Hot off the press (okay – well SlideShare magic),  I’ve just posted by Best Practices Conference slide deck for the "speak to your CFO" session, along with the ROI spreadsheet for the PMIS scenario that I used during the demonstration. Like the "wicked problems" slide deck, slideshare conversion isn’t quite there, so just contact me if you want a pptx version.

…and the spreadsheet. Just remember you scary MBA and finance types. I *know* this is a simple sheet and you can pick all sorts of holes in it. It is really for training and guidance purposes only. (Therefore see the obligatory "don’t come crying to me if this gets you into trouble" disclaimer below).

THIS CODE IS PROVIDED UNDER THIS LICENSE ON AN “AS IS” BASIS, WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES THAT THE COVERED CODE IS FREE OF DEFECTS, MERCHANTABLE, FIT FOR A PARTICULAR PURPOSE OR NON-INFRINGING. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE COVERED CODE IS WITH YOU. SHOULD ANY COVERED CODE PROVE DEFECTIVE IN ANY RESPECT, YOU (NOT THE INITIAL DEVELOPER OR ANY OTHER CONTRIBUTOR) ASSUME THE COST OF ANY NECESSARY SERVICING, REPAIR OR CORRECTION. THIS DISCLAIMER OF WARRANTY CONSTITUTES AN ESSENTIAL PART OF THIS LICENSE. NO USE OF ANY COVERED CODE IS AUTHORIZED HEREUNDER EXCEPT UNDER THIS DISCLAIMER

Use at your own risk!

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I have been extremely quiet on the blogging front lately, because I have been extremely busy, splitting my time between working on my two presentations for the up-coming Best Practices SharePoint Conference, as well as wearing my undies on the outside (ala superman), deep in the bowels of some unhealthy SharePoint farms, nailing various technical and governance issues and helping organisations regain some lost assurance. On top of that, I’ve also been doing a lot of non IT related work in a group facilitation discipline.

I thought it’s about time I emerged from this big mushroom I find myself under to let you know more about what I will be speaking about, as well as some of the other speakers and topics that I really looking forward to. Seriously, we are in the company of giants with this conference. The caliber and quality of the speakers has me wondering what the hell I am doing there!

I mean we have all the "A list" big kids of the SharePoint world there. Gary Lapointe is a freakin’ bona fide superstar! – via his STSADM extensions, he has saved the asses of more SharePoint admins and developers than even Joel has. Robert Bogue is an even better all-rounder than Andrew Symonds (sorry non cricketing countries you won’t get that analogy) and touches on a wider variety of topics than anyone else I have ever come across. Then there the likes of Andrew Woodward, Ben Curry, Bob Mixon, Eric Shupps, fellow metalhead Mike Watson, Ruven Gotz and Todd Bleeker just to name a few!

Somehow I have to squeeze in a beer with all of them yet stay sober enough to present. That’s a tough ask!

Anyway, both of my sessions are in the CIO stream and I think are rather topical given the current financial crisis crap that is happening around the world.

My first session is called "How to avoid SharePoint becoming a wicked problem". This is a pet topic of mine – something that I have spent a lot of time on, and developing new skills in (hence the aforementioned facilitation work). For the record, I didn’t make up the term "wicked problem" – its been a subject of academic research since the term was first coined in the early 1970′s. This session is going to cover a lot of what I have learned on this topic including how to spot SharePoint wickedness early, recognise it for what it is, and apply the *right* sort of tools and techniques to mitigate it.

I do worry that people will find some of my stuff a little too left field, but I do have the results to attest to the value and power of these techniques and I am really looking forward to sharing my methods and comparing with what has worked for other presenters and attendees.

The second topic is on the topic of good old SharePoint Return on Investment (ROI). I’m one of these people that believe most things can be measured or quantified. I’ve always wanted to return to my series on "How to Speak to your CFO" and continue down that road. Given we have entered once in a lifetime era of falling profit, plummeting asset prices, reduced budgets, costlier finance and great uncertainty, my quest for bringing a lasting peace to the cold war between managers and geeks moves to San Diego

My aim for this session is to allow non SharePoint people to understand where some of the hidden costs are SharePoint, as well as show SharePoint people the basic financial tools for ROI modelling and secondly, I will explain how to build an ROI decision model and provide a scenario that we will try out some different assumptions with.

As for the rest of the veritable *buffet* of topics – where do you start? First up, I am torn between Bill’s "Aligning your Information and Findability Architectures using SharePoint Server 2007 Technologies" and Yoda Bogue’s "Selling Governance in your Organization". If I go to Bill’s session, then I’ll definitely be attending Robert’s Governing Development in SharePoint session.

In the afternoon, it gets even harder! You have "Transform the My Site into an Information Hub" by Mark Eichenberger, Bob Mixon’s "Learn why Taxonomies are the Most Important Part of any Document or Information Asset Management System, How to Facilitate the Government out of Governance by Virgin Carrol and Nuts and Bolts Governance- Practical Application of the Concepts

.. and that’s just day one!

Seriously people, no matter that sort of SharePoint sub disciplines push your buttons, you are going to get extreme value for money here. You will come away with an amazing amount of material that will result in real and tangible cost savings across various areas of the SharePoint realm.

If you live in California or anywhere in the US – there is no excuse If *I* have to spend 25+ hours cooped up in  plane just to get there and survive the jet-lag to present, then you should come on down and join the fun.

Hope to see you there!

Paul Culmsee

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Oh how times change! I am reading a good book at the moment called "Competing on Analytics – The New Science of Winning" and I hit one particular quote that I have to share with you. It’s one of those statements that makes perfect sense at the time, but is kind of funny when you look at it in the context of recent world events in the financial markets.

…But in other cases, analytics can permanently transform an industry or process. As Money-ball and Liar’s Poker author Michael Lewis points out in talking about investment banking. "the introduction of derivatives and other new financial instruments brought unprecedented levels of complexity and variation to investment firms. The old-school, instinct guys who knew when to buy and when to sell were watching young MBA’s – or worse, PhD’s from MIT – bring an unprecedented level of analysis and brain power to trading. Within 10 years the old guard was gone".

I love that line "analysis and brain power", given the contribution of derivatives to the prospect of a "teensy weensy" global recession. Mind you, how much ‘analytics’ do you think is going into current decisions and company valuations on the stock market?

Where are those old school guys? I want ‘em back!!

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Hi everyone. Some light reading for the weekend

This post is not authored by me (Paul). Instead, my one-and-only darling wife. Apart from being an all-round hottie, she has been studying a post-graduate business course at University. The content of this post is one of her papers that when I read it, found it to be a really excellent piece of work. Her lecturer agreed too – and awarded it a high distinction.

Now the reason that I am posting this to the CleverWorkarounds blog is she really did some serious research, and I ended up reading a lot of the material too. In fact, I used a lot of her reference material when I was writing the global strategy and technology, and "project fail…" series of posts. If you liked that stuff, you may find some stuff here you like also.

So without further adieu, I present to you her paper, examining what skills and competencies that global managers require to operate in an increasingly complex and dynamic global environment. Please let me know what you think of it.

Introduction

Traditional business methods are being made redundant by the surge of globalization. Managers who continue to practice their traditional managerial skills long gained in business schools are finding themselves ineffective in the global environment. Globalisation is a “conceptual situation where political borders become increasingly irrelevant, economic interdependencies are heightened, and national differences due to dissimilarities in societal cultures are central issues of business. The world, with its complex and dynamic forces, becomes a global marketplace for global managers” (Kedia and Mukherji 1999). In such a world only the ones who understand the impact globalisation wreaks and thus adapt accordingly will survive. Thus to be competitive in the global marketplace the traditional managers must transcend and become global managers.

A literature review has been undertaken to identify the global mindset, and the skills and competencies essential to the global managers. From the numerous frameworks, this paper proposes a new framework design consisting of (1) knowledge competencies; (2) interpersonal competencies; and (3) personal competencies. Skills and competencies within these groups are interdependent of each other suggesting that the development of one group cannot exist without the other.

Global Managers

Prior to framing the skills and competencies necessary to becoming effective global managers, it is essential to understand who and what are global managers. There are numerous literature and studies available on this topic and yet there appears to be no consensus towards a unified definition. It is through the roles and functions of the incumbent that competencies are derived from. However, due to the divergence of the definition of the global manager, the roles and functions that set them apart from domestic managers have also not been clearly clarified and agreed upon. The different roles ascribed to the global managers offered by Bartlett and Ghoshal (1994, 77-91) and Caligiuri (2006) are outlined in Table 1. Thus emerges the differing frameworks of competencies of the global manager.

Table 1: Two existing sets of roles ascribed to the global manager

Contrary to popular perception, Bartlett and Ghoshal (1994, 77-91) and Baruch (2002) controversially argue that the universal global manager does not exist. Bartlett and Ghoshal instead identified three groups of specialists (the business managers, the country managers, and the functional managers) with different organisational goals and roles working together in the global market, and being lead and integrated by the corporate managers. The authors accepted that these roles are not practised by the traditional managers. Baruch reports that there are no common traits or qualities that can assist in identifying the global manager. Barush concluded that the mindset, the “right frame of mind” (characterised by, for examples, openness, awareness, and genuine appreciation of culture and customs) coupled with the basic qualities essential to successful managers will enable them to manage successfully abroad. This distinction contradicts their argument of non-existence of the global manager. According to Jokinen (2005) these differentiations do indeed characterise the widely accepted term of the global manager.

Amongst the numerous definitions, global managers are those who “understand different cultures and lead mixed-nationality teams” (Barnevik 2001, xi-xix) and are “able to unleash human potential and leverage the richness that lies in cultural diversity” (Whitfield 2003). They are expected to fulfil critical roles such as integrator, coordinator, innovator, coach, and strategist (Aycan 2001, 119-135). To implement these roles effectively, it is critical for the global managers to possess a global perspective consisting of a global mindset which is supported by certain knowledge and skills (Kedia and Mukherji 1999). These essential skills and competencies will assist in maintaining a competitive advantage thus ensure their continual success in the complex and dynamic global market.

Essential Competencies of a Global Manager

Various frameworks of global competencies exist, as shown in Table 2, however for the purpose of this paper a new framework will be proposed; one that takes the elements of the ‘global perspective’ into consideration. A literature review was undertaken to frame the key competencies deemed essential and specific to global managers. The framework integrates competencies that (i) refer to explicit and tangible information and ability necessary to accomplish a task; (ii) refer to the cognitive and behavioural abilities to utilise knowledge gained to successfully complete the assignment; and (iii) are fundamental personal characteristics that can impact on knowledge and skills development and action. These competencies are categorised into three meta-competency groups: (1) knowledge competencies; (2) interpersonal competencies; and (3) personal competencies.

Table 2: Leadership competencies of global leaders. Examples of some existing frameworks

(The table ‘Leadership Competencies of Global Leaders’ (Parker 2005, 385).

Knowledge competencies

Knowledge competencies are concerned with factual information pertaining to a clear and deep understanding of technology, business, and industry required to complete tasks successfully. They are the basic building blocks for global managers’ journey towards a global perspective (Jokinen, 2005). The competencies in this section include technology savvy, international knowledge, cultural and cross-cultural awareness, business and industry savvy, global risk management, and best practice standards.

Technology savvy

The rapid onslaught of globalisation has been largely due to advances in technology interconnecting companies across the world. Goldsmith, Walt, and Doucet (1999) see technology savvy as a key competency for global managers as it significantly impacts the organisation’s core business. Technology is not only vital for communication, and effective information management, but also greatly impacts the organisation’s production processes. In the fast pace world of technology certain products, processes and services can be outdated very quickly. It is therefore necessary for global managers to not only be able to use technology, information systems and telecommunications effectively but also understand its impact by assessing and analysing the affect it has on the global operations of the firm (Kedia and Mukherji 1999). Technology solutions that may be pertinent to the global managers include Business Intelligence tools such as the SQL Server suite (Analysis Services, Reporting Services) and Oracle; and collaborative tools such as Microsoft Office SharePoint Server, Skype, Microsoft Groove 2007, Google Apps, and instant messaging tools such as MSN Messenger (P. Culmsee, personal communication. May 3, 2008). Solutions such as those listed above may not be required by all managers as it depends on the type of industry they are in, and the organisation itself.

International knowledge

Competency in this field means an understanding of the different socio-political and economic policies governing each country. A global organisation operates world-wide abiding by the rules and regulations that govern that particular nation. Therefore it is essential to clearly understand the structure of these systems, their decision-making processes, and how they impact business operations and those around them (Whitfield 2003). Subject matter such as international finance, international law, and comparative labour relations should be familiar to the global manager (Caligiuri 2006). Knowledge in this field not only assists in penetrating foreign markets distribution networks (Tan, Erramilli, and Liang 2001) and the smooth running of the business but it can be a competitive advantage.

Take Procter & Gamble for example. In the early 1980’s, in their fight for higher margins from the pharmaceutical industry, Indian pharmacists nationwide targeted the company by boycotting Vicks products. Gurcharan Das, CEO of Procter & Gamble’s Indian subsidiary realised that the Vicks products contained all natural herbal ingredients, found in the age-old Sanskrit texts. Products compliant under this Ayurvedic system of medicine in India could be sold in food shops, general stores, and street kiosks. Das proved this compliance to the Delhi government and the local FDA and had the registration changed from Western medicine to Indian medicine. With the new registration, the company was able to expand its distribution channel beyond pharmacies and build a new plant for Vicks, enjoying the tax-advantages and lower labour costs (Das 1994, 197-210).

Cultural and cross-cultural awareness

This pertains to the understanding and appreciation of the country and its society’s norms, beliefs, rites, rituals, symbols, behaviours, motivations and stories. Effective global managers value and manage cultural diversity and consider this diversity an asset not a hindrance (Caligiuri 2006). Nardon and Steers (2008) state that many inter-culture assignments occur on short notice thereby giving managers limited time to learn about that particular culture, and intimate understanding of the cultural diversity may be difficult due to geography. In these circumstances cultural and cross-cultural awareness is learnt “on the fly”. Despite the obstacles, understanding this diversity will be of great benefit to the global managers.

Procter & Gamble will be mentioned again to illustrate this issue in relation to business. Das (1994, 197-210) noticed that the company had trouble selling Vicks Vaporub to Northern India, whereas sales in the South were high. He decided to capitalise on the high market sales in the South instead of attempting to correct the market in the North. The company profited. Das later discovered that the reason for the poor sales in the North was due to the fact that people in this region did not like to rub things on their body. Had Das ignored the market trend and decided to expend resources attempting to impose the product on the North, poor sales figures would likely have continued as products would remain on the shelves.

Business and Industry Savvy

Coupled with technology savvy, business acumen, a thorough understanding of the business and its industry is critical for achieving organisational goals and objectives (Parker 2005). Global managers must intimately comprehend not only the company’s business strategies, products, and resources, but also the structure of its global operations, worldwide market opportunities (Aycan 2001, 119-135; Osland 2001, 137-156) and competitive conditions (Osland 2001, 137-156). Bartlett and Ghoshal’s (1994, 77-91) role of the scanner will be required here to achieve this savvy. They will need to filter, analyse and interpret the scanned knowledge. This knowledge can then be communicated across the organisation and actioned. This breadth of understanding will assist the global manager to recognize as well as anticipate change (Parker 2005), stay on strategy, and find and overcome threats (Kedia and Mukherji 1999).

Global risk management

Parker (2005, 468) quotes Mihaly Simai’s definition of international risk as “important, potential disturbing and destabilising factors or acts originating with, or generated by, various actors on different structural levels, and having spillover consequences for other members of the international community”. Some of these risks include political, currency-exchange, and corruption. Globalisation provides many potential techniques to allow global managers to improve the organisation’s bottom line, from the productivity gains of operating in lower cost countries to the ability to leverage global position in pricing negotiation with suppliers. Due to the nature of their role, the global manager would need to have a higher risk tolerance level to deal with uncertainty in the global market. However, there have been cases where appropriate safeguards have not been taken to assess and minimise risk. An excellent example of the differences in risk management maturity occurred in early 2000 (SCM n.d).

In Albuquerque, New Mexico, a thunderstorm set fire to a factory at a plant producing mobile phone semiconductors resulted in contamination that destroyed millions of mobile phones worth of chips. This plant was owned by Phillips NV, a major supplier to Nokia. In Finland, Nokia’s computer system indicated delay in the arrival of shipments of phone chips from Phillips. Three days after the fire, Phillips notified Nokia about the situation and advised them of the one week delay in the shipment. The fire impacted the production of some 4 million handsets. Nokia required the chips for their new generation of phones. This delay would mean that more than 5% of the company’s annual production might be disrupted during a time of booming phone sales. Strategies were formulated and acted upon. Phillips and Nokia agreed to join forces temporarily to overcome the crisis. Nokia was able to launch their new phones to very satisfied customers on schedule. Ericcson, on the other hand, received the call from Phillips but did not act. They assumed that the one week delay would not affect their business. When they realized the full extent of the problem (three weeks after the fire) it was too late. They could not find suppliers with the available chips for their new generation phones. At the end of 2000, Ericsson reported a loss of US$1.68 billion in the company’s mobile phone division.

Best Practice standards

In a highly competitive global market it is advantageous for the global managers, and thus the organisation, to understand and comply with/implement best practice standards as those involved in business have higher expectations and standards. These standards exist to provide independently verifiable assurance to a variety of stakeholders, assuring these stakeholders that the organisation is performing in accordance with the requirements of these standards. Examples of these are legislative frameworks: SOX and HIPAA (Healthcare) in the USA, and BASEL II (financial risk management) in the European Union; Compliance frameworks such as GAAP (Accounting), COBiT, COSO (control frameworks), ISO9001 (Quality); Frameworks to improve process/visibility such as Six Sigma, LEAN, and Kaizen; Frameworks to improve specific disciplines such as PMBOK and, Prince II (Project Management) (P. Culmsee, personal communication. May 4, 2008).

Managers must also incorporate ethics and corporate social responsibility into their business as part of best practice. This voluntary benchmarking can build trust, demonstrate that they possess integrity and honesty, and can be a competitive advantage as it will enhance reputation. Environmental and social ethics and business were once seen as opposite ends of the business spectrum however, with increasing social awareness and empowerment, society and NGOs are leading the way to ensure that industries are respectful of community and the environment. As businesses increasingly come under fire for their lack of environmental and social ethics, it is safe to conclude that embracing ethics and CRS is good business practice.

Interpersonal competencies

It is not sufficient for global managers to only gain knowledge but also critical for them to possess the appropriate skills to transfer this knowledge into action effectively. Interpersonal competencies are those that relate to the social/relationship interaction or management of others. Competency in this area will lead to fruitful results when dealing with others. These competencies, acculturation, diversity management, leading and motivating a diverse workforce, cultural networking skills, creation and conveyance of a clear vision, and capacity for managing uncertainty and conflict in the global environment, are described below.

Acculturation

“Acculturation is the process whereby the attitudes and/or behaviours of people from one culture are modified as a result of contact with a different culture” (Maxwell n.d.). Awareness of cross-cultural differences is vital but not enough. The challenge for the global managers, after gaining cross-cultural knowledge, is the willingness and ability to embrace and integrate multiple perspectives (Aycan 2001, 119-135) and use it to their advantage. To achieve this they must learn to let go of their own cultural certainty, unquestioned acceptance of basic assumptions, personal frames of references, unexamined life, accustomed role or status, social reinforcement knowledge, accustomed habits and activities, and known routines (Osland 2001, 137-156), accept that differences do matter (but not inferior), be open and receptive to new ideas, ready to accept another perspective (Rifkin 2006) and be able to master both non-verbal and verbal communications (Jokinen 2005) pertinent to the culture. Caligiuri (2006) recommends fluency in language to assist in effective verbal communication.

An example of how acculturation will benefit the global manager can be demonstrated by the understanding of a brief explanation of the Japanese negotiation style (Adachi n.d.). Japan still maintains a hierarchical business structure. Prior to commencing the negotiation, they ascertain their standing/ranking and that of their organisation in respect to others. Their language is indirect, ambiguous and controlled (agreeable) as harmony and the concept of ‘face-saving’ is important to them. The subject matter is talked around rather than being approached directly. Even if they have strong views or oppose someone else’s view, they will avoid offence preferring to skate around the subject so as to maintain the relationship. They value long-term relationship over short-term monetary gain. If an agreement cannot be reached, they are more likely to change the subject or ignore it all together. Information gathering about the other is important and negotiations will not be commenced until they obtain what is needed. A broad agreement is first made from the negotiation, and detailed agreements later.

Diversity management

Managers who perceive diversity as important and have the ability to manage this diversity can leverage these differences for mutual business gains (Whitfield 2003). Managing diversity pertains to the ability to co-ordinate groups of people from differing backgrounds, characterised by culture, gender, age, religion, etc., working effectively and productively together on the same tasks. To manage diversity effectively, the organisation’s culture must value its diversity. For behaviour and thinking to change this value of diversity must be embedded in processes and structures (Parker 2005). With globalisation comes culture diversity. To be successful, it is crucial for global managers to be competent in this skill.

Leading and motivating a diverse workforce

Leadership skills are essential to all managers however the ability to lead and motivate a diverse workforce in the organisation’s global environment is specific to global managers due to the nature and composition of the workforce. Inspire (Kedia and Mukherji 2001). This can be made more difficult task when the “team’ members are located in different parts of the globe. A critical aspect of an effective global leader is to facilitate integration, lead in a manner consistent with the follower’s cultural expectations while simultaneously helping the members develop a set of norms that allow for differences in social-interaction preferences (Stahl 2001, 197-210). To be effect they must inspire others, go against outdated or ineffective practices, build trust amongst the team, delegate, be a mentor, and demonstrate sensitivity and empathy to those they lead (Tubbs and Shultz 2006).

Cultural networking skills

These are ‘relationship management’ skills (Jokinen 2005) created and maintained to further the organisation’s interest within the global environment. Global managers will need to understand the culture for effective networking. Goldsmith, Walt and Doucet (2000) report that the ability to negotiate alliances and manage this complex network of relationships is vital to the success of a global venture. Building a positive long-term relationship with others is critical. Khan (2007) believes that the adage “It doesn’t matter what you know, it’s who you know that matters” holds true in most countries. To further themselves and their organisation Khan suggests that it is necessary for global managers to develop good relations with the “influential and effective people” around the world who will impact the business positively.

Creation and conveyance of a clear vision

Part of the global manager’s role is the accomplishment of organisational objectives through the work of others Those who are able to set and pursue the organisation’s goals will assist in the success for the organisation.Effective managers have the ability to, not only set visions, but they also have the ability to articulate these visions effectively for all to understand. Effective communication of the vision in a global environment transcends all organisational, geographical, and cultural barriers and boundaries (Parker 2005). The bility to manage the change process within the organisation is of utmost importance to succeed in the envisioning of goals. The visions set should be clear,measureable, motivating and pertinent to the organisational goals. There must be accountability and ownership throughout the process, thus employee empowerment is critical. Leadership skills such as building trust, inspiring and motivating others in the achievement of the goals, evaluating others and delegation of responsibilies accordingly also required for the achievement of the vision (Tubbs and Shultz 2006).

Capacity for managing uncertainty and conflict in the global environment

This is an ability to function effectively in unfamiliar constantly changing, complex and paradoxical environment (Kedia and Mukherji 1999) while maintaining patience and composure (Stahl 2001, 197-210) demonstrating a high tolerance for ambiguity. Global managers in this environment feel comfortable/at eased with rapid change and corporate forecasting, and have a greater capacity for overcoming adversity (Tubbs and Shultz 2006). This indicates an appreciation of challenge and an ability to deal with situations and crisis directly rather than displaying an avoidance attitude. In order to achieve this, others skills such as sound verbal and non-verbal communication, for examples active listening, negotiation, interviewing, and non-verbal cues), ability to scan the world for information, and an understanding of diversity and its impact are a necessity.

Personal competencies

The fundamental personal characteristics or traits of a person will not only affect the attainment of knowledge but also how and if the knowledge will be executed. Knowledge and skills alone do not make a global manager. It is the personal traits of the person that will drive the acquisition of the knowledge and affect how the skills are performed.

Self-awareness/Emotional Intelligence

To be self-aware, the global managers would have an astute insight of how they are perceived by others, clear insight of themselves, and a clear insight of their own roles with respect to others in the group (Maznevski and Zander 2001). Self-awarenesss will assist towards the development of emotional intelligence, which is “the subset of social intelligence that involves the ability to monitor one’s own and others’ feelings and emotions, to discriminate among them and to use this information to guide one’s thinking and actions” (Salovey and Mayer, 1990). It is this deep understanding and intuitiveness of self and others that will assist the manager to transform and develop.

Inquisitiveness

The inquisitive mind is one that has an insatiable demand for knowledge. It will assist global managers in seeking information and strive for continuous learning (Parker 2005). The inquisitive mind will question and probe until the best course of actions and results are obtained. Global managers with inquisitive minds are adventurous and will always have up-to-date knowledge and skills to achieve their goals.

Honesty and integrity

Global managers who possess and exhibit honesty and integrity demonstrate respect for their peers, value and accept others for who they are. These managers are keen to build and maintain trust. They place the organisation and others’ interest above their own. They are just and fair and will do what is best for others. Global managers with honesty and integrity will ensure that best practice standards are implemented and maintained. Employees working for them will be empowered (Parker 2005). This trait will assist the global managers to lead and motivate their team. The case below, taken from Parker’s (2005, 387) book, demonstrates the ultimate act of integrity through leading by example and trust building, exemplified by the actions of Norbert Reinhart.

(“Your shift is over” taken from Barbara Parker’s (2005) book Introduction to Globalisation & Business, page 387).

Open-mindedness

Global managers with open minds are less likely to be judgemental and view diversity as inferior. They will be more receptive to new experiences and ideas, and be able to see and accept change more readily (Caligiuri 2006).

Adaptable/flexible

This is the capacity to adjust or vary one’s thoughts and thus behaviour according to the immediate requirements of the condition or situation. An adaptable or flexible mind will assess and analyse the foreign culture, compromise, and then find innovative and creative ways to arrive at a solution (Stahl 2001, 197-210).

Optimism

Optimism is a mindset that looks on the positive side of a given situation. Optimistic managers are forward thinkers, will most likely persevere, learn from their mistakes, and encourage and motivate others to succeed. They themselves will be more motivated and pro-active. This positive outlook will also assist the global managers to cope in unfamiliar and uncertain situations and people (Jokinen 2005).

Empathy

Empathy is a genuine understanding, concern and respect for another’s thoughts, feelings, needs, motives and assumptions and one’s capacity to respond to those factors appropriately. Empathetic managers will consider someone else’s situation, “show appropriate discretion”, and “argues from position of the host country” (Stahl 2001, 197-210). This trait will assist the global managers in their relationship with people worldwide as their listening skills will improve, and are able to appreciate differing viewpoints. This understanding of others will lead to cross-cultural sensitivity and expertise in global human resource management (Jokinen 2005).

Global Mindset

To complete the manager’s global perspective, global managers must possess a global mindset. It is a way of being, described by Rhinesmith (1992) as “a predisposition to see the world in a particular way that sets boundaries and provides explanations for why things are the way they are, while at the same time establishing guidance for ways in which we should behave” acting as a filter.

Rhinesmith sees those with global mindsets to always drive for the bigger, broader picture; accept the balance of contradictions; look towards organisational processes rather than structure when dealing with uncertainty; value and leverage diversity of teamwork and play to their advantage; view change as an opportunity rather than a hindrance; and open to surprises, embracing challenge and uncertainty, and always question the status quo. They are proactive and their thoughts and actions are not limited to boundaries. They have the ability to effectively manage competition, complexity, adaptability, diverse teams, uncertainty, and learning. Rhinesmith also characterises them as having astute knowledge in technology, business and the industry; highly developed conceptual capacity; flexibility to deal with the constant changing global and local market demands; sensitivity to cultural diversity; judgement in making risky decisions with little information; and the capacity for reflection in seeking continuous improvement.

Conclusion

Despite the abundance of literature on the global manager there is still a lack of unity in defining the global manager. Due to this deficiency for a clear and precise definition, the exact roles of the global manager have also not been defined. This has resulted in the existence of various frameworks of the competencies of the global manager. Some of these frameworks, for example Tubbs and Shultz’ (2006) taxonomy of competencies in global leadership, include skills and competencies that are too broad, and not specific and pertinent only to the global manager.

It is recognised that the standard managerial skills and competencies are also required by the global manager. However there are certain competencies that only the global manager would require to be effective. This proposed framework, the essential competencies of a global manager, outlined in Table 3 below, contains competencies that are unique to the global manager. They are crucial to the function of the global manager in the global environment. The design of the framework is important. It implies that all the competencies outlined are interdependent of each other. One set of competencies cannot be achieved without possessing the others and no one competency has greater weight than the other.

Table 3: Framework of the essential competencies of the global manager

By understanding the global perspective required of global managers to function successfully in the global market, the Human Resource Department can work towards the development of this perspective in their managers. Programs such as Diversity/cross-cultural awareness training, diversity management, emotional intelligence training, and understanding the global market can assist the domestic managers to understand different perspectives. HR plays a very important role in the development of skills and competencies necessary for global managers.

References

Adachi, Y. 1997. Business negotiations between the Americans and the Japanese. www.mgmt.purdue.edu/centers/ciber/publications/gbl/GBL%20-%201997/2a.2%20Adachi%20Yumi.doc (accessed May 4, 2008).

Aycan, Z. 2001. Expatriation: A critical step toward developing global leaders. In Developing Global Business Leaders: Policies, Processes, and Innovations, eds M. Mendenhall, T.M.Kuhlmann and G.K. Stahl, 119-135.London: Greenwood Publishing Group.

Barnevik, P. 2001. Preface. In Harvard Business Review Global Strategies: Insights from the world’s leading thinkers, eds P. Barnevik and R.M. Kanter. Boston: Harvard Business School Publishing.

Bartlett, C., and S. Ghoshal. 1994. What is a global manager? In Harvard Business Review Global Strategies: Insights from the world’s leading thinkers, eds P. Barnevik and R.M. Kanter, 77-91. Boston: Harvard Business School Publishing.

Baruch, Y. 2002. No such thing as a global manager. Business Horizons 41(1):36-42. Business Source Premier. http://opac.library.curtin.edu.au (accessed March 28, 2008).

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Hi all

Welcome to the 7th post on this series delving into the murky depths of SharePoint project failure. I’m sure that even if you haven’t used SharePoint, or been involved in a SharePoint project, most will have experiences of being sore and sorry from a project gone bad and the content presented in this series thus far has been somewhat familiar.

Speaking of sore and sorry, I am writing this post days after buying the kids a Nintendo Wii. I’m not a geek-toy kind of guy, so I’m usually a little behind when it comes to consumer gadgets, but what a brilliant product it is. I am completely addicted to Wii Sports (especially the tennis and baseball), but after two days, I am feeling muscle ache like I have never felt before. I can barely move!

So I’d better stop playing that damn game and get back to business. In the unlikely event that you are hitting article seven for the first time, I suggest you go back and read this series from the start. You will learn all about tequila slammers, why Microsoft is like Britney Spears, Bill Gates selling SharePoint to Sergei Brin and the wonderful land of chocolate where projects never fail.

More recently, we targeted the infrastructure and development geeks in posts five and six. Now it’s time to cast our lens over the guys who control the budgets and get paid way more than you and I. So of course it is the project sponsor and senior management in general

This post will definitely come across as the most idealistically naive of the series and will drift away from SharePoint again and back to people and personalities. To write from a position of authority about the management contribution to project failure, one has to have been in the management role. Given that I have never been the CEO of an organisation larger than two people, I thought I’d better call in an old friend to help me on this one – but I’ll get to that later:-)  

Ideally, this should be the last post in this series, because looking at project failure from a senior management and organisational strategy point of view is where the buck stops really. But alas, based on some of the fantastic feedback from readers around the world, I think there will be at least one more before I am finally spent

Senior Managers: Can’t live with them, can’t live with them…

Let’s get all the cheap-shots in early – I am a product of the senior managers who I have worked with, so I am interested in how close my observations are to yours.

Managers eh? Are coffee, redbull and tequila shots enough? Hell no! How about stress balls and voodoo dolls? I don’t think so. In fact the only effective cure I personally have ever known for bad managers is panadeine forte and if that fails, changing jobs. I say this because I can attribute pretty much every stress-related headache I’ve ever had, partly to someone with the word "…manager" in their job title.

In general the higher up you go in an organisation, the lower the computer literacy gets. But paradoxically the size and cost of their barely used laptop goes up proportionately also. Once you are at CEO and board level, you have lost so much tech savvy that even the photocopier is a bit of a challenge. Sending a fax? Forget it – that’s what personal assistants are for, right?

But the laptop/toy thing… Senior Managers are like peacocks in the golden wing lounge of an airline. The unspoken battle of who has the smallest laptop and fanciest corporate toys goes on in earnest, despite most of them not being able to explain anything more than how much they weigh…

At this point I feel its only fair to give readers the CEO view. So I hand the reins of this article to a former CEO of mine who I have a great deal of respect for. I was in at the very beginning of one of his businesses (first employee), and I feel much wiser for the experience. On top of 10 years in Silicon Valley, he has successfully started and sold three businesses, been a senior manager at a Fortune 500 company in the USA, has an MBA and is a graduate of the Harvard Business School Executive Education Program.

Taking a 30,000 foot view from a CEO or Senior Management level into IT or SharePoint project failures probably highlights some of the criticisms of management losing their technical knowledge or technical literacy as they progress further up the management hierarchy.

Running a business, division, group or function within an organization requires a completely different perspective than implementing a technology or making a technical decision.

As a senior manager your job is about building consensus around the business strategy and implementing strategy within your group or division. Whether the strategy is created by you or more likely driven by a board, shareholders, competitors or management more senior to you, a manager needs to consider the business requirements and strategic goals first not the technology choices available. Even for a CIO or CTO.

I mean if the business doesn’t hit its cost, revenue or profit targets, eventually we are all in the same line at social security.

I personally focus very little time on what technology is implemented. That’s what I hire smart managers for and what they hire smart techs to determine.

If they cannot do this job for me, then there are plenty of other jobs around for them to do…outside this company!

Nothing is more annoying and frustrating early in a project life cycle than when a CRM or ERP or Enterprise Content Management (ECM) project is communicated to me as a Microsoft SharePoint, SAP or Oracle project even before the full requirements for the project are determined.

Do you actually have a clue as to what we want to achieve with this project from a business perspective?

Ensuring the business requirements of the project are clearly defined, consensus and agreement amongst stakeholders is realized and clearly communicating the process changes the new systems will create are what I see as key requirements for a successful project and key requirements for making the correct technology decisions.

Do most techs care about this or are they more interested in padding their Resume with more qualifications? Do manager’s focus on best practices or are they convinced by great advertising and corporate lunches (read articles on consumer buying behaviour)? Does the organization have an incentive structure in place that adequately rewards project, therefore business successes, and punishes the opposite?

It’s not as simple as what technology is best. If that was the case, I wouldn’t be constantly hearing about IT projects taking twice as long to complete or costing twice as much as budgeted or not delivering the benefits expected.

There! The big boss has told it like it is! Note that my learnered CEO friend mentioned "building consensus around strategy".

If you would like know more about the skills and competencies required for a truly effective global manager, check this post. For the rest of us, let’s examine strategy some more…

Organisational Strategy (and Nintendo Wii)

If I ask you to tell me your organisation’s strategy, can you answer it off the top of your head? Now be careful here, if your answer was something like "we sell Britney Spears CD’s" you have misinterpreted my question. I’m not asking you what your organisation does, I’m asking for your organisation’s strategy. (And clearly, selling Britney Spears CD’s is probably not a smart long-term strategy).

I’m sorry it seems I can’t write a SharePoint post without making Britney Spears jokes! I can’t help it – its a compulsion! Mind you, if you’re a Britney fan, you should be used to it by now anyway

Do you want an example to make the "strategy" question clearer? Then you need to go no further than the very console game that is hurting my arm as I write this – the Nintendo Wii.

Before the Wii came out, Sony’s PS2 reigned supreme, selling some hundred-million-billion units. Microsoft had thrown its hat into the ring with the XBox with moderate success (mind you, is a 4 billion dollar loss a success?) and Nintendo was there in 3rd place with the GameCube. Microsoft then released XBox 360, packed with more power and graphic capabilities, directly targeting Sony’s dominance. Sony meanwhile released the PS3, also crammed with more ‘grunt’, building on the formula that made the Playstation brand so successful. Both Microsoft and Sony were playing the "mine is bigger than yours" game, upping the ante in terms of processing power, graphics engines and the like. But the basic formula of a game console was unchanged.

What did Nintendo do? After the relatively flat sales of the GameCube, they could have abandoned their ‘cutesy’ heritage and attempted to play the same "pissing in the wind" game with Sony/Microsoft and had Mario and Luigi "poppin a cap in yo ass" in "Grand Theft Auto" style.

Can you picture that? (It’s clear someone did – just doesn’t work does it?)

(Broken image alert – sucks to be you if your organisation blocks youtube)

So what was Nintendo’s strategy? They shunned graphics, power and went solely for *fun*. "So?", you say, "The GameCube and N64 did the same thing and were a poor cousin to the Playstation in terms of sales". But they added an extra gameplay element – the WiiRemote – a whole new gaming experience.

The result is that the Wii has completely smashed Sony’s PS3 and Microsoft’s XBox 360. It has now shipped some 25 million units since its release. Furthermore, if you don’t shop early on the day stock arrives, then forget about getting your hands on one of the consoles! – at least in Australia.

PS3 has gone from top seller to third place. The XBox360 has been a solid improvement by Microsoft, but it’s clear they were too caught up in the strategy of out-playstationing the Playstation. Wii basically snuck up under everybody’s nose and have completely stolen the show.

…and I bought one too.

So there you have it. Strategy 101 – Nintendo Wii

Organisational Strategy and Communicating It

So assuming a SharePoint project (or any other project for that matter) goes bad, how much blame should be lumped at management? You of course have to be careful here, blaming "management" might be a great way to let off steam, but sometimes it is easy to be misinformed. If you simply see "management" as a bunch of suits, up there in their ivory tower, getting paid way too much, chances are you are misinformed to some level. (Please note that at no point am I advocating *not* indulging in manager-bashing as it is as cathartic as bashing Microsoft)

But ask an ex-Enron employee whether management are to blame for all the world’s evils and I would argue that they are extremely well informed.

So, what have we learned from the Nintendo Wii strategy example? A well crafted and well executed strategy can have a dramatic effect on an organisation’s success – and therefore their bottom line. But it is clear that a good strategy can be derailed by poor execution. Let’s now look at the execution of strategy in more detail.

Muddling through Misinformation…

The fact is that we are all misinformed in our way, even the boss. We can’t know *everything*, and thus we need to rely on the combination of life skills and experiences of participants.

But an organisation with poor management likely results in much higher level of misinformed staff than a well managed organisation. So what is the difference between a well managed and poorly managed organisation? Whilst the differences are well beyond the scope of this post, it is fair to say that to stay consistently successful for a long period of time, the crafting and execution of strategy is a massive factor.

A critical part of executing strategy is making sure that all of your employees are on-board, owning and evangelising the strategy.

Is this easy? Hell no, but it has been done many times and there are actually plenty of good examples. Most products that are household names are beneficiaries of well executed strategy. But for a particularly interesting case, go and research into the turnaround of carpet company, Interface Inc if you feel like doing homework.

I have stressed a few times in this series, that wicked problems are often characterised by people having differing interpretations of the problem to solve. A well thought out, but poorly communicated strategy can have a devastating effect on this. The most wicked problem that I ever worked on, was at a company where I really had no idea of what the strategy was. Nor did the stakeholders, because not only were they not able to agree on requirements and scope, they were actively engaged in turf-wars and mini fiefdoms.

For what its worth, if you think I’m just a jaded ex-employee, then I should point out that the share price of this company has badly under performed against its competitors and the broader market over the last few years as well. If you subscribe to the view that long-term shareholder returns is the ultimate scorecard for directors and senior management, then that fact should offer insight into why several large projects were not a success there.

Between writing part 4 and part 5 of this series, I was reading a book on the strategies of successful global managers. It is called Global Strategies: Insights from the World’s Leading Thinkers (The Harvard Business Review Book Series). After reading it, I felt an irrepressible urge to write about it, as I knew it was related to the overall "theme" of this project failure series, but I couldn’t quite see where it would fit at that time. So I wrote an interlude, looking at where technology in general fits into global strategy.

If you check that interlude post, I made a case of Whirlpool’s performance through the 90′s. One of the most interesting things about Whilrpool’s example was that the CEO, David Whitwam went to great lengths to communicate the corporate strategy.

If you’re going to ask people to work together in pursuing global ends across organisational and geographic boundaries, you have to give them a vision of what they’re striving to achieve, as well as a unifying philosophy to guide their efforts.

That’s why we worked so hard at Whirlpool to define and communicate our vision.

The pivotal thing that Whitwam did however was teach financial metrics to all employees. Specifically, return-on-equity. (No I am not going to explain return on equity in this post – maybe a future "Learn to Speak to Your CFO" style series.). Below is a quote from Whitwam, specifically talking about this.

… Other programs … pay people – from top management to those on the factory floor – on the basis of return-on-equity (ROE) or return-on-net-asset (RONA) goals. Employees at Whirlpool all understand what ROE and RONA mean, what drives those measurements, and how they’re linked to shareholder value

I was impressed at this because the "learn to speak to your CFO" series was aimed squarely at nerds (and IT Managers for that matter), who seem incapable of looking at IT decisions based on a measurable financial metric. It’s all well and good to talk about TCO but you know there actually is that the middle letter that acronym is called COST! The thing about cost is if it can’t be quantified in some way, then how the hell are you supposed to know if you have improved things? It’s a slow drift back to the whole "choose the product before working out the problem to solve" issue talked about in part 3.

The brilliance of the Whirlpool strategy – teaching and communicating the metrics by which the organisation is judged and linking it to pay/performance incentives has many positive effects. One of which is now when a potentially wicked problem is being tackled, stakeholders are at the very least, arguing their interpretation of the truth based on a commonly defined metric!.

So rather than the people arguing a course of action because they think it’s the "right way", they are now forced to argue their action in terms of a tangible return on investment measure. This has a distinct and subtle effect on decision making also. Now people start to think about the organisation as owners!

Ah – an energised staff who have a strong sense of ownership in the organisation! Such a corporate culture can yield tremendous benefits beyond delivering a good project. Google is a great case in point.

Corporate Culture and Project Failure

Corporate culture is a direct result of the attitude and values of an organisation. Management have a huge influence on this and in fact it is incumbent on them to influence and direct corporate culture to as part of executing organisational strategy.

I would argue that a weak corporate culture has a big impact on organisational maturity, which in turn affects morale, which in turn directly affects project success. The bigger the project, the greater chance of failure.

Here’s a short 10 question test to assess your corporate culture

• Are Herculean tasks are the norm? Do jobs get done via someone taking "above and beyond" to a stratospheric level?
• Is the above "doing the impossible" attitude encouraged or expected?
• Do staff complain that "no-one follows process" and play the people blame game?
• Does the organisation seem to make the same mistakes over and over?
• Are people timid when it comes to taking on responsibility due to the aforementioned blame game?
• Is corporate information shared along "turf" lines? Is there an "us" and "them" mentality in relation to other departments or offices?
• Are there customer or supplier complaints?
• Do your BDM’s promise things that defy the laws of physics?
• Are there lots of knee jerk reactions to issues or problems?
• Is the organisation suffering from employee absenteeism and turnover?

If this sort of thing is rampant at your organisation, and it has been for some time, then I believe that it is really a failure on the part of senior management to cultivate a organisation culture conducive to project success. The more you relate to the above list, the more you are set-up to fail.

Conclusion – Manager Bashing

So I conclude part 7 by partaking in the very thing that I earlier suggested was being misinformed.

It is all senior management’s fault! Those up-themselves "suits", up there in their ivory tower, getting paid stupid amounts of money while us little guys get screwed over working 80 hour weeks for not enough money! Someone should do something!

On a serious note however, senior management and boards have to accept that they often need to do more to articulate and execute their strategy in a way that engages with staff, and instils a strong sense of ownership. Failure to do this sets up many projects for failure before they even begin.

(I told you this post would be idealistic!)

Thanks for reading

Epilogue

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My wife is studying a business course at university and I have been reading some of her reference books. One book was particularly good and really got me thinking about technology’s contribution to global organisations and how at this scale, most problems likely have a large degree of wickedness.

This edited book is called Global Strategies: Insights from the World’s Leading Thinkers (The Harvard Business Review Book Series), and it is well worth reading – even for you technical geeks.

What it does is look at the strategy, and execution of strategy, that has led some organisations to make the transition from regional to global success story at the expense of their competitors. We are talking corporations with tens of thousands of employees here too, and the CEO perspective really hits home to you – the sheer *mammoth scale* of it all.

Trying to change a culture at an organisation of 20 employees can be an insurmountable challenge. Try 45,000 employees across 15 subsidiaries in 10 different countries. (Makes a SharePoint rollout seem like a walk in the park.)

Two chapters of the book that really struck me, were “The Right Way to go Global: An Interview with David Whitwam”, and “Local Memoirs of a Global Manager”. After I read them, I tried to think about the impact technology would have on helping them with their strategy – more on that in a moment.

Also, in reading this book, it made me cringe when I remember what I used to be like, as a younger idealistic twenty something with a huge passion for technology, but utterly nil business acumen.

I was an anal-retentive security and infrastructure specialist trying to impose order on the typical chaos that is a typical IT environment, large and small. But in defence of this attitude, I think it was more that I was trying to find better ways to help the organisation in the only way I knew how to – try and tame the technology.

So nowadays I look at the sheer passion behind proponents of various dogmatic technology wars like Windows vs *nix, Java vs .Net, C# vs VB, Security at all costs, SharePoint vs ?,  and smile in a kind of way that I’m sure that more experienced people smiled at me back then. This sort of passion that if harnessed can be used for tremendously positive outcomes, if you can get past the initial *naivety* to technology’s place in it all.

David Whitwam and Whirlpool

David Whitwam was the CEO of Whirlpool Corporation from 1987 to 2004, the white goods manufacturer. In this 1994 interview, he outlined some of the strategies he embarked on to catapult Whirlpool into the global market. 

In 1987 Whirlpool was facing margin pressures in the mature North American white goods market. In 1989 Whirlpool purchased the under-performing NV Phillips appliance business in Europe, that was facing similar pressures. Rather than immediately cut costs and change operations, Whitwam implemented a strategy to create a “unified, customer focused organisation capable of using its combined talents to achieve breakthrough performance in markets around the world“. Below are some of his reasons as to why they took their chosen course of action.

Most international manufacturers aren’t truly global. They’re what I call ‘flag planters’. They may have acquired or established businesses all over the world, but their regional or national divisions still operate as autonomous entities

Let me use the washing machine as an example. Washing technology is washing technology. But our German products are feature-rich and thus considered to be higher-end. The products that come out of Italy run at lower RPM’s and are less costly. Still, the reality is that the insides of machines do not vary a great deal. Both the German and Italian washing machines can be standardised and simplified by reducing the number of parts, which is true of any product family. Yet when we bought Phillips, the washing machines made in the Italian and German facilities didn’t have one screw in common. Today products are being designed to ensure that a wide variety of products can be built on the same basic platform

Duh! Makes perfect sense doesn’t it.  Phillips manufacturing costs cannot compete in terms of economies of scale on account of no re-use between divisions. There are so many costly consequences to this problem to mention. But this wouldn’t take too much effort to model on the immediate cost savings to be had with the ‘platform’ strategy implemented. Well executed, the sort of competitive advantage that could be derived is significant.

Now let’s think about the issues at the Philips plants again. When you think about the sort of technology that facilitates the execution of the strategy to standardise, what would we need? Of course, it would be nice if we all used the same tools, all shared the same data, all had access to the most up to date information at the right time.  But the reality is that at this point, it is far too early to deal with the technological aspects. Let’s see why…

Now I don’t know about you, but I have worked in companies where sub-divisions of the one company were so autonomous that communication and co-operation was very poor. The “us and them” mentality was very prevalent indeed. As a result of this technology ‘maturity’ was inconsistent, with rampant vendor, functionality and interoperability overlap. But it went deeper than that – suspicion and mistrust manifests itself across an organisation at many levels.

On an even more micro scale, take that example of the two Philips factories and think about it in terms of your own IT department workplace within your division. How many little turf wars are there being played out on a micro scale on a daily basis. Do you have your Apple fanboi who is intent on getting rid of all those crappy Windoze PC’s? Do you have a conspiracy theorist security “nazi” who insists that your Antartica office MUST have 802.1x security implemented at all costs? Do half the programmers hate .NET and the other half hate Java? Does your Packeteer and RiverBed fanbois think each-other are idiots?

Now focus back out at an international, multi-organisational level. Go from one IT department, to in the case of Whirlpool and Phillips, the triple whammy of regional, cultural and dual corporate walls to break down across many disciplines – not just IT. So that is a whole stratospheric level of hurt to turn around…

If you’re going to ask people to work together in pursuing global ends across organisational and geographic boundaries, you have to give them a vision of what they’re striving to achieve, as well as a unifying philosophy to guide their efforts.

That’s why we worked so hard at Whirlpool to define and communicate our vision.

Okay, so we have top level commitment – tick that box. This is standard recommendation fodder in pretty much *every* best practice methodology that exists out there. Pity it doesn’t happen often enough but for Whirlpool it has and that’s great.

So what about selling that vision to the organisation? Where is the resistance and how to you break through it?

Top level managers often incorrectly assume that since consumers differ from location to location, their businesses can’t operate effectively as a unified entity. … And you have to remember that we were planning to build a global enterprise, not a US army of occupation. If you try and gain control over an organisation by simply subjugating it with your preconceptions, you can expect to pay for your short-term profits with long-term resentment and resistance …

This is interesting because it is counter to the way IT departments tend to conduct themselves. When a company merges, the big fight begins between IT departments on whose technology ‘wins’. But why are IT departments even fighting this battle? It’s not even their call! The question they should be asking the executive is “What is the vision and philosophy we are striving for? How can we help the organisation achieve this? Are we even ready to deal with the technology issues?”

When we first took engineers and manufacturing people from the US to Europe to go through the plants, they would spend all their time walking around and saying to themselves, “We do all of these things better at home.” The Europeans who toured the US facilities had the same parochial attitude. Neither group spent any time looking at what it could learn from the other.

There are numerous companies and many improvement experts that talk of satisfying internal customers. At Whirlpool, we once did the same, but we currently believe that internal customers do not exist. … Companies that believe they have internal customers … lose sight of what they’re trying to accomplish as an organisation.

Unfortunately in the interview Whitwam talks of strategy to overcome these barriers, but does not quantify how long it took. In fact he stated that he did not believe that Whirlpool were ‘there’ yet and were not yet a truly global organisation. This is despite the fact that revenue increased a little over 4 billion in 1988 to over $7 billion in 1992.

Of all of the strategies that he outlines to align people and break down these barriers (too many to mention), there was one quote in particular that I loved.

… Other programs … pay people – from top management to those on the factory floor – on the basis of return-on-equity (ROE) or return-on-net-asset (RONA) goals. Employees at Whirlpool all understand what ROE and RONA mean, what drives those measurements, and how they’re linked to shareholder value

This quote for me, is very important, and really was what inspired me to write the SharePoint ROI series. It gets to the essence of why senior managers really couldn’t give a toss about why, say, Linux is more or less secure than Windows or why SharePoint is better or worse than Google Apps, or why their security guy gets so uptight about them using Blackberry’s. They are answerable to shareholders and they are measured by the performance of the company in terms of profitability and growth. Profitability and growth is much more about the alignment of people to a common goal than it is about picking a particular technology. If you can achieve the alignment of a global organisation to the execution of your strategy, then the technology side of things will take care of itself.

So here is a company, actively teaching its workforce to think like a CFO, to make decisions and look at problems with the view of its potential to impact the bottom line. This type of education has two other added bonuses too. As I mentioned in my post about Selling SharePoint, if you can’t describe a problem in terms of a quantifiable problem, how can you measure if you have solved the problem? By having a continued focus on the performance goals of the company, you can tackle the solution to problems in terms of how much they will improve that bottom line.

And finally, the workforce might gain a few skills in their budgeting at home

Gurcharan Das

So now we take another tack and look at a slightly different perspective and talk about Vicks Vaporub – the stuff you rub on your chest and soles of your feet when you have a cold.  Vicks is owned by Procter & Gamble, and Gurcharan Das ended up as the CEO of Procter & Gamble India, and later Managing Director, Procter & Gamble Worldwide in Strategic Planning.

Now Vicks is a global brand, sold all over the world. But this story is one of knowing your local market, and I think a good case study on global companies, strategy and technology.

But this story is earlier than that and tells of when Das was product manager for Vicks in India. He noticed that sales were particularly strong in the South, but poor in the North. He had the choice of pouring more marketing resources into the poorly performing North, or invest those resources into further developing the South. He chose the latter, and it was the right choice. As it happened, North Indians didn’t like to rub things onto their bodies. In the South, people were accustomed to rubbing all sorts of balms onto their bodies for aches, pains or whatever else.

…yet the more important lesson was that it is usually better to build on your strength than try to correct a weakness. Listen and react to the market. Resist the temptation to impose your will on it.

Also when Das took over Vicks, the marketing was run in the same manner as North America. The bulk of the advertising was in winter, yet sales data showed that in India, significant sales occurred in the monsoon season – summer. Das brought forward his marketing to these warmer months and was rewarded by an immediate sales gain. Further capitalising on this notion, Das invented a brand new ailment for Vicks to treat – “the wet monsoon cold” – clever

Now this is good, clever local business strategy, but this next move for me was a stroke of utter genius. In the mid 1980′s the company was in a stand off against chemists and pharmacists who had boycotted sale of Vicks and other products in a fight for higher margins from the pharmaceuticals companies. Das realised that the ingredients of Vicks were all natural, herbal formulas.

All their ingredients were found in thousand year old Sanskrit text. What was more, the ancient Ayurvedic system of medicine enjoyed special patronage of the government. If we could change our government registration from Western medicine to Indian medicine, we could expand our distribution to food stores, general stores, and street kiosks and thus reduce dependence on the pharmacists … what was more, a new registration would allow us to set up a new plant for Vicks in a tax-advantaged “backward area,” where we could raise productivity dramatically by means of improved technology, better work practices, and lower labor costs.

This turned out to be a master stroke, and highlights the importance of local focus in the success of products in a global market. Das makes the point though, that he is not suggesting that managing a global brand is a completely localised process.

Multinational companies have a natural advantage over local companies because they have talented people solving similar problems for identical brands in different parts of the world, and these brand managers can learn from each other’s successes and failures. If a good idea emerges from Egypt, a smart brand manager in Malaysia or Venezuela will at least give it a test.

Managerial basics are the same everywhere, in the West and in the Third World. there is a popular misconception among managers that you need to push a powerful brand name with a standard product, package, and advertising in order to conquer global markets, but actually the key to success is a tremendous amount of local passion for the brand and a feeling of local pride and ownership.

Das made one other comment that I liked too.

The irony is that all the money a company makes is made outside the the company (at the point of sale)., yet the employees spend their time inside the company, usually arguing over turf.  Unfortunately, we don’t see customers around us when we show up for work in the mornings.

When I became CEO I made a rule that every employee in every department had to go out every year and meet 20 consumers and 20 retailers in order to qualify for their annual raise. This not only helps to remind us who pays our salaries, we also get a payoff in good ideas to improve our products and services

And Technology?

In reading this book, you can see that those companies who have succeeded have combined global ideas in terms of standardisation, simplification and economies of scale with a sharp local focus on what the consumer wants in each region. This puts me in a conundrum. For it to succeed, technology to support this has to both be standard, yet completely localised.

IT departments are generally not a profit centre and in general, are fairly far removed from the end customer. Thus it is unsurprising, in my experience, that most tend to act in a way that Whitwam described  “a US army of occupation”. A recent example for me was a worldwide company who insisted that Outlook Web Access (webmail) should not be allowed at all for un-quantified “security reasons”. The time zone difference between Australia and Africa (the two locations with the largest staff presence) were such that there was barely any time overlap from when the Australian office closed and when the African offices started for the day. Since staff could not log in to webmail when at home, many decisions took much longer to be made, because the average email took a day to get a reply.

Consider a competitor who can get decisions made, actions agreed upon without this day’s lag? Who is going to be more efficient and nimble in the marketplace? Which company is better placed to learn from the experiences of each-other?

At a macro level, there will always be a need for some technology to be the same. For Whirlpool, to base their product range on a common platform aimed at the reduction of costs of bringing new products to market, require good technology to go with the willpower and vision. But as illustrated with Vicks, to service a local customer, with different needs to customers in other areas, some flexibility is required to this over-arching attitude.

Vision always comes first. Selling the vision to the organisation and aligning staff to it comes second and then, technology to facilitate the execution of the vision comes third.

I think that a lot of IT organisational problems stem from either failure of setting a clear vision or failure in articulating and selling of that vision to staff. I think that the closer you get to the customer (point of sale), the more flexibility is needed in your application of technology. Back in the bowels and engine room of the company consistency of technology and process is very important.

Ultimate arbitration on whatever your leaning is bottom line, right now and into the future.

And SharePoint? (and why SharePoint can fail?)

SharePoint (and products like it) of course are tools that facilitate information sharing among a group of people via a variety of great features. The irony is (and this has been explored in the posts on wicked problems), that it requires a lot of planning, due to the architecture of the product in particular, the broad nature of how it can be used, and the way the product requires practitioners to think in *advance* of how to classify, segregate and divide up information, as well as staff to un-learn practices that they have been performing a certain way for years.

But without a shared understanding of the vision and strategy of an organisation to achieve that vision, SharePoint can exacerbate the problem of silos, turf wars and staff not working in a coordinated fashion to achieve the strategic organisational goals. Whitwam went against the grain of conventional process improvement theory when he stated that that internal customers did not exist at Whirlpool. “Companies that believe they have internal customers lose sight of what they’re trying to accomplish as an organisation”.

So you may have gotten to here and you are still wondering what the hell is the point of this post? Well thanks for sticking with me – I am finally there

In my last post, I talked about “organisational maturity“, in relation to how SharePoint projects can be doomed to fail from the start. I never really provided a definition for organisational maturity other than “awareness and pragmatic adoption of best practice methodologies”. In reading this book I realise that it goes much deeper than that, right back to organisational vision, formulation of strategy, buy-in of that strategy globally and quality of execution of that strategy.

At the start of this post I mentioned that if you could channel the sort of passion that IT professionals have in technology, inspire them into thinking beyond the technology and incorporate them better into global strategy, that is going a long way towards improving “organisational maturity” and therefore better equipped to handle problems that could easily become “wicked”.

Thanks for reading

Paul

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This third post in the “Who do SharePoint Projects Fail” series has been hard to write, not because I am struggling with ideas, but because I have too many! It is hard to put all the reasons why SharePoint projects go wrong into a coherent chain of logic.

In the first two posts in this series, we did a basic examination of wicked problem theory.

Part 1 introduced you to tequila slammers, as well as the pioneering work by Horst Rittel and the concept of wicked problems.

Part 2 also delved into the murky depths of academic history to demonstrate that even back in the seventies when ABBA stole the hearts and minds of teenyboppers around the world, at least some people had time to look at wicked problems in relation to building IT systems.

If you take away anything from part 1 and 2, it is this.

• Too many tequila slammers hurt
• Before you blame the product, the project manager, the stakeholders, the nerds, the methodology or anything else in vicinity, go back to the problem you are solving and determine its ‘wickedness’

Now we will finally look at this large, complex, scary beast known as SharePoint. I have no means to quantify how much of a percentage of project problems arise from issues related to “the product”, but it definitely happens. Unsurprisingly enough, it is easy to argue that some of the areas that I highlight below are people issues, but we still get to indulge in Microsoft bashing – and who doesn’t enjoy a bit of that eh?

The Microsoft Effect – Good enough…

Microsoft in some ways remind me of Brittany Spears*. Both crash things, both can be abusive, both get themselves into trouble with the law, both have ignored legal judgements, both have loyal fans who love them no matter what and detractors that will never accept they can do anything right, both get caught with their pants down on occasion, and both have produced some pretty ordinary crap in their time. Despite this, they sell squillions of copies and make a ton of money.

*Just in case you read this article at some future point where Brittany is long forgotten, substitute whichever starlet is in rehab

But Microsoft is *big*, Microsoft are *safe*. We already use Microsoft in the organisation now and thus Microsoft products *integrate well*.

So what is it about SharePoint that makes it such a magnet for a wicked project? Put quite simply, with SharePoint they have taken integration to another level. Microsoft have done their homework and created a product/platform that has a combination of the right kind of capabilities that *together* can be extremely compelling. Each component, judged individually as a point solution would not necessarily compete against dedicated products in the space. But Microsoft long ago learned that a combination of tight integration and the old 80/20 rule usually wins.

There have been document management systems and web content management for years. I’ve previously been involved with a large Hummingbird deployment. As soon as I saw MOSS 2007 I know it was going to massive, not because it was as good as Hummingbird, because it wasn’t. But it was *good enough* and it was made by Microsoft. Market success therefore was assured.

Easy to Impress – A Mythical Example

To demonstrate how effective this combination of features can be as a sales tool, consider this mythical conversation between a somewhat green, yet enthusiastic Microsoft evangelist named Bill Gates, who is discussing MOSS with key stakeholders at the company GOOSUNACLE. Their names are Scott McNealy, Sergei Brin, Steve Jobs and Larry Ellison.

(1 point for each in-joke you spot)

Scott McNealy (Infrastructure Manager): Okay Bill, here’s our key problem. We can’t find anything and our knowledge sharing is abysmal. We waste so much time trying to work out where stuff should be, and nobody follows the standards. People reinvent the wheel constantly and we keep making the same mistakes over and over again. Our file system really sucks with so much duplication and complexity. It has so much history there, that nobody wants to own it or fix it up. This has cost us market share and our bottom line is suffering. What can you do to help?

Bill Gates: Well Scotty, (do you mind if I call you Scotty?), I am glad you asked. SharePoint represents a new way to manage your enterprise documents. It can help you with built in version control, check-in/out, metadata classification and a recycle bin. Additionally, it is web based, making it much more accessible to your staff. It is also tightly integrated with Microsoft Office, particularly the 2007 version. We also have document format conversion features and records management too.

Sergei Brin (Knowledge Manager) : “Sweet!. Kind of makes the whole notion of a separate intranet and file system start to look ‘old school’. What about search? I feel very strongly that a good search engine is worth its weight in gold.

Bill Gates: That’s a great point you make Sergei, but I think it is best you leave search to us experts at Microsoft. Now in relation to your question, search is vitally important and SharePoint has a very powerful, scalable, customisable search engine that allows you to index all sorts of data sources. 

Larry Ellison (Database Administrator). Okay, so you can classify and search your files and other content. But I’m a database kind of guy. What about our line of business data in our databases? Can we improve its visibility to a larger audience?

Bill Gates: You certainly can Larry. We have several features that facilitate this, but specifically, we have the business data catalogue feature, which allows you to connect to 3rd party data sources for search, business intelligence and reporting. That way, you do not need to train your users in your line of business applications. They can simply visit the SharePoint portal, and view their dashboards and key performance indicators, so gain visibility into the business. In addition we integrate with SQL Reporting Services and can easily surface enterprise reports into the portal. Excel services is another feature that falls into this area. Imagine being able to publish your complex Excel sheets to the portal and users can interact with then without requiring excel on their desktops.

Scott McNealy: That is all very interesting indeed, document management, business intelligence and reporting in the one product. The other big issue we have is ensuring that people do things consistently. Larry and Steve in particular, keep releasing marketing slogans without formal approval. The “unbreakable” and “sooper dooper secure”  campaigns kind of backfired on us, and it would have been much better we had a more rigorous review process.

Bill Gates: Ah yes Scotty my lad, that is an excellent example. SharePoint contains a powerful workflow engine under the hood, that allows us to automate business process. So for example, at Microsoft when staff members leave the company, as part of our exit process we automatically create a task for the ever popular “throw the chair sendoff”. Supporting the workflow, is the document management features that I described earlier, as well as business forms via infopath and forms server.

Steve Jobs (Communications and Branding Manager). What about the GUI? It has to look good for people to engage with it. Additionally, I’d like the content to be available via mobile devices too.

Bill Gates: SharePoint has a powerful web content management foundation as well. It is built upon ASP.NET, which uses a templating system known as master pages, page layouts and web parts. But rather than me get into the detail here, I’ll recommend you visit my all time favourite blog called CleverWorkArounds and read the branding series. It should answer all of your questions. In relation to mobile devices, content can be displayed on these devices with no additional conversion. Suffice to say that it takes advantage of some of the workflow and document management features to facilitate content editorial approval, scheduled publication, and the like.

Steve Jobs: We are sold, Sergei, pass me the chequebook.

The downsides of versatility

So, Bill has sold Steve, Larry, Sergei and Scott on the possibilities of SharePoint. All of their respective buttons have been pushed and that can see it solving particular problems in the business. At a high level, they can see the value of re-use and efficiencies gained from using the same platform.

But which problem are we solving? If you asked them individually at this point, they would give you different answers. Its clear that Steve likes the WCM features, while Larry digs Business Intelligence. Sergey loves search and Scott wants to sort out document management.

Already, there is a wicked problem in the making, because it is easy to fall into the trap of “a tool looking for a problem” and nobody yet has the same definition of the problem. (one of Rittel’s key wicked problem warning signs that we covered in part 1)

The panacea effect

With so many features in SharePoint, combined in just the right way, it is the panacea you have been looking for. So you have found your cure, lets use it for everything right? The panacea solution often costs more, or is overkill for an initial problem, so to justify it requires you to sell it’s potential to solve other, bigger problems.

If you have read the first two articles in this series, you will realise pretty quickly that this is very high risk approach and can get out of hand pretty quickly. Just because a tool is versatile and has the potential to solve multiple problems does not mean it will necessarily be the best option to solve your particular problem.

Add the Microsoft effect to the panacea effect and the combination is more lethal! 

IT departments are particularly guilty of going down the panacea road and the reason this happens is also unsurprising when you think about it. IT are conditioned to think in terms of ‘tools and services’. By that I mean that, they exist to support and manage the organisations IT services. All business divisions have a desire to consolidate, streamline and reduce wastage and the IT department is no exception. In terms of an IT Department perspective, consolidating the number of “IT services” is attractive as there is tangible cost in managing many disparate systems.

So on the surface of it, SharePoint brings the IT department the potential tangible advantage of a common platform to support and manage.

I won’t belabour this point any further, because I have written about this issue on a couple of occasions, the best example being my choose your own adventure post and more specifically, its follow up. To the left is the book cover I did for the choose your own adventure. Sometimes pictures speak a thousand words.

It is also not fair to pick on IT either. I’ve gone out to many sites where the ‘SharePoint champion’ is not an IT person at all. But there is a consistent theme there. They want to use it because they have seen the potential for it to solve problems. Seeing the potential to solve a problem is not a problem statement. Therefore, by deploying this tool into the organisation, what problem are you solving and how do you determine if it has been effectively solved?

As a result of the panacea effect, we end up at another great debate of IT projects.

Point solution vs platform solution

I believe that as far as web content management products go, there are better point solutions around than the features SharePoint supply. WordPress for me is a much better blog system than SharePoint, Drupal as a pure WCM offers similar features to SharePoint for a fraction of the cost. Documentum is a better records management system by far and Cognos is going to trump SharePoint in the business intelligence stakes. Closer to home, in my SharePoint for Cisco nerds series, I had a comment that suggested that RANCID was a much better choice than SharePoint for Cisco configuration backups. He is absolutely right too, it is much better. But he is equally wrong too, depending on what the problem is and the point of view of the individual. (to find out why you have to read the whole series and judge for yourself)

This debate is essentially a version of the “Off the Shelf” vs “Custom Designed Software” chestnut. A point solution will meet your core requirements, however it may require you to change your business processes to work around it. Custom designed solutions can integrate nicely with your business process as they are to your exact specification. But the time and cost to develop can be significantly more and requirements can be fluid or prone to creep. (and you know how project managers hate that!)

Ah, but of course, being a point solution, the advantage of those products are diluted as your requirements broaden. You need multiple point solutions, those point solutions need to play nice with each other. The integration and support costs start to increase.

Although I see SharePoint as a platform solution in general, it actually has the best and worst elements of both off the shelf and custom designed software. It can cost you a lot of dollars and it all depends on your problem being solved. For example, it can be used purely as an application development platform, where a custom solution can take advantage of SharePoint features to underpin their own application, saving development time as you do not have to write certain functionality yourself. In this scenario it was always going to be a custom development job anyway, and SharePoint actually saves you money.

However, some problems are best fixed with a point solution and some are not. Where you can get into trouble is investing a lot of time and effort into a platform, because of the adherence to the panacea effect. The goal behind the platform may well be legitimate and well intentioned, but at the end of day, you are potentially talking a high development cost to get it exactly the way you want when a point solution may be a fraction of the cost.

I previously blogged a 6 part series on SharePoint ROI considerations, and although I haven’t blogged about it yet, there are financial modelling techniques available to consider some of the esoteric considerations like ‘opportunity cost’ of point vs platform. I will blog on this topic in the future, but for now, if you take anything away from this section, it is not to underestimate the value of the point solution when looking at your problem being solved.

Conclusion

*pauses for a big sigh*

That was a tough article to write, and the next one is probably going to be tougher, as I will no doubt have an urge to go back and edit this article. But I’ll resist that temptation as otherwise I’d never get these articles out.

But I hope that what you take away from this post is a deeper understanding of some of the reasons why a SharePoint project in particular can get out of hand and become wicked in nature. The quicker you spot them, the quicker you can head off the potential pain and suffering that will follow.

In the next post we will keep digging around SharePoint’s dirty little secrets and then look into some techniques that we can use to try and mitigate some of these issues.

cheers

Paul

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So I put something to him. Two words to be exact. “Non compliant”.

The irony was that I had actually been trying to win support for adopting *some* ISO17799 principles as a yardstick to measure ourselves, knowing full well that at some point we were going to be asked. But I never was able to get any management behind the idea. Why? Because it was seen as not particularly critical to the business.

Then, they were asked by a client, and heaven forbid, it has to be done by the next day!

What this highlights to me is the general disinterest among many in business of things that are seen as ‘getting in the way’. These days I’m better at appreciating why this is the case and I’m better at providing quantifiable explanation/justification, but it is still disheartening nonetheless.

So I was thinking to myself whether the attitude I experienced was similar at all to the current subprime victim in the news, Bear Stearns.

Being Australian, I am not as familiar with US securities regulation, but just for a laugh I went to the Bear Stearns investor relations web site and there on the second last page of their 2007 10K report is the “CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 (Corporate Responsibility for Financial Reports) OF THE SARBANES-OXLEY ACT OF 2002″

Maybe it’s my warped sense of humour, but there is probably plenty of good people at that organisation who were part of the compliance effort. Some would have been “true believers”. I wonder if senior management who sign these things have ever read their compliance material?

Will there be prosecution? If you believe uncle google, there will. Since my last post on the intent of SOX and its relevance to the current fear and panic in financial markets, a few more interesting articles have popped up drawing a similar conclusion to mine. The best of them with some choice quotes I have linked here with a reference to their articles:

This first article looks at the collapse of New Century Financial, the company that is argued as the trigger of the subprime issue. It notes the actions of the auditor, KPMG were ominously similar Arthur Anderson’s actions during the Enron debacle.

• http://english.ohmynews.com/articleview/article_view.asp?no=382209&rel_no=1

A United States Justice Department investigation into the failure of mortgage lender New Century Financial last year has found that accountants could be to blame.

The Justice Department investigation suggests that the auditor, KPMG, allowed New Century Financial to engage in “significant improper and imprudent practices. Contributing to KPMG’s implication in the mortgage lender’s collapse is a series of e-mails in which practitioners raised issues to KPMG partners. In order to preserve the relationship, the concerns were ignored 

The next article digs deeper into what I suspect will happen in relation to the onerous compliance issue. Any argument on reducing the regulatory overhead (however well made) will be very unlikely to succeed for a long time in the current political and social climate.

• http://www.businessinsurance.com/cgi-bin/news.pl?id=12594
• http://www.businessinsurance.com/cgi-bin/news.pl?id=12594&pageNo=2

“An increasing appreciation for the internal controls is emerging,” Jim Turley, chief executive of accounting firm Ernst & Young, said at the Chamber conference, where many of the pro-business speakers said there may be a need for more regulation

In fact, the Sarbanes-Oxley disclosure requirements should have helped clarify one of the fundamental questions in the credit market meltdown: When did executives know the value of subprime mortgage-backed securities were actually much lower than what appeared on their companies’ books?

This is interesting because it is an interview with Michael Oxley and Paul Sarbanes themselves. I have read opinion out there that believes this whole mess makes a mockery of Sarbanes-Oxley. So it’s interesting to hear from the architects of the law.

• http://www.livemint.com/2008/03/15003003/Subprime-crisis-parallels-Enro.html
• http://www.livemint.com/2008/03/15003003/Subprime-crisis-parallels-Enro.html?pg=1
• http://www.livemint.com/2008/03/15003003/Subprime-crisis-parallels-Enro.html?pg=2

“One of the tenets of our Act was transparency. Clearly, one of the problems with the subprime mortgage crisis is the lack of transparency in the secondary market. These are somewhat parallel problems to the lack of transparency going back to Enron and WorldCom. There is consensus on some of the areas and others are pretty controversial

This article focuses more on the applicability of Sarbanes Oxley to the US mortgage side of things.

• http://www.itbusinessedge.com/item/?ci=29499

If the industry comes to the conclusion that Sarbanes-Oxley applies, it would mean that all direct lenders of subprime loans would be accountable for section 404 of Sarbox. In other words, they will have to establish, document and maintain internal controls for financial reporting just like a publicly-traded company

And finally the politicians. (I think you can guess what they are saying…)

• http://www.chicagotribune.com/business/chi-fri_regulation-debatemar28,0,6327532.story

In Congress, at the White House and, increasingly, on the presidential campaign trail, calls for newer and tougher regulation and more government intervention have become almost a daily mantra because of threatened home foreclosures, poor mortgage-underwriting practices, troubled mortgage-backed securities that no one wants to hold and a Wall Street bailout engineered by the Federal Reserve Bank

Anyone care to put a wager on how long issues like this will take to appear on the PowerPoint presentations of product salesmen?

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In 2001, the supposedly blue chip US multinational called Enron filed for bankruptcy. For you younglings who were still at school, this made pretty big news around the world. Many of the senior executives are still in jail for fraud related offenses. the whole sorry tale is one of greed, corruption, deceit, insider trading, huge theft of workers’ entitlements and massive job losses. As part of the collateral damage, Enron’s auditing firm, “Arthur Anderson” was also obliterated as its reputation dissolved quicker than Paris Hilton’s credibility.

google “enron scandal” – it’s interesting reading

Sarbanes-Oxley (real brief version)

Anyway, one of the things that came out of this and other scandals like Worldcom, was the Sarbanes-Oxley act. Its intent was to:

Protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.

It did this by creating new standards for corporate accountability, and significantly beefed up penalties for acts of wrongdoing. Boards and executives are now personally accountable for the accuracy of financial statements. There are additional financial reporting responsibilities, with particular focus on the verifiable application of internal controls and procedures designed to ensure the validity of their financial records.

Now executives tend to like spreading the love (risk) around, and if they are going to go down, they like to take others with them. So IT professionals also have to do their bit for the common good. This is because the financial reporting processes of organisations heavily utilise IT technology. As a result, IT controls that relate to financial risk are fair game.

So how to account for IT controls?

COBiT

COBiT is not the only IT control methodology used for SOX compliance, but it’s the only one I am familiar with COBiT (Control Objectives of Information and Related Technology) is commonly used as the framework to cover all your IT controls. I won’t get into detail here, as COBiT is a big subject in itself, and I have some information here already.

SOX Criticisms

Was SOX an over-reaction to isolated indecent’s of large scale fraud? It is clear that some believe this to be the case. “Compliance cost is too onerous” is very commonly cited, particularly with smaller affected firms. Most scarily for me, is seeing the term ‘SOX’ being used as a sales tool for products that at best, have little relevance to what SOX compliance is really about. The same criticism can be levelled against service companies as well, who are happy to bag Microsoft’s amateurish use of FUD, yet use disturbingly similar methods to sell products and services that have questionable relevance.

When researching my training material last year, I came across this nugget of information that gave an indication of the level of frustration that SOX has caused.

A global study from European accountants Mazars, found that close to 20% of EU companies are planning to de-list from the US market to avoid complying and more than half feel the costs outweigh the benefits 

But I then found this interesting snippet.

However this has the potential to impact on the cost of credit for such companies as warned in July 2006 by Moodys. “The cost of capital for public companies in countries that choose not to implement US Sarbanes-Oxley (SOX) type corporate governance rules may soon increase to reflect the additional risk premium resulting from companies and their auditors concealing the true level of audit risk” 

So now we come to the point of this post. What did they say above? “Cost of credit”? So Moodys implies that SOX compliance offers a level of assurance to suppliers of capital.

Six Years Later

I liked Moodys’ quote in the previous section. Fast forward to the present and the word “credit crunch” is on the news quite a lot. So is it fair to rate the effectiveness of SOX compliance based on the current turmoil in financial markets?

To answer that question, we have to look at the current problems that have led to the current financial crisis affecting world markets.

Here is a pretty good layman’s summary that explains the sub-prime issue and the problems with stagnant or falling property values. However we need to delve a little deeper here. The New York Times has a great article that goes into the necessary detail but it is large, and I’ll try and paraphrase it as briefly as I can.

In the past decade, there has been an explosion in complex derivative instruments, such as collateralized debt obligations and credit default swaps, which were intended primarily to transfer risk.

These products are virtually hidden from investors, analysts and regulators, even though they have emerged as one of Wall Street’s most outsized profit engines. They don’t trade openly on public exchanges, and financial services firms disclose few details about them 

Among the topics they discussed were investment vehicles that allowed Citigroup and other banks to keep billions of dollars in potential liabilities off of their balance sheets — and away from the scrutiny of investors and analysts. 

Now what was the intent of SOX again? “To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes”. What do we see above? “potential liabilities off the balance sheet” … hmm

But there’s more..

Credit rating agencies, paid by banks to grade some of the new products, slapped high ratings on many of them, despite having only a loose familiarity with the quality of the assets behind these instruments.

Still others say the primary reason the Fed moved so quickly was to divert an even bigger crisis: a meltdown in an arcane yet huge market known as credit default swaps. Like C.D.O.’s, which few outside of Wall Street had ever heard about before last summer, the credit default swaps market is conducted entirely behind the scenes and is not regulated.

Ratings agencies have similarly been under fire ever since the credit crisis began to unfold, and new regulations may force them to distance themselves from the investment banks whose products they were paid to rate.

If you research into the fate of Arthur Anderson, they were screwed by a sudden and fatal loss of reputation as a result of their association and conflict of interest issues in relation to Enron. Disturbingly, the last quote above criticising ratings agencies reminds me very much of the conflict of interest criticisms levelled at audit firms like Arthur Anderson.

Crystal Ball Time

Since the practices quoted above are not necessarily illegal, and it is too early to determine whether the SOX laws will be used in a punitive sense to institutions caught up in the current crisis. I’m not a lawyer and as a result, my opinion here is naively uninformed. But like the Enron/Worldcom scandals, regulatory authorities and other interested parties will rightfully ask questions about risk management, and therefore the effectiveness of the controls for SOX compliant organisations.

This current crisis makes previous scandals pale into insignificance. A news site that I frequent reports that US investment bank Goldman Sachs  suggests that credit losses will amount to 1.2 trillion US dollars. That is a freakin’ *insane* amount of money and many people affected do not even realise it yet until they see their next pension/superannuation statement.

Consider that the world population is some 6.6 billion people. The above loss is therefore 180 US dollars per person on the planet! … Mind boggling isn’t it.

Notwithstanding the directly affected people who are defaulting on their mortgage, getting margin called, etc. Many, many people will be royally pissed. Politicians will react to this by forming committees to look at how to prevent this from happening again. SOX will be revised, or new regulations will be developed. More checks and balances, more compliance overheads, more disclosure.

Thus, more accountants, more lawyers, more business advisers, more IT security professionals, and of course, smelling a new FUD angle, more snake oil salesmen selling irrelevent products and services.

If companies think that their compliance costs are high now, just wait. I think it’s going to get a lot worse.

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I hope that you had a bit of fun with my first “choose your own adventure” story. (Do yourself a favour and read that first!)

Writing that one was most fun. Did you suddenly think of the names of current and former colleagues as you read it?

Anyway, now it is time for you to sit on my virtual knee and listen to the moral of that story because believe it or not, I actually had a really important point to get across.

The two catalysts…

Recovering CPA Mike shares similar views to me in a lot of areas. He wrote about possible reasons why SharePoint initiatives rarely have any decent form of ROI analysis performed on them. He talks, among other things of a ‘first wave’ of technology buyers, not used to ROI analysis. He also mentions the whole “must have” mentality of popular technology.

He’s dead right on both counts and my additional take on it is this.

Right now, there are only two types of SharePoint projects I seem to be working on. Those that are initiated via the IT department, or those that are initiated because a new CEO or senior manager is a previous SharePoint user and wants it.

I suspect that for the next 6-12 months, these two will be quite predominant catalysts.

The latter is actually my preferred scenario, but it does cause me some short term pain. In this scenario, the IT department usually is caught “on the hop”, to some extent, as they have usually very little SharePoint exposure or awareness.

The short term pain is based around me having to fast-track SharePoint product understanding at at infrastructure, application and governance level. This has to be performed among all the different IT department hearts and minds. This is not as straightforward as it may seem. Often IT people can actually take longer to ‘get it’ then non IT. As I demonstrated in the light-hearted version of this post, there are various different hearts and minds that have to be won over in different ways. (Some will never be won over).

But the nice thing about this scenario is buy-in is generally assured. When CEO’s say they want something, it generally gets done and I get to skip a lot of long, boring meetings with little outcome.

I’ve seen this scenario screwed up also, but that is for another post. This article is all about the other scenario – the one that carries more risk, despite best intentions.

If You Build It, They Will Come?

So here we are, no matter how it came to be, the IT department has seen SharePoint and likes it. (Well, not everyone in IT but those who have a say in it .

[ Snip the many meetings, arguments, dogmatic agendas and general whining to get to this point ]

The strategy for moving forwards seems to be oriented around the proposition of that Kevin Costner movie, “Field of Dreams”

“If you build it, they will come”

(Oh god ! Now I have admitted I watched a Kevin Costner movie! Please don’t worry as I am cool – I listen to Opeth )

What I mean by  the “If you build it, they will come” mentality, is the commonly adopted premise that if you can demonstrate how IT uses a tool like SharePoint to improve how it goes about managing its affairs, then it is a shoe-in to sell to the rest of the organisation, right?

I beg to differ, for many reasons. But let’s take a closer look on why this approach is so often used right now.

Products, Products, Products (and some definition of terms)!

I.T departments are service providers. They operate, manage and are accountable for IT Services. IT Services are provided by IT infrastructure and the governance of that IT infrastructure.

IT Infrastructure is all of the “products” that combine in various ways to provide the IT services. Examples of infrastructure include your physical servers, network devices, storage area networks and UPS. Examples of infrastructure include also applications like Microsoft Exchange, SQL Server, Apache webserver and operating systems such as Windows 2003 and *nix.

IT departments are good at this stuff (in theory anyway) because they tend to see the IT world as the management of products that provide service. They look at how these products interact and have a very good understanding of the dependencies, risks and day-to-day management of these products. My former world used to be Cisco networks, Active Directory, SQL Server, Exchange, Redundant storage, backup agents, etc. I cared little for the Information Assets being provided by these IT Services because I was rarely a user of those Information Assets!. If the IT services were available, then I knew that the information assets they facilitate were available and that’s all I was accountable for!

So is SharePoint is just another product then? Let me ask you this? How many IT departments do an ERP install by themselves? Not many!

Information Assets

Aha! I just used a new term before. “Information Asset”. I originally came across the term in when I worked with ISO17799/27001 a few years back. However I don’t quite think the ISO definition is ideal because it also uses the “Asset” term for IT products and services as I have defined them in the previous section. (I have always found this much harder to explain to people when calling everything an “Asset”).

So instead, we will stick to my previous definitions of IT Services and IT Infrastructure and use this definition for Information Asset which I like much better.

“An Information Asset is a definable piece of information, stored in any manner which is recognised as ‘valuable’ to the organisation”

The above definition you will note does not talk about information assets in terms of the services that provide it. Instead it is focused on it’s intrinsic value. Below are 3 characteristics of information assets with intrinsic value

• Information assets are recognised to be of value to the organisation.
• Information assets are not easily replaceable without cost, skill, time, resources or a combination.
• Information assets form a part of the organisation’s corporate identity, without which, the organisation may be threatened.

The I.T Department and Intrinsic Value

IT departments are generally inward facing in that they often know the least about the information assets that have real intrinsic value to the organisation. They know all about the IT Services and Infrastructure that provides those services however.

But for many other sections of the organisation it is the other way around. They have no significant understanding or appreciation of the IT services or infrastructure.  Nor should they – it’s your job! The majority of non IT staff are accountable for increasing the intrinsic value of the organisations information assets. So long as you in IT ensure the confidentiality, integrity and availability of the IT services that support the information assets, you are doing your job. ( Nobody will appreciate it, but you are still doing your job )

A Tool Looking for a Problem

So back to my premise. The IT department likes SharePoint, sees its potential and thinks it could be good for the organisation. So let’s use it for our own internal use, and then use this as a showcase of how it can be used elsewhere in the business to improve the way things run in the business.

Improve what? By how much and how soon? What is current the problem that is resulting in operational wastage and therefore reduced earnings per share? How much is it costing us per annum? What percentage of improvement can we expect by this investment and how much confidence do you have in your estimates?.

I’m sure you can answer this in terms of internal IT service performance via quantifiable evidence like frequency and reason for helpdesk calls, number of helpdesk staff over time, staff retention rates, backup/restore stats, etc. But you are exceedingly unlikely to be able to answer it from anywhere outside of IT.

So what problem do you want to solve for the business? At a macro level its easy to say, “SharePoint has this wonderful feature X that does this and it will solve so many problems”, but it’s not enough… not by a long shot

and who are you to talk anyway?

IT Departments also more often than not, do not exactly have the sort of quality control and organisational efficiency that they would like to have. If your helpdesk queue has 167 outstanding jobs, with poor clearance rates and turnaround time. Your existing infrastructure is poorly documented, change control and configuration management is questionable. Staff are unhappy, turnover is a problem and politics/dogma gets in the way of progress.

So, you are not exactly setting an example here. Will yet another tool solve a bunch of problems that essentially people/process in nature?

More importantly, will the business take you seriously? What is your track record like?

Improving the approach (you can still fiddle a bit )

So fine, use SharePoint in IT. (I’m not against it – I’m just cautioning against the ‘typical’ IT approach of the tool before the problem.). But do yourself a favour and define a problem to solve first. The problem MUST, MUST, MUST be a measurable one and it can’t be trying to bring about world peace. So instead of writing

“We need a change control process” or “We need a new helpdesk system”

define a quantifiable goal such as:

“Reducing helpdesk calls per day from the current average of 140 per day to a goal of 70 per day in 4 months (50% reduction)”, thus saving us $1,240,000 per annum”

Don’t pull the savings estimate out of your rear end either! State your assumptions on how you came up with this figure. Gut feel almost always is not good enough. (For what it’s worth, I have blogged a little on doing this last year, but a lot more is to come!)

Now you have a clear goal to achieve and you can discuss how to achieve it. You will have to do an analysis/measurement phase, where you mine your data (or embark on a collection phase if you have none), to determine the causes of the high cost . You will examine the processes and systems that have allowed this to happen and slowly weed out the candidate causes until you hit the one or two that have the most impact on the problem.

Interestingly, using our helpdesk example, you may find that the root cause is not the helpdesk per se, so putting resources into tracking helpdesk calls in SharePoint is of less value than optimising the flawed process causing the calls. That process may not be an IT owned process - interesting eh! It may be that you use it for a non-IT business process problem after all!

Anyhow, the goal is that you will be able to provide a re-engineered and optimised process. With the help of a tool like SharePoint, along with training and a degree of cultural change, you can work to achieve this goal. Chances are, the SharePoint bit takes less time than the analysis/data gathering/data mining and process optimisation phases.

So after 4 months, you can easily quantify whether you achieved your goal and if you did, you utterly rock and the entire team can go to the pub for the afternoon!

Conclusion (Now we are getting somewhere!)

Now you are in a much better position to go back to the business with a SharePoint proposition, demonstrating how in 4 months, you were able to use it to help you optimise a business process that has saved/made money.

This is what business wants to hear! In addition, this now gives you the sort of springboard and model that can be used to examine other problem areas of the business. You have also kicked a goal via your departmental staff learning how to manage the SharePoint IT ‘service’, and its various infrastructure components. That is one less cost you have to factor in with your financial models

Phew! I think I am just about done!

My personal interest in process optimisation stems from my interest in improving the bridge between financial justification of technology and the technology itself. I intend to write more on techniques for process optimisation in further blogs and how I went about setting up an IT portal based on elements of ISO and ITIL. For those of you that find this information useful (probably not so much the tech guys , please let me know.

regards

Paul

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