issues.
2. You select at least 2 engineers with personality and style (and the ability to stay calm under the most stressful situations) to effectively interface with internal and external customers.
3. Individuals on your team must have good relationships with bigger R&D team, and willingly share their learnings with all.
4. At least a small percentage of the team must work full time to ensure successful transition of knowledge.

Managing the timing, goals and milestones of the transition team is crucial. You cannot afford to be there indefinitely. It is not good for either party. So, set goals and expectations on both sides and be ready to pull the plug if people are not pulling their weight. Needless to say, at the time I wasn’t the most popular person in the R&D organization, but through the work of the transition team we built internal support and established a shared vision.

Immerse yourself in their language

Sometimes closing the gap between R&D and Customer Support might require everyone on the R&D team to become part of Customer Support. Though this may not be the most efficient solution (and also not the most popular), establishing a rotation for R&D escalation support will ensure everyone in your team experiences the challenges and issues that Customer Support sees. If you do choose to go this route, make sure to dedicate an accountable resource to make sense of the constant change; in my case my QA Manager was responsible for managing the rotation.

Though it was painful at times, this process did help my R&D team to have a better understanding of:

1. How our customers were using our products;
2. What major issues our customers were seeing and why;
3. An insight into how the overall product worked (vs. just focusing on their own silos);
4. Building a one-to-one relationships with Customer Support;
5. Ultimately building a better product and technology platform.

In conclusion

Through experience, one can learn a lot about what not to do…. Innovation is a system, and it needs to be managed as such.

Technorati Tags: Customer Support, innovation customer gaps, knowledge transfer

Change is a journey. It is multi-dimensional. Following the uncertainty principle, it seeds its own story of successes and failures. Many have written on the topic of change and change management. Perhaps, Franklin Covey summarizes the best.

Knowledge is the theoretical paradigm, the what to do and why. Skill is the how to do. And desire is the motivation, the want to do. In order to make something a habit in our lives, we have to have all three.

– Stephen Covey; The 7 Habits of Highly Effective People

At the end of the day, our energy flows to where our attention goes. If you are a manager tasked with improving teamwork between silos, ensuring the decision-making process incorporated all the right individuals from different groups maybe more important than the decision itself. If you are implementing new processes, providing training and tools are great, but not enough without the proper incentives to ensure people are utilizing it. 

Change Cycle

The change cycle starts with awareness. Whether you are using the ready-aim-fire or ready-fire-aim method, change is a process of trial & error coupled with reflection, which drives needed course corrections. Just like a treasure map, the change process guides its followers through a complex network of interactions, activities and deliverables. Given that, it is crucial to define and communicate your change process, whether the desired change is cultural, procedural, organizational or any other type. This not only provides a structured methodology to what may seem like a chaotic process, but it also builds-in accountability and engagement for all.

As you are initiating and implementing your change process, you also develop your design language. Sometimes explicitly, but mostly intuitively, we pick a design language for presenting and communicating change. Our design language kit includes everything from fonts, colors, images, vocabulary, terminologies, attitudes, styles, principles and more. It redefines and establishes our new belief and value system, and sets the foundation for establishing common understanding and vision. 

Staring at a blank canvas can stir up emotions of fear, doubt and excitement. However, maintaining a forward momentum is crucial for change progress. At times like this, to maintain momentum towards the desired goal, recognizing what it is not is as important as understanding what it is. Remember, change is a journey, a marathon and not a sprint. As Yogi Berra said “When you come to a fork in the road, take it.” However, keep in mind that through your learnings and reflections, you may need to course correct. And, be ready to challenge your beliefs and values, as you are building a new reality.   

Lastly, as you move through your change process, keep in mind Michael Fullan’s eight basic lessons of the new paradigm of change. They are not only great advice but valuable wisdom.  

• Lesson 1 - You can’t mandate what matters. (The more complex the change the less you can force it.) 
• Lesson 2 - Change is a journey not a blueprint. (Change is non-linear, loaded with uncertainty and excitement and sometimes perverse.) 
• Lesson 3 - Problems are our friends. (Problems are inevitable and you can’t learn without them.) 
• Lesson 4 - Vision and strategic planning come later. (Premature visions and planning blind.) 
• Lesson 5 - Individualism and collectivism must have equal power. (There are no one-sided solutions to isolation and group-think.) 
• Lesson 6 - Neither centralisation nor decentralisation works. (Both top-down and bottom-up strategies are necessary.) 
• Lesson 7 - Connection with the wider environment is critical for success. (The best organisations learn externally as well as internally.) 
• Lesson 8 - Every person is a change agent. (Change is too important to leave to the experts, personal mindset and mastery is the ultimate protection.)

This is a personal story and a reflection on the separation that exists between a company’s online and physical retail stores. Given current economic conditions, companies have to be more customer focused and look to continuously integrate many facets of their businesses, including creating a linkage between their customers and suppliers. Through this, they can create a continuous cycle that delivers exceptional customer experience which will become a key competitive advantage as the world continues to become flatter and cheaper. Now to the story and reflections…

Recently, our son received a ToysRus gift card. After walking down the isles several times, we all agreed he should purchase the HyperX Radio Control BiPlane from Estes. We felt Estes was a well known brand in this space and the marketing materials on the packaging specifically indicated the design made it perfect for a beginner pilot. As a note, the plane was only and exclusively available in Toysrus.

Unfortunately, my son and husband’s excitement for flying this airplane died within the first minute as the plane crashed twice, destroying the 2 out of 3 propellers that came in the package. Wisely, hubby decided to stop the flying experiments in order to find a source for new propeller parts. Things went from bad to worse within minutes as 1) he found out that parts are not easily available anywhere (including from the Estes or ToysRus websites); and 2) Toysrus’s online store had nine 1-star reviews for the exact plane, strongly recommending a don’t buy rating from everyone who took the time to review their purchase. Each experience was identical to ours: plane crashes immediately and breaks, no parts available and extremely difficult to fly!

Now, if you had an online store enabling your customers to share their product experiences, and you had a product where your customers were providing a negative feedback with a recommendation of “don’t buy!“, would you:

1. Return the existing inventory back to the manufacturer along with your customers’ feedback and request them to revise their product;
2. Recognize that is just the feedback of a few, but would enable a transparent way for your customers to access the on-line reviews in the physical store and make informed decisions before they purchase;
3. Give a deep discount for that toy to sell out your existing inventory faster;
4. Pay people to write favorable reviews for these lousy products;

Ok, option C might be little too harsh, but after the deep discount we received at checkout and then finding out the toy just doesn’t work, I can’t help but wonder if that was their strategy after all…. And please don’t use option D under any circumstances.

After making a special trip back into town, we were able to return the toy. However, the return process was another less-than-pleasant experience…. Let me ask: if your customer has feedback for you or your suppliers, would you:

1. Give her a customer feedback form and thank her for her time;
2. Hand her your business card that includes all the different ways she can submit her feedback;
3. Tell her to call 1-800-toysrus and navigate the phone-menu of doom, and strongly emphasize that “as an employee I have no control over any decisions the company makes”;

Many firms still view their online and physical retail stores as separate entities. Yet, the line between what is virtual and what is real is quickly deteriorating and customers are demanding the best customer experience regardless of location. We are quickly moving from an integrated customer experience being a “nice to have” to a “must have”, as the young generation becomes the new generation of shoppers. Just think, what percentage of parents suggest that their kids check out the reviews and prices on Amazon.com before any major purchase takes place for video games, books, toys, …?

Lets go back to my previous questions. Now, replace ‘you’ with ‘your employees’ and repeat the questions. How would they respond? Recently, Amazon.com received the highest customer satisfaction index. This is not a surprise, as Jeff Bezos is obsessed with the customer and customer satisfaction. So much so that the Amazon.com logo reflects a smiling, satisfied customer (the “arrow” pointing from a-to-z) for the A-to-Z of products they carry. Bezos is also known for randomly testing his company’s customer experience and pushing the limits each time. Eating one’s own dog food is the best way to experience what your customers are seeing, and it should be a requirement at all companies…

I mentioned the importance of providing the linkage from your customers to your suppliers. Internet and social networks are making it easier, cheaper and more scaleable than ever for any producer to be directly connected to their customers. I have seen product managers connect with and respond to their customers on Amazon.com. Other times after reading reviews, I was left wondering if anyone was out there listening. Which do you think sends the message “we care, about you and about our products” to your customers the most?

On a more positive note, as the story shows, there are plenty of opportunities for firms to make a difference through their service, the products they offer, how they incorporate customer inputs into their procurement process and enable their partners to develop better products all the while using green materials and sustainable processes. With the current state of the economy, every aspect of your business’ touch points become key for building loyal customers. And frankly, if you are not focused on building the next generation of loyal customers in a toy business, what does that say about your longevity?

Technorati Tags: customer service, CRM, Toysrus, Amazon.com

“In preparing for battle I have always found that plans are useless, but planning is indispensable.”
Dwight D. Eisenhower

I don’t know about you, but I constantly feel as if I am running out of time, or maybe that time is running away from me. Either way, 2008 went by really fast, and we are already half way through the first month of 2009…

The whole world seems to be on speed. There seems to be an exponential loss of time, resulting in the constant need to go faster, to reduce costs and all the while delivering great products and services. With all the pressures, one might be tempted to cut corners to gain advantage. However, here are the 5 areas where you should take your time in order to streamline and increase your speed.

Solve the right problem

We all have our favorite products and products we love to hate. Each product carries its own signature, identified first by the problems its solving, and second by the design approach taken. Focusing on the wrong problems is very costly, such as in the case of the “butterfly ballot” in Florida during the 2000 election. Sometimes a near death experience is required to discover the right problem, such as in the case of the Iridium Satellite system.

The process of identifying the right problems to solve forces us to go deeper, to understand and analyze root causes, to discover key constraints and drivers. And, potentially to design and develop breakthrough solutions. You can read more about the importance of Choosing the right problems to solve in Product Vision Blog by D. Philip Haine.

Test, verify and validate

SC Magazine recently reported on the cost of fixing software defects: The cost of fixing software defects runs into millions.

The survey of 139 US corporate development organisations on the pressures and costs of software defects was carried out in conjunction with Coverity in Q2 of 2008. IDC estimates the cost of fixing software defects at $5.2 million to $22 million annually, depending on organisation size.

The reality is the longer you wait to fix a problem after its insertion into the product, the costlier it will be. There are numerous studies from the software industry to support this, but the concept applies to other parts of life. And cost can be direct – schedule, resources, budget – as well as indirect – loss of trust, negative publicity, impact to customer loyalty, low team morale, …

Studies have also shown that early testing and validation improves defect detection rates, such as in the case of using inspections to find design errors, and with the argument for using pair programing during software development. Concept testing, usability testing and other market research tools enable companies to test, verify and validate early on, enabling them to focus on the right problem definitions.

Communication and alignment

Perhaps it’s every leader’s dream and nightmare:  keeping her team rowing the same direction with maximum effort. Yet, as Patrick Lencioni states in The Five Dysfunctions of a Team: A Leadership Fable, “The ultimate dysfunction of a team is the tendency of members to care about something other than the collective goals of the group.” (Btw, my 10-year-old-son loves the The Five Dysfunctions of a Team, Manga Edition: An Illustrated Leadership Fable!)

Clearly communicating vision, incorporating specific objectives and establishing well defined outcomes will enable your team to row in the same direction. As you proceed, keep in mind the following key elements for effective communication:

• keep it simple – the more complex the message is, the more time it will take to communicate it clearly and directly (and the greater the risk of misunderstanding);
• keep it familiar – analogies, metaphors and stories will make it memorable and familiar. Also, drive it home by repeating your message, ideally through diverse communication forums (visual, meetings, emails, 1:1, posters, ..);
• lead by example – in addition, ensure transparency in communication and actions;

Also, note that getting everyone to row on the same direction is not enough. You need to monitor the effort that each and every one is putting in, including providing the necessary support and tools to ensure optimal effort by all. So, monitor the progress of your teams as well as your communication.

Finally, vision is important, but more so is getting the basics right as soon as possible for success. Focusing on early benefits and implementing quick wins will reinforce your vision and strategy.

Measure, monitor and make it repeatable

“If you don’t know where you are, a map won’t help…” Whatever your needs and goals are, without proper measurement and tracking, you can’t tell if you are on the right track and making making progress towards your objectives. More bluntly, you can’t improve what you don’t measure.

You can get a good sense of where you are by comparing your planned, actual and baseline progress. In selecting your metrics, keep in mind the following guidelines:

• keep metrics simple – make them easy to understand, easy to generate and collect;
• choose relevant metrics – each metric should be in the support of the objective and somehow connected to the value that the organization is looking to create. In addition, choose metrics that enables people to act, such as monitoring actual project costs rather than measuring performance by stock value;
• focus on leading indicators – choose metrics that allows you to be proactive, such as in the case of measuring the employee turnover to gauge overall productivity and health of the organization rather than relaying on employee surveys;
• fuel meaningful conversation – the ultimate goal of metrics is to stimulate learning, generate action and accelerate improvement. So, select metrics that will help support conversations and insights for the organization;

Where applicable, create a simple 1-page dashboards to measure the progress against your objectives. As an example, for your projects, your 1-page dashboard could include:

• Top 3-5 project goals and elevator pitch;
• Key project milestones and current state;
• Top 3-7 project issues, especially any red flags that stop progress;
• A few key project metrics – code complexity, team velocity, defect find vs. fix rate, product performance metrics (startup time, throughput, cycle time, …)

Finally, where possible, ensure repeatability of your processes, whether it is metric collection and analysis, development activities (source control system, defect management, nightly build & test cycle, backups, …) or other activities. Through repeatability, you will reduce surprises, avoid preventable problems, reduce not-invented-here frictions and ultimately establish a sustainable pace and repeatable successes regardless of personnel changes, new projects, or other disruptions.

Reflect and adjust

I talked about postmortems and the importance of organizational memory as part of the learning process before. Reflection is a critical component of learning; it enables us to evaluate our experiences, learn from mistakes, identify best practices, revise and adjust accordingly. Make time to reflect on key areas that impact your organization, such as:

• How to remove/reduce complexity – complexity is cost. There are many sources of complexity from your customers, suppliers, geographical spread, products and services, management organization and people. Identifying and removing/reducing complexity will save time, improve productivity and reduce cost;
• Where and how to add/create value – reflect on how satisfied your customers are, how you compare to your competition, what are the current trends, …;
• How to assess the health of your organization, process or product – including questions such as how effective are existing processes, what are the best practices, where are the bottlenecks vs. where is the energy/time better spent;
• What are your/your organization’s existing presuppositions – whether you are conscious of them or not, presuppositions keep ideas out of reach. Finding them and challenging them will allow new ideas to develop;

Technorati Tags: streamlining, waste, slow down to speed up

Technorati Tags: innovation strategy, Innovation Weblog, economic downturn

Traditional risk management processes rely on the evaluation of the impact vs. the likelihood of occurrence. As every innovator will tell you, Murphy has a permanent spot in their team. Given that, accurate assessment of the uncertainties the innovation process brings would be like walking on water. More importantly, attempts at managing those risks can stifle the innovation process. Using a mindful approach to risk management, organizations can improve the effectiveness of their development activities while fostering their innovations simultaneously. To start, evaluate your existing project risk management processes and update it using the following ideas.

1. Understand the nature of the risk: Start with a high-level breakdown of your project risk areas. For each item, identify:
   • the type of risk: schedule, cost, resource, market, brand, operations, …
   • the level of impact and to whom
   • the level of innovativeness: cost reduction, incremental improvement, major revision, product extension, next generation platform, technology/market newness to the firm, technology/market newness to the market, …
2. Assess your appetite for risk: Risk appetite is the amount of risk an organization is willing to take on in the pursuit of value, such as new innovative functionality, achieving market objective, financial results and so. Every organization, project and risk is different. With that, for each of the risks identified in #1, also assess your risk appetite. To facilitate an empowered decision making process, the risk appetite could incorporate trigger levels. For new technology implementation risk:
   • threshold #1 – 2 week schedule slip – managed within the project team
   • threshold #2 – 2-6 week schedule slip – managed within the Program Management Team
   • threshold #3 – 6-8 week schedule slip – managed within the Sales and Marketing Team
   • threshold #4 – 8+ week schedule slip – managed within the Business Unit Team
3. Prioritize, prioritize, prioritize: Incorporate this understanding of your risk areas and customer impact into your prioritization process. Life is about tradeoffs. For projects, this means deciding how to allocate your resources, manage your schedule, and how much of what functionality to implement. Your risk prioritization should align with your resource and budget allocation.
4. Agree on risk management strategy: For every risk area, you need to determine how to manage the risk:
   • nullify – make it a non issue by removing the risk area, such as by eliminating the new functionality
   • transfer – identify a 3rd party to transfer the risk to, such as through partnering
   • reduce – either through reducing the likelihood of occurrence or the potential impact. For technology projects, using roadmapping processes and agile development practices are a good way to reduce new product development risks
   • agree – “yes, it is a risk and that is OK”. However, combining this acceptance with risk appetite analysis would improve results.
5. Compile a risk portfolio heat map: Incorporate risk management as a portfolio in your strategic planning process. Colorful heat maps can visually demonstrate where your investments are along with where your risk lies.
6. Align organizational structure to support risk management strategy: Build an effective team, promote the right capabilities, rebalance resources, … In the process, make sure to support and reward your leaders based on the characteristics of the innovation and risk levels they are responsible for. In the end, if they are not rewarded for failing and learning from those failures, they won’t take risks. No risk, no great breakthroughs.

In addition, make sure the following key ingredients are necessary to achieve a healthy balance of risk and innovation.

1. Build a culture of accountability and responsibility for results. Don’t forget to manage the white space!
2. Foster an environment that enforces and encourages organizational learning and knowledge sharing. It will enforce an innovation focused culture with emphasis on furthering the capacity to innovate.
3. Emphasize the KISS Principle. Keep the risk management process simple, and incorporate it into everyday decision making activities and embed it into the DNA of how your organization works.
4. Change is hard . Build a systemic process to deliver and implement change.
5. Embed the following practices into your processes and culture to ensure success:
   • senior management commitment;
   • clear and stable vision;
   • information and knowledge exchange;
   • flexibility and the ability to improvise;
   • collaboration under pressure;
   • openness and transparency;
   • data/evidence driven decision making;
6. Improve your communication skills, as good communication is key to effectively dealing with risk. It will enable better decisions, better implementation, empowered teams, increase in trust, …

In summary, by ramping your risk management process to foster your innovation projects, you will:

• enhance overall innovation capacity of your organization;
• contribute to efficient use/allocation of capital and resources;
• develop and support your people, and increase your organizational learning;
• optimize operational efficiency while balancing for innovations and risk taking;
• improve your decision making, planning and prioritization;

Technorati Tags: risk management, innovation and risk