Time for change…

Today was my last day at Pactera Switzerland (formerly Innoveo Solutions) as Managing Director and Board member.

The end of a 14-year journey started with some slides presented at the Helvetia Group Executive Board in 2000. This period was full of nice and tough moments, bringing so much experience. I had the chance to meet so many great people (partners, customers, providers, competitors) and to work with/for them. To travel and discover new countries and new cultures: Russia, China, India, UAE/Dubai, Morocco, Italy, Spain, Germany, Austria, Denmark, … But specially I had such a great team around me, this is for sure what I’m the most proud of, and which is making my departure so complicated and emotional! You are the best, my colleagues and friends, my best wishes to all of you smile emoticon And thanks for your great gift (cf. picture), a book full of photos from our last 14 years events!

From Monday, I’m joining another great team at Boomerang Pharmaceutical Communications as Global Chief Operating Officer. I know this strong mid-size company since its foundation 17 years ago and I was working there as Board member for a long time. I’m very excited to integrate the Management Team there and to participate to the next steps of the growth of Boomerang!

Internet Mega-Trends

I couldn’t have a look earlier to the well-known KPCB Internet trends presentation. Lots of figures and insights in the 164 pages.

The latest edition of the annual Internet Trends report includes:
1. Key Internet trends showing slowing Internet user growth but strong smartphone, tablet and mobile data traffic growth as well as rapid growth in mobile advertising.
2. Emerging positive efficiency trends in education and healthcare.
3. High-level trends in messaging, communications, apps and services.
4. Data behind the rapid growth in sensors, uploadable / findable / shareable data, data mining tools, and pattern recognition.
5. Context on the evolution of online video.
6. Observations about online innovation in China

Some notes from my side:

  • Internet Users: <10% Y/Y growth & slowing…fastest growth in more difficult to monetize developing markets like India / Indonesia / Nigeria
  • Smartphone Subscribers: +20% strong growth though slowing…fastest growth in underpenetrated markets like China / India / Brazil / Indonesia
  • Tablets : +52% early stage rapid unit growth
  • Mobile Data Traffic : +81% accelerating growth…video = strong driver
  • Smartphone Users = about 30% of 5.2B Mobile Phone User Base
  • Tablet Units = Growing Faster Than PCs Ever Did… +52%
  • Tablet Users = Loads of Growth Ahead… At 56% of Laptops / 28% of Smartphones / 8% of TVs
  • Population penetration and Global users:
    • TVs 78% / 5.5B
    • Mobile Phone 73% / 5.2B
    • Smartphone 22% / 1.6B
    • Laptop+Desktop 21% / 1.5B
    • Tablet 6% / 0.4B
  • Mobile Usage = Continues to Rise Rapidly… At 25% of Total Web Usage vs. 14% Y/Y
  • Average Revenue per User (ARPU) and Mobile % of Monthly Active User (MAU):
    • Google $45
    • Facebook $7.2 / 79%
    • Twitter $3.6 / 78%
  • Healthcare Realities (USA)
    • Costs Up to 17% of GDP, at $2.8T in 2012, +2x as percent of GDP in 35 years
    • Waste = 27% of Spend, $765B of healthcare spend estimated from excess costs: $210B = unnecessary services; $190B = excess administrative; $55B = missed prevention opportunities; $310B = inefficient delivery of care / fraud / inflated prices (2009)
    • Individual Costs Rising, >25% of family income likely to go to healthcare spending in 2015E vs. 18% in 2005
    • Chronic Conditions = +75% of Spend, Most costly = cancer / diabetes / heart disease / hypertension / stroke…1 in 2 Americans has at least 1 chronic condition, 1 in 4 has 2+
  • Healthcare Realities (part II)
    • Digitization of Healthcare Happening
    • Providers Using Fully Functioning EHR (Electronic Health Record): 84% of Hospitals / Academic / Institutional practices
    • 51% (& rising) of office-based practices
    • Consumers Happy to Communicate via Email: 62% for healthcare concerns
    • Digital Health Venture Investments Rising: +39% Y/Y to $1.9B (2013, USA)
    • Examples:
      • Redbrick Health – employer engagement platform = 4:1 ROI savings per participant
      • Teladoc – employer focused telemedicine platform = $798 savings per consultation vs. office visit & ER over 30 days
      • Mango Health – adherence app = 84% Statin adherence vs. 52% market average
      • WellDoc – chronic disease platform = diabetes app prescription with reimbursement
  • Internet Trifecta = Critical Mass of Content + Community + Commerce
    • 1) Content = Provided by Consumers + Pros
    • 2) Community = Context & Connectivity Created by & for Users
    • 3) Commerce = Products Tagged & Ingested for Seamless Purchase
  • Biggest Re-Imagination of All = People Enabled With Mobile Devices + Sensors Uploading Troves of Findable & Sharable Data
  • More Data + More Transparency = More Patterns & More Complexity
    • Transparency : Instant sharing / communication of many things has potential to make world better / safer place but potential impact to personal privacy will remain on-going challenge
    • Patterns : Mining rising volume of data has potential to yield patterns that help solve basic / previously unsolvable problems but create new challenges related to individual rights
  • Big Data Trends
    • 1) Uploadable / Findable / Sharable / Real-Time Data Rising Rapidly
    • 2) Sensor Use Rising Rapidly
    • 3) Processing Costs Falling Rapidly…While The Cloud Rises
    • 4) Beautiful New User Interfaces – Aided by Data-Generating Consumers – Helping Make Data Usable / Useful
    • 5) Data Mining / Analytics Tools Improving & Helping Find Patterns
    • 6) Early Emergence of Data / Pattern-Driven Problem Solving
  • Photos Alone = 1.8B+ Uploaded & Shared Per Day
  • Costs evolution:
    • Compute Costs Declining = 33% Annually, 1990-2013
    • Storage Costs Declining = 38% Annually, 1992-2013
    • Bandwidth Costs Declining = 27% Annually, 1999-2013
    • Smartphone Costs Declining = 5% Annually, 2008-2013

 

Management vs. Leadership

I was searching for articles marking the differences between Management and Leadership, after a discussion in the office.

Three interesting ones I’ve found (literature is huge in this area):

  1. Wall Street Journal
  2. changingminds.org
  3. Harvard Business Review

The Wall Street Journal article is stating a book from Warren Bennies listing in a very nice way the main differences:

  • The manager is a copy; the leader is an original.
  • The manager maintains; the leader develops.
  • The manager focuses on systems and structure; the leader focuses on people.
  • The manager relies on control; the leader inspires trust.
  • The manager has a short-range view; the leader has a long-range perspective.
  • The manager asks how and when; the leader asks what and why.
  • The manager has his or her eye always on the bottom line; the leader’s eye is on the horizon.
  • The manager imitates; the leader originates.
  • The manager accepts the status quo; the leader challenges it.
  • The manager is the classic good soldier; the leader is his or her own person.
  • The manager does things right; the leader does the right thing.

This is resonating a lot, isn’t it? ;-)

6 Management Styles

Last week, I was thinking of the 6 different management styles, something I first heard in 2000 during my MBA. Interesting how some topic can pop up in your mind.

Two interesting inputs in Wikipedia and Leadersin Heels.

As a reminder, also for me (!), the 6 categories:

  1. Directive
  2. Authoritative
  3. Affiliative
  4. Participative
  5. Pacesetting
  6. Coaching

My experience still is that you have to consciously chose the best approach depending on the people and the context. No best style!

Seth Godin –The business of Software

via Seth Godin

If you are reading this post, you may know how far I like all the super valuable inputs of Seth Godin. Really inspiring! So, when Seth was publishing a post about the business of software, I was super excited.

First I have learnt that Seth’s first job was to lead a team that created 5 games for …. the Commodore64!!

Some, to my point of view, very interesting abstracts from his post. Although I *really* encourage you to read the whole post (even a bit long, really great!):

[…] Clearly, just writing a piece of software no longer makes it a business.
So if it’s not about avoiding fatal bugs, what’s the business of software?

At its heart, you need to imagine (and then execute) a business that just happens to involve a piece of software, because it’s become clear that software alone isn’t the point. There isn’t a supply issue–it’s about demand. The business of software is now marketing (which includes design). […]

COMMUNICATE TO USERS: As we’ve seen in just about every industry, marketing involves effectively communicating a story about benefits to (and among) the people who will appreciate them. For software entrepreneurs, this means identifying a group of people who need the utility of what you can offer them and who are willing to give you permission to educate them about why they should buy. Without either element, the software is dead. […]

I think niche opportunities for software are largely unexploited. […]

So, the questions I’d ask:

  • Who can I reach?
  • Is the product so remarkable that they will talk about my product with their peers?
  • Can I earn and maintain permission to continue the conversation?
  • Once they learn about the utility offered, will they pay for it? […]

ENABLE COMMUNICATION BETWEEN USERS: This is the holy grail of software. […] The network effect is the increased utility of a device that enables communication. […] If you can improve productivity or satisfaction by connecting people, then people will selfishly help you do your marketing.

When building a software business that uses the network effect, I’d ask:

  • Does the connection this enables create demonstrable value?
  • Is there an easy and obvious way for someone who benefits to recruit someone else to join in?
  • Is it open enough to be easy to use but closed enough to avoid becoming a zero-cost commodity? […]

LAST THING: Paying for it. In a competitive market where the marginal cost of an item is zero, the price will move to and eventually reach zero. […] The goal, then, is to create a dynamic where the market isn’t competitive. […] The other condition that’s necessary, though, is that users have to believe that payment is an option. The web has trained the vast majority that interactions online should be free. That makes the act of selling software, particularly to people who haven’t used it yet, really difficult. There are two ways around this:

  1. Free samples. Many software companies (37signals being an obvious one) have discovered the drug dealer model, in which the software is free for a month, connections are built, utility is created and then it begins to cost money.
  2. Move to a platform where commerce is expected. […] The app store for the iPad is like that. The expectation is that this software is going to cost money. It’s far easier to sell a serious app for the iPad than it is on the web, because the platform is organized around commerce.

[…] I wanted to help you realize that just because you can code something that doesn’t mean it’s a good idea. The issues of permission, of networks, of scarcity and of the desire to pay are inherent in the business part of the business of software. […]

Wow, really really impressive analysis!

Demonstrating strength

via Seth Godin

Wow, interesting post from Seth (a while ago, but still ;-). It is about showing (or not) “weakness” to the outside, which is seen for Seth clearly as a strength. Totally agree with that. I don’t like people that are making errors and have issue to apologize. For me, always a first signal of “more coming issues”…

Actually, I agree with *every* point mentioned, even if there are not always *easy* to implement ;-) But who says it should be easy?

Apologize

Defer to others

Avoid shortcuts

Tell the truth

Offer kindness

Seek alliances

Volunteer to take the short straw

Choose the long-term, sacrificing the short

Demonstrate respect to all, not just the obviously strong

Share credit and be public in your gratitude

Risking the appearance of weakness takes strength. And the market knows it.

And I’m still convinced you can run your business well *and* follow these kind of rules!

Fear of conflict?

via Jeff Bussgang

Excellent post from Jeff concerning dysfunctioning teams, based on a book from P. Lencioni – Five disfucntions of a Team. Patrick Lencioni lists the five main issues that can araise within a team, and how to combat them:

  1. Inattention to Results
  2. Avoidance of Accountability
  3. Lack of Commitment
  4. Fear of Conflict
  5. Absence of Trust

Jeff is then emphasizing the impact of fearing confllicts within an organization.

[…] Again and again, I see management teams and boards of directors shy away from conflict. It is quite natural for humans to avoid conflict.  In fact, our deeply programmed “fight or flight” instincts are designed to protect ourselves and run away when we sense danger.  Interpersonal conflict is a danger we all prefer to avoid as it makes us uncomfortable. […]

Here are a few techniques I’ve found help address this issue, particularly in start-ups. [more information in the post]

  1. Building Trust
  2. Annual Reviews
  3. Systematic Post Mortems
  4. Go Direct

[…] Conflict can be stressful, draining and uncomfortable.  Yet, it is incredibly natural, healthy part of life, particularly in a start-up.  And creating a culture that can handle conflict effectively clearly has a positive impact on performance.

Whole post is definitely worth a read ;-)

Corporate Culture: unusual Netflix example

Introduction

Netflix thinks that “as they grow, they have to minimize rules”. Different approach as what we all know, experience, read. And … Netflix is definitely not a startup anymore! I would like to share with you a document from Netflix I found on SlideShare about their culture and some quite innovative management ideas they have put in place. Feed for thoughts ;-)

Netflix – the company

Sources: Wikipedia, Netflix Shareholder communication

  • Netflix (NASDAQ: NFLX) is an online DVD and Blu-ray Disc rental service, offering flat rate rental-by-mail and online streaming to customers in the United States.
  • Established in 1997 and headquartered in Los Gatos, California, it has amassed a collection of 100,000 titles and approximately 13 million subscribers.
  • The company has more than 55 million discs and, on average, ships 1.9 million DVDs to customers each day.
  • More than 90% of subscribers have evangelized Netflix. More than 70% of subscribers had an existing subscriber recommend Netflix.
  • Number of employees (2009): 2’000+

Netflix reference guide on freedom & responsibility culture

Source: Netflix presentation on SlideShare

Worth an entire read, as the presentation is meant for reading, more than presenting ;-)

Some abstracts:

Their nine values

Great workplace is stunning colleagues:

Great workplace is not day-care, espresso, health benefits, sushi lunches, nice offices, or big compensation,
and we only do those that are efficient at attracting stunning colleagues

The keeper test managers use:

Which of my people,
if they told me they were leaving in two months
for a similar job at a peer company,
would I fight hard to keep at Netflix?

Hard work- not directly relevant

• It’s about effectiveness – not effort – even though effectiveness is harder to assess than effort

• We don’t measure people by how many evenings or weekends they are in their cube

• We do try to measure people by how much, how quickly and how well they get work done – especially under deadline

Our model is to increase employee freedom as we grow,


rather than limit it, to continue to attract and nourish
innovative people, so we have better chance of long-term continued success

Seems like 3 bad options

1. Stay creative by staying small

2. Try to avoid rules as you grow, suffer chaos

3. Use process as you grow to drive efficient execution of current model, but cripple creativity, innovation, flexibility, and ability to thrive when market inevitably shifts

A fourth option:

• Avoid Chaos as you grow with Ever More High Performance People – not with Rules

• Then you can continue to run informally with self-discipline and avoid chaos

• The run informally part is what enables and attracts creativity

With the Right People,

Instead of a Culture of Process Adherence,
Culture of Freedom and Responsibility,
Innovation and Self-Discipline

Mostly, Though, Rapid Recovery is
the Right Model

• Just fix problems quickly

High performers make very few errors

• We’re in a creative-inventive market, not a safety-critical market like medicine or nuclear power

• You may have heard preventing error is cheaper than fixing it

– Yes, in manufacturing or medicine, but…

Not so in creative environments

“Good” vs “Bad” Processes

• “Good” processes help talented people get more done

– Web site push every two weeks rather than random

– Spend within budget each quarter so don’t have to coordinate every spending decision across departments

– Regularly scheduled strategy and context meetings

• “Bad” processes try to prevent recoverable mistakes

– Get pre-approvals for $5k spending

– 3 people to sign off on banner ad creative

– Permission needed to hang a poster on a wall

– Multi-level approval process for projects

– Get 10 people to interview each candidate

Vacation policy and tracking

Until 2004 we had the standard model of N days per year

We’re all working online some nights and weekends, responding to emails at odd hours, and taking an afternoon now and then for personal time.

We don’t track hours worked per day or per week, so why are we tracking days of vacation per year?

We should focus on what people get done, not how many hours or days worked.   Just as we don’t have an 9-5 day policy, we don’t need a vacation policy.

Summary of Freedom & Responsibility:

As We Grow, Minimize Rules.
Inhibit Chaos with Ever More High Performance People.
Flexibility is More Important than Efficiency in the Long Term

Appropriate context

The best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people

Context, not control

Provide the insight and understanding to enable sound decisions

CONTEXT

– Strategy

– Metrics

– Assumptions

– Objectives

– Clearly-defined roles

– Knowledge of the stakes

– Transparency around decision-making

CONTROL

– Top-down decision-making

– Management approval

– Committees

– Planning and process valued more than results

Setting the right context

Managers: When one of your talented people
does something dumb, don’t blame them.
Instead, ask yourself what context you failed to set.

Again, context vs. control

Managers: When you are tempted to “control” your people, ask yourself what context you could set instead

Highly Aligned, Loosely Coupled

• Highly Aligned

– Strategy and goals are clear, specific, broadly understood

– Team interactions are on strategy and goals rather than tactics

– Requires large investment in management time to be transparent and articulate and perceptive and open

• Loosely Coupled

– Minimal cross-functional meetings except to get aligned on goals and strategy

– Trust between groups on tactics without previewing/approving each one – groups can move fast

– Leaders reaching out proactively for ad-hoc coordination and perspective as appropriate

– Occasional post-mortems on tactics necessary to increase alignment

Annual comp review

• Hiring is market-based at many firms, but at Netflix we also make the annual comp review market-based

– Applies same lens as hiring

• Essentially, rehiring each employee each year, for purposes of comp

– At annual comp review, manager has to answer the Three Tests for the personal market for each of their employees

Development

• We develop people by giving them the opportunity to develop themselves, by surrounding them with stunning colleagues and giving them big challenges to work on

– Mediocre colleagues or unchallenging work is what kills progress of a person’s skills

• Individuals should manage their own career paths, and not rely on a corporation for planning their careers

Innovation & execution

• Need a culture that supports rapid innovation and excellent execution

• Both required for continuous growth

• There is tension between these two goals; between creativity and discipline

Team work and high-performance people

• Need a culture that supports effective teamwork of high performance people

• High performance people and effective teamwork can be in tension also – stars have strong opinions

Cross-posted on the Innoveo Blog

Laurent is a Certified ScrumMaster!

As you may know, we are more and more using Scrum as a team-based framework for developing our Skye® standard software product (front-end solution for insurances) at Innoveo.

What is Scrum? (ScrumAlliance definition)

Scrum: A team-based framework to develop complex systems and products.

Scrum is an iterative, incremental framework for developing any product or managing any work. It allows teams to deliver a potentially shippable set of functionality every iteration, providing the agility needed to respond to rapidly changing requirements.

The Scrum framework constantly challenges its users to focus on improvement, and its Sprints provide the stability to address the ever-changing needs that occur in any project.

These characteristics have led to Scrum becoming the most popular method in the world of agile software development.

We are consequently very proud to inform you that Laurent Kempé, who is acting as our Innoveo ScrumMaster besides being our internal “Scrum champion”, has successfully passed his ScrumMaster certification!

Congratulation to Laurent for this nice step and recognition.

Next step is now to apply for the next level: Certified Scrum Practitioner, as shown below (ScrumAlliance certification process):

cross-posted on the Innoveo blog