The Business Decision Making Process

I have often wondered exactly how are business decisions really taken? I come into this question with  a background in industry and a post graduate education at a business school. One phrase and I heard it often, boiled down to ‘gut feel’. Which most certainly is the oppositte of careful anlaytical thought process or perhaps we combine a bit of both and call it gut feel!?

https://i1.wp.com/hm.dinofly.com/images/myspace/gut_feeling.gif

Why did for example a recent e com major decide to go all app only ? And then revert that decision? What was the thinking to go against what seemed the normal grain and then come back to accept the truth perhaps and do a public roll back?

For that specific case, a lot I think can be pegged onto a few “new hire” situations, where expensive new recruits were expected to create and execute on earth shaking business plans. Something like if you had a football club and hired Gareth Bale for $100 million. If Gary did good you made money and if he did not, you lost a lot!! Thanks to all that pressure what if Gary made a self goal ?!

gbale_1

 

 

Whatsapp – Email overload & Enterprise social networks!

The last few years I have been really getting acquainted with several companies in my line of a work as tech sales guy. I see several organizational problems that I see building up due to unfettered tech and its wrong usage.  I’d love to solve them and have a few suggestions and being who I am they are inevitably about the more adoption of technology! I mean hey Whatsapp just got bought for like $10 +billion and people have a huge opinion about it. But all it did there was just move text messaging from the voice on CDMA+GSM spectrum network to the Internet Protocol/data network on the GSM+CDMA spectrum and added a layer of take and share media and files, create private friends or family social networks and on the mobile!

Email overload at the workplace is the latest big thing now that I really want to handle – it is so current now that were you to type in that search word – damn there’d be an article an hour back like say this one when I started to type this out. The solution is not too tough really – all you have to do is move that traffic else where on other servers that can handle it and is not as crowded and with less noise.

Go Yammer  and the ESN way. ESN is something I think I coined if no one has used before: enterprise social networks. If you don’t want to use Yammer – you may as well use FB – create corporate FB Ids centrally etc. But the point is it is they are there and can be used. You could try moving to the sales force dot com platform and use that as your workflow and sales force automation systems also and create that process. People like it or not read their FB messages, twitter feeds, Whatsapp dialogues more than anything else. More than SMS perhaps! There is even bug report on mozilla asking to see if reddit can be used to replace yammer?

Also the medium makes it such that people are forced to stay on script; brevity is the soul of wit as said Polonious in Hamlet  – a Shakespearean play. People need to have to be brief by the urgency of the medium and the forced restriction of space. Occasionally it spawns it’s own language like BRB, IMO, IMHO; LOL; BTW! Plus it brings in the concept of presence ; you know who is logged in on a server somewhere on the internet and can send receive files etc!! There are also possible videoconferencing and tele calling available which makes ESN the best way to go to handle email overload. In a very Marshall Mac Luhanesque manner; the medium becomes the message! Also it is open source capable and can be mostly configured for free with admin levels rights requires payments but it gets the work done!

Mis Management

It was a surprise for me early in the morning recently when I took up my copy of the Economic Times to read and see that on the first page the magazine had an article on the sad demise of management talent and sensibility at an up and coming and a bright star Indian IT services company.

I was surprised as the ET – venerable paper as it is – does not easily take a stance as to call out someone or a company and a star of the media and up and coming and all that out for being worse off than we thought they were. I wouldn’t say that I have a very good idea of the company being thus identified or know people there or are aware of what they do and how they do it. Little that I do know and what I read from the front page article on the ET – it seemed like they fairly well yes had lost the plot. Born in the early 1970’s as I am  – I remain still rather partial to the feel of print – actual physical news magazines and newspaper and occasionally maybe once a year – even do take a printout or two. Reading the newspaper I realized that I should quickly have an electronic copy since they may pull the article from the web site soon and downloaded the soft copy of the e paper.

The article on the company was interesting and it seemed even if you don’t know them all that well that they were kind of doomed to fail on the bets that they were taking. The one that sticks out the most was their plan to develop a cell phone on Android! I can actually visualize this in my head – the main people thee CEO and CFO had probably in one of their foreign trips and goaded most certainly by their children had gotten themselves the latest iPhones. That blew their minds and they saw this huge opportunity – maybe initially for Apps or something but then some smart aleck most certainly said – why not go the whole hog and make a whole new phone. These are what I call the emperors’ new clothes moments – the group think and communal blindness situation – no one in the board or that management meeting would be able to see why this could not work.  The reference here is to the fairy tale about the emperor that had gotten new clothes stitched that were not actually there and he was naked – but no one in his entourage or among his people could see that. No one at this company could contemplate when they planned to get into the cell phone business that hey we are up against the best and the biggest – people like Samsung, Nokia, LG, Apple, Motorola besides ODMs like HTC, Acer and the rest – what are the chances we will succeed. I mean this specific space – making another cell phone (handset) is something on which a lot of research has definitely been done – dominated as it is by the big daddies of the tech industry – some names that I have already taken. I will however also mention that in that same time two hitherto unknown companies who had been distributors of Nokia managed to make, brand and sell their own cell phones giving stiff competition to both the Finnish and the Koreans. It is not so much about the phone or what you bet the farm on – it is about the orchestration, the execution and the delivery. You mess that up and you mess a lot of the big things up!

Mis management at companies and their grandiose plans that are never well thought out and doomed to fail from conception isn’t new. They have been happening since people have gotten into managing and there is nothing surprising about that either. Management is about people done by people and people have several issues and thought processes that are exposed to their inherent psychoses and personal frailties’. More often than not these cast a long shadow on decision-making processes and they way team members are selected and managers tend to fill themselves and their rank with coteries and yes Sayers. It is like they are primed for failure. In my career as a corporate slave and managers I have had exposure to several companies and managers who had no clue. Sometimes it is chilling to think of how some people wield unbelievable power by their circumstances when they ought not to be allowed to do so! One of the worst examples of this in my life ever as hen I took up this role heading sales and marketing at a start up telematics company. They made a neat little product that would use GPS and the GPRS radio system on the GSM to track the movement of the vehicle in which it was installed over a map in real time. A pretty simple business model it seemed to me and something that we ought to be able to find customers for and partners to take to market with I felt. This was especially so as products like LoJack were already pretty useful in the US and were something that had shown a credible business model. The company also had a sizeable OEM business outfitting high-end yachts with these tracking systems. I was sure we had a great thing going. For the terrestrial business however the plan was to sell to domestic (Indian) users like the road traffic companies who ran busses and we had won a deal in such a company in a tender situation where we had managed to win the deal as we had quoted the lowest – which at that time was free and we would also pay the company some money. If it does not immediately make sense – there is hardly anything wrong with that – there is no reason or rhyme behind it and there never was. The plan was we would have access to the busses that we had set these GPS tracking equipment up with and the bus company would give us advertising rights on these busses. We would recover the money spent and also some extra with ad revenues.

So the company had outsourced the selling of ad spaces in busses to this third party agency – which at that moment had not been the best in selling such ad positions in busses. The whole project was failing miserably all around us as t he number of busses that had to be covered or connected to these devices – each of which at its cheapest was a shade above a thousand rupees. We had a situation where we were bleeding money on installing the devices free of cost and not really recovering anything on the advertisement revenue model due to poor execution there. It seemed counter intuitive – we were a company that started out making devices that helped you track your vehicles and boats in real time over the air. We were not in the advertising business and there was no surprise that we were making such a hash of what had seemed at that time on paper at least a very brilliant one! We were rushing towards bankruptcy at a rate unbeknownst to the best but our management had been rather successful in getting venture capital and private equity investment of the risky type from people that they had been petitioning for a while. The CEO and who had hired me was a septuagenarian IIT graduate who had in the past been senior management of not CEO or COO at two large American multinational hard disk and disk drive makers in the 1980’s and early 1990’s. The problem was that he was this bad decision a day kind of a manager and had occasional brilliances like giving away our bus tracking data through the GPS devices that we had in place to other companies who built services like bus tracking for bus passengers on web and SMS etc. free. The other guys built these services and made money and we made nothing. To be honest I thought my CEO’s decision making was trouble and initially thought it might be an offshoot of some strong medication that he may have been under. A little basic research on the internet showed me no that he was in fact a chronic case and in the early 1990s and as COO of his then company had made a huge investment in a massive plant to make 5.5” floppy drives in Thailand. The Thai economy had chosen just that year to tank due to political instability and well 5.5” floppy drives were overshadowed for that small while entirely by 3.5” floppy drives. So let us say that was the worst of the bad bets that you could possibly taken in that line of work. That company went into bankruptcy and liquidation pretty fast and the then COO and my current boss had at that time made what can be termed a pretty neat killing during the winding down. This was information available from the SEC website and the EDGAR online services free of cost and was there for any one that wanted to see. At least some of the PE and VC companies that had till that time invested some $15 million in that 10 year startup should have?! I didn’t stay with them for too long unable to see for myself a valid and meaningful role and leant a few months after that I had left that it had been sold to a large MNC in the telematics space for the off shore development centre that the company provided with its bench of trained engineers and process for what seemed a paltry $2.5 million. The old CEO made a neat packet and on hindsight what then seemed to be mis management seems now to my cynical self like an astute plan to run the company into the ground and sell for cheap!

How are companies then ever be able to grow unhindered if they have not been from birth or later growth endowed with the best and most idealist managers that have naught more than the organizations growth and dominance in mind? It never happened even though this is the one that companies need to wrap their arms around. Large companies like Microsoft long since known as the hot bed of politics and the setting of a many a corporate coup inside the organization’s hallowed halls manage to exist and thrive due to the one time singular brilliance perhaps of their founders that have helped them develop artificial monopolies that help them carry on and turn a neat profit far into the next generations. But it is not a smooth flow and even there new incumbents have overturned what existed and there is a dearth and death of innovation from such organizations. In many places and industries perhaps in this world you could get away without being perhaps the greatest innovator – not so however in the spaces that Microsoft operates in.

The coach – the guy who shows us the way!

What is it about football coaches – like the game and its players they have to be a bit on the wild side? The 2006 World Cup Finals is a great study in contrasts – flamboyance pitted against a studied approach. Every one of them has a story to tell. At Japan legendary Brazilian footballer Zico must be a sad man for their loss at their first fixture and the coach has been embattled there anyway.
 
And then there is Sven Goran Eriksson the Swede at England who has had some of his personal life love trysts rather humiliating published. Jurgen Klinsmann at Germany is no less criticized at Germany due to his love for all things American – he lives in California and has used American style fitness experts and regimens in his teams training for the world cup.
 
La Volpi the Mexican coach is also not liked too much by his fellow countrymen and that is a tough town there and that coach does not look any bit less tough than he has to be. There is also the legendary Leo – Don Leo Beenhakker – the celebrated senior Dutch coach who took Trinidad & Tobago; Brian Lara’s team & the world’s smallest every World Cup qualiying nation – all the way to Germany! Cigar fed Don Leo has been termed peripatetic – yup that gent –  he’s been around since he discovered Rijkaard!
 
A coach is someone that shows you the way – in the great Indian tradition there was Dronacharya, his failings with Ekalavya duty bound as he was laid light on his shoulders and it was such a pity to note that he was done in by the same that he so carefully taught! A good coach can make the person within rise to heights that was never thought possible. A coach can get performance out of humans to make them –  perhaps superhuman?!
In modern management the coach takes the role of the mentor – a teacher and guide – sometimes may even be a philospopher. Gung ho American companies even have  CEO coaches. The idea essentially is that these alpha male he men CEOs need people around them to teach them to be senisitive – an handler as it were?!?
 
But these are anonymouse lives that they lead – does any one recall – Valdemar de Brito?  He was Pele’s coach while he was at FC Santos and once  speaking to Pele, during Pele’s youth soccer years at the professional level training for the club:  "When you play for me", he would say, "You obey my orders. You come to practice on time, you stay as long as tell you to stay, and when you are here you do exactly what I tell you to do. Whether you are here or away from here you will not smoke or drink, and you will get to bed on time to get your rest. I will make you tired enough -don’t worry! – Without you arriving here tired because you didn’t get enough sleep". "What I have said goes for every man on the team; we’ll have no prima donnas. Anyone who cannot stand this discipline doesn’t have to stick around – but for those who do, I will teach you all I know about the game of Football". 
 
Those who follow world cup trivia may recall that de Brito is also the first ever player to ever miss a world cup penalty kick. That is a straight shot at the goal and to miss that means real bad news! But I guess he redeemed himself in some ways to have been the guy that ‘spotted’ Pele. In modern Indian history like in the past – we have our own gurus. Narayan Murthy – the creator in many ways of Infosys of India has decided to fade away in the sunlight as a benign sage. It was interesting to note also how soon later Bill gates of Microsoft also seemed to follow a similar path announcing his roadmap for a gradual  step down and dissipation from the big software giant at Seattle, WA. Both these great minds had passed on the mantle through a mentoring position and we await the next high or dips that their successors will take their companies to. But if they have done their jobs well – then what shall follow shall be bigger than what they left behind.

Technology and the organization…

It was in I think the May 2003 edition of the Harvard Business Review that Nicholas G. Carr opined that ‘IT doesn’tmatter’. He  argued that IT added no more value to an organization that had not IT. It was an earth shocking paper in its approach. Contrarian views are never popular and then again these were about the industry which has after all includes some of the richest people in the world in its roster. The paper caused quite a furore and the big daddies like the computer operating and office productivity software maker from Seattle and I think that other big daddy yacht guy making databases and stuff got really wild with some very angry comments.

 

But then again is not there something there – rich are the people making and selling technology and off course they would not brook a perspective denouncing what they do. The debate is I think no longer alive now – but there were interesting thoughts there. There was I beleiev a conspiracy theory on that article too which argued that the author along with large contractors was trying to argue high IT wages down!

 

Technology is a fair maiden and a glamorous one at that – and everyone loves her – whatever be the reason they do. But the thing with technology is that there are as are everywhere else – too many con men out there and too many mediocre people trying to get ahead and no wonder it does not work for a lot of people. Decisions on technology have often been taken by organization for considerations beyond what technology delivers. Convoluted purchase processes do not make it any easier to ensure that the best tech wins.  Is there a cause and effect relationship here – tech may be great and may be sexy – but isn’t the jury is still out on whether it makes or breaks a co.? Well tech is what makes the email work – when it is needed and the ERP work without trouble and that is as we all know is what it was supposed to do anyway?

 

For a lot of people – technology is just another thing you need to add to the building and electricity and the rest of those fixed costs – they know why they need the building – but usually they are not too sure why they need the technology and as usual they are buying it the way they buy their news papers and their stationery. There is inevitably no clear thought process that goes into the decision – for a lot of people it serves as a huge mandatory requirement type of a thingy!

 

It is not without reason that they ask whether technology has any value for the organization?!! I am not surprised that it is not obvious! Any investment provides returns if you know why you made that investment and if you knew that there are chances that you will find some value out of it. If however you made it because every one else were doing it and you just found one which was cheaper than everyone else – is that not a lot like a making a decision for the wrong reasons?

 

In my experience and I feel have a fair amount of it on the issue – I can and will argue that CIOs and people in charge of the tech initiative or installation and maintenance of technology (fair maiden as she is!) within the firm are making – often the wrong choices. There is a fad buying going on out there and there is a trend and often a fad becomes a trend and not very often – but it does – it can – become ‘de rigueur’ – the done thing!.

 

I offer that if people were to approach their tech investments as what they are – an enabler. We need to define clear results – clear deliverables – but none the less this is not something that will not do the job in itself – but will only work how you make it all stick together and what plan on achieving with it. It is a lot like they did in America – when they argued that the gun makers must be sued cause they made guns and these were used to kill people, because Mac Donald’s made fast food and people wanted to eat it and hence they are to blame that made it!

the importance of trust in optimising corporate perfomance

Francis Fukyama was it I think that wrote a solid tome on trust and why it is important and I was just looking and experiencing it in my life and my work and seeing all that more we could do and must do and will do – and all if we just had a bot more trust and all that.
 
It is funny to think to that extent – trust could make companies buy/procure better, creationg of trust could probably help sales organisations sell better- whatever way yoy look at it – abot more of trust and we could probably cover more ground. Whether it be the Israel &  Palestine – Hamas and all that – or even of it was pulling of the multi billion dollar  business deal.
 
Trust however is not as easy as it used to be and people have not enough of it and there is not a lot of it going around either and there are problems all around when you say the trust thing or try invoking it. People do not easily trust or are trusted and all things seem to indicate that people are getting rather cynical – they trust even less than they used to! I haven’t numerical data or a study to cite off hand – but I know the feeling, you could say it was an empirical study!
 
 But a bit of trust can make things better and studies and I can cite here – have shown that a little bt of trust can take things far and both players (if there were say 2 people playing a game with trust being a key currency / derivative / requirement) could earn/take back in rewards much more if they trust than if they do not!
 
The roots of game theory and John Nash’s psychoses was probably trust and the loss of it and the mathematics to attempt to rationalise its loss?!! But we do not rust yet easily and never have and probably will keep doing lesser of it all around!