JIRA is the baby version of Google Wave

Often the problem in development projects, especially those that involve many people and parties, is that a lot of the information and knowledge about current discussions and decisions is merely captured in emails. Emails, however, are merely chronological and often contain many strings of thought. New thoughts are copied into new emails with new mailing lists. Parallel communication takes place with different people. In the end, the aggregation of the insights is nearly impossible and individual employees need to be assigned to collecting and documenting this information again. This is clearly inefficient.

The advantage of Google Wave is that multiple people can work on one Wave about a single topic and do not need to order their discussion in chronological order. Additionally, a clear change history can be used to track changes – and more transparent than with emails. Another point is that the information is centrally hosted for everyone to see and edit. It’s not concealed in individual mailboxes.

These advantages can also be found in JIRA, an issue tracker I am currently working with again. While Google Wave is not available yet and will be mainly focused on non-business use, the advantages described above can already now be used with tools such as JIRA.

I do not want to be unfair to the brilliant work of the Google Wave developers. It’s preview promises far more: real-time collaboration, inclusion of maps, editable in real-time, a great user interface with a people-centered approach and much more. But at the same time it will not have workflows included – it is not designed as an issue tracker.

I would hope that the JIRA developers and the community around it takes notice of the great stuff Google is doing and takes some inspiration for their own roadmap. This would ease project and knowledge management greatly.

For more info on Google Wave you should really watch this video:

Public, Internal and Secret Strategy Papers

We just had an interesting discussion whether a strategy paper can be made public within the company. For one, it would be most purposeful to inform the employees about the direction where their company is heading and how they plan to do so. However, not everything should be published because of the threat that the competition will get their hands on this paper. Some aspects should be kept secret, right?

But how far can you go? Can you state the opposite of what you are really going to do, just to surprise the market? Wouldn’t the employees feel mocked? What if they as well have advised you otherwise? Better not to tell them anything to avoid disappointment?

Publically limited companys, for instance, can not publish anything relevant to their expected performance, not even internally, as to avoid the “spreading” of insider information. Wouldn’t a more detailed strategy description in contrast to a high level vision paper be more motivating for the employees, though?

The Difference Between Consultancies and New Media Agencies

Comparing consultancies and agencies, the first impression is that they are very similar, almost the same. But there are some crucial differences. Based on these differences, I will present some recommendations for new media agencies to reduce risks and maximize the ROI.

Starting with the similarities:

• Both sell manpower and rely on the knowledge of their employees for quality in the work delivered.
• Both are called-for when work needs to be done that the client’s workforce is not capable of doing or is understaffed to do so – additional staff won’t be hired for short-term products. 

Differences:

• While consultancies mostly sell non-scalable amounts (working hours/days needed), the agency mostly sells outcomes (an end result of a project with a functionality) for a fixed price. Thus, agencies usually have a greater risk of not meeting time and budget, or the opposite may be true, generating a larger ROI than with the non-scalable work of a consultant. Agency work seems to be more risky, therefore.
• Since agency work involves more repetitions than consultancies, standard tools or technologies can be developed or learned in order to cut on time and budget. If an agency manages to exploit this possibilty better than its competitors even with the expected personalization, it may reduce its costs, and thus, their profit margin. As soon as these tools develop to fully scalable products without need of real personalization, it can not be fully counted as an agency anymore but rather as a vendor which is not the focus of this blog.
• The investment for receiving a job is considerably lower for a consultancy than for an agency. While it is sufficient for a consultancy to send consultant profiles to a (potential) client, that does not suffice for an agency to whin a pitch. A consultancy is usually confronted with a pitch that requires way more ressources than the adaption of existing consultant profiles. Often, weeks of man power are invested into concepts and presentations, not knowing whether the effort might be converted to sunk costs if the pitch is not won.
• Consultancies are seen as partners, helping out during bad times, agencies are usually seen as mere executors that adhere to the wishes of the client. In combination with fixed price projects, this may be a very risky combination for the agencies if requirement management and change request management is not handled well. A client’s wishes are most often inprecise at the start of a project and equally as often undergo changes during the project (well known scope-creep). 
• Consultancies are most often requested for work on subjects with high management attention, mostly concerning the core competencies. The objectivity of consultants is required to best evaluate the sharpness of the competitive edge. Agencies are usually summoned to execute projects that need to be done, but are not recurringly vital to the company – otherwise the client would have invested in employees that could do the same work. In rare cases that is not the case, but then the client is so dependent on external suppliers (in this case agencies) I would not recommend this approach to him.

All in all, I have painted a picture that clearly shows more risks for the agency’s business. What would I recommend to reduce these risks and maximize ROI? 

• Requirements management, change request management and bid management need to be exceptionally well handled. The first two because that may reduce unexpected costs during the execution of a project, the latter may reduce sunk costs by either prioritizing bids well according to the probability of winning them or by improving the quality of the pitch material, thus improving the chances of winning.
• Increasing the credibility and thus the trust with the potential client in order to increase the possibility of winning a pitch. Herein lies the power of communicating your knowledge openly and an increased brand recognition thereof. 
• Constantly improving the tools you can use to minimize the costs while executing your project.
• Selling more projects of a kind to reuse knowledge, leverage well functioning tools and routine, and thus increasing economies of scale
• Selling more consultancy work as add-on to the mere execution of technological projects with a clearly defined output

Steps on the Relationship Ladder towards a Deal

Level of Relationship with Potential Client

Market Strategies for Service Providers

Take these sub-definitions of knowledge:

• knowledge from the experience of past projects encompases process and client-specific knowledge. This deduces a higher probability of a successful implementation.
• knowledge of technology and/or special skills increases the probability that the professional service provider is capable of implementing what he has promised and reduces the risk of time-consuming learning on-the-job (eventual prolongations)

Now apply these fields to a professional service provider that has a low brand recognition and in my assumption also a small list of references. My visual outcome:

Market Strategies for Professional Service Providers with a Low Brand Recognition

When to Persuade Potential Clients

Which stages does a professional service provider need to pass successfully in order to receive a new job? With disecting this process you can identify the communication needs. 

1. Circumventing a pitch / tender
2. Getting on the short-list
3. Winning a pitch / tender

Circumventing a pitch / tender

Usually a new job (at least in the business of creative agencies) is pitched (I will further use the word pitch, meaning the same as tender or call for bids). Only a handful of professional service providers is invited to take part (the short-list). However, as more often seen in the classical consulting business, a pitch may also be circumvented due to two factors:

• the professional service provider is already working for the company and the new job has been declared as an extension of the service provider’s current occupation
• personal connections on a high management level have avoided the official purchasing process (number of members on the short-list = 1)

In order to circumvent a pitch, it is important rather to invest in connections or a high quality output; communicating your knowledge isn’t as important here.

Getting on the short-list

This is where communicating your knowledge skills might come in handy. In case you’re not already on the short-list for regular jobs, here’s your chance at joining the club: new members are mostly inserted into the short-list when the job either concerns a new field of technology / skills or an existing member is to be expelled due to past éclats. Either way, the company will search for other experts in the field, especially true though for the first reason. And this is your chance: communicate openly what you know so that you will be found in this line of business.

Winning a pitch

When you have already managed to be on the short-list, this is a no-brainer. If you don’t show off your knowledge / experience during a pitch, you can be sure that all your will seem more adept than you.

Conclusion

In order to get on a short-list without a very strong brand, you will need to make some of your knowledge available to everybody, just to be noticed. The knowledge published will need to be covering a fairly wide field (though only in the field of your core competencies).

However, if you’ve made it and you’re already involved in a pitch, you will need to show off a different kind of knowledge: you really need to focus on the specifics of the potential job. Hopefully, now you can show a little more than what you have already presented while trying to get onto the short-list.

Competency Deployment Needs Management Support

A prerequisite for value generation through knowledge is the proper identification of an employee’s comptetencies. However, this is only the first part of the deal. The actual deployment of these competencies can only be facilitated when the management is listening to the ideas of the employee and allows for changes. 

Any costs created by acquiring new and fresh competencies may be in vain when dreadlocked habits inhibit change and even ignore work already done. If the work is not leveraged due to a resistance toward the new approach, sunk costs are created. Additionally, frustration and demotivation might arise and inhibit further innovation introduced by the concerned or other new talents.

Putting Things Into Perspective

Having just started at a new company, I can talk from fresh experience: Knowledge I have gathered throughout some time has helped me to ask different questions, new questions that helped my colleagues rethink and reword. At the same time, I find that knowledge I thought was very helpful and important seems uninteresting to them – and vice versa: simple concepts can provoke amazement. 

Concerning a special service offered to their customers: all performed activities were always taken for granted since they had developed it some time ago – it seemed normal and boring. From my point of view, I’m pretty sure that no other company can offer what they (or now we) do. They had a USP kept unnoticed. 

Two days later: we now have a presales presentation that has these features highlighted. Value has been created – not really because special knowledge has been added, but because different knowledge and experience has put the existing into a new perspective.

What you need, however, is time and a culture to share the thoughts. And time to document and establish the new. In our case, we were able to assign these costs to a certain presales project. Would we have extracted a new USP if that presales project hadn’t been around?

Does it Pay Off to Invest in Knowledge during Non-Billable Time?

A consultant or any other knowledge worker will inevitably learn while executing projects: on-the-job experience. He will improve his skills with handling the customer and partners and will do some project-related research he can bill the customer for.

The Increase of Knowledge

However, I’ve recently had the first customer who has actually clearly stated “no learning while earning”. In his opinion, he pays quite a high price for a well known professional service provider because of their knowledge. And understandibly, he won’t pay for us to obtain general knowledge we could then reuse with other projects as well. He wants to pay only for our services not for our intellectual well-being. 

If the knowledge he wants does not exist in-house, we can either ask him to look for another service provider (not very likely, I guess) or we’ll actually pay for the acquisition of the required knowledge by our own (let aside that there are ways of billing without his knowing what he payed for – however, this is not what this blog is about and what the author stands for).

The Billing Price Does not Run Parallel to Knowledge Investments 

The Price of Knowledge

A problem arises: During the time in which the responsible consultant is being trained or does his research, we can’t bill his hours, plus we might need to invest in off-the-job training. Would we increase the billing price for this consultant by 1$ for each dollar invested in his knowledge acquisition, theoretically we would always receive the same margin (margin = billing price – employee’s cost including investments in his knowledge). However, the actual return at the end of the year would be negative because we can’t bill the days on which the employee has acquired the knowledge.

Thus, we would need to increase the billing price for this consultant by 1.5$ for each dollar invested, right?

Can You Compare Employees to Inventory?

I won’t discuss this from a moral point of view. I pose this question because I try to provoke new thoughts on lean and foresighted people management.

A Little Theory (bear with me)

A Warehouse with Inventory

Why does a retailer need inventory? To reduce the lead time from the order until the product has reached the customer. You don’t want to wait for the cow to be milked when you go out to buy a yoghurt.

Since inventory invokes costs such as space, management, raw materials, you will want to have an inventory that is always as low as possible. But at the same time not too low because else the customer would need to wait for too long and switch to your competitor. 

The Similarities of Employees and Inventory

At my university, we had a discussion that a mere service provider does not have any inventory costs. In a physical sense – that’s true. But the amount of people you have at any specific point of time has similar characteristics to the amount of inventory:

• You shouldn’t have too few because you would have customers waiting for outcomes. You shouldn’t have too many due to the costs. You see a similar fluctuation during times of recession in professional service agencies and manufacturers.
• Better employees deliver a unit of output faster to the customer (those are the closer warehouses), worse or newer employees need more time to deliver a unit of output to the customer (warehouses farther away). The more central a warehouse is located (the better an employee), the more expensive.
• You can either store the inventory yourself (full-time employees) or you have a supplier who stores it for you (contractors). The first means more bound capital but at the same time it’s reliable and you know exactly what you got and what quality you sell. Secondly, you don’t have a risk of losing your customer to your supplier.

The Difference: Storage Time Improves the Product

The main difference, however, is that physical inventory can not improve while it is being stored. Free time of employees that can’t be billed to a project can be used more effectively – such as the 20% rule of Google. You can improve the knowledge or the creative output of the employee. He will become more productive. 

The down side is that the best employees will most probably be always be fully booked, and thus, can not increase their knowledge since they don’t have any free time to do so. Here’s the difference to the before mentioned Google approach: Google’s rule holds up irrespective of the amount of work that needs to be done. And they have made quite a nice PR effect with that story – even increased their sales due to innovation. While lean people management seems more cost effective in the short-term since you try to reduce non-billable time (see my share price idea in an earlier blog post), the contrary (investing in your core competency: knowledge) may increase the amount of sales and enhance your innovation potential and your image.

Concluding, one can say that the every-day management of an employees time (resource management) is equally as important as inventory management is to retailers. Professional service agencies have the advantage over retailers, however, that storage times can be well used with the product improving.