Shefaly blogs about the importance of keeping promises to customers. Drawing largely from the consumer product world, she paints an argument for timely delivery and the serious costs of messing up. In the highly transactional world of consumer goods with large volumes of relatively lower priced goods getting sold to the masses this is very true. You absolutely have to tie in your suppliers, manufacturing, marketing and sales to a tee.

Move to software.

Nick Carr talks of commoditization in the hardware and software product markets: "It's typical when industries mature and buyers start focusing on prices rather than features…. They're competing on cost rather than innovation and features."

What about the world of software services? Firstly, we deal with 'clients' and not 'customers'. Dawud nails the difference. With clients, the 'when' of delivery is important, but the 'how' of delivery is even more important.

When was the last time you had a large, complex program delivered perfectly on time? Let's face it. Slip ups happen. Unlike a P&G shampoo, each project is 'manufactured' to order and there is too much magic in the process for things to be perfect. What saves the day is relationships and the trust that comes with it.

So, how do you build trust while you deliver?

Honesty: Many delivery issues have two sides to it. Both the vendor and the client could have done things different. One way to open up clients to do their bit is by being honest about one's own mistakes. When clients see that they you are your own devil's advocate, they will stop feeling compelled to attack and will instead be open to meet you half way.
Honesty is also in being open about what is good your clients. Say you are trying to sell a rewrite of a large legacy mainframe application. There are two options in front of you.
Option a). Keep the backend as it is and rewrite the UI alone in a new technology. Price: $5M
Option b). Rewrite the whole thing lock stock and barrel.  Price: $12M.
Based on your analysis you are sure that Option b would be too high a risk to take and would likely lead to failure. Option a, though far from ideal would more than meet the needs and has a high chance of success. Which one would you recommend? If you put down the pros and cons in all honesty and recommend option a, this would lead to a high trust partnership and if you land up with downstream issues in delivery, you will have the client on your side. Joe Ippolito has some good tips on honesty in sales.

Communication: Communicate both the good and the not so good at the right time using the right tools. Often, bad news is bottled up and hidden away from the customer until it is too late. The reasons? Hope and fear. On one hand, people hope that somehow the problem would vanish and on the other hand they fear that bringing things out into the open would spoil relationships or make them look incompetent. Often, bad news is brought up through emails. Big mistake. Face to face communication of bad news allows appropriate communication of the context and ensures you have better control on the situation. Communicating bad news early and in a face to face discussion builds trust and shows the client that you really want to solve problems.

Listen, listen and listen: Listening to anyone provides that person psychological air and allows a climate of trust to build. Ask for ways in which your service can be improved and don't take "all is fine" for an answer. All is never fine. Probe to bring out small irritants. Nips these in the bud.

Choose battles wisely: Every client will have shortcomings. Overlook the small ones, complement the client and compensate for these lapses. Letting the small stuff pass builds trust and allows you to bring up the more important aspects where you need the client to change.

How you deliver does matter a lot.

Ramshankar laments about the lack of visibility when it comes to the services that IT departments support and expose to the business. "There are very few organizations where one gets a sense of what IT truly delivers to its customers at what cost, at what performance level, conditions and so on….What about “make your own Service menu” like “make your own pasta”! Is there flexibility within IT Services to accomplish this?" He goes on to suggest ITIL V3, a standard that recommends dynamic catalogs as a possible solution that can help end users and business see IT like a burger. Log in to an intranet portal or something and 'order' IT. Essentially hide away complexity and expose a very simple front end to business.

Renjith blogs about ITIL V3…"the Service Catalog concept have been enhanced and coupled with Demand Management, Portfolio Management and Request fulfillment."  

Interesting. Now, where's the burger?



IT plays multiple hats when it comes to business. I briefly touched upon the two broad types of IT demand in a previous post. Basically, there is the transformational 'change the business' part, and then you have the keep-the-lights-on 'run the business' aspect. 

Certain portions of 'run the business' are definitely like a burger. Desktop software installations come to mind. You have limited complexity, a fixed set of ingredients (read skills sets), a mature and repeatable execution model, resources are interchangable and not too many unknowns. When was the last time an IT engineer failed to install Office on your desktop ? Surely you can, given the right tools, adopt sophisticated demand forecasting with integrated resource fullfillment and maybe even aggregate demand across customers and have a portfolio level approach. The benefits are clear and easy to quantify.

'Change the business' is an entirely different game altogether and so will any aspect of 'run the business' that requires close integration with 'change the business'. This is more complex stuff that requires a more strategic approach both from business and from IT. 'Change the business' is more like a full course meal in a gourmet restaurant, replete with all the bells and whistles. 

Burgers are cool and have their place. So do gourmet dinners. The trick is to know what to serve to which customer.

Abhijit writes about estimation as being the weakest link in software development. He says:

"Most of the times the people who estimate and people who develop are different, their skillsets are different, and most importantly the business needs and constraints change at a higher frequency. "

Estimation is surely a weak link. Often, sales guys try to sell the project through an estimate. From a management perspective, if you can get the three edges (scope, time, cost) of the 'golden' triangle to meet then you have a successful development project. What do you think is the weakest link ?

I sometimes grudge the fact that I never made any money with stock options. But do I deserve any at all ? Let me find out. First, let me establish a logical basis for granting stock options to an employee. Stock is ultimately a share in the business and to get a share of the business, broadly speaking: a). One should have invested one's own money as capital (in which case the stock compensates for entrepreneurial risk taken)  or b).One should have been in a position to do something that would enhance shareholder value directly and importantly tangibly. I stress the words directly and tangibly here and c). The difference in shareholder value added between an outstanding performer and an average one should be significant enough to grant options to motivate the outstanding performer and d). The base salary should be low enough compared to the shareholder value added to justify share options.

Case a). Granting options to a project manager. Base salary: 80K
Sub case 1: Great manager manages the project well and delivers 10% ahead of schedule with associated 10% lesser cost at an increased operating margin of 30%. Believe me, this is not an easy act.
Annual Revenue from  project : $1M
Operating margin          : 30%
Earnings from project   : $300000
Share holder value added : $6M (assuming a p/e of 20).
Sub Case 2: Average manager delivers 10% behind schedule with associated 10% cost overhead at an reduced operating margin of 25%. 
Annual Revenue from  project : $1M (most clients ultimately pay up!)
Operating margin          : 25%
Earnings from project   : $250000
Share holder value added : $5M (assuming a p/e of 20).
There is an added cost due to loss of interest due to delayed payment which I shall ignore here.



Case b). Granting options to a sales manager.Base salary: 100K
Sub case 1: Great manager signs three large deals aggregating $50M at an increased bill rate that allow a projected operating margin of 30%
Annual Revenue generated : $50M
Operating margin          : 30%
Earnings from the manager  : $15M
Share holder value added : $300M (assuming a p/e of 20).
Sub Case 2: Average manager signs one deal for $5M at an decreased bill rate that allow a projected operating margin of 25%
Annual Revenue generated : $1M
Operating margin          : 25%
Earnings from the manager  : $250K
Share holder value added : $5M (assuming a p/e of 20).

Seems like the superstar sales guy deserves a few options. His contribution to share holder value is direct, tangible and is an incredible 3000 times his base compensation and he outperforms his "average" counterpart by a factor of 60.
The superstar project manager for all the long nights he has put in has only managed a contribution to share holder value that is 75 times his base pay and he outperforms his "average" counterpart only by a factor of 1.2. Moreover, his contribution is not as direct and as tangible as that of the sales guy. After all what is a project manager without a team ?

It is never easy to link individual contributions to shareholder value, and the logic in the arguments above are not watertight, but well it is clear that I am either moving into sales or going back and ranting to my boss. :-)

                        -Frederick.P.Brooks in the ‘Mythical Man Month’

In a people intensive business like software services, attracting and retaining talent is the single biggest driver for software delivery success. I have seen one great developer single handedly pull a complex project out of the dumps in three weeks flat. Unfortunately, he was too good to stick on and left (sigh!). I am sure any manager would have had similar experiences. Well, let me start with the fundamental issue of attracting talent. After all you can’t retain talent that you can’t attract in the first place. Let me point you to the master blogger Joel Spolsky’s article on this. For those of you that like my site better than Joel’s (now stop laughing with me will you!), read on to know my specific views for the Indian Software market. So you are a small services company competing for talent with the likes of HP and Oracle in a seller’s market. What is it that you can do to attract great talent?

Create a unique, niche brand identity: In India, in the services world, people tend to gravitate towards attractive brand names. Now, many of the attractive brands are also the bigger brands. No cause for despair though. The key here is that you don’t need to be a big brand to be an attractive one. But you need to generate the buzz, the excitement. Now, how many software professionals from Bangalore remember the Aztec Software recruitment billboards that were a regular feature till a few years back? The billboards are no longer there, but that’s a terrific example of a small company creating a strong recruitment brand image. Define a niche for yourself, dream up an innovative promotion campaign and go to town with it and watch the resumes roll in. Say you are a product outsourcing company; craft your campaign around the unique words, feelings and emotions that your employees get to experience each day. Use words unique to your context (say a code word for a successful product release, or the nick name for the client’s CTO). Better still, get your employees to dream up the content for your ads. Nobody can communicate raw emotion than the people who are experiencing it every day, day after day. Let the excitement, fun and learning come out in a way only your employees can put it!

Consciously build informal networks: The best prospects are those that never apply! How does one target this segment? Brute force head hunting comes full of risks. Well, actively create informal networks. If you have a need for great architects, create a corporate “Architecture blog” and encourage your star architects to start writing about their work and their ideas. This is not going to directly bring in dozens of resumes overnight, but will create mindshare in the niche segments that you want to target. When your competitor’s star awakens, his first instinct will be to tap into your informal network. Why? Because, thanks to the value he has gained from your company’s blog and the semi personal/semi professional relationships he has built with your employees, the company and it’s work are already sold. He already believes that people like him are successful in your company. You just need to discuss numbers now before you bring him in!

Publicize your success with people: Next time you put out your recruitment ad, let your stars sing their success stories. Let them speak about how the company has helped them reach their goals. Give out the contact details of your star and let the candidates write to/speak to him. This will serve the cause of retention and also make your recruitment pitch more credible.  

Impress the common man: The common man knows Microsoft as Bill Gates’s company and not without good reason. In India, people are attracted to big charismatic names. But why bother about impressing the common man when you are looking for great techies? India is a place where social pressure and image are important drivers for choosing a company, especially at junior levels. I recently had a relative call me up and ask me if his decision to “send” his freshman engineer son to a big brand name company over a smaller unknown company (one that paid 50% more) was a good one. The father, a cement company veteran had a huge say in where his son was to start his career. Still don’t believe me? OK. Go to Bharat Matrimony and do an advanced search for any brand name software company. You will be surprised at the number of guys and girls trumpeting the fact that they work for a well known brand. If you have a big name in your company, get an NDTV or a CNBC to interview her. Let the people *outside* the software world know about what she and your company are doing.

Make recruitment ads more meaningful: Most recruitment ads do two things well .a). Spell out a great job description. b). Trumpet the company. What most don’t do well is to spell out the benefits. If your company sponsors an expensive and coveted certification, have a great pension scheme or a tie up with an IIM to do an MBA; make it part of your ad. You never know what appeals to an individual. Put your best step forward!

Before I end, thanks to my friend Sumanta, a tech whiz with a large product development outsourcer for bringing up this important topic to my notice.

Learn to say no: "Try to please everybody and you end up pleasing nobody" the saying goes. It can't be truer. Be it with subordinates or superiors, push back legitimately with datapoints to back up your case. A developer overloaded with work could come up with estimates for her tasks and share the same with her manager, therby rescheduling the excess work. Pushing back and delivering is usually better than promising and failing. Here are six great ways to say no.    

Leave multitasking to your Pentium: Often you find job descriptions that read: " Should have the ability to multitask". Hopefully recruiters are confusing the ability to handle tasks requiring different skill sets for true multi tasking! Multi tasking is a good way of introducing errors into all the tasks that are being multi tasked. Single task focus allows one to get more work done with fewer errors. 

PS: Even CPU's that do too much multi tasking are inefficient due to the context switching overhead.

Visualize stressful activities before you execute: Visualize yourself successfully performing a stressful activity before you actually do it. Say you find salary negotiations stressful, visualize yourself speaking to the potential recruiter. Mentaly play out the scenarios in detail and see yourself walking off with your dream pay package. 

Cut out the harmful imagination: During stressful times, the demons in our mind are often more dangerous that the real world problems confronting us. Our own imagination plays out the worse, creating self induced stress.

Be on top of your game: Often, incompetence is the root cause of stress at work. Actively take up certifications and courses that keep you on the bleeding edge of technology and business. Ensure the effort you put in links up with the next milestone you wish to reach in your career. A team lead who desires to be a manager could investing time in running through free training programs at the MS website. Proactive skill development helps alleviate the anxiety and the stress that sometimes comes with career growth.

Delegate effectively: Effective delegation helps empower people, allows one to focus on higher value added activities and distributes workload. The initial overhead involved in kickstarting the delegation is more than made up for by the rewards that accrue later. Here are some tips on effective delegation from about.com.

Hire the right people under you : A successful team requires a potpourri of skills: Technical, managerial and domain. It is impossible for the top guy to have everything. Keep a core skill with you, know enough about the others and ensure people under you complement your core skill by specializing in areas that are outside your core skill.   

Crap has hit the fan ? Remember the old Persian saying "Even this will pass".

Exercise daily no matter what: Twenty push ups will do the trick. No fancy equipment, no personal trainers and no five thousand rupees shoes from Nike. Any sort of vigorous physical exercise releases endorphins, natures own “fix”. Not convinced ? Ok, maybe this BBC article can convince you.  

Pray often: Stress comes from two broad sources: a). Things we can control b). Things we cannot. Prayer is magical when it comes to dealing with the unknown. The power of faith is priceless when you really need it. You can get prayers from your own faith here.

Take adversities as opportunities for improvement:     

"That which does not kill you makes you stronger" - Friedrich Nietzsche

Every difficulty potentially teaches us a new skill. They make us stronger, better and tougher.Here's what Charles Carpenter says about handling adversities. Also check out the fable about the coffee beans.