Tuesday, March 31, 2009

Processes as Art, not Science

 In the March 2009 issue of the Harvard Business Review, there's a very interesting article about the relevance of distinguishing between processes that can be standardized (process as science) and processes that are and should remain flexible (process as art). The authors argue that it is a deadly mistake to try to standardize business activities that are expected to deliver highly customized output to customers while being run in contexts of highly variable environments.

The article also presents a simple tool to decide whether a process should be art of science, which the authors call the process matrix (click on the picture to see). This is all music to my ears because it provides some serious academic support to one of the core propositions of BusinessQuests, i.e. that each specific customer requires a highly tailored approach to achieve business progress. The authors of the Let me quote the authors:

"The movement to standardize processes has gone overboard. Some require an artist’s judgment—and should be managed accordingly." - Joseph M. Hall & M. Eric Johnson

Over the years working with innovative as well as more traditional privately owned European companies I realized how unproductive - perhaps even damaging - it can be to even try to express in a standard format like a process flow those processes that make a company different from its competitors. In fact, I came to call this "the spirit of craftsmanship" when facilitating a workshop with customers, which is also one of the reasons why I enjoyed so thoroughly Small Giants (more on that some other day or on my reading list on my profile). That's precisely one of the points made by the authors of the article and again, let me quote:

"What we call “art” is often described as “judgment-based work,” “craft work,” or “professional work.” The common thread in such work is variability in the process, its inputs, and its outputs. Art is needed in changeable environments (for example, when raw materials aren’t uniform and therefore require a craftsperson’s adjustments) and when customers value distinctive or unique output (in other words, all customers don’t want the product or service to perform or be performed the same way)."

The article mentions the following domains as areas in which processes ought to be treated as art rather than science precisely because much of the value they produce results from the flexibility and adaptability of the process to a given business environment:

  • leadership training... so much for the established methodologies that are supposed to produce your next generation of leaders mechanically and perhaps also the analysis of Hall & Johnson should prompt companies to completely review the way they manage women for leadership: the processes they now have were written far too long ago by men, for men and in a logic of dominant alpha leadership (in its most idiotic form it is also known as the "W" style) and the attributes they seek to develop in the leaders of tomorrow are just completely misplaced

  • auditing, which comes as a huge surprise when you think of the job as it's done by the big-5, no make that 4, no make that 3... until the next big Barings or Enron-class blunder... but is no surprise at all if you've been in the shoes of the auditor or due diligence contributor identifying problem areas in ways that you could only explain after uncovering the problem (it's a bit like creative inspiration in a way)

  • hedge fund management and that's one that only half a year back could have surprised me too, but not after reading Taleb's Fooled By Randomness...

  • customer service, which might come as a surprise, but not if you've ever had to deal with off-shored customer service departments who do their work perfectly decently... but fail to really help you

  • software development, which speaks volumes about why agile approaches like scrum work so well

  • account relationship management, which says a lot about the challenge to recruit good people to do that job

  • business development, which comes as no surprise if you've ever come across people who can generate pretty transformative ideas by simply discussing with you about your business model, something that BusinessQuests has been doing over the past decade or so (not that I want to pat myself in the back, but I'm sure you'll understand how happy I was to see this area mentioned in the article)

  • industrial design, not surprising at all

I would probably add a few, which I'm sure are in the research (now impatient to read the book if these guys decide to publish one on this topic):

  • social marketing

  • interactive marketing

  • architect's services

  • financial engineering, i.e. building the financial vehicles and structures that allow business to achieve its purposes

  • tax services

  • legal services

Monday, March 30, 2009

Dating, an anti-cyclical business?

A most intriguing article in the latest issue of The Economist states that dating sites seem to be doing rather well in the recession. The correlation between the Dow Jones falling by more than 100 points and the increase in the traffic of one of the dating sites was arguably the most astonishing of all facts presented in this article.

clipped from www.economist.com

Online-dating websites prosper in the recession

It may be that people have more time to devote to their private lives as the economy slows; that uncertain times increase the desire for companionship; or that living alone is expensive, whereas couples can split many of their costs.

25% of women said stress about the state of the economy made them more inclined to seek a long-term relationship. The company also noticed that the number of visits to its website was higher than average on days when the Dow Jones Industrial Average fell by more than 100 points.

Back in September, users were sending 6,000 on-site instant messages a day, says Sam Yagan, OkCupid’s boss. Now that number is over 18,000.

“The majority of relationship discord stems from economic troubles,” he says. Instead of fighting, married people are taking stock of their lives. “They want to do something that makes them feel better about themselves,” Mr Biderman says, “and $49 is a tiny expenditure for a life-altering affair.”

 blog it

Saturday, March 21, 2009

Law enforcement for a change

Great piece by Stanley Bing. If we step back it's quite sad and probably yet another indication of the need for some radical changes in the financial system with a view to restoring the logical order of things, which is that finance should serve the economy, not lead it.

For the past fifteen years I've been in contact with friends and B-school alumni working for finance departments in quoted companies who had a mission every end of quarter: make sure their company's figures reached or exceeded the expectations of analysts working for major investment banks and brokers... So at least once a quarter their mission had nothing to do with their company's core business and everything to do with window dressing, to call thing the way they are. And of course poor implementation of standing legislation as well as bringing poor new legislative measures into force (read Sarbanes-Oxley) did nothing to improve things... which is why I wanted to share this video.

Tuesday, March 17, 2009

Conference on the economic situation

Last Thursday BusinessQuests helped organize a conference on the financial situation. We had Prof. Bruno Colmant, who also happens to be the CEO of Euronext, and Prof. Philippe Defeyt on the panel and they presented a number of interesting developments to explain the causes and the dynamics of the current situation. Aside from the content, which is very much within my field of attention, the event has been a great opportunity for me to test the adoption of online tools by a predominantly tech-conservative  audience. Results of my tests in a future post. This one is about the content of the conference.

Here are a few of their most noteworthy points:

  • while there have been crises before, this one is like no other because of the speed of information processing that we now have

  • according to Colmant the roots of this crisis are in the Internet bust of the early part of this century (needless to say it's an assertion that had me raise my eyebrows)

  • Defeyt made a passionate case against established practices of trade liberalization without any effort being done to bring better coherence to labor and fiscal legislations of trading partners

  • both panelists expressed concern that the consequences of the current period could be social unrest similar to what we now see in Greece

  • panelists agreed that the causes of this mess are in the US and that the collapse of Lehman Brothers prevented this crisis from hitting Europe much more than it does. According to them the extent of the banking problems is significantly smaller in Europe compared to the US

  • Defeyt and Colmant felt that the lack of trust of citizens for established institutions, be it banks or governments is cause for real concern and probably the single biggest impediment to relatively quick recovery

  • they also both agreed on the principle that nothing should be done to help the auto industry because its future is behind us at least insofar as its current form is concerned. Interestingly they mentionned that there's production overcapacity in the range of 30% to 35%

  • Colmant made a vibrant case in favor of market mechanisms claiming that markets are efficient for letting supply and demand meet to define the fair price of assets, something that had Defeyt react by saying that there's a host of resources that are used by the economy, which are completely unaccounted for. Defeyt also questionned the way in which economic prosperity is measured in our countries and claimed that we should be looking for free circulation of people, ideas and culture, not products because it does not make economic-ecologic sense to be transporting vegetables across Europe when they could be sold on markets closer to the place of production

  • the audience had a couple of very interesting questions about the extent to which Adam Smith's vision is actually verified in the real world, whether the market is relaly efficient considering irrational jumps in prices of assets, whether China is where the world economy's salvation will come from...

Overall good stuff and an interesting evening although I doubt anyone got out of the room with clear answers. One of the reasons why we put totether a participative site on Ning to give attendees an opportunity to continue the discussion and access photos, video and notes from the event. I am curious to see whether people will start conversations and see the opportunity to take an active part in this crucial public debate...

For me this has been a great way to test how a more conservative audience of late adopters of technology reacts to the usage of tools like Amiando (excellent stuff) for setting-up the conference or Ning after the conference. Furthermore, we ran a survey on SurveyMonkey about the economic situation, its causes according to the audience and the assessment of the quality of information people got from the media and from banks. A vast majority of the people (we polled about 30% of the attendees) were really unhappy with the way banks handled the matters pertaining to the crisis. I'll publish some of the conclusions later this week.

Below is a mind map hosted at WiseMapping, but it's in French, the language of the conference.

Thursday, March 12, 2009

Day of conferences

This is a day of conferences for me. First I'll be spending most of the day at Plugg and then I'll be off to a conference I helped organize on the economic situation and its impacts.
I certainly look forward to meeting a bunch of enthusiastic people at Plugg and attending presentations and panels which will hopefully be good food for thought.

Thursday, March 5, 2009

Philippe Stark on design

What inspiration and fun Philippe Stark can be! There's more than meets the eye in what he says in this presentation...

Seemingly dissimilar items composing a coherent picture

Today is one of these days when I can express better than on most other days why I carefully remain on a spot that is common frontier to several seemingly different worlds: business, marketing, technology, psychology, software development, complex adaptive systems, social media... At the end of the day this is also what defines BusinessQuests: the often treacherous area defined by 'business + innovation + technology', where starting from what drives people is a fundamental starting point. BusinessQuests is where people's quests drive business value and where people's values resonate with quests in business.

What a good day this was! Started early, spent the day in two cities
while cooperating with people in 7 different areas of the world and
discovering refreshing perspectives... I met some pretty creative and passionate entrepreneurs, got exposure to beautiful artistic creations including some nice stuff with Philippe Stark (an awesome super-passionate creator) and had a speedy meeting with Nicolas Martignole a leading practitioner of agile practices in the field of software development.
What's the common thread? Several things:

  1. all was made possible thanks to the tsunami of innovation of the past 15 years, which brings quantum leaps in productivity and a degree of flexibility one cannot even dream to have in established companies (there are in fact a couple of exceptions)

  2. quality of experience is defined by the encounter between subject and object, between the user and the tool, between the objective and the means... All of the exposure I got today was high-quality in that respect. I'd call it flow and resonance...

  3. the fundamental dynamics of all of these moments were defined by emergent forms of organization, nothing predefined or predetermined, no rigidity and yet lots of harmony and order...

  4. in most instances today it was all about co-generating creative and productive moments with people who participated to working sessions to co-create, to exchange, to focus on what makes a damn difference, not on pecking order, power struggles and ego-play... Good stuff. Today I came across some chaps who are excellent representatives of what I call "High Tide of Talent"

  5. underlying all was the coexistence of content and relationships, the necessary combination of network optimization and content adequacy, which is ultimately a fundamental recipe in many areas of the emerging business environment from SEO/SEM issues to how causes are supported to activism to software development (one of the reasons why agile is gaining traction) to business development and even perhaps to venture and entreprise financing

Apologies for being philosophical on this one, but some things need to be approached from a different angle and make it necessary to use the perenial principle of beautiful creation: COUS, that is Combination of Opposites and Union of Similars... More on that in a future post :)

Wednesday, March 4, 2009

Quote of the day

Given the experience of attending recent presentations and having workshops and discussions with start-ups or companies in growth mode, this quote may provide motivation to (re)think basic assumptions about a business... or any other creation for that matter. Particularly relevant as a minimalistic tool like Twitter shows unexpected versatility and incredible adoption levels:

"Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away."
Antoine de Saint-Exupery

Tuesday, March 3, 2009

Beta Group in Brussels

Back to the Beta Group this evening at my Alma Mater, home of the B-school that has given me much useful knowledge at a time that feels like centuries ago for anyone who's been heavily involved with innovation in the past decade or so. There were more than 200 people in the room, which I find particularly positive for innovative ventures.

Again a couple of very interesting initiatives and very refreshingly most of them had credible business models. As I've said before on this blog I completely disagree with people downplaying the importance of a business model as they develop extreme positions to support the (correct IMHO) position that innovation needs to be supported regardless of the existence of a business model.

Let me give you my top 3 and some notes I took during the presentations...

The companies that have the very best prospects in my opinion are as follows:

  1. Incloode (currently in private beta) because they do tackle a real problem insofar as video production is concerned thanks to their idea to have video templates, which they call videoplates, and smoothen considerably the process of creating a video of acceptable quality for regular folks. It's all about enabling the production of user egnerated content in a field where there are really technical hurdles to overcome at an acceptable cost in terms of time and effort. On top of that they have a nice little business model that allows them to make money in different ways and with differents players from end-users to owners of video content to owners of audio content... Good stuff and well presented.

  2. Mollom because they seem to have an awesome product that makes comment moderation a smoother process than it would be otherwise. I liked their way of dealing with comments in "grey zones", where automated processing will not tell you with adequate levels of confidence whether a comment is spam. Since they went live their product, having stopped over 36 million spam comments, has 99.95% accuracy, which means less than 5 errors in 10,000 operations... Top site is the NY Observer where they help manage and stop over 70,000 spam comments PER DAY! Pretty good stuff. The way they use feedback from their installed base to improve the performance of the product is another strength. Their mission seems to be to offer tools to help moderation of online resources, which I find both nicely focused and broad enough to anticipate a nice size of targetable market.

  3. Moodio because of the very clever way they've found to build a nice little business model atop an initiative that seems to have started as a generous attempt to give Belgian musicians a video platform of professional quality to promote their creations. The value of their business model comes from the fact that instead of trying to be yet another video or social networking platform they hook-up to existing players like Facebook or Myspace offering instead to the owners of original content ways to promote events and sell stuff relating to the content on video or to the artist. Seems to be really elegant in a space that is crowded and very difficlut to make profitable.

One of the companies that was presenting today had big problems with the performance of their platform, part of which may have been caused by either the Internet connection or the browser, and I think that reflected negatively on the actual relevance of what they do. I'm talking about YourTour (now in private beta), whose tool will mean a lot to you if you've ever taken care of preparing and planning holidays or a short tour foryour family or of a group of friends. These guys have done some pretty clever work to develop a tool that optimizes your access to information to organize a tour with associated events, visits, sight-seeing...etc. Think of it as the combination of the dynamic web with your favorite tourist guides and driving directions / map tool. Quite intersting in fact. There was a good question about the trustworthiness of the information and advice they give their users for hotels, restaurants, places to visit...etc

Which bringgs me to where I think their next frontier lies and it's defined by the following points:

  1. merging user comments and customer rating of places with their formalized data used to optimize the tour. To do that I'd use existing platforms on which customers rate places, restaurants, touristic providers...etc as well as platforms that manage feedback like uservoice, getsatisfaction or feedback 2.0

  2. allowing the user to define which parameters should be used in the optimization (e.g. I may want a given guide's rating to be used or not, I may want user ratings to be used or not...)

  3. enabling users to export and embed a tour on their blog or website before, during and after a trip, possibly with a feature that would allow visitors to that site to vote for specific parts of the tour

There was one initiative that left me largely unimpressed because it seems to be trying to do too many things and at the age of minimalism as expressed by Twitter ExtraFootball might need to think about what stuff should be dropped and integrated through other platforms. In other words I would advise them to streamline, streamline, streamline and focus, focus, focus and integrate, integrate, integrate with the rest of the world; in that respect Moodio's example should be good inspiration IMHO. They have a couple of points I like and would use if I were in their shoes:

  1. the combination of community and content, which I think is the way to go as the pendulum is now moving back towards increased value and importance of content

  2. as regards content production they're clearly doing something right by combining professional journalists' articles and user generated content

  3. the way they've made it possible for "tribes" to exist within the community, i.e. allowing fans of a given team to immerse themselves in a version of the service that is fully branded

Patterns of innovation

There's a very interesting analysis by McKinsey and the World Economic Forum on innovation called "Building an innovation nation". It shows how different regions stack-up on the global innovation map and the authors identify assets that are required to drive innovation. It's worth reading, and prompts me to make a couple of comments, some of which have to do with the random nature of our world...

My comments on the piece are in three areas:

  1. I'm not sure about the correlation between patents and actual innovation. To give an example: Twitter brings enormous innovation of the real kind (i.e. used by actual people and companies in the economy), but I haven't heard about them filing any patent whatsoever. Another example without any patent would be Jamendo a company that is transforming distribution of music with their service for commercial consumption of music...

  2. in hindsight correlations often look like causality and we can build great theories about what made something successful... theories that can be statistically verified over a period of time, but do not necessarily constitute the "truth" if there's such a thing. Reading Taleb's Fooled by randomness and it would make sense to extend the study to past periods of History when there was innovation without any patenting system and without established institutions like governments or companies doing anything to facilitate innovation. Among the excellent examples to study is the period during which the craftsmen of France self-organized to invent practices (innovate), deliver projects like major cathedrals (requiring sophisticated maths to be designed) and to educate the next generations of craftsmen (today we would be speaking of knowledge management, except that these guys did not have Oracle databases or other sophisticated It equipment)

  3. which brings me to the last point: to me the world is a chaotic place that you cannot shape with recipes. All one can do, whether a CEO or the President of the most powerful nation on Earth, is create turbulence that causes the overall self-adapting system to change its form... taking into account the fact that other turbulences exert their own influence (see current financial crisis)...