Sunday, April 12, 2009

How to Create a Successful Web Site For Nothing (or Almost Nothing)

http://online.wsj.com/article/SB121803326363016929.html?mod=psp_editors_picks

By VAUHINI VARA

Have you got eight hours and $10? Then you can build a Web site for your business.

Thanks to competition among Web-hosting providers, and the falling costs of Web storage, it's never been easier to get a Web site up and running -- from buying the domain name to building a site to setting up a payment system to tracking traffic.

But many small businesses still seem intimidated by the job. In a survey published last year, JupiterResearch LLC found that just 36% of online small businesses -- that is, businesses with fewer than 100 employees, where managers access the Web at least once a month -- have Web sites.

So, here's a guide for owners looking to make the leap online. We'll lay out all the steps you need to take to build your site, and present some expert opinion about getting it noticed and keeping track of customers -- all with no technical background required.
1. BUY A WEB ADDRESS

First, you have to buy a domain name -- e.g., YourCompany.com -- for about $10 a year. As an example, we'll show how to buy a domain using the registrar Go Daddy Group Inc., but you can shop around at others, such as Tucows Inc. and Register.com Inc.

Type the domain name you want in the search box at GoDaddy.com. If it's taken, try another. When you've settled on one, scroll to the bottom of the page and click "Proceed to Checkout." Ignore the offers for additional products and services, continue to the checkout page, enter your payment information and hit "Checkout Now."

You're now the owner of a Web address.
2. FIND A HOME

For years, companies have charged small businesses a fee to "host" sites -- store the sites' content on their computers. According to a recent survey from Jupiter, about a third of small-business executives say they pay up to $1,000 a year for Web hosting, and about another third pay more than $1,000.
Boost Your Ranking
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PODCAST: WSJ's Vauhini Vara talks with search-engine-optimization expert Bruce Clay about how to boost your site's ranking on Google and other search engines.

The Journal Report
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* See the complete Small Business report.

Fortunately, in the past year, a number of companies have begun providing hosting services free of charge. They often make money by charging for premium services or running ads on your Web pages.

All you need to do is visit the Web site for one of these hosting services -- such as Microsoft Corp.'s Office Live Small Business, Weebly Inc. or SynthaSite Inc. -- and enter a user name, a password and some other details. Then visit your domain-name registrar and tweak your settings so that your Web address points to the service you've chosen. The hosting service will give you instructions on how to do this.
3. BUILD YOUR SITE

Once you've got a host, you'll want to design your site. The good news: Most of the free hosting services provide tools that let you build a site quickly, without lots of technical know-how.

Among the things you'll need: a welcoming home page; an "About" page that describes you and your business; and a "Contact" page that tells people where you're located and how to reach you. The rest depends on your business. If you own a restaurant, you might include a "Menu" page. If you're selling a product, you might include a "Store" page where people can buy your wares.

Adding those things can be simple. In Weebly, for instance, click on the "Pages" tab, then choose "New Page." In Office Live, click "Web pages" in the top left-hand corner of the editor and choose "New page." In SynthaSite, click "New Page" at the top of the editor.

In each case, doing so calls up a blank page template, like opening a new document in Microsoft Word. Once you've created a page, you usually can add content simply by typing the text you want into the template and dragging and dropping graphics.

There are some downsides to these free hosting services. Each offers several dozen design templates, but you could still end up with a site that looks pretty generic, unless you have Web-design skills or hire someone who does. What's more, most of these services don't offer an easy, one-click way to add flourishes such as shopping carts or more than two columns on a page; that, too, takes some know-how. Mostly, you just arrange pictures, text and other elements, and that's it. And, sometimes, even doing that can be tricky for nontechies.

There's one more free and easy way to improve the design of your site -- using HTML programming code. Fortunately, you don't need to have programming skills to use HTML. All you need to know is that a block of HTML -- essentially, a bunch of gobbledygook words and symbols -- can add extra features to your site. And numerous third-party sites offer handy HTML blocks you can plug into your site, as easily as copying and pasting text in Microsoft Word.

Ali Shapiro, a health counselor in Philadelphia, recently found one such program -- an appointments calendar -- at Scheduly Ltd.'s site. She copied a snippet of HTML from Scheduly and pasted it into the "Contact" page at her own site, PyourNutrition.com. The result: Visitors to Ms. Shapiro's site can see a calendar with her free time slots and sign up for appointments over the Web.
4. GET PAID

Probably the easiest way to let customers pay you online is to let somebody else handle the technical work. One popular option is PayPal, from eBay Inc. The service lets people pay you by clicking a button on your Web site, which takes them to a PayPal page where they can enter payment information. You don't have to do any work to process the transaction.

The basic service is free, but you have to pay a fee each time someone pays you: 30 cents, plus 1.9% to 2.9% of the transaction. This basic service isn't fancy -- if you want to build a full-blown retail site, you'll probably want to buy special e-commerce software -- but to offer a basic payment option on your site, it's enough.

To set up an account, click on the "Business" tab at PayPal.com and follow the instructions. Once you've done this, click on the "Merchant Services" tab. Then, choose "Website Payments Standard," from the left-hand column.

You'll see three orange buttons you can place on your site: "Buy Now," "Add to Cart" and "Donate." If your customers are likely to purchase one item at a time -- say, a yoga lesson or a day-care session -- click on the link under the "Buy Now" button, which will send them directly to a page where they can pay for the item. If your customers might want to browse around your site for different types of items before paying, choose the "Add to Cart" button, which lets buyers fill a shopping cart with several items before checking out. The "Donate" option is mostly for people who aren't selling anything, like bloggers soliciting donations.

You can then follow the instructions to create a button for each item you want to sell. PayPal will give you some HTML that you can paste into your Web site to add the buttons. You should put these buttons on your "Store" page, next to a picture and description of each item.

The service has been a boon for Graydon Blair of Syracuse, Utah, who sells biodiesel supplies at UtahBiodieselSupply.com. When he started his company, MGBJ Enterprises LLC, he looked for software to add a shopping cart to his site. "All of them wanted me to pay them lots of money, and I thought their stupid shopping carts didn't look nice," he says. So, "I built my little Web site, and threw some PayPal buttons on there."

Visitors to his Web site can use a "Click here to purchase" button to add an item to their shopping cart and buy it via PayPal. Payments get sent directly to Mr. Graydon's PayPal account, minus the PayPal fee. He says he now does 100 to 150 PayPal transactions a week. He brought in $750,000 in revenue last year and is on track for more than $1 million this year.
5. GET SPONSORS

It's easy to add advertisements to your Web site to make extra cash. Every time someone clicks on an ad on your page, you get paid a small amount, which varies depending on the particulars of the ad.

One of the most popular services is Google Inc.'s AdSense. Advertisers pay Google to place ads on Web sites throughout the Internet; site owners, meanwhile, can sign up at Google.com/adsense to host those ads on their pages.

You've probably seen the ads, which often appear as blocks of text along the right-hand column of a Web site. Google scans the content of participating sites to decide which ads would work best on the pages. For instance, an ad for used cars might appear on a site with car reviews.

But you need to ask: Will ads actually improve your site? Showing the wrong ads -- or, sometimes, any ads at all -- could turn off potential customers. If you run a funeral parlor, for instance, ads could come across as distasteful. Also, you'll probably need a lot of traffic to make significant money from the ads, since you typically get just a few cents when someone clicks.

For Tim Carter, ads made a lot of sense. Mr. Carter, a former carpenter, wrote a home-improvement column running in papers across the U.S. The only problem: Publishers were paying him a pittance.

In 2004, Mr. Carter figured out how to make serious money from his work -- by tapping into AdSense. He had been posting his work on his own site, AskTheBuilder.com, for nearly a decade. Google scans his site -- which has separate pages for topics like cabinets, fences and mold -- and places appropriate ads on each page, such as pitches for kitchen cabinets and mold removal.

He has since branched out by selling other types of ads. Taken together, his ads bring in close to $2,000 a day, based on daily traffic of about 40,000 visitors. He has also branched out by hawking his own products, like a stain-removal bleach. In total, his site brought in more than $1 million in revenue last year.

"I'll tell people in my columns, 'Look, this is what you need to do.' But they're still going to need the products to do it -- and that's what they see in those ads," Mr. Carter says.

6. GET KNOWN

So, you've got your site up and running. Next, you'll want to be sure people can find it.

We asked two experts, Bruce Clay of Bruce Clay Inc. and Alan Rabinowitz of SEO Image Inc., to reveal some tricks about search-engine optimization -- moving your site to the top of search-engine results.

Start with your site itself. You should use language on the site that is associated with the business. Let's say you're a florist. Most likely, you'll show up prominently in search results if people search for the exact name of your business. But the trick is to show up when people search for complicated terms related to your business, like "wedding flower arrangements." That's because you want to attract people who might not know about your business but are looking for something that you provide.

Mr. Clay offers two shorthand ways to do this. First, ask your employees to send you a couple of words or phrases that describe what your company does and incorporate that language into your site. Second, do a Web search for terms related to your business and look at the language used in the top search results. For instance, a search for "cowboy boots" turns up several Web sites that also use the phrase "Western wear." The fact that those sites turn up so high in search results means that they're doing something right. So, if you sell cowboy boots, you should also refer to Western wear on your site to draw additional traffic.
[Image]

You should also make sure to include those phrases in your page titles -- the headings that appear in the blue bar at the top of a browser window -- since search engines pay particular attention to these. (How do you change the title bar? In Weebly, click the "Settings" tab and type in the "Site Title" field. In Office Live, click the "Page Editor" tab, then click "Page Properties" and type in the "Page title" field for each page. In SynthaSite, click the "Properties" tab and type in the "Window Title" field.)

If you primarily do business locally, there are other ways to get noticed. Start by trying this exercise: Type "Seattle spas" in Google and pay attention to the results. At the top of the page, you'll see several spa listings, with phone numbers, reviews and Web-site links, next to a map showing each spa's location.

Below that, you'll see traditional search results, but many of the links won't send you to a specific spa's Web site. Instead, they'll send you to a news or review site, like Citysearch or Yelp, that talks about area spas.

So, it's important to get into the listings at the top of the page, next to the map, as well as into the news and review sites. To do that, first register your business with Google's Local Business Center (Google.com/local/add). By entering some details, like your business's address and phone number, you can automatically be listed in Google's local results at the top of the page.

Next, the news and review sites. Say you're a spa owner in Seattle: Click on the Citysearch page that comes up in a search for "Seattle spas" and find contact information for a Citysearch editor who might want to include your spa in the site's list.

Also click on the links for review sites like Yelp, which solicit reviews from businesses' customers and often give businesses a way to list themselves. Don't review your own business on these sites (it's usually against the rules), but you can encourage your customers to post reviews, as long as you don't bribe them with freebies (also usually against the rules).

7. TRACK YOUR TRAFFIC

A bunch of companies offer free tools to help you track who visits your Web site, how they find it and what they do once they're there. This can help you tweak your Web site to attract more potential customers.

The best-known provider of tools is Google; you can find its offerings at Google Webmaster Central (Google.com/webmasters). We'll focus on one of the programs: Google Webmaster Tools (Google.com/webmasters/tools).

To set this up, follow Google's instructions for uploading a file to your Web site so that Google can track it. Once you've done this, look at a few areas on the Google Webmaster page.

In the "Statistics" area, click on "Top search queries." This shows you two things: the search queries for which your Web site turned up, and the queries from which people actually visited your Web site. If a search term appears in the first list but not in the second, it means your Web site is showing up in search results for that term, but people aren't clicking on it.

To improve your site's performance for that term, you should tailor the language in your Web site. Say your Web site shows up in searches for "experienced Seattle therapists," but nobody is clicking on it; that suggests that you might want to describe your level of experience on your site to improve your performance.

You can find another handy feature of Webmaster Tools in the "Links" area. Click on "Pages with external links" to see a list of other sites that include links to your site. This can give an insight into how others view your site. For instance, if you run a bar and see that a local hotel links to it from its own Web site, you can guess that the hotel is recommending your bar to its customers. So, you might offer special discounts to that hotel's visitors.
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—Ms. Vara is a writer in Iowa City, Iowa.

Write to Vauhini Vara at vauhini.vara@wsj.com

Wednesday, February 11, 2009

Highest-Paid IT Skills and Certifications During the Recession

http://www.cio.com/article/478414/New_Research_Reveals_Highest_Paid_IT_Skills_and_Certifications_During_the_Recession

– Meridith Levinson, CIO

January 29, 2009

Foote Partners today released its latest research on IT skills pay. Foote Partners' IT Skills and Certifications Index shows the individual IT skills and certifications that increased and decreased in value during the final quarter of 2008. This latest data reflects for the first time the impact of the financial crisis and economic recession on IT skills and what companies pay for them.

The specific non-certified IT skills that increased in value during the fourth quarter of 2008 include:

NetWeaver Portals (SAP EP)
PHP
Apple OS X/Tiger/Leopard
ITIL
Java/J2EE, SE, ME
NetWeaver PI (SAP XI)
Master Data Management
Unified Communications/Messaging
Database Management
Microsoft SQL Server
Oracle Developer Suite
SAP Solution Manager
NetWeaver BI (SAP BW)

IT Skills that Decreased in Value

Skill
	Percent Decrease
ATM	32%
Novell Netware	30%
Tie between: Visual J++ and Perl	28.6%
SMTP	25%
Tie between C and AIX	20%
Tie between Accelerated SAP (ASAP) and SAP PM	16.7%
Tie among Windows Vista/XP, WAP, WML	14.3%
Tie among JavaBeans/EJB, RAD/Extreme Programming/Agile Programming, SIP (Session Initiation Protocol)	12.5%
Tie among Microsoft BizTalk Server, SAP KW, Tivoli	11%
Microsoft Identity Integration Server	10%
SAP FI-Travel Management	9%
Tie between SAP SEM and SAP Web Application Server	8.3%

Notably, some of the SAP skills that are among the highest-paid, such as SAP Web Application Server and SAP SEM (Strategic Enterprise Management), according to Foote Partners' research, are on the decline. Rapid application development, extreme and agile programming skills, which also rank among the highest-paid IT skills, are on the decline, too.

Highest-Paid IT Certifications

The highest-paid IT certifications that commanded pay increases in the last three months of 2008 include:

Highest-Paid IT Certifications That Increased in Value

IT Certification
	Percent Increase
Brocade Certified SAN (Fabric) Designer	42.9%
Cisco IP Telephony Design Specialist	25%
Microsoft Certified Solution Developer	25%
Microsoft Certified Trainer	25%
Cisco Certified Design Professional	25%
HP/Accredited Systems Engineer	12.5%
Planet3 Certified Wireless Security Professional	11%
Microsoft Certified Architect	10%
EMC Proven Professional Technology Architect-Expert	10%
SNIA Certified Storage Networking Expert	9%
IT Certified Architect (ITCA/Open Group)	7.7%
Certified Information Security Manager	7%
Cisco Certified Internetwork Expert	7%

Other IT certifications that aren't among the highest paid, but that saw pay increases are:

Other IT Certifications That Increased in Value

IT Certification
	Percent Increase
CompTIA Security+	46.7%
GIAC Security Essentials Certification	46.7%
Certified Ethical Hacker	40%
Planet3 Certified Wireless Network Administrator	40%
Cisco Certified Design Associate	40%
CompTIA Certified Technical Trainer	33.3%
EMC Proven Professional Technology Architect-Specialist	28.6%
RedHat Certified Technician	25%
HP/Certified Systems Administrator	20%
Brocade Certified Fabric Professional	14.3%
GIAC Certified Incident Handler	14.3%
Sun Certified Network Administrator for Solaris	14.3%
Check Point Certified Security Administrator	14.3%
Citrix Certified Enterprise Administrator	12.5%
SNIA Certified Systems Engineer	12.5%
Cisco IP Communications Express Specialist	12.5%
Security Certified Network Architect	10%
SNIA Certified Architect	10%

Among the highest-paid IT certifications, pay for Cisco Certified Voice Professional, Certified Information Systems Security Professional (CISSP) and GIAC Security Expert certifications is on the decline. Pay for those certifications declined by 9.1, 7.1 and 6.7 percent respectively.

Monday, December 1, 2008

Removing Complexity

http://geekdoctor.blogspot.com/2008/10/removing-complexity.html

Tuesday, October 28, 2008

Removing Complexity

"Fools ignore complexity. Pragmatists suffer it. Geniuses remove it."
Alan Perlis (Creator of ALGOL, one of the first programming languages)

Whenever I purchase something for myself or my home, I always think about the complexity that the purchase will add to my life. Adding more stuff to my life can lead to short term gratification, but it also can lead to long term maintenance headaches.

The same can be said of information technology. Here a few examples:

1. A few years ago, I had dinner with Steve Ballmer and explained that Microsoft should produce secure, reliable products with fewer features and lower cost. Who really wants their outline reformatted by the Outline Wizard in Word? Who really wants to apply the latest emergency patch that's required because of too much code supporting too many seldom used features? He explained that I was mistaken since most people use 95% of the features in Office and the average user prioritizes new features over everything else. We agreed to disagree and he returned to Redmond to manage the creation of Vista.

2. At BIDMC, we buy and build software. Every time we buy a commercial product we need to think about interfaces from our existing systems to the new product and from the new product to our existing systems. All those interfaces add significant complexity, makes recovery from downtime more difficult and increase the cost of support. Recently, a clinician commented that one of our new software purchases really surprised her, since it added complexity, fractured workflow, and inconvenienced many users for the benefit of a few.

3. When we build software, we are often tempted to add all the bells and whistles requested by the user. For each new custom feature there is a cost of maintenance, additional training, and potential bugs that could compromise stability/reliability. I've been involved in many development projects that eventually became so complex that the software had to be rewritten to ensure usability, security and maintainability.

4. Customizing commercial packages seems like a good idea to get the buy in of stakeholders. Over my past decade as a CIO, I've found that stakeholders come and go, and when they leave, all the esoteric customizations they designed are often retired. In fact, many upgrade projects include the retirement of all the previous customizations that became an impediment to life cycle management of software, added complexity, and over the long term were more hassle than benefit.

5. Best of breed seems like a good idea when you're comparing products based on narrowly focused requirements. We did that with our email system i.e. Exchange for general email functions, Brightmail for spam protection, McAfee for virus protection, Tumbleweed for secure email transmission, SendMail for SMTP gateways etc. The end result was a feature rich system that has been too challenging to maintain and debug. Our next purchase will be an appliance from a single vendor which consolidates Spam filtering and security into a single product.

In short, complexity is generally not a good thing. What am I doing to battle complexity?

I try to use the fewest number of vendors possible - one (or at most two) storage vendors, one desktop vendor, one network vendor, and a very few application vendors. The more vendors, the greater the integration effort, the increased support and maintenance burden and the higher the cost.

I aim to avoid customizing commercial software whenever possible. My experience is that customizations are rarely worth the investment. Once customizations are in place and the users really understand the implications to workflow, cost, and impediments to future upgrades, they are no longer so enthusiastic about them.

I use enterprise-wide generalizable tools whenever possible i.e. one content management system for the web, one means of authentication/single signon, one ERP system for all fiscal/administrative functions.

How are we seeing this "removing complexity" idea play out in the industry?

People are adopting Gmail, Google Apps, and Facebook as "good enough" productivity tools.

People are adopting commodity hardware, clustered together using basic Linux operating systems, instead of proprietary niche solutions.

People are using Software as a Service offerings with thin client computers running nothing more than a browser. Even Microsoft has embraced the new reality of cloud computing, demonstrating a willingness to eliminate the complexity of its current operating system and application environment.

In the world of IT, simplicity is often more reliable, more secure, and more usable. Whenever I'm tempted to add complexity to address the needs of a few customers, I remind myself that Less is More. Per the Alan Perlis quote above, we should all strive to be geniuses!

Posted by John Halamka at 3:00 AM

Sunday, November 23, 2008

Get Rid of the Performance Review!

http://online.wsj.com/article/SB122426318874844933.html
http://online.wsj.com/article/SB122426318874844933.html#printMode

OCTOBER 20, 2008
Human Resources
Get Rid of the Performance Review!
It destroys morale, kills teamwork and hurts the bottom line. And that's just for starters.
By SAMUEL A. CULBERT

You can call me "dense," you can call me "iconoclastic," but I see nothing constructive about an annual pay and performance review. It's a mainstream practice that has baffled me for years.
To my way of thinking, a one-side-accountable, boss-administered review is little more than a dysfunctional pretense. It's a negative to corporate performance, an obstacle to straight-talk relationships, and a prime cause of low morale at work. Even the mere knowledge that such an event will take place damages daily communications and teamwork.

Tips on Dealing with a Poor Performer4:00
UCLA professor, Samuel Culbert, shares some managerial tips on improving an employee's performance. (Oct. 20)
The alleged primary purpose of performance reviews is to enlighten subordinates about what they should be doing better or differently. But I see the primary purpose quite differently. I see it as intimidation aimed at preserving the boss's authority and power advantage. Such intimidation is unnecessary, though: The boss has the power with or without the performance review.
And yes, I have an alternative in mind that will get people and corporations a great deal more of what they actually need.
To make my case, I offer seven reasons why I find performance reviews ill-advised and bogus.
Handling a Bad Review
JOURNAL PODCAST: How should an employee deal with a negative performance review, both during and after the meeting? Samuel Culbert talks with Erin White.
Join the Discussion
JOIN THE DISCUSSION: Do you agree that performance reviews do more harm than good? What effects have you seen in your company? What would you suggest that reviews be replaced with? Share your thoughts in an online forum with Samuel Culbert.
The Journal Report

See the complete Business Insight report.
TWO PEOPLE, TWO MIND-SETS
Let's start with an obvious reason: The mind-sets held by the two participants in a performance review work at cross-purposes. The boss wants to discuss where performance needs to be improved, while the subordinate is focused on such small issues as compensation, job progression and career advancement. The boss is thinking about missed opportunities, skill limitations and relationships that could use enhancing, while the subordinate wants to put a best foot forward believing he or she is negotiating pay. All of this puts the participants at odds, talking past each other. At best, the discussion accomplishes nothing. More likely, it creates tensions that carry over to their everyday relationships.
Then there are second-order problems. A subordinate who objects to a characterization of faults runs the risk of adding another to the boss's list: "defensiveness and resistance to critique." And the boss who gets her mind turned around by a subordinate's convincing argument runs the risk of having a bigger boss think she failed to hold the line on what had been decided and budgeted. Good luck to her when she next gets evaluated.
PERFORMANCE DOESN'T DETERMINE PAY
Another bogus element is the idea that pay is a function of performance, and that the words being spoken in a performance review will affect pay. But usually they don't. I believe pay is primarily determined by market forces, with most jobs placed in a pay range prior to an employee's hiring.
Raises are then determined by the boss, and the boss's boss, largely as a result of the marketplace or the budget. The performance review is simply the place where the boss comes up with a story to justify the predetermined pay. If the raise is lower than the subordinate expects, the boss has to say, "We can work to get it higher in the future, and here are the things you need to do to get to that level." Or the boss can say, "I think you walk on water, but I got push-back from H.R. and next year we'll try again."
Ross MacDonald
In other words, too many lines spoken in a performance review are a cover story for the truth and have little to do with performance. Even when it's a positive review, the words spoken are likely to be aimed more at winning the subordinate's gratitude than at providing a candidly accurate description.
OBJECTIVITY IS SUBJECTIVE
Most performance reviews are staged as "objective" commentary, as if any two supervisors would reach the same conclusions about the merits and faults of the subordinate. But consider the well-observed fact that when people switch bosses, they often receive sharply different evaluations from the new bosses to whom they now report.
To me, this is just further proof that claiming an evaluation can be "objective" is preposterous, as if any assessment is independent of that evaluator's motives in the moment. Missing are answers to questions like, "As seen by whom?" and "Spun for what?" Implying that an evaluation is objective disregards what everyone knows: Where you stand determines what you see.
The absurdity is even more obvious when bosses -- as they so often do -- base their reviews on anonymous feedback received from others. This illogic is highlighted in the contemporary performance-reviewing fad called "360-degree feedback." Hate mail, I suppose, is similarly "objective." People are told, "I can't tell you who said this," as if the alleged truth-teller has no ax to grind and the allegation is unrelated to a specific motive or a disagreement in a relationship. Come on! Isn't "anonymous" just a slicker way for people to push what's in their political interests to establish, without having their biases and motives questioned?
What will it take for people to really understand that any critique is as much an expression of the evaluator's self-interests as it is a subordinate's attributes or imperfections? To my way of thinking, the closest one can get to "objective" feedback is making an evaluator's personal preferences, emotional biases, personal agendas and situational motives for giving feedback sufficiently explicit, so that recipients can determine what to take to heart for themselves.
ONE SIZE DOES NOT FIT ALL
Employees all come with their own characteristics, strong suits and imperfections that they orchestrate in every attempt to perform their best. Because no two people come similarly equipped, they draw upon the unique pluses and minuses they were endowed with at birth along with compensatory assets they subsequently developed.
Failing Grade
The Promise: Performance reviews are supposed to provide an objective evaluation that helps determine pay and lets employees know where they can do better.
The Problems: That's not most people's experience with performance reviews. Inevitably reviews are political and subjective, and create schisms in boss-employee relationships. The link between pay and performance is tenuous at best. And the notion of objectivity is absurd; people who switch jobs often get much different evaluations from their new bosses.
The Solution: Performance previews instead of reviews. In contrast to one-side-accountable reviews, performance previews are reciprocally accountable discussions about how boss and employee are going to work together even more effectively than they did in the past. Previews weld fates together. The boss's skin is now in the game.
And yet in a performance review, employees are supposed to be measured along some predetermined checklist. In almost every instance what's being "measured" has less to do with what an individual was focusing on in attempting to perform competently and more to do with a checklist expert's assumptions about what competent people do. This is why pleasing the boss so often becomes more important than doing a good job. Create a positive impression and the boss will score you high on any dimension presented.
Worse, bosses apply the same rating scale to people with different functions. They don't redo the checklist for every different activity. As a result, bosses reduce their global sentiments to a set of metrics that captures the unique qualities of neither the person nor the job.
Maybe, for instance, there's a guy who doesn't voice his viewpoint when he disagrees with something said. Does that mean he should be graded down for being a conflict-avoider -- as if the boss's in-your-face way of communicating is superior? He may be seen as doing a bad job based solely on an incompatibility of styles that may have little to do with actual performance.
PERSONAL DEVELOPMENT IS IMPEDED
The drive for improvement goes on in big and little ways at work. You would think that the person in the best position to help somebody improve would be his or her boss.
Yet, thanks to the performance review, the boss is often the last person an employee would turn to.
Why is that?
The No. 1 reason for that reluctance is that employees want to turn to somebody who understands their distinctive talents and way of thinking, or knows them sufficiently well to appreciate the reasons behind the unique ways they are driven to operate. By contrast, people resist help from those who they believe can't get them in proper focus, especially when they have tried on many occasions to tell them.
What's more, people don't want to pay a high price for acknowledging their need for improvement -- which is exactly what they would do if they arm the boss with the kind of personal information he or she would need to help them develop. It could all come back to haunt them in the performance review. No wonder the developmental discussions the boss wants to inject at the time of a performance review so often get categorized by subordinates as gun-to-the-head intimidation requiring false acquiescence, lip-service agreement and insincere, appearance-correcting actions.
DISRUPTION TO TEAMWORK
Managers can talk until they are blue in the face about the importance of positive team play at every level of the organization, but the team play that's most critical to ensuring that an organization runs effectively is the one-on-one relationship between a boss and each of his or her subordinates.
The performance review undermines that relationship.
That's because the performance review is so one-sided, giving the boss all the power. The boss in the performance review thinks of himself or herself as the evaluator, and doesn't engage in teamwork with the subordinate. It isn't, "How are we going to work together as a team?" It's, "How are you performing for me?" It's not our joint performance that's at issue. It's the employee's performance that's a problem.
All of which leads to inauthentic behavior, daily deception and a ubiquitous need for subordinates to spin all facts and viewpoints in directions they believe the boss will find pleasing. It defeats any chance that the boss will hear what subordinates actually think.
Here's a simple example: In a performance review, the boss cites a subordinate's missing a high-profile meeting as cause for a reduced rating. What if the reason was something personal -- perhaps a son picked up by the police -- that the employee doesn't want to reveal? Why not reveal it? Because one-way accountability inevitably creates distrust. Does the boss self-reflect and ask, "What did I do, or should I be doing, to build up the trust?" No, the boss faults the guy for secretiveness. It's a vicious cycle.
For Further Reading
See these related articles from MIT Sloan Management Review.
Building Competitive Advantage Through People
By Christopher A. Bartlett and Sumantra Ghoshal (Winter 2002) Today's scarce, sought-after strategic resource is expertise, which comes in the form of employees. http://sloanreview.mit.edu/smr/issue/2002/winter/3/
Rethinking the 'War for Talent'
By Deepak Somaya and Ian O. Williamson (Summer 2008) An implicit assumption of the "war for talent" perspective is that departing workers are lost to competitors. Yet employees also leave to join "cooperators." http://sloanreview.mit.edu/smr/issue/2008/summer/02/
How Consistent Are Performance Review Criteria?
By Peter Gwynne (Summer 2002) Managers in the same company frequently use different criteria to review their employees' work -- unless the organization has trained them to do otherwise. http://sloanreview.mit.edu/smr/issue/2002/summer/1f/
Why Leadership-Development Efforts Fail
By Douglas A. Ready and Jay A. Conger (Spring 2003) Investments in developing leaders have often failed the companies seeking to create a pipeline of leaders. http://sloanreview.mit.edu/smr/issue/2003/spring/11/
Strategies for Preventing a Knowledge-Loss Crisis
By Salvatore Parise, Rob Cross and Thomas H. Davenport (Summer 2006) When employees leave an organization, they depart with more than what they know; they also leave with critical knowledge about who they know. http://sloanreview.mit.edu/smr/issue/2006/summer/09/
IMMORALITY OF JUSTIFYING CORPORATE IMPROVEMENT
I believe it's immoral to maintain the facade that annual pay and performance reviews lead to corporate improvement, when it's clear they lead to more bogus activities than valid ones. Instead of energizing individuals, they are dispiriting and create cynicism. Instead of stimulating corporate effectiveness, they lead to just-in-case and cover-your-behind activities that reduce the amount of time that could be put to productive use. Instead of promoting directness, honesty and candor, they stimulate inauthentic conversations in which people cast self-interested pursuits as essential company activities.
The net result is a resource violation, and I think citations should be issued. If it's a publicly held company, shareholder value gets decreased. If it's a governmental organization, time is lost that could be spent in pursuit of the public good. And what participants learn in the process has more to do with how to survive than with meaningful self-development.
I've often thought that every organization should be considered partially a public entity since they exist, in part, to provide meaningful activities for the people who work in them. Skills and mind-sets acquired at work go home with people to affect family, community, culture and even the world. The more positive an atmosphere we can create at work, the more positive an impact it has at home. In short, what goes around comes around.
SO, WHAT'S THE ALTERNATIVE?
The alternative to one-side-accountable, boss-administered/subordinate-received performance reviews is two-side, reciprocally accountable, performance previews.
Let me explain.
The boss's assignment is to guide, coach, tutor, provide oversight and generally do whatever is required to assist a subordinate to perform successfully. That's why I claim that the boss-direct report team should be held jointly accountable for the quality of work the subordinate performs. I'm sick and tired of hearing about subordinates who fail and get fired, while bosses, whose job it was to ensure subordinate effectiveness, get promoted and receive raises in pay.
Holding performance previews eliminates the need for the boss to spout self-serving interpretations about what already has taken place and can't be fixed. Previews are problem-solving, not problem-creating, discussions about how we, as teammates, are going to work together even more effectively and efficiently than we've done in the past. They feature descriptive conversations about how each person is inclined to operate, using past events for illustrative purposes, and how we worked well or did not work well individually and together.
The preview structure keeps the focus on the future and what "I" need from you as "teammate and partner" in getting accomplished what we both want to see happen. It doesn't happen only annually; it takes place each time either the boss or the subordinate has the feeling that they aren't working well together.
Realistic assessment of someone's positive qualities requires replacing scores on standardized checklists with inquiry. As a result, step No. 1 in giving effective feedback almost always involves "active questioning" inquiry. Inquiry contrasts with most performance reviews, which begin with how the evaluator sees the individual and what that boss has already decided most needs enhancing. Both participants need an answer to the most significant issue at hand: "Given who I am and what I'm learning about this other individual, what's the best way for us to complement one another in getting work accomplished with excellence?" If in the process the other person decides to change and develop, so much the better.
Bosses should be asking all the questions that occur to them in inquiring about how a subordinate thinks he or she can best perform the job. Then, after they have exhausted their questions, they should ask the subordinate for what else they need to know. At a minimum, they should be asking "How will you be going about it?" and "Specifically, what help do you need from me?" Why not get it all when, at the end of the day, the boss still has the authority to play ultimate decider?
Some of you may also ask if the performance review goes away, how do we prepare the groundwork if we want to fire somebody? For the better, I'd argue: Take away the performance review, and people will find more direct ways of accomplishing that task.
Substituting performance previews for performance reviews promotes straight-talk relationships for people who are up to it. It welds fates together because the discussion will be about what the boss-subordinate team accomplishes together, which I believe is the valid unit to hold accountable. It's the boss's responsibility to find a way to work well with an imperfect individual, not to convince the individual there are critical flaws that need immediate correcting, which is all but guaranteed to lead to unproductive game playing and politically inspired back-stabbing.
There are many bosses who would like to change that game, but they feel handcuffed by the rules already in play. I'd like to believe that if given the chance, they would embrace a system that allows them just as much authority -- but in a way that promotes trust, not intimidation.
Keep in mind, of course, that improvement is each individual's own responsibility. You can only make yourself better. The best you can do for others is to develop a trusting relationship where they can ask for feedback and help when they see the need and feel sufficiently valued to take it. Getting rid of the performance review is a necessary, and affirming, step in that direction.—Dr. Culbert is a consultant, author and professor of management at the UCLA Anderson School of Management in Los Angeles. He can be reached at reports@wsj.com.

Wednesday, November 5, 2008

Open Innovation (good ideas coming from outside the company)

http://en.wikipedia.org/wiki/Open_innovation

Open Innovation is a term promoted by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at Berkeley. The concept is related to (but distinct from) user innovation, cumulative innovation and distributed innovation.

The central idea behind open innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (e.g. patents) from other companies. In addition, internal inventions not being used in a firm's business should be taken outside the company (e.g., through licensing, joint ventures, spin-offs). In contrast, closed innovation refers to processes that limit the use of internal knowledge within a company and make little or no use of external knowledge. Some companies promoting open innovation include Procter & Gamble, Innovation Exchange, NineSigma, InnoCentive, yet2.com, IBM, Philoptima, and Nerac.

Prior to World War II, closed innovation was the paradigm in which most firms operated. Most innovating companies kept their discoveries highly secret and made no attempt to assimilate information from outside their own R&D labs. However, in recent years the world has seen major advances in technology and society which have facilitated the diffusion of information. Not the least of these advances are electronic communication systems, including the internet. Today information can be transferred so easily that it seems impossible to prevent. Thus, the open innovation model states that since firms cannot stop this phenomenon, they must learn to take advantage of it.

It is the business model of the firm that determines what external information to bring inside, and what internal information to take outside.

[hide]

[edit] Open source vs. Open Innovation

While open source and open innovation might conflict on patents issues, they are not mutually exclusive, as participating companies can donate their patents to an independent organization, put them in a common pool or grant unlimited license use to anybody. Hence some open source initiatives can merge the two concepts, this is the case for instance for IBM with its Eclipse platform which IBM is advocating as a case of open innovation, where competing companies are invited to co-operate inside an open innovation network.^[1]

[edit] Difference between traditional innovation and open innovation

Open innovation needs a different mindset and company culture than traditional or closed innovation.

Closed innovation Principles	Open innovation Principles
The smart people in our field work for us.	Not all the smart people work for us. We need to work with smart people inside and outside our company.
To profit from research and development (R&D), we must discover it, develop it and ship it ourselves.	External R&D can create significant value; internal R&D is needed to claim some portion of that value.
If we discover it ourselves, we will get it to market first.	We don't have to originate the research to profit from it.
The company that gets an innovation to market first will win.	Building a better business model is better than getting to market first.
If we create the most and the best ideas in the industry, we will win.	If we make the best use of internal and external ideas, we will win.
We should control our innovation process, so that our competitors don't profit from our ideas.	We should profit from others' use of our innovation process, and we should buy others' intellectual property (IP) whenever it advances our own business model.

Monday, November 3, 2008

The Consumer is Boss - P&G

http://money.cnn.com/2008/03/07/news/companies/lafley_charan.fortune/index.htm?postversion=2008031012

'The consumer is boss'

Back in 2000, P&G was stumbling; earnings, execution, and morale were all poor. Now this historic company, founded in 1837, is on a roll. How did it regain its footing? One key: getting to know its consumers better.

By A.G. Lafley and Ram Charan

(Fortune Magazine) -- In this adaptation from their forthcoming book, The Game-Changer, A.G. Lafley and management consultant Ram Charan describe the principles of innovation and give a grass-roots example of how listening to the bosses in this instance, Mexican housewives - can pay off.

The first section describes, in Lafley's own words, the difficult circumstances he faced on becoming CEO of Procter & Gamble (PG, Fortune 500) in 2000. The rest is the work of both authors.

A.G. Lafley: A few minutes before a business meeting in California on June 6, 2000, I received an unexpected phone call from John Pepper, former chairman and CEO of P&G. John got right to the point: "Are you prepared to accept the CEO job at P&G?"

I was stunned. Just the afternoon before, I had been speaking with chairman and CEO Durk Jager about our plans.

"What's happened to Durk?" I asked.

"He resigned."

"Why? What happened?"

"I don't have time to go into that now. I just need to know whether you're prepared to do the CEO job for P&G."

"Of course I am."

"Then get on a plane as soon as you can and come directly to my office when you arrive back in Cincinnati."

"Okay." I turned to my P&G colleagues and told them I had to leave.

On the plane, I considered this sudden turn of events. I tried to put first things first: What would I need to do in the next 24, 48, 72 hours? What about the first week, first month?

No question, P&G was struggling. We'd issued a big profit warning in March, and the business was still performing below expectations. We'd moved to a new global-business-unit-led strategy. We'd totally changed the organization structure. We were adjusting to more global competition, a faster-changing industry landscape, and the challenges of the Internet. In the midst of all this, we'd raised the company's goals to unprecedented levels. In hindsight, we were trying to change too much too fast.

Job one was to determine the state of P&G's business. When I began digging into the numbers, I found that we were in worse shape than I had suspected. On June 8 we issued another profit warning, and the stock fell further. We had lost more than $50 billion in market capitalization in six months.

I knew it would take another three to six months to know whether we had bottomed out. In the meantime, I had to retain key people. I talked one-on-one with each leader to come to a clear understanding of the business challenges and opportunities. I encouraged them to compete like hell externally but to collaborate like family internally. Just about everyone signed on to this vision. Proud P&Gers, we were embarrassed by recent results. To turn the company around, we focused on a few simple, powerful things.

1. We put the consumer at the center of everything we do. Three billion times a day P&G brands touch the lives of people around the world. Our goal is to delight consumers at two "moments of truth": first, when they buy a product, and second, when they use it. To achieve that, we live with our consumers and try to see the world and opportunities for new products through their eyes. At P&G the CEO is not the boss - the consumer is. In ways large and small, we were not living up to the "consumer is boss" standard - and we were paying for that lapse.

2. We opened up. Long known for a preference to do everything in-house, we began to seek out innovation from any and all sources. Innovation is all about connections, so we get everyone we can involved: P&Gers past and present, customers, suppliers, even competitors. The more connections, the more ideas; the more ideas, the more solutions. And because what gets measured gets managed, we established a goal that half of new-product and technology innovations have some contribution from outside P&G - such as licensing or buying a technology, finding a partner, or making an acquisition. We are already beyond that figure, compared with 15% in 2000.

3. We made sustainable organic growth the priority. Organic growth is less risky than acquired growth and more highly valued by investors. This strategy also suited our decision to increase the emphasis on core brands like Tide and Crest, where adding a few points in market share can mean hundreds of millions in new revenue.

4. We organized around innovation. To get organic growth, we needed to innovate. Innovation enables expansion into new categories, allows us to reframe businesses considered mature, and creates bridges into adjacent segments. By running a disciplined development, qualification, and commercialization process, we have proved that we can manage a large portfolio of innovations in various stages of development. Innovation is at the core of our business model.

5. We began thinking about innovation in new ways. We started from the premise that it is possible to run an innovation program in much the same way we run a factory. There are inputs; they go through a series of transformative processes, creating outputs. It is possible to measure the yield of each process, including the quality, the end product, and the financial and market results. We also developed tools and know-how to manage the risks of innovation.

A.G. Lafley and Ram Charan: Great innovations come from understanding the consumer's unmet needs and desires. Regardless of the market, innovation must be consumer-led. That is not the same thing as consumer-decided. As Henry Ford once put it, if he had listened to the marketplace, he would have built a faster, cheaper horse. He understood that what people really wanted was a better way to travel. Consumer insights lead to innovation opportunities. You must develop an appreciation for who your consumers are and how they live, to know their needs and also their aspirations. Only then can you figure out how to deliver a product that can improve their lives.

You might think that P&G, of all places, would know that. After all, it created the first market research department and has long been acknowledged for the almost relentless way it seeks knowledge of consumers. For a long time, though, P&G did not really see consumers as active participants in innovation. Their role was essentially passive: responding to stimuli in experiment after experiment to provide "quantitative research data." P&G was talking to a lot of people, but not listening to them. The company also tended to narrow in on only one aspect of the consumer - for example, her mouth for oral-care products, her hair for shampoo, her loads of dirty clothes for laundry detergents (most P&G consumers are women). P&G had essentially extracted the consumer (and at times a particular body part as well!) from her own life and focused on what was most important to the company - the product or the technology.

Recognizing that it needed to look at consumers more broadly, P&G has moved away from traditional behind-the-mirror focus groups to more immersive research techniques, increasing its spending on such research more than fivefold since 2000. How does it do this? Among other things, thousands of infants and toddlers crawl through the Baby Discovery Center every year as P&G researchers watch how infants interact with their mothers, how they move, how their diapers work. There are also specially designed innovation labs. One looks like a grocery store, another a drugstore, and another the different rooms in a typical middle-class American home. Consumers might be asked to come in and be given $100 to spend. By watching how they navigate the aisles and what catches their eye, the company is able to unlock deeper insights into their behavior. The Feminine Care unit once even created a club for teenage girls to get them to relax and talk about menstruation.

LEARNING FROM CARLOS AND MARTA

This kind of research is particularly important when P&G ventures outside the U.S. The most promising sources of business opportunity these days are in countries that are not yet rich but are growing fast, such as China, India, Russia, Mexico, and Brazil. P&G needs to listen to these bosses particularly closely, because it does not know them as well as its neighbors in Cincinnati.

Through a gate on a back street in Mexico City, into a courtyard, and up two flights of stairs is the modest two-bedroom apartment of Marta and Carlos. Marta, 32, is a stay-at-home mother of two basketball-crazy girls; Carlos is an accountant at a car repair shop. Their home is no larger than a good-sized hotel room, with a tiny kitchen and a dining room just big enough to hold a table and four chairs. There are no closets, so the couple has put up wooden shelving for the family's clothing. The walls are covered with family pictures; on the door is a printed prayer and two crosses. This home is truly their castle. They saved for 12 years, living with Marta's parents, to buy it. Marta takes meticulous care of every inch: Even the family toothbrushes are kept in order, snapped to attention by a device that hangs on the wall above the sink.

Marta is P&G's kind of consumer. In fact, she is a P&G consumer - Ariel laundry detergent, Downy fabric softener, and Naturella sanitary pads.

Carlos makes the equivalent of about $600 a month, making the family part of what P&G terms the lower-income consumer market - households with income between $215 and $970 a month. These families account for about 60% of the country's 106 million people. The poorest 25% of Mexicans do not have the disposable income to be much interested in what P&G has to offer; as for the top 15%, since P&G entered the country in 1948, its products have done pretty well.

But for a time the company was not as successful with the middle 60%, which is where the most population growth is. "We tend to hire from relatively high [Level A] socioeconomic classes," notes Carlos Paz Soldán, vice president of P&G Mexico and Central America, but most consumption comes from C and D household incomes. Continues Paz Soldán: "We were pretty ignorant about them in a deep way." That ignorance represented opportunities lost. "We have to win in this segment today," the P&G Mexico office concluded in an internal study. It went on to ask, "What are the business opportunities we have with them, and why?"

That was the right question, and P&G's past failure to think it through has cost it. In one case, innovation did deliver a better product - but it still flopped because it didn't deliver what consumers wanted. Launched in the late 1980s, Ariel Ultra laundry detergent was concentrated so that women needed to use only half as much detergent per load. P&G saw that as a significant benefit because most lower-income households have limited storage. Ultra's enzymes also delivered better cleaning. P&G was convinced that it had a winner.

The bosses told them otherwise. For one thing, Mexican women didn't believe that they could really get their laundry clean by using so little. For another, Ariel Ultra didn't foam. Many members of lower-income households do manual labor and are acutely conscious of odor; they considered foam a signal that their perspiration was being rubbed out. In a matter of months, Ariel Ultra was gone.

One manager put it bluntly: "We could have understood. We should have understood. We didn't, so we failed." Paz Soldán drew the correct conclusion: "We had to get out of our offices and become immersed in the real world and daily routines of lower-income consumers and in the stores of the retailers we partner with."

Starting in about 2001, P&G developed the "consumer closeness" program to create such experiences. "Living It" enables employees to live with lower-income consumers for several days in their homes, to eat meals with the family, and to go along on shopping trips. In a related program, "Working It," employees work behind the counter of a small shop. That gives them insight into why shoppers buy or do not buy a product, how the shopkeeper stacks the shelves, and what kind of business propositions are appealing. The idea behind Living It and Working It was to sit down with the bosses and to hear what they needed, even if they couldn't articulate it directly.

Maybe that sounds vague, even touchy-feery. In feet, P&G employees report that those have been profound experiences for them. But that is not why these programs exist; P&G created them to help create new business - and it works. Downy Single Rinse proves that such understanding can, in feet, be translated into profitable products.

THE BOSSES SPEAK UP

In the early 2000s the Mexican market share for Downy fabric softener was low and stagnant. P&G wasn't sure what could be done about it, since the assumption was that people who didn't have modern washing machines didn't use softener. Not wanting to compromise the Downy brand by dropping the price too much, P&G decided to try to come up with something specific to the needs of the lower-income consumer.

One of the things P&G people notice - often to their shock - by Living It and similar experiences was the problem of water. Before the Europeans arrived in the 16th century, Mexico City was surrounded by a lake; now the metropolis is parched. Suspicion of drinking water is high. Carlos and Marta buy bottled water, as do a large proportion of families who make much less than they do. Millions of rural women still lug buckets back from wells or communal pumps. In the cities, many have running water for only a few hours a day. Most homes do not have fully automatic washing machines; even fewer have dryers. All this makes doing the laundry a seriously draining chore.

At the same time, lower-income Mexican women take laundry very, very seriously. They cannot afford to buy many new clothes, but they take great pride in ensuring that their family is turned out well. Sending your children to school in clean, ironed clothing is a visible sign of being a good mother. On Marta's wooden shelves and hangers, every single item, from jeans and T-shirts to Carlos's suits, is tautly ironed - and she is the rule, not the exception. P&G found that Mexican women spend more time on laundry than on the rest of their housework combined. More than 90% use softener, even women who do some or all of their laundry by hand.

"By spending time with women, we learned that the softening process is really demanding," recalls Antonio Hidalgo, P&G brand manager for Downy Single Rinse at the time of its debut in March 2004. A typical load of laundry went through the following six-step process: wash; rinse; rinse; add softener; rinse; rinse. No problem if all this is just a matter of pressing a button every once in a while. But it's no joke if you are doing the wash by hand or have to walk half a mile to get water. Even semiautomatic machines require that water be added and extracted manually. And if you get the timing wrong, the water supply might run out in the middle. "The big aha!" says Paz Soldán, was discovering how valuable water was to lower-income Mexicans. "And we only got that by experiencing how they live their life."

Putting it all together, P&G knew that Mexican women liked to use softener; they had high standards for performance; and doing the laundry was arduous and time consuming, and required large amounts of water. These ideas were put through the wringer, as P&G launched the kind of large-scale quantitative research it is known for. They stood up to the scrutiny.

Having identified a problem (making laundry easier and less water-intensive), P&G turned to the labs for an answer. Their solution: Downy Single Rinse. Instead of a six-step process, DSR reduced it to three - wash, add softener, rinse saving enormous time, effort, and water.

Launched in 2004, DSR was a hit from the start. Hidalgo recalls when he told one mother he had worked on DSR, her face lit up. "She thanked me," he says, with satisfaction, "and asked me to please bring more of these kinds of products to her life." Hidalgo is, of course, trying to do just that.

VALUE, NOT PRICE

Particularly when innovating for lower-income markets, it is important to think about value, not price. Lower-income consumers are price sensitive, of course, but they will pay for products if they deliver a benefit they consider worth the money. By listening to women like Marta, P&G created a trusted brand and a profitable product. Marta positively purrs when she recalls how her nieces tell her, "Your clothes smell so good."

First Published: March 10, 2008: 5:01 AM EDT

Find this article at:
http://money.cnn.com/2008/03/07/news/companies/lafley_charan.fortune/index.htm?postversion=2008031012

Friday, October 24, 2008

What It's Like to Be a First-Time CIO

http://www.cio.com/article/print/194600

What It's Like to Be a First-Time CIO
– Jason Scott, CIO of Innovation Ads, as told to Meridith Levinson, CIO
March 10, 2008

Editor's Note: Jason Scott joined Innovation Ads, a full-service online advertising agency, as its first-ever CIO on September 7, 2007. Scott, 31, had never held the CIO role before. Most recently, he ran IT for Corporate Express Imaging, a $450 million division of office products supplier Corporate Express. Scott started out as an administrative assistant in the IT department at Corporate Express Imaging when he was 20 and still in college. Over 10 years, he climbed the corporate ladder at Corporate Express only to realize that he'd have to leave the company if wanted to become a CIO.
new LinkedIn.CompanyInsiderPopup("in", "Corporate Express");

Jason Scott
Day One: Locked Doors, Missed Connections
I showed up for my first day of work at my new office in downtown Manhattan at 7:30 in the morning carrying a box filled with family photos, framed college degrees, certificates, awards and code samples. I reported for duty wearing jeans and a Pink Floyd T-shirt. Not exactly how I envisioned my first day as a CIO, but I had arrived in New York late the night before with my wife, two kids, dog, cat and luggage, and I simply didn't have time to unpack my power suit.
The Innovation Ads office was previously used as the set for the fictional Mode magazine office featured on the sitcom Ugly Betty. I stepped off the elevator on the 21st floor, but the door to the hip, brightly colored office was locked. I was the first one there, and since I didn't have a key, I couldn't get in. A few minutes later, a stylishly dressed employee showed up. I introduced myself to him as the new CIO and asked him if we could get into the office. He pulled a credit card from his wallet, slid it between the door jam and the bolt, and opened the door. Note to self, I thought, Improve security on office doors.
I located my sleek corner office, put my stuff down and went to find my boss, Iain Grae, the president and cofounder of Innovation Ads . He wasn't in his office so I tried calling him. No answer. I later learned that he was in Europe.
new LinkedIn.CompanyInsiderPopup("in2", "Innovation Ads");
Iain and I first met and became good friends when we were students at Florida Atlantic University in the late 1990s. In 2005, he offered me the CIO job at Innovation Ads, but my career at Corporate Express was going very well, and a move to New York simply wasn't feasible for me at the time. (I was living and working in Florida.) Iain and I stayed in touch, and two years later he asked me again to join Innovation Ads. The timing was much better for me and my family. I had just finished a big project at Corporate Express and was ready for a change. And Innovation Ads was in a much stronger position when Iain approached me in 2007.
new LinkedIn.CompanyInsiderPopup("in3", "Florida Atlantic University");
I wandered back to my office and just sat there, not quite sure of what to do. I knew I was expected to be a contributing member of the team on day one. Yet I had no specific direction. Was there something I should be doing on that first day? Were we in the middle of a project? It was definitely a little disconcerting and very different from my previous experience at Corporate Express. Each time I moved into a new position there, I spent the first week moving into my new office, getting my stuff together and meeting new staff. I could ease into it. But here there was no ramp-up time. The first day I walked in, it was as the CIO.
By 9 o'clock the five members of the IT staff started showing up. They stared at me through the windows surrounding my office as if I were a fish in an aquarium, and I peered back at them with uncertainty. After 15 minutes I said to myself, This is ridiculous, and I went out and introduced myself to them. I told them about my background and about my extensive programming experience. They looked at me like I was full of it. In essence, they told me: "Everyone who comes in here tells us they know systems and development." I asked them about their jobs and about the company. I was just trying to get the lay of the land.
It was an interesting first day, for sure. I felt like a boxer who had survived round one against a world heavyweight champion: I didn't win. I didn't knock down the champ, but I didn't lose or get knocked out either. I was relieved I got through day one without any major issues. Next: Facing Down Loneliness, Fear, Frustration and Self-Doubt
Facing Down Loneliness, Fear, Frustration and Self-Doubt
My first week on the job was frustrating. I didn't know any of the staff. I didn't know any of the vendors. I didn't know the interactive marketing industry or its terminology.
At Corporate Express, when someone talked about delivery problems or FIFO and LIFO costing, I could speak that language. At Innovation Ads, everyone was talking about campaigns, enrollment management and lead generation. I didn't know what they were talking about. People were giving me projects, saying, "We need this client to be able to do a co-reg, but they're also driving an affiliate network." I was scribbling down notes but I had no idea what they were asking me to do. That was scary.
There were times when I wondered, Oh my god, what if I make things worse? What if I can't do this job? I imagined the core system crashing for five days and the company losing $10 million. What would I do? I didn't know who my go-to people were. I didn't know if my staff was going to accomplish what I needed them to accomplish.
In my previous role, I had a lot of people I could ask for advice. I had known them for a decade, and they were always happy to talk things out with me. Here, I had no one to ask. I had to rely on myself and do what I thought was right.
Getting the Lay of the Land, Finding a (Temporary) Go-To Person
Innovation Ads was so different from Corporate Express.
For starters, Innovation Ads, which launched in 2002, is privately owned. It's driven by speed, progress and growth, while Corporate Express, as a public company, is burdened with compliance, regulations, reporting and controls. I always thought that when I became CIO—wherever that was—that it would be very formal and hierarchical, much like it was at Corporate Express, where you have to have "gray hair" to be promoted to executive management and where every executive has a front-row space in the parking lot. At Innovation Ads, everyone on staff is my age or younger. There's a music studio in the office for employees. It's a substantially different environment and not what I expected, though I must say it's certainly no less effective or lucrative than Corporate Express.
I tried to adapt to my new environment, and I resolved to do my best. I came in early. I worked late. I read up on open-source technologies such as Apache, PHP and MySQL, since they were new to me. I also started reading books, news articles and white papers on online advertising, e-mail marketing and behavioral targeting.

Six Tips for Surviving Your First Ever CIO Job
1. Expect the unexpected.
2. Identify your go-to people. Seek out one or two members of the IT staff whom you can ask for advice and approach with questions about the company as you get up to speed.
3. Don't rely on your go-tos too much.
4. Trust your instincts, judgment and experience.
5. Read up on your new company, industry and any and all unfamiliar technologies your company is using.
6. Solve some small, visible problems within your first few weeks on the job to help build some momentum.
--M. Levinson

To get my arms around my new position and employer, I found someone on the IT staff to be my go-to person. Whenever I got a task, I talked it over with him. I asked him what he would do and what the company had done in the past. I selected my go-to guy on the basis of his tenure. Out of the five people on the IT staff when I joined, he had been at the company the longest—a year.
Relying on my go-to guy was a double-edged sword. Not knowing him very well, I didn't know if he was really any good. I also found myself becoming dependent on him over the first couple of weeks—especially as other developers, who had tired of being pulled in different directions by my predecessor, started leaving.
Then our most important system went down. Two weeks into my tenure, our core online advertising engine, iPMS, which tracks campaign activity and success rates and transmits leads to and from clients and vendors, stopped working. The application wasn't receiving leads into its database, so lead forms that customers were submitting weren't making their way into the system.
In our business, leads are our lifeblood. They're our product. So when iPMS stopped working, the sales team rightly started freaking out and raising hell. The sales director stormed into my office and asked, "Are we having a problem with the system?" I had no idea so I asked my development group what was going on. They ran some queries and tests and told me exactly what the sales director told me, "Looks like no data is being inserted into the database," they said.
I sat down and started looking through the code with them. Using pure systems logic, I quickly identified the problem. A lower-level developer had changed a core configuration file by accident during testing, and that change directed the application to a nonexistent database server—hence the reason why lead forms weren't entering our system. Within minutes, we fixed the problem, and just like that, we were back in business.
That was a big moment. Fixing a mission-critical problem engaged me with the business. It's a funny thing: I started in the CIO role with grand visions of how I was going to change the world, and yet it was this one minor system blip, which lasted at most five minutes, that was the catalyst that helped me build my confidence and that gave the company confidence in me. Go figure.
Things went South again a week later: My go-to guy gave his notice. I panicked. What now? I thought. I'm going to have a completely new staff who doesn't know the system and neither do I.
My go-to guy's quitting turned out to be a blessing in disguise: It took away my crutch and forced me to walk on my own. I had to lead the charge. Things started getting better, and I quickly learned the system—trial by fire, so to speak. I felt more powerful and far less dependent.
Next: Hiring Right, Rallying the Team
Hiring Right, Rallying the Team
When I first started at Innovation Ads, there was a distinct lack of team spirit among the IT staff, primarily due to their long-standing frustrations with the prior technology leadership. People showed up at nine, parked themselves in their cubes, put on their headphones, worked on their projects and left at six. No one talked to each other, or knew what the others were working on. Nor did they care.
The first thing I did was weed out people who didn't share my enthusiasm for programming. I live for software development and application design. I simply couldn't do anything else. If I won the lottery tomorrow, I'd be sitting at home writing computer applications. It's what I love. Anyway, I hired six new developers, and everyone who came on board wound up being really good. This is the team that's going to take our company to the next level.
Hiring is hands-down the most important thing for a CIO, for any manager. If you can't build a good team and hire the right people, you will drown—no ifs, ands or buts about it. Few CIOs have the time anymore to step in and solve technical problems themselves. My days are full morning to night with vendors, management, shareholders and staff. Even if I wanted to step in and do this stuff myself, there's simply not enough time in the day.
Finding the right people that you can count on—and letting them know how important they are—is key. I told my development group that they're the crown jewel of the company, and that the company could win because of them alone. I told them that they were my number-one priority—that my own boss came second. "What's important is what you guys need from me," I said. "My boss has five direct reports he can call on. You guys only have one boss." I let them know that I was going to represent them to upper management and that I would take full responsibility for any technical problems that came up. I wanted to shield them from politics and blame and bolster their faith in me as their leader.
When I worked for Corporate Express, I was driven to work hard not because I really cared for the company (how excited can one get about office products?) but because of my boss, the national vice president of sales, Al Zoldos. I learned a lot from him every day I was there, and I trusted and respected him. All of his direct reports did. I truly wanted to make him proud.
At Innovation Ads, I decided that I wasn't going to try to sell my developers on working hard for the sake of the company. That's a cliché. I wanted to get them to work hard for me, the way I was inspired to work hard for Al. And in exchange, I do everything in my power for them. If they believe that I truly care about them, which I do, I have a much better chance of getting them to help me and thus, help the company.
One thing I did was purchase new computers for my developers with 90 inches of monitor space. You could fit a full-grown New York Knick's guard on the monitor. Everyone in the company took notice of the technology team's giant new machines. It made my group feel special, and I think it helped inspire them to do their best work.
I also created wallpaper for their desktops that featured the Google logo in a rifle's cross hairs and put it on all the developers' machines. Google is by far our largest competitor, and I wanted to align my developers around a common foe and make it clear to them that we're shooting for the top. We are not out to be a successful online marketing company; we are out to be THE successful online marketing company. I want Innovation Ads to be as well known for its advertising platforms as Google, Microsoft and Yahoo.
When everyone else in the company saw the wallpaper, they wanted it on their machines, too. Between the monitors and the wallpaper, the technology group's zeitgeist had begun.
What a Difference Six Months Makes
Over the course of my 10-year career with Corporate Express, I became a go-to person. I felt like a star, but at the same time I always wondered in the back of my mind if my star status was due to tenure or talent. I took this job with Innovation Ads for many reasons. First, I always wanted to be a CIO. Second, it was a great company in a new and exciting industry, and I relished the chance to help it achieve its true potential. Finally, I wanted to test myself—to see if I could replicate my success at Corporate Express in a new position, with a new company, in a new industry, in a new state with people I'd never met before—and more importantly, with people who had never met me.
Although the first couple of weeks were tough, I'm now six months into my job and I have to say I am loving life. This is what I want to do. This is where I want to do it. This is what I worked a decade for. This is my dream.
The executives and managers who've been with Innovation Ads from the start are running an extremely successful business. What they've done here is amazing, building a company from zero to the multimillion dollar company it is today. They might not have one single gray hair, and their style is definitely more freewheeling than stodgy, but they're just as effective, productive and successful as the rest of corporate America, if not more so. I've learned a whole lot more about management and motivation here than I would have had I worked another 10 years at Corporate Express.
I'm getting way more satisfaction and joy now building and guiding a team than I got from being the go-to guy at Corporate Express. I'm watching my team grow, make the right moves and be productive. I've doubled the development staff to 12. Productivity has grown tremendously. The accuracy of code has also gone up tremendously. Instead of having to light a fire under my staff, I have to hold them back. They're smiling, laughing, arguing and doing all the things a team should. The whole company's morale is up because of the development group. I sometimes sit in my office watching them work and I smile with pride.
And yes, in case you were wondering, the doors to the office are now secure. They lock and unlock via electronic security cards. We know who comes and goes at any time, and we can even unlock the doors via the Internet if we have to.
© 2008 CXO Media Inc.

IT and Business Clippings

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[edit] Open source vs. Open Innovation

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What It's Like to Be a First-Time CIO

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