Just who is running whom?

One conclusion that I keep coming to when I read the financial or managerial press is my thankfulness that Open Box is a privately owned company.

I was reminded about it this morning when I settled down to read the latest issues of the Harvard Business Review where once again the fact that the tail is wagging the dog with the requirement for quarterly earnings calls/forecasts etc. How on earth can someone run anything long term with the focus also being brought back to such short term attention is entirely beyond me.

People that I have spoken to say that they, more or less, say and do what is expected of them whilst trying to ignore it – much like background noise. They are then better able to focus on what is really important: making sure that they have a successful enterprise a year, two and ten out.

This begs the question, where has the greater financial system lost the plot to the point where business is being dictated to focus on the very immediate short term result by outsiders (analysts, commentators and so forth) rather than focus on what is really important: having a sustainable business that contributes to its community and society in the long term. What follows from this question is why on earth or we letting this ludicrous situation continue?

In my opinion this is the much less talked about underlying reason for the recent rush to taking companies private.

First impressions aren't always correct

So earlier this week I was doing some research and I happened across a Cape Town based company that was in the financial systems that I was doing some research on. Cool, I thought, maybe I can see what they have been up to since I was last in that industry – it has been quite a while – near on 8 years.

Well it didn’t take long – the only part of their website that had much in the way of content was their case-studies section. The rest I assume, no, hope (for their sake) is password protected (otherwise to be honest the site is “dis-advertising” them). Two (of the 5) names of the case studies looked familiar, very familiar, so I read on. Well the reason why they were so familiar is because they were my old clients and the case study that they were highlighting was my work! Fair enough one would think BUT (and here is the kicker), these were projects I completed for UK based clients in the UK while I was in the UK working for another company (Deloitte) i.e. these case studies had *nothing* to do with them.

I guess that they could argue that they are case-studies for the enterprise software that they sell and offer services around. That is, for a company that has been around for near on 10 years with a pretty decent client base, a pretty poor show.

To make matters worse, they didn’t even change any of the wording of the case studies– I should know, I wrote them!

Misleading or fair play? What are your thoughts?

The Google Effect

A lot has been written about Google (point of note: I’m talking about the company – their approach/culture and so on – not the “products”), most (if not all) of it good – at least up until now. Something that has been missed in this avalanche of positive press has been the effect that the perception of Google has had on the psyche of others – both companies and individuals.

In the face of such overwhelming success everyone is clamouring to emulate Google. Now don’t get me wrong, I don’t think that it is a bad thing – I think that everyone can learn a lot from the perception of the way Google goes about things. Open Box is no different – in fact I have heard a lot of people comment that we are the “Google of Cape Town” and I think that is quite cool!

The point that I think a lot of people miss (and you will notice that I have used the word liberally thus far) is that it is the *perception* of Google that everyone clamours after as opposed to the reality. An example? Well a good one is one that came up in a discussion in the office the other day is the “entirely flat organizational structure” of Google. Now the perception that people like to put on this is that there is Larry, Sergey and Eric and then the next level is the rest of the 10,000 odd people in Google. Let’s take look at it from another direction. Google teams are (apparently) made up of around 3 people, one of which is the team lead. If we say the whole company works this way (for simplicity sake), doing the simple math gives us over 3,000 team leads. Since I know how difficult / impossible it is to have even a whole team of 50 people “reporting” / getting guidance (or however else you like to put it) from me, I doubt that Larry etc. can handle 3,000 – a sort of Father Christmas on Christmas Eve scenario. All of which speaks to a lot more than a “flat” structure.

To paraphrase something that you to be said of Steve Jobs: there is a “reality distortion field” surrounding Google. Distortion or not, this perception is still a very worthy goal to strive towards and it is this influence that I believe will be Google’s greatest legacy of our generation.

What's in a Watt

What is the next big thing? Well, if about 500 people at a conference (Realcomm, an annual IT focused Real Estate conference which was held in Boston this year) I was recently at are right it is Watts. Yes, that which powers your light bulb (or PC) is the next big thing.

This is being driven by a combination of energy prices and global concerns for the environment (yes, this is finally getting real air time). It is particularly relevant for Real Estate when you look at numbers like: 10% of the entire US usage of electricity is used for commercial building lighting and the fact that 47% of energy in the US is used in buildings.

These drivers are pushing, some would say, a revolution in the way in which people view buildings – one speaker (the CEO of a large utility company) foresees the day when buildings becomes the “power plants”, with a net outflow of energy instead of the other way around. This would be done by things like the usage of nanotech paints which trap and store usable energy from the sun. Sounds like Science Fiction? Well the really cool part is that this is not so far into the future.

Neat.

Mid Sized Company - Mid Sized Advice

Is it just me or are there very few people or companies that cater for the mid sized company?

Let me explain. In recent weeks we have been looking at doing some things from a profit share perspective that are a little different from the norm. Doesn’t sound like a big deal, does it? Well we pretty quickly figured out that anything a little out of the norm is more than a little tricky to get advice on – everyone seems to want you to fit into their “product”.

Fine, so we put together our own way of doing it and now we need to get it validated by the experts (to make sure that it is tax efficient etc.). Next problem, who do we speak to? A tax expert? No, they don’t factor in the accounting side of things. An accountant? No, they don’t understand the tax implications. An investment adviser? No, they don’t understand tax or accounting! Oh, just forget it. Wait, that’s not a solution either. *Hits the books*...

America's Cup

As some (most? all ideally) you know SA has an entry in the AC (America’s Cup) – without any doubt the biggest and most prestigious sailing “race” (series of regatta’s actually) there is around. Before going any further I’d like to repeat all the press about how big a deal it is that the guys on Shosholoza got as far as they did. I know only too well (but at a completely different scale) how difficult it is to come out of SA with a (relatively) minuscule budget and compete with teams with up to 10 times the funding.

Quite aside from budget – and the strains on the team that it produces – you also have to admire the guys who have slogged it out day in day out, quite literally “beating their brains out” tuning the boat/sails/rig day after day (for those not in the know it is not pretty, elegant or much fun). It is mind-numbing.

That said, it was really unfortunate to see them being tripped up on the little things – the torn sails or broken spin poles. Often incurred when trying to outdo themselves unnecessarily. When a conservative approach would have sufficed, a “go big or go home” approach surfaced instead – something very common to South African sailors (I know, I have succumbed to it myself on occasion). It is with this in mind that the decision to replace the combination of Mark and Ian was so puzzling – here were the guys that knew what the rest of the team could do (and not do) and most importantly would do it with a calm head.

Going Networking Crazy

It is near 10:30pm and I’m still at my machine. Why? Well oddly enough (for me) it isn’t to plough through my ever changing inbox, it is to update things on another (social this time) networking site that seems to be the flavor of the month.

Some time ago I joined up to Linkedin – a pretty good business networking site. It provides a useful function of “book marking” acquaintances, and friends that I’ve come into contact with, one way or another, in the workplace over time. It gives me another way of keeping in touch with them and what they are doing (from a work perspective) as they have changed jobs, moved countries. At least that’s what I use it for – I’m sure that others take it much further.

A more recent addition is Facebook. The bottom line with this one is that if you’re under 35 and you’re not on it, you’re just not with it. If you’re over 35, well then this may well be the first time you have heard of it – confirmed by a colleague (who is the nearest in the office to my “ancient” age) comment upon hearing that I’m now on Facebook: “Cool, now I’m not the oldest person I know on it”!

The one problem that I have always had with these things - and I’m guessing that others out there struggle with the same thing (or not) – what is the etiquette to adding people to “your network”? When is a “friend” a friend, or just someone that you know? When is a person someone you add to Facebook but not to LinkedIn (or visa versa)? When is someone you work with (a client for example) someone that you invite to your (business or even social) network? I guess that I’m not big on just adding people randomly so that it looks impressive that I have a big “network” of "friends" / "business contacts" (depending on the site).

Another problem (ok, I lied about only having one problem with this phenomenon) is, when is it going to stop? I have started to lose count of the networking sites out there that have been the “got to be on” and, maybe I’m a bit sad (don’t follow that thought), but I’m quite looking forward to having my evenings back (so I can get my inbox down to a respectable size before it fills up with overnight mails again). In the meantime I'll be sitting here a while adding friends (or hopefully they will find me and initiate contact so I don't have to).....

Agile: The myth of theory

A lot has been written about Agile – my favorite has to be that it should be written F......Agile.

Seriously though, I think that a lot of the writers miss the point. Agile is a wonderful theory, but that is where all too often it only works, in theory (caveat here: I’m basing much of this on the SCRUM method of Agile project management). As an economist (yes, my career doing that was about as short as my career as an environmentalist) I can tell you that any theory (economists love theories) relies on a lot of assumptions. Some assumptions are valid most of the time; most aren’t (all of the time). As someone who is focused on ensuring that the end client gets what they are looking for at the end of the day, the biggest assumption that underlies the Agile approach – and that is its inherent flaw - is that a client will be happy with an open-ended approach to both duration and cost with no guarantee (or idea) of what they will end up with.

There are of course plenty of customers out there who want things quicker (which is of course how Agile is sold) and there aren’t many people in technology (or any industry) who aren’t keen to try something new (buzz words are of course required, and therefore supplied). The trouble is that when the client gets into the detail and finds out what it actually means the project quickly becomes something quite different, but without any of the up-front structure or process. The result is usually a few key individuals “dying” in the process of trying to get the project out the other side, whilst on-lookers (usually the sales people but sometimes even including some of those on the team, but not those dying) congratulate themselves on a great new methodology.

The disturbing part of this is that it is amazing how frequently I come across people who are fixated on Agile (and only Agile) – whether it is recent graduates (heaven help them or their first client – someone won’t be happy at the end) or seasoned IT professionals (who really should know better).

Like any management “breakthrough”, an Agile approach has its merits and some of its guidelines just make common sense and I would argue are applied by an half-way decent project manager whether it is part of the methodology that they are following or not (I have to ask, in what project management methodology would you not say, for example “Face-to-face conversation is the best form of communication”! – and you can supplement pretty much all of the Agile precepts here).

Recruitment: Catch-22

Over the past 10 years or so I’ve seen the recruitment game from a number of sides, including employee, head-hunted, interviewer, recruiter (client side), business owner, and entrepreneur. It is as the last three that I have experienced an interesting catch-22.

Last year a highly successful serial entrepreneur that I know, and have a great deal of respect for, came to me to chat about a business that he was putting together to create a recruitment portal. The business had a number of very compelling slants to it that made it particularly enticing to be involved (as an employer looking for good people). However the recruitment catch-22 immediately reared its head – by welcoming a recruiter (read portal in this case) into your fold you open yourself up to having every one of your people being head-hunted away to other firms by that recruiter (if not immediately then in the near future, and if not directly then indirectly).

While I work hard to make sure, and I like to think (and am told repeatedly by those who should know – the people themselves), that everyone in Open Box is happiest where they are, I’m also very aware that promises of greener pastures and associated pots of gold are very tempting to anyone (even if the pasture is dust when you get close and the pot of gold never materializes).

I guess this is one of the reasons why we are very selective about not only the people we hire but also the people we have as vendor partners (in this case recruitment agents).

Recruitment: An inherent conflict of interest

A while ago I read a great book that made me look at the world a little differently – Freakonomics (if you haven’t read it then I can very highly recommend it). One of the themes in the book was the conflict of interest that is inherent in a real estate agent. They are, in theory, supposed to be acting on behalf of the seller – they are after all contracted by the seller to sell the house and are paid by the seller based on the proceeds of the sale. One therefore assumes that they hold the seller’s interests at heart in their actions. Those of you who have ever sold a house would not be surprised to know that this isn’t so. The agent is actually just keen on getting a deal, at pretty much any price as long as it happens quickly – 7.5% of 1.5million for 3 days of work is better than 7.5% of 1.65million for 30 days of work (particularly in a good market where they can move onto another deal on day 4).

This is of course not to say that estate agents are dishonest – it is rather just understanding what their drivers are.

Unfortunately the same can also be said for another profession which has the unfortunate perception of attracting the “less than scrupulous” in good times, recruitment agents. Recruitment agents are paid by companies that request their services to find them good people to hire. Therefore, as in the real estate model, one would normally assume that the agent is working with the best interests of the client company in mind. Unfortunately this is not so since they make their money on a % of the person’s salary when they join the company, their “driver” will be to sell a person into a company no matter what the fit – an inherent conflict of interest.

Since all players of the “game” know this one could argue that this is fair. What is not fair however is when the agent realizes that a good person can be “sold” multiple times (person joins, collect fee, then head-hunt to another company, repeat) across a number of companies in a short space of time – something to watch out for (both as an employee and an employer).

My kingdom for.....

Ah the joys of technology – I can have pretty much my whole life all wrapped up in my notebook. Yes, that does sound pretty sad but then it does at least have a pretty big hard drive as, the theory goes, there’s a lot to store. As with anything that seems simple, there’s a catch: finding it again.

I’m one of those people that never deletes an e-mail, no matter how trivial it may seem at the time. I learnt this the tough way a long time ago when I couldn’t retrieve a whole bunch of e-mails that become really crucial. Ignoring e-mails for the moment, we move onto other files (yes, like my life quite possibly also far too much work related). While I’m pretty good at filing files in relevant folders I sometimes find myself in a situation where a file belongs in 2 places, which makes searching for it later on a real pain.

I know what you’re thinking…. “technical dinosaur, there are plenty of great desktop search tools out there”. Well that would be the answer but the problem that I have experienced with them is that they are a death knell to your machine’s speed. I know this because a few months ago I went through 3 rebuilds of my machine, 2 with desktop search (Google: loved it – note the past tense) and 1 without. Once I figured out that the indexing on the search was killing my machine (particularly at start-up) it made the choice for me: no search.

My kingdom for that (fill in the blank) I’m (still) looking for….

Bliss is: Never needing to ask directions again

I'm sitting in my new favorite airport lounge - the Virgin lounge in JFK (flying SAA from NYC to Cape Town). I have to say that Virgin really know how to do this pampering luxury thing well. Anyway, this lounge isn't the only thing that has impressed me recently.

One of my clients has recently acquired a very large section of real estate (focus on estate here - a pun for insiders) in mid-town Manhattan. Having spent the better part of the last 6 years in and around New York, I figured that I'd be able to find my way there for an 11am meeting with no problem. As fate would have it also had a colleague (new to Manhattan) in tow so the dent to my pride when we got a little lost (it was only by 100m and I did ask for directions pretty much immediately...) was all the more pronounced. This time Google Maps didn't help.

Well move aside Google, I have discovered (thanks to Mike C - the person I was meeting) HopStop and I'm not looking back. This neat tool calculates the best route from one place in a city to another, using bus, subway, walking etc. A boon for people like me who end up meeting clients and friends scattered across different cities.

Now I just need to find the same thing for London (Streetmap is getting a little outdated and I'm not even going to start on the TfL site!).

How big is too big (or how fast is too fast)?

A question that I am asked quite frequently is how big do I want Open Box to be and how fast do I want to get there?

We have been lucky – we have been in the very fortunate position of being able to decide for ourselves what we want to do and how we want to do it. This applies to our growth.

We have also been lucky in that we have always been successful – or at least my short-hand definition of being successful (having really great, dedicated, people who liking working together, working on projects for good clients, with solid revenues, which in turn support the continuation of good people working with good clients). As a result I have been quick to point out that we haven’t had to grow to be successful (it isn’t part of my measure of success). This has left us with the opportunity to grow only where it makes sense and where our clients need us to.

I read recently that McKinsey, which holds itself out as one of the world’s leading repositories of knowledge on how to manage a business, say that they will never grow their company by more than 25% per year because otherwise it is just too hard to transmit the corporate culture. Obviously this isn’t a helpful guideline when you’re a 5 person start-up – doubling in size is not a difficult thing to do in 12 months – McKinsey is certainly not at that stage. But for companies that are no longer 5 person start-ups (and who are growing fast), it does beg the question: “What do you know that McKinsey doesn’t?” or perhaps the better question is: “What does McKinsey know that you don’t?” It does also highlight a challenging aspect of growth that starts to potentially have an affect on my definition of success – that of the culture of the company not being transmitted.

What all this does clearly indicate is that every company is like every individual – they may share some common high level similarities but no two are the same and therefore it is dangerous to assume what works for one will work for another, which brings me to my answer: It depends…….

Quote of the Week

I’ve been reading a great book recently (Founders at Work – highly recommended). In one of the interviews, a founder says that once his company started he was largely driven not by the possible success, fame or money, but rather the unthinkable possibility of failure. Upon the buy-out of his company (for many millions) the over-powering feeling was relief (that he hadn’t messed it up).

Coming from one of the success stories of our time, these are sobering words for an entrepreneur indeed.

Bikes and Corners

So, here I am, sitting in the office on a Thursday evening. Why you may ask? Well it is not that I have one of my usual evening conference calls – those are all done (got to love daylight saving and the fact that it means that I’m 1 hour closer to US East Coast). No, I’m here because some idiot didn’t realize that you can’t take a 90 degree corner at 50km/hr + on a bicycle.

Let me explain. On Sunday I joined 35,000 others in riding The Argus, a cycle 109km race around the Cape Peninsular. It is pretty spectacular – you head over 4 mountain passes, riding most of the race next to the sea. But, as I’m sure you can imagine, 35,000 people anywhere makes it pretty crowded. I was fortunate enough to be “seeded” which meant I got an earlier start and which meant that I was aiming for a decent finishing time. All was going well until about 3kms from the finish and this idiot careered past me and then into the safety bales. Unfortunately (for him and me) he ended up lying (with parts of his bike) across the road in front of me. The decision was: person or bike. I chose bike. The end result was a rapid greeting of the road, gutter and pavement. Amazingly my bike was ok but to add insult to injury (literally) I also got a flat. I still finished in a decent time but…… it could have been so much better (and I could be sailing instead of gingerly using my leg and arm)….

The good news is that my incident was the worst of all my colleagues and friends that did the race (unless of course if you include the case of sunburn that our supporters on the route ended with) and I should be ok for a mountain bike on this weekend.

What's in a Name?

After having sat on the sidelines for, shall we say a while, I finally took the plunge and set this blog up. The actual process of doing this is really easy, that is until I came to the url...... now I know just how many blogs are out there (millions), as every name I could think of (that had some sort of relevance, or not) was taken! Ah well, I think that I finally got it nailed!