I didn’t admire everything about him though, especially the stories of how he would sometimes harshly treat employees, curse, and belittle others. The man was a genius though when it came to business in his industry and business in general – and you have to respect that. There’s quite a few things that I admired and learned from Steve Jobs, but one of his greatest qualities, I think, was his tremendous sense of vision.

Steve had a keen sense of vision of where be wanted his company to go and what kind of products they should produce. I think that solid vision from the top-down is what drove Apple these past 14 years since his return.

From watching a lot of his keynote speeches, product introduction presentations, and interviews, I could clearly see that this man knew the direction that he wanted his company to go in and how his products would take the company in that direction. Steve also had that innate and hard-to-come-by skill of taking that vision and articulating it simply enough so that everyone could understand it.

I learned the importance of having a good vision and mission for any company in business school at Nevada. I saw the most concrete example of how a strong vision leads a company to success in Steve Jobs at Apple. The world has truly lost one of its greatest visionaries. Steve Jobs was a man who propelled technology – and the whole world – forward. He did it with a strong sense of vision, communicated powerfully and clearly. That’s something we can all learn from him and hope to emulate.

P.S. I enjoyed typing this post on an iPhone, one of Steve’s greatest inventions

We both love to travel, drive, and take photographs so it was a trip of a lifetime for us. We drove to Reno for me to attend UNR two years ago but we had taken a northern route via I-80 and I-90. This time we took a more southern route in order to visit some family in Oklahoma, Texas, and Atlanta.

As with any other endeavor in life you end up learning a lot of new things about you and your environment. Some of the things I learned:

1. Sometimes you have to take a risk and go for it. We had never driven on US 50 through the Nevada desert – the “loneliest highway in America” – and I was worried if we should with a fully-loaded car and only the two of us. I was well educated on what the trip entailed, so it turned out to be not a big deal and one of the best experiences of our life. Would not have been so if I had chickened out.
2. You may meet new and wonderful people in the most mundane of places. One experience was being invited to sit in on the daily conversation meeting with a group of old-timers at the only Dunkin Donuts coffee shop in Albuquerque, NM. They and the manager made us feel like we were old friends.
3. Always a good idea to plan ahead. We always had a destination city that we tried to reach by 7 or 8pm everyday and tried to book a hotel room there ahead of time.
4. Expect the unexpected. We got a big crack on our windshield from a rock in Moab, UT and got into a fender-bender in Denver which delayed us another 3 days while we got our car repaired.
5. Hotel fire evacuations at midnight are never a fun thing. Never a good idea to keep your customers in the dark as to what happened either.
6. I am not as good a driver as I thought. Good thing for my hubris.
7. I love New Mexican cuisine. We ate at some amazing restaurants in Chimayo, Santa Fe, Albuquerque, and Las Cruces.
8. We both increased our love of America’s National Parks. We stopped at Arches, Canyonlands, Rocky Mountain, White Sands, and Great Smoky Mountains national parks on this trip.
9. You have to compromise and learn to listen to your spouse. I learned this from spending 24 hours x 24 days not being away from my wife on this trip.
10. In some things, my wife is more brave than I am!
11. America is such a beautiful country
12. God is there. We both experienced Him in new ways on this trip and this trip strengthened our relationship with Jesus Christ.

Stay tuned for pictures of the highlights from our trip. I have them posted on Facebook already and will have them imported into WordPress soon.

In this post I talk about what it means to compete on analytics and the benefits and drawbacks of doing so.

“Competing on analytics” was coined by Thomas Davenport and Jeanne Harris in their 2007 book of the same name. I read the first two chapters of the book and so far it is great read for any business leader thinking of employing BI.

What does competing on analytics mean?

• Davenport and Harris describe in their book Competing on Analytics (2007) that competing on analytics means “extensively using data, statistical analysis, explanatory and predictive models, and fact-based management to drive business decisions and actions.”
• Gaining a competitive advantage by executing your business with maximum efficiency and effectiveness and to make the smartest business decisions possible.
• Being careful not to only equate analytics with software and hardware. It’s involves management style and organizational structure changes as well to truly differentiate itself.
• In layman’s terms, it’s a system put in place in your business that forces decisions to be made with some supporting facts behind it rather than on gut feeling alone.
  

Benefits of competing on analytics

• “With so many things becoming commoditized, business processes are among the last remaining points of differentiation and competition” – Davenport and Harris (2007).
  
• Eliminate guesswork from processes and business models.
• Reduce costs (such as Walmart, UPS).
  
• Customize products and services (such as Netflix, Amazon).
• Revenue enhancement.
  
• Increase analyst productivity – now your statistical analysts can spend 20% of the time gathering the data and 80% analyzing it, instead of the other way around.
  
• Fraud reduction (such as the custom algorithms many credit card companies and banks use).
  
• Increase customer conversion rates – turn shoppers into buyers.
  
• Decrease customer attrition – create loyal customers and win back former customers.

Drawbacks of competing on analytics

• If time is limited to make a decision, you have to proceed with your gut sometimes. But research shows that intuition is a good guide to action only when it is backed by many years of experience.
• Any analysis relies upon a series of assumptions. If the assumptions no longer apply, the analyses would not give accurate models. For example: credit card companies predicting willingness to pay based on good economic climates. An economic downturn can negate this assumption.
• Takes a lot of time and money! Can take years to come to fruition. Needs extensive groundwork laid first (such as when Harrah’s started laying the software and hardware groundwork for their Total Rewards loyalty system 20 years before they started using it for BI).
  
• Ongoing commitment. People have to use it and money and time have to be spent in maintaining the system.

Those are all I could think of. If you have any more advantage or disadvantages in using BI to compete on analytics, let me know.

Here are some things that your company must have in order to use BI effectively:

• Know where your company stands right now in terms of using data for decision making (ex. just creating reports)
  
• Decide where your company wants to be in using data for decision making (ex. statistical forecasting or predicting level)
• Right culture (ready to use data). All decision-makers have buy-in to the idea that BI is critical for success.
• Top-management/CEO support. You know you have this when leaders start saying “bring data or facts to support your belief.”
• BI should be employed and visible at enterprise level, not just departmental level.
• The right metrics have to be developed to measure what your company needs to stay on top in its industry.
• Strategies are built around BI. CEO’s should tout it and make it very public.
• BI should be implemented in response to a weakness in your company. Identify specific business objectives that data analysis can help meet. (ex. Wal-Mart focusing solely on supply chain)
• Right people (skills)
• Right Software: DBMS, Analysis: SAS, etc., , ETL software, ERP, Data Warehouses, and much more
• Right Hardware: High-end servers, fast processors, lots of memory, lots of disk space
• Willingness to conduct experiments (such as Harrah’s)
• Lots of data (internal, external, structured, unstructured)
• Distinctive competency (or desire for one)
• Willingness and a structure to maintain the system and make sure your people use it.
• Ongoing commitment. People have to use the data the system produces for decision making and money and time must be allocated to maintain the system on an ongoing basis.
  

In order to use BI successfully you have to make sure all the necessary pieces are in place first. A comprehensive evaluation of where your company stands on each of these points and data strategy plan should be conducted before taking any BI initiative. Lastly, I can’t stress this enough. Top-management has to support and publicize it (“this is the way we’re doing business now”). So many BI initiatives have failed because top-management only gave lip-service to the notion of using BI to compete.

Lastly, please note: not every company needs or can sustain BI if they don’t have these qualities. Don’t sell them the hype!

In essence, “BI is any activity, tool, or process used to obtain the best information to support the process of making decisions” (Scheps, Swain: Business Intelligence for Dummies, Wiley Publishing, 2008). Scheps and Swain go on to say that BI gives your company timely, accurate, high-value, and actionable business insights, and the work processes and technologies used to obtain them.

In layman’s terms, BI is processes and technologies that are used to make you rely less on your gut and more on evidence and data to support decisions that your company faces.

There is mounting research and numerous examples that companies that make better decisions with the use of BI are more successful in the long term. Leaders in all types of organizations are faced with tough decisions daily. The difference between the roads taken and the roads not taken can make all the difference between successful and unsuccessful companies. Anything that can help decision makers make decisions intelligently and rely less on their gut is valuable.

Here are some examples how companies are using BI today (not an exhaustive list by all means):

• Netflix (uses BI to customize services and make decisions that media moguls have always made by gut)
• Rensselaer Polytechnic University (uses BI for which applicants to accept and how much financial aid they should receive)
• UPS (logistics)
• FedEx (logistics)
• Walmart (supply chain management)
• Amazon (customized web-site and analytics)
• Oakland A’s (personnel hiring – written about in the book Moneyball)
• Harrah’s (customer loyalty rewards)
• Capital One (20% growth in EPS for many consecutive years)

These are all large for-profit corporations with the exception of RPI. However, BI can be used in small-medium companies and non-profits as well. BI has become widespread enough and cheap enough that organizations or any kind can employ BI of some level.

BI’s value proposition from the alphabet-soup of similar systems that came (and went) before it such as DSS, MIS, EIS is that BI has to be used across the entire company, rather than just in the realm of one department or technical-wizards. BI can give insights into your business that are not obvious. Every company has smart people who can connect the obvious dots. BI connects the dots that are not obvious. This can give your company a competitive edge that competitors cannot match.

So, why aren’t more companies using BI right now?

• Don’t have the time and/or money that is necessary for it
• Not willing to gather the necessary data
• Not willing to develop the metrics that will measure business success
• Not willing to study or use statistics
• Do not see the value of it or cannot quantify a return-on-investment (ROI)

The fact that many businesses are not using BI right now can give you a competitive advantage if you decide to invest in it. Being different makes you remarkable if you apply it correctly.

Lastly, using BI is not easy nor is it automatic. It’s important to not to equate BI with only software and hardware. It’s not enough to install software and “flip a switch.” Good BI involves good people who can use the system and derive meaning from it. BI involves a change in management style and organizational structure for your company to truly differentiate itself. In my next post I’ll talk about some of the things it takes to make BI work for your company.

She argues that enterprise software has become too complex. The hope that it would solve a lot of the complexity and remove a lot of the legacy systems operating in companies today has not played out well. In fact, corporations are running intensely complicated enterprise software nowadays often patched with legacy systems. She quotes studies that show 70% – 80% of IT budgets are spent just trying to keep existing systems running. Management became used to the idea that buying more and more hardware and software would help them cut costs and improve operations. That is also the tag-line sold by a lot of systems vendors.

She also disparages ERP systems for their complexity and cookie-cutter processes and writes that the infatuation with SOA as a cure-all is also misplaced. I agree that the concept of SOA (sold as “lego-blocks” of interchangeable code) is very enticing. Why reinvent the wheel every time your company needs software for a specific process that has been addressed somewhere else? However, as she points out software is nothing like lego blocks. The inherent complexity and functionality required of software does not make for clean interfaces with many of the systems in most companies.

What is her solution? Nothing very detailed or concrete but she says that executives need to understand IT issues. They should be willing to hear the downsides of technology instead of buying into the hype sold by vendors. She also recommends business schools to create courses designed to show the interdependence of IT and business functions.

I like the article in that it offers a differing viewpoint on enterprise software. So often I read articles in trade journals or business journals that claim that ERP or SOA or any other host of acronymns will be a cure-all for companies. You hardly read about the potential downfalls. I also like the fact that the Sloan Review included other authors and experts who wrote responses to Ms. Rettig’s article. I don’t know if Sloan does it for all their articles, but it was refreshing to hear what others thought about it (including Nick Carr, author of “IT doesn’t matter”).

Good article. Read it if you have the time. Don’t believe all the hype. Investigate claims and do lots of research before investing heavily in enterprise software solutions.

We decided to visit Phoenix, Arizona and the Grand Canyon during my spring break in 2009. We were driving on our way from Reno to Arizona on US 95 S and had just left Nevada and entered Needles, CA. I believed that the route through US 95 to I-10 would be a better and shorter way than taking I-40. I did not expect it to be so lonely or so long. It would be another 80 miles or so till we reached the junction to the Interstate. It was so beautiful to see the lonely desert road and distant mountains in the background.

We were talking and enjoying the ride when Ann suddenly felt a sharp pain in her lower abdomen. The pain quickly became unbearable and she was really hurting. I had no idea what it could be and told her to recline her seat all the way back. My thoughts went to gas. After a long time, the pain was still there. I then thought that it may be a kidney stone. There were no cars in front of us or behind us for miles. No towns nearby. Just miles and miles of featureless California desert.

I was stuck between a rock and a hard place. I thought of pulling over and calling 911 for an ambulance. But how long would that take in the middle of nowhere? Would she make it to wait that long? By hearing her I knew that this was serious. I decided to keep going driving fast but surely, until I saw the first inhabited place I could stop at and asking for help there. That is when I started praying. I prayed like I never have in my life. I kept asking God to come down and help us since we have no other option. My mind was racing with prayers and my throat became so dry from the tension.  I drove the next 40 miles in literal white-knuckle driving passing into the oncoming traffic lane to overtake numerous cars and trucks on the one-lane road. We drove a good 40 miles with Ann in intense pain and my mind racing with prayers. I remember specifically praying from the promise that God would be with his righteous in time of trouble and asking Him to make good on that promise because I had no other option at the time. I knew that we had no one else to help us on US 95 that day and asked God to take away the pain from my wife. That is when we came upon Vidal Junction.

Vidal Junction, CA. The cross roads of US 95 and state route 62 with nothing more than a couple of gas stations. It felt so good to see some signs of life! I stopped at the first gas station and wanted to run inside to ask if there was a hospital nearby. My wife said she wanted to go inside and try to use the bathroom. I escorted her inside to the bathroom ($1 charge to use it if no purchase) and told the lady at the counter our predicament and asked if there was a hospital nearby. She said the nearest one was a small hospital about 18 miles away across the border in Parker, AZ. Our intended destination to the junction of I-10 was another 40 miles away in another direction. That junction was in Blythe, CA and it had a much larger hospital but would take us much longer to get there. I did not know if the pain would get worse or what would happen. Going to Parker would be definitely out of our way  throw our schedule out of track. But that did not matter. I just wanted her pain to go away.

So there I was. At the cross roads literally with a decision on which road to take. East or South. When Ann came out of the bathroom, I told her the situation. She told me she felt a little better. We decided to go South and continue on US 95 to Blythe. We prayed at Vidal Junction and started on our road south. The whole time I remember praying that her pain does not get worse and just get us to the junction and Blythe. That’s all that was on my mind the next 40 miles.

We reached the junction to I-10 and I asked her how she was feeling and what we should now do. Should we continue east to Phoenix or head west into Blyte and the hospital. She said she was feeling better and we decided to go on our original route to Phoenix. After driving a few miles on I-10, Ann drifted into sleep. When she woke up about an hour later, she said that the pain was gone. We still took it gingerly and I kept praying till we reached Phoenix that night.

Her pain was completely gone for the rest of the trip and we were on track the next day on our original schedule and got to see Phoenix and the Grand Canyon. It was a memorable trip but the most memorable part for me will always be that 80 miles in the California desert that afternoon with no one to help and everything resting on prayer. It could have gotten much worse, but it never did.

Later that year, we would find out exactly what the problem was when she had a recurrence of the pain (which I’ll write about later). The second time we were at home in Reno and had the comfort of the hospital nearby. But on that afternoon in March on that lonely road in California, we had nobody. Just our faith that God would be there when we prayed just as He had promised to us in His word the Bible.

I can safely say that God answered our prayers that day. While driving, I had asked Him to keep His promise… and He did just that.  I witnessed it and I will always testify of it. I have written down in a secret place all the times that God has come through for me. Not every little minuscule prayer that He has answered, but the most memorable ones are when there was no other option and no one to help us like that day in Vidal Junction.

Psalm 34:15 says the eyes of the LORD are on the righteous, and His ears are open to their cry for help. If Christianity is true and you are a true Christian, there must be experiential evidence in your life to the the things that are promised like this in the Bible.  Not subtly, but powerfully and unmistakably. This is one of those times in my short life. The way the events of that day played out are memories stored deep within in my heart. I still ponder the mystery of how God operates in this world but I know that He is trustworthy when everything is on the line and there is nowhere else to turn. From this and many other experiences, I know I can take Him at His Word.

Vidal Junction. Another junction in my life where I chose to trust God and continue on my journey of faith in this life. One more event in my life that helps me know that my faith is well-placed. The pictures below would not have been possible unless God had helped us at Vidal Junction.

It was an interesting and very scholarly article on how effective and lasting organizational change can be made. Some of the new information for me was

• Changing an organization requires leaders to change themselves first.
• Change must begin by looking inside. The system and the person must change.
• Real adaptive change is painful. It involves painful adjustments in their attitudes, work habits, and lives.
• This process usually requires the
  1. Surrender of personal control
  2. The toleration of uncertainty
  3. The development of a new culture at the collective level
  4. A new self at the individual level.

Chris Argyris’ double-loop learning methodology (shown below) makes a cameo appearance in this article. It’s a great methodology and one that will lead to examining the root causes of problems instead of continually treating the symptoms.

I remember a lot of what I learned in my change management class by reading this article. Namely, that change management is a people issue rather than just a process or technology change issue. If your people are not stakeholders in the change process and understand that they have to change themselves as well as the business processes, then you will be more successful.

In short, this article is a great read on learning how to change even though the application of will be different for different circumstances.

Many employees feel that speaking up may have negative repercussions for their position in the company and/or that speaking up does not make a difference. The authors state that this phenomena, which they call “organizational silence,” is a dangerous impediment to organizational learning and change. It hampers the growth of pluralistic organization where multiple viewpoints can be expressed and debated freely.

Negative effects of organizational silence on the organization

• Stifles innovation. Innovation requires a context where employees can feel free to deviate from the norm and offer novel perspectives or ideas.
• Stifles organizational learning.
  • Without dissenting viewpoints, there can be no critical self-examination of ideas or course of action.
  • By blocking negative feedback  or information, a false sense of security pervades the organization that everything is working fine. Errors can magnify over time.
• False consensus. Top management may assume that silence is signaling consensus and success.
• Filtering out negative information. Even if management directly asks employees for feedback, employees may carefully filter out negative information.

Negative effects of organizational silence on the employee

• Stress and anxiety. Cognitive dissonance – a state that leads to stress because of a discrepancy between one’s belief and one’s behavior. For example, a salesman who knows that customers are unhappy with a product but cannot raise this issue to his superiors because of fears of negative repercussions may come under stress to act like there is not a problem when he really knows there is.
• Feeling of no control. People naturally want to feel that they have control and a voice in things that affect them. Being able to express opinions gives people a greater sense of control.
  
• Both of these factors can lead to
  • Reduced motivation
  • Pyschological withdrawal
  • Turnover
  • Sabotage (organizational deviant behavior)

Conditions that can lead to organizational silence

• Managers who fear negative feedback or information (especially from people under them).
  • When negative information comes from below as opposed to above, studies have shown that it tends to be seen as less legitimate and less accurate and more threatening to one’s power and credibility.
• An erroneous  belief that management cares more about the company than employees do.
  • Unstated beliefs that employees are only “self-interested” and that management knows whats best about issues of organizational importance.
• An erroneous belief that unity and consensus are signs of organizational health whereas disagreement and dissent should be avoided.
• A top management team that has been together a long time.
  • Studies have shown that the longer a team has been together, the more they favor consensus and will tend not to challenge shared assumptions.
• A lot of levels in the organizational hierarchy and high-power distance.
• Collective sensemaking by employees.
  • Employees will share their experiences of not being able to speak up and this becomes a cultural epidemic inside the organization as the accepted norm.
  • Sometimes this sensemaking can be erroneous or based on false assumptions (for example, the rumor that an employee lost a promotion because they spoke up).
    

These factors can set in motion the creation of systems that stifle the upward communication of negative information.

In conclusion, this is a problem that affects many organizations to some degree. One suggestion for breaking down the walls of silence that the authors put forth and which I agree with is that organizations should seek and reward dissenting opinions and negative information. Systems should be put in place that also allow employees to remain anonmyous if they choose to come forward with sensitive information.

Bottom Line: Once again it’s systems that will drive the behavior of the employees to speak up or to remain silent. It’s management that is responsible for creating these systems (good or bad).

The case study was a somewhat detailed description of some of the factors that the author and The Men’s Wearhouse CEO and managers thought were critical to their success. At the time this case was written, the men’s clothing industry was fiercely competitive with many companies exiting due to financial strains. However, The Men’s Wearhouse continued to grow. The case study tried to answer the question of what made this company so successful in a difficult competitive environment and what ensured that this high level of success would continue.

There were many factors to their growth and success in that time period as highlighted in the case study, but the key ones in my opinion and the ones they did differently than their competitors were the following:

• Commitment to the employee
• Commitment to servant leadership

Commitment to the employee

Founder and CEO George Zimmer saw the “untapped human potential” of his employees as the key asset rather than property, plant, and equipment.
Accroding to Zimmer, the company’s five stakeholder groups are (in order):

1. Employees
2. Customers
3. Vendors
4. Communities
5. Shareholder

Zimmer states that the best way to maximize shareholder value is to put shareholders at the bottom of this hierarchy. He’s only interested in long-term shareholder growth as opposed to short-term, quick growth. He believes that (as we learned in class) that if you take care of your employees first, they will in turn take care of your customers, who will then in turn take care of your top-line growth.

I think this is a wise strategy for any company in any industry (as long as it is not only given lip-service but actually put in place in the form of systems). The Men’s Wearhouse took care of their employees by implementing management systems such as fair compensation and staffing, promotion and career development, good hiring and firing policies, performance appraisals, and good communication with employees at all levels.

This isn’t the first formal hierarchy that I’ve seen with the shareholders placed last in importance. Johnson and Johnson’s corporate creed also places the shareholder last because they too believe that if you take care of all the other stakeholder groups first, the value will trickle down to the shareholders. As stated in the case study, in contrast to The Men’s Wearhouse, most retailers don’t consider the employee first of all.

Commitment to Servant Leadership

The Men’s Wearhouse has been called a “high touch” organization. Training and mentorship (“touch”) are highly valued and emphasized in the company. In fact, Zimmer believes that mentoring their employees is the company’s key to success. At The Men’s Wearhouse you can even get fired if you are an exceptional producer and performer but weren’t doing a good job in mentoring others or weren’t a team player.

Servant Leadership in The Men’s Wearhouse case meant that you put your organization’s goal and success at the same level as your personal success. They wanted all managers to train lower level employees and mentor them personally. Even Zimmer and his executive managers would visit stores for personal training and mentoring.

The Men’s Wearhouse created a culture by putting in place a system where sales people (wardrobe consultants) weren’t out for their own personal sales growth, but always looked to see how they can improve others in their store so that all the employees in the store realized their maximum potential.