The HR Outsourcing Rush

HR outsourcing is arriving. The HR department, long considered a cost center, performing back end tasks, has had to re-orient and re-engineer itself in line with the demands of the emerging e-conomy. It has had to take on the role of a business partner, which performs core HR functions that have a direct impact on the revenue building capability of the company.
Makes me wonder, considering that these would be outsourced to Indian BPO companies, what would the skills necessary to the HR SMEs in these BPO organizations? No people contact, no strategic thinking...just operational process related stuff...the Maintenance Expert role according to Ulrich's HR role matrix :-)

Top Consultant.com says:

The integration of Razorfish, Scient and Lante by SBI and Company is proving a great success, according to Ned Stringham - President and CEO of SBI (for full details click below)
http://meta.unit.net/topconsultants/sbi/index.html

It has emerged this week that Deloitte & Touche is to become the last of the Big Four accounting firms to adopt limited liability status. The move, which would protect partners from Enron-style legal action against the collective firm, both reduces risk for the existing partner pool and also makes it easier to attract senior hires - who might otherwise have been nervous of joining the firm.

The other Big 4 rivals - PricewaterhouseCoopers, Ernst & Young and KPMG - have already changed their legal status.

Limited liability effectively means that future liability for failed audits will be limited to the individual partners involved in that audit, leaving others in the partnership untouched. The trade-off is that firms must make their accounts public, something the audit professional has historically avoided.

I wonder will this liberate them?...or does this mean more creased brows on the furrows of clients and shareholders?

Directors of EDS have forced Dick Brown to step down as CEO of EDS. It was Brown who initiated the aggressive growth strategy that saw EDS pursue high-profile "mega deals" - some commentators believe at the expense of more traditional business.

Apart from diverting resources, the "mega deals" have also hit EDS financially as they have left the company highly vulnerable to bankruptcy filings. Two major clients have filed to date, and EDS has also encountered problems with 2 government contracts. Following profit warnings in 2002, the company warned in February that it was at risk of not meeting its 2003 earnings target. A major strategic review has been underway since this time, and a change in leadership was seen as critical to reassure investors and drive through necessary changes.

"The EDS Board of Directors and Dick Brown mutually agreed it is in the best interests of the company to effect a leadership change at this time," said Roger Enrico, an EDS director.

Michael Jordan, formerly head of CBS, was named chief executive and chairman of EDS. The board also enticed EDS veteran Jeffrey Heller out of retirement to become president and chief operating officer.

Mr Jordan, formerly a consultant and principal with McKinsey & Company, will now rethink EDS’s entire business strategy. The strategic review is expected to be concluded in the next two months. One of the issues likely to be under consideration is whether EDS should make a major consulting acquisition to parry that of IBM, recent acquirers of PwC Consulting

For the official press release see:
http://www.eds.com/news/news_release_template.shtml?rowid=3236

BearingPoint - formerly KPMG Consulting - has this week named Robert Falcone as its new CFO. Robert Lamb, BearingPoint’s previous CFO, parted company with BearingPoint in December to join FleetBoston Financial.

Gyan from Arie de Geus
Arie is a thinker whose simple book "The Living Company" affected my views of organizations. Here he talks about the organizations that are needed for the future ...superb reading

How might companies look different in the future?

The human element will be dominant as communities, managed for longevity rather than for profit, evolve in harmony with changes in competition, technology and values.

How should performance be measured?

Set wide performance targets, in terms of final outputs. Leave lots of room for people to organize themselves to achieve that output. Go for effectiveness, rather than efficiency. Effectiveness means achieving the highest quality output in the shortest possible time, rather than at the lowest possible cost. Count on your people to take care of efficiency-if you trust them and if they trust you.

How can learning become operational?

Maximize intellectual output by establishing a learning process. The best learning takes place by play. Play has been defined as experimenting with a representation of reality-a simulation that you have created yourself-rather than experimenting with reality itself. A team at play comes to a satisfactory end result in, measurably, about one half of the time that it would take in a reality-based situation.

Is there an analogy in nature?

Biology teaches us that birds, being mobile, propagate innovation by flocking. When individuals are hired for their skills and kept static-not moving around organizationally-there's very little flocking, which results in an ineffective transfer of innovation. Knowledge travels best as individuals move around the organization through regrouping, promotions and career changes, which promotes "action learning" in the new destinations.

My post in Brint.com about KM theory and Practice

My personal opinion is that the theory and practice of KM are both together in an 'emergent dance' (if I can call it that!) to evolve into something meaningful and value adding for organizations, individuals and society at large.

Because KM spans expertise across so many different disciplines, there is going to be churning and chaotic conflicts on "what is KM?" (we have already seen that happening over the last few years) and the more fundamental questions "what is knowledge?" and "can we really manage knowledge?"

I am an optimist and willing to watch with fascination as it develops into something that is larger than it is now!

Another Comment of mine in KnowledgeBoard

Knowledge Exchange

The fallibility in most of the "people process" models for Knowledge Sharing and Exchange is that they seek to address the superficial acitivities by initiatives like training and communication.
The problem lies more at a fundamental mental model level. The mental model driving most KM initiatives in organization is "extractive" is nature (that is, KM is seen as an initiative from which the organization gains without investing too much in people) over other initiatives like Organizational Learning which have a more developmental orientation

Radical vs. Incremental Innovation

My post on Radical vs. Incremental Innovation at the KnowledgeBoard Innovation SIG

We distinguish incremental and radical innovation by the following methods.

Incremental innovation happen at the activity and idea level, but radical or breakthrough innovation occurs when mental models shift.

To facilitate such shifts in mental model is a process that is deeply reflective not just on "how" and "what" but also on questioning the "whys" ...the ability to challenge the sacred cows that are assumed for one's domain and industry, and essentially also entails disrupting the 'established' structures and processes.

A comment on definition of CoPs

I think that a useful point that could be included in these definitions is the paradoxical nature of CoPs, because unlike a social community there is an inherent 'design' that is included in them, and yet they are emergent as they develop, and any attempt to craft them usually tends in stunting their growth.

My definition of Organisational Culture On KnowledgeBoard.com

"Organisational Culture is the the sum total of the image the organisation has of itself and the identity that others give to it. It includes the mental models that drive it and the assumptions that cloud it. This covers values, norms and artifacts of the organization."

My Definition of Learning Organisation on KnowledgeBoard.com

"A Learning Organisation is one in which there exists processes, systems and intent to continually challenge and questions one's own mental models and assumptions and to ask oneself "why?", in a non-threatening manner"

Dataquest had also asked my comments on "Hiring Mistakes" and since you may not be able to read the comments in the magazine (since my email has been acting more like snail mail...here is what I said):

· Do you think the good old face to face interview practice needs to be changed?

Yes it does have to change. It should remain face to face but be a lot more structured. HR departments need to be able to sense an interviewee’s behavioral preferences. They should use a lot of “what if…” :what would you do…?” “why?” questions rather than ask about “what” and “how” questions focused on the past and based on the CV.

· Why/why not and what are the options?

Companies could use a lot more case studies and group hiring techniques. They could also use ‘work one day on the job’ so that the interviewee gets a feel of the place, his boss and subordinates.

· Could you give an anecdote (not necessarily within your current company) in which a better evaluation technique could have helped avoid a hiring mistake?

Most hiring mistakes happen when both sides do not gauge the requirements of the other side. In one case a candidate with the requisite skills was hired into a fresh team of a company. Even though she had the competencies that the job demanded of her, there were two major differences that both the sides ignored putting any attention to , or to clarify. She had come in from a process oriented company where everyone knew of the field. Here she was going to be in a fresh team that was starting off and had to put processes in place. In the previous job her profile had been to interface and build business with external customers while in this job she had to interface with internal customers, which eventually led to her frustration and quitting the job in 4 months.

· Could you outline some best practises that will help avoid hiring mistakes?

Both sides need to clarify the job down to the last detail. The candidate should meet and spend some time with prospective peer group and boss. The prospect should also find out how critical is the job, who did it earlier, scope for growth and learning, how will performance be evaluated etc. Remember, most hirees leave on account of interpersonal problems with the team working already , or because what was promised and what was delivered wasn’t clear. Both sides need to explore and clarify their assumptions before they jump in to the joining. Costs of not doing so could be not just monetary but far worse like ill-feeling and a bad taste in the mouth.

My quote in the article Backseat Driving in Dataquest:

In fact as both Gautam Ghosh, senior executive, Satyam Learning Center and Hema Ravichander of Infosys claim, "HR cannot confine itself to an ivory tower and operate from there."

My posting in KnowledgeBoard's article on Weblogs and communities:

Blogs are great for commentary on issues and
musings. However I am not sure how they can actively aid
community building, unless there are directories of blogs, which
can be facilitated by Google.com's acquisition of Pyra Labs which
is the company that started Blogger.com...As the joke goes, are we
ready to Bloogle ??

And another item on Knowledge Work as Craft Work

I agree with your observation that the mental
paradigms driving knowledge work are industrial in nature and not
'craft' oriented...that would explain the overabundance dependence
on 'tools' and not 'apprenticeship' to share knowledge

My post in ISTT in a reference to a case study of an auto company's marketing programmes:

Often marketing incentives seek to right a symptom and not a
disease :-) and are quik fix solutions.
More data would needed to be taken before one can propose a solution
to this case (thanks for posting this, by the way)

The company needs to ask itself:

1. How much is it in tune with the customer? Is it relying on
marketing 'research' for its data or does it rely on mining first
hand 'insight'

2. How does the customer percieve the product? When such schemes are
launched they inadverdently give off messages to the customer
saying "we are desperate" "our prices were way too much" and "we
have been ripping you in the past"...how would these messages impact
them vis-a-vis the perceptions of the competition.

3. How intergrated is the rest of the organization to the marketing
and sales group? Is the success seen as only the M&S team's success
or the organizations success?

4. Is the marketing team looking for own personal incentives which
could be counter-productive to the organization? How are reward
systems linked to overall performance of the initiative?

5. How much strategy alignment occurs when strategy is communicated?
Is it just a 'telling' process or is it a 'co-evolved and co-owned'
process?

Emergence

Emergence publishes articles of a qualitative nature relating complex systems, sensemaking, psychology, philosophy, semiotics, and cognitive science to the management of organizations both public and private.

A good site edited by Lissack. Especially for people interested in systems thinking.

My post in IndiaStrategy-ThinkTank

If I think about it, confidence is the desire of "I can do it" and a very
personal feeling...and one sees it in a team sometimes (as in the current Australian team) and one can easily confuse it with arrogance (Glenn McGrath, or Sourav Ganguly anyone?)

To transcend this 'can-do' attitude at an organizational wide frame is a
difficult proposition, than infusing a team with it. This is because at an
organizational level lots of other variables come into play.

To infuse confidence in the organization, I guess the following would have to be given :

1. Inspiring and trusted leadership
2. Processes that are seen as value adding and not as bureaucracy
3. Transparency for ideas to travel across the organization
4. Constant efforts to break silos and look at the larger picture

Consulting in 2003, Areas of Growth

Polling ~ 1,500 management consultants, the results provide the clearest indication yet that the sector should experience a modest recovery this year. Over 75% of respondents believe that 2003 will be characterised by stability or growth in revenues, whilst only 24% believed there would be any further headcount reductions at their firm. Perhaps unsurprisingly, consultants at niche and medium-sized firms are considerably more bullish than their large firm counterparts - both in terms of overall growth expectations and also headcount growth.

Therefore it looks like the market is going to trust the smaller niche players more and more. Good news for people like us !

Which Strategy Consultancies do candidates most want to work for?

McKinsey continues to enjoy a major competitive advantage over rival consulting firms, according to the results of a survey published by Top-Consultant.com

Respondents confirmed McKinsey is the employer of choice amongst strategy consultancies, securing almost twice as many votes as any of its rivals. It was followed by BCG , then by Bain & Co. followed by Booz, Allen Hamilton

Top Ten Trends for Online Communities

The article starts with:

"The online community sector has negotiated a wrenching twelve months, as played out in each issue of the Online Community Report. While user popularity of online communities continues to swell, the business underpinnings of most efforts have foundered. Contraction and closures have characterized the sector.
Fortunately, there are a number of specific niches within the online community space which are bucking the trend and demonstrating strong revenues, credible earnings (now or forecast), and a promising future. This article reviews ten such areas which, given their financial promise, represent the future of online communities."

Interesting insights especially, that people are interested in paying for search communities and not just any communities !

wiAn inquiry into the role of weblogs in online community building

"The rise of the Internet as a medium of communication has prompted much debate about its effects on social interaction, both offline and online. The ever changing landscape of cyberspace (Gibson, 1984) - characterized by the rapid development and subsequent adoption of new technologies - has necessitated a perpetual game of catch-up on the part of academics interested in this area of study. Previous efforts at characterizing and analyzing virtual communities in Internet Relay Chat (IRC) and Multi-User Dungeons (MUDs) have been integral in laying the groundwork for future research on the effects of Computer Mediated Communication (CMC) on social interaction. However, the emergence of new applications and technologies have brought the findings of the aforementioned research projects into question, since the communication processes (and patterns of social interaction) of any online group are highly dependent upon the technical settings of the particular mode of CMC (Liu, 1999)."

Knowledge work as craft work
"Knowledge work takes us back to a world of craft work practices. The "symbolic analysis" that Robert Reich identifies as the essence of knowledge work is designed to create the one-of-a-kind results that characterize craft products. Recent flaps over plagiarism by both students and professionals are a concrete reminder that the goal of knowledge work is the creation of new results."

This article draws interesting parallels between crafts and KW and points out that our mindsets rooted in the industrial society might be limiting to understand the needs of knowledge work and workers

Dr. Madhukar Shukla of XLRI, Jamshedpur in Business Today's Trimillenium Issue on

(Un) learning about Jobs & Work

Crystal-gazing into the future (and that too about people!) is a dangerous preoccupation. And yet, it is also tempting. Perhaps the only way to speculate about people management in the future is by looking at where the emerging business realities are leading us to. In doing so, one can decipher 4 clear trends which will set the people management agenda for the New Millennium.

Firstly, what we see is a shift from a mass-manufacturing economy to a knowledge-based economy. Even in manufacturing industries, pure manufacturing operations have become an increasingly small part of what adds value to the customer. Unfortunately, the operational paradigm for managing people still has its historical roots in the smokestack economy. Essentially this paradigm works on 2 assumptions: one, efficiency can be achieved only when you de-skill the work; and, two, control comes from routinising work. Correspondingly, we have the prevalent people management systems, which are based on hierarchical controls, segmentation of tasks, and a limited access to information.

But the emerging economic order makes the inadequacies of this paradigm obvious. The new economy thrives on knowledge-workers who perform complex and highly-skilled jobs. And, the fast-paced (and uncertain) changes in the business environment make it impossible to routinise most jobs. Developing people practices for such knowledge-workers will be a challenge.

The second shift concerns the relevance and goal of the learning process. Current involvement with learning is based on an appreciation of the fact that the increasing pace of change makes old skills inefficient in dealing with emerging realities. But it still remains primarily a one-time activity: having learned a core skill, one can continue to remain economically productive as long as one continues to incrementally update one's skill and knowledge sets. The major challenge of the future is likely to come from the discontinuity of change. It is important to appreciate that a faster rate of change merely makes existing knowledge inefficient; but when change is discontinuous, it will make the existing knowledge, skills, and mindsets irrelevant.

There are 2 significant people-management issues involved: one, the need to evolve learning technologies that help people to harness new skills, knowledge and mindsets at a fast pace. And two, the challenge to develop unlearning technologies to counter the irrelevancy of knowledge. At present, it is generally assumed that learning automatically involves unlearning. But as the change becomes discontinuous, facilitating unlearning will become a separate people management issue.

The third shift-which will make many traditional hr and management skills obsolete-is in the nature of work and the organisation: work is moving out of organisational boundaries. Traditional intra-corporate functions are getting outsourced; cross-corporate consortia are becoming more prevalent; the Net is enabling people to work from home or elsewhere; and customers and suppliers are increasingly becoming involved in new product development initiatives. Organisations will depend on the performance of people who are not part of the organisation in the same way as they used to be.

Most existing practices for managing people, however, rely on direct controls and monitoring mechanisms. They also presuppose that those who work together for a task, know each other, or belong to the same organisation. The limitations of such assumptions become obvious when the issue is to align and enthuse non-employees about the company's initiatives; or when the need is to create a team of virtual strangers who will only come together temporarily to work on a project.

The fourth shift is a corollary of the third. As work moves out of the companies, so will careers. Companies will have to design career and motivational strategies for people whose skills are required by the organisation, but who are not likely to remain with it for more than a year or two. There are two implications of this trend. Firstly, organisations will need to reconceptualise the work at hand in terms of time-bound projects, and develop relevant performance management systems. Secondly, providing challenge and professional fulfillment would become the key to attract and motivate talents.

In future, however, the concept of the career itself is likely to acquire an altogether different dimension. The emerging business scenario not only provides more opportunities for professionals to move across jobs, but also to create new businesses for themselves. There are also valid reasons to believe that such career or business options will continue to increase as we move into the future. One can identify 2 key drivers of this change: the secularisation of technology and the globalisation of business. Increasingly, easy access to user-friendly technology (or knowledge) will empower individuals to follow their ambitions without having to encounter too many obstacles. Amidst such changes, deciding on a career option actually becomes an act of choosing a lifestyle. In many ways, this would be a welcome change: work will no longer mean just an occupation or profession; it will become the persons vocation (or calling). But this all-encompassing nature of work is likely to have other repercussions as well. For these young, talented, empowered, and global professionals, life in a world full of opportunities and freedom can also bring new sources of stress. For instance, when work becomes one's lifestyle, the chances of imbalances in life's priorities, between professional and personal, career and family, and work and leisure, increase. And more likely than not, the personal, the family, and leisure aspects will take the backseat. The predominant issue in managing these professionals will not be motivating them to work more, but to make them work less!

There are likely to be other kind of imbalances as well. For example, in life's developmental stages. Earlier young adulthood has been the time to learn, to get married, and to establish oneself in a job. One worked to achieve something by the time one was 40 or 50. But as opportunities increase and obstacles vanish, reaching one's life pinnacle would become possible even during the 20s or 30s. One can only speculate what would happen to such people: will they continue to raise the bar for themselves till they get burnt out? Or will they retire and suffer from boredom and ennui? Or turn to entirely new and different areas of pursuit?

Gareth Morgan on Metaphors in Management: The Pros and Cons

Much of management thinking in the late 1990s is being dominated by two broad types of metaphor. The first urges us to embrace images of flux and transformation. One perspective here encourages us to jump into the melee of hyper-competition by beating, outsmarting and upending our competition before they beat us. Another encourages us to move our organizations toward "edge of chaos" situations and see the transformations that emerge.

A second broad type of metaphor is encouraging us to become corporate bankers by levering and developing intellectual capital to meet the demands of a knowledge economy. Great metaphors with great insights. But, hopelessly flawed unless you see that they are just metaphors. The challenge is to take the creative insights and lever them for all their worth. But avoid the weaknesses and limitations, or they will come back to haunt you.

Learning is Social
An interesting story from Xerox
What Thomas heard from the trenches, in fact, did little to elevate her estimation of the training department's role in the learning process at Xerox. She was astonished to learn just how removed from the sphere of real work was the prolonged methodology for developing training classes, a process that unfolded along these lines: First came a flyover visit to determine training requirements. Those requirements were handed off to designers back in Leesburg, who designed a curriculum. Months later, training-delivery specialists parachuted onto the scene armed with a detailed script.
But these scripts were next to useless, according to the workers. They complained to Thomas that they heard way too much about tasks they never or seldom performed, and way too little about some of the most crucial aspects of the job. Moreover, there was never an opportunity to practice what they were taught until three or four weeks of classroom training ground to a blessed halt. By the time workers were actually back on the job, they'd forgotten most of what they'd been told. To learn billing and credit procedures, for instance, trainees endured 11 weeks of nonstop classroom lectures before taking their first customer call.
Worst of all, none of the talking heads had ever set foot in a customer service setting. "They tell us how work gets done based on what someone else has told them," the workers told Thomas. "When we finally get back to the job, co-workers have to explain to us how things really get done."

This common phenomenon has been discussed for years in training circles, but always with the problem attributed to "change resistance" by bullheaded workers and supervisors. As far as Thomas was concerned, the workers' complaints signaled a defect in the training, not in the trainees or their peers.

Over the initial objections of the training department (some trainers assigned to the ICS project later became staunch advocates of the new approach), IRLS recommendations were put into place. Not only did the ICS workers prove themselves adept at teaching their jobs to each other, by their own accounts they were exhilarated by the challenge of doing something new and different. "It was the best sort of team-building I'd ever seen," says Rick Hawkins, who came to the ICS project from account administration. "It forced us to rely on each other daily." In learning new skills for the ICS pilot, Hawkins estimates he spent no more than eight hours away from the job, listening to co-workers in an informal classroom setting; the rest he picked up while on the work floor.

Articles on HR at Ma Foi

Some good articles, specially Sushant and Raghu at this site.

Trends in Consulting in India

As the Rs 400-crore Indian consulting market (industry estimates) starts booming (it is showing a growth of 50% per annum), the two sides have begun competing fiercely. On one side are big IT companies like IBM, Cambridge Technology Partners, Citicorp Information Technology Industries Ltd and TCS. On the other are management consultants like McKinsey & Co, PwC, Andersen Consulting, Ernst & Young and KPMG, who are making IT an integral part of their business. Management consultants are also beginning to reorient themselves. With clients asking them to implement what they preach, consultancies are building formidable IT expertise. PwC is transforming itself almost into an IT company. Some 700 people of its 1,000-strong staff are engaged in IT-related activities. About 500 alone are ERP consultants. Business is growing rapidly too. Total revenues increased by about 45% in the last three years, but in IT-related areas the revenues increased by almost 80%. In fact, by the year 2001, PwC expects two-thirds of its revenues to come from e-business consulting. Others are following suit. For Ernst & Young, 60% of work comes from IT-related areas. Cisco has taken 19% in KPMG after the latter was involved in its e-business consulting. As for Andersen Consulting, 80 of the 200-strong workforce in India work on technology-related areas. And it is now increasingly focusing on e-commerce and convergence technologies like m-commerce related projects as its major thrust and growth area.

Kuhn's Structure of Scientific Revolutions - outline

Kuhn was the chap who said that Scientific thought passes through paradigm shifts which are brought about by people who are either young in age or new to the field or both.

Basically, the established paradigms that exist in the minds of the scientists do not enable them to look at data that differ from their paradigms!!

Metaphors of Organisation -
by James Lawley
"All theories of organisation and management are based on implicit images or metaphors that persuade us to see, understand, and imagine situations in partial ways. Metaphors create insight. But they also distort. They have strengths. But they also have limitations. In creating ways of seeing, they create ways of not seeing. Hence there can be no single theory or metaphor that gives an all-purpose point of view. There can be no 'correct theory' for structuring everything we do."
Read this page !!

Is Independent HR Consulting Right for You?

For folks who are thinking of Independent HR consulting, this article gives them a great feel of the issues. Basically the summary of the article is

Independent consulting has made its way into HR.

Don't overlook the need for sales skills if you want to go out on your own.

Finding a niche and creating a business plan will put you in the direction of success.

Top-Consultant.com - News from the Consulting Universe

Ian Davis has today won the leadership vote at McKinsey to become the firm’s new Managing Partner. Davis was standing against Michael Patsalos-Fox in a vote of Senior Partners at the firm. He will now take over the McKinsey helm from the outgoing Rajat Gupta on the 1st July. Gupta stands down having led the firm for the maximum-permitted three consecutive 3 year terms.

Will McKinsey's India focus go after Rajat Gupta moves out ?

Davis is understood to favour a return-to-values drive, encompassing greater investment in training and development, and a renewed focus on working with top clients on top issues.

Knowledge Management & New Organization Forms: A Framework for Business Model Innovation

This is an online article written by the founder of Brint.com Dr. Yogesh Malhotra

Top Ranked Training Websites on the Net

These are the Top Ranked Training and Development Websites as ranked by users. Don't know how much they are useful, but you might want to check them out

HR revisited: Role of IT in recruitment

Technology helps many HR executives move beyond the perception that they're bureaucrats who spend money rather than make it. Forward-thinking HR folks focus on helping to shape the big picture rather than documenting its details. There are a lot of companies making HR as a part of their business strategy.

KPMG's European KM Survey 2002/2003
Companies believe that an average 6% of revenue as percentage of total turnover or budget annually is being missed from failing to exploit knowledge effectively, are the findings of this annual survey.

KnowledgeBoard: the European Knowledge Management (KM) Community - Home Hits
Top Ten Trends for Online Communities 9
6-Mar-2003 - This article by Jim Cashel of the Online Community Report, examines specific niches within the online community space which are demonstrating strong revenues, credible earnings (now or forecast), and a promising future. This article reviews ten such areas which, given their financial promise, represent the future of online communities

Have updated the title and template of the blog !
Let's see how I like it !!

Another posting on Brint board

My personal humble opinion is that KM is expanding in scope and also spawning off whole systems of sub disciplines, which link with other branches of thought.

1. Expanding KM: KM at a strategic level is expanding, linking with strategic thought and focussing on how knowledge can enhance business breakthroughs.

2. Focussed KM:
(a) IT: The KM tools market is undergoing a consolidation and the hype that has been defused is seeing tools being shaken to separate the actual KM tools from Document Management tools.

(B) Intangible Assets: Looking at the Knowledge Assets with a financial lens.

(C) Human Processes: As organizations understand the importance of learning and knowledge creation KM will move to top management and HR, and I don't think they are ready to handle the scenarios.

My posts on the Brint KM Board:

As a CEO of a knowledge corporation said "all my assets walk out of my door" and he doesn't know whether they will come back the next morning!!

How do we protect these knowledge assets? By trusting and encouraging the employees we have, and knowing that ideas and knowledge will always be permeable and travel no matter how an organization tries to water-tight them

On the Balanced Scorecard:

My opinion is that companies after taking these quadrants of the Balanced Scorecard get back into the old rut of managing by metrics.

Let's take the example of the focus of the BSC on Customers. Many instances can happen as to how companies can interpret this quadrant. For example, one company can say it will measure "the number of times we meet our customers" which is at a very basic activity level kind of measure. While, another can choose to measure "Customer Satisfaction level" and while it is a
more 'evolved' method than the first one, it can still deteriorate into meaningless number crunching. While a third company can say "Using the Pareto principle, let's see which 20% customers contribute 80% of our business , take their feedback and measure as to how we have implemented their views into our products/services"

So while all the three firms can claim to implement the BSC only the third one is actually using it to its full potential.

The really worrisome part is that the BSC is now being touted by IT firms and the real fear is that of getting snowed under data.

Reliance overall is a great case study for how a company can
master "radical growth" as a Prof of mine puts it.

That reliance has been able to define the concept of "core
competence" from an industry to a process is well chronicled.

What is not so well chronicled is the way reliance has mastered the
art of

(i) Knowing its business web
(ii) Mastering the +ve feedback cycle (also known as the virtous
cycle)

Let's look at the business web...as said earlier, Reliance views its
competence to be an executor of large, challenging projects, and it
knows how to mastermind partnerships (either with Du Pont, L&T,
MorganStanley) to execute these projects.

When it comes to feedback loops lets take two examples..

Reliance has quick delivery schedules, which leads to a low customer
inventory, which result in savings to customers, which results in
two things : (a) A larger customer base (b) the customer willingness
to pay a premium...both these result in substantial profits over
competitors, which is ploughed as investments into locational and IT
facilities which results in quick delivery schedules...thus driving
this virtuous cycle faster and faster, grnding away all the
competition :-)...


Or the second virtuous cycle it has mastered:

Investments to assimilate talents and IT infrastructure, leads it to
have knowledge of global sources of funding, which gives it access
to low cost capital, which fuels growth and expansion and drives
profits and surplus which is invested in more talents and
infrastructure :-)

These virtuous cycles trigger "the law of increasing returns"
something not too many economists would agree with ;-)
But it is not enough to know and master these virtous cycles...and
therefore it needs to bet on the correct technology standard...and
that is what we are witnessing now...the war between GSM and CDMA
standards...and it is the side that bets on the winning technology
that comes out the winner...and the irony is that the technology
does not have to be the better technology or even more matured
technology...:-), hence an organization that can foresee the
technology and standard waves and can ride that is always the
winner..

In fact, it is quite amazing to notice the commonalities between
Microsoft's strategy orientation and Reliance's...both always keep
their eggs in different baskets...experiment in the market (not as a
test:-), listen to the feedback and constantly keep improving based
on that..speed and size of launch is valued by both of them
(Reliance Infocomm's 28th Dec launch reminds one of Windows 95 !!)

Warm regards,
Gautam

Between strategy crafting and execution

Over the last one week a colleague and I were involved in diagnosing
how strategy execution dilutes as it flows from the top to the
frontline salespeople and then down to the level of dealers.

It was interesting to note that the deviation in strategy execution
happens right from the group that crafts the strategy. This is due
to assumptions not clarified on small seemingly inconsequential
details like (how a certain initiative has to be carried out, what
is the context, and what is the overall purpose?)

This translates into more deviations and dilution as the strategy
flows downstream, which emphasis being placed more on the means than
the ends, and then the firm starts to track numbers that take focus
away from the overall purpose.

Finally, when the rubber hits the road at the level of the retailer
and dealer he/she is aligned to a totally different purpose by the
sales people than what the planning group wanted him to be.

And the reviews that are supposed to be clarifying these questions
only add up more to the confusion with people not knowing why they
are requesting a certain request or doing a certain activity.

It was an amazing learning as to how organizations are falling short
in performance and a pointer to things like how MUCH more they can
achieve.

ETHICALITY IS NOBODY'S BUSINESS

hi folks,

When we were in B school (XLRI, Jamshedpur) we had a core course
called "Business Ethics" which would evoke a lot of yawns and
amazement from the students (XL was the first B School to introduce
this course in the mid 80s)...and the comments would range from "How
boring" "Global fundas" "what an oxymoron" etc etc

Of course this was much before Enron and ensuing scams, and I
guess "ethics" has become hot now :-)

My OHO (own humble opinion) is that ethics (amongst other things) is
an organizational trait that is a direct descendant of the
entrepreneur/visionary's worldview and mental models....this shapes
the policies, processes and the unwritten rules of conduct as to
what goes and what does not go in that organization. If the founder
is a person who wants to "win by hook or crook" then the
organization degenerates into "ends over means" ...If the founder
takes the view that the path and the goal are both non-compromisable
then the foundation is laid for a truly 'generative' corporate
culture..

Some organizations have achieved outstanding success with "ethical
business" and some have achieved it without it...The reason for the
debate exists because nobody can prove that ethical business
practices lead to business growth...there have been cases recently
of academic research suggesting that "good" CEOs are much better for
the organization and employees than "loud abrasive" CEOs...however
that has to be seen in the social context of the Protestant work
ethic in the US and could be a result of the need to "right"
sentiments towards business post-Enron...

I guess the time is just right for a research study in this area in
India...any PhD student interested ;-) ?

Those who are following the banking/fin services thread, I just
wanted to sound you out.

In the "discipline of market leaders" it is analysed that market
leaders usually do three things very well, and of them one thing
extremely excellently :-)

These are:

1. Customer Orientation
2. Process Excellence
3. Product Leadership

While for a large part, the focus is determined by the nature of the
industry one operates in, (for example, a logistics/ courier company
has no choice but to be leading in process excellence)... what
distinguishes one from the other is leadership in one area.

Therefore Sony leads in Product Excellence over others like National
which concentrate on process excellence to get it out cheaper after
Sony gets out the product.

So, where are our various players in the Indian Banking industry?

Who is the product leader?
Who leads in process excellence?
And who leads in customer orientation?

The premise of the theory is that you have to be good on all three
but can only differentiate from the others on the basis of one.. !

Anish, this might address your questions too :-)

Regards,
Gautam

On Independent Director's Consulting Assignments:

That's an interesting point...would like to think through how that
would work...

1. Would only people who can promise x number of days for consulting
assignments be eligible to be on the board?

2. What if the expertise they get does not get used in a particular
year...does that get carried on the the next year to become 2x days?

3.Is there a conflict of interest when independent directors do
consulting assignments...? For example, would they make and
implement certain recommendations that they normally wouldn't have
if they were not stakeholders ??

4. Do these directors get 'double compensation' for being directors
and consultants...?

Interesting thoughts...

What roles Can HR play:

This model is not mine but of a gentleman called David Ulrich...Dave
is not a HR prof, but has made it his forte, so that's a different
perspective from him

Ulrich's model says that HR essentially has two paradoxical and
sometimes conflicting roles to play...

1. As upholder of processes and
2. upholder of people needs

It also has two other roles to play ...though these might not be so
conflicting...

1. Operational focus
2. Strategic focus

Putting these axes together you get four roles of HR which somehow
never seem to gel together...

1. Maintenance Expert (Operational focus, high on processes) :You
have met these guys who say "The policy says this hence you have to
so this"

2. Employee Champion (Operational focus, high on people) : This guy
believes that processes need to be built around people and not vice
versa...is mostly the rare 'loved' HR person...he/she fights for
your training , your promotion...takes on the systems for you.

3. Change Agent (Strategic focus, high on people): This person in
clued into the top management's strategy and proactively works on
questions like "what capabilities do my employees need to develop to
take charge of the future? And how do we build these capabilities"
This is the person we'd give our right arms to be our HR
heads...unfortunately, most of the people of this inclination choose
to become independant consultants and advise companies... :-)

4. Strategic Partner (Strategic focus, high on process):This chap
seeks to constantly align the HR strategy with business
strategy...he/she's mostly responsible when your performance
appraisal system changes every year...when your compensation
strategy changes to align to some market demand and this person gets
most of the blame...

Coming back to your question...

Most companies (even at the top management level) see HR people at
roles 1 or 2, even if the HR directors sit on the Board they are
supposed to concentrate on roles 1 and 2 :-(....

Some businesses (and not necessarily new economy firms) have
recognised the need for HR to be a strategic partner (examples being
AV Birla group, where the HR director, Dr. Santrupt Misra is the
youngest board member, and the Tata Group where Satish Pradhan is
bringing in new concepts everyday :-)

On IT Services firms trying to become IT Consulting firms:

You know Mahesh, and others,

It makes me wonder sometimes why Indian IT services firms bother
about paying lip-service to the concept of "rising up the value
chain" especially now that people like Accenture are coming down the
value chain and competing in their own backyard.

Last year, I was with one of the top 4 Indian IT firms and we
started talking about this mythical journey of "becoming an IT
consulting firm" (for those interested in mythology, this sounds
suspiciously like the archetype of 'the hero's
journey' ...somethings in our collective unconscious, I guess ;-
) ....we did a series of focus groups in the firm trying to figure
out the issues and why should we be doing it in the first place...

The biggest challenges for an India Inc IT firm as it makes the
transition from services to consulting are:

1. Dealing with uncertainity : Typically most s/w engineers deal
with a fixed URD (User Requirement Document) that is signed off by
the client and is almost like a line written in stone, and if there
are changes to that the client pays or your BM takes the decision on
that...but the challenge for consulting is that you need to evolve
the same after dealing with a lot of fuzziness and
uncertainity....not a strong point with techies (sorry for the
generalisation ;-)

2. Domain expertise: Typically, the chasm of domain expertise has
been sought to be overcoming by the process of taking in senior guys
from the consulting firms ...but this does not help in reducing the
gap between the techie PLs/PMs and these newly recruited Engagement
Managers (or whatever they are called)...while the company hopes
that some learning will happen when a project is obtained...

3. The mindset: Most IT services professionals/firms operate with
the 'supplier' mindset, and this colors all their interactions with
the clients. Changing this mindset to that of an 'expert'
or 'partner/collaborator' is the biggest hurdle...as these mindsets
are not just in the minds of people....they are codified in the
processes and systems of these firms...and undoing that is an uphill
journey...

So the question was, does it make sense to rise up the value
chain...and the answer was yes...

It wasn't 'yes' because of the usual reason ....which is more $/hour
kind of argument that your strategy firms trot out...

As one PM said "If I become an IT consultant to a big Fortune 10
client, it gives me immense leverage and influence to ensure that
normal maintenance/ERP/development work flows into our company"

So there, they want to rise higher so that they can grow bigger
lower down ;-))

The e-Learning market could possibly be seen as two major blocks of
offerings:

1. Learning Management Systems providers. LMSs are basically a sort
of ERP for training and teaching groups. The market (even in the
west) is constantly evolving with the likes of Saba, Docent etc
going through a rough patch (not assisted by the fact that the
investments here are not seen as mission critical unless you are a
very very big player) and the trend is for these firms to get bought
over by ERP and other IT companies (Sun's acquisition of Isopia for
example), and on the other hand ERP players enlarging the scope of
their web appplications to cover training/learning also (Oracle has
iLearning for example). LMS can come as a box or even in ASP
versions),

2. Web-Enabled Content: This a very crowded space and covers in-
house content developed by companies, universities (MIT has put a
lot of its content on the web as part of its Open Course Ware
initiative check http://ocw.mit.edu) and multimedia companies also
coming into this space. Am not very sure, but guess this is the
place that egc occupied. The main drawback about these firms are
that they don't have the Instructional Design competence (chunking
learning on the web so that it becomes understandable) and where I
can see a firm like NIIT adding its competence.

And to make the scenario even more complicated there is a hybrid
market emerging called the Learning Content Management Systems
(LCMS) !!

Check out my article on e-Learning at this site:

On ISTT:

egurucool's acquisition by NIIT

I think the reasons given are very cogent. However, the acquisition
is also the vehicle by which bigger firms try to gain competenices
in the new emerging area that the younger nimbler firm has gained
sustainable competencies in.

I know people like Tom Peters are very anti-acquisitions, terming
them the 'mating of the dinosaurs' ...but i think that looks at the
picture from point of view when two giants merge (AOL Time Warner
looks bad now!)

But the strategy of a bigger giant acquiring smaller firms has been
perfected by firms like Cisco to constantly keep themselves on the
cutting edge of technology (bad pun!)

This strategy can work only when the acquiring firm has the maturity
to absorb the culture change that it brings and give the space to
the new technology to flower. Additionally it gives the smaller firm
the access to the networks, processes and customer base of the
larger firm.

In this case , prima facie, it looks like NIIT has obtained a good
acquisition. It gives it the base of e-gurucool and synergise it
with its own K-12 business. The approach of egurucool was individual
students while K-12 addressed state education bodies for IT'fication.

Till we can look back at this in hindsight :-)

Regards,

On ISTT my views on:
Core vs Non-Core:

hi folks,

I go with the 'vision and passion of the family member' line of
thinking.

I worked with Satyam Computers earlier. Satyam, for those who are
not aware, was into typically old sectors of having a spinning mill
and a construction company (as an aside, the construction company
still exists, named "Maytas" ...Satyam spelt backwards)

The son of the founder , Ramalinga Raju during the course of his
education in the US was fascinated by computers (he wasn't even an
Engineer!) and brought 9 of them to help in the old family business
around 1987, and to tinker around with...and now his firm is among
the top 5 Indian IT firms...mainly caused by his passion and ability
to spot an opportunity. This percolated down to the rest of the
organization and Satyam's attitude was 'get the opportunity' and
from a pure play IT services it developed competencies in ERP
implementation, e-commerce, CAD/CAM etc

Looking at narrow definitions even something like ITES is not core
to the business of IT firms...but all of them have gone into it..
(Infy with Progeon, Wipro with Spectramind, HCL with e-Serve, Satyam
with Nipuna) , so this question needs to be asked in this respect
too..my answer is that they do not view the IT business as core, but
rather the ability to convert demanding customers, gauging their
needs, and ramping up fast to meet huge requirements them....which
traditional BPO firms like Daksh and Brigade are learning slowly.

I remember Rajeev posted a file on Arie de Gues' work "the living
organization" ...his book says :
"Companies die because their managers focus on the economic activity
of producing goods and services and forget that their organisations'
true nature is that of a community of humans"

Shell (in which Arie worked as head of Strategy) conducted a study
of companies older than Shell (approximately more than 100 years) 27
in detail, of 40.
They asked the question " Why did they survive?" and found the
following points common to these firms:

1. Sensitive to their environment (in harmony with the world around
them - tuned to what was going on).
2. Cohesive, with a strong sense of identity. (People felt part of
them - community - managers chosen from within - "stewards").
3. Tolerant (of activities on the margin - experiments,
eccentricities... - did not exert overly centralised control). This
tolerance usually resulting in these marginal business becoming
growth driving and central businesses of the future !
4. Conservative in financing (frugal, money in land - could pursue
options their competitors could not)

Longevity was NOT linked to…
• Return on investment
• Material assets

Food for thought, as to how we look at organizations... :-)