Behavior and Brilliant Bastards

Behavior is a funny thing. We usually take it for granted because it seems to be something personal. It seems part of someone’s personality, not to be meddled with. And can we even influence or change it?

But then, on the other hand, it is too important to just let it go. It can be one of the most powerful assets in a company, if the collective behaviors of people work towards a collective ambition and common goals. And if not it can turn into a very destructive instrument.

Another reason why behavior cannot be ignored or in all cases accepted is that there is a clear relation between behavior and Company Culture.  Because of this relation it can influence culture and thereby have an effect on other people’s engagement and performance. This in turn of course has an effect on the chance of implementing your strategy and being successful. A mouthful, of course. But everyone knows this.

Our Qhuba Leadership team had a diner last week and we had asked the twelve participants to do an Erika. Remember Erika? She was the first streaker, throwing off all ballast (more specifically: all her clothes) to focus on her goal (whatever that may have been, probably five minutes of fame).

 

 

 

 

This was in the eighties so I think she got what she wanted.  The reason I mention her is because of the “Erika Principle”, which might help you focus. It stands for:

• Erase
• Reduce
• Increase
• Keep
• Add

So we asked everyone what not to do (or do much less) and what to start doing (or do much more) to implement our Strategy. we expected discussions about focus, markets, services, strategic directions, or activities, but what we noticed was that many of the things people mentioned were behaviors.

The relation between behavior and culture, as mentioned before is a direct one, but not a one-on-one relation. There are many definitions of what a company- or a corporate culture is. They range from “the way we do things around here”, to “the collective attitude of all the people”. I prefer a more specific definition: a Corporate Culture consists of shared ambitions, behaviors, shared values and shared assumptions of all who play a role in the company.

 The tricky thing is that even if some of the ambitions, behaviors, values and assumptions are shared explicitly, a lot remains below the surface. Mental picture: the Iceberg. What is visible is usually in documents that no one reads and in behaviors that everyone sees. That is why I believe that the influence of behaviors is large, which is exactly why as the leader of a company you cannot accept disruptive or destructive behavior and should do everything you can to promote behavior that is in line with your ambitions, values and believes. And sometimes that hurts.

Some people in key positions can be very good at their jobs in the sense that they have all the intellectual capabilities and the experience to succeed, but they can still be unsuccessful and even damaging to the company because of how they behave. We call them Brilliant Jerks. Sorry for the title of this blog, I could not resist the alliteration. Some have limited social skills which might alienate especially those they have a hierarchical relationship with. Even more serious is negativity, sarcasm and disputing as a way of participating in conversations. This behavior is often seen in College fraternities – in fact the Dutch word for Fraternity is Dispuut. It  has no place in a professional environment, though. Still, you will see it everywhere. The colleagues who can not sit and listen to anyone or any presentation without interrupting every few minutes. And when that does not have the desired effect or kickstart a heated argument, they will up the ante and by taking remarks or even words out of context to pin someone down that way.

We do not accept this. Instead we ask them if they are aware they do this, and if they are, why they do it. Explaining how it destroys any exchange of information, as well as cooperation, creative processes and decision-making sometimes helps. If it continues, we confront them, and as a last resort: we remove them.

Of course the best way to influence behavior is by setting the example ourselves,  and expect the same from our (Leadership) team.

 

Paradoxes and Dilemma’s

Last Sunday, for the first time in five years, Qhuba had a Beach Party: we had Beach Volleyball, a Sand sculpture-artist, barbecue, Soccer Championship on a big screen, and… partners and kids.

It was great. Why didn’t we do that before? Company – Family – Party,

Indeed, why did we not? Work life and personal life are interconnected nowadays, we work from home sometimes, they hear the stories, and how much fun is it when your kids and your spouse get to meet the people you work with and talk about? Great Fun! And probably I am the reason it never happened before, because work and home were different worlds me, and I kept them separate. This seemed like a good idea, and now it does not sound like such a good idea anymore. Or maybe for some people it still is, since not every attends these kinds of Parties, and not everyone who does attend brings his family. Not everyone has a family, for that matter.

Trying to think this through it becomes obvious that companies and people are constantly faced with Paradoxes.

This was an example; there are many more, bigger and smaller:

 

• Work and Private mixed or separated
• Command & Control, or Self Steering?
• Customer Focus, or People First?
• Collective growth or personal development
• Lean, or Agile?
• Exploitation or Exploration?
• Management or Leadership?
• Focus or differentiation?
• Short term or long term
• Cash or Value?
• Product focus or Market orientation?
• Network company or traditional Hierarchy?

 

The list goes on as long as you want, but first this: are these Dilemma’s or Paradoxes. I believe the difference is crucial. As far as I am concerned they are Paradoxes. In my definition a Dilemma is an “either-or” contradiction, usually the result of, or the solution to a problem. Good stuff for tough Leaders, because they need to make a choice between two alternatives that appear to be equally attractive or unattractive.

A Paradox on the other hand is an “and-and” challenge, seemingly contradictory and exclusive at first glance.

 

 

But what if the juxtaposition of alternatives is only perceived, and we do not think the challenge through, or we are not open to new possibilities as a result of our background or our worldview? Our opinions are often shaped by assumptions about what is right, and we act in accordance with those assumptions, without questioning where they came from.

If we do this, we turn Paradoxes into Dilemma’s, which we will then solve by making choices that have only losers, leading to polarization, negativism and missed opportunities.

 

Bob de Wit and Ron Meyer wrote about this in their book “Strategy Synthesis – Resolving Strategy Paradoxes to create Competitive Advantage”:

Most people are used to solving puzzles, resolving dilemmas and making trade-offs. These ways of understanding and solving problems are common in daily life. They are based on the assumption that, by analysis, one or a number of logical solutions can be identified. It might require a sharp mind and considerable effort, but the answers can be found.

However, most people are not used to, or inclined to, think of a problem as a paradox. A paradox has no answer or set of answers – it can only be coped with as best as possible. Faced with a paradox, one can try to find novel ways of combining opposites, but one will know that none of these creative reconciliations will ever be the answer. Paradoxes will always remain surrounded by uncertainty and disagreements on how best to cope.

 

So Paradoxes require effort, and learning how to deal with them, rather than killing them by making simple choices. A few simple steps might help, but it is a journey into uncharted waters.

The first step: Acknowledgement: make clear and agree on the fact that you are dealing with a paradox and not with a Dilemma that requires a “yes” or “no”, or a “left” or “right”.

Then: Accommodate a conversation, a discussion or a process. This might be the hardest part; talk about the paradox without all your preconceived notions of “how we do it”, or what is best, but instead look at the alternatives from all sides, seriously considering both their positive aspects as well as their negative aspects.

After that: Acceptance: we need to accept that for most paradoxes there are not simple solutions, and that the outcome is uncertain, as it the future. A change mindset helps. Let’s have that Family–thing and see what happens.

And finally: Creativity: look for workable ways to deal with complex concepts, systems, structures and solutions. Experiment and be prepared to turn the whole thing upside down.

 

And complexity…? If we can give each other the leeway to organize a Beach Party, to attend or not to attend, and to bring spouse and kids are not bring them, and if our kids can build sandcastles together, and decide to destroy them again, or finish them, or to play volleyball or watch soccer then we should be able to deal with the business paradoxes, too. Especially if we are able to admit that we will be wrong sometimes, or even that we want to be wrong.

 

For all who want: another Beach Event next year. With kids, Or without, Or both. I will be there.

How to build a business – Net Promoter Score

Two things have always been crucial in the assignments we do for our clients: what are the benefits we create (expressed in Economic Value or Cash Value Added) and are they truly excited and delighted by what we do. Over qualified resources, continuous support by peers and validation of the results are key in accomplishing this. But at least as important: are we able to measure and prove it? benefits Management has developed into something of a specialism, especially if you do not only measure in financial or quantitative terms, but also in areas like Risk, Scalability, Agility, Motivation.

Customer satisfaction, or even Client Delight is another challenge. Luckily this topic has been addressed some twenty years ago, by Fred Reichheld, a consultant from Bain & Company. He spent years researching enthusiasm, loyalty and commitment in customer relationships. Surveys did not seem to provide the answers he was looking for, partly because the answers from dissatisfied, undifferentiated and enthusiastic customers were so different that they could not drive any management decisions on improvement.
For answers he focussed on the happy customers only and decided to measure their enthusiasm by asking them one question, that he thought related directly to their loyalty: how willing were they to recommend the firm. We see this unpaid marketing department at work every day, nowadays through recommendations on the internet, and more than anything else, by the Like button of Facebook.

Back then, it was a new concept, which he called Net Promoter Score, or NPS. More than the financial benefits our clients have, and definitely more than the revenue we generate, the level of loyalty created is key to success, and yes it is similarly important to measure the level of frustration and disappointment of those who might become active detractors.

With growth come more formalized processes, more dashboards and reports. close relations and intuition alone is no longer enough to keep track of our performance, and the time has come to also implement this process: Basically all that is required are three steps

Step 1.: ask each and every client one question: “How likely are you to recommend us?”, and have them score the likelihood on an eleven-point scale from 0 to 10

Step 2: Break the results up in three categories: those  that gave ratings from 0 to 6 are “Detractors”, the one that logged a 7 or 8 are “passively satisfied”, and only the score of 9 and 10 represent the “Promoters”.

Step 3: Compute the score by only looking at the difference between the Detractors and promoters: %Promoters – %Detractors = %Net Promoters.

So far so good. That is to say: there is potentially a lot wrong with NPS. A 0 score and a 6  have the same impact on the score, but from the client’s perspective there is probably a large difference. Also 0% detractors and 60% promoters gives the same result as 20% detractors and 80% promoters. So we want more: we want to know what are the reasons behind the score, and we want to be able to act on specific cases if there is reason. It is a one-question-only thing some say. If you do not understand the data you cannot act others argue. It seemed so simple

Now, three decisions need to be taken. Do we ask this question only, or do we ask more to find out what drove the score? Do we ask the questions ourselves, or do we get more honest answers if someone else asks them, and do we ask face-to-face, by phone, or by mail/online?

More discussions. We asked for advice. The specialists gave us options. One question, a few questions, many questions. Open questions, closed questions. Damn.

We asked more advice. some of the reactions were outspoken, almost emotional:

On line surveys are no more effective than written… only difference is the envelope.

The problems with written/on-lines include…

•  Only outliers are motivated to respond… those who are very happy or very unhappy… so you get skewed results.
• You don’t know who actually responded (the VP’s emo-punk daughter? An Admin? The dog?
• The spontaneity (and any associated honesty) is lost.

Why in the world would anyone follow-up by phone to a written survey?

Respondents should NEVER be “followed-up” on unless they specifically request it.

Even if their responses are negative!

No respondent wants to justify their response or discuss it further… unless they ask for it.

The right way to do it is to be sure you ask enough open-ended questions in the survey to get the info you need without follow-up.

When you follow-up (and especially if you quiz them on any response), you bias or destroy their future cooperation.

Phone is best, 3^rd party, brief is good.

Okay, we got the message.

So this is what our survey looks like. Two questions, preceded by an e-mail, asked by phone, by someone the client does not have a personal relation with:

1. Based on the work Qhuba did for you, how likely is it that you would recommend Qhuba, on a scale from 0 tot 10?

2. What factor had the most impact on your answer

• the character and behavior of the resource (like integrity, cooperation)
• the competences of the resource (knowledge, execution power)
• the benefits realised versus the cost
• the cooperation with other people in our firm
• the relation and connection you have with our network
• something else

Now I have one last question: How likely do you think it is that the NPS score we log and the answers to these questions will help us create more value for happier clients?

How to build a business – Ten Questions

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 – Employees and Contracts

Building a business requires creating and activating a network of Partners, Associates and Employees. We are striving for a healthy mix of people who share a DNA and a sense of purpose, but who might have different needs and possibilites, depending on their personality, the stage in their career, the desire for short or long term reward (cash versus value) and the appetite for risk.

For capable people with skills and ambition who want to be surrounded by people they can work with and learn from and who prefer or require a monthly income, becoming an employee can be the most appropriate choice. We call them intrapreneurs. This relation needs to be formalized in an employment contract. Contracts are not pretty. Despite network organisations, work2.0 and despite all good intentions basically they arrange and exchange of time for money.

The good intentions are that we want all our people to be independent, that is: responsible for their own choices and their own success, we know they are reliable professionals, who do not compromise on quality, and who are connected to a network of peers they like to work with and work for. This is our DNA. The intention is also to make sure they have an adequate monthly income and that there is no limit to what they earn, based on how successful they are.

Now try to stick all that in an agreement. What we did is: we offer all our professionals on the payroll a basis salary, and then we make a budget available that is equal to 50% of what their personal turnover is. Out of this budget they can make choices on for instance education, a company car, laptop, et cetera. The difference between salary plus costs and their personal budget will be paid as a bonus, if a set of OKR’s (Objectives and Key Results) are met. A nice combination of security (for the employee), limited risk (for the employer), freedom of choices on personal development and reward and intrapreneurship. Or so we think.

Of course a contract describing this level of freedom and responsibilities within the boundaries of the labor laws results in quite an extensive document. You would think that the more experienced employees, with several previous employers, would be most critical, especially because in their case the base salary usually is lower than what they were used to – be then the upside is higher than anywhere else. The opposite is the case. Last week we lost a prospective employee, who seemed really talented and a perfect fit, due to this contract.

The base salary was higher than what she earned in her previous job, we explained the model, the role, the responsibilities, the budget, the holidays, the risk, the fiscal implications. All better than where she came from. She did not sign. I am confused. Either she was not what we thought she was, and she did not understand it, or it was too good to be true and she became suspicious that their might be a snag. Or maybe we are a more average company than we think we are, or than we want to be, and people just expect a salary in exchange for their time.

The last option a refuse to accept.

Researchers like David Marsden (Professor of Industrial Relations and a Senior member of the Centre for Economic Performance) at the London School of Economics will tell us that in the Network Economy their is not only the contract between employer and employee, but also the psychological contract and the economic or incentive contract. Maybe I should go to London and try to understand. Or better, let me go to Brazil and visit Ricardo Semler. He did it the other way around in his company Semco, letting his employees choose what they do, where and when they do it, and even how they get paid. He wrote a book about it called Maverick, the success story about the world’s most unusual workplace.

So that’s where I will go if only because the weather in Sao Paolo is more attractive than in London.

How to build a business – Managing Customer Tasks

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.

How to build a business – Themes 2012

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

• Network: how to operate as network companies in a networked society
• Content Marketing: how to use permission marketing (thinking as a publisher) versus bug and beg marketing,
• Effectuation: The theories of Saras Sarasvathy of Carnegy Mellon University on how her research of successful entrepreneurs uncovered five basic principles these people shared. Her 2001 publication “Causation and Effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency” was the start of a whole series of publications on the subject.

 

 

CIO

• 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.

 

CFO

• 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

 

 

 

CHRO

• 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?

 

 

CEO

• 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…)

 

 

ExComm

• 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”.

 

Building a business – When it rains it pours

It has been an interesting week.

We had the first meeting with our Board of Advisors. A few months ago we decided that it would be a good idea to have a small group of senior people, with a mix of Corporate Boardroom background, Entrepreneurial experience and business & technology management experience to advice us on our Strategy and Structure, on our Reputation on the world and on our business model and operational challenges. At the same time we want this group to know and understand so much about our business that they can provide intelligence and leads on where we should use or extend our network.

The three advisors are Peter Wakkie, lawyer, former boardmember of Ahold, and now member of the Supervisory Board of ABN-AMRO, TomTom and BCD Holdings. Peter is a relative outsider to the content of our business, but his feedback is in an excellent position to advice on how the corporate world sees us. His feedback is both direct and spot-on. Hennie Wesseling is a former CIO of TNT. He knows the business technology world inside out, and can help us sharpen our proposition and focus. Gerrit Schipper is both entrepreneur and boardmember. The companies he worked for have a large technology component.

The most important lesson from this first meeting probably was: focus on the top of the market. Even if you do a lot of work with a much more operational character: you will get the interesting assignment from executive and through non-executive directors. So: you can do a lot of different things, but you do not have to mention all those things. Find and interest the top boardroom advisors on Business and Technology strategy, and guarantee smooth execution of those strategies. If you cannot explains to a CEO which strategy, which risks to consider and which choices make most sense in the light of his business strategy, there is little use in trying to be the one to execute it.

I am probably better at advising than at being advised. When you think you have it all figured out, others with a different perspective see plenty of room for improvement. Annoying when you hear it, also stimulating when you think about it back at the office, and very useful when you something with it.

The next day I was called that Qhuba has won a FD Gazellen Award for fastest growing companies. So we did get somewhere the past few years. Sometimes we forget that it is not obvious that companies grow fast, that plans lead to success. Instead we have the tendency to focus on what could have gone better, where we could have been. What’s the use of a prize? Well at least some people – again with a different perspective – look at your company, and at it performance and plans. If they decide you did something special, that is stimulating. In this case, KPMG, ABN-AMRO bank and Graydon did the research and interviews. Of course, in marketing terms it is a hundred times more relevant what others say about you, than what you say about yourself.

Last Friday afternoon we came close to reaching an agreement with Deutsche Bank.  Compared to earlier conversations with other banks, they seem to be more interested in what we are doing, why we are doing it and how we are doing it. The proposal was not exactly what we were looking for, but this week I expect a term sheet with better conditions, and the kind of flexibility that will enable further growth.

And finally we have been talking about assignments to several new clients that have the size, the ambition and the kind of Business Technology Integration challenges that suit us best. When Philips, Heineken and a Private Equity funds call us for help, we are getting where we wanted to be.

When it rains, it pours.

How to build a business – Growth and Conflicts

This morning we had our weekly Qhuba board meeting. We are trying to look at what we should keep doing, stop doing and start doing.

It is never that black and white of course, though. A small group of people running and company together with a larger group of partners have the tendency to focus on what needs improvement and on the sub optimal. I start every meeting with the Good News:

We are growing and have welcomed three new Associates in our company in the past week. Great news.

We have started using Yammer for collaboration, communication and knowledge sharing (or microblogging as it is called). At least half our people have become active users within two weeks. Great news, too.

We have a some new clients in the Mobile Telecom market (Vimpelcom, Ziggo), Technology market (Xtilton), Private Equity and Banking (ING). Excellent news.

We have also lost a partner. Or at least we lost him as a partner, and will for time being continue to work with him as an Associate.  This sparked a discussion about people leaving, and about the level of conflict involved. Since we started some ten people left, or were asked to leave

Dennis mentioned: “Without going into the specific of this case: is this an incident or is it an issue? Can we regular people “situations” and can we afford it that Associates, Partners or Staff leave the club? If they tell a story that is not consistent with the message we want to propagate in our internal or external network that might do more damage than any marketing agency can repair.” A commendable comment. Dennis started as an intern almost two years ago, ran the backoffice for the whole company within a year, and became part of our management team this year. Besides being an indispensable asset, Dennis is doing research for his thesis. The subject: successfactors in the governance of network companies. We expect more guidance from him when he is done.

Tjibbe – always the diplomat – responded: “We are in the people business. Two things: One: engagement with anyone in any structure is something of an experiment. Two: we have to look at each case separately. I am not worried about an Associate of employee leaving because of lack of performance. We are not in a static environment, where people do not know exactly how they can be successful. Sometimes they over-sell themselves, sometimes we look more at the cultural fit than at the motives – which are much harder to discover. With partners it is probably much more complex and has to do with the expectations. They expect, we expect, and we are all only going to find out what is realistic when we have started working. You will probably see a difference in outlook and commitment in the period where they join without an assignment, and in the period when they are deeply embedded in a client organization.”

Dennis: “I understand that we are in the people business and that people change with the circumstances, but I cannot understand how someone made conscious decision six months ago commit himself fully to a company like, wants to claim part of the proposition, has ambitions as a professional, as an entrepreneur and as a future shareholder, and now cannot wait to leave.”

My answer: “You’re right that there is too often a mismatch between mutual expectations at sign-on time and the expectations a few months later.

It seems that people are too enthusiastic in the beginning, or that we are too enthusiastic and that after a while the focus changes to the short-term and to cash, away from the long-term, the value, and entrepreneurship. Maybe we have a tendency to overrate the network. Knowledge and capacities, and they overrate over commercial capabilities. This makes perfect sense, because in the end almost everyone wants to spend most of his time on challenging client assignments, and earn an income, and only a few can afford to invest in the long-term entrepreneurial side of things.”

We have decided earlier that we should treat the relation with other Qhubans the same way as we treat emotional relations in our private lives: first we start dating, then we get engaged, than we get married. So we should always start working with people as Associates, and focus on the assignment, and only in a second stage (for example, after a year at the earliest), after he or she has met all the conditions, and he is convinced that it is in his long-term interest to join the company, should we consider a partnership. At the same time we have to make sure we address some of the things people find important. Remember the mindmap with changes and conditions:

I agree with Tjibbe that entrepreneurship is a bit of trial and error. It involves risk. You can’t foresee everything, and if it doesn’t work it is better to make a decision and not waste each other’s time.

However much we want to be a network of entrepreneurial professionals, the majority of people are attracted by assignments and our external network (Associates), a smaller group is attracted by our internal peer network, support, exchange of knowledge, and the possibilities to create business value (Partners).

Perhaps Dennis’ research will provide new insights in motivation and decision-making.

When coming back from holiday he Yammered: “After a summer period back in university library: what was it really about startup network enterprises? Is it trust, a common purpose, exchange relations? What about interdependencies or knowledge sharing? And reciprocity? Let’s find out…”

I can’t wait until he does (find out);

“What are critical success and failure factors of network governance regarding a startup network enterprise, whereas the social dilemma is taken into account?

 

Network governance is (interfirm) coordination that is characterized by organic or informal social systems, in contrast to bureaucratic structures within firms and formal contractual relationships between them (Gerlach, 1992:64; Nohria, 1992). Network governance is increasingly used to coordinate complex products or services in uncertain and competitive environments (Jones et al., 1997).

In case a network enterprise is a startup, a company with a limited operation history, governance of such an organization is even more defiant. These companies, generally newly created, are in a phase of development and research for markets and therefore faced by possible difficulties and challenges in their first phase(s). For network enterprises it could be more challenging because there are more dependencies compared to more traditionally organized or centralized organizations; e.g. a network is a pattern of social relations over a set of persons, positions, groups or organizations (Sailer, 1978). An extra important factor here could be the Social Dilemma. Social dilemmas are situations in which collective interests are at odds with private interests. Such situations arise when faced with prioritizing either short-term selfish interests or the long-term interests of a group, organization, or society.”

I am sure he will translate the academic English in business English for us. One thing is for sure: running a business involves tough decisions, but does it involve conflict? 
Martin Zwilling of Forbes.com believes it does:

Many entrepreneurs are not prepared for conflict, or actively avoid it. Their vision, passion, and focus are so strong that they can’t imagine someone disagreeing, much less fighting them to the death. But the reality is that startups are composed of smart people, with emotions as well as intellects, working in close proximity under much pressure, so conflicts will occur.

In fact, most business conflict is constructive and should be embraced in steering through the maze of innovation and change that is part of every successful business.

Good to hear. We are prepared and do not avoid it. Now learning how to deal with conflicts. Some tips from Peter T. Coleman in his book “The Five Percent: Finding Solutions to Seemingly Impossible Conflicts:

• Know what type of conflict you are in. The first step is to assess whether the conflict is win-lose, win-win, or mixed (some competing and some shared goals).
• Not all conflicts are bad. Most often, conflicts present us with opportunities to solve problems and bring about necessary changes, to learn more about ourselves and the business.
• Whenever possible, cooperate. Research has consistently shown that more collaborative approaches to resolving work best.
• Be flexible. Try to distinguish your position in a conflict from your underlying needs and interests in the relationship
• Do not personalize. Try to keep the problem separate from the person when in conflict (do not make them the problem).
• Meet face-to-face and listen carefully. Meet in a neutral location, and work hard to listen to the other side in a conflict. Accurate information is critical, and careful listening communicates respect. Don’t mistake sending text messages and emails as listening.
• Be fair, firm, and friendly. Research shows that the process of how conflicts are handled in usually more important than the outcomes of conflicts.
• Conflict occurs when individuals or groups are not obtaining what they need or want and are seeking their own self-interest. Sometimes the individual is not aware of the need and unconsciously starts to act out. Other times, the individual is very aware of what he or she wants and actively works at achieving the goal.

If goals cannot be aligned it is best to separate. But then out of mutual interest, and without conflict. Mental note to self.

How to build a business – Procrastination and Return on Relationships

My daughter has just started DP1. That is the Diploma Programme of the International School. Her tutor Mrs. Chowdhury has warned both students and teachers that time management is the biggest challenge, and social networks are the biggest threat. “That and procrastination” my daughter told me. I was going to tell her about the limited value of all these superficial friends sharing all these hardly relevant pieces of information. Mere distractions and reasons to shift focus away from serious study and school work. Apparently she was a step ahead of me.

And are we not on Facebook, LinkedIn and Twitter, too? Aren’t our most valuable assets our network, our knowledge and the intelligence we can gather about people, the companies they work for and the trends and themes affecting our markets? Aren’t we persuading our people to do what I am trying my daughter to dissuade from doing? Maybe we run the risk of procrastinating, too.

Great word… I looked it up.

The American Heritage Dictionary, for example, defines procrastination as “To put off doing something, especially out of habitual carelessness or laziness,” while Merriam-Webster Collegiate Dictionary calls it “To put off intentionally the doing of something that should be done.”

Some psychologists have suggested three criteria for a behavior to be classified as procrastination: it must be counterproductive, needless, and delaying. And while all procrastination is delay, not all delay is procrastination. It is “to voluntarily delay an intended course of action despite expecting to be worse off for the delay.”

Now I noticed a funny juxtaposition: where teenagers delay schoolwork because of relations and information, independent professionals often have the tendency to postpone networking and intelligence gathering to focus on the content and on their proposition. We see that in some of our partners. When on an assignment there is a tendency to focus on the job and to submerge in the pressure of the assignment, sometimes forgetting to actively maintain connections and share knowledge and opportunities. In between assignments productivity goes down, and although high on the to-do list, phone calls and research are postponed, or done at the last minute.

On the other hand, others – like myself – with more time for network- and research related activities run the risk of becoming addicted to meeting ever more people, to digesting more and more information in thousands of little pieces of information from RSS feeds, headlines, Twitter and LinkedIn updates and to storing and distributing contacts, opportunities and intelligence through applications like Salesforce.com and Yammer.

What makes sense, what does not, and how do we invest our time wisely?

Rolf Dobelli has written an interesting article, which was translated into Dutch and published last week by NRC-Next on how this constant stream of information affects us. In his view news (information) is to the mind what sugar is to the body: not very healthy, but difficult to resist. He calls it “small bites of trivial matter, tidbits that don’t really concern our lives and don’t require thinking. That’s why we experience almost no saturation. Unlike reading books and long, deep magazine articles (which requires thinking), we can swallow limitless quantities of news flashes, like bright-colored candies for the mind.”

According to Dobelli “At core, human beings are cavemen in suits and dresses. Our brains are optimized for our original hunter-gatherer environment where we lived in small bands of 25 to 100 individuals with limited sources of food and information. Our brains (and our bodies) now live in a world that is the opposite of what we are designed to handle. This leads to great risk and to inappropriate, outright dangerous behavior.”

There is some encouraging news in there: humans are suited for working in tribes, for thinking and Dobelli encourages us to take time to dive deep into he content. That sounds familiar: relations (a network), and content (knowledge). That sounds like us. But how do we strike a balance?

The 1970’s the management theories focused on Product Life Cycles. Companies were organized around how products were conceived, designed, tested, developed, approved, manufactured, sold and distributed to the market.

Of course customers made up the “market” and therefore in the 1980’s the focus shifted to customer-centric theories and the Customer Life Cycle.

Still, what defined the seller and the buyer was a transaction, when a product or service changed hands in return for payment. The customer life cycle provided a way for a seller to look at a buyer as not just a single transaction but as a series of “one-off” orders. Thus we moved from focusing on “getting the order” to “serving the customers needs” in the hope that the same buyer would return to the seller for more business.

However, due to the one-directional information flow, there were still some significant benefits being left on the table. The most visionary and innovative companies wanted to steal a lead in the Value Chain race and to do this the Relationship Life Cycle was developed.

The transaction thinking is replaced by interaction thinking, and instead of only measuring Return on Investment, and focusing on the bottom line, or on “What’s in it for me”, network companies like ours should focus on Return on Relationship or “What’s in it for everyone involved”. In other words, the measurement is on relationships and determining how everyone has benefited from the relationship, as well as how everyone can continue to benefit from it.

It is not easy to measure what investment is required to build a network of serious relationships. Let alone what the return is. This is abundantly clear for people who are active in the executive search business: it takes years to get to know, assess, and interact with a network of people, that at some point in time might be candidates for jobs at your client. To be able to determine who is the perfect candidate for a role in a company requires that you not only have an excellent idea and an expert opinion about someone capabilities, but also about how they would fit in the clients environment, in the longer term ambitions, in the personal situation. And then it takes a relationship build on trust to approach and convince someone to change jobs. What the clients sees is a few phone calls to someone you already knew, not what is involved in knowing. That is why we do not charge our clients based on the hours we spent, or on a percentage of the annual salary of the hired candidate, but leave it to the client. He can base the reward on the value he perceives, on how satisfied he is.

Return on Relationship is a term most often used by Ted Rubin.

Rubin makes a case for establish social networking metrics based on “conditions of satisfaction” (a concept promoted by Jeffrey Hayzlett, former CMO of Kodak and the author of The Mirror Test). In other words, what are the specific outcomes that will bring satisfaction to you, your brand, your business, and your customers? Engage, Educate, Excite, Evangelize. Evangelizing by your users is the end goal. To get there concentrate on building relationships and not numbers of viewers or visitors. Most measurements and statistics that are used with regard to relationships (such as number of Facebook fans, Twitter followers, retweets, site visits, video views, positive ratings and vibrant communities) are merely indicators that a brand is doing something that is creating value. That is only a starting point for RoR.

I cannot say we are able to measure our RoR. A metric like Net Promoter Score could give an indication on how clients look at the relation, and the satisfaction it brings to them. What we do know is that relations are not only established with clients, but – and equally important – with candidates, partners, suppliers, staff, thought leaders and others. We also know that metrics should include words like “trust”, “engage”, “authentic conversation” and “reputation” – all things that are at the heart of what a network company stands for. And possibly these things can be defined by setting up conditions of satisfaction, based on our purpose, vision and values.

So if Relationships are the new currency, and if we continuously invest in them, and want to be able to measure them, should we reward our staff and partners also on how they create value from their relationships?

In all three areas of focus we distinguish: reputation, structure and performance relationships play a role. We used to make the interaction transactional in all here areas, by allocating to our partners (besides a large portion of their personal turnover) a percentage of turnover based on how effective they were bringing new people into the partnership (Reputation), but we recently decided to change this and now allocate only percentages (but a larger percentage than before) for commercial activities that lead to revenue (Performance).

Instead of rewarding for RoR we decided that the knowledge and the network are assets that are so integral to who we are that we select partners on both.

Information and access are no longer scarce commodities. Attention is. On a personal level we should be careful what information we pay attention to, and then it should better be serious attention. In the network it works the same we, we can organize access to anyone, but our success will be determined by being able to decide with whom the interaction will lead to a relationship that is authentic, meaningful and beneficial for all.