The Problem

A good friend, John Reynolds, has eloquently commented on a subject near and dear to my heart: Leadership.  More specifically, Project Leadership vs. Project Management:

My job lets me work with talented programmers and business people all over the world.  These folks all know their jobs – the programmers know how to write good code and the business folks know how to run their business – but when you bring them together they often can’t get a project finished.

The objective of all projects is to deploy Business Solutions. Requirements grow up to be Plans, Plans grow up to be Projects, but many Projects just don’t grow up to be Solutions. Like the Energizer Bunny, these Projects just keep going and going and going… but they never get anywhere.

I blame a lack of leaders.

John has captured the essence of the problem.  The projects that become successful solutions have leadership.  And this is something we’ve written about quite a bit. BPM especially requires leadership because you’re asking different constituencies to play nice together, despite the fact that the changes wrought by BPM will have uneven benefits and consequences.  The leader can coerce, cajole, persuade, confront… and can bring the resources and willpower to the project to get it done.

Leaders: Born or Made?

I fear that leaders are born, not made (although training certainly helps improve them).  When a project is stalled, a hero can’t just “take charge” and get a project back on track.  Leaders aren’t leaders without followers.

There have been many variants of this debate with regard to athletes, entrepreneurs, CEOs, leaders.  I come down on the side of nurture more than nature.  I’ll not deny that we are each born inheriting our own gifts, bestowed by our parents.  But how we develop and hone those gifts and shore up weaknesses it what makes us the adults and professionals we grow to be.

A Solution?
How do we develop leaders?  We might first ask, how do we develop heroes?

Step 1: expose your high potential team members to people you consider to be heroes.  Let them work in the proximity of great contributors to learn what it means to be a great contributor.  Try to awaken in them an awareness of what it is that makes the hero admirable, and an awareness that they, too, could be a “hero”.  Work with them to leverage their strengths.  Let them learn by following the example set by your heroes. Give them opportunities to succeed AND fail.

If I can distinguish between a hero and a leader – a good hero “leads by example” – not by consciously thinking about leading, but by doing all the things that we would want others on the team to do.  They work hard, they are focused on what’s good for the team, the project, the company.  They care about their colleagues and will help them.

The first step in evolving a leader from a hero, is to create self-consciousness (let me explain).  We have to wake in the hero, that self-awareness that they can lead intentionally, rather than unconsciously.  The key difference is intention.  A leader intends to have the effect of leading others.  A hero may lead others but isn’t intending to do so, and may even be alarmed and uncomortable when it happens.  There is a fear of responsibility, fear of failure, fear of letting others down.  If you want to foster that leader, give them the opportunity to succeed and fail.  And invest in teaching what you expect from leaders, and what their team will expect.  It takes a fair bit of coaching or self-awareness, but people can learn to lead.  I’ve seen it happen, and I’ve seen it happen even within our own projects among the customers we work with.  Soon, someone walking the path to becoming a leader, acting with intention, will learn from the feedback loop of consequences.  They’re on the path.

This is important because, for BPM to continue to grow and succeed, we need a lot of leadership.

John has a few more important points to make:

What we need are Project Leads… People who command the respect of both the Business and Technical folks.  We need people who have met both Business and Technical challenges in their careers, and who can show all of us “how to get there”…

That’s why we lack leaders for our projects.  There simply aren’t many Business people in the world who are respected by Techies, and not many Techies in the world who are respected by Business people.

This is not by any means an easy problem to solve – but if we want success for more of our projects, we need to find more of these leaders.

This is why, at BP3, we have tended to focus on developing our technical heroes into leaders who care about business.  But we also try to make sure that they understand the value that business leadership brings to the table, so that we’re ready to embrace it when we find it within our team or within our customers’ and partners’ teams. I agree with John: not an easy problem to solve, but sometimes the ones that are worth solving aren’t easy.

According to the Kansas City Business Journal, 40% of US Professionals want to quit.  Wow.

But lets turn out attention to why so many professionals want to quit: their employers view them as a liability rather than an asset (read the article, it is there, between the lines). And with all the layoffs over the last 18 months, there’s more work spread across fewer employees.  In an environment of more work and stress, and fewer bonuses and benefits, we can understand why people might want to quit.  I’ve heard people say that someone should feel lucky to have a job- but equally, the employer should feel lucky to have their employees stick with them through hard times. It is, after all, your best employees who can still leave when the economy is down, and find a new job.

In another post, I tried to explain the dark side of the staffing service “body shops” out there: BPM experts are not a commodity, despite their best efforts to treat us so.  The big staffing firms I previously wrote about are also not committed to their people in any meaningful way.  When a project kicks off, the firm staffs up via hiring and contracting. But what happens when the project is over?  At these big firms, they just let go of all the people that can’t immediately place on another project.  People aren’t an asset to these firms, they’re a liability:  An obligation to pay salary and benefits. This is especially true of firms based outside the US who  leveraging local resources on a temporary basis (the locals are staffed up and down for each project independently in many cases).

We recently reached out to colleagues from a previous project – and we weren’t going to be surprised if they weren’t still working with the same customer.  But you could say that we were surprised they didn’t work for the big consulting company any more.  You might be thinking, sure, some low-level programmers got let go when the project finished. But no.  We’re talking about the people who were entrusted with running the project and managing the customer relationship.  Rather than leveraging their talents in another project, they were shown the door.

It must, at times, be hard for people who work at Fortune 500 companies, with a wealth of people walking their halls that have worked more than 10 years at the firm to understand the amount of turnover that happens at a typical big consulting body shop.  Or to understand how these firms put their teams together on short notice, and disband them equally quickly.

As a small firm, we sometimes have to hire talent to meet the demands of a project, but we’re hiring talent to reach a new plateau, and we’re taking on a commitment to continue their employment beyond just the project (otherwise, we’d just offer a contract).  We just celebrated a colleague’s one-year anniversary at BP3, and he’s about to embark on his 4th project with us.   And it isn’t a burden to pay salary to these employees. They’re our only real asset as a firm – their knowledge, experience, and commitment to our customers.

I hope in this time of economic turbulence, more employers will realize how much their people mean to their success.  And I hope we never forget that at BP3.

Great post by R “Ray” Wang on Enterprise Irregulars about building a “Star Analyst” Firm.  While it is targeted at star analyst firms, most of the points apply well to any services firm that intends to trade on the idea of being “stars” in their requisite space. Tenet #1:

Almost everyone I spoke with began by saying, “Start with star talent.  Don’t make compromises on B-players.”  Then they added, “Most will fail to keep this up over time because the firm gets greedy and focused on leverage instead of client quality.  Keep in mind, if you lack stars, you won’t attract stars.  Set high standards for recruitment.”  The experts are right.  Buyers, sellers, and the media have to recognize your team as market leaders.

I couldn’t agree more.  It is exactly why, when we started BP3, that we started by thinking about who we wanted to talk to and build our team with.  It is also why we focus on what Ray refers to as “Star” potential.  Lombardi used to refer to these people as “heroes” – the people who could do it all: technology, process improvement, coaching, and thought leadership.  There was also a note about alumni.  I agree with Ray that it is important to recognize that people will leave over time – and to keep in touch with that alumni network.  By taking an active role in two previous employers’ alumni efforts, our business at BP3 has benefited directly and indirectly.  Of course, that wasn’t the goal, but it was one of the side-effects.

Mike Gammage posts the question:  is BPM ethical?

Against this background, the hard reality is that the business case for any significant BPM project is almost invariably based on job losses.

The jobs may be lost through automation, or through productivity increases.  The BPM project will typically enable the same work to be done by fewer people.  More positively, the BPM project may enable the same people to do more work – that is, there are no jobs lost immediately.  But, even so, the societal effect is not dissimilar because economic growth will now create fewer jobs.

Put crudely, and for the sake of this argument, BPM seems to be a job-killer.

Now I believe, as will many of you, that work is about far more than simply generating wealth and meeting basic needs. Work provides each of us with a role in the community, it enables us to develop our talents in service to others, and to contribute to the advancement of society.

So it’s a serious question that deserves attention: Is BPM – my work– ethical?

I commend Mike for undertaking a post on this subject.  I have a few thoughts for him to consider when he returns:

1: Competition is the Job Killer.

The first thing to realize, is that BPM isn’t the job killer.  The job killer is the competition for your customers. If you can’t win that competition for customers, you will have a massive dislocation of jobs.  That competition is faceless and unrelenting, unfortunately.  You don’t get to look into the whites of your competition’s eyes and try to agree on a reasonable pricing model – if you do in the US, it is called collusion or anti-competitive behavior (there are similar rules in other locales).

So you have to invest in improving the cost structure and performance of your business, in order to remain competitive.  BPM is a tool to do that.  Just like Microsoft Word and computers put a generation of typists/secretaries out of work, BPM and other software will put a generation of manual paper-movers out of work (or copier repairmen perhaps?).

2. BPM can Save the Jobs of the People you know

A Good BPM implementation can save the jobs of the best people in your company.  By making each unit of work more valuable, it is easier to justify paying them, even increasing their pay.  You’re increasing their economic value add to the system.

Moreover, if the people doing the work become the people improving the work, they can really maximize their positive effect on the business. It also frees up labor to focus on other value-adding areas of the economy (though, I’ll grant, that is an easier macro- than micro- argument – individually not everyone can make the shift, and not everyone has the savings to bridge the gap – which is why I’m a big fan of unemployment benefits and insurance).

Finally, if you can sell the value of these process improvements to your customers, you can actually use process improvement as a way to increase your top line, not just your bottom line.

3. Manage for More than one Bottom Line

BPM and the like can help you achieve more than just cost savings – BPM can help you more reliably achieve any outcome you set out to achieve – higher customer sat, a higher net promoter score (NPS), reducing impact on the environment, increasing customer lifetime value, etc. This is sometimes called the “Double Bottom Line” or “Triple Bottom Line”.  But realizing that your business is about more than just money, why shouldn’t you use process improvement to increase your odds of hitting ALL your business goals rather than just some of them?

Although BPM causes us to examine what we do, and second-guess the positive outcome, I believe overall it is not only ethical but necessary.

Inc. has a fantastic article adapted from Tony Hsieh’s upcoming book, it is a riveting read, to me. Tony and his CFO championed a culture as the key means of differentiation in the difficult online shoe and apparel retailer segment.  Competing against Amazon online isn’t easy.

What makes Zappos different is that they don’t compete on price:

Zappos sells shoes and apparel online, but what distinguished us from our competitors was that we’d put our company culture above all else. We’d bet that by being good to our employees — for instance, by paying for 100 percent of health care premiums, spending heavily on personal development, and giving customer service reps more freedom than at a typical call center — we would be able to offer better service than our competitors. Better service would translate into lots of repeat customers, which would mean low marketing expenses, long-term profits, and fast growth. Amazingly, it all seemed to be working.

They compete by differentiating on service.  And they’ve bet that by taking exceptionally good care of their employees, that that would translate into better customer service.  By all accounts it was working quite well, but the board wasn’t supportive of “Tony’s social experiments”, but rather tolerated them as long as things went smoothly and the risks to the business weren’t too great.

I think it would be too easy for business owners and managers to conclude that Zappos, and by inference, Tony’s “social experiments”, failed because they sold to Amazon (albeit at an attractive price).  I believe precisely the opposite is true – that they were able to command north of a $1B value precisely because of the culture they created – which made them both an interesting business for Amazon to acquire, and a separate culture which Amazon would find worth preserving (despite the normal tendency of acquirers to stamp their culture upon acquisitions instead).

At BP3, we also pay 100% of insurance premiums.  We invest in our employees’ retirement plans (through matching – not just through paying the administrative fees) – more companies should be doing this.  But we’re also looking to increase our investment in other team growth opportunities – including events like bpmCamp.  We’ve invested here in there in other personal development opportunities but if I’m honest, we haven’t done enough yet.

As a professional services firm, we can relate to Tony’s thought process on culture.  If you take care of the people who touch customers, you are, by inference, taking care of your customers as well.  If you take the people who touch your customers for granted, you are borrowing trouble and relying on people to swim upstream to provide a positive experience for their customers.  You’ll find it harder to retain the best talent, and you’ll find your competition acquiring the best talent.

Taking care of your team is job 1. My hat is off to Tony and the whole team at Zappos.  We’ve been fans, and we’ve been happy customers, here’s hoping that Zappos continues the culture crusade into the future.

Business Insider reports on wage increases at Foxconn:

WSJ reports that according to a company announcement, minimum wage workers may see a more than doubling of wages, while others will see at least a 30% hike — previously the company had indicated a 20% wage hike to deal with the problem, so this is already an expansion.

I’m curious if this is going to stick at Foxconn, and if it will affect wages in China generally.  If so, I think it is generally a good thing for China, for the potential growth of the middle class there, etc.  It may raise prices modestly here, but counter-balancing that it may also moderate downward wage pressures here as well.  Or, perhaps it will create pressure to put manufacturing in other locations around the world.  Time will tell.

Mark Suster (@msuster) makes a (somewhat) controversial argument that one should not hire job-hoppers.  Apparently what makes it controversial is the judgmental tone of the email, and the black-and-white nature of the initial statement.  The title of his piece?

“Never Hire Job Hoppers. Never. They Make Terrible Employees”

But, if you read it more carefully, and his comments below – he is quite clearly saying that some people develop a pattern of job-hopping.  If someone is a “job hopper” they will not make a good employee.  People take issues with both parts of his argument:

First, that you can determine (pattern match) on job hopping.  They argue for circumstances and exceptional situations.  But Mark really was quite clear that 2 or 3 of something does not define a pattern.  its 6-10 data points that define a pattern.  I think even if you disagree with his exact definition, you can arrive at your own definition of what a job-hopper is, and match people to that pattern (or not).

Second, that job-hoppers make for bad employees.  However, most of the arguments made on this point started by describing someone that would not meet Mark’s definition of a job hopper.  Moreover, Mark didn’t argue that these employees wouldn’t do good work, necessarily.  His argument is that you want to build a team that lasts – and these job hoppers can really undermine your company and your team’s morale when you are trying to get to exit velocity (and critical mass) at your firm.

I think Mark’s right.  Building sustainable value requires hiring people who share your values (select to the best of your ability), and who are interested in building the enterprise at the same time that they are building themselves.  When you have shared values and commitment, it is easier for the the employer to compromise to enable employees to reach their aspirations as well as aiding the firm in achieving its collective aspirations.

Some would argue that you can align long-term incentives that build with longevity – to encourage job hoppers to stick around.  But in my experience those incentives don’t work on someone in this job-hop mentality.  On the one hand, the rewards are too far in the future to motivate them. On the other, during any significant rough patch in the business, they may perceive those long-term incentives as being worthless or unattainable.

Its hard enough to retain people through inevitable troughs when they’re not job hoppers.  And employees, like investors, often buy high and sell low – joining a firm when things are great, and leaving when things are tough, but often right before the firm rebounds again to a higher plateau.

Having said all of that, I also feel that employment is not a blood pact, nor is it a marriage.  While you need people to stick around to grow your company, they also need the employer to give them enough leadership, financial reward, and emotional energy to be motivated to help you build it.  Its a working relationship based on mutual respect and trust.

Of course, lots of people follow Mark, and Paul Dix took it upon himself to have a full-blown response about hiring job hoppers.  He does make some good points, but misses the mark.  The basic argument he makes is that you should hire people that won’t stick around for more than a year, two at the most.  The most undermining point in the whole post: “…while I’m currently bootstrapping my own [company] and haven’t hired anyone yet.”  So really, Paul needs to go through the experience of hiring employees and retaining them before he can speak well to both sides of this equation.  Having been on both sides of the equation myself, I can summarize a few things nicely:

1. If you’re company is growing, it is easier to retain talent.  Sales fixes a lot of problems, because it creates opportunities for the people on your team.
2. When people stay less than a year, the company tends to burn a lot of resources on that employee without earning the investment back in revenue (or product improvements that will drive such revenue).  As a result, it is natural for companies to hedge their risk of hiring someone who is likely to leave quickly.
3. When you stay at a company longer, you definitely get the closed loop feedback of your own performance.  You can see if your customers are successful or unsuccessful.  You can see if your code performed well in production or failed miserably.  You can see if techniques you thought would scale, actually do.  You can see if organizational and hiring decisions you made actually work out – was that brilliant engineer you hired really a great employee, or just a great interviewee?  Sticking around gives you that data.
4. None of this absolves the company of the responsibility of making the firm an attractive place to stay.

I think the spirit of what Paul is missing, is that you’re trying to build something bigger than yourself – and you want to attract people to that cause that share that desire.  If you find people that fit your definition of “job hoppers” – by all means contract them if they can tackle specific problems or have specific skills you need – but don’t hire them, because it isn’t what they really want anyway.  Their goals and your goals as the company hiring, are too misaligned for it to work out well.

A conversation with a friend went something like this:

Friend: When are your HR folks going to act on “Descriptions will be added soon”

Me:  Oh, actually, I think *I’m* the HR person that needs to update the descriptions.

Friend: in that case, when will u describe the role of a process improvement consultant?

Me: Good question. I wonder if we should describe it on our site or leave it a mystery.

I mean it.  Should we really explain what we want?  If I describe it all would anyone sign up for it? Am I giving away the secret sauce?  Maybe its better to leave it open ended and just describe it as it is: a person with the objective of improving processes.  We then veered into a discussion of roles.  Some of the analysts have proposed roles like the new business process analyst or the roleplay actor.

But there’s too much discussion of new jobs and roles to hire for.  We should be focused on developing our people.  Focused on skill, capability, and competency.  Ideally, all three in one person.  Too much focus on a specialist for every niche, rather than on investing  in creating exceptional multi-disciplinary team members.

And we got to talking about “generational differences”.  If you’re to believe the majority of media coverage, all the “millenials” are using twitter and social networking sites like crazy, running circles around their elders.  I really detest this sort of generational stereotyping, because it strikes me as intellectually lazy, prejudicial, and smacks a bit of endorsed age-ism (As an aside, I just listened to a podcast on Millenials from Forrester that quite literally made me cringe.  Mere words can’t describe it).  It also misses some interesting points:  the real professional value of all these networking tools is for people aged 30+, or more precisely, people with some work history in their chosen profession who have had time to make meaningful connections with colleagues from say, the last 3 jobs.  Quite a few of my 20-something friends don’t use Twitter and don’t see the point.  But nearly every business owner I know uses Twitter (most of those business owners are too old to be “Millenials”).

I’m always on the lookout for the intersection of startups and process.  And recently Mark Suster put together yet another great post, this one about how to put your technical team together for your startup.  And specifically, the difference between your CTO and VP of Engineering.  He also has this fantastic graphic:

Engineering Team

To quote Mark:

“…In my view it is important to distinguish the difference between the CTO and the “VP Engineering.”  Because these titles are so often used I’m sure that some people will have hardened views about what they mean that are different than mine.  But for non-technical founders let me offer you a definition that you can use when you build a team.  The VP of Engineering is the person who still has great technical chops but prefers not to be a coding monkey (that term is meant in the most endearing of ways).

The VP Engineering aspires to manage teams.  They feel comfortable with C++ but also have a black-belt in Excel.  They are sticklers about managing unit tests, system tests and regression tests. In fact, they are passionate about automating testing overall.  They know how to estimate work units, how to manage the agile development process and how to get the most out of their teams.  VP’s of Engineering are essential to making sure the trains run on time.  The VP of Engineering is also your primary interface to your head of product management and often the VP of Engineering is somebody you would drag in front of clients to win big deals.

And first and foremost a VP of Engineering is a people manager….”

As Mark puts it, the CTO is your purist, a hardcore technical visionary and perfectionist.  Your VP of Engineering is about process, and values scaling the organization and having repeatable systems and processes.

One of the most anticipated sessions at bpmCamp was a discussion on off-shoring.  It had one of the highest turnouts of day 1. There were some interesting observations from the discussion :

1. Everyone agreed that daily communication across multiple mediums was a must: phone, email, instant messaging, screen sharing.
2. Structure helps: Daily SCRUM sessions, for example.
3. Bringing offshore folks onshore for a while helps – consensus is that this is more important than the reverse, though both are good.
4. Despite having productive off-site working relationships within the US, several participants reported a drop-off in productivity when going off-shore – despite no obvious logistical/infrastructure difference besides timezone.
5. Integration and collaboration among the teams is vastly more important than documentation and specifications.  The trend toward increasingly exact specifications to manage off-shore resources mirrors what happened with software development methodology in the US many years ago – with increasing gateways and overhead, and slowing velocity and innovation. (This led to a waterfall backlash, and the popularity of Agile software methods)
6. There’s a lot of potential in the follow-the-sun model, and in cost-savings.  But the challenges to productivity are real.

My own advice: when off-shoring, work with firms that do BPM deployments locally, for local market customers.  The adjustments they have to make to do a remote-BPM project are less-severe than the adjustments technical staff have to make from traditional IT projects to BPM projects.

Theo Priestley once again has me thinking with this post asking “Is This the End of BPM Centre of Excellence?“:

There are two trains of thought at play. In recent interviews on Redux, Vinay Mummigati of Virtusa said “A BPM center of excellence (COE) is an absolute must for organizations planning to adopt BPM across the enterprise. As companies adopt BPM in more than a single department they often start seeing challenges in terms of standardization, scalability, performance and governance.”

And yet there was a completely different perspective taken by Max J Pucher of ISIS Papyrus who stated “…if there is one thing that Social BPM could knock down, it is the Process Center of Excellence and the related bureaucracy overhead!“

Ever a pragmatist, I would suggest that inside any firm that can adopt “social” media techniques, the Center of Excellence has to adapt its traditional role.  Instead of being primarily a governance and gatekeeping organizations, the mission should be re-defined as:

• Providing expert resources for BPM initiatives to draw on – no matter how much participation and spread of BPM skills, there will always be process improvement specialists who have more knowledge and context than the average participant.
• Providing social infrastructure for collaboration – wikis, BPM collaboration platforms, Sharepoint sites, email lists-  whatever is most appropriate for the organization. Lower the barrier to entry for collaboration among your BPM practitioners, users, and participants.
• Encouraging and Curating the content generated from “Social” BPM and collaborative activities.  Knowledge workers need positive reinforcement for their participation in social BPM, and with the greater volume of content the CoE’s role will shift to be more editorial rather than primary authorship.
• Breaking down barriers to communication and collaboration, rather than creating new chains of command and approval.

It isn’t that there isn’t a need for experts-  there is!  But the role of those experts changes from manager-governor to coach-collaborator.  Of course, being an outside consultant, this isn’t a stretch for us to see the writing on the wall -because this is the role we already play for our customers.

Ben Horowitz writes in “Four Things Some VCs Do That I Don’t Like” one thing in particular which really resonated with me:

VCs often confuse marginal social courage with real courage. For example, they think CEOs who fire people easily are tough. I’ve fired dozens of people and laid off hundreds. None of them was easy—not a single time. Having an easy time firing your loyal employees indicates a lack of courage and a lack of leadership. More specifically, it indicates a lack of willingness to really understand the negative consequences of those actions. If you fire people easily, you likely lack the toughness to look in the mirror.

(My emphasis on the last sentence).

This statement gives me great insight into the character of Mr. Horowitz.  Because firing people *is* hard.  And when you have to do it (for performance or for financial reasons), you do it with heavy heart.  As he says, courage isn’t doing things easily.  Courage is doing the hard things even though they’re hard, if they have to be done.

Ted Leonisis of Newsweek writes about Google’s decision to stop filtering search results in China. In the first half of the article he focuses on this decision by Google and why it might be the right thing to do (for Google).  He points out, rightly, that this type of gesture would be meaningless if you couldn’t “keep the lights on,” but if you have the financial means, then he makes a persuasive argument for Google’s decision.

His take:  while Google has imperiled billions of dollars in future profit (in China), it has rendered itself “a happy company at peace with its values—and happy companies are more, not less, likely to continue being successful.”  This statement really rings true with me.  There are definitely companies that thrive on adversity and conflict, but companies in general seem to be more successful when their business and their values are in alignment.  I believe this is true regardless of what your values are – if you run a cut-throat competitive business, it is best not to shy from conflict inside the four walls of your company.  If you run a customer-service oriented business, its important to take care of your employees.

Ted also uses the example of AOL to illuminate: the mission at AOL transformed from bringing the Internet to everyone, to making the next quarter’s numbers… and many important business decisions were made that did not align with the higher calling of the company.  The separation between a company’s actions and its mission can also happen when the mission is achieved (either by your firm or others) – for example, with AOL, Internet access for everyone has happened – it just isn’t AOL that made it happen after a certain point.  For Microsoft, a computer on every desk is a reality – they’ve succeeded so well that they need a new higher calling to bind the company together.

Of course you can create motivation that lasts months or years around a competitive threat – no doubt the xbox folks could put their sites on Sony and Nintendo to motivate for years.  But what drives Nintendo is, I would argue, a better core mission.  If I had to state it, I’d call it “making gaming fun for everyone.”

Ted refers to his way of thinking as “double-bottom-line thinking.” If you expect these decisions to be non-capitalistic, then you misunderstand the logic behind his thinking.  For example, he raised prices at Washington Capitals games because he wanted to build it into a franchise that could succeed – and lower prices would only further damage its financial ability to achieve success.

This “double-bottom-line” thinking is central to the way we look at bp3′s business as well: we really believe in improved business processes, this is not just a shortcut for us.  We also focus on taking care of our team – because our team takes care of our customers.  When friends and colleagues who run their own businesses ask how we can justify paying for benefits like health insurance or 401k matching, I ask them if they are sure they can afford not to.  We believe we’re managing to our double-bottom-line, but it is something we need to revisit periodically to assess.

This “double-bottom-line” thinking is something that is not often weighed in process improvement projects, but perhaps it should be.  If we just squeeze the process without considering how to make the net result better for customers, and to align the process better with the higher calling of the company, then we might be missing something terribly important.  Aligning with both mission and the bottom line requires first, asking a question: “how does this align with our mission?”

(Note: there is a whole segment of BPM to address this, and other priorities, and how they feed into business planning: the business motivational model, or BMM )

Preamble

With the thinning of the herd of Pure Play BPM software vendors, and with the energies of firms like Oracle and IBM behind BPM, I think two predictions we can reasonably make are:

1. BPM software will be pervasive (or pervasively available).  IBM, Oracle, Pega, Progress, Software AG – they’re all going to move a lot of BPM software.  And of course it looks like open source offerings are going to be more prevalent as well.
2. BPM software is going to get better – either because the big stack vendors invest in the new products they’ve acquired, or because the remaining pure play vendors continue to innovate at a faster pace and grow, or because open source solutions will lift the bar for the minimum requirements that all the BPM software suites have to match.

Why Pure Play BPM Consulting?

But the other prediction we can make, is that there is a growing need for specialty BPM consulting firms – or, dare we say it, “pure play” BPM firms.  These BPM consulting firms are all about BPM – and not about being all things to all people. Nearly all of the points I’ll make about BPM pure play service firms likely apply to pure play services firms in other market segments.  The advantages:

• They really “get it” with BPM – and they’re willing to explain it to customers, they even evangelize to people who might never be customers.
• They’re really invested in understanding the BPM space – which pays dividends over time. Their staff don’t go from BPM project to integration project to database architecture project – they’re transitioning from BPM project to BPM project. It takes time and patience to develop a deep practice in BPM, and it takes time to develop a deep bench in any services business.
• The right methodology and tactics to get BPM projects successfully deployed. And after all, success is what we’re after…
• Really deep expertise on at least one BPM software suite – every product suite has its own strengths and weaknesses and you want staff that knows what those are before they start your project.
• Process improvement staff, that understands how to marry improvement methodology to BPM Software.
• They are “high touch” - high quality, long-term relationships with customers are more important than chasing the next shiny deal, because they’re not selling software…
• Experience, quality, focus, and vision. Not volume.
  

Pure Play BPM consulting firms also fill the void left by pure play BPM software companies being purchased by the Big Software companies of our day – previously these pure play firms had staff focused on BPM alone, but now that they’re part of a bigger machine, focus will be diluted within a much much bigger team.

It’s hard to imagine the big guys matching this focus – not that they can’t afford to, but just because they have so many customers, and so many products, and so many people, that they’ll always depend on specialists (pure plays, if you will) to augment their teams of business and technology generalists.  These general purpose consulting, outsourcing, and off-shoring firms just don’t bring the BPM-specific focus to the table.  As such, customers will continue to need pure play service providers to bring that depth of experience and focus to the table.

Requirements Risk

The BPM Pure Play consulting firms know that you can’t throw requirements over the wall to 50 guys offshore to build the software to meet those requirements.  That’s very old-school separation of responsibilities, but it is based on a lack of trust between the parties – requirements have to be thoroughly specified before anyone can start working – and all the work has to be exactingly matching the requirements or it isn’t accepted.  Keep in mind that the biggest risk to any project is that the requirements are wrong; any methodology that puts off finding out the bad news is going to increase risk.

As my friend and colleague John Reynolds pointed out in the comments on my previous post, so much of this is about Trust.  The pure play firms understand how to build that trust with the business by building the solution in the same room, and doing frequent playbacks of the results of their labor.  Iterations and Accountability are the watch-words of these engagements. It doesn’t take 50 people to get the process right, it takes just a few of the right people in the room, and they have to be brave enough to hear the feedback of the business on a daily or weekly basis, and then course-adjust.

Prioritizing

Another issue: the big firms don’t know what they are not.  They’re trying to provide any service their customer needs. Pure play BPM services firms don’t need to increase their own footprint on the project by capturing non-BPM work, because the universe of BPM consulting work is already so much bigger than their ability to capture that business.  Sure, an increased budget will be good for the bottom line of any services company.  But a pure play services firm can be relied upon to turn down work that isn’t in their sweet spot – or at least to advise you that you are asking the firm to take on work that isn’t their strong suit.  Pure play services firms (not just in the BPM ecosystem) can afford to turn down work because they know what they are, and more importantly, what they are not.

Where did we get these crazy ideas?

These aren’t revolutionary ideas – they’re well known and understood and tested in industry as best practice (and not just for BPM projects).  But the general firms just can’t adjust from a world of 100+ person projects to a world of smaller, independently motivated teams engaging in highly value-added projects that act independently – it just isn’t part of their business model.

The BPM Pure Play service firms are the tips of the spears in a sense – the vanguard of experts that increase your odds as a customer of punching through the inertia and hitting the target of success we’re all aiming for.  The BPM ecosystem needs that ability to cut through the noise and focus on what matters most.

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.