The eWorld Radar

Marry me – A very short guide to outsourcing

I attended a very interesting breakfast seminar on outsourcing hosted by AT Kearney.

A number of key points emerged including the importance of treating the relationship between the buyer of the outsourcing services and the supplier as a marriage as opposed to a purely commercial arrangement.

This clearly requires a great deal of trust and continuous effort to ensure that both parties remain committed. 

The big challenge I see with this is that whilst I, the buyer, might pledge my heart to you, the supplier, you are happy and even motivated to have a more polygamous approach. Thus this feels a little one sided.

Another model might be that the supplier is the parent and the buyer is the child. Like many parents the ability to make each child feel that they are the ‘special one’ is the key skill.

The Coalition Concept model of outsourcing as presented is nonetheless very comprehensive and inclusive. Click here to view the associated white paper.

So you think you think you have a digital business?

Most organisations have embraced digital technologies to the extent that some aspects of the business are now reliant on IT. Some organisations in recognition of emerging trends have put the mobile ‘app’ at the centre of their business strategy.

But most of these organisations are still running industrial business models, using new technologies to do old things in new ways.

Digital businesses on the other hand look to do new things in new ways.

Such businesses also have the following characteristics:

• They don’t recruit using job specifications. They build the business around the strengths of the people they have access to.
• Their senior management team are not fantasists imagining that once they have created a strategic plan nature and the market will simply get out of the way.
• They fail fast and thus learn and evolve fast.
• They operate more like a swarm of bees in that they embrace situational awareness, collaboration and real-time decision making as part of their daily activities.
• The boundary between the organisation and the market is blurred.
• They major in information management and minor in information technology management.
• Their people are more akin to artists than compliant organic business cogs.

So be aware that just because your organisation has embraced IT and your staff are e-skilled, this does not guarantee that you are well positioned for the digital economy.

At best you have a hi-tech factory.

Ade McCormack

Are you amplifying the IT Value Chain?

There is a chain that runs from technology and people suppliers through the Procurement and HR functions respectively. It continues into the IT department and via the users to your organisation’s market.

Thus there are a number of actors involved in this IT value chain. They include:

• External recruiters.
• Business development staff of the IT service companies.
• HR staff.
• Procurement staff.
• Technologists.
• Users.

I would also add the IT function leadership and the senior executives associated with the organisation.

But value amplification means more than just sending the HR function a number of resumes that have the same buzzwords as those on the job specification. It means more than beating up suppliers to get the best price. It means more that having users who barely use the IT tools they are provided with because they have no real interest in ‘sweating’ them.

When this happens or worse, amplification turns into dampening. The CIO might be an easy target to blame when the investment in IT seems to deliver headaches more than anything else. And the CIO may be partially responsible but I would argue that anyone involved in the value chain has to take responsibility for this situation.

In many cases it is a lack of trust between adjoining parties in the chain. And this lack of trust in part is because many people along the chain lack both an ability to cultivate trust and a sufficiently mature understanding of IT to really add value.

With this in mind I have developed the eWorld Academy.

Take the test - Click here to see if you or your people need some game raising support.

Ade McCormack

The Inverse Peter Principle

You may be aware of the Peter Principle (more accurately a hypothesis) which suggests that people will continue to be promoted until they reach a position where they are in effect incompetent and thus do not rise further up the organisational hierarchy.

In the digital economy, this is unlikely to hold true because there will be no hierarchy. There will be experts and there will be those that align this expertise with what the market needs. The latter being an emerging 21^st century expertise domain.

This poses a problem if you are not an expert. In other words this is a problem for most of us.

Leaders who are used to setting the vision will be replaced by leaders who can infer the vision based on environmental factors including their access to expertise.

Managers who are paid to goad, charm and bully the workers into doing what is best for the company will no longer have a role where the workers are more motivated and passionate about what they do than any administrator.

Workers who operate in the traditional factory mode of doing the same stuff day in day out and whose thinking extends no further than lunch options will simply not be required. Unless they occupy niches in which there are no economies of scale on which to base the necessary investment in automation.

Thus career job number one is to reinvent ourselves as a genuine expert through acquiring the necessary skills and experiences. And to then alert the world to the new you. This may give rise to the digital economy Inverse Peter Principle, ie a race to genuine competence.

Ade McCormack

Empower your ‘bad-job’ workers

In a hyper competitive market, where customers look at the price tag before they look at the offering, it makes sense to keep your labour bill as low as possible.  And so where you cannot ‘automate out’ the labour you simply minimise the investment in those workers that take up the so called ’bad jobs’.

Well according to the Harvard Business Review this approach to worker investment is flawed.

Zeynep Ton, visiting assistant professor in operations management at the MIT Sloan School of Management suggests that retailers can break the low-price low worker investment link by adopting the following practices:

• Reduce the catalogue of items sold. This reduces complexity both operationally and in what workers need to get to grips with.
• Rather than flexing the workforce in line with demand, cross train workers so that they can be reposted as required. Thus there are less clueless temp workers damaging the brand.
• Apply lean principles to eliminating waste so that worker productivity is maximised.
• Empower employees to make real-time decisions, which translates into better customer service.

As mentioned in previous posts, most organisations are in a ‘race to the bottom’. The winners will be those that can flourish when they get there. And they will be unlikely to achieve this unless they place great emphasis on their staff, new technologies and information management.

Ade McCormack

Trends – Social Entrepreneurship

The pointlessness of conspicuous consumption coupled with a sense of wanting the planet to be a slightly better place because one existed is leading to a large scale review of the pursuit of a career based on solely financial goals.

Typically this has led to private sector workers migrating to public or voluntary sector jobs.

However over the last century we have seen a growth in those in the entrepreneurial class opting to focus on social rather than financial goals. Florence Nightingale  being an early example.

The 2008 recession triggered an interest in social capitalism, which in essence suggests that better social policies lead to better economic output. Social entrepreneurship is not so much about fixing society to create better economic outcomes, but to fix business so as to create better social outcomes.

The web and in particular social media has provided a platform that is causing social entrepreneurship to flourish.  For example the ability to connect those with money to those that need the money at the volumes needed to help the intermediary cover their costs (and make enough money to grow their model) could only happen with a web-based model.

Keep in mind we are not talking about a facility that enables venture capitalists to lend to pre-IPO start ups. We are talking about allowing the average Joe in any Western economy to micro-finance the business of a start up in say rural Africa.

What is interesting here is that the model can be so effective that the economic goals whilst largely secondary can increasingly be almost primary without compromising the social output.

New technology and in particular Search engine optimisation and PPC allows the most impoverished of social entrepreneurs to enjoy the economics associated with a global business.

Social enterprise may seem like a ‘race to the bottom’ in terms of margins. But that is where many ‘big ticket’ players today are heading because of the pressure of competing in a global market.

Smart entrepreneurs today may realise it is wise to ‘start at the bottom’. Those in emerging economies will have no other choice. But that constraint could well lead to a discipline that enables the emerging economy entrepreneurs to out compete their resource-rich western rivals.

So social entrepreneurism becomes less of a ‘conscience balm’ and more of a necessity for those looking to ‘stay in play’ in the global marketplace.

Ade McCormack

Mistakes versus Failure

Post industrial revolutionary Seth Godin wrote an interesting post recently on the difference between failure and mistakes.

There is something weak about failure and there is something apologetic about a mistake. And that’s perhaps why we tend to feel more comfortable about making a mistake than failing.

But according to Seth mistakes come about as a result of carelessness and easily avoided, whereas failure is taking an initiative to reach a goal which doesn’t work out.  

So we need to make less mistakes and fail more. In fact our tendency to avoid failure is an innovation killer. And our tendency to make mistakes is a good reason to replace us with a computer.

Click here to read Seth’s post.

 Ade McCormack

Chief Herbalist Officer

Organisations work well when the data, information, knowledge and wisdom flow easily to those that need it, when and where it is needed. Blockages in that flow lead to problems. This can lead to poor or sluggish decision making. Or worse can lead to misgovernance.

Organisations tend not to think in terms of flow. The focus tends to be the customer, the supplier, the talent, finance and so on.

In many respects this is like Western medicine. You have a problem. The problem area is identified and the treatment is focused on regaining full functionality in the target area. But often the doctor is only treating the symptom of a more serious underlying cause.

With this in mind, I encourage business leaders to adopt a more Traditional Chinese Medicine (TCM) approach. In TCM the focus is on the energy flows around the body. The focus of the doctor is to identify flow blockages and unblock them.

I would argue that many of the issues organisations face today would be resolved if the data, information, knowledge and wisdom flowed freely. This is the job of the Chief Information (Flow) Officer.

Ade McCormack