How to build a business – Ten Questions

October 16, 2012

We have been in business for several years, we have more than sixty world-class people working with us, worked for eighty-eight world-class clients, held one hundred and fifty-three management meetings and published numerous internal and external documents. At some point it seemed to make sense to bring it all back to ten basic questions. The answer to those questions should describe all the major aspects of our business. Answers that all of our people should be able to give, when the questions are asked.

 

Here are the questions:

1. Where do we come from?

2. Why do we exist?

3. What do we look for in our resources ?

4. How do we behave?

5. What do we do?

6. How will we succeed?

7. What is the one most important thing right now?

8. Who must do what?

9. How are we organized?

10. How we make decisions and deliver on them?

 

And here are the answers

 

1. Where do we come from?

Qhuba, founded in 2007, is a fast-growing network organisation with more than sixty Partners, Staff and Associates (‘Qhubans’). Qhuba means drive, the drive to work together, to learn, to grow and to succeed.

 

2. Why do we exist?

We exist because we believe running companies can be fun and strategies can be implemented successfully when people of character and competence work together.

Qhuba believes that strategies are best executed by a multi-disciplinary leadership team that takes collective responsibility.

 

 

3. What do we look for in Qhubans ?

Regardless of whether they are Clients, Candidates, Network Partners, Prospects, Associates, Staff, Associate Partners, Partners, Managing Partners, Equity Partners, Practice Directors, Shareholders, or Friends, we expect:

  • Character (Integrity and Intentions)
  • Competencies (Hard and soft skills)
  • Network
  • Track record
  • A drive for Autonomy, Mastery, Contribution and working with Peers.

 

4. How do we behave?

We are Independent, Reliable, Uncompromising, Connected

 

5. What do we do?

When organizations look for support in the successful execution of their strategies, we provide (introductions to) people with the right character and competence. We can do this based on Client Value Pricing, on temporary assignments, on the client’s payroll, for a success fee or without a fee.

 

6. How will we succeed?

Together Qhubans use conversations to build a network of world-class professionals to make clients successful by providing capable people and by arranging introductions, opportunities and exposure, meanwhile building a highly recognised organisation as a platform for professional and personal growth.

 

7. What is most important right now?

Increasing Reputation in our network

  • Increase NPS with clients by delivering results
  • Increase credibility with prospective clients through content-marketing, sales and references
  • Increase Trust within Qhubans through growth and success
  • Increase Reputation with candidates through marketing

 

 

8. Who must do what?

Strategy, Structure and Reputation:   Wouter Hasekamp

Network:                                              Tjibbe van der Zeeuw (Liesbeth Hans)

Knowledge and Research                   Liesbeth Hans

Publications:                                      Hotze Zijlstra

Marketing:                                           Wouter Hasekamp, Rachelle Nall

Enablement and Support:                  Dennis van Alphen (Tom Kisters, RikJan Kruithof)

Portfolio:                                             Partners and Practice Directors (Peter Rappange, Mohammed Chaaibi, Gerard Kok, Evert-Jan Tazelaar)

Sales:                                                 Mario School (Susanne van Kleef, Gerard Kok, Evert-Jan Tazelaar)

Delivery:                                             Tjibbe van der Zeeuw (Beatrice Friebel)

 

 

 

9. How are we organized?

Qhuba is organised in Practices that address specific areas of expertise, without losing sight of the collective goal: strategy implementation across disciplines. Practices in the portfolio of Qhuba are:

  • Interim Management
  • Recruitment & Executive Search
  • Programme and Portfolio Management
  • Lean and Transformation
  • Finance and Benefits Management
  • Sourcing Support
  • Lean IT
  • Cloud Consulting
  • The Qloud Company

 

 

10. How we make decisions and deliver on them?

We believe in Collective Leadership: given our values and despite different intentions and goals we want to be able to operate as a tribe of peers, each contributing as a person and as a professional, without giving up our autonomy. Starting points for this ‘Tribal Democracy’ are:

  • Freedom of Thought
  • Freedom of Speech
  • Freedom of Choice
  • Freedom of Dissent
  • Radical Transparency

 

 

Conditions for participation in decision-making are:

  • Trust, which consists of Character (Integrity & Intentions) and Competence (Capabilities & Results)
  • Transparency of Information and Opinion. Silence equals disagreement. This is our first rule of engagement.
  • Commitment, both active commitment and formal commitment. This is the second rule of engagement
  • Accountability; there is zero-tolerance for lack of Trust, lack of Integrity, lack of Transparency, lack of Commitment, but also for Passivity, broken promises, non-performance
  • A shared definition of success made measurable and a focus on results. One team, one goal.

 

Success is measured by:

  • Client Benefits Realized and Nett Promoter Score
  • Staff retention en recruitment
  • Revenue – Margin – Profit

How to build a business – Managing Customer Tasks

February 23, 2012

Several times a year we organize “What’s Qooking” events, where professionals in our network share their ideas on themes that interest them, while cooking our own food.

Last week we had Gerry McGovern as our guest. Gerry is the founder and CEO of Customer Carewords and an authority on increasing Web satisfaction by managing customer tasks (more about that later).

His clients include: the Tetra Pak, HSBC, Microsoft, IBM, Cisco, UK Ministry of Justice, and the U.S. Internal Revenue Service.

 

Gerry speaks, writes and consults on web content management. He has been doing this since 1994. His latest book, The Stranger’s Long Neck: How to Deliver What Your Customers Really Want Online, was published in June 2010.

 

Gerry propagates and uses a quantitative method, which results in changes in website navigation and content that transform websites into profitable tools. He has done this for customer-oriented websites, business partner portals, and intranets.

Gerry is a funny person, full of stories from practical experience. He is the ultimate wake-up call for everyone involved in creating and improving websites. He will not stop stressing the importance of Facts Not Opinions. This is a generic problem he touches. In any business, but especially in consulting we are short in facts, long in opinions.

Another one that Gerry uses in his book on website, but where you can replace websites with businesses: “If there’s one reason more than any other that Web sites fail, it is because the web teams managing them lack understanding of, nd empathy for, their customers. The customer is a stranger (…)”

Whatever you intuitively think is right, usually has a negative effect

 

 

Web task management is about managing your website around top tasks. Success is measured on the ability of customers to quickly and easily complete these top tasks.

Traditional website management focuses on managing the technology and/or the content.

 

These management approaches fail because they manage and measure the wrong things. If you manage from a technology perspective, then the metrics are nearly always volume-based. It’s about the number of documents that are published, or the number of searches that are carried out.

 

Managing from a content perspective is even more volume-based. Many senior managers are still quoting the utterly useless measure, HITS. (HITS stands for “How Idiots Track Success.”)

 

Task management is based on the idea that your customers come to your website to complete top tasks as quickly and simply as possible. It measures success by how quickly your customers can complete these tasks.

 

Web task management measures success based on a simple question: Was your customer able to quickly complete the task they came to your website to complete? Answering this question demands a very different website management approach.

 

This is interesting stuff for marketeers, and one of the most important lessons would be: “Offline is for getting attention, online is for giving attention”, but in general the fact-based practical approach to Why we are doing things in business, and how we measure success is something all business should focus on. In one of the next Qhuba blogs I will focus on Benefits Management, another area of expertise that many companies don’t spend too much time on.

Strange phenomenon: thousands of projects are started, based on business cases, but for very few projects the outcomes and benefits realized are measured. Room for improvement.



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 – Peter Rappange – Project teams and steering committees – Trick or Treat?

September 10, 2011

I promised a while ago that I would get Peter Rappange, who is running the Programme and Portfolio Management practice for us, to start blogging to his views, knowledge and templates. He just did, and I am happy to publish his first blog. You can follow him on his own blog site.

Here is his guest blog, about the subject closest to his professional heart: how to run or help organisations run successful projects.

In all my years as project manager I have on many occasions experienced the interaction with steering committees as a disguised blessing in the sky. Often I have wondered why on some occasions this was a smooth ride and on others a troublesome relationship. It is not that I have overnight dramatically changed my performance in executing projects. So what is the magic behind a good relationship. Over the years I have become reasonably skilled in the execution of projects and thus been given bigger projects to execute with more challenges until finally I ended up managing large global programmes. One thing was sure: with the start of every new venture it was an uncertainty how the relationship between the project team and the steering committee developed. With the years and the many interactions I have had with Steering committees in different forms, sizes and complexity it started to dawn on me: a good relationship had something to do with openness in your communication, predictability and respect. If you are open in your communication and predictable in the results and outcomes of your actions you will gain respect. With respect you earn the right to be listened to and you will notice that your advise will be followed. I refer to this as the Kiwi/Melon model. Both look nice and green on the outside, but if you cut them in half one is still green and the other : BRIGHT RED. So don’t become the melon by trying to hide the issues but be a Kiwi and show the reality. That way you become trustworthy and people will start to follow your advice.

So what does this word predictability mean in relation to projects. It starts very simple : If you explain a Steering committee what they can expect from the project and agree the role they have to play in the interacting with the project you start to create a situation of mutual understanding. Key in this relationship is that the project is predictable in their behavior towards the steering committee, in other words be the KIWI. This is more easily said than done. Predictability requires a certain level of structure and discipline of both parties. This is not an invite to overwhelm an organisation with all kind of project methodologies etc. but a drive towards agreement around a few basic principles. Don’t get me wrong I am a keen fan of project methodologies , provided they are applied with intelligence.

What are the dimensions on which we can govern a project

What can the steering committee expect from the project team

What can the project expect from the steering committee

How do you ‘steer’ a project

An important aspect for each project is to have a certain level of predictability. Nobody likes surprises like late calls on delays or budget overruns which require ad hoc decision making. I have found the following checklist a good aid in assessing project on their structure.

Does a vision exist of the future state or end goal after the project is completed. In other words do we know what we have to deliver and against what level of quality

Do we have explored and documented all options to succeed our goal

Do we have the governance defined in which the project need to operate

Do we have a business case defined against which we can measure and steer the project – This also helps to quantify the benefits

Do we know the cost (including the effort required) and timescale against which we need to deliver the scope

Are we aware of all the risks and issues

Do we have a clear vision on the dependencies of other initiative’s in the organisation to be able to set the right priorities

With the above elements in place the project team is able to report on a regular basis progress and have a meaningful interaction with both the project sponsor and steering committee around the way the project is progressing. This brings me to another topic I want to raise some awareness around namely the interaction between project and steering committee.

Projects are managed on a day to day basis by project managers. Nobody disputes this (I hope). But even with the best of the project managers in place, each project still requires supervision from within the organisation for one simple reason: projects don’t run in isolation and are often dependent or influenced by decisions made organizational units who may not have the project objectives as their foremost primary target. Therefore a balancing act is required to match the project objectives against the strategic and tactical initiatives that take place in the organisation. I have come across an interesting article in which this dilemma was described as the ‘devils act ‘ I have taken the liberty to expand a bit on this model as I find it a good illustration on the challenges a steering committee faces.

The concept of the model is to maintain a constant state of equilibrium. To do so steering committees need to ask themselves constantly:

What is the most important we want to achieve:

  • On Time delivery ?
  • 100% Quality ?
  • As cheap as possible?
  • As safe as possible?

This without losing the sight of the Business case !!

The project manager can’t answer these questions. He or she may have an opinion but ultimately it is the steering committees responsibility to provide clarity and steer the direction towards the projects end goal. The project manager’s task is to provide the data for the steering committee to make these decisions. Hence the importance of the point I made earlier about being predictableas a project.

Therefore it is important to understand how project teams interact with steering committees and vice versa. Much of this has to do with the way we provide information and how we take decisions. Somebody once told me if you – as a project manager – leave a steering committee meeting without having at least agreed on action items for each member of the SC it wasn’t a good meeting. The point he tried to stress is that participating doesn’t mean the role of individual SC members is to sit by and listen, but to play an active role in removing barriers for the project.

There is a lot of documentation around what constitutes a good membership of a steering committee so I will not bore you with these details. What for me important is that people realize the triangular relationship between the sponsor, the project team and the steering committee, each with their own unique role to play but together they share an ultimate common goal – a successful realization of the business case.

To help focus the debate how this interaction should look like, I use a simple model which I consider a good aid to explain the engagement between project and steering committee. The concept is rather simple you split the debate in two parts to maintain focus. You start to concentrate on the past and provide a ‘loocback’ based on historic data the project tracks. The duration of this look back period depends on the frequency of engagement with the SC ( I would recommend a 4 – 6 week cycle depending on the duration of a project). Important during the review is to try and assess if you can detect a trend in the performance of the project in realizing it’s objectives.

The second part of the debate is the project ‘lookout’ . Now the focus is on the future and we try to understand what the project need to achieve, look at the impact of potential emerging changes and risk and an assessment if the current project performance will guarantee a successful achievement of future targets.

If we try to adopt

I cannot guarantee an instant success but only hope that by adopting these basic rules we might even end up with a situation where we perceive a steering committee engagement as a pleasant experience instead of a blessing in disguise.

I invite you to do the same and share with me your experiences be it positive or negative.


How to build a business – Partners, Practices, PPM

August 25, 2011

Apparently it is a mixed blessing to be a partner in our company. We have a structure wherein partners are by and large responsible for their own success in the context f our organization. The Partner profile has several components, but in the end we are most interested in the motivation of potential partners. Usually we have known them for a longer period and are already convinced of their professional and intellectual capabilities, as well as of their management and interpersonal skills. More difficult to fathom are the real value of their network, the leadership skills, and most difficult to assess is the motivation.

Although there is a list, (which I have attached as Profiling) of fifty skills and competences that we find relevant, in the end it all boils down to what drives the candidate. Mastery is probably the most obvious motivator, and the one that stands out. Partners are without exception the ultimate specialists in their fields, have had success and recognition in the past, and…    And then what? Do they want to cash in on that capability? Then there is an issue, and they are bound for disappointment, because there are many capable professionals. Are they on the other hand also driven by a sense of purpose, a desire to make a relevant contribution, then we get more excited, and if that contribution extends to a group of peers they want to work with, then we might be enthusiastic. Now if the potential partner has what we call Autonomy, that is to say, if he convinced that he can be successful himself, wants to take the risk and responsibility for his own and our collective success, and has the characteristics of the entrepreneur than we are convinced.

Sometimes it does not work out that way, and a partner that seemed to have it all, turns out to be primarily focused on “the next assignment” and on “what is in it for me”, and we have to go our separate ways.

And sometimes it works out much better than we could have hoped for.  A partner like Peter Rappange was always recognized for his expertise in the area of programme and portfolio management (PPM), but instead of pursuing roles for himself he decided to organize a circle of professional around that expertise, spend time and effort – based on his vision of how companies can benefit from it – on developing the content and material that will enable a larger group of people to help clients implement processes and to define, execute and control a portfolio of projects.

He started our first Practice, and with us will make it a success. When you work with Peter, you cannot help but think about Napoleon – in the good sense. No success is not an option. His leadership style was considered unorthodox at the time but today we see that he had all of the major and minor characteristics that make a strong leader. Not only on the battle fields, where most of the opposing armies where perplexed but his military strategies, but also internally where Bonaparte with his hands on approach, was able to connect with the people he was leading.  Knowing that your boss is willing to jump in and help out when you need it as opposed to judging you if you aren’t able to handle it, is very reassuring.

Peter deserves respect for giving up considerable short-term revenue and recognition, and trading it in for longer term content, connections and value.

And clients do need what he has to offer.

I sent this tweet yesterday:

The article behind it is from Harvard Business Review and sketches a dreary picture of cost and schedule overruns: “1 in 6 IT change initiatives such as ERP and CRM systems turn out to be money pits, with cost overruns averaging 200% and schedule overruns of almost 70%, according to Bent Flyvbjerg of Oxford and Alexander Budzier of McKinsey, who studied 1,471 such initiatives worldwide”

In the ‘90s I worked for Shell, and this phenomenon was one of the reasons for me to leave and put all my energy in a company called ICE. ICE delivered ERP projects for clients like Reliant Energy and Philips Medical systems on budget and time. All we had to do was work with good people. Our company thrived.

Project Delivery capability alone means nothing, though. After ICE I joined Samas, an office furniture manufacturer, as CIO to run their IT department. We could deliver IT projects, too. And we did, almost killing the company. While we successfully rolled out SAP in Germany and Switzerland, the CEO saved France from bankruptcy, and the CFO refinanced the enterprise and started reorganizing The Netherlands. Then, we all landed on the Dutch organization at the same time. Samas was organized in the typical silo manner: strategy, technology, finance, human resources, marketing and sales had their own goals, targets and responsibilities.

The Samas disaster taught me some valuable lessons, and I decided to start Qhuba, a company focused at Strategy Execution across disciplines.  In my view the old stovepipes should all come together in an orchestrated Strategy Execution effort, and the organization should be adapted to serve the short-term and long-term needs with regards to strategy definition, execution and control.

Some of the decision making and activities will be performed by centralized, permanent bodies, some by temporary needs-based bodies, and some by participative bodies (for instance on a part-time basis).

Strategy Execution

Portfolio and Programme Management is a capability crucial to Strategy Execution, and a PPO (Portfolio and Programme Office) is a typical example of such a centralized permanent body.

At clients where Peter and his team where able to share their ideas, and take responsibility for execution they were met with interest, sometimes skepticism, and often enthusiasm. Now that the results become more visible, benefits become tangible, and the approach has matured from “bringing capable people on board to deliver on projects and programmes” to “implementing the process, adapting the organization, taking responsibility for the results and anchoring the approach in the culture of the organization”, we have seen his attitude change from selling and converting to sharing.

I have asked Peter to make all of his ideas, successes, lessons learned and material available, and I know that he is preparing to do this in blogs, articles, whitepapers. Below I will already sketch some backgrounds on this, an forgive me for all the beautiful jargon: Wait until you see him jump from his chair, run to the whiteboard and explain what it means to be Ranking value and benefits, Determining the size of the portfolio pipeline, Assessing the impact of uncertainty on projects and portfolios, Understanding the benefit and risk relationship, Establishing a portfolio governance capability, Managing the portfolio to maximize benefits and Implementing PPM and a PPO.

The process from Idea to Realisation is fairly straightforward:

PPM

Key to the success of this process is being able to rank the ideas is a way that ensures that only the ideas that are critical to strategy realization are funded and executed.

The Flow

When defining a Portfolio and Project management Process (PPM) the most important questions to address in the organization are the WHY and HOW questions. No rocket science, but still:

The Why is supposed to address the question of  Purpose: Can we ensure we do those projects that are adding to the implementation of the corporate strategy and bring us most value.  It is a focus on effectiveness, or: doing the right things

The How process looks at the way an organization implements the Programmes and Projects they have selected.  Here we look at the efficiency or doing things the right way. How well can an organization plan, execute and monitor the Programmes and Projects.

The Enterprise Portfolio & Programme Office plays a role in managing the process.

Central PPO

Peter will start sharing his approach and the whole body of knowledge in more detail soon, and hopefully especially the client stories.

Apart from enthusiasm, is there any evidence that this is an answer to where we started: are projects – and especially IT related projects – simply bound to fail or at least have significant overruns in budget and deadlines?

Industry research by Gartner, Forrester and others report cost savings from applying project portfolio management in the order of ten to twenty per cent of the total IT budget – but are such reports supported by reliable research?

An MIT study of more than 300 organisations in 23 countries found growth and agility was linked to a portfolio approach. They also argue that governance is crucial and that organisations ‘with superior IT governance have more than 20% higher profit than firms with poor governance given the same strategic objectives’.  The results of this study were published in a book by Harvard Business School Publishing.

In another MIT study more than 100 Fortune 100 CIOs were surveyed and interviewed. They found that 65 per cent believed IT project portfolio management yields significant business value, although only 17 per cent appeared to be realising the potential value in practice.

An a four-level IT portfolio management maturity model (ad hoc, defined, managed and synchronized) in the lower maturity level significant benefits were reported– from removal of low value, duplicate, redundant and poorly performing projects, but enterprises at the synchronised stage showed a substantial improvement on asset performance – they achieved cost savings of 40 per cent, better alignment of IT budgets and business strategy, and greater central coordination of IT investments across the organisation. Other benefits identified by interviewees included: wider support from senior business management; the process was perceived to be fair and objective; and it resulted in increased investment in IT.

In the Netherlands Chris Verhoef of the Free University came to similar conclusion. I cannot advise you to read his article on Quantitative IT Portfolio Management though, unless you are fond of almost hundred pages of formulas.

Funny that the better the performance, the more money is invested in technology. I am not sure if the last one is good news:. There must be a break-point… If you look at it from an asset optimization point of view it makes sense though: best invest where the return is high.

Still good news for clients, and for us: there is a lot of room for improvement, and we do not have to accept failure. Way to go Napoleon! Just steer clear of Waterloo.



How to build a business – to be or not to be a CIO

August 22, 2011

Many of my partners are CIOs, and so are many of our clients. I have attended loads of conferences and CIO Days, and the last few years my company has participated as a juror in the CIO of the Year Awards. And although CIO conferences and platforms tend to waste at least some of their time together on the position of the CIO (“Should the CIO be in the Board, or can he be successful when reporting to the CIO, too?”), there were also many occasions where we could discuss the role and the agenda of the CIO, and – maybe more interesting – the profile and attitude of the CIO. I have met some extremely capable and interesting people in this network, and came across a remarkable diversity of backgrounds, motivations, and views on the role of the CIO.

This week I was approached with the question whether I wanted to be candidate for a CIO role for a large multinational company. I have held this position before at Reliant Energy, at a Multinational Manufacturing company and at a large Commodity Trading company. The question made me think about what it would take to be successful in such a role, at what would be on my plate this time, and especially about the motivation to say yes or no.

The Why

What drives a CIO? In many cases the CIO can play a role that looks a lot like the tightrope walker’s balancing act. He is right between strategy and execution, between Technology and Operation, between Data and Intelligence, between Clients, Internal stakeholders and his own team of experts.

It is not the best paid of the C-level jobs, it does not come with the decorations and respect of the Executive role, and it can be a risky position, too. The change a CIO is fired is considerably higher (43%), than that he is promoted (10%), according to research published by CIO.com. Hence: CIO equals Career Is Over. So external motivators like money, respect and security are not the ones to look at. The best people have a drive caused by intrinsic motivators such as Autonomy, Mastery, Making a contribution, Connecting to Peers. Successful CIOs can can set their own goals and decide on the way they will reach them. They will take responsibility for their own success and their own failures. And are able to set their expertise on processes and technology to work for the greater good of the company and it’s customers.

Creating value for the client, as well as for the clients’ customer is a key ingredient to an interim CIO. Let’s not talk about business-IT alignment. Let’s instead start with convergence, or even better: Customer Centered Convergence. Of course creating value for customers is the focus and responsibility of an entire organization, not just for sales and services units. The supply chain processes, not directly visible are an integral part of the strategy, and in these processes, as in all other processes, information and technology will be involved. In many businesses the client-touching processes, the supply chain processes and the back office processes require a convergence of business, information and technology. That is what makes the CIO role one of the most interesting ones. That is where he can make a difference, and that is why the balancing act is so much fun.

If I could be a CIO in a company that understands that the reasons for combining Strategy and Execution, Technology and Operations are all based on customers’ needs. And you can only serve your customers effectively if the vision, the operation and the technology are integrated from beginning to end into a company that moves beyond the individuals, and beyond their silo’s.

Now more than ever before the companies that have done this are successful, and the themes on the agenda are of the sort that make the CIO role the most interesting one of all the Chiefs. Who can afford not to think about Customer Centric Convergence, or Mobility Solutions, or about Data, Analytics and Business Intelligence, not to mention Outsourcing, Cloudsourcing, Cloudcomputing?

The What

Now what are the are the focus areas and the mandates of the CIO? I have not come across a better and more balanced description than the one given by Faisal Hoque and Tom Trainer, Global CIO of PepsiCo, and Information Week’s “CIO of the Year” as well as CIO magazine’s “Quintessential CIO” , in “Winning the Three-Legged Race.

Business Technology Management Framework

Their views are reflected in a collection of dimensions and capabilities that quite accurately describe all those areas the CIO has to focus on.

The four dimensions are pretty straightforward:

1. Processes: a set of robust, flexible and repeatable processes, defined and consistently optimized to ensure:

  • General quality of business practice—Doing the right things
  • Efficiency—Doing things quickly with little redundancy
  • Effectiveness—Doing things well.

2. Organization: an appropriate organizational structure based on clear understanding of roles, responsibilities, and decision rights, including

  • Participative bodies—involving senior-level business and technology participants on a part-time basis
  • Centralized bodies—requiring specialized, dedicated technology staff, for instance for Enterprise Architecture and Portfolio Management
  • Needs-based bodies—involving rotational assignments, created to deal with particular efforts, such as projects

3. Information: Data must be available, relevant, accurate, and reliable. Metrics distill raw data into useful information, for instance for decision-making. Information should be distributed across all layers of the process, from client, through the organization to the partners and suppliers.

4. Technology: Effective technology can help connect all the other dimensions. Appropriate technology helps make processes easier to execute, facilitates timely information sharing with and about customers, and enables consistent coordination within the organization.

Four capabilities

1. Strategy, planning, and management, to establish a joint business-technology agenda. Capabilities such as Business Technology Strategy, Strategic Planning & Budgeting, Strategic Sourcing & Vendor Management, and Consolidation & Standardization can drive toward innovation, agility or resilience in specific areas .

2. Technology investment, or
 Investment Management: Defines business and technology management roles in making decisions on assets and value rationalization. Capabilities such as Portfolio & Program Management, Approval & Prioritization, Project Analysis & Design, and Resource & Demand Management can create a performance-driven decision matrix for resource allocation.

3. Strategic enterprise architecture. Provides end-to-end enterprise visibility. Capabilities such as Business Architecture, Technology Architecture, Business Technology Standards, Application Portfolio Management, and Asset Rationalization drive the execution of a converged business model with an actionable enterprise blueprint. It shows the connection points between business processes and technology.

4. Governance and organization. 
 Establishes what decisions should be made, the people responsible for making them, and the process used to decide. The enterprise should seek a set of networked governance capabilities. Capabilities such as Strategic & Tactical Governance, Organization Design & Change Management, and Communication Strategy & Management underpin the success of critical networked governance models:

  • Visioning networks that create and articulate a strategic vision
  • Innovation networks that foster collaboration to conceptualize and implement new business models
  • Sourcing networks that enable multi-sourcing arrangements, joint ventures and strategic alliances
BTM

How the organization sees the role of the CIO, and which capabilities deserve more time and attention is key in establishing the CIO mandate, according to a report from IBM entitled “The Essential CIO: Insights from the Global Chief Information Officer Study,”.

In the Leverage Mandate, the organization demands high-performance IT and the CIOs focus on managing essential IT activities and getting information to decision makers faster and more accurately. The business expects CIOs operating with the Leverage mandate to concentrate about half of their efforts on the fundamentals of delivering IT services.

Internal collaboration and client interaction are among the principal goals of Leverage mandate CIOs.

CIOs focused on cross-enterprise growth continuously tune business processes and internal collaboration to gain tighter integration. Like allCIOs, those working with an Expand mandate are responsible for the fundamentals—a well-run ICT infrastructure that offers data security, integrity and system availability. Yet, they must also continually refine operations to optimize efficiency and seek competitive advantage with the help of IT. Still the focus is mainly on internal processes and better decision-making.

CIOs looking beyond the boundaries of the enterprise to simplify business processes and generate real-time insights up and down the value chain, might be operating with a Transform mandate and are expected to be a provider of industry-wide solutions to support business. Transform mandate CIOs are leading efforts to simplify both internal and external processes for clients and partners alike.

With a Pioneer mandate, CIOs are seen as critical enablers of the organization’s vision and typically spend less than one-quarter of their time or budget on delivering fundamental IT services or business process efficiency. CIOs exhibit an entrepreneurial spirit and enable the radical redesign of products, markets and business models. This group of CIOs ranked product- or service profitability analysis their top priority for turning data into usable intelligence. And they cited adding new sources of revenue as the highest impact of IT on their organizations

The How

I always believed that you cannot manage people. People need leadership. Still good leaders – and definitely great IT leaders – are Executives (and that implies they have political sensitivity and timing), adept at interaction with people (including other executives), and at managing projects, financials, and contracts.

If we are to do the right thing and do the thing right, we need to interact with all stakeholders (Shape Demand), set reasonable expectations, deliver on what we promise and Lead our own team, while building and maintaining relationships with peers, clients and partners.

On the one hand there are the Leadership skills, that enable the CIO to Execute Strategies through sharing a vision, inspiring by example, connecting, generating real traction, showing and generating interest, maintaining momentum and measuring and celebrating success, while on the other hand he needs to have a set of capabilities that need continuous adaptation to a changing world. At the moment understanding the importance of a Enterprise Architecture, with a lot of decentral decisions and responsibilities is crucial, combined with contract management as a core competency. More and more services are provided by outsourced developers, software and hardware vendors, consultants, and other third-party IT service providers, and not always to a central IT department. The CIO coaches more than he prescribes, supports more than he delivers, and enjoys the interaction more than the transaction. The Demand-Supply model is dead.

The most important trends, according to Forrester:

  • From alignment to convergence. To succeed, the CIO will have to converge with the business and not think of IT as a separate discipline but infuse technology in business decisions.
  • From execution to innovation. Drive innovation and boost business-partner relationships.
  • From technology supplier to services orchestrator. . The new CIO will not just supply technology but will be responsible for sourcing technology solutions and developing services for business.
  • From operations to business outcomes. Today many CIOs are being measured on revenue growth, customer intimacy, and their contribution to innovation. This focus on business outcomes ensures the CIO is focused on business priorities.
  • From rules to guardrails. For many, this will be a radical change — from layered technology management to new rules for ownership, accountability, and responsibility.

The more I think about it, the more I am convinced that the CIO role is the most interesting one in a company, even if it is your last job at that company. That is why we went independent isn’t it… so we could not be promoted or fired.


How to build a business – Crisis? Crises!

August 15, 2011

We have started our business at the end of 2007. So we have always operated in times of crisis. But what is this crisis? Four years later we can make some sense of it, and determine what the impact on building our business has been. But first: What crisis or crises are we really talking about?

There is a sequence of crises: the housing crisis, the credit crisis, the banking crisis, the liquidity crisis, the economic crisis, the debt crisis.

Crisis

All together they are probably called The Financial Crisis or “the greatest financial crisis since the Great Depression” as the Wall Street Journal called it. It began with a boom-bust scenario in real-estate, or better: it really started with another boom-and-bust: the dot-com bubble of the late 1990s. When the decline of the stock markets in 2000 marked the beginning of a recession, interest rates were lowered to limit the economic damage. These low interest rates where a good stimulus to consumption, but also for the mortgage market. A lot of people were able to buy properties. The housing market boomed and anybody fit enough to put a signature under a contract could buy a house as banks and other financial institutions came up with mortgage products for anyone, including people who really where not financially fit enough to buy. The subprime mortgages kept interest rates low for the first few years (ARM (Adjustable Rate Mortgage) only to be increased in the following periods.

Housing crisis (2007)

In the US, the housing market peaked in 2006. Banks and other investors had devised complex financial instruments to slice up and resell the mortgage-backed securities in an attempt to hedge against any risks. More and more home-owners, over-leveraged, and now unable to pay defaulted, banks foreclosed and housing prices started to fall. The pyramid started to crumble, starting in 2007 when two hedge funds owned by Bear Stearns that had invested heavily in the subprime market, collapsed.

Credit crisis (2008)

Instruments with names like “Mortgage-backed securities” (MBS) and “Collateralized Debt Obligations” (CDO) suddenly posed grave problems for banks that had bought them, and at the same time more and more people were unable to pay their mortgages. Banks started to distrust each other, and credit was hard to come by, which was not only harmful for the housing market, but also for businesses. Hundreds of billions in mortgage-related investments went bad, and once mighty investments banks had to write off substantial amounts.

Banking crisis

Some of the largest insurance companies and banks had to be saved by government. Some were not. In March 2008 the Fed staved off a Bear Stearns bankruptcy by  buying $30 billion in liabilities and engineering an acquisition by JP Morgan Chase. Fannie Mae and Freddie Mac were bought by the US Government to save them, Lehman Brothers went bankrupt. Merrill Lynch sold itself to the Bank of America to prevent bankruptcy. In September 2008 AIG (American International Group) had to be bailed out for $85 billion because it was exposed to securities known as CDS’s (Credit Default Swaps, a financial instruments designed to protect against a default by a particular bond or security)

In The Netherlands losses from those investments and the effect of the tightening of credit caused ABN and Fortis to be bought by the Dutch Government.

Stock markets plunged and credit markets froze. Injections of government funds were used to strengthen balance sheet, not to lend to businesses. This causes a shortage of liquidity.

Liquidity Crisis

Central banks tried to inject liquidity in the markets, but still, the crisis spread more banks got into trouble and countries like Iceland and Pakistan had to seek emergency aid from the International Monetary Fund. A vicious circle of tightening credit, reduced demand and rapid job cuts set in, and the recession was a fact.

No doubt this period also created opportunities, especially on the longer term: banks will not be seen as they were seen before, and refinancing as well as mergers and acquisitions will be a different business then until now. I do not think we would have been able to play the role that we did in the Mobile Telecom industry if the traditional investment banks where in the same position as a few years before. Also, companies restructuring debts, reorganizing, and adjusting their strategies to the new market situation created chances that we might not have had otherwise.

One of the most interesting aspects of this crisis: it will take a long time before confidence in banks will be restored, and I can see the whole Financial Services industry changing. As Brett King, the author of bank2.0 wrote: Consumer (and business) behavior and technology will chance the future of Financial Services. And: why call it Financial Services if no service is provided? Would we have been approached by an American investor who wants to create an online B2B bank in Europe. Maybe, but an Economic Crisis could be the right time for companies to engage in ‘Disruptive Innovation’ and new business models.

Economic crisis (2008)

During 2008 and 2009 many countries tried to provide stimuli for their economies, injected cash, reducing interest rates, and sometimes buying industries. In the US  General Motors and Chrysler went bankruptcy with the US Government investing more than $60 billion. Thousands of jobs were lost. While banks seemed to recover and were returning bailout money to governments, unemployment rose to the unprecedented levels in many countries. In The Netherlands unemployment was relatively low with less than 6% in 2008 and less than 5% in 2009. On average in the Euro zone there was a 10% unemployment rate, But then, in the Netherlands a large portion of the workforce are independent contractors (6,5% or 500.000 people). This provides flexibility in terms of unemployment, but large numbers of professionals without an income.

Our company had (and has) a risk profile suited for situations like these. With relatively few people on the payroll, and more working with us in a network-setting as partner or associate, we did not feel the pressure of having to take assignments at ridiculous rates. At the same time we were able to recruit some of the most capable people around. Also, it became clear who our real clients were, and which companies were opportunistic enough to offer rates that were below what they would pay their own staff. We saw it all: low rates, ninety days payment conditions, and competitors that could not say no.

Debt crisis (2010)

By the end of 2009 the financial crisis seemed to have faded away, companies were hiring again, and the Dutch stock market (AEX) had risen more than 35%. In 2010 though a new crisis came to the surface as information about the size of Greece’s debts reached markets in Europe. After Ireland and Portugal turned to the European Union for a bailout, Greece came to the brink of default in June 2011. Support for the euro started to erode, markets began to sink worldwide and signs of a renewed credit crunch in Europe appeared.

Also in the US deficits that had risen sharply since the recession began in 2007, and unemployment levels that remained high even as the economy began a slow recovery. Although in August, hours before America would have defaulted on its payments, an agreement about a debt ceiling, and associated cost cutting was reached, Standard & Poor’s downgraded the government’s AAA rating, and, four years after the crisis began, the economies of the United States and the countries of Europe continue to struggle, confidence is not restored and markets fear the possibility of a double-dip recession.

In the “real economy”, companies perform worse than expected. Looking at our clients, companies like Tata Steel, TomTom, KPN-Getronics and E.on are facing lay-offs, Vattenvall is writing off on Nuon, RWE on Essent. Still, they are turning to us for talent and ideas. It is a good time to find out who are long-term thinkers, who are reliable and uncompromising. Just today, we spoke to an independent contractor who turned down what seemed like a once-off opportunity to help reorganize the IT Department of a major Dutch telecom company. Instead of engaging in what would no doubt have been a long and profitable assignment, he turned down to assignment because after a few weeks it was clear that internal politics as well as the strategy and lack of commitment made the chances of success, without collateral damage to the people involved, slim. He put ethics, his good name and long-term value above short-term financial gain. We cannot wait to start working with him.

We have grown, and in this crisis many new players emerged and became successful.

At the same time, we can see another bust and boom scenario coming our way. Although we are paying customers – of LinkedIn and Google, and enthousiastic users of Facebook and Twitter, some of these social network companies are sold or at least valued at astronomical amounts, without the stability or the profits to justify them. That is a bubble waiting to burst.