Monday, July 16, 2012

Torture "Chambers"

In the Old West (USA) there was a famous outlaw and gunfighter named John Wesley Hardin.  His story is famous, with claims of him single-handedly killing over 42 men.  You could read more about him in a book called Triggernometry

One of the things about Hardin that always fascinated me was his use of initiative.  In more than one case Hardin was able to draw his pistol and shoot down another man who was already pointing a cocked pistol at him.  Imagine how that might seem impossible.  There he was standing, "dead to rights" with a man holding a gun on him.  All the other man had to do was pull the trigger and BLAM, Hardin was dead.  But in every case he was able to reach down, draw his side iron, aim and pull the trigger.  And each time the man holding the cocked pistol was dead before he could react.

There is a technical explanation for how Hardin could accomplish this feat.  The U.S. Military and associated people have developed a concept called "OODA" and it shows how a human's mind will work in these types of situations.  I'm not going to cover that in this column but you can read about it here: http://en.wikipedia.org/wiki/OODA_loop

While I usually write about CIOs, today I'm going to discuss CEOs and the importance of initiative as it pertains to leadership.  I read an article in Forbes the other day that talked about five sitting CEOs that should have already been fired.  Among the list were two men who are frequent targets of criticism.  One was Microsoft's Steve Balmer and the other, whom I will now talk about, was Cisco's John Chambers.

Chambers took the helm of Cisco in 1995 and for a time helped that company come to dominate the networking space.  He did so well that by 2001 Cisco's stock was trading at over $70/share.  Like many leaders who enjoy great success - business, banking, military - Chambers fell asleep on the job.  He turned into an administrator rather than a visionary and the wheels started falling off.  My personal feeling is that he became enmeshed in the activity of enjoying success rather than creating success.  You can read any number of articles about the perks and compensation that Chambers has received.  If you do your own research, you should make a quick comparison to Steve Jobs and his $1 salary.  Think about where each man was focused and then compare that to the relative growth and success of their companies.  Yep, one man was clearly leading while the other was clearly "managing".

Over the past 10 years, Cisco's stock has gone from $70+/share to somewhere around $15/share.  That's a loss of almost 80% (!)  So what happened, you might ask?  Here are a few things that show where Chambers and his team dropped the ball:

  • Cisco missed out on smartphone mobility.  Do you see any Cisco presence in the burgeoning smartphone or tablet market?
  • Smart grid - Here is an area where networking is THE biggest component in a multi-billion dollar sector.  No obvious Cisco presence there.
  • Cloud storage or cloud processing - there was a small push in 2009-10 for Cisco to get into that business but nothing public really emerged.
  • Supply chain - at least three times over the past seven years Cisco has had order fulfillment times of over six months for some of its core products.(I'm not going to cite specifics due to confidentiality concerns)  That's just a ludicrous amount of time for a core product order to take.
  • Networking Fabric - the new direction in networking is to have a smart or learning system that can evolve over time.  Utilizing new software and hardware, the network becomes much flatter and gains the ability to intelligently route and prioritize traffic.  One of Cisco's competitors, Juniper Networks, has had a product out for several years now called "Q Fabric".  In terms of advancement, this product is light years beyond what Cisco has been able to produce in the smart-networking arena.  Cisco has played in the space for years, trying to put out a half-baked strategy/product first called TRiLL and then "Jawbreaker" but now nothing is on the horizon.
As leaders we must always be seizing the initiative.  Doing anything less has real world consequences that, depending on the scale, can range from hampering growth all the way to costing investors billions of dollars and thousands of employee jobs.  And mark my words, Cisco better look hard right now at HP to see what happens to workforces that languish too long under managers who do not lead or innovate. (They end up shedding tens of thousands of jobs).  That's going to be Cisco's fate if they don't get their act together soon.  I'd say the same thing about Microsoft if they didn't have the XBox product and stranglehold on Office productivity.

As a leader, the next time you think about "Going On The Defensive" just reflect on how John Wesley Hardin (and your customers) will tune you up.

Tuesday, July 3, 2012

Henry Ford, SAP, & the Cloud

Henry Ford was famous for a great many things, especially the first truly mass-produced car called the Model T.  He also had a very famous quote that came from a question someone posed about customizing the Model T they had just ordered.  Apparently they wanted some changes made to the body and paint color.  Henry Ford, upon hearing the customer ask about color options, had this to say: "Sir, you can order your Model T in any color you'd like just as long as it's black."

What most people don't immediately realize is that Henry Ford and his auto company were in business right at the beginning of the "mass production era" of the Industrial Revolution.  Previously, everything - clothes, shoes, machines, ships, locomotives - was made by artisans.  In a very real sense, everything made up until that point had been a unique item.  Today we label that kind of work "hand crafted" and laud it for being something great.  Each time you order a coffee drink at Starbucks, for example, it's hand crafted.  It may all taste the same but each drink is unique.  But you pay a premium for that uniqueness to the tune of about $4/cup versus 89 cents at McDonalds.

Henry Ford had to standardize everything in order to make an affordable and hence acceptable price point for American consumers.  And not only did he need to make a car that was as cheap as possible,  it had to radiate quality.  He needed to convince consumers that it was far superior to the horse-and-buggy standard of the day.  You could imagine what people would have said back then if the Model Ts broke down all the time.  (Imagine an older voice like Grandpa Simpson: "Well, I may be old fashioned but I never had to change no dearned spark plugs on ol' Betsy the horse out there!")

Fast forwarding about 100 years, we can see some parallels between the construction of Model Ts and the implementation of ERP systems, especially SAP.  From the 1980s to about 2010, SAP implementations had mostly been conducted with an artisan approach.  Once the decision was made to go with the system, the next 12-18 months would be spent in the "blueprinting" process.  Anyone who has been involved with a large implementation knows that "requirements gathering" is a nasty phrase, easily on par with your average R-rated four letter word. 

In truth, through about 2010 each implementation, even if labeled "vanilla" or "out-of-the-box", had been an exercise in hand-crafting. 

Yes, some will argue that there have been multiple approaches to standardizing an SAP implementation and I'll list some of them here:
  • ASAP (accelerated SAP)
  • Rapid Deployment
  • Big 4 (each of the big firms has their own "recipe" for these projects)
  • Agile
  • Scrum 
But while the actual work approach is standardized, the requirements gathering has always a free-form exercise.

So now we're in 2012 - how much can change in just two years?  The answer is everything. SAP and its partners are moving towards delivering pre-packaged, cloud based versions of their product.  They have taken the art out of the implementations by doing the requirements gathering and configuration beforehand.  You might ask how they do the requirements gathering before they even enter a sales cycle with your business?  The answer is that based on about 30 years of industry knowledge, they have been able to come up with configurations for each sector that meet about 75-90% of business need.  Of course you won't get the perfect artisan solution, but that's an easy tradeoff when you can get most of what you want at about 30% of the cost and a full lifecycle implementation time of 6-12 months.

Don't forget that by entering into a cloud-based solution, you are also bypassing the need to stand up any infrastructure.  That means no servers, no on-premise software, and no data center footprint.  (Just make sure that your network and Internet bandwidth are up to par or you'll be in trouble!)

Right now I'm referencing SAP because that's my current experience.  In particular, I'm working with one of their partners called Sparta Consulting who has developed the cloud based SUNAS SAP solution.  I never endorse products on this blog but a couple of quick Google searches will give you more context to the above.

It's not just SAP who is embracing the cloud and the "Henry Ford" pre-configured approach.  You can find many different providers doing the same thing including heavyweights like Oracle and Microsoft and up-and-comers like Workday. 

It's taken a hundred years, but the approach to building the Model T has now caught up to the ERP world.  Expect many different options when it comes to your future implementation(s) just as long as you choose the color black.