The summary of an MIT Enterprise Forum’s gathering of 3 economists seemed to be optimistic, but with major caveats and concerns.  With three bubbles in our rear view mirror (dot.com, oil, and banking/real-estate), the concern has turned to a potential fourth bubble: cash (when there’s too much of it, inflation can eat away at it too quickly).

Here in Austin, a major new shopping center has opened (phase 2 of the Domain), and the tallest building in Austin is nearly complete (the Austonian, apparently the largest residential tower in Texas).  Meanwhile, Facebook is opening an office and hiring 200 people in Austin.  And co-working facilities seem to be doing well, while providing a good support network for small businesses. So perhaps the better-than-average local economy is influencing my optimistic outlook.

Meanwhile, the Senate has passed a $15B jobs bill. I don’t know if anything in the bill will affect our business directly, but we make our decisions without regard to tax effects (generally that seems like putting the cart before the horse), and from what we can see the environment is still favorable for BPM software and deployments – businesses are investing in process improvement, and BPM.  And big software companies are investing in BPM software (witness the acquisition activity of December and January).  Its a good time to be focused on BPM.

Ok, its no secret that I love coffee and cafes with wireless.  But as I’ve said before, I think having an office is important.

But recently two authors have made the case much more eloquently than I have.  James Reinhart’s post, “Why your start-up needs to get out of Starbucks and into an office right now” makes a great case for why working at the local coffee house can be undermining your start-up.

He points out the main deficiencies:

• 75% productivity (this might be generous)
• Lack of space for whiteboards, etc.  The virtual tools don’t replace real stuff yet.
• Boundaries between work and play dissolve in an unhealthy way.
• It doesn’t save much money (office space is cheap).

I’d add to this:

• If you have to take professional calls, the coffee house, and the busy street outside, are *not* appropriate places to do so.  Neither is home, with the dog barking in the background.
• You can often sublet space cheaper than the market rate from another company that isn’t able to fully utilize their space yet.

So he’s given us the cost-benefit justifications… and that’s where the “Locker Room Theory” comes in, which captures the essence of how I feel about having an office.

Today, many people believe in the distributed model – many executive teams are spread all over the country (or globe) and connect only virtually.  Many start-ups believe in the model.  But David Dufresne’s reaction:

I’m sorry, but I don’t buy that at all. As far as I am concerned, business is all about people. Building a winning tech company is mostly about people and having a strong team dedicated to a strategy and executing it together. Being a hockey fan, I will use a hockey team as the analogy for a portfolio company. Being on the road is like being on the ice. That’s where you score goals. That’s where you win that big contract. That’s where you build momentum; grow a sales pipeline, forge partnerships, hurt your opponent, drop the gloves if needed, etc.

But, when players are not on the ice, they are in the locker room. The locker room is where it’s hot and where it stinks of hard work and empty cups of coffee. It’s where you regroup in between periods, look your teammates in the eyes, listen to your coach and team captain, get ice for that bloody bruise, adjust your strategy and tactics. It’s also where you celebrate after a game. Open that case of cold beers every Friday at 4PM. Get back to the whiteboard to figure out what went wrong on that goal against or sale lost to a competitor.

I think this is great insight, and if you don’t mind a hockey analogy, it works well.  In our business (business process management consulting), we can’t avoid being a distributed team.  But we do our best to make it feel closer (investing in videoconferencing, for example), and we very much believe in our investment in a headquarters so that when we are together, we can *really* be together and hash things out.

When people ask me why BP3 has office space, I don’t have trouble explaining why.

Great article from Jeff Jarvis advising companies with nonphysical goods to stop selling scarcity and start selling value. It is a principle that can be applied to a great many businesses, not just the “Web 2.0″ world, but as he points out, education and consulting as well.

His advise to advertising businesses: sell the outcome, don’t sell the scarcity of your space!In the Content world, he points out that content just isn’t scarce any more.  The existence of this blog is actually just one more data point to that effect!  Information is not scarce either – with Google at our fingertips. He goes on:

Thus we have performers and consultants. There is still value in unique performance. We will continue to buy tickets to concerts by stars (but we won’t pay for the Muzak covers of their songs on elevators). We will buy books. We will pay to sit in a movie theater with popcorn. The new competition in the case of media and performance isn’t that someone will make a good-enough version of what we do but that there is more call for the public’s attention.

Quality is a scarcity. But it is a real scarcity.

The challenge is, there has to be recognition that:

• You (your company, your product, your content, etc.) represent quality, and
• Your level of quality is discernably and valuably differentiated from other sources of similar product, content, expertise, etc.

In BPM, we’re suffering a scarcity of BPM-related skills.  We already have a general shortage of technical skills in the world, but on top of that, having the technical skills combined with the understanding of business and process improvement – we’re talking about a real scarcity for the right talent and skills.  But as I’ve argued previously, BPM isn’t hard because it is rocket science – each component task we do in BPM isn’t hard – its hard because knowing the right combination of tasks is a subjective, judgmental activity that depends on experience.

But the *real* scarcity isn’t the BPM bonafides.  The real scarcity is quality BPM skills and personnel.  Because what we’re selling isn’t truly our hours of labor.  What we’re truly selling is the outcome: a successful BPM deployment; a successful BPM program; or a successful transfer of skills and methods to a COE. My shorthand for this is that our customers are buying success.

Lest there be any doubt that BPM skills are in demand, Tom Baeyens has pointed out that SimplyHired stats claims the average jBPM salary in CA is US$114,000.  Not bad.  Lombardi BPM shows similar numbers.  It supports what we’ve been saying all along – BPM skills are in demand, and it should be a great career for the next decade (or two, or more).  Its just hard to see “process” going away as an important concept in business. So what the SimplyHired stats tell us is that the technical side of BPM is in demand – regardless of the tool set, there is a mismatch between supply and demand right now that is going to take time to fill – and knowing the technical side of the coin is only half of it – the other half being the business process side of things.  I can tell you from experience that not all great technical people have an interest in business process, and not all of them can make the adjustment to focusing on the process over the technology.

In the meantime, your best bet to get up to speed is to get a job that will let you learn on the job, attend training, etc.  There really aren’t any formal education programs at universities that are widely recognized (although there are a small number of universities that have a small number of opportunities to learn about business processes).  There are classes you can take from the software vendors or the likes of Bruce Silver, and there are certification programs-  but no sense paying for certification until you know what you’re doing.  Once you get started, then try to take advantage of the many resources on the net, and resources like bpmCamp.

What a great post by Steve Blank, yet again, as he reveals a classic cautionary tale from start-up land (“The Elves Leave Middle Earth – Sodas Are No Longer Free”).

It’s about the Sodas no longer being free.  Seriously.  Coke. Diet Coke.  Mountain Dew.  No longer free.  Free drinks are part of start-up culture and lore, and it is just one of the little perks that founders do for their companies when they themselves are interested in free sodas too.

Shouldn’t matter, right? But it does:

But the damage had been done. The most talented and senior engineers looked up from their desks and noticed the company was no longer the one they loved. It had changed. And not in a way they were happy with.

The best engineers quietly put the word out that they were available, and in less than month the best and the brightest began to drift away.

Worse, as he sat there in the board meeting as the free drinks were getting canned, he was amazed that none of the experienced VC’s in the room objected, or pointed out the folly of this change in policy – from free drinks to paying 50 cents.

Steve was amazed that they didn’t speak up.  But I’m not.  Its like Marvin Haggler once said: “It’s hard to get up and do roadwork when you’re wearing silk pajamas.”  The VCs have forgotten why free drinks matter to engineers.  They’ve forgotten what “road work” is like.  Its surprising that Steve Blank still remembers it so clearly (perhaps the academic/historian part of him hangs on to these memories).

As Steve recalls it:

Then the new CFO got up to give her presentation – all kind of expected; Sarbanes Oxley compliance, a new accounting system, beef up IT and security, Section 409A (valuation) compliance, etc. Then she dropped the other shoe.

“Do you know how much our company is spending on free sodas and snacks?”  And to answer her own question she presented the spreadsheet totaling it all up.

There were some experienced VC’s in the room and I was waiting for them to “educate” her about startup culture. But my jaw dropped when the board agreed that the “free stuff” had to go.

I sure hope Steve spoke up and let them know what a mistake they were embarking on.  I know he wasn’t on the board, he was a guest – but all too often I’ve seen bad outcomes come to pass because no one felt comfortable or felt it was their place to speak up for what they thought was right…

I lived through one of these transitions as well, but for our firm, it really was the beginning of the end – not just a sign for people to look around, but a sign that the management of the firm had dramatically changed their priorities to reflect a new, tougher, economic situation, and the layoffs that were about to come.

Read a fantastic article on the business insider about leadership, as written from the perspective of two gentlemen who served in Iraq as infantry officers in the Marine Corps.

The quick highlights:

1. Respect your people, your team.  But then they go on to give actionable advice as to how to demonstrate the respect you have for your team.
2. Honor performance, and performers.  When you send the message that people don’t matter, or can’t excel, then you’ll find that no one excels.
3. Listen.  But then they go on to explain this in an eye opening way- “Listen aggressively”.
4. Know how to give an order.
5. Don’t be afraid to lead.
6. Inspect what you expect from your team.  This is a bit like the measure what you want to improve axiom of process improvement.
7. Be clear about what you want.
8. Get over yourself.  You’re not THAT great.
9. Stand by the changes you implement, to make sure that they “take”.
10. Develop subordinates who understand the same things.

Good stuff.  The anecdotes that go with these points are well worth the read. We are constantly reminding people that the biggest requirement for BPM success is leadership.  It takes leadership to effect change.  It takes leadership to get any project to the goal line.  So many of the common reasons that people cite for IT, or BPM, failures, really just boil down to leadership, experience, or both.

As previously noted in this blog (see Putting the Band Back Together), we’re believers in hiring Heroes.  Meaning, you find and hire people that can, to large extent, “do it all”.  We want to be the tip of the spear, at the front of the phalanx, for our customers. And the reason we do this is because we believe that BPM deployments greatly increase their odds of success when you seed the team with a few really good people.  So I was very interested to see Chris Dixon’s article “Man and Superman“.  In it, he examines why some tech companies seem to thrive beyond their first great product innovation’s life-cycle.  He points out that Sony, Apple, and Microsoft all achieved this, but all were driven by a “Superman” during that time.  In each case, when “Superman” wasn’t around, the companies did not fare so well.

I once worked for a company that, at the time, believed in great people making a difference.  We studied works like Covey’s Seven Habits, and Jim Collins’ Built to Last (and later, Good to Great).  However, at some point management decided that employees were highly expendable and fungible (the term “resources” entered the lexicon).  The company is a shadow of what it once was.  Reading Chris’ evisceration of Jim’s thesis that great companies are all about culture, not a singularly great leader, I can’t help but wonder if Chris has it more right than not.

Chris points out that most of the companies Jim profiled have since fared poorly – and not just with respect to the current economic climate, but with respect to the S&P 500 (Circuit City, for example, went bankrupt).

Culture might be important – but if you’re Superman in your organization, you better find another Superman to take over when you’re gone.  The real lesson to take home from his post is that people count.  Having good people counts.  Culture alone is not enough.  At BP3, we’re going to keep focused on hiring Heroes – perhaps we won’t live up to the Superman label, but we want the best, and we want people who are driven to keep expanding their abilities and who aren’t satisfied with status quo.

As a firm that is entirely focused on BPM implementations, we get a lot of queries from staffing firms, and I’m going to take this post to speak out against the practice of using these expensive, non-value-adding, players in the marketplace.

We get (each of us at BP3) about an email a day from a staffing firm looking for “a Lombardi Teamworks Administrator (or Developer or Architect) in Bentonville, Arkansas (or Bay Area or Boston or where-ever” (or other locations).  (someone should tell these guys that there is only one company in Bentonville likely to buy BPM and need to hire outside help… )  If I could convey one thing to companies deploying BPM and using staffing companies to augment their teams, it would be to understand the value chain in the BPM staffing equation, and why those firms are ill-equipped to help companies achieve their goals with BPM.  If you’re using a staffing firm, odds are you could save money and time, and achieve better results, by working directly with BP3 (or other boutique BPM firms).

Customers: Problems with Staffing Firms

From the perspective of a customer, what are the problems with using staffing firms?

Problem #1:  BPM services aren’t a commodity. They specialize in commodotized staffing in areas where there are millions of developers to choose from, like vanilla Java development, PHP, SQL, HTML, etc.  They have no concept of why the going rate for BPM experts is higher than the going rate for Java experts. They are used to treating software engineers  like day-labor construction jobs.

Problem #2: These staffing companies don’t understand what BPM is. No one at these firms has worked for a BPM software vendor, or a BPM consulting firm.  They’re essentially headhunters/recruiters, with no vertical domain expertise in BPM.  The staffing companies won’t provide any differentiated value add once the person is placed.  There are no skills at the staffing company to help that consultant be successful once they’re onsite.  There’s no technical support, no project management support, no lifeline to call.  There’s just a rate and a # of hours.  They don’t care if you deploy a waterfall or agile methodology, they don’t care if your project is successful – frankly, their job is to sell bodies, not to sell success.   If you are a customer, don’t ask them to help you make your project successful other than by adding or replacing personnel.  If you are a contractor through these firms, God help you if you struggle – you won’t get any help from them.  If they smell blood in the water they’ll replace you as though you were a stapler that didn’t staple straight.  But they will NOT help you.

Problem #3:  Because they don’t understand BPM, they don’t understand Process Improvement.  So you are going to forgo any help identifying opportunities for process improvement, or getting someone on staff who really understands how to do that.  When you work with a firm focused on BPM, you can expect to get those skills in either the people you contact with or the people who support them.

Problem #4:  They can’t get the best resources.  Because they aren’t BPM experts, they don’t know which of the folks they talk to are good and which ones aren’t.  They aren’t deploying people they have years of history working with. They aren’t deploying people they have a good basis from which to interview and judge competency.  They’re just deploying whoever will take the lowest rates and the most demanding contract terms, allowing them to maximize their profit.  There are very few really good BPM experts out there, relative to the demand – and even fewer experts who are available at any one point in time.  Some of the best BPM experts in the world work for BP3 and companies like ours, but you’ll never get to them through the staffing outfits – because boutique firms like ours are a threat to their business relationship with customers.

Independents: Problems with Staffing Firms

From the point of view of a contractor considering a staffing outfit:

Problem #1:  You are a commodity to them – a stapler, or worse, a staple.  They don’t care that eventually you’ll go work for someone else, they just want to maximize profit right now.  They’ll squeeze you hard on rates and terms in the contract.  They don’t care if you’re happy, they don’t care if you’re successful, so long as they have a chance to replace you with someone else and keep getting paid.  They don’t care if you get eliminated from consideration for arbitrary or unimportant reasons (like, having the wrong accent, being unable to travel on a particular date or day of the week, or having 22 months of experience instead of 24 minimum… )

Problem #2:  Staffing companies will not “sell” you to their customers.  They are just presenting you, and not taking sides too strongly – they let the customer decide if they want to work with you, and they’re not strongly invested in the outcome for any one person, because the customer knows that the staffing firm doesn’t know you from Adam and Eve.  See point #1:  you’re a staple. There are more just like you (as far as they’re concerned).

Problem #3:  Once a staffing firm has presented you to a customer (or rejected you for that customer), you have no shot of getting into that customer through another avenue.  This is a function of the contracts between the staffing companies and their customers – usually anyone they present, even if they present them with the reasons why that person isn’t a fit, is no longer available to the customer without violating some kind of contractual constraint that requires them to pay the staffing company.  As a result, they’ll never revisit these decisions.  So if you, as a contractor, put your name out through “Superior Staffing”, but also reach out to BP3 about working on a particular account – odds are that you’ll either get staffed through the staffing firm at a lower rate than what we would pay (if you’ll take it), or you’ll get rejected because the customer has already seen your name through the staffing firm and doesn’t want to run afoul of that contract.  Many independent contractors mistakenly believe they are better off reaching out to as many opportunities as possible at the same time – but if those opportunities are consulting and staffing firms, that isn’t the case.  I’ve seen embarrassing situations where the same person was proposed by three different companies to the same customer.  If you have a more valued relationship with one of those firms over the others, the customer sure won’t see it in that circumstance.  And they’ll likely see you as little more than a mercenary and not someone that they can depend on to work the duration of the contract.

Why Work for BP3?

Against this backdrop, we’re being approached every week by people who want to work with BP3.  And our colleagues refer additional people our way every week.  In fact, we just hired another great asset for our team last week.

In a previous post we made the case for why customers work with BP3:  we’re in the business of selling success. But why do BPM experts and people interested in BPM want to work for BP3?

So why do these highly skilled professionals want to work with BP3?

1. We live eat and breathe BPM.  This isn’t a fad or hobby for us, this is our livelihood and our career.  We understand why BPM expertise is differentiated.  Prospective employees and contractors understand that if they work with us it will improve their own brand in the industry by association.
2. We’re invested in the success of our team.  We want our staff to be successful.  We’re working on long-term relationships with our clients, and as a result – when we put someone on our project, we continue to provide technical and project management support, not to mention support through managing the customer relationship.
3. We don’t squeeze our folks on salaries and rates just because the economy is challenged.  We want to be working with our staff for a long time, and we know BPM is going to be in demand for years to come.  We’re not so short-sighted as to put the squeeze on people at the first sign of trouble.
4. We represent our colleagues well to the customer.  We help our customers understand the strengths and fit of our consultants.  We help work out a travel schedule that works for both parties.  We provide video conferencing capabilities from our home office to help enable effective remote work.
5. When the going gets tough, we help.  We’re BPM experts.  We can help with the technical lifting, and we can help with process improvement consulting.  We can help get a project that is off the rails, back on track.  And our customers know that we’re there to help.  Its part of why they keep coming back to work with us.
6. We have a good reputation.  I believe we have a good reputation for fair dealing, for being good to work with and for.  We also have a good reputation in the BPM market as experts in our field.  It isn’t our first time to the rodeo.
7. Our business is growing.  Despite the economy, we’re growing in the face of it and staying focused on our key value driver:  making customers successful with their BPM projects.

If you’re a BPM practitioner, BP3 is a great firm to work for.  If you’re a BPM customer, BP3 is a great firm to work with.  We’re not your only option, but we’re trying hard to be your best option.

Recently I was discussing with a colleague at a software vendor what BP3 does for a living.  The question was asked, first, what does BP3 do?  I gave my usual response, which has to do with process improvement and implementing processes in BPM suites (I like to call this marrying theory and practice).  At the end of my spiel, I was asked if we’d be interested in being a reseller for their software.  In fact, being a reseller may make sense at some point for BP3, but that’s down the road a ways.  I responded that we really aren’t in the business of selling software – we don’t have a sales staff, we don’t cold call new customers.  In fact, we usually get referred to customers by word of mouth.

By whom? he asked.  Well, it varies, but it includes:

• old colleagues who know what we do now for a living and know we do it well
• other BP3 customers who liked our work
• software vendors
• consulting companies

I think the last two bear remarking on.  My audience wasn’t convinced. Why are software vendors and consulting firms asking us to help out and referring or subcontracting business to us, if they don’t get the quid pro quo of our bringing them additional business by bringing in new customers?

It turns out that the software vendors and consulting companies we work with have their own consulting staff.  But they still bring us into their customers.  Even their prospects.  Why?  Because what they’re buying with BP3 is success.  They’re not really buying our process modeling, our technical jujitsu, nor our process improvement skills – although they know they’ll get top-notch work in each of those areas.  They’re really buying the insurance policy for success in BPM, which is called BP3.

That’s when I realized we had moved from the question of “what do you do?” to “why do your customers work with you?” to “what are your customers buying?”  Why, our customers are buying BPM Success, and they’re buying from us.  That’s why major outsourcing firms will bring us in to work on major accounts or projects.  Its why software vendors ask us to run proofs of concept.  Its why customers call us when they have a critical project.

In the process of answering this question, I realized we’re making our “pitch” incorrectly.  We need to transition from “what we do” to communicating the BP3 value proposition: “what you’re buying from BP3 and why.”

So the next time someone asks me what we do, I think I’ll tell them, we sell success.  (And then explain the context of BPM and how we do that.  )

I read a blog post recently by Mick Liubinskas on first-mover advantage.  But the underlying analogy he uses is compound interest, arguing that the advantage of being “first-mover” is the chance to start accumulating learning and experience earlier than others, and to let that learning compound year after year. In this context, being “first-mover” isn’t that important – but learning from your experience and customers, and then growing from it is.

I can’t say for sure how well the analogy applies to startups generally, but it applies to the BPM space quite well.  How?  Through luck or by plan, most of the BPM plays have been slow-developing. They’ve grown quickly by enterprise software standards, but not so fast when compared to the growth rates that many software companies enjoyed in the late 90’s.  That growth rate has been manageable enough that the companies have organizational learning, and actually benefit from it, rather than being spread so thin that the organization isn’t earning that compound interest on experience.

Similarly, I think companies deploying BPM could do well to consider the power of compound interest.  In early months on the first project, the benefits of experience for your core BPM team aren’t quite so obvious, but as you are able to grow your capability by an increasing amount in each turn of the BPM project crank.  You can speed the learning curve by hiring or contracting expertise to your team, but it takes investment over time to make BPM a part of your team’s, or company’s, DNA.

This notion of compound interest in learning is part of the fundamental principle behind the consulting business as well – by having learned from so many BPM projects, we look to lend our expertise and experience to our customers to help them achieve a “second-mover advantage” – moving faster by skipping some of the dead-ends or detours that we might have experienced in our own journeys.  Regardless, this article reinforces something I’ve always believed in – a steady consistent investment usually performs better in the long run than big changes up and down over a short period of time.  There’s a cost to starting up, and a cost to shutting down, and with steady investment you start to earn that “compound interest” on your investment that is increased efficiency and organizational knowledge.

We’ve been working hard on Putting the Band Back Together over the last 2 years. I’m happy to say we’ve just added two new members to the team that have a long, successful history deploying BPM solutions, but who were ready for a new chapter in their careers after writing successful prior chapters.

Pavan is someone we’ve worked with on-and-off for the last 4 years, and he’s had successful deployments both with us and without us during that time, as he was one of the foremost experts on the ground in BPM at BearingPoint.  He’s deployed Lombardi solutions but also worked with other vendor products, and he’s one of those guys you can always count on in a pinch. I’ve been talking to Pavan quite literally for over a year looking for the right opportunity to bring him on board.

Wade is another guy we’ve worked with on-and-off over the last 4 years, and when I found out he was leaving his previous role, we jumped at the chance to bring him on board.  He was the technical lead for a major insurance company’s BPM efforts, and has additional experience with significant IT apps at that firm and at previous firms.  He adds to our insurance expertise, but also brings a wealth of BPM experience to the table.

Both of these guys are the kind of people you’re proud to work with, and proud to have on your team.  They can play more than one role, and yet when push comes to shove they can solve hard problems with software.  They’ll be helping us out with a major project right off the bat, and we couldn’t be happier to have them on the team.  When we say we’re putting the band back together, these are the kind of guys we want on our team-  experience in the school of hard knocks, time in the trenches of BPM deployments, prior experience with other applications and integrations, and maturity.

Welcome aboard, guys!

Sometimes it is hard to convey the amount of experience your team has.  Sometimes it is hard to convey the positive impact you’ve made on a company you used to work for.  Sometimes it is hard to convey how much you’ve positively impacted the customer base. But at Driven 2009, Lombardi actually gave me a great way to communicate this to the folks who were there.

All in all, Lombardi walked through 18 different customer stories by my count.  These were really compelling stories of customer success, achieved value, and really deep references for Lombardi.  By the time they were done discussing the 18 customers, I realized individuals from the BP3 team had played key roles in the success of no fewer than 16 of them (often as employees or partners of Lombardi).   Peter noticed this as well.  It isn’t just pride that causes me to say that we have the most experienced team in the business.  And the quality of that experience is second-to-none.  You can’t trivially recreate the experience of being the first person to segment a Teamworks workload between user-traffic (UI) and background processing (of events, web services, and batches).  You can’t trivially recreate the experience of helping an insurance company develop common global processes that accommodate local variation across nine European countries, or helping a global manufacturer apply six sigma techniques to their process prioritization and improvement efforts.  You can’t trivially recreate the experience of starting the Lombardi On Demand Assistance program, nor being the anchor man on the team.  You can’t trivially recreate the experience of being the chief architect and advocate of BPM within your organization for over 4 years.  These are great guys to work with, and I’m barely scratching the surface.

I also found it interesting that in Gartner’s Magic Quadrant, their assessment was that Lombardi customers, in general, are more mature in their thinking about process and BPM.  They don’t typically look at it as a small part of a big project, they look at it as a program, a discipline, as a way they’ll be doing business going forward.  This is actually a *significant* difference in outlook as compared to the typical BPM customer cited by others in the industry.  We take some pride at BP3 in that we helped shape the attitudes of Lombardi and our customers in the early years at Lombardi, from 2003-2007, to get customers to really think bigger and longer term, and to get Lombardi realizing the benefits of broader adoption and deeper adoption within the customer base as something more than just additional license sales.

We are equally gratified and proud to be part of creating new stories in the BPM space, helping customers achieve significant success.  We’re not resting on our laurels, on our past achievements, we’re right now working on critical-path projects for customers anyone would be proud to list as references.  And we are very thankful for their belief in us, and in our ability to help them achieve their business objectives.

I’m often asked why I do what I do by friends who are not in the traveling consultant business.  Been thinking about these types of things a lot lately, as you might have noticed in a previous post.  There are a lot of reasons of course, but there are only a few that really matter:

1. I love what I do.  Yeah, there are days when it is “work” and days when it is fun, but when I have quiet moments on the weekend, I am grateful to get to do this for a living.  (definition:  “this” in my mind, is building what we believe can be the best BPM practice in the business, and building it from scratch, and all that entails).
2. I like being able to provide for my family.  There are other careers I would love, most of them don’t pay as well.  Some of them might, if I jump ship.  But I’m glad that what I’m doing allows me to provide for my family.
3. I love the people I work with.  At each of the last three roles I’ve had at companies, I’ve essentially been able to assemble my team.  In one case I did my recruiting internally, rebuilding a team around the company’s flagship product, responsible for more than $40MM in maintenance revenue every year.  In the next case, we were building up the services practice at Lombardi, where the # of people in technical field services grew (conservatively) 10x in my 4 years there.  I have a lot of good, positive feelings about those people that I helped bring on board.  The same is true at BP3 – we have the kind of team you want to succeed for.  For them as much as for yourself.
4. Mom and Dad are proud.  Admit it, that matters :)

A couple of recent experiences, and a few recent articles I’ve read, rubbed me the wrong way on this question of why we go to work.  Admittedly, that isn’t the question being asked, but it should have been!

Problem #1: How Employers Approach “Why we go to Work”

Employers are far too focused on compensation as both a way to create satisfaction and as a source of employee dissatisfaction.  First, I read this article by Joel Spolsky on Inc.com.  The title is appropriately attention-getting: “Why I Never Let Employees Negotiate a Raise“.  I figured that this one would be interesting, right off the bat, and it was.  But I don’t like the outcome.  He starts with the provocative scenario:

What would happen if you got to work one day, went into the kitchen, and saw a list of your employees’ salaries taped to the fridge? Would you freak out? Would you expect to find half of your staff weeping and the other half waiting with pitchforks outside your office door?

I think for one thing, the employees would be rightly pissed off about the invasion of privacy!  Salary information is not just private to the employer, but to the employee.  Joel asserts that keeping salaries secret is a way to avoid paying people fairly.  He might even be right, though no data or studies are cited to back up the assertion, because that interpretation probably fits how some of us feel about it from anecdotal data – we all know someone who was paid pretty out of line with their peers (high or low) somewhere we worked.

But Mr. Spolsky’s next statement is, I think, the foundation of my disagreement with his approach to compensation:

When my partner and I started Fog Creek Software, we knew that we wanted to create a pay scale that was objective and transparent.

Aspirationally, this doesn’t sound so bad.  My objections? First, if the goal was fairness, why not say “fair”, rather than “objective and transparent” ?  Notice, the word fair didn’t occur here an the assumption is that if it is objective and transparent it will also be fair (but I can name several examples in life that are transparent and objective – and not fair)… Second, the statement presumes that a pay scale can be objective and transparent – that is the basic assumption going in.  I’ll concede that there is precisely one objective part of compensation: the dollar amount.  And you can make that dollar amount transparent.

But the process of selecting the right salary, and the transparency of that process, has limits.  The basic idea is to take your experience + skills + scope of your job, sounds pretty objective.  But then there’s the question of which experience should count – does someone’s .NET programming experience count toward their Java programming salary?  The article proposes that objective skills are pretty easy to arrive at, from newbie to “consistent successes” – but these are subjective judgments that they are making about their employees skillsets – not *objective* assessments, and as such they can never be fully transparent.

Ultimately, I’m not a believer in putting a number on someone and assigning salary based on that.  I think a respectful conversation between the employer and employee (or prospective employee) generally will lead to mutually agreeable answers that are less likely to be looked at badly in the future (by either party).  Make sure that if the discrepancies in pay between employees are ever exposed, that you can confidently defend those differences.  If you can, then there’s no reason to fear questions on the subject.  In one important aspect I agree with Mr. Spolksy:  you should *assume* that salary data will get shared at some point, and so you should not do anything you can’t stand behind 100%.

Problem #2:  How Employees Approach “Why we go to Work”

People (in this case, we can probably just say “Employees”) often approach this question without really thinking about it.  They’re chasing the next rung on the ladder, the next reward, the next bonus, the next project, the next external confirmation of success.  But they haven’t defined, for themselves, what success looks and feels like.  As a result, there’s often an over-focus on compensation.  But Maslow’s hierarchy would tell us that after a certain point, when our income covers our physical needs and safety, that it has diminishing returns (because its utility toward achieving love/belonging, esteem, and self-actualization is less than its utility for achieving basic needs).

At South-by-SouthWest (SXSW) this year, Tony Hsieh gave a great presentation about customer service and culture at Zappos.  Particularly relevant to this subject, skip ahead to the slides in the 40’s, and especially slide 44, where he displays the 3 types of happiness:

1. Rock star – chasing the next high
2. Flow – engagement, time flies
3. Meaning / Higher Purpose – being part of something bigger than yourself

The point is that having a larger purpose is a more sustainable form of happiness than chasing the next high.  In general when I talk to people about joining our team (or, in previous lives, my other organizations), I first made sure that there was cultural alignment about what matters to the employee and what matters to me, and what matters to our team.  If someone doesn’t already start out believing that customer success matters, I’m going to have an uphill battle teaching that to them, and it might be easier to let them figure that out on someone else’s dime.  If someone doesn’t get excited about building the best BPM shop in the world, or being part of a great team – it just isn’t a fit.  When someone is consistently focused on compensation trumping all other concerns, I generally recommend they either stay where they are or go contract, and accept that risk/reward proposition.  Or if they’re too focused on being paid “fairly” they may prefer a system like Fog Creek’s.  I would expect Contractors won’t get the psychological rewards of building up a company, but they can more easily maintain a laser focus on their own personal bottom line.  Just beware slide 44 from the Zappos presentation!

Meanwhile, we’re going to get back to building a BPM business we can be proud of.

During Day 1 of the conference, Lombardi confirmed their belief in something that I’ve believed for many years- that the key things holding back BPM adoption are Leadership and Talent.  Lombardi’s take on leadership was that executive leadership (C-level) is required to really foster BPM adoption in a broad way at an organization.  I think there was general agreement in the room that it is a lot easier when that is the case.  However, I wouldn’t let the rest of the organization off the hook so easily.  Obviously, as an outsider – as a vendor, or consulting firm- the people in the room need to focus on getting executive support for BPM, and even leadership of BPM initiatives.  But for insiders, within the organization, if your executives aren’t leading, and aren’t supporting, you have some work to do.  Leadership doesn’t always come from the top at organizations – it often comes from where the need is, which is a polite way of saying, it comes from people who are dealing with real problems (where the sh*t hits the fan).

Often these leaders at lower levels of the organization need help – the data and tools (ammunition) to make their case to executives, the methods and tools to manage and measure their BPM projects, and a sounding board for their efforts.  And this is just why BP3 is in this space – we think Leadership is the critical element, and we think our job is to augment those leaders with expert advice, support, tools, and assistance.

The second term Lombardi focused on was “talent”.  Of course, we’re really talking about “people who are expert enough in BPM to implement BPM.”  It isn’t truly talent (as in, the “born with it” kind) – its the combination of skill, experience, knowledge, and wisdom.  And when you’re sitting in a room full of BPM practitioners, one of the things you do is take stock of your own team and what your role in the ecosystem of partners should be.

At BP3, we’re the most experienced team on the planet for Lombardi Teamworks BPM implementations.  We have quite literally brought together some of the best and brightest in the BPM universe into one team.  And I think we can be a keystone in the strategy of helping companies develop their own BPM teams:

• A customer putting together their BPM Center of Excellence (CoE)
• A consulting firm putting together their BPM practice, or needing help in a region outside their normal operating geography
• A software company adding BPM to their portfolio, needing to augment their skills or team
• A solutions company selling a solution based on BPM software, needing more weight or heft or reach behind their deployment team.

I was encouraged to see the quality and variety of partners in attendance as it tells me we have the seeds in place for really growing the number of BPM practitioners available to the marketplace.

Update: In Day 2, Lombardi came back to the theme of the talent gap – specifically a very good chart showing the ramp of BPM projects relative to the ramp of talent to work in and on those projects, and how often customers (or partners) will hit the wall as the talent gap reaches a certain level of pain – causing delays in projects, or higher costs, or just stress for a team stretched too thin.  The more aggressive your BPM roll-out plan, the more acute the pain from this talent gap will be.  Recognizing that this can happen, of course, you can plan around it by establishing relationships with partners to help fill those staffing gaps or help accelerate knowledge acquisition in BPM.  See the above bullet list – if your firm is engaged in building a BPM competency, and your plans are aggressive, you’re going to need help from outside experts to bridge the gap – or else you’re going to have to accept a longer pipeline for delivery.

There was also an extensive discussion of Lombardi University – Lombardi’s new approach to education and certifying individuals and partners.  That’s going to take a separate post to comment on, however.

I’ve been trolling on Twitter recently – meaning, I’ve started following a few people, just to see if anything interesting crops up.  I haven’t really felt the urge to post to twitter, but I thought I’d see what kind of wisdom arrives in 160-character tidbits.  One thing I immediately don’t like – all the links are reduced by tinyurl to very small URLs – but this also has the effect of making it harder to tell if someone is sending you a malicious link of some sort (even by accident).  Twitter accounts can be hacked after all.

So yesterday I had my first real “hit” on twitter – meaning, the first time I saw something that was really of interest and value that I would want to turn around and share.  It was a link to one of Steve Blank’s articles on “SuperMac” – relating his experiences as Chief Marketing Officer (or VP of Marketing) of a graphics board company that focused on the Mac market.  Honestly, who cares about the graphics market of 20-30 years ago, right?!  But the lessons are not technical lessons, they’re more about understanding the customer and leading your team.

In  “Strategy versus Relentless Tactical Execution”, Steve makes a fantastic case for why execution matters, and also points out one of the most common mistakes college grads make when interviewing:

Just as an aside, over my career I must have interviewed scores of business school graduates (some from the very fine universities where I now teach) who would say, “I want to do strategy.”  Well yes, I understand that, but this is a startup, what else do you want to do?  “I just want to do strategy.”  Those were very short interviews.  The “strategy” of learning who SuperMac’s customers were, what solutions they needed and what our repositioning would be was a three month effort.

The tactical execution took three years.

Note, if you want to do “strategy” (which is a fine endeavor) and nothing else, you have just defined your career as one in large corporation or in a consulting firm.  Stay out of startups.  Tactics mean tenacious and relentless execution measured in years.

On the technical side of the house, the analogy is “Design” instead of “Strategy”, and tactical execution in the technical world largely consists of coding.  I did at least a hundred college technical interview screens each year for 5 years+ at Trilogy when I graduated from college.  And one of the things I learned was that when a college grad started selling me on their design and architecture skills, versus their coding skills, it was a huge red flag.  Of course, when I was a college graduate, I could have easily made the same mistake, assuming that my knowledge of software design and architecture made me desireable to a company, and up to that point, assuming that almost anyone much older than me didn’t know as much about software as I did (in the general population, that was probably true, but not within the specific software company population!).  To succeed as a software engineer or technical consultant, you have to have the personality that will allow you to focus on the relentless execution of the plan.  As you gain experience, your voice in the plan (the strategy, the design) will increase.

In his next article on SuperMac, “Building the Killer Team – Mission, Intent, and Values”, Steve further pounds the table on some principles of leadership that I think are critical:

1. Titles are not your job.  Your job is defined in terms of what you are expected to accomplish for the company and how you further the goals of the company.  Some of Steve’s examples of people in his group defining their job in terms of their narrowly-written title are pretty amusing.
2. You have to give your team a mission- something bigger than “set up the trade booths.”  The mission for his marketing team was pretty specific – growing sales by a specific amount, at a specific margin.  But it could have easily been written a little bit more high level, with some bullet points for the specific year’s financial targets.  Given that mission, the team members and leaders can make better decisions about how to get from here to there – and about prioritizing the mess of work that might be in front of them!
3. Accountability.  Steve describes a world where deadlines in his marketing department were not met. Consistently not met.  And no one was surprised- there was always an excuse.  Finally, he tells them no more excuses for missing commitments – that you can ask for help or work it out ahead of time, but no more showing up on due date with hat in hand full of excuses.  I think this is not as frequently a problem in consulting organizations:  our customers are going to demand a certain level of accountability from us.  But I have seen that this is often a problem in Marketing organizations – precisely because there usually isn’t a customer picking up the phone when they miss.  As a result, it takes more internal discipline and willpower to create that sense of accountability.

Look for more in this space on staffing thoughts.  Because I think part of what Steve gets at is the motivation behind working – the “why” in Why we go to Work.  At this stage in the growth of BP3, we think about the why’s a lot.

In a previous post, I discussed hiring “heroes” and putting the band back together. This seems like a good time to revisit that thread, but this time, let’s focus on what it means to have an experienced team.

Businesses are always advertising “experience”. I think we could all agree that years of experience is also not the only interesting metric to look at. But just for argument’s sake, let’s address it. I want to spend a moment debunking some of this:

1. You’ll see a local company advertising that they’ve been in business since 1950, for example. But then they don’t tell you that someone new bought the business two years ago and all the staff turned over. So, really, its a 2-yo business that is trying to leverage a 50+ year history.
2. Consulting firms will often tell you how many “total” years of experience they have. “50 years of experience in software” – but of course if they have 50 people that’s an average of 1 year of experience per person… which sounds a bit less exciting. If its two people, that’s a bit more interesting, isn’t it?
3. Companies will assign their “general” software experience to a “specific” software category, and conflate the two. For example, after doing 10 years of software deployments, and 3 years of BPM deployments, someone might say they have 13 years of process-oriented software deployments under their belt. Not an outright lie, but it sure is misleading, isn’t it?

I think the only meaningful measure of experience in consulting is the median level of experience. That measure will tell you that if you get a resource from this organization, half the time you will get this much experience, or more. Of course it would be nice to have a full distribution graph but we can’t really expect companies to provide that level of detail on a regular basis :)

At BP3, we think we have the most experienced BPM deployment team in the business. Our median software industry experience is 16 years, and our most experienced technologists don’t shy away from writing code, either. Our median BPM deployment experience is 4 years (and climbing). You work with BP3, you’re working with people who know how to develop BPM solutions, who have done it before, and have the scars and smarts to show for it.

But is years of experience really the measure to focus on? Well, it certainly tells an important part of the story, but the other part is to answer the question of what kind of experience? in a meaningful way.

The answer to that is pretty straightforward for BP3. We have, on our staff, the guy who authored Lombardi’s deployment methodology, created the Lombardi On Demand Assistance (LODA) program, and created the Business Process Analysis function at Lombardi (previously “Transformational Services”), and expanded training offerings to include method training. We also have the guy who ran all of the technical delivery functions in Lombardi professional services for 4 years, and hired most of that team. We have the primary driver of Aflac’s award-winning BPM deployments on our team. We also have the former leader of LODA at Lombardi for the last 2 years. Each of us has had critical experience helping customers get BPM software deployed, and helping customers realize ROI from their BPM initiatives.

In addition, we’ve each had compelling, high impact roles prior to our work in the BPM space. We have a lot of relevant experience about how to focus on high-impact changes to business processes, and a lot of relevant experience about how to translate process into a solution represented by software.

If you need help with your BPM initiative, give us a shout.

Gartner published an article about the lack of skills needed to implement Business Processes, as well as 11 steps to take to determine whether you should source your BPM projects internally or externally.

As an early colleague of mine used to like to say:  “The Genius of the And” (if I remember right, one of the principles from “Built To Last”).  Even if you have the internal skills to staff a BPM project, you’re likely to want to bring in a vendor-specific expert or an outside expert on process improvement for fresh perspective.  And if you’re a company that prefers to outsource these projects, you are going to benefit from seeding that external team with a well-informed person inside your own org, someone with a lot of institutional knowledge but also the confidence to buck conventional wisdom.  In other words, a little of both internal and external is probably the best of both worlds…

Regardless of what you decide, don’t lose sight of the importance of the partnership between business and IT on these projects.

Good article on SearchCIO.com last week. The first paragraph points out the challenges:  lack of internal resources, and internal politics.  The second paragraph brings up another: complexity.  Of course the article goes on to point out that the challenges are worth it, because the rewards are significant and measurable.

The points are a bit obvious:  BPM is “new” in IT circles, relative to other technologies in use.  It also is a bit “different” in that it isn’t just a new programming language (in fact, it *isn’t* a new programming language), but if done right, it requires a different way of doing things, in that some of the traditional boundaries between the business and the folks who write code for a living are broken down.  It also tends to require a little more agility from the integration specialists and database specialists than traditional application development efforts. The approach is closer to an Agile development approach than a traditional software development approach (although I’m not big on the particular religions of software development methodologies, Agile is at least a close proximity to the implementation style you want to adopt).

Finally, BPM isn’t something the kids are learning in college.  Hiring someone fresh out of school (graduate or undergraduate) isn’t how you jump-start your BPM expertise, as you might have previously jump-started your Java expertise or Ruby or Rails expertise.  With BPM, you might or might not use those technologies, but the skills and knowledge you need to have a handle on include:

• BPMN
• Process Mapping
• ROI
• Measurability
• Prioritization
• Abstraction
• Staging / Incremental Improvement
• Technical prowess for web services, thin or thick user interfaces, Java API’s, XML, Databases

The complexity of deploying BPM often comes from the cross-department, cross-functional nature of the projects.  The typical analogy is that the process is the elephant and each group within the process is like the blind man feeling their part of the elephant and trying to guess what the whole process looks like.  We have to get these constituents into the room and complete the picture.

The lack of internal staff with these skills or experiences is most likely because these kinds of cross-department and cross-function projects are rarely embarked on.  Most of the members of your IT and Business teams may not have worked on such a project (and their previous experience may have made them gun-shy).  That’s the time to pull in some outside experience- and if you can get both generalized experience with BPM projects, and specific-vendor experience, from the same outside firm, then so much the better.  You’ll be better served by firms that aren’t interested in backing up the bus and unloading a whole bunch of consultants, if you’re goal is to have a core competency in Business Process roll-outs, or BPM.  Instead, you’ll want to find firms that will augment your team, will reduce your risk, and will be available for the long-term, on your terms, to assist your process efforts.  In our experience, most companies start with one project, and then expand to two or three parallel projects in the next iteration.  So, even as internal staff are getting ramped up, the need to leverage outside expertise across those projects (risk mitigation) actually increases at that point, even while the percentage of outside help relative to internal resources actually declines as the internal expertise builds up.

If your organization is one that outsources non-core competencies, and BPM is not a core competency, then you can also work with a firm who will staff up as you need more work done, and stand down as your work winds down.  At BP3 we’re interested in business continuity contracts where we maintain a long-term relationship with our customers and help them through high- and low- tides both with initial development as well as ongoing maintenance and support.  Doubtless we’re not the only ones interested in providing this kind of white-glove service.

We just had our first internal videoconference between HQ and our Atlanta office.  Well, that’s how we like to refer to Flournoy when we’re not calling him BP3-East.  We made the decision to invest in Videoconferencing equipment because it is really important to have high fidelity communications both internally and with our customers.

When I was at Lombardi we built a distributed geographic technical team based on the belief that high-value, high-touch interactions with customers were crucial to building lasting customer relationships.  That’s a really hard thing to do right when you are starting from a base of 2 or 3 staff members, and don’t have the national network of people to draw on.

At BP3 we’re going to attack this in two ways.  First, we’ll hire geographically again, I have no doubt.  We have a better national network to tap into this time around, and some of our colleagues from Austin have moved to other cities, and might be able to help us find the right people.  Second, we’re going to invest in videoconferencing equipment.  We think it will enhance the quality of our offsite work with customers, and likely it will somewhat reduce the need for travel expenses.  It also sends a powerful message to our team that we’re interested in their quality of life and their ability to do good work remotely.

Videoconferencing still isn’t cheap (can’t wait til its under $1000/seat), but I was pleasantly surprised at how affordable it is compared to what it cost 10 years ago, for a better product.  And with the cost of travel increasing, videoconferencing looks more and more affordable by comparison.  Oh, sure, you can go the <insert favorite IM chat client> route, but the fidelity of such video connections is generally terrible, and certainly not good enough to show someone at a remote location what you’re drawing on your whiteboard.  We went with a Lifesize system.  Its high-def, the quality is fantastic (720p), and with remote control, the person on the other end can zoom into our whiteboard to see what you’re drawing.  Voice is included in the video/audio stream, so there’s no need to place a separate voice call.  And there’s no per-call charges because it all goes over IP (over your network).

We’ve been pleasantly surprised at how many of our customers have videoconferencing setups as well.  Often these are underutilized assets, but there’s no reason for that to be the case on our projects!

I want to thank good friend Megan Lueders for giving us a demo of the system and getting us to take this seriously.

The other day an old friend dropped me an email.  He wanted to talk.  The next day we got on the phone and and we spent some time catching up.  This is someone I’d been trying to hire for years, and he tells me he is leaving his current job and looking for his next job…

Him:  So before I go looking for another job, I want to find out more about what you guys are up to down there?

Me:  We’re putting the band back together.

Him:  Oh yeah?

Me:  (listing the people we’ve hired or put on contract)

Him: Wow, sounds like it!

Me:  You still got that trumpet?

Okay, I didn’t really say that last line.  When I mentioned the conversation to Lance, he quoted another famous line from Blues Brothers:  “We’re on a mission from God.” (picture deadpan delivery here).

So yeah.  We’re putting the band back together.  We’re finding people we’ve worked with over the last 5+ years that we really found rewarding to work with, but for various reasons moved on to other things or took a different path.  We have a new value proposition to offer them, some additional independence, and a chance to get onto really exciting wave building in BPM.  And we *are* on a mission from God (so to speak): spreading the BPM gospel is the mission and we’re dedicated to the cause, because we see the ROI.

On a related note… At Lombardi’s Driven 2008 we heard a lot of talk about “unicorns” and “heroes”.  There seemed to be a concern that BPM deployments relied too much upon these mythical “unicorns” that could understand the business processes (and the business people themselves), convert them into BPM Models that the business could understand AND that could be implemented in software, and then could implement those models in software of your choice… and then they could help you with systems engineering, architecture, database work, J2EE, Java, XSL, XML, Javascript, AJAX, etc.

And we heard about Heroes.  Those guys that can run a project, sling some code, mentor the team they’re working with, and deliver the project successfully. The implicit negative was that all this might happen in the absence of any adult supervision or structure.

The outcome of these two “problem statements” – not enough unicorns, not enough heroes, therefore, difficult to scale – was a hypothesis that the way to combat this problem was to refine the roles that people on BPM deployments play so that perhaps more people can participate in the process of building out processes.

We don’t fault anyone for embarking on this strategy.  It makes a certain amount of sense (especially when you’re trying to get quite large, and manage that growth).  However, its not what BP3 is about.  We’re putting the band back together.  We’re hiring those heroes, those unicorns.  Those people that have the capability, accountability, and discipline to do it all.  And we are hiring people that have the potential to be “heroes” or “unicorns”.  We believe we know how to foster the right kinds of experiences and growth opportunities.  We believe we can create the right culture, that leads to the development of these all-around players.  Partly we believe this because we’ve done it before, at more than one company.

And we believe when people pay for our services, they want the best, and they want experience.  Which is what they get – the most experienced team in the BPM business. We’re not interested in scale for scale’s sake.  We want organic growth and quality growth.  We’re putting the band back together.