Tuesday, September 30, 2008

Value based enterprise

There has been and will continue to be thousands of articles about the current economic situation. The people on the far left will call this failure of free market capitalism, and the far right will blame the Bill Clinton types for forcing banks to lend to anybody with bad credit......
In all this finger pointing a few basic facts and fundamentals are missed out.

Human enterprise is based on value creation. In the last few years this basic fact has been ignored. Business organizations and their leaders resorted to increasingly complex financial instruments that actually obscured all visibility to the fundamental measures for any successful business. Hence wealth creation was not based on any real tangible value to people or the economy in general.
In the past even though the Internet or dot-com bubble left a lot of us with broken wallets, at the very least it also left us with great infrastructure for progress in telecommunications, IT, and worldwide collaborative projects. Unfortunately this time round the financial bubble has left us with no basic tangible value.
Whether we need a bail out package, or what a bail out package should like can be debated for ever, but the only way out in the long term is to engineer truly valuable technology or products. An area of enterprise that has great potential for value creation, both in terms of social and economic value is "green technologies". The organizations that can drive value through true innovation in green technologies have a great chance of sustainable value creation. Having said this there is also the potential of the "green bubble"

The "green bubble" would constitute of organizations and governments painting everything they do with a "green "twist, knowing full well that there is no true value to society. Then again this becomes a game of fake wealth creation and hence a bubble.

Hopefully human enterprise in the long term will mean value creation in socio economic terms. Currently, through the credit crises, the china milk scandal and the hundreds of different "easy money" schemes we come across daily , we are stuck in a mode of wealth creation with no social benefits.

Being an optimist, I believe in the long term good of the human enterprise. But also being a pragmatist, I will review all green initiatives with a microscope to ensure that there is tangible socio economic value to the enterprise.

Just as I finished my draft I saw a great article in the New York times by Thomas L. Friedman titled 'Green' the bailout. He concentrates on primarily an American perspective.

Friday, September 12, 2008

Solving your solution

In a conversation with Kirtimaya Varma the Editor-in-Chief of EDN Asia, he mentioned that he was on his way to publishing his second book , a humorous book on the flourishing IT business. In this context he mentioned "solving your solution"(I believe it is the title of his new book ).

This got me thinking about our lives today. How often are we "solving solutions". i.e trying to solve a problem that either does not exist, or is grossly misunderstood. "help" of this nature most likely worsens the situation of the people/organizations that are the "target" of this help.

In business we see a number of examples of "help" turning into a nightmare. I have seen organizations spend millions of dollars on tools that are supposed to help make the organization more efficient, but instead lead to confusion. The worst case is when the organization changes it's "measures of success" to make the new system look good as opposed to make the organization better.

At a professional level we consciously or subconsciously are always trying to increase our value to an organization. So what happens is that as one builds an organization, often the number one goal changes from a business goal to that of self preservation and then self enhancement.

A great real life example at a local technology company in Singapore:
The company grew to a size of about 80 people in a matter of 3 years and they needed to track leave balance and other HR needs. So what starts out as a small team to help track employee leave balance for a company then in 2 years took the shape of a HR IT infrastructure organization that suddenly needs a budget and people etc. Now the company has 500 employees, of which there are 25 IT professionals in HR who are continuously building and improving a HR application for the company. This same company has another 18 IT engineers supporting the company, has 22 database programmers and 15 analysts, and 14 people on the web team, all providing support to the companies engineering, sales and marketing teams, and is headed by the person who originally was tasked to find an application to track employee leave balance. In December of 2006 the engineering team was told that they would be "helped" to run their team better because now they can track on the web the leave balances, the salaries , and another 10 things that I can't remember.
In January 2007, the engineering VP, and co founder who is a close friend of mine asked for help for some web features that the engineering team needed for testing their new product and for supporting the release of their new platform. The reply he got was that the business decided that his request was not a priority, and that his request would not be attended to until august 2008. He later found that the "business decision" was not made by people that that designed the products or brought revenue to the company but was made by the the team of the person who 3 years earlier set up the HR IT team. He also found that the things on the list above his request were evaluation of web configuration tool to standardize product data sheet representation on the web (the sales and marketing team did not ask for this), tuning the HR database to allow tracking of leave balance to the hour as opposed to half day periods (none of the managers had asked for this) , automating the mail room distribution , etc... To cut a long story short, in May of last year, the CEO dismantled the infrastructure team, out sourced the work to a company that specializes in implementation of business systems and web development.

Now the business decisions are made simple and transparently because only the "core" functions to the company have the ability to prioritize business needs.
There should be no hesitation in a business to tell a group what position they play. On a soccer team if everybody is a striker then the team loses.

In world affairs too there are many examples of "solving Solutions". Many of the recent wars and regime changes have done little to help any of the people that were supposed to benefit. And in the current banking crises let us see what all the government and central bank "help" does. Does it "help" the economy or does it help the people who caused the problem. Time will tell....

Sunday, September 7, 2008

Machine autonomy and intelligent robotics systems - tremendous potential and danger

The nature of my job, exposes me to many areas of research and development. Robotic systems, autonomous vehicles, cognitive systems and other similar areas are currently hot topics in many research labs in academia, industry,and of course the military.
There are a number of groups involved with research in this areas. One of the most useful is that of robotic systems that can help assist the elderly. Different aspects are being researched by various groups. Some research groups are looking at individual autonomous systems that help the elderly in specific areas, say bathrooms, or kitchen. Other groups are looking at humanoid robotic systems that integrate a variety of capabilities and help in numerous domestic tasks.

Billions of dollars are being spent by government and private organizations on robotic or autonomous systems. The most funding of course comes from the military. Most of the military projects are aimed at bomb detection and disabling systems, scouting systems, systems to assist soldiers in hazardous areas etc. There is also substantial government funding worldwide on autonomous systems that can assist in civil defence like fire department, and security management.
The developments in many of the research labs are incredible. But as most inventions, some of the uses envisaged are also incredibly lethal. I wonder how much of the motivation for these systems is to take away public pressure on governments that go to war. The more the wars are automated, the less body bags the citizens see. Saving human life is a great endeavour, but these same inventions can allow the government to go to war without accountability, because often those of us coming from, and living in countries where people opinions count, look at body bags on our side and not at the cost of the war or the lives taken in the regions our politicians decide to wage war on. We need to make sure that our money does not give governments a licence to kill.

Thursday, September 4, 2008

Why it is difficult to be M's Friend - hold a mirror to your face

I had a wonderful vacation with the family for a few weeks in Kerala often referred to as God's Own Country for the splendid beaches, mountains, back waters and much more. Most of the time I was not connected to the rest of the world (no news, TV, computers, etc...) and it was nice to have a few days of splendid isolation and give a 100% to the family. The photos attached are taken in Poovar about 30 KM from the capital city Trivandrum. Being away from the daily grind also gave me time to reflect and solidify some ideas about business, economics, politics and technology.

I have a friend who when I asked him if I could mention his name in the blog, said no, so I'm going to call him M. I have known M for over 10 years and consider him a friend and a sounding board for ideas. I also discovered that many people find it hard to be be his friend. I think I know why. During any serious discussion or debate, M holds a mirror to your face, i.e. he asks the hard questions, questions your motive, your assumptions, and your agenda. He does this purely from the intellectual need to establish clarity, both for the speaker, and the audience. This approach, however evokes hostility, because it is seen as questioning ones authority, integrity , etc.. Of course like all of us M is not perfect either and some times does antagonize people when he probably can get the same results without antagonizing them. But I deeply appreciate his friendship, candor, and clarity.

Holding a mirror to your face:
In previous blog entry titled agenda coloured glasses I had talked about agenda based decisions. Holding a mirror to the face of a speaker ensures understanding of people's agenda. In working closely with many senior managers across many industries, one of the questions that make many people agitated is when they are asked what is the "value" of their group to the core of the company or organization. Does the competence of your group need to be the competence of the organization or should it be out-sourced?

Another "holding a mirror" question is that on performance. I have seen so many managers wanting numerous metrics in place to "manage" their teams, but get very defensive when they are asked the motivation of those metrics. Is it an issue of trust, integrity, productivity etc. Also often managers do not want the same metric of trust or integrity to measure them because they feel that they are obviously above that - but then does it mean that they are hiring less trustworthy , or less productive people?
Metrics are useful when they are simple, in limited numbers and the value can be easily communicated both to your employees and to the managers above you.
In most organizations there are different constituencies that need to be represented and whose interests need to be balanced. The Customer, the employee, the share holders and of-course the vendors or suppliers. Any decision that skews too much in the favour of any of these constituencies will effect the other constituencies and can ruin a company.
On a parting note I will give you an example of skewed decisions causing organizational failure.
An automotive company that I have worked closely with has a great engineering team that makes innovative products that are used by many major car makers in the world. They also have a great purchasing and finance team ensuring strict compliance with their corporate financial and governance policy. The purchasing department was so effective in cutting down prices and sourcing lowest cost providers that at some point cutting cost became the sole purpose, while supplier sustainability was forgotten. What ended up happening is that the engineering team could then not get any good vendor to work with them on a long term basis because all the engineering system companies that worked with this company either became bankrupt, or stopped servicing them to ensure sustainability. So the good purchasing department got great prices. The good financial team ensured payments were stretched out as much as possible, and the good engineering team spent a lot of time on re training new vendors and hence loosing out on time to market. Effectively this company has great individual constituents but is a failing company that is in bankruptcy. So hold a mirror to your face when you make a decision or go into a debate. Thank you M for your clarity of thought.