Coaching, Cooperation and Confidence

October 30, 2014

One of the finest moments in the life of a parent, and one of the most decisive moments in the life of a child is when he is better at something than his father or mother. For fathers is often a sport, and when it comes to football that moment is near for me. Sometimes we bring that moment closer by letting our kids win a game, but they don’t really believe. It does make them happy for a moment, but for their confidence it does not do much.


In companies it is often the other way around: the managers are usually afraid that their staff, or others in the company, will become better at something than they are. Sometimes they already are. They keep their team on a short leash and take a position of seniority by instructing their staff which method to use, and thereby create a dependency, because they are the experts. This serves no other purpose than boosting the ego and amplifying the senior position of the expert manager to confirm the power-relation. These people emphasize their own interest in an organization by claiming successes that should be attributed to others.


Leaders who hire people who are better than they are quite rare. Perhaps out of fear of being irrelevant.


This is a pity of course, because the organization will be weaker rather than stronger, and the full potential of the organization is not utilized. Moreover it is quite frustrating and demotivating when someone hijacks your successes to secure his own position. It will lead to conflicts. And: “Internal conflict is like an autoimmune disease: the technical cause of death may be pneumonia, but the real cause remains and hidden from plain view.” Negative circle …


We have a tendency to instruct. People working with me might recognize that. We think we know how things should be done; we give the order and request an update on the results a week later. In an environment with a lot of educated content experts this is not surprising: since our schooldays this is how we acquired knowledge: the teacher instructed us, we did our homework, and then she tested whether we had done well.


It may work, but this may not be the most motivating method.


There is also much talk about the “Master-Apprentice” principle. The Master passes his knowledge and experience on to the Apprentice, who goes to work right away, is continuously instructed and corrected and sometimes gets assignments to figure something out for himself. I would call this mentoring.

Mentoring comes from Greek mythology, where Odysseus, when he left for Troy, entrusted his home and the education of his son Telemachus to his friend Mentor, with the command: “Teach him everything you know.”








Still a lot like the schooldays.

For those who have no insecurities about their own position and relevance, and who dare to look at the potential of people rather than just their current performance, there is a third way: coaching.

If we create a coaching culture and use a management style that focuses a bit more on coaching instead of directly diving into the facts and methods, we could cooperate in such a way that our coworkers become aware of the possibilities for working smarter, and for removing obstacles to success, without handing over the responsibility for their work and their own accomplishments. Then everyone can claim his or her own success.

Success builds confidence, confident people to take personal responsibility, and so on. Positive circle!


Let’s help each other so, instead of trying to outsmart one another.

Not that this is exactly easy. John Whitmore, of whom more later, said: “It maybe harder to give up instructing than it is to learn to coach”.


My own first experience with coaching was not entirely voluntary. I will explain why. With one of my best friends I have a deal to learn something new together every year. We do this mainly because we’re both busy and otherwise we might spend too little time with each other, but also because new things are interesting. It was not easy to agree on what is interesting enough to learn, though. We looked at twenty weeks of furniture making, at ten days cooking course at Le Gordon Blue in Paris, at a curriculum at Harvard, and at some other things, but consensus was not reached. Therefore, the deal was adjusted: one year he decides, the next year I will. My choice for example was to follow a curriculum of Art History at The Hermitage. Ten weeks, one evening per week. For me a nice and safe option, with a classical education, and a history as a gallery owner in Amsterdam. Maybe I wanted to start my learning experience as an expert, and not feel inadequate or look like a schoolboy. When his turn came up last year he got back at me and opted for a course in Professional Coaching” I guess because he knew that I would otherwise never do that. I’ve already written about this before, and I am very glad we did it. Incidentally, as my revenge, next year we will follow a training course in Skydiving. This was my choice, because a long time ago he was selected to train as an F16 fighter pilot. He had to parachute jump, too. For some reason, after two jumps, he did not dare to jump out of a plane anymore. Dream gone, and replaced by a career in e-commerce, which turned out rather well. But still, this fear has always bothered him, and now he has to get over it.












Sometimes we need a bit of external help and pressure to make you us aware of what we do not know or what we can do but are not doing. In the end, it remains our own responsibility what we do with it.

How to build a business – demotions

March 14, 2013

There has been a lot of publicity lately about demotions and salary cuts for older employees in IT Services companies like Capgemini, whose market value does no longer justify their salaries.


Like they did not see that one coming.


What is this fuss all about?


Of course people are aware that the number of years you are with the company and the number of times you had your salary raised has no correlation to the value you will bring to the clients. Many years with the company? Maybe that has given you insights in the internal organization, or maybe you can manage or coach younger colleagues. That is not very interesting for a client, who wants practical knowledge, results and tangible benefits.



Especially now, with a much more dynamic and flexible labour market, clients are much more critical and service providers see rates that feel the pressure of the crisis. So how could they have put themselves in this situation? Probably everyone has always been focused on the short-term, because collective labour agreements have dictated that salaries be raised every year, because clients were never the most important stakeholder in companies like this?

In The Netherlands we have almost four hundred collective labour agreements. In only six of them demotion as an instrument is part of the agreement. Unions, whose members are to be found under the older employees, have every intention to keep treating demotions as a taboo.


The whole idea of demotion is not new of course. In 2000 the Wetenschappelijke Raad voor het Regeringsbeleid published a report suggesting that “the salary profile and the productivity profile” are getting out of sync. Their solution: more flexibility in salaries, no automatic correlation between age and salary increases, and ultimately demotion.


So what is the alternative and how could they have prevented this?


First of all, is seems more logical to correlate pay directly to productivity or market value. This can be done by paying basic salaries, plus additional components for both individual market value (measured through billable revenues) and company performance.


The question both companies and their employees will have to start asking themselves is how they can influence revenues per employee. Market value is determined by what clients are willing to pay based on the perceived benefits – although most people seem to think rates are determined by smart sales people. The employee feels he has limited influence on his market value. This of course is not true.

It can be increased by development though experience, training and smart matching. The first two are up to the professional. Matching – placing the professional on the assignments where he or she can add most value – is usually done by sales people. Unfortunately usually the match is made based on competences in CV’s and not on Character, Values, Culture and soft skills.


Our solution: make groups of professionals responsible for their own success and value. Self Steering teams determine what kind of professional education and training they need, and they are stimulated to build a network of clients. With some commercial training they are able to help the sales people not only with leads and opportunities, but also with better matches for proper rates.

The budget available for salaries and other compensation has a direct correlation with the revenues generated. The team members together determine their  own salaries. Demotion: a concept of the past.

How to build a business – Themes 2012

December 13, 2011

The year is almost finished. That makes it time to look forward. We had some discussions in our management team, in our network, and with external media partners to talk about what themes will be or should be on the agenda in 2012.

Below the result

Themes for Professionals

  • Intrapreneurship: Most professionals – capable talented people who are on the payroll of companies – we speak to are looking for opportunities to develop themselves and their careers, and believe the most important steps they have to take involve development from professional to entrepreneur (or intrapreneur). Wikipedia about intrapreneurship: In 1992, The American Heritage Dictionary acknowledged the popular use of a new word, intrapreneur, to mean “A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation”. Intrapreneurship is now known as the practice of a corporate management style that integrates risk-taking and innovation approaches, as well as the reward and motivational techniques, that are more traditionally thought of as being the province of entrepreneurship.


Independent Professionals: Once a professional has taken the step to become independent, and thus in a sense an entrepreneur, the themes highest on the agenda are

  • Growth: on the one hand there is growth as in; Personal Development, on the other hand the growth of their business through more professional services, such as acquisition or sales, personal marketing and risk mitigating services on the fiscal, legal, and pensions side.
  • The Shift: another theme we picked up is the interest of especially independent professionals, to make the move from ambition to Purpose & Mastery.


Entrepreneurs: among entrepreneurs the prevailing themes (next to “what the impact of the economic crisis, the credit crisis and the euro crisis really is”) are




  • Business Execution: IT is now beyond the first two phases (more efficiency through IT in the backoffice, and more efficiency in IT), and can now become in integral part of a business strategy. Technology and Information deployed to create value. IT needs to build better cases for business value, it needs to play a role in driving customer centricity (and track customer sentiment, usage, and profitability through analytics), and it needs to leverage business analytics to foster innovation.
  • Business Technology Integration: Making money with technology. CIO’s need to be much greater strategic partners for the businesses they support Business Model Transformation. CIO looses and business takes control.

And then there are the technology driven themes like:

  • Mobility: Bring your own device, Client/Consumer interaction, Mobile payment
  • Consumerization: the trend for new information technology to emerge first in the consumer market and then spread into business organizations, resulting in the convergence of the IT and consumer electronics industries, and a shift in IT innovation from large businesses to the home. For example, many people now find that their home based IT equipment and services are both more capable and less expensive than what is provided in their workplace. The term, consumerization, was first popularized by Douglas Neal and John Taylor of CSC‘s Leading Edge Forum in 2001 and is one of the key drivers of the Web 2.0 and Enterprise 2.0 movements
  • Social: Social Media, If you don’t have a strategy by now, you’re behind. Globalization and tech savvy millennials are forcing firms to rethink how relevant current and future customers will find their firms. Put together a social media panel or team, Think about how you can effectively manage the data you collect
  • Cloud: ‘nough said, but still a theme for years to come.
  • Big data: ‘Big Data’ is a term applied to the rapid growth of data that has resulted from more automated collection methods and greater capacity for storage and processing. This exponential rise is driven by the proliferation of sensors for gathering data automatically, including those in mobile phones, and more activity taking place online, which can be more easily recorded. Although the use of large data volumes for business is not new, some things have changed, creating new opportunities for innovation. There are three key changes that have brought the issue of data onto many more agendas. Firstly, data storage, processing power and cloud services continue to make large scale data analysis more and more accessible. You no longer need to build your own data centre to use this technique, expanding the pool of users. Secondly, there are many more opportunities to capture data, from sensors in phones and RFID tags in products, as well as a greater social acceptance of contributing manually entered data to social services. Thirdly, it is now possible to analyse unstructured data, so it is not necessary to run your business with detailed customer forms or electronic point of sale terminals to benefit from this form of analysis. Natural text in emails, photographs and sound can all be analysed and ‘mined’ for insights, rather than only structured, coded information that needed to be captured electronically or manually coded.



  • Cash: CFOs believe they should play lead roles in managing financial risks, designing the capital structure, optimizing working capital, and managing investor relations. They also think they should more frequently play lead roles in managing capital investments and revising the dividend policy
  • Growth: Growth remained the top priority for CFOs globally in the first quarter of 2011. With capital supply and efficiency gains largely accounted for, companies now appear focused on growth in a post-recession environment. New products and services, acquisitions and foreign market expansion are expected to be the key drivers behind this growth. Across EMEA (Europe, Middle East and Africa)2, growth through product and market expansion tops the agenda for the majority of CFOs, with a focus on both raising capital expenditures, as well as making strategic acquisitions.
  • Refinancing
  • Acquisitions: With improved access to capital in most economic regions, and with the risk appetite of CFOs consistently increasing around the world, it is no surprise that strategic acquisitions top the priorities list for many CFOs globally. However, despite expectations of increased M&A activity in 2011, there is concern that activity will be constrained by several key factors. In North America, CFOs are wary of unleashing the more than USD 2 trillion in collective balance-sheet cash that has remained on the sidelines since the recession. This limited spending appears to be the result of concerns about the economy and consumer demand, industry regulation, and a shortage of attractive investment opportunities. In EMEA, CFOs continue to expect M&A activity to increase in 2011, with the improving economic outlook and availability of financing. However, the ability for companies to secure targets with the right strategic fit and at the right price is increasingly becoming the limiting factor for CFOs. A similar story is unfolding in Australia, where the majority of CFOs intend to pursue M&A opportunities in 2011 but cite that the greatest hindrance to undertaking an acquisition has been the inability to identify a suitable target.
  • Emerging Markets: Investing in emerging markets





  • Performance Management: Move from administrative role (hire to retire), HR directors can play a boardroom role by identifying the decisive factors that play a role in strategy execution.
  • Commoditization of HR: HR services will turn into commodities. HR resources will be outsourced together with the payroll activities, or replaced by do-it-yourself tools from the cloud. Before the term “Chief HR Officer”  has become widely accepted, he or she will have the same fate as the CIO… early retirement. Recruitment can be done online, the Linkedin network will offer plenty opportunities to interact with candidates. References, assessments, salary benchmarks and training can be obtained online. So unless the CHRO becomes Chief Talent Officer, Chief People Officer or Chief Performance Officer, with a direct relation to the company’s strategy, he will be commoditized, or outsourced.
  • Workforce Analytics: Workforce Analytics and – Planning
  • Talent: Will there really be a war for Talent?




  • Growth: Growth in an uncertain economy
  • Customer retention: Customer retention: In a world of eroding customer loyalty, customer retention must be a top-down, high priority, company wide mission
  • Reputation: Guarding your reputation
  • Technology: Technology and Innovation
  • Talent:
  • Risk: Risk management and investments, Contingency
  • Strategy Execution: Strategy Execution (Strategy consulting is dead…)




  • Steering Teams: ExComms as teams: cooperation/interaction between boardmembers
  • Value Creation: Strategy is not about power and money, but about Value Creation – and not only shareholder value. Strategy development and execution with value and purpose in mind will be a theme
  • Innovation. in order to survive, companies – especially those operating in an increasing dynamic and digitalized environment, with knowledge being the most indispensable and important resource for innovation – need to establish trusted relations to aligned communities, networks and stakeholders. The notion of “embeddedness” is introduced to mark the increasing challenge of substantially integrating firms into their surrounding communities so as to assure the absorption of their exploitable knowledge. Innovation 3.0 (social Innovation) goes beyond Technological innovation, or Open Innovation (defined as “Innovation 2.0”) and clearly beyond Closed Innovation (defined as “Innovation 1.0”).

Non-execs: Consultancy, Contingency and Contacts instead of control and advice.

We expect to read and write articles about these themes – especially those that are on the agenda of different stakeholders –  and we will no doubt see them pop up in conferences and seminars. And just maybe there will be some others, like “how to grow after the crisis”, or “the next Big Thing after Social Media”.


How to build a business – Praise (and blame) or Truth (and transparency)

November 28, 2011

Don’t we all love Awards? Certainly there are plenty prices given for all kinds of accomplishments: there is the “Topman van het jaar Award” – although some of them ran into a world of trouble shortly after receiving this Award  (like Ad van Wijk and Cees van der Hoeven). Then we have the CIO of the Year Award (as well as the Outsourcing Award and the Innovation Award), the CFO of the Year (as well as the Controller of the Year Award), and a whole lot of more specific prices for M&A success, Retail accomplishments, Credit Management, the Henri Sijthof price for the best financial reporting and many, many more.

What is behind all these Awards?

People like competitions, shortlists, ratings, averages, winners, losers. It makes business look like a sport. It brings people together, gives them something to talk about: it creates a network. The network is an interesting platform for sponsors with something to sell. It is good marketing.

Come to think about it, I have two problems with all these prices:

  1. They all suggest that there is an individual responsible for some form of corporate success. This is never the case. The only sensible Award would be the ExCom of the Year Award, where an entire Executive Committee is judged on both Strategy and Execution, on how they work together, and what kind of Leadership they demonstrate.
  2. A network that spends too much time on Awards, and on the wining and dining can be a very interesting platform to strengthen the social ties, but might miss the opportunity of facilitating real exchange of ideas and knowledge.

The second point is interesting: online and physical networks provide an enormous opportunity to exchange information and learn something, but most are lacking the ambition to share content. It is more about who knows who, about visibility rather than credibility. Of course, that is not necessarily what sponsors or advertisers want to do. They are usually still more interested in broadcasting their message, or pitching their product, rather than in interacting with a group of peers. Who than will pay for these network or these network events to operate?

I am not sure, but maybe the trick is to decouple the content from the sponsor, like TED is doing. Yes, there are sponsors, but no, they have no influence on the content, which is of extremely high quality. This could also be the model for multi media publishing companies like FD Media Group, or even ICT Media, CFO Media. Focus on the quality of the content, identify the themes the audience is interested in hearing about and contributing to, and they will all come, participate, visit your site, buy your newspaper of magazine, or listen to your radio station. If relevant people are confident enough to share their knowledge, their dreams, their successes, but also their failures and uncertainties you will have an interested audience, which attracts sponsors and advertisers.

So radical transparency once again is the recipe for success.

Talking about radical, about transparency in relation to the first issue I mentioned (how a group of executives work together to achieve their goals): have a look at the Bridgewater Principles.

Bridgewater is an investment company that manages approximately $125 billion in global investments for a wide array of institutional clients. Bridgewater, which has a 36-year history, has been recognized as a top-performing manager and an industry innovator, and is by now the largest and best-performing hedge fund manager in the world.

It is widely claimed (also by the company management) that these results are a product of its unique culture. Truth and excellence are valued above all else.

Ray Dalio, who founded the company has written a set of principles that all employees in the company are supposed to use as the guiding principles, in life and work. They are very interesting, a bit scary, and sometimes entertaining, if you have the patience to read all 123 pages. More than radical transparency it also is hyper realism. No politics, no bullshit, just say it as it is. And they do.

Management meetings and individual reviews are recorded, and if they think anyone should learn something from such a recording, it is sent to all staff. These recordings usually involve the individual getting shredded publicly. Everyone is encouraged to given open and honest feedback so meetings often resort to public shaming and the demolition of people.

Some of the Principles:

Truth – more precisely, an accurate understanding of reality – is the essential foundation for producing good outcomes. That defines the next step: all things “good” must be grounded in reality. And then: While most other seem to believe that pain is bad, I believe that pain is required to become stronger.

It all sounds a bit like corporal punishment and a level of cruelty you rarely see. It think Ray Dalio would agree:

Be the Hyena. Attack that wildebeest.

For example, when a pack of hyenas takes down a young wildebeest, is that good or evil? At face value, that might not be “good” because it seems cruel, and the poor wildebeest suffers and dies. Some people might even say that the hyenas are evil. Yet this type of apparently “cruel” behavior exists throughout the animal kingdom. Like death itself it is integral to the enormously complex and efficient system that has worked for as long as there has been life. It is good for both the hyenas who are operating in their self-interest and the interest of the greater system, including those of the wildebeest, because killing and eating the wildebeest fosters evolution (i.e., the natural process of improvement). In fact, if you changed anything about the way that dynamic works, the overall outcome would be worse.

Bridgewater also operates consistently with the belief that to be excellent and improve at a fast rate, we must be hyperrealistic and hypertruthful. We therefore need to overcome any impediments to being realistic and truthful.

Then, Mr. Dalio continues with 210 principles, some of which are:

To get the culture right:

1. Trust in Truth

4. Be extremely open

5. Have integrity (meaning you only say what you mean, regardless of how it is perceived) and demand it from other (never say anything about a person you wouldn’t say to them directly; – I guess just to be sure – Don’t let “loyalty stand in the way of truth and openness

6. Be radically transparent (we saw that one coming)

7. Don’t tolerate dishonesty

8. Create a culture in which it is ok to make mistakes but unacceptable not to identify, analyze, and learn from them

14. Get over “blame” and “credit” and get on with “accurate” and “inaccurate”

15. Don’t de personalize mistakes

26. Recognize that conflicts are essential for relationships because they are the means by which people determine whether their principles are aligned and resolve their differences

31. Ask yourself whether you have earned the right to have an opinion. As a general rule, if you have a demonstrated track record, than you can have an opinion on how to do it. If you don’t, you can’t, though you can have theories and ask questions. Oh and I like this one:  Everyone should be upfront in expressing how confident they are in their thoughts. A suggestion should be called a suggestion; a firmly held conviction should be presented as such. Don’t make the mistake of being a dumb shit with a confident opinion

To get the people right

52. Hire right, because the penalties of hiring wrong are huge

54. Weigh values and abilities more heavily than skills in deciding whom to hire

59. Don’t hire people just to fit the first job they will do at the

100. Evaluate People accurately, not kindly

130. Know that it is much worse to keep someone in a job who is not suited for it than it is to fire someone

132. Do not lower the bar

and then 78 more principles on how to perceive, diagnose, and solve problems, and on how to make decisions effectively.

It has lots of characteristics of a religious cult, but still, I hate to admit it, you have to respect this guy.

I will increase my daily dose of red pills.

Building a Business – an IT company

November 4, 2011

What is it with IT?

In all our assignments Technology plays a role. Does that make us an IT Consultancy, as the newspapers and media are consistently calling us?

Nothing wrong with being an IT company by the way, because of all the fast growing companies in The Netherlands, more than 25% is active in the IT sector. On average in this sector revenues have increased 166% in the last three years, against 129% increase for all fast growing companies across all industries.

I am happy to say that we did better than that, but not sure I should be happy to be in the group of “IT companies”. Is there any non-IT company? Can anyone still do business or have a meaningful life without Information, Communication and Technology? I don’t think so.

Triggered by Qhuba winning an FD Gazellen Award, and by an article about the growth of the importance of the IT sector, BNR Newsradio called me yesterday, and asked about the reason for growth in economic challenging times.

What I tried to tell them was that in my opinion we have arrived at the third stage of maturity in the technology industry.

111103 – BNR

At first, companies could save money using IT. Technology was used to automate manual labour. No more need for typewriters; bookkeeping could be done electronically and the planboard could be used generating new ideas instead of planning. Lots of advantages and a better life.

In stage two things got out of hand. Everything was automated, the IT industry and IT departments became powerful forces, and synonymous for “Expensive, Dangerous and Slow”. Outsourcing and ERP were the flavours of the decennium. It became more important to save money on IT, than with IT. I am still trying to find one outsourcing project that really delivered on the business case that was the basis for the decision to outsource in the first place.

Meanwhile on a personal level technology was completely adopted, and extremely successful. Consumerisation… Don’t we all have better tools at home than at work?

And now we are in the third stage: Technology as in integral part of the business model and the strategy of companies. No more demand-supply, no more business-IT alignment. And please no more megalomaniacal projects.

Let us for argument’s sake assume that all companies have only three business processes: idea to market, market to order and order to cash.

In stage one (saving cost with IT) we saw most energy being directed at automating the order to cash processes: how to procure and produce, deliver, invoice and account for stuff.

Now companies can use technology to create new business model, new offerings, and to collect, connect and analyse both information and people: Idea to market. That sounds like Innovation and like Effectuation: generate ideas, embrace opportunities and involve real people.

Also on the commercial side and on the customer intimacy side technology can be put to use. Companies can really interact with the market. And I mean interact as in “Interaction” not only “Transaction”. We can get to know, communicate with and support existing or potential clients, and they with us. This is crucial to the success of businesses and will reshape the traditional concepts of the Market to order process.

If bringing people together that understand how to integrate business and technology into new models, and how to executing these models to delight your customers means that you are “in IT”, than I am proud to be an entrepreneur in the IT sector.

Building a Business – Conversations

October 24, 2011

Sharing information and intelligence is one of the key drivers for people to join our company. We regularly organize What’s Qooking events, where we have conversations about interesting developments in the world of Business Technology Integration, while cooking.


The last one was in a Ferrari showroom, with a guest speaker – Dave Lamereis – who gave us an insight into what’s qooking in the technology labs around the world.

David believes that scientist have already started to transform humans to become living gadgets, with electronics embedded in our bodies to supplement human intelligence and emotions. Depressed? Push a button instead of popping a pill. We will wear contacts with augmented reality displays built-in and we will be able to print anything we want on our 3D printer. Need a new organ? The doctor will print one for you.  Experimental beating hearts and functioning kidneys have been printed.

Sounds a bit scary. The fact that it is possible does not mean that we will all use this, though. We are still autonomous people, making our own decisions.

The people we are working with strive for personal growth, professional growth, expansion of a network of peers, possibly also financial growth. I have the impression that rather than only focusing on the virtual, most of us also want to make something, Make a tangible contribution. Not only consulting, but also execution. Maybe with 3D printing the age of creation is back again.

Still the most important word for us might be growth. We expand our knowledge, our network, we increase the relevance of what we are doing, and for this purpose, our company has to grow as well. There is safety in growth in numbers, in optimization based on data and KPI’s. This is what we could be characterized as puzzles: more pieces, more chances. More data to be analyzed by experts, more solutions to be designed and implemented. A good start, but it gets really interesting when we are not looking at puzzles, but at mysteries. If you don’t know what the pieces are, if you don’t know how to measure success, experts are of little use. Here you need teams, with an open mind, who want to explore rather than exploit, who are ready to work together in an agile manner, striving for effectuation rather than for cause and effect.

We had the experts, and we have the challenges that they can sink their teeth into.

Our next challenge was to create and put to work these teams. Have them, using their collective knowledge, experience and creativity, come up with executable ideas, opinions, products, ventures that would genuinely excite our clients. That is much more in the area of idea to market, or market to order processes, than on the order to cash (production, supply chain, delivery) process, where most of the effort of most of the companies is directed at.

Teams having conversations. Amongst themselves, with clients, with everyone. In marketing speak what they deliver is consultancy, contingency and contacts. But what they really do is have conversations. Not easy for most conditioned professionals, but very enjoyable and valuable. We formed one such team for a prospective client, Travix International. Travix – a billion euro company – is the result of the merger of five online ticketingcompanies (Cheap Tickets, Vliegwinkel, Flugladen , BudgetAir and Vayama). It is run by capable entrepreneurial people who are focusing on the integration of the hitherto independent operating companies, and all core activities but at the same time having conversations all over the world with people from different industries to shape ideas, exchange experiences and connect to people who will increase the chances of growth and success. Last Thursday we sat with Gerhard van der Bijl, Jos Schreurs, Dave van Stijn, Willem van Groenland and Tjibbe van der Zeeuw. Next Thursday we will meet again with the board of Travix.

Real conversations between real humans. That seems difficult in a business world full of processes, models, frameworks and things. This is our ten-step approach:

  1. Relax
  2. Have a sense of humor
  3. Be curious
  4. Listen
  5. Find your own voice
  6. Tell the truth
  7. Enjoy yourself
  8. Be brave
  9. Don’t panic
  10. Go home and think, then go back to 1.

Guest Blog – Who will be the payments processor of the future?

September 12, 2011

One of our most active partners is Ward Hagenaar. Not only does he have strong content (financial services, payment industry, software development), a strong and active network, but he is also very active in a commercial capacity and in external exposure, for instance through blogs.

Ward is going to combine these talents in what we would call Business Development: bringing different trends, players, thought leaders and experts together to help our clients execute their strategies in these fields. The fields are closely connected to the trends, such as mobile payment, NFC, social network marketing,  client interaction and product innovation. The most stimulating meetings with Ward were with people responsible for innovation in companies such as Rabo, Equens, Ericsson and NS.

The challenge will be to find the focus and approach that will take these initiatives a step further than the brainstorm and drawing-board face, towards executable plans and go-to-market strategies.

I did not have to stimulate Ward to start sharing his thoughts and ideas with our network, because he has been writing and publishing for a longer time. His blogs on the payment industry are published on Finextra.

Below, as the next Qhuba guest-blogger, Ward’s latest publication:

I used to work at a large payments processor focussed on POS card transactions and ACH payments. Around 2000 we started adding e-commerce propositions, typically low volume high investment activity at that time. At first we missed success due to our focus on security with SET, the protocol from the brands based on a PKI infrastructure. PKI proved to be user-unfriendly and complex.

We moved to new platforms and attracted banks to offer our services to the market. I felt we were competing with the upcoming e-commerce payment service providers. To be honest our clients the banks and my organization couldn´t follow the speed that the more agile PSP could develop. Also banks where afraid to offer an internet solution they hardly understood, the complexity and the effort to connect merchants to the platform.

Main reasons for not achieving success where, the required amount of functionality and continuous speed of development, the lack of focus at the sales organizations from our customers the banks, and as a result the reduced volumes achieved.

At the end we closed the services down in 2004 and our processor remained happy with its focus on POS card volumes that kept steadily rising at 8% a year without extra effort.

The PSP´s went on and attracted up to tens of thousand of merchants. The e-commerce volumes reached huge growth while maintaining high margins. Now e-commerce is 15% of total retail sales.

At that time I did not view the PSP´s as payment processor similar to our processor services. Wrong I was! Sure they didn´t need to offer 99.999% availability at low costs, comply with regulations as we did and surely had more effective and direct sales channels. But what a success they achieved, what a profitable business they operate and what a scale of operations is reached often offering worldwide services to multiple specific market segments.

Several PSP´s have been valuated at 100´s of millions of Euro´s in acquisitions.

Who will be the payment processor of the future?

Hard to tell, both the traditional payment processor and the PSP have stopped being innovative. They still focus on a single channel and miss the convergence of channels that is taking place in retail. Both have legacy systems and operations hard to change or only at huge costs and risk.

The PSP perhaps has best cards in hand. They still directly have the merchant in view as their customer where the regular payment processor works for financial institutions and only has indirect market contacts. PSP´s are used in operating multiple interfaces at reasonable effort, this is not the case at traditional processors. More importantly PSP´s offer added value services like reconciliation, fraud screening, e-wallet solutions and a broad range of payment methods.

So more customer centric and highly valued as they are I would suggest PSP´s to have a look at the physical retail POS environment as well and offer a multi channel solution to the retailer.

A great start for any payment processor would be to offer every e-tailer a mobile internet version, disclose the suitable payments methods and start innovating. Mobile internet will also be used to order services or products without a direct payment, payment could be performed at the pick up point, perhaps the physical shop. So a new playing field will emerge as mobile will bring the channels together and the processors cannot wait any longer. Most important is to think in terms of service providing to the merchant and redevelop services around this fact.

The payment processor of the future will have to walk some extra miles. Help the merchant increase his turnover by offering multi channel acceptance, reporting and added value services. Design together with the merchant a smart set of payment options for this channels that support sales while reducing costs.

Payment processors and acquirers could also have an important role in providing the merchants with knowledge and contracts for important services like Foursquare, Living Social and the likes that help merchants to distinguish themselves and attract customers.

If anyone can see the next generation payment processors I would be very interested.