Being professional…

The common dictionary defines professional as following an occupation as a means of livelihood or for gain. It also says it relates to a person who is an expert in their chosen field or vocation. I imagine each of us has a mental picture of what we believe a professional might be. In business the idea of a professional takes on many different shapes but I’d like to cover some of the basics.

When I say “the basics”, I’m referring to our appearance, conduct and behavior as people working in business environments where we interact with others each day, especially customers and those external to our own organization.

Someone once said that 80% of success is just showing up. I would add that how we show up makes more of a difference. I recently did an interview for a senior role in the company that is intended to be primarily customer facing. Upon review of this person’s resume (CV) it made sense to schedule a meeting. It was at this point that my views of a professional were challenged. While this person had good experience, a seemingly successful track record and knew a fair amount about the topics we were discussing, I was constantly distracted by their shirt. This person’s shirt had never been ironed, the collar was turning up, the stitching on the sleeve was coming apart and I kept trying to reconcile in my mind how this was something they didn’t realize might be troublesome in an interview, especially for a role that would be dealing directly with customers at senior levels.

Maybe his dry cleaning got lost or his iron stopped working that morning or perhaps he just didn’t see it as important. The person didn’t have the complete set of experience and skills we needed and if he had, then I would have definitely addressed this in the interview. Part of me wishes that I raised it with him regardless just to make him aware and see if he was even conscious of this fact. This experience emphasized all the more how important “being professional” really is. This again goes back to what our definition or expectation might be, but if we take the simple dictionary definition, then being viewed as an expert and following an occupation somehow implies that we need to know where we fit into the equation and then look the part accordingly. I say accordingly because there isn’t one look or one way to be professional but it takes awareness and initiative on our part to know the what’s, why’s, when’s and how’s.

Answering the question: Would people buy from me? Will others follow me and accept my leadership? Am I credible?….

You might ask a different question. As business people, being professional means that we use a mirror and a lens. We use a mirror to honestly evaluate ourselves and ensure that our appearance, conduct and behavior meets the requirements for the environments we’re in. We use a lens to consider how others see us and whether we need to change something; be on time for meetings more often, talk less, listen more or even iron our shirt. Perhaps it is a bit personal, but I’ve had to tell others that they could use a mint or even take a shower.

If you work in a company where you are involved in the buying process, think about the people and companies you like to buy from. Maybe you’ve taken for granted that they show up dressed for the occasion at hand or that their company exemplifies core values and a presence that says “professional”. The truth is, it takes work to understand what professional really means for the given area or field we’re in but also for the customers we serve and the company we work in.

One organization held semi annual company meetings to discuss this very topic. They used the time to dig deep into the culture of their company and continuously redefine their definition or being professionals in their field. Everything from dress code, materials used, communication style and many other areas were addressed. They dusted off the employee manuals and kept a fresh perspective that if the markets and customers were changing then they needed to as well. This takes commitment and a level of effort that many will struggle to achieve but in the words of Alistair Cooke “A professional is someone who can do his best work when he doesn’t feel like it”

Customer Experience or Customer Satisfaction

This week I had three separate experiences with three different companies that all provided poor customer experience. I trust that you have similar experiences weekly as well. The whole idea around customer experience is to maintain an ongoing deliberate effort to keeping customers pleased with the service they have received so that continuous improvement is something that exists as a real process. Customer satisfaction (CSAT), on the other hand, has a similar intent but has become relegated to binary measures such as surveys that produce a number (e.g. 95%) and often miss the closed loop requirement of getting under the skin of the survey.

Two of the three experiences I had were related to the company employee not knowing the answers to questions about their product even though they were the person responsible to interact with customers and serve them. Not only did they not know simple answers to questions I had about their product, they kept repeating the same wrong answer and ignored any attempt on my part to keep clarifying my initial question. The third experience was related to a global financial services firm that changed my account password at the request of an employee in my firm who was simply trying to get their access to accounts reinstated for the purpose of reviewing. In all three of these experiences I would provide a fairly low customer satisfaction rating if I were asked. That said, I have used the services of all three of these companies for years and have been fairly pleased. The question then is how does recent customer experience rate as opposed to overall customer satisfaction?

One answer to this question is to recognize that customer satisfaction is captured as a point in time measure that relates to a range of time over which a product or service was procured while customer experience is a real time measure relating to the most recent touch point of a customer with your product or service. While CSAT is important for capturing the high level view of “how we are doing”, customer experience provides us with an opportunity to improve in a rapid fashion.

Perhaps this is better explained in the difference between email and instant messaging. Email is a communication while IM is really a conversation. Many of us have used email for both up until the recent explosion of IM platforms like Twitter, Facebook, Yammer, texting, etc. These IM platforms have changed the way we talk to each other but have also become increasingly important for companies and their customers to share instant feedback. When a colleague of mine had a poor purchasing experience with a technology vendor, he tweeted about it on that company’s twitter account and got contacted within a day and was offered a satisfactory resolution. This is customer experience in action because the experience of the customer was dealt with in a real time manner vs. this same customer being sent a survey weeks after the purchase. Even if my colleague completed the survey, rated the company poorly and submitted it, chances are when the company processed all the surveys they received back their rating would still be high and this one customer experience would have been lost in the bunch.

In the enterprise space where large companies are providing services to customers via technology platforms the same holds true. The product development lifecycle (PDLC) takes many steps into consideration from the beginning of an idea through it’s production into a working product or service. The customer experience component needs to be at the heart of the PDLC of any product or service. This goes beyond just including various customer audiences to be part of the review process, it also needs to encompass a mechanism for how customers who use the product/service will interact with the company to resolve matters, improve service and build a better experience as close to real time as possible.

An emphasis on customer experience can bring a level of transparency and accountability that forces a decision, embeds a sense of urgency and causes companies to respond and resolve matters instead of burying the bad ones under the rug or letting them get lost in the survey frenzy of traditional CSAT models.

The continued used of technology platforms like IM will help improve customer experience if it is used correctly and is one mechanism for doing this but more importantly, companies need to remove the obstacles and the noise that prevent them from maintaining the heartbeat of their customers.

Customer experience is a conversation and the connection of voice and touch.

Optimizing the Supply Chain – Distributed Agile

In 2007 the topic of offshore distributed agile was front and center in the outsourcing community. There were lots of differing messages regarding the validity of actually using agile across two or more teams in two or more locations. We can say we’ve come a long way since 2007 but there are some key messages that haven’t changed and then some that have.

I had presented at a venture capital forum that year on the topic and recently pulled out some of the content to contrast what we are saying today. I was interested to see how our learning and thinking has changed. Here are some of the things that haven’t changed since 2007.

Past thinking included messages such as:

• Highly collaborative approach required
• Traditional supplier-client relationship is difficult
• Result: client will drive the supplier to waterfall
• Client must provide/support key roles (Product Owner, Scrum Master) and shares success metrics w/supplier
• Constant attention and guidance is not the same as babysitting
• The traditional approach is often based on “best guess” with contingency built-in
• Agile projects on average are cost competitive
• We’re not just writing “cool code” but rather…
• Requirements that relate to business value
• Shaped daily by the Product Owner and business
• High profile projects are cancelled/written off
• Proven and successful approach to reduce risk
• A framework, metrics and measurements are critical to ensure quality and support the team
• Work to understand the roles needed to support the effort required
• Maximize your budget by choosing the optimum team size.
• Going slower isn’t safer and can cost you more

Current thinking has changed and called out some distinct differences:

In looking at some of the statements being made by enterprises today we hear that that stakeholders are frustrated with slow IT development processes. We’ve also come to realize that adding more people doesn’t necessarily equate to meeting the development demand on IT. If you are someone who is reading this and thinking that you already get this concept then just know it is not prevalent thinking across most large organizations. There is still a very real mindset that more people get more done. While true in some cases, it is proving not to be the case in many IT projects.

Outsourcing is still a very good strategy and not in question, rather it is how we best use our outsourced teams to optimize the entire supply chain that is in question

That said, IT is also realizing that there are many mature processes that are simply not being leveraged. There isn’t a single answer to the problem but there are many narrow approaches companies take to solve problems or to try and deliver projects vs. leveraging a wider set of practices that, when combined, can provide outstanding results.

In terms of extending agile capability in the organization, especially as it relates to distributed teams here are the messages that are relevant today:

• Maximizing the flow of value to the customer vs. Maximize team velocity
• Learning happens at the rate it can be consumed by team, organization, customer
• Increasing value, improving flow and advancing quality far outweigh the “staffing up” approach
• Understanding which practices and approaches are fit for purpose:
• Scrum, as a core agile practice, does indeed “Optimize the Team”…
• But not necessarily the business since it is often limited to application development
• Lean, as an overarching process, teaches us to try and Optimize the whole (or as wide as possible – as far left and as far right in the P/SDLC)
• Kanban, as a tool, is more relevant today – touching the integration into the PDLC in terms of Brand, Marketing, Sales, Operations and all things business being flowed to the customer
• What do the business really want
• To connect with their customers
• To serve them with the right things, at the right time
• Innovation and creativity that creates differentiation
• To create new customer experiences based on new technology
• To move faster – Stop being bound by the legacy of traditional IT
• An engaged organization (including suppliers)
• More value

Some considerations in closing out this topic:

• Invest in an Agile “Enablement” strategy not just Scrum
• Understand the impact that can be made across the organization
• Enablement vs. Consulting
• Emphasize a culture of learning “to do the work” amongst your employees and the extended supplier team
• Education vs. Training
• Develop a learning path for key roles and teams that can include your supplier team

Don’t confuse effort with results

In response to my recent post, Two Primary Principles, I was asked about the tagline on my blog, “Don’t confuse effort with results”, and whether this is a principle I’ve described before. I realized that I hadn’t done that so I wanted to take this opportunity to do so.

I first heard this saying in 2001 from an executive I was working for who had the decency and courage to pull me aside one afternoon and share that although my work ethic and effort was not in question, the results, or lack of them, were in question. To be completely transparent, I was speechless when he explained this principle to me. I realized in that moment that I was viewing my work efforts as a measure of my success vs. weighing the results they were producing. I imagine this is a difficult conversation to have with anyone as a manager but it is certainly more difficult and challenging when you are having it with someone who has a big title and is expected to deliver quite a lot back to the business.

I’ve done a fair amount of work in refining this principle in my own life and in the lives of those I’ve worked with since. Similar to the other principles I’ve discussed previously, below I offer a more detailed explanation of this principle and what it means. I will pause here to say that this principle has been the basis of many difficult discussions for me since 2001 with other co-workers and employees. It is clear that a large percentage of people in the workforce, especially in management and executive roles struggle to know the difference between effort and results.

Don’t confuse effort with results

• Be sure you understand your role and the responsibilities associated with it
• This might sound obvious but many people need to regularly assess what is expected of them in their role especially as companies are shifting their focus more frequently and are expecting senior managers to know enough to step up and take on more
• Seek out your manager and discuss the results expected from you
• This goes beyond quarterly and annual MBO goal setting.
• It involves knowing how you will achieve the results, what the impediments and obstacles might be and knowing how to answer “what great looks like” as it relates to the varying results you must deliver
• Maintain a constant sense of urgency
• If you focus on working through all your tasks so you can “tick the box” and feel productive, you risk slowly losing the sense of urgency required to honestly evaluate your results and radically change direction if your to-do list is not working
• Remember that no one is indispensable
• This one stings because some of us can’t imagine being sacked or demoted but in this economy we can no longer avoid this or deny the possibility that we might not be suited for the role we believe we are so perfect for
• Perspective is king and viewing our role as a privilege vs. entitlement will keep us balanced
• Desire feedback
• Talk with peers often to ascertain their views about your work performance and results
• Understand whether your work is producing value for the company, it’s employees, it’s customers, it’s community
• Stay informed
• Have an interest in knowing what other companies expect from people with your title and role, what they are paid, what incentives drive them and how they are measured. This type of knowledge will help you shape your focus and perhaps provide creative ideas for your employer to make your role work better for you and them

I would wrap this up by also stating that this principle can and should be something positive that motivates behavior in the right way. There will be times when it isn’t so positive and may cause us to make some very tough decisions with people that work for us but if we apply it properly to ourselves and to our teams it will allow us to establish a culture that is vibrant and results-driven.

Two Primary Principles

As a company, we talk about values and principles a lot. We discuss it with each other and we discuss it with customers. It is more of a hot topic today than it has been for some time. The definition of company values and principles is important. Understanding the driving principles for you in your role and your company is just as important as the company’s mission statement and charter.

What you say you believe will impact how you behave and once you’ve put it out there for all the world to see in writing or etched on the glass of your conference room, then it is even more likely that you will need to remember them. A colleague of mine that presents to companies often on the topic of change and transformation often begins his presentation by showing a slide with our company’s values and principles on the left hand side. He then asks the audience if they can share what their company values and principles are. Each time I’ve witnessed him do this the result is the same; the audience shouts out some of the values and principles but typically it stops after 2 or 3 are mentioned. Each time it is obvious that they don’t really know them well.

At this point, my colleague will press one of the keys on his computer to bring up the right side of the slide that shows that company’s values and principles, something he got either off of their website or annual report. Again, each time the response is equally the same; quietness in the room and everyone is now at full attention. It sounds rather parochial but the impact is quite dramatic. It proves that being is very different from doing.

There are two important principles I want to mention that we as a company and as a team look to apply consistently. These two don’t define all that we look to be and do but they are two that come up often in conversation and are worth describing briefly.

Ask forgiveness not permission

There are things that this principle implies and things it does not imply. First, it does not imply that doing whatever one wants is the way to work nor does it imply that it is okay to do anything that could be questioned from either a moral or ethical standpoint.

This principle implies that we desire to be an integrity-driven organization. To do that, it means we want people to be more than just empowered, we want them taking initiative to do the right things in the right way. We want them to take risks (sometimes calculated, sometimes not) if they believe it will benefit the customer. It means we are willing to say we were wrong and reset expectations rather than not having tried to begin with.

It also means accepting that we won’t always get it right but that we need to explore every possible option, be truthful even if it risks a relationship, be clear even if it means that ambiguity is a better option.

The smartest and most creative people in the room are those who are willing to be in the room. While we have structure and some hierarchy as an organization, we believe that the best results come from establishing a culture of courage and initiative to just get stuff done.

People don’t care how much you know until they know how much you care

While this statement has been used in many different contexts, it has come to mean something very specific for us. We are privileged and fortunate to employ some of the brightest people in our industry. We are also privileged and fortunate to get to work for some of the best companies in the world. In both cases we work with people everyday who want to make a difference and don’t simply want it to be just another day on the job.

Especially in the current economic climate, the appreciation for employment is even deeper. With all that, it can still be challenging and frustrating to work in an organization if you don’t feel appreciated or respected. We all have a need to be appreciated, to be told we are adding value and doing a great job.

While I completely understand the thinking behind the now famous phrase “today, perform random acts of kindness”, I would change this to say “today, be deliberate in demonstrating you care”.

Compensation is a large part of the satisfaction we get from work but it isn’t the largest part; appreciation, respect, value and worth play a very big part in how people view themselves, their employer, their customer and their contribution.

We believe being deliberate in communicating is the best way to share feedback, further results and remove that ambiguity I mentioned earlier, that often sends the wrong signals to people.

Yes, we believe in a few more values and principles but these two are so vital to the integrity and life of the organization.

Application not Replication

This week I found myself using a one-liner that I’ve not used for sometime; application not replication. Many of us use one-liners because they often communicate a learning or experience in a very succinct way and avoid the need to use too many words. That said, one-liners are often just phrases we’ve picked up and tend to use randomly in any given conversation.

Then there are one-liners that have a deep and profound meaning to each of us because we have lived the experience rather than having just heard about it. For me, application not replication is one of those “one-liners”. This one-liner relates to a common mistake people make in many areas of life but for the purpose of this article let’s just say it relates to business. It refers to previous success and failure, to the things we did or didn’t do in other roles and positions we’ve held in companies.

For me, it was learning over a period of 20 years in my career that the very things that had worked so well in a previous role which resulted in enormous success could not be replicated in a new role in much the same way but rather the learnings had to applied. This is where application not replication comes in. I’ve seen this in many organizations at the senior management and executive level where people move companies, take new roles that have prominent titles and the expectations to go with them and then struggle to achieve the goals and objectives that they were known for in a previous life. Companies hire people that perform well, they want individuals that are proven, have had demonstrable success and exemplify the values that are important for their long term success as an organization. In many cases that is exactly what they get but in many more cases it isn’t.

While there are differing reasons for this, I can say with certainty that many a time it comes back to the failure to apply this principle of application not replication. Quite often, people enter a new role with the solution in mind rather than understanding all the problems they need to resolve. They may not articulate it this way but many have a perceived notion of how to fix almost every problem they’ve encountered or heard about in the new role they are taking because they assume it can be dealt with in the exact same way it was in their previous role. Never wanting to be accused of stating the obvious, I’m guessing you are thinking that this is something that everyone should just understand so why is it worth writing about?

This is worth writing about because I’ve recently watched a C level executive come into a new role where he was expected to establish a change program that would improve the companies ability to compete as well innovate and after nearly three quarters on the job he has struggled to define what that program should look like. It is not an issue of aptitude because he is an intelligent and established business professional who has had success in previous roles. Of course, I would say that there is always a learning curve in a new company and there will be some skills that we won’t have as we go from one role to another but the problem is much simpler because in this case you can trace it back to the belief that replicating the same practices would have the same effect but in a greater way since this new role and challenge is much bigger. This sort of sounds like doing the same thing over and over again and expecting different results – where have I heard that?

Equally, I believe we too are subject to this same trap. Because it is a trap that can be continuous, we need to continuously monitor and assess our current environment and fully understand the problems we must solve and then overlay the learnings we’ve brought with us to see if they apply. Sometimes we simply won’t have the answer and this is where surrounding yourself with people that are smarter than you makes sense because they’ll have a perspective you haven’t considered if not the answer itself.

It is easy for us and our people to get frustrated or even cynical and critical when things don’t seem to be moving as fast as we would all like because change is hard, the pressure is on and the clock is ticking. This is why a retrospective is a simply but effective practice. We need to stop periodically, get a heartbeat and see where we are and what we have done or haven’t done. It is one way of practicing the process of elimination and the process of investigation so we can rule out whether we’ve been forcing an approach based on replicating vs. applying.

Here is a mental checklist to help us avoid the trap:

• If things aren’t working well now, think back to when they were and recall what you were doing then; you will likely discover you may have drifted off the path a bit and gotten away from the practices that were doing the job in exchange for something too complex
• If its not broken it doesn’t mean you shouldn’t fix it; an attitude of awareness and change often proves to be more effective than an attitude of complacency and procrastination
• Remember that reputation is something that you’ve brought with you, its not who you are now; we can’t live off of yesterday’s successes or yesterday’s lunch (at least I can’t)

Ownership mentality

You might have heard the term ‘founders equity’. This is a term that refers to the equity a person has in a company who is typically a founder or co-founder of that business. It also refers to the equity given to an individual that may not have been a founder or co-founder but was asked to join the organization as such and receive the benefits, and associated risks, that come with being grouped in the ‘founder” category.

People with founders equity are trusted by the owners of the organization a little differently than perhaps employees who have been given the type of equity that may come with a new role. Both have a great value and importance and both bring a sense of belonging and responsibility. Founders equity, however, brings just that little extra belonging and responsibility because it says to the person that they are viewed as really important and strategic to the company’s plan from the inception of the business. It also says they are expected to go above and beyond and demonstrate that personal sense of ownership that would be expected of the owners themselves. In other words, they take the risks but also reap the rewards, they understand that they may need to own the problem and not just the profit.

In a recent leadership mentoring discussion, I was asked to explain in one word or phrase what I thought best described the characteristic of an exemplary employee. The only phrase that came to mind was ‘ownership mentality’. Simply put, there are people in companies that thrive on being the best they can be for themselves and for their respective employer and their work ethic mirrors that of the owner(s).

Their motivation comes from within and is born from a desire to succeed. This is important because what I’ve seen over and over again is that giving equity to a person, whether founders equity or otherwise, as a way to build loyalty, retention and ownership, is not a guarantee that you’ll get it. The guarantee is in finding the blend where a person’s personal desire for success is joined up with the company’s desire for success and they are inextricably tied, willingly of course.

I’m a big believer in compensating people fairly and even generously. I’m also a big believer in equity as a way to drive behavior and build the trust that is needed in constructing world class companies but I’m not in favor of sacred staff and entitlement that is sometimes displayed by people who have been entrusted with equity of any kind, especially founders equity.

Apart from compensation, the responsibility that companies must execute on is embedding a sense of belonging, responsibility and ownership in it’s people. Of course, there will be some who are trusted more than others and expected to do more than others but everyone plays a vital role in the organization’s success and it is important that the company communicates clearly what the expectations are but also listens clearly to what the people are saying.

Ownership mentality means there is a work ethic that transcends your average day job and the compensation package. It means that the people understand that their contribution today will have an impact on the business, it’s people, it’s customers, and it’s extended network. The reason many people don’t feel or work this way is because in their respective roles they seem isolated from the varying things that go on each day, but believing that your isolated role is somehow only important to what tasks you are performing is ignorance on your part and poor communication on the company’s part…or both.

How do we get an ownership mentality? I would start by talking to the owner/founder. The fact that you are interested in doing that would also be an indicator that you have a desire to work that way. Listening to how the owner/founder started the company will have an effect on your thinking. Understanding the sacrifices that were made or are still being made will give you an appreciation for the company and even for how you are viewed.

I wish more companies spent time communicating to employees about their value and worth. If people understood the painful and laborious process that it takes to find the right person for your company then they might reflect on their decision to join differently. It is not enough to expect just the owners to have an ownership mentality. This needs to extends as far as possible into the organization. It is not necessarily the same as “skin in the game” because that has a monetary tone to it and what I’m describing is much deeper and not necessarily tied to money.

If you’ve been given founders equity or any equity in the company you are with then I would encourage you to reflect on your role, your performance, your results, but most of all, your attitude and work ethic. If your best customer or founder were asked whether you have an ownership mentality could they unequivocally, without any hesitation, say yes…

The Engagement Manager

Several weeks back I published a fairly detailed job description of a consultant. The feedback has been overwhelmingly positive on this post, not so much for the newness of the content but rather for the straightforward detail and breakdown of the core areas of competency and focus that the role mandates. One of my desires is to write about topics that are useful and applicable to how professional services companies and consultancies do their job. Another desire is to explain, in more detail than expected, things that customers should know about how services companies think and operate.

The better PS and consultancy firms have done great work in publishing models, methodologies and methods for delivering a service and helping a customer and these are often not shared or made available. In the spirit of continuing a shared approach, I wanted to publish on another key role that services companies employ and customers benefit from; The Engagement Manager (EM).

An EM is an interesting role in that it involves many of the same competencies you would expect to find in the consultant but has a larger focus on business development, sales and account growth and penetration. In some ways, it is the ultimate salesperson or account executive. The role can have a sales quota but also have responsibility for program delivery. The EM interfaces with people at all levels of the organization and is partner to the consultant(s) on the ground.

The word “engagement” infers a tie and a bond to a relationship and for many customers, the role of the EM is invaluable in maintaining a healthy and fluid relationship. To that end, below is job description that I’ve used as a framework for the role of EM. Each competency area contains three bullets, the first being the minimum expectation, the second a common baseline and the third a seasoned professional.

The Engagement Manager

Knowing The Customer

• Has a well grounded understanding of the customer’s environment, organization, challenges, objectives and goals
• Has an established map of the environment inclusive of the dependencies and priorities
• Has the knowledge to completely articulate the customer’s business model, it’s competitive risk and market position

Growing Demand

• Through collaboration with the customer and account team, possible solutions and opportunities are understood and identified in a timely manner
• Through collaboration with senior management, stakeholders, sponsors and partners, specific opportunities are quantified
• Through standing meetings and sessions with senior leaders and decision makers, facilitation and follow through of specific solutions and services are regularly completed and aligned with the customer’s requirements

Student Of Industry

• Maintains a fundamental understanding the the services and solutions that the company can provide to customers
• Translates the fundamental understanding into discussions and communications that are directly related to the customer and their specific needs to address challenges and solve problems.
• Operates as a subject matter expert (SME), provides customers with insights and counsel and sees beyond the scope of service

Defining the Service

• Focuses primarily on standardized/productized services that can be easily explained and communicated to customers
• Focuses on customizing services and solutions for customers to tailor the engagement specific to the customer environment
• Focuses on value driven solutions that are defined and shaped to a specific set of needs, leverage reusable IP and content but take into consideration the interdependencies of teams, commercials and expected outcomes

Business Development

• Operates as a go-to person to advise the customer and interface with the account team
• Operates as a senior leader to build trusted relationships, leverage the right resources and establish credibility with the customer
• Operates as the trusted advisor, has demonstrated the ability to lead and close engagements, develop opportunities and maintain buy-in

Consultative By Nature

• Brings a fresh perspective to the customer and account team, contributes to how the engagement(s) can be shaped and led
• Demonstrates strong facilitation and communication skills to advance opportunities, manage stakeholder expectations and engaged in a consultative dialogue and approach
• Seen as a core leader and contributor for counsel and direction for the customer coupled with a deep understanding of the customer environment

Conductor

• Operates as an independent resource, relying mostly on themselves to complete tasks and manage opportunities
• Leverages available resources to ensure that the customer can be serviced efficiently and effectively without creating a bottleneck situation
• Like a conductor, understands their role is to lead and leverage the best possible network of resources, skills and tools that best service the customer and communicate a model driven by above average response times, do the right things at the right time in the right order

Detail Oriented 

• Follows the process, maintains good records and data and communicates well with the customer
• On top of the details, each opportunity, engagement and reporting item is understood, maintained and shared including completeness of data and customer information to ensure open communication and visibility
• Maintains a complete and structured set of data for each customer and the respective opportunities/engagements

The other piece of work would be to map these beginner, intermediary and advanced competencies to a set of metrics within your organization to determine how well, or how bad, the role is being fulfilled. This can be as simple as a stack ranking model but can be as detailed as defining acceptance criteria for each of the three competency descriptions across all the competency areas.

It is also important to understand the need for this role vs. an account executive, an account manager, a consultant and/or the other roles you might employ that are more senior and customer facing. You might choose to call the EM by another name; e.g. Partner or Principal. You may also choose to have the EM role dedicated to an account or two and look to have their time, or a portion of it, paid for by the customer. It is really a matter of what you expect the role to be and to do within your organization, and for that matter, the customer’s organization as well.

Benevolent Dictatorship

A benevolent dictatorship, as defined in Wikipedia, is  a form of government in which an authoritarian leader exercises political power for the benefit of the whole population rather than exclusively for his or her own self-interest or benefit or for the benefit of only a small portion of the population.

A former work colleague defined it as “getting you to agree to my good ideas”. Even if we stick to the definition, which in and of itself promotes a healthy form of leadership, the title or phrase “benevolent dictatorship” still doesn’t sound too pretty. It is the latter word that throws the whole title into dismay but the underlying principle stands true and the idea of exercising authority for the sake and interest of the whole organization is a good one. In the agile and lean world we tend to react the same way to titles or references to management teams that we see in companies as well.

In Management 3.0, Appelo makes the point that the term leadership, used in the place of management, is not necessarily the right word since when referring to those in executive management as leadership we infer that others in the organization can’t necessarily lead or be viewed as leaders due to the way terms and titles are used. This point rings true and no matter how our organizations are organized we need to be conscious of how we apply titles and terms and how we communicate them across the whole company.

The challenge we face, however, is that in the enterprise space (unlike the software industry) we can’t simply shift organizational models to do away with titles and terms and replace them with what we might consider more agile leadership or lean executive management oriented ones, at least not yet and not as straight-forward as we might want. Titles and references to those titles and teams in large enterprises have meaning and reference to how things operate.

In one of Mike Cohn’s blog posts titled The Role of Leaders on a Self-Organizing Team, the statement that self-organizing teams are not free from management control is indeed true. Maybe at this point you’re wondering what exactly is the point, after all you understand the concept of self-organizing teams and you also get that managers are still needed to manage and run parts of the company. Yes, all true but perhaps this article is more for the enterprise executives and managers who are entrenched in the day to day grind of running an operation or a global business and are now equally entrenched in trying to figure out the right management model for adopting an agile/lean approach since someone told them it all has to change.

The truth is that every enterprise company I know and have worked with refers to certain people in the organization as the leadership team. Hierarchy still reigns supreme in most large global companies and when we look at organizational change and how to best shape it, doing away with this type of hierarchy is not likely or even possible. Refining it, however, in incremental, more focused ways is possible and is often the catalyst to adoption at the wider level. More simply stated, creating a flatter organization that is still managed well with structure and agility is possible when done at the department or program level vs. an attempt to do it en masse from the outset.

Embedding agile/lean thinking and leadership in a large, global company is not for the faint of heart nor is it to be handled like an ERP implementation. It is a series of quick wins that we can measure along the way and create a pull model within the organization rather than pushing it on everyone. Most of us go on our experience and mine tells me that it is okay to tell enterprise customers that their organizational change initiatives, meant to support the adoption of an agile/lean way of working, will still require executive/senior leadership that can lead and support the cause and still empower teams to get things done – it’s not one or the other, it’s both and while I do agree with the point of empowering people and communicating to them in a fashion that supports leadership at all levels, enterprise companies can actually leverage their existing organizational models to support adoption vs. needing to radically change them.

The idea of benevolent dictatorship then, in this case, could apply at all levels in the organization. This means that you have people contributing their ideas and insights for the betterment of the whole program/team/department/company but you still have a key decision maker that must take ownership to move the best ideas forward. It is exactly this emphasis on the whole team vertically from executive level to project level that we must ensure the thinking is applied and embedded.

One final point as this relates to enterprise companies. It is not the organizational models that we need to get hung up on and what they call people within them as much as it is ensuring that the right people are in the right roles. It is getting people to agree to the ideas that are good and right for the that company and aligning it to those that will get it done.

Pricing Models

I often find that the most challenging part of finalizing an engagement with a customer is determining the best pricing model. This isn’t because there is tension in negotiation or even on the cost of the engagement itself. It is largely due to shaping a pricing model that helps meet specific objectives without becoming a distraction well into the project. Part of it is expectation setting, another part is alignment with financial goals (for the customer and the service provider) and another part is the shaping of behavior since money often does influence how everyone behaves especially when it is written in a contract.

There are considerations to be made when working with a customer to construct an engagement supported by an optimum pricing model. Some of these considerations include:

• Clarity on the value currencies (drivers) that will shape the deal
  • Time to Market for the project
  • Specific KPIs (Key Performance Indicators) that will communicate progress/success/failure
  • Identification of risks that can alter the course of the project
  • Understanding of all costs that will impact project profitability and could potentially influence behavioral change
  • Pricing model flexibility to allow for changes as the project matures or the objectives change

In addition to defining these currencies there are a number of pricing models to consider. Below I’ve described the most common pricing models that service providers and consultancies use. There are some great books written on how to price engagements, including The Price Advantage by Walter L. Baker, Michael V. Marn and Craig C. Zawada.

Time & Material (better known as T&M)

This model is perhaps the most common and is often the most problematic since it is entirely based on the cost of people with no responsibility on meeting specific value criteria or deliverables in the contract. Characteristics of this type of pricing model include:

• Daily or hourly rate multiplied by the number of days or hours, sometimes referred to as “level of effort”
• Customer  is invoiced and pays strictly for actual services delivered
• The rate is a factor of differing criteria that will likely include:
  • Skills required
  • Competency and experience of the person and/or team
  • Geographic location that will impact the market value of the rates
  • Domain experience if industry expertise is needed
• Discounting is typical based on:
  • Supply and demand
  • Competition and the desire to win the work
  • Duration of the project (the longer the engagement, the more competitive the price)
• Low risk assumed by the service provider but also a lower level of control and influence over the outcome
• High risk assumed by the customer since deviations or changes are usually dealt with by Change Requests that can be costly

Fixed Time & Material (sometimes called T&M Not to Exceed)

This can be confused with Fixed Price, which is different and discussed below. The idea behind a Fixed T&M model is to create a little more structure and security around the contract. Characteristics of this type of pricing model include:

• An agreed price for the engagement in exchange for a defined scope of work
• There is still negotiation on the rate per person or per team and the level of effort (number of days) BUT there is a fixed or capped amount that is discussed with the customer
• Due to the exposure of the rates, adding anything to cover unexpected risk (contingency) is difficult. That said, I have found that discussing this with customers openly and honestly usually results in agreeing on some percentage of assumed risk added, e.g. 15% (although that number can be higher or lower and needs to be agreed and validated with the customer depending on the scope of work)
• The payment is usually related to actual work effort vs. deliverables or milestones, e.g.
  • If it costs the service provider more time to complete the project and they exceed the “fixed”  amount then they are responsible for the difference
  • If the service provider can deliver the project in less time and come in under the “fixed” amount initially agreed then the customer benefits from the difference in savings
• High risk for the service provider since the engagement is still priced on T&M but is controlled by a fixed amount
• Low risk for the customer – project amount is fixed (budgeted), early delivery is to their financial gain, late delivery is still to their financial gain although the impact on one or more of their value currencies could be negative

Fixed Price

As it relates to service contracts, more and more companies are opting for Fixed Price and many more are now considering Outcome Based mentioned below since both of these represent mutual accountability and responsibility and reflect the intended partnership that was desired to begin with. Characteristics of this type of pricing model include:

• The engagement has a fixed price for the scope of work required and is NOT based on T&M discussion but rather perceived value – in other words if the delivery of this new customer facing rating application will deliver an estimated £5M in new revenue then is spending £1.5M to build it sensible (I don’t know since there are other variables but typically you need some level of an economic framework to assess the value of a fixed price engagement)
• The service provider is responsible to determine the level of effort and the best team to deliver this work and then provide a fixed price to the customer that will often include some percentage of assumed risk (contingency). The assumed risk is predicated on certain factors:
  • The extent to which the scope of work is understood – doesn’t necessarily have to be fully defined
  • The gap between the technical and business requirements vs. the service provider’s ability to fully deliver it
  • External factors or resources that may be needed to make up skills, competencies or expertise
• Price can still be negotiated
• The contract defines not only the scope of work and the engagement methodology of the service provider but also clearly describes the assumptions from both parties, responsibilities for each and how issues will be resolved
• While possible, penalties/late fees are not typical in a Fixed Price although some customers want to see them and this lends itself more to the Outcome Based model described below
• The invoicing of a Fixed Price engagement is tied to an agreed payment schedule vs. billing for services rendered
• The degree of risk for the service provider is high but their ability to shape and control the outcome along with the client is equally high therefore the exposure is limited assuming that the partnership intent exists
• Customers can benefit greatly from this model if all parameters are well defined and communicated upfront

Outcome Based (often referred to as Risk/Reward)

Over the years I’ve seen several attempts at this type of contract. Most of them failed but not because the model doesn’t work but rather the setting of expectations is not thorough enough and neither is the ongoing communication that is necessary to maintain complete transparency and trust. Unlike the other pricing models we’ve discussed, Outcome Based engagements require a bit more love and attention to make them really work.

They are often approached the wrong way by assuming that the key criteria is setting an SLA (service level agreement) and associated penalties. While these need to be represented, approaching this model with the intention of forming a benefit driven engagement proves to be far more valuable. Characteristics of this type of pricing model include:

• The engagement is governed by rewards for performance and delivery of outcomes and the risk of losing or minimizing the total compensation if outcomes and deliverables are not realized
• Similar to Fixed Price, the pricing model is a set amount and related to T&M but inlike a Fixed Price engagement that is simply a capped T&M contract, Outcome Based models are all about achieving deliverables and outcomes:
  • The scope of work is directly linked to specific deliverables/outcomes for the project that can be related to milestones (feature/function delivery), performance metrics (time to market/cycle time, cost/waste reduction, etc.) or some combination of both
  • Other outcomes can include a discounted rate from the service provider in exchange for revenue or productivity goals associated with the project
• Establishing ceiling and floor scenarios so that there is understanding on how much reward a service provider can expect if they over-achieve and equally what is the worst-case scenario is something goes wrong.
  • You might find it hard to believe but it is this lack of expectation setting and math exercises upfront that often lead to broken contracts and relationships.
  • The degree of risk on the service provider’s side in delivering the project needs to be balanced with the degree of potential upside, influence and control and the customer’s objectives for the project.
  • Customer Value Analysis type work upfront significantly helps this discussion and can often help shape a mutually optimum agreement
• The degree of risk for this type of pricing model is typically very high but again, the ability to shape and control the outcome is also high.
• Do these types of contracts if you have an established relationship with a service provider that you know will put skin the game because your success is directly linked to theirs (not on just this project, which is obvious but in terms of overall long-term goals).

The best pricing model is different for each project and organization and is going to be driven by a company’s maturity and experience in contract and vendor management along with their willingness to be creative and even re-shape existing policies. This largely depends on what they want to achieve with each project or program and what are the governing factors for the company itself. The explanation of these models will hopefully help some to re-think how they are doing it today and find ways to minimize their risk and exposure and more importantly build better relationships with their partners.