Category: Thought of the day (Page 1 of 4)
I’m well known for not liking analogies. I find they generally give people comfort that they understand something without actually changing how much something is understood.
So if I’m forced to use an analogy I’ll at least try to use one that hasn’t been used before, and to use it until it breaks by folding backwards on the analogy so it no longer makes sense. My data quality assurance analogy at the moment is:
Imagine you’re asked to prove that you own your house.
This is an analogous to the regulatory trajectory in financial services – where increasingly data provided to regulators must be attested to met certain data quality criteria.
So again, imagine somebody has asked you to prove that you own your house. You can do this by presenting a deed of title. You might also make a humorous distinction between you owning your house versus you owning a mortgage. Because really the bank owns the house, am I right?
But within this distinction you can make a fairly precise statement about how much of your home you own. You might need to rely on estimates regarding what it’s worth, but you can get the percentages of ownership pretty accurate.
But imagine if deeds of title didn’t exist. Imagine mortgages didn’t exist. Imagine plans that show houses appearing on lots with specific boundaries and reference points for context didn’t exist.
Imagine again being asked to prove that you own your house without the benefit of deeds, mortgages, plans, addresses, and other context. It’s still possible to prove ownership. Now you have to lean on concepts like homesteading; and create a narrative chain of ownership based on the initial claiming and working of the land, through successive transfers of ownership to your own claim. You also have to devise your own way of identifying your house – perhaps using a flag with your family crest.
The problem with this approach to proving ownership is that it’s different for each home. Everybody would need to tell the entire story of how this particular home has come to be on this particular block of land, and who participated at every step of construction and transfer of ownership.
The depth and level of corroboration for this story of ownership would mean we’d need to bring in many of the people who are characters in the narrative and confirm their roles and recollections. Some of these people would disagree with particular points in the story enough to open up doubt or all least require further alternative corroboration.
Once some of the people in the narrative die, or even if they just refuse to turn up for each successive re-telling of the ownership narrative, you lose the ability to prove ownership. This type of approach is therefore clumbersum – requiring a complex narrative that is different for each house – and ultimately inconsistent in the level of assurance it can provide.
The level of assurance is itself dependent on the unique and total narrative around ownership. If, for a particular home, part of the ownership story contains the unsolved murder of the owner and subsequent homesteading by a mysterious stranger, then the certainty of ownership is different than for an ownership story that doesn’t contain that feature. So the idea of a proof with 95% certainty cannot be committed to in general.
The alternative – when you don’t need a completely different narrative ownership story per individual home – can’t be designed by any individual home owner. Instead it has to be built up, shared, agreed, and sustained by the community.
The system for proving home ownership that we have now, that allows for proof of ownership, and even allows as to manage precise percentages of ownership, is the analogy I use for data quality. Because information passes through the community like the ownership of a house, there needs to be a framework agreed by the community so data quality can be consistently understood.
When somebody visits your house for dinner, it is enough that you answer the door to prove sufficient ownership of this house to not expect dinner to be interrupted. Sufficient ownership for this purpose isn’t even real ownership – it could just be a rental agreement. Whereas other assertions of ownership require further proof.
If your organisation doesn’t have artefacts that describe the structure and flow of information it’s like not having house plans that show which property we are talking about. Likewise, if the community doesn’t agree to a specific, potentially costly, process of verification of data as it is transported across the organisation, this is like not having title deeds that you can depend on.
Still with me on this analogy? No, me neither – which is why I don’t like analogies.
Amazon is betting that the troves of data it generates from shopping patterns on its website will give it advantages in its retail location that other bookstores can’t match. It will use data to pick titles that will most appeal to Seattle shoppers.
Reminds me of banks and branch networks, the doubters when Apple announced retail stores, and how things both change and stay the same.
Here’s a thought of the day:
The commoditisation of management: Defined as the process in which access to information means that any idiot who has just watched a TED talk can promote themselves as the pinnacle of leadership.
But I jest…
I would have loved to have seen the presentation that’s been given some positive press here. Westpac are putting some meat around their transformation agenda after having learnt from the experiences of other banks.
Many of these large scale transformation programs (think ERPs, CRMs, core systems replacements, etc) have a tendency to teach the organisation about a product. The whole organisation will learn how to implement that product – they’ll learn it’s strengths and weaknesses, and the right and wrong ways to successfully exploit them. Those in the organisation who aren’t part of the solution will at least learn that they have an opinion about these things.
Now, the actual benefits of these programs aside, this is a strange way to for your organisation to spend a few years. These programs become a distraction that take up executive, management, and operational attention. But what if you changed the conversations so that rather than learning about a product, you completed the same program but what you where really doing was learning about your customers and how to better orientate your organisation towards their needs?
I think the approach Dave Curran has managed to convey (again, based on the reporting – I wasn’t there) starts to do that. This approach means that effort is first and foremost about the customer. Now I’m the first to say it’s not that simple. There is still a lot of work to make that vision operational. But it completely changes what the organisation will primarily be learning during program.
The key lessons now will be about customers – what Westpac knows about them, what they don’t, what decisions they are making every day, and how that might be understood by Westpac staff when making their decisions. The other lesson they will be learning is how technologies they already have, combined with technologies available in the market, can be used together to support various customer scenarios. Not trying to find “the best” solution without any context, but trying to design solutions across a well informed view of what is important to customers.
I think too that if this is done right, the discussions won’t be broad sweeping generalisations. They won’t be “is this one monolithic system really customer focused?” Likewise, there shouldn’t be that tendency to continuously revert to “yeah, but what is a customer?” That conversation seems out-of-the-box but is typically only asked because the people in the room have never met a customer (!) so they revert to broad open questions rather than use their experience.
Done right, this approach will draw out rich, informed conversations that admit that we have to bring components together to support specific customer scenarios. It will draw out conversation about what we don’t (!) and ensure we find out. Done right, this approach keeps up the sustained momentum these programs need to do the hard work that will truly transform the organisation.
I have a few grounding concepts that I think are relevant here. They are quite simple in their nature but powerful as the basis for governing change. I’d suggest these should be established for the program.
The Customer Advocacy Office
We talk about the importance of customers all the time but often the question we don’t ask is “what is the business unit in our organisation that advocates for our customers?” I don’t mean lets give somebody the responsibility for customer and then split the role into “Contact Centre” and “Web site”. I mean real, serious thinking about customers. Being able to understand and back up with facts. Being able to offer targeted operational changes – backed by evidence – that will improve the experience of customers.
Customer Experience Campaigns
Your organisation is probably comfortable with marketing campaigns. But what if the concept of a campaign was expended to include any situation where your customer had a defining positive or negative experience with your brand? Customer Experience Campaigns apply the basic concepts that are used to manage a marketing campaigns to all of the individual experiences of your customers. This is actually really difficult, and really important. And it’s what we mean when we say we want to be customer focused – but do we actually do it?
Customer Information Management
There is a lot of work required to get a single view of a customer. There is even more work required to repurpose that view so that it highlights the information required for different groups to make decisions (i.e. single core data, multiple views). But that’s still not “customer information” – that’s just consolidating and presenting data effectively. A true responsibly for customer information management means knowing what you don’t know about your customers, and understanding the value of finding out. It also means understanding how modern technology allows us to understand and predict the complex decisions that our customers are making by using big, social, cheap, integrated data to act as a proxy for intimacy when you can’t always get inside your customer’s heads.
Customer Return on Operations
Things like Net Promotor Score (NPS) are great but they are the tip of the iceberg when it comes to using customer-driven metrics to improve your organisation. These “voice of the customer” metrics are great but they are “lag” indicators until you do the correlation required to make them “lead” indicators. Measuring you customer return on operations combines how your customers think you perform with how you think you perform. It’s hard, it takes a prolonged effort, but who could argue that it’s not important?
Competency Centre -based Business Transformation
Many transformation programs are top-down. This means they are limited to the types of transformation that you can achieve top-down. The Westpac approach will required a middle-out approach. There are many functions within the organisation that will need to be transformed to execute on the vision. Thankfully, competency-centre based business transformation is an excellent alternative to top-down transformation – if your transformation team “gets it”.
This approach also includes the question of which type of “core” you want your organisation to have (accounting, versus product customisation, versus customer hub). When you’ve done the right homework, you can then make clear and informed decisions on whether something is differentiating or not differentiating. This decision drives standardisation but it is so mixed up in a tight bundle or current power struggles it needs an informed third party to arbitrate.
I’m not saying just talk about the concepts above in the executive management team. I’m saying that in addition to the other governance required for this sort of program there are executive roles for each of the above areas. There are charters and terms of reference for each of the above areas. Each of these areas should be managed as a business capability where the executive in charge is responsible for working across functions so that the people, process, information, and technology all work together to support the capability.
By the way, I’m not sure I get the title “Dancing About Architecture” that the article I link to above uses. I’m assuming it’s a reference to the “Writing about music is like dancing about architecture” quote that I, like everybody else, mis-attributed to Elvis Costello until I just looked it up. It’s a nice image – the idea that you might use something other than architecture (such as your customers) to guide the direction of your architecture. You dance around (or “about”) your architecture so it knows where to look. Though by alluding to the music quote the author seems critical of the approach. Anyway – looking forward to part 2…
Okay, so this has the scientific due diligence of an art installation rather than an actual proof of utility. But it shows why market-based management is so important.
One project is Michael Marcovici’s Rat Trader. The book describes the training of laboratory rats to trade in foreign exchange and commodity futures markets. Marcovici says the rats “outperformed some of the world’s leading human fund managers.” The rats were trained to press a red or green button to give buy or sell signals, after listening to ticker tape movements represented as sounds. If they called the market right they were fed, if they called it wrong they got a small electric shock. Male and female rats performed equally well. The second generation of rattraders, cross-bred from the best performers in the first generation, appeared to have even better performance, although this is a preliminary result, according to the text. Marcovici’s plan, he writes, is to breed enough of them to set up a hedge fund.
If the above scenario actually works it means a dramatic change in the way we think about the “decision-making” part of the management process.
If the stream of data (think “big data”) can be processed by an arbitrary meat-based neural network – and proven to be effective – what is the point of performance management on the rats?
IT News is all about government intervention today.
Leading with stories on the London Taxi blockade and the likely unpopular stance of the AIIA to recommend not introducing legislation to address the so-called “Australia tax” on IT products and services.
It all comes back to innovation. Uber, who the Taxi drivers are complaining about, is innovating. They’ve developed a high quality service that customers want. They are disrupting an industry. They are doing what every management consultant has been telling them to do (though I’m not suggesting that’s why they’re doing it).
As usual, their competitors want protection from the government. Which seems unfair and all very anti-competative of the taxi drivers but I understand where they are coming from. They don’t just want protection – they want protection in exchange for the all of the regulation they have had to endure in the past:
“Why, asked the drivers, is Uber allowed to compete in an industry that is otherwise highly regulated?”
Fair point. Previous legislation has an impact of future expectations – remember that.
Back here in Australia, where Microsoft has admitted it is engaging in the horrendous crime of “charging what Australians could bear” – AIIA is recognising that legislation that caps prices will just as likely cause exits from the market as it will cause lower prices. Just like minimum wage legislation – however desirable in its intended outcome – can’t help but cause jobs to disappear.
But what if it’s not just that Australia can bear higher prices? What if this just plays to our pride in being a lucky and prosperous country? What if Australia’s payment of higher prices reflects an innovation challenge?
It’s not all about price elasticity. There is another major competitive force at work here – the threat of alternatives. Perhaps the reason Australia appears to bear higher prices isn’t because of the prosperity of the lucky country no matter how much we want to believe it.
Perhaps Australia is paying more for IT products and services because our knowledge of alternatives is less.
I’m a happy Apple customer so I’m not knocking Apple products at all. But Apple was slow to make a dent in the Asian market because there are so many other options there. Success in Australia’s limited option market probably helps fund expansion into Asia (speculation).
Knowledge and availability of alternatives is an important force in competition and therefore prices. I’d argue that availability isn’t a problem in Australia (though it might be if you tried to regular price) but rather the problem is knowledge of alternatives.
I’m not just talking about alternatives to Microsoft Office like OpenOffice, LibreOffice, Google Doc, etc. I’m talk about alternatives to Microsoft Office like focusing on the content! Like not needing to write a long complex document to get things done. Like maybe using Photoshop instead and creating something a little more visual.
I’m also talking about alternatives like experimenting with your digital channels to try out new integrations with your customers using the devices they already use. Rather than writing an internal document to explain to a disengaged management team something they should already know. Take that team to a customer site. Or at least show them the data you have collected about in-store traffic flow.
AIIA has the right idea. The legislative framework needs to create the environment for innovation here in Australia. Not to try and protect us from the companies we freely purchase products and services from. The Australian response doesn’t always have to be legislate, or boycott, or feel helpless. Sometimes it has to be – innovate.
Does not knowing how to do something yourself make you expert enough to tell other people that “it won’t take you long”?