Friday, February 5, 2016

Evolve, or Disappear

What dissatisfies a Client of a service?


It is rarely bad service in some absolute sense of “bad.”  A customer’s satisfaction is the gap between what is expected and what is received.

Everything is relative. 

A typical service client cannot always tell when a service is performed well.  But, a typical client is very good at sensing disappointment.  In short, the central fact in the services business is a frustrating one: It is much easier to fail in a service than to succeed.

In an increasingly complex world with constantly shifting expectations, an obsession with planning and detail can be more of a hindrance than a help in sustaining high levels of client satisfaction.  It can wed your teams and business model to plans of action that are not working in the marketplace, and that are not reflective of how your business has changed.  Good enough often isn’t in the eyes of the service recipient, despite all the dashboards and metrics.

We can’t let the presence of risk, or the absence of clarity, prevent us from taking action.  Whether that action be an investment, a change of partners, or the retirement of a legacy business model.  Call it innovation if you must, but services-based relationships must evolve or die.  If you’re in the business of delivering a service, you better have a plan to evolve.

The wave across companies to adopt “As A Service” modes of operating – whereby best-effort is replaced with defined and measured service outcomes – is a fundamental transformation of how businesses operate.  It’s a lifestyle change of momentous proportions.

But, it’s a change that will occur purposefully and through phases of change.  With rare exceptions, we’re not talking about a big bang shift in how large companies organize and operate.  We’re chipping away at the familiar, and replacing it with the progressive.

“As A Service” is, increasingly, an expectation of service recipients.  It’s defining “good” for the execution of business functions.  It can’t be controlled or constrained.  It is the new normal for running businesses.

Leaders of corporate Shared Services operations, and providers of outsourced services, are challenged alike to offer new forms of service delivery that reflect the higher expectations of the service recipients.  This is not a matter of waiting for new requirements, or putting a veneer on the old service model. 

What’s expected of those worthy of sustaining services-based relationships is a commitment to market-based “As A Service” offerings.  Your customers are watching.

Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now Senior Advisor for Alvarez & Marsal, and Chief Evangelist at Peter Allen & Partners.


Tuesday, February 2, 2016

Venturing into the Gig Economy



I recently listened to a podcast by the venture capitalist Naval Ravikant, CEO of AngelList and founder of ePinions.  His comments told me that I had crossed a very important threshold, and did even know it.  I am living in the “gig economy.”

Naval was responding to a question regarding the impact of information technology in driving a new form of economic model.  As an investor in many forms of tech-enabled business services, I was intrigued by his response.


Naval remarked that the industrial revolution of the 1900s brought people together around minimal efficient scale, such as factories, to drive productive collaboration.  Today, innovations in social, mobile, analytics and cloud technologies are driving substantial reduction in the cost of basic transactions, allowing disintermediation among service participants. 

Proximity to one another is no longer required for the consumer and the producer of a service.  One example is the Uber driver who receives orders via mobile phone without any human intermediary. 
He offered a better example in describing independent contractors using Twitter and online sources (like LinkedIn) to find jobs.  The podcast referenced the “gig economy.”

Whether it’s selling your arts and crafts on Etsy or Ebay, offering taxi services through Uber or accommodating tourists in your spare room via Airbnb, the world of work appears to be changing. This is the “gig economy” — where incomes are earned or supplemented by trading individual goods and services online.

One survey issued in January suggests that some 45 million people, or more than 1 in 5 adults in the US, participate in the gig economy, also known as the sharing or on-demand economy. According to the poll by Time magazine, 14.4 million people derive a majority of their income from the gig economy, defined as "contingent work that is transacted on a digital marketplace."

Naval’s commentary went beyond the business-oriented examples to advocate for a more personal adoption of “gig living.”  He argued that each one of us has the opportunity to develop and exploit our personal brands, and our unique expertise.

This reminded me of a recent conversation with a senior executive in a large company who said to me, “We are over-run by consultants.  What we really need are experts.”  And, expertise is a personal, not institutional, trait.

Naval offered a recipe for success in the gig economy, comprising:

·         Find something you love to do, and for which you have a shot at being among the best in the world
·         Build your independent brand around it – with your name
·         Only take up creative work – providing opportunity for continuous learning, refinement, relevancy; building competitive advantage
·         Develop personal comfort with a boom-bust cycle of demand

At the heart of this is the premise that it’s best to leverage what you do best and hold tightly to your independence in the gig economy.

Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now Senior Advisor for Alvarez & Marsal, and Chief Evangelist at Peter Allen & Partners.

Image:  https://hacked.com/primer-gig-economy/







Wednesday, January 13, 2016

Patience is No Virtue

Most people I meet tend to think that organizations work on the principle of inertia:  structures and strategies tend to stay as they are, either at rest or in motion.

But it appears to me that organizations actually are subject to the Law of Sharks.  If a shark does not move, it cannot breathe.  And it dies.

A conversation with a senior executive of a global bank reminded me that this principle cascades to personal ambition and career management.  He is the #2 leader in a large organization, with little movement among the ranks above him.  “A shark’s gotta swim,” he said to me when I asked what was next for his career with the bank.  Enough said.


Moving organizations tend to keep moving.  Dormant ones tend to run out of air and die.

Movement takes many forms, and involves many muscles.  A continuously-evolving strategy is one form of movement.  So, too, is the insistence on lean operations and avoiding bloat that brings weight which much be carried about.  Rotation of talent, especially at the senior ranks, is an especially important form of muscle-building.

Realignment and refactoring of strategic partnerships is an area of common neglect in building the strength of an organization committed to movement.  Too often, companies tend to think that yesterday’s decision is one that seals destiny, when actually it’s an opportunity for building agility – the ability to flex and move.

To worsen this problem, not-moving rarely causes any immediate pain to an organization.  This encourages even more waiting.  “It ain’t broken, so don’t fix it.”

Not-moving begets more not-moving.  By the time the delayed consequences of all of this not-moving occur – one of which being that action-oriented people in the company flee for new situations, making the company even more waiting-oriented – it is often too late to correct them.

In the age of digital disruption, with nimble competition lurking around every coral reef, it’s essential that your organization embrace movement, change, and realignment.  Purposefully, and with a cadence of being a survivor for the long term.

Act like a shark.  Keep moving.

Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now Senior Advisor for Alvarez & Marsal, and Chief Evangelist at Peter Allen & Partners.
Image: https://www.flickr.com/photos/zeeyolqpictures/

Wednesday, December 30, 2015

Nothing Ventured, Boring Legacy

There’s something about a new year that prompts many of us to reflect on our course and speed.  I’m no different.  In my case, I’ve decided to make a change of trajectory as we enter 2016.



My teenage daughters have stopped asking me what I do for a living.  My explanations bore them, at best, and confuse them in the most likely scenario.  Their generation has a hard time grasping the value in providing advice to companies that are trying to find solutions to hard business problems.  There’s nothing tangible in talk, and they think that advice equates to talk.

I often tell my girls about the start of my career – being a junior member of the team that built the ARPAnet, the foundation of today’s Internet.  They feign interest in this – it’s something that they recognize as being central to their text messaging, apps-driven lives, but it’s like breathing to them.
They ask, what have you done lately?  What do you stand for?  How are your contributions measured?

Times like these prompt many of us to reflect on what gives us the greatest satisfaction, and that which carries our passion.  Fulfillment comes in many forms, and the threshold from one year to the next is a natural place to reflect on the values we value.

My passion is centered on the “As A Service” economy that is revolutionizing the ways that technology-enabled services come to reality.  I have written, spoken, and advised on this topic for most of the past five years.  It’s the next-iteration of many heritage operating structures.  I’ve worked with some great buyers of “As A Service” offerings, and some progressive providers of clever services.

It’s time for me to make this my sole focus.  It’s time to measure my contributions in different ways – principally around the creation of substantial and sustained innovations in business models.  Peter Allen & Partners (www.peterallenpartners.com) will launch on January 1st.

From this platform, I will help organizations retool their operating models to take advantage of the disruptive potential of “As A Service” modes of service.  My network of like-minded colleagues is deep, and together we will take on assignments that exploit our expertise in the essential elements of service-based commercial models.  We will bring new services to life.


My girls may not know what this means now, but I intend to point to tangible outcomes that we achieve through purposeful application of a unique passion.  Bring on 2016.

If you know of anyone who might benefit from my help – in buying “As A Service” offerings progressively, or in building/selling/delivering “As A Service” offerings with distinction, please let me know. 

May the New Year bring each of you great energy around your own particular passion.

Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now Chief Evangelist at Peter Allen & Partners.

Thursday, December 3, 2015

Using Burning Ambition to Drive Change


Most companies approach significant business decisions through one of two opposing perspectives: ambition or desperation.
I’m talking about those decisions that cut to the heart of sacred matters such as structure, offerings, channels, and partnerships. Decisions that carry overt ramifications.

When I talk with senior executives about the potential for substantial change to a business - such as new organizational models, outsourcing, alliance relationship, or M&A - I start with questions that help me to understand their motivation. Sometime the words that come back mask the true impetus for making a change.

Initiatives motivated by ambition tend to involve a broader group of people than those driven by desperation. They tend to rally the troops. The words convey construction.

Desperate times tend to narrow the universe of executives focused on the remedial actions, and they often take the form of secretive undertakings. The vernacular is about dismantlement.

For example, one recent conversation focused on a persistent pattern of competitive losses for a company that believed its offerings were market leading. Senior management wanted to sort through the conflicting rhetoric of the marketing, sales, and offering teams. Why was the company not being selected in competitive evaluations?

Once the facts were laid bare, senior management had some hard decisions to make. They unearthed arbitrary qualification processes, lack of references, substandard features, misaligned channel strategy, archaic pricing models, and under-prepared sales teams.

Did the data tell management that the war was lost and that it was time to exit the market for that particular offering? Or did the data reveal that the market was hot and that excellence in execution would reap great rewards?

It all depends on the perspective, but one thing is clear: being indecisive about the competing extremes would relegate the company to a dumpster fire of under-performance and frustration. No decision was a decision to fail.

If the conclusion revealed that these are desperate times for the offering, management would either decide to exit the business or make substantial structural changes.

If, instead, the leadership decided that there were lessons to be leveraged and that it was time to “double down” on the opportunity, management would settle on a very different course of action. This might include leadership changes, added investment in features, or new sales approaches. Ambition and optimism would underlie the announcement of such changes. Alignment among the team would be essential.

As my good friend Peter Fuda likes to say, “When “good enough” isn’t good enough, it’s time to organize transformation around a burning ambition.” While people tend to follow ambition with much more vigor than desperation, both emotions motivate change.

One last tip: deal with desperation quickly, but deal with ambition collectively.

Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now a Boston-based Managing Director at Alvarez & Marsal.

Image: benwatts/Flickr

 

 

 

 

 

 

Wednesday, October 28, 2015

Internet of Thinking: Why IBM Bought The Weather Channel


 


Today’s sit-up-and-take-notice moment for me was IBM’s acquisition of The Weather Channel’s digital properties. We are having more and more of these unusual maneuvers occurring in the IT Services industry, and there are more to come as the industry reinvents itself.



I am a product of this industry. Genetically, it is an industry wired around the development and integration of systems. Dating back to the dawn of the computer age, companies such IBM have existed with the value proposition of being adept at automating processes via computing technologies (although few others have as deep a pedigree as IBM).

It’s an industry that ritualizes requirements-driven design and implementation of capabilities that meet specified “user” functions. 

One of the more instructive experiences in my career was a U.S. Defense Department program that I led to modernize the wholesale logistics (buying, storing, transporting, and delivering everything from boots to bullets) processes for all branches of the military. 

We had thousands of people working to synthesize the needs of the user community, rationalize legacy systems capabilities, model data sources and references, and write code to bring a new “standard system” to life.

This was the final government assignment in my career, as I was dismayed by the political unraveling that led to the cancellation of the program due to the lack of agreement among the military departments involved. Consensus is a tough way to drive innovation.  I moved on from this to the commercial services world - IT and Business Process outsourcing.

In the commercial services segment, I found much of the same: buyers and providers of IT Services tend to think in terms of requirements at the present moment. There’s less political consensus-taking, but decisions are still afflicted by thinking that is constrained by what’s comfortable and familiar.

IBM’s move to “use the data provided by The Weather Company's sensors to boost its analytics offerings for business clients” is remarkable for its progressive potential. I doubt that this is a strategy being driven by any specific client requirement.

Henry Ford observed, “If I'd asked customers what they wanted, they would have said ‘a faster horse’.” To be an innovator in your industry, you have to have a deeper understanding of the future than do your customers.

Ford’s observation is somewhat akin to a market leader understanding that its legacy business is fading fast and that it must make bets on new forms of value for the market of the future. 

By my reckoning, IBM’s strategy here is to create an “As A Service” suite of offerings that leverage the IoT assets of The Weather Channel. You can be assured that this isn’t the only such move, but merely a key component of a bigger ambition.

“As A Service” isn’t a requirements-driven approach where a service provider responds to a specific set of client needs. Rather, it’s a market-driven approach that reflects informed anticipation of the needs of multiple clients.  That’s the Internet of Thinking.

 
Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now a Boston-based Managing Director at Alvarez & Marsal.

Image: courtesy IBM via YouTube

 

 

 

 

 

 

Monday, October 19, 2015

Bridging IoT and As-A-Service


Over the past year, I’ve written extensively about two topics close to my heart: Internet of Things (IoT) applications and the evolution of the “As A Service” Economy. 

In my mind, these two topics are inexorably linked.  More accurately, the “business model” bullet in my IoT Requirements framework is predicated on adoption of As-A-Service modes of delivery. 

Few believe that IoT will take life as islands of gadgets that exist with the marginal benefit of network connectivity to “phone home” for updates to their software. Rather, IoT devices will be knitted into a system that learns and evolves over time. Commercial pressures will dictate that such systems are brought to reality as a service.

IoT will allow for new forms of decision-making prompted by events and/or triggers that are initiated by IoT sensors. The sensing IoT devices - whether monitoring the garage door, regulating Fido’s dog food consumption, or watching for rainfall in a wheat field - will communicate their observations. Some devices may take actions autonomously as well, but they will still communicate.

Once prompted by an IoT sensor, decisions will be based on input from multiple sources. These sources will include other IoT sources, contextual factors (e.g., time of day, environmental conditions, etc.), and relevant sources of insight. That’s the “correlation” reference in my requirements list.

As each system records decisions and related effects, it will learn.

This simplistic portrayal, which can be described for any number of examples, forms the ideal framework to industrialize, standardize, and scale as a service. In fact, even via “As A Service” models that exclude IoT - such as processing financial transactions, administering payroll, or monitoring compliance with regulatory policies - the same essential steps are taken. This is basic systems discipline: input, process, output.

The IoT to “As A Service” linkage comes most prominently at the point of defining the business model. Every device manufacturer who is thinking about Internet-enabling their products must define the ways through which their devices are part of a new service value proposition. That “As A Service” ecosystem may be a proprietary platform that is unique to the manufacturer. More likely, it will be part of a broader ecosystem that involves other forms of devices and services.

Does anyone think that the clever new thermostats that provide remote control of room temperatures are going to remain constrained to that functionality? I doubt it. Temperature-As-A-Service isn’t bold enough. 

I am seeing more and more IoT examples that carry the attributes of an “As A Service” mode of operation. These include a broad set of features that I will describe more completely in a future post, but which include:

     Multi-tenancy

     Functional modularity

     Data security/Integrity

     Open interfaces (APIs)

     Configurability

     Dynamic capacity provisioning

     Workflow integration

     Committed services roadmap

     Little capital outlay

     Contractual flexibility

     Operating resilience

     Dynamic denial of service resilience

     Surveillance/audit

     Usage/transactional pricing

 
Anyone hoping to play in the IoT market must develop expertise in the principles of operating “As A Service.” 

Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now a Boston-based Managing Director at Alvarez & Marsal.

Image: romanboed/Flickr