Remote isn’t going away

Rishi Sunak’s recent urging to get people into the office isn’t going to be enough to reverse the trend to a hybrid work environment.

My (small) workplace did a staff survey last year to get some feedback on whether/how much people wanted to be in the office in the future. The general consensus was for some hybrid with a couple of days a week in the office. Similar patterns seem to be playing out in many other companies.

In general, we saw that younger staff wanted more time in the office and older staff wanted less. Simple explanation: If you’ve got a young family and moved out of town somewhere with a longer commute but more space then you’ll be perfectly happy spending more time at home. If you’re quarantining in a small flatshare with little outside space and not much chance to meet other people then you will crave time away from home.

As many industries move towards a more hybrid onsite/remote working pattern, how big of a problem is this for younger employees? Do older staff have a moral duty to be in the office to help develop younger staff?

I fully understand that people of a certain age have fond memories of chatting to someone far more senior in the smoking room and that people of certain industry backgrounds will have fond memories of working long days in the office and then going out all night with their co-workers.

But even in the office a lot has changed over the last 20 years. There was a time when people would be regularly talking to each other, either face to face or on the phone. Now it’s common for people sitting next to each other to message each other. I have to keep reminding myself that when someone says “I spoke to X”, they usually mean “I sent X an email”. Not to mention how many kids are comfortable building relationships with each other over Discord rather than meeting face to face.

Even before the 2020 lockdowns began, people were relying on virtual forms of communication more and more. The lockdowns accelerated and broadened a trend that was already happening.

Insisting that people go back to the old ways of working simply because people in authority have fond memories of the past is not going to cut it. While there is obviously value in physically meeting face to face, there is also value in working remotely. The world has moved on and managers need to adjust to handling hybrid/remote teams.

Management and product development lessons from the 1950’s

2671775In 1955, Elihu Katz and Paul Lazarsfeld published “Personal Influence“. This studied how small-group dynamics moderate or influence mass media messaging. For example how people decide who to vote for, which brand of lipstick to use, or which movie to go and watch.

Reading this in 2018 it’s striking to see how much is still valid. I’m not posting this to provide tremendous new insights. Any insights here are over 60 years old. Apparently, human behaviour doesn’t change very much over the generations.

How people choose their leaders

In order to become a leader, one must share prevailing opinions and attitudes. (p52)

They cite a 1952 study on children in a day nursery in which kids with “leadership qualities” were separated from the other children who were then placed into groups of 3-6. These new groups created their own “traditions” (e.g. who sits where, group jargon, division of who plays with what objects). The original leaders were then re-introduced:

In every case, when an old leader attempted to assert authority which went contrary to a newly established “tradition” of the group, the group did not respond. Some of the leaders, as a matter of fact, never returned to power. Others, who were successful, did achieve leadership once more but only after they had completely identified with the new “tradition” and participated in it themselves. (p52)

Or another 1952 study amongst a religious interest group, a political group, a medical fraternity and a medical sorority:

[T]hose who had been chosen as leaders were much more accurate in judging group opinion … But this was so only on the matters which were relevant to the group’s interest – medicine for the medical group, politics for the political group, etc. It seems reasonable to conclude … that leaders of groups like this are chosen, in part at least, because of recognized qualities of ‘sensitivity’ to other members of the group. (p102)

A succinct argument as to why people who want to become leaders need to first spend time listening.

Group participation improves take-up

Here’s are some more 1952 studies that the authors cite:

  1. A study in a maternity hospital in which “some mothers were given individual instruction .. and others were formed into groups of six and guided in a discussion which culminated in a [group] ‘decision’ [to follow the instruction.” The participants in the group dicussion adhered “much more closely” to the child-care programme. (pp74-75).
  2. A study comparing a lecture approach vs a group discussion on “the nutritional and patriotic justifications for the wartime food campaign to buy and serve ‘unpopular’ cuts of meat. 3% of those involved in the lecture followed the desired course of action, vs 32% of those in the group discussion.

Worth bearing in mind in the next meeting you host, or the next corporate communication you send out.

How small groups construct their reality

So many things in the world are inaccessible to direct empirical observation that individuals must continually rely on each other for making sense out of things. (p55)

Apparently 1952 was a bumper year for social sciences. Here is another 1952 study in which individuals were asked to decide how far and in which direction a point of light was moving. The catch was that the point of light was static. The study found that:

  1. When people were shown the light individually, they would make their own judgment of how it was moving. When they were later put into small groups of 2 or 3, “[e]ach of the subjects based his first few estimates on his previously established standard, but confronted, this time, with the dissenting judgments of the others each gave way somewhat until a new, group standard became established.”
  2. If a group session came first, the group would achieve a consensus of how the light was moving, and each individual would adopt the group’s consensus as their own position.

The way reality is generated by social groups is something to bear in mind during user research activities.

How the make-up of a group affects quality of communication

You guessed it, it’s another 1952 study that found that:

  1. Rank in the group affects how people communicate. Specifically: “[P]-erson-to-person messaged are directed at the more popular group members and thus may be said to move upward in the hierarchy, while communication from one person to several others tends to flow down” (p89).
  2. As groups get larger (from 3 to 8) “more and more communication is directed to one member of the group, thus reducing the relative amount of interchange among all members with each other. At the same time the recipient of this increased attention begins to direct more and more of his remarks to the group as a whole, and proportionately less to specific individuals.” (pp89-90)

I’m sure these two findings will ring very true of many meetings you’ve been in. I suspect that the person who becomes the centralising leader in these communications might not even realise the role they are playing. Reading this makes me more keen to try out the kind of silent meetings approach they use at Square.



That’s not a business, it’s a hustle

“That’s not a business, it’s a hustle.”

I’m paraphrasing Dan Lyons speaking at a recent Chew The Fat event. He was talking about his time at HubSpot and wondering how a loss-making company could grow so fast, list, and make a lot of investors a lot of money. In his view its business model is fundamentally flawed: he describes it as buying dollar bills at face value and selling them at 75 cents each. That sort of model may well get you hyper-growth but it’s a hustle, not a business.

The image of the hustling, zillionaire tech entrepreneur who has never made worried about profits has become dangerously deeply ingrained. I recently got talking to a graduate – evidently a bright individual – who ran a business idea past me. It was to do with optimising a retail shopping experience. Quite a neat idea so I asked the obvious question: where would the revenue come from? The consumers or the retailers?

He didn’t have an answer.

He assumed that all he’d have to do is somehow get some VC money, spend it on scaling a platform with loads of users, then sell out and walk off into the distance with $50 million in his pocket. Now that’s a hustle, not a business. There are cases where this has happened. But there are also plenty of cases of people winning the lottery and I suspect that on a risk-weighted basis, winning the lottery is more likely than being a part of the next Whatsapp.

Please, if you want to become an entrepreneur, bear these two things in mind:

  1. You stand a better chance of making a successful business if you have intimate knowledge of the problem you are trying to solve. If you’re targeting students then, fine, as a recent student you might have more than enough knowledge to build a viable business. But if you’re not then probably you would need to work somewhere for a few years to get that deep understanding first (“domain knowledge”, in the jargon)
  2. You will stand a better chance of success if you can create something that makes revenue, profit and cash. All those things are different so make sure you have a clear idea of how they will interplay in your business. In fact, you might even end up with more money in your pocket if you build a niche, profitable, growing business than if you go chasing unicorns.

This doesn’t mean you need a detailed business plan. You just need to be articulate those two points in as straightforward a fashion as possible. Here’s a classic DHH talk to hopefully get you thinking along the right lines . Incredibly it is still as valid today as it was in 2008.

Startup Lessons from the English East India Company


The Company of Merchants of London trading into the East Indies was founded in 1600 as a scrappy startup trying to disrupt a spice trade dominated by the Dutch. Over the next two centuries it evolved into a solid financial performer, a regulated monopoly and then into a branch of government.

Please put aside for the rest of this post any concerns about the various and many reprehensible things done by, or in the name of, this company. Just look at it from the perspective of what it can tell us about growing and evolving a business.

Turns out that plus ca change. Much of what we obsess about in the world of startups today would be very recognisable to an observer in the 1600’s. In the 21st Century how companies get created and develop is not all that different to 400+ years ago. Shouldn’t be surprising as ultimately we are still people and people haven’t changed all that much over the centuries.

The quotes below are from John Keay’s The Honourable Company.

On being an early stage investor

The first voyage didn’t live up to founder or investor expectations but it was a pretty impressive feat nonetheless. Now there’s a sentence that could easily apply to every MVP I’ve seen. It set out in 1601 in search of the spice islands and their cloves. Didn’t quite make it but managed to return in 1603 with plenty of pepper.

[T]he 218 petitioners who in 1600 had become the Company of Merchants of London trading into the East Indies had subscribed for only one voyage. The majority now wanted their money back; they were not amused when instead they were told that for every £250 they had subscribed, £200 must be reinvested in a second voyage. (p25)

Same lesson applies today to any early seed investor. Make sure you’ve kept enough money aside for a top-up later on. Whatever you put in now won’t be enough.

On the importance of dog-fooding

England had one huge commodity at the time: wool. The Company was desperate to find a market for wool and thought that Japan might be a good bet. Unfortunately not so. Keay quotes John Saris, leader of this expedition who in 1613 wrote that:

The natives were now more backward to buy than before because they saw that we ourselves were no forwarder in wearing the thing that we recommended to them. ‘For’, said they, ‘you commend your cloth [wool] unto us but you yourselves wear least thereof, the better sort of you wearing silken garments, the meaner fustians [made from cotton] (p58).

Product Managers take note: use your product and be seen to use it 🙂

On the roller-coaster of investing in a growth stock

“£100 of stock purchased … in 1657 had slumped to £70 by 1665 but thereafter appreciated dramatically. By 1677 it was valued at £245 and by 1683 was selling at anything between £360 and £500.” (p170)

Now look at the stock price chart of Facebook 2013 vs Facebook 2016.

On becoming a solid financial performer

If the 17th Century was about a scrappy startup trying to figure out its business model, in the 18th Century the bean counters took over.

By 1710 it was regularly sending to the East ten to fifteen ships a year, each of around 300 tons… Thirty years later the number of sailings had risen steadily … to around twenty, each ship being usually of 490 tons. (Over 500 tons and the ship’s company had to include a chaplain.) … Naturally prices and profits fluctuated but there was none of the erratic boom and bust so typical of the previous century. Shareholders came to expect their annual 8 percent dividend and when in 1732 it was proposed to reduce it to 6 per cent there was such an outcry that the directors had to think again. India stock had become the eighteenth-century equivalent of a gilt-edged security, much sought after by trustees, charities and foreign investors. (p220)

Interesting to see the emphasis move from capital appreciation to income generation.

On dealing with the haters

Naturally success breeds detractors and the Company had plenty of those. From a 21st Century perspective it’s really interesting to see 17th Century people struggling with trying to make sense of international trade. When the first voyage returned in 1603 it faced some hostility back home: “Already there were those who failed to see how exchanging precious bullion for an inessential condiment like pepper could possibly be in the national interest.”(p24).

One recurrent criticism … was that the Company must be impoverishing the nation since it exported treasures and imported only luxury items. In the case of Indian cottons these were manufactured goods which must be killing off English manufactures… But in 1620 Thomas Mun, a director of the Company, met … objections in his Discourse of Trade unto the East Indies. Mun argued convincingly that there was nothing inherently wrong with exporting precious metals provided that values of such exports was less than the value of the imported goods. ‘For let noe man doubt that money doth attend merchandise, for money is the price of wares and wares are the proper use of money, so that coherence is inseperable.’ (p119)

We may not be so worried about exporting gold any more. But there are plenty of similar debates about trade vs. protectionism still going on.

On the role of telling a good story to the financial markets (and of investing in yourself)

Robert Clive, already a powerful presence in the Company, was sent from England to run their interests in India in 1764. He was so excited at the opportunities he found that he “gave instructions for ‘whatever money I may have in public funds or anywhere else and as much as can be borrowed in my name’ to be invested in Company stock.” (p376)

Clive was massively over-optimistic about what he could deliver. The huge annual surplus he foresaw was “sweet music to the ears of the directors” and when news of these predictions reached London in 1766 they had a profound effect on Company stock.

[T]he Company’s stock, a normally unexciting performer on the financial markets, suddenly began to climb. It added …. about five percent in a single day and it went on climbing, nearly doubling its value over the next eight months. Clive’s friends …. bought heavily; but as word of his optimistic calculations … leaked out, outside investors also leapt on the bandwagon. On the Amsterdam and Paris markets the bubble went on growing and as the wilder speculators moved in, the greater became the pressure to keep the bubble from bursting.

An obvious way of preventing such a catastrophe was by boosting confidence still further with a hefty increase in the annual dividend … Accordingly, in September 1766, the General Court of Proprietors moved from an increase from six to ten percent… As a result, stock values continued to climb. (p378)

Turns out he had been massively over-confident and the stock price crashed later on. But just goes to show much people have always been driven by story telling and their animal spirits.

And finally, on how to eventually turn philanthropist

Of those who remained in the Company’s service the American-born Yale brothers proved the shrewdest operators. In the late 1680s Thomas Yale handled their affairs in Siam while Elihu Yale maximised their profits as Governor of Madras. Eventually both attracted the Company’s censure and were dismissed for abusing their positions. Elihu was not, however, disgraced and … he was able to retain his Indian fortune. Part was donated to his old school, then known as His Majesty’s College of Connecticut. In 1718 the grateful trustees renamed it ‘Yale College’ in his honour. (pp199-200)


Valuing Sweat Equity, 1100 AD

Find a valuation for a startup is a thorny and emotive subject. How much is the idea worth? How much is the founder(s) working for many months without any income worth? How much is your advisory board worth?

So I enjoyed coming across this keep it simple approach from Genoa around 1100AD

From David Abulafia, The Great Sea, p277

Often … merchants engaged in what they simply called a societas, or ‘partnership’, where a sleeping partner would invest three-quarters of the total and his (or her) colleague would invest one quarter, while also agreeing to travel to whichever destination had been agreed, and to trade there. On his return, the profits would be divided in half … [A]nother arrangement became even more common: the commenda, where the travelling partner invested nothing more than his skills and services, and received a quarter of the profits.

Using this model you come out with the “sweat” part of the valuation being worth between 25% and 33% and the “investment” part representing the rest. Of course this doesn’t take into account that in 1100 being the travelling partner put you at risk of serious bodily damage rather than just a few all-nighters and stressful pitches. Nor does it take into account the fact that there are bound to be differences between fitting out a ship and cargo for a sea voyage in 1100 and turning a software MVP into a self-sustaining business.

But (coincidentally?) the relative weights between cash and sweat do feel about right.

Unlimited Paid Vacation Time For Buyers


“In a Results-Only Work Environment, people can do whatever they want, whenever they want, as long as the work gets done.” This is not simply company-sanctioned flextime. A true ROWE has unlimited paid vacation time, no schedules, no mandatory meetings, and no judgments from co-workers and bosses about how employees spend their days. In other words, managers trust employees to get their work done and do not mandate — or even comment on — when, where, or how it happens. Because everyone is evaluated based on what they accomplish, as opposed to how much time they spend looking busy at their desks, it becomes clear very quickly who is actually getting work done and who isn’t.

And an example

For example, after migrating to a ROWE, Best Buy’s strategic sourcing and procurement team boosted employee retention by 27 percent and shed 10 low-performing employees. But the real proof was the huge uptick in performance: The department, which buys materials for the corporate environment, saw a 50 percent increase in cost reductions over two years.

Now I suspect that there is a bit more here than meets the eye but nevertheless it’s a story worth keeping in mind for buyers.

Yawntastic delays at NHS mega project

Not sure whether the appropriate word is “still” or “again” but here and here is another piece of news of failures to deliver technology systems in the UK public sector.

While I’m on the subject here are a couple of other items that popped up today. IT failure ’causes £130m arrears’  courtesy of Phynbarr. And Moody’s to investigate staff over rating bug (that “incorrectly rated about $1bn of complex debt securities”)  from the FT (free registration required).
And yet organisations keep going over the same ground with the same approaches. And wonder why they continue to fail. Perhaps Michael Krigsman should become part of the standard training for all people involved in software projects. In particular for the sponsors and managers who are (in theory) accountable for the project.

IT and Procurement. Can we ditch the stereotypes?

Two things caught my eye this week on the ongoing love/hate relationship between IT and Procurement.

IT doesn’t like Procurement

An article in Computer Weekly, 10 June 2008 print edition under the title: Procurement teams fail to serve IT. It reports on a talk given by Andy Kyte from Gartner. Some quotes from the piece:

Andy Kyte said that some businesses spend as much as 90% of their IT budgets on third-party suppliers but fail to get good value for money. Kyte said that IT procurement teams often act as if the only stakeholder they work for is the finance departments, and this is the reason why many deals do not add value and even lead to projects failing.

And, directly quoting Andy: “There is an obsession with cutting costs in IT procurement, but IT is about ensuring a better quality service to users.”

You’d expect Andy Kyte to know his stuff when it comes to procurement. After all, he’s featured here at AribaLive 2005.

Procurement doesn’t like IT

Which brings me to the this posting on the Ariba blog about Software As A Service vs IT. Here’s one quote: “it seems clear that IT’s tight grip on all things digital is gone and end users are winning the war.”

Which war? Justin goes on to explain:

What business user can survive without access to SaaS applications like WebEx or Salesforce? After a long battle over letting those and other apps through the network gates, the end users have won. IT simply can’t hold their end users back, strangling their productivity as more and more critical applications move online.

So can we ditch the stereotypes?

The stereotypes are there in full effect: From IT’s perspective, procurement is only about cutting costs. From Procurement’s perspective, IT is a gatekeeper which prevents users from doing business effectively. Sure there is some truth to both of those stereotypes. Yet at the same time there are CIOs who are looking at ways to break down information barriers within and between enterprises just as there are CPOs who are looking to generate value beyond unit price savings. From what I’ve seen in my professional life so far – which has touched both IT and Procurement – the similarities between the functions are greater than the differences.

What’s good for Ariba is good for eProcurement (and eSourcing) has a list of the Top 100 Most Influential Technology Vendors for 2008 (via Deal Architect).

Ariba is at at a respectable 38.

Interestingly Netsuite is only at 85 (Salesforce is at 8). Shows that despite all the attention heaped on the CRM guys, that there are plenty of other players out there adding value, quietly. For example – check this graph from which bizarrely enough shows (relatively) masses of hits for Netsuite, a smaller number for and a “hey, who the heck are you anyway?” line in blue at the bottom for Ariba.

Vinnie Marchandi raises his eyebrows  at the results , well … it is an Aberdeen report so what do you expect 🙂 ?

Nevertheless any publicity that gives a little more recognition to Ariba, and by extension eProcurement, is a good thing as far as I’m concerned. Perhaps as an industry we aren’t as sexy as a Salesforce or a Netsuite in terms of hits, but we can hold our own in terms of value.

Sales vs Procurement

Steve Bagshaw from Supply Management recently posted a blog entry regarding an article they printed in 2003 about “Killer Sourcers“.

The feature explained how a new breed of purchasing professional was being developed. These buyers were ruthless negotiators with little care for supplier relationships or management.

It seems that the opposite is true now, with companies investing a huge amount of money and time in working with, rather than against, their suppliers.

A while ago I posted a tongue-in-cheek joke from an IT sales person who said that procurement managers, while they talk a good talk about quality, only care about lowest unit price. Then last week I posted some comments from an organisation researching into supplier attitudes to e-auctions.

And here’s a webinar directed at another procurement tool that sales people apparently loathe: RFPs. SAMA  is hosting a Webinar on Feb 21st, entitled The RFP Antidote: a cure for procurement headaches.

The blurb for the webinar:

You may have developed great relationships with end users, coaches and economic buyers when suddenly a strategic sourcing or purchasing person comes into the picture and demands that all communication has to go through them. Then they don’t (or won’t) understand the value proposition, disregard your longstanding relationships and say “All I care about is price.”

This webinar will offer strategies and tactics that SAMs are successfully using to mitigate the impacts of procurement and competitive RFPs.

The webinar is being run by an organisation called Factor R which advises suppliers how not to lose their existing clients. Here’s a document outlining some of their recommendations. It is worth reading for procurement professionals.

I’m reading between the lines a bit here but I think I’m broadly on track:
1. Try to deflect procurement’s involvement if possible (e.g. arguing that an RFP is not appropriate in the current climate, etc)
2. If that isn’t going to work then meet your client and show them other ways they can achieve cost savings (e.g. through consolidating more spend through them, upgrading to avoid replacement costs, process efficiency savings by doing something else)
3. Demonstrate that your client already has a great deal because most of your deals since you sold to them have been at a higher price
4. If that isn’t going to work then see if your client will let you write the RFP

At first sight this seemed pretty alarmist.

On second reading the content is pretty smart advice.  And, you know what? From having been on the receiving end of having to complete RFPs I can sympathise with sales people who get faced with a large document that doesn’t seem to ask any of the “relevant” questions (by “relevant” I mean the ones you wish the buyer had asked).

For sure, sales people will always want to sell as little as possible for as many $$$ as possible. And on the other hand, procurement will always want to get as much as possible for as few $$$ as possible. But is it true that, away from the verbiage spun out by pundits (including this one) that procurement really only cares about driving down unit costs? Or if, as Steve Bagshaw suggests, times have indeed changed within procurement, how long will it take for this news to filter through to the sales people?

My view: the world is not so binary as “price only” or “collaborative supplier relationships”. Here’s a good article from CPO Agenda (from 2005 but serendipitously popped into my RSS reader yesterday). A sober analysis of how a more collaborative approach with your suppliers works well sometimes, but not all of the time.