Warren Cammack

On Monday I was inspired to go out and make people angry.

This isn’t normally how the week begins however having sat and listened to Dave Snowden for an hour it’s hard not to walk out of the room and start telling someone they’re doing everything wrong.

His story begins with a recollection of one of his targets whilst working at IBM. Dave was told by the CEO that he would receive a bonus of $5000 for every letter of complaint that asked for him to be sacked by someone of director level and above. Dave received three that year and he explains all of them being the result of people being unwilling to jeopardise short term profits when offered long term gains for a company. He explained that people and therefore companies are most at risk of failure when they’re successful and therefore complacent. When everything is going well people don’t want to try new ways of doing things. Perhaps one positive of the predicted second wave of the GFC?

Dave then jumped to rip apart management science that is mostly based on case studies. He laughed at the cause and effect hypothesis that most of them used and cited a fictional (or is it out there somewhere) case whereby a number of CEO’s were surveyed on their bowel movements and the performance of their companies. Admittedly he added that it could actually be the case that where the company was performing well, the CEO would be less stressed and therefore their “output” would be more solid. External factors such as access to prunes and high fibre cereals were of course omitted from said survey.

An oft cited text is “Good to Great” by Jim Collins (Good to Great) which in summary tries to determine the factors about a company that lift it from being simply average to industry leading. Again Dave throws out the theory and asks if it’s not simply that any company that is able to define a market will set a pattern that others will be forced to follow. Personally I disagree with this statement as there are a number of examples of companies that have entered the market second with a different DNA to the market creator who have then gone on to see success far in excess of their competitotrs. Google and Apple were not first to market in their core business.

David discussed the apprentice model of learning as something that was missing in the majority of today’s workforce. He cited the analogy of someone using a recipe book vs being a chef. The former would not be able to manage when things go wrong and the only way for a chef to be trained is to learn from failures and this is expedited by working as an apprentice to a more experienced chef.

The rest of the talk is best summarised in bullet form as David jumped between topics and provided a wealth of thought provoking points:

• Business requirements methodologies will never work as they all assume people know what they want and can articulate them effectively. It also doesn’t matter how logical the method is for defining requirements, if the previous experience of delivering a project is negative then this will need to be tackled first and should be where the focus is. Despite being poor at articulating what they want, users are good at saying what they don’t like about the current system.
• Twitter’s system of followers means that typically a person’s followers increase by helping others. This network was not defined but simply evolved over time.
• Focus on resilience, not robustness. This enables quick evolution to new opportunities. The example given was of old English (or Welsh!) houses built on flood plains that were expected to flood occasionally. The houses were designed so that the ground floor walls could be easily scrubbed clean and the furniture was able to be hoisted up to the ceiling above the water line. This was far more effective than trying to prevent the flooding happening.
• IT departments can strip out 45% of their costs by not managing the client, generations of IT savvy executives are coming through the ranks and don’t need guidance on what to do.
• Autism is rife in both IT and economics, the logical thought process required to succeed in the technical side of the role is the downfall of those needing to deal with business customers. David referenced a book (The Curious Incident of the Dog in the Night-Time) that provides the reader with some insight into what an autistics world looks like.
• People learn more by failing than succeeding due to the human fear of failure – they don’t want to repeat their mistakes. Enabling failure and encouraging it increases learning.
• Soldiers in the field pay more attention to stories of near failure than documented best practice. Test pilots are documented as recounting how to handle out of control airplanes based on what other pilots have told them rather than what the manuals state.
• Human nature is to seek out information to support their current train of thought – if you hear a story in an interview twice then every subsequent story will result in you pulling components from them that corroborate the original.
• Six Sigma should be names “Six Stigma” due to it’s cult like discipline and strictness. 3M have removed this practice from their organisation as the thinking around this stifled innovation. It works for pure manufacturing processes but not the service industry.
• The nature of the system defines the way we make decisions, we’ve been making systems to audit process and hence decision making is structured this way. David co wrote the anarticle on a framework for decision making
• Complex systems require flexible boundaries, brittle boundaries will break. It’s better to motivate the good behaviors and negate the bad than define complex systems.
• 10% of the project will cause 90% of problems.
• Mix your project teams, don’t work with teams that you have done previously. Incentivise small teams to continue working in agile, the alternative is to be allocated to a waterfall project.
• Zimmerman exhibits and promotes classic systems thinking – this doesn’t enable evolution around usage. Architecture should allow some space in how the thing is used i.e design the buildings and build the paths between them when people have had time to use them. [From a practical perspective I disagree with this thinking for IT projects which typically require clear end point thinking].
• Ritual ensures a specific way if thinking. Ritual dissent is a great method for getting the best idea out of a large group of people. Four teams work on a proposal – one person from a group pitches, other teams then rip it apart whilst the pitcher sits with his/her back to the group and is not allowed to respond.
• In terms of motivation it is damaging and dangerous to rely on extrinsic measures. Anything explicit (and extrinsic) can and will be gamed.

Dave Snowden’s website is here for more detail on the topics above: www.cognitive-edge.com.au

There’s also a webcast of the same presentation he gave earlier in the week: http://gigtv.rampms.com/gigtv/Viewer/?peid=459a0ab5d1d746aa8f318306a05c260d1d

At a recent ACS/CBA event I was lucky enough to hear Peter de Jager speak about how one could go about predicting the future. Now a topic such as this is generally accompanied by images of flying cars and the like however this talk was far more practical and proposed legitimate reasons that a business would want to invest in such an exercise.

Firstly, why would an organisation want to predict the future? Peter gave the analogy of a crows nest on a ship being there to provide greater foresight to the captain and crew as to what is ahead – this is far more effective than standing on the bow of a ship. Having the ability to see what is ahead removes the stress and pressure of responding to last minute change and allows an organisation to plan and preferably to take advantage of upcoming changes.

This makes perfect sense and the real question is how do we go about predicting the future? In order to predict the future we need to understand how people respond to change. Instinct assumes that others will respond in the same way as yourself however this is typically incorrect – there are as many responses to change as there are people in the world.

A pre-requisite to being able to predict the future of a particular industry is to be a subject matter expert in that space. There is no silver bullet for prediction however for IT there are a couple of principles to consider:

• Moore’s law
• er’s law . Everything will become colder, faster, cheaper, whatever-“er”
• Rule of 100. Increase, decrease anything by 100 what does it look like then?
• As soon as anything becomes cheap enough a number of people will have it
• Vapour point – removal of something from the value chain i.e. book publishers where disintermediation by amazon  etc will allow authors to distribute their content to the public directly. In this example the author takes 70% of revenue (Kindle) vs 7% in a traditional author-publisher model

Key takeouts

• It’s not about you
• Don’t ignore human nature
• Technological constraints will always diminish

Examples of companies who predict well

• Harley Davidson – they predicted the changing need of their customers desire to customize their motorcylces.
• Italian railway company – built a railway that went over a mountain at an angle that would not be possible to ascend with engines available at the time. By the time the line was complete the engines were available.

• Prediction of 3.5% growth next year in Australia, 1.5% in the US and we’re both very vulnerable to recession
• Prediction that Germany will split from the Euro
• View on poor productivity is that it will improve as business learns to do more with less. We need to get aggressive in terms of obtaining resources from overseas.

• Poor European countries will continue to go through write down, this will cause major problems for European banks.
• Any recession in Australia would be minor
• Believe house prices will vary in loss/gain across country primarily due to the supply of jobs in those areas. There’s still a prediction of housing shortages which will maintain overall growth. House prices will stay strong in the medium term due to booming economy.
• Last time we had an infrastructure boom like this the AUD was trading at 150% against usd. ANZ predict 115 but cannot rule out 130.
• In response to a question on whether US property was a good investment Warren recalled a story of an Australian man who was killed when trying to evict tenants from a Detroit property he had bought. (the recollection was slightly incorrect according to the Herald Sun Story)
• Consumer spending is likely better than the figures that are reported as the aging population of Australia buy more services instead of goods. Also due to currency we are buying more from overseas.
• Consumer behaviour is however changing to be slightly more conservative as our spend/save ratio changes from 97% to 80%.

• Can Asian countries sustain growth despite slowdown in north Atlantic countries
• Strong prospects for Australia
• The trade balance is up $25bn (2%), this may reach 3% and increase inflation risks and hence why the RBA may raise rates to counteract that. In the medium term rates should go up.

 Shane Oliver

• Concept of the Australian two speed economy is exaggerated as there is only a 2% difference in employment between mining and other industries. Compare this to employment in the Netherlands of between 5% and 20% depending on the industry.
• Believe that unemployment will go up by 5% and there will be rate cuts towards end of the year to stimulate the economy.
• Singapore is on the brink of recession
• The average Sydney house costs $630k, the average house in LA is $350k. Relative incomes are however the same. Inflation is not caused primarily by private supply/demand. Lots around services, council rates etc which are due to government policy.

The Australian Computer Society hosted an event for CIO’s, Directors and Senior Managers to discuss the question of “What Distinguishes Great Leaders”? Preetha Shekar of RedGiraffe gave a great presentation on the topic to start the conversation on the tables, asking pertinent questions and making some great points:

• Is leadership part of you?
• How focussed on outcomes is the company?
  I’d ask if this isn’t what every successful company is focussed on? If they’re not then how can they survive?
• Who is the key influencer in the team?
  Not necessarily the manager, you don’t need accountability to be an influential person.
• Leaders when know when to bat and when to hold back.
• How do you build emotional infrastructure in the team?
• Motivational strategies are a band aid for poor leadership.
  All of the money spent on motivational consultants for teams may be better spent on hiring new leaders!
• Promotions to management positions are typically based on technical accomplishment.
  But what other tangible way is there of measuring success? This is particularly difficult when promotion to management is seen in many cultures as success and therefore people strive to obtain such a position when it may not suit their natural capabilities.
• There are two types of leadership – positional and true “leadership”.
  The former is controlled, safe, focuses on fixing errors and optimising process. The latter involves helping others to achieve their goals and brings out the ability to shift gears and work around obstacles when required. There is nothing scientific to the approach, it’s all about having a vision and focusing on getting there. Target the outcome rather than the detail of how to get there. When asked if they doubted they could get to the end state a true leader would reply they had no doubt and could always see this happening. Confidence is paramount to being able to leading others to this end state.
• It’s about courage, not the kind where you would run into a burning house to save someone – that’s more akin to bravery.
  Courage to keep going when people doubt you and stick with the vision you originally dreamed up.
• Authenticity is key. Many people say that they can’t be who they truly are at work – ask yourself why not?
  Be 100% real, it’s less work to be yourself and it means you can focus on getting things done rather than maintain a façade.
• Communication is key – ensure your people know what you want and what they need to do. Take their input and ensure you’re listening along the way, if you’ve hired the right people then they’ll tell you not what you want to hear but what you need to hear.
• Franklin T Roosevelt , “If you treat people right they will treat you right – ninety percent of the time.”
• Last but not least is that leaders should leave a legacy of inspiration to those around them.

Some great things for any leaders to think about and the conversation around the table was that everyone finds being a leader challenging – but yet the rewards far outweigh the work when you see people truly succeed.

FST put on a conference (presentations, audio files and agenda) to raise the awareness of security threats in the financial services sector each year this year there were a number of interesting speakers and topics on the agenda:

Implications for Security in an Increasingly Mobile Environment

(Greg Drumm, Head of Alliances and Emerging Payments, Consumer Cards and Unsecured Lending Retail Products, Australia, ANZ)

More than 50% of US Financial Institutions offer mobile payments and there are over 170 closed loop payment options. Wing payments is ANZ’s offering in Cambodia and aims to provide easy funds transfer to the 8M residents who do not have a traditional Bank account. There is a a great youtube video that goes into more detail about this technology.One question which doesn’t appear to be answered is how the system will combat fraudulent use of the system, in particular money laundering.

ID theft accounts for approximately US$4bn/year of fraud at the present time and there doesn’t appear to be an easy way to stop all of it happening. Solutions such as voice biometrics could be the way forward but at present they are costly and require a change in customer behaviour across a number of channels.

Greg went on to talk about sites such as Installsforyou.biz where it is possible to buy large numbers of compromised PC’s at bargain prices. These enable fraudsters to launch attacks on other sites or simply host Trojans which capture person information (including login credentials) and facilitate crimes against their owners.

An example of an Estonian ATM showed the dangers of leaving USB ports active on such devices. The fraudsters had uploaded malware which enabled them to obtain data from cards without their owners or the Bank even knowing. Even more worrying than this was the malware that was uploaded to an Iranian nuclear plant about six months ago…

Tonight the grandfather of Enterprise Architecture, John Zachman presented to the DAMA audience at the Australian Museum. Despite his standing as such an amazing professional, his presentation whilst old school (read OHP slides!) was hilarious!

It’s probably best to summarise what he said in point form:

• An analogy of a building architect reflected on the challenges of an Enterprise Architect. When determining how much detail to put into an architectural plan it depends how much the building owner actually knows what they want. If the owner knows exactly what they want then you can get away with a high level plan, if they haven’t a clue then you need to put in an ‘excruciating amount of detail’.
• Why does the enterprise need still need IT people when everything is cheaper to outsource – both the building and maintaining of IT systems. It’s proven that you can’t just outsource something and expect it to run effectively – you need to define how it works and apply appropriate governance to ensure it remains that way. And this is why we still need IT people within organisations.
• It takes a mechanical engineer 4 years of training to be able to adequately read plans, it takes 2 more for them to be able to draft plans of their own that meet the standards. However to understand whether that design is going to work or not you need to have the experience to know what will and won’t work. A comment about the amount of grey hair being proportional to your ability to be an EA – maybe it’s time to procure some grey hair dye….
• Overcomplicating design is so common but instead we should be looking at what is the bare minimum required to achieve the goals – saving time and money for the business.

The key takeouts for small business are that it’s essential to use high quality and experienced staff to help design what your enterprise landscape looks like, it’s probably the case that you can’t afford to have someone like this permanently employed so use a contractor. However it’s even more important to have someone within your organisation who can tell them what you need and where you are going so that the design is correct.

And for enterprises the takeout is exactly the same….

John also recommended reading this book -Does IT Matter? Information Technology and the Corrosion of Competitive Advantage

Check out some of the models in this book – Enterprise Architecture Using the Zachman Framework (MIS)

Tonight at the Ivy, Paul Borrud head of Facebook Australia  spruiked the latest products from Zuckerberg’s stable. He began by talking through the new Facebook Places functionality which is targeting the competition from Foursquare and others who are now beginning to capitalise on the commercial models that are enabled by having the geographic location and intended actions of a loyal user base. There was very little detail from an Australian perspective but Paul cited examples in the US where merchants would provide limited availability offers to those customers who “checked in” to locations. He also said that the new functionality would be released in the local market in the second quarter of this year (April?).

The most interesting point (from my perspective) that Paul made was in the examples of how companies were effectively using Facebook to engage with their customers. Chase began by offering their customers the ability to share credit card awards points totals with friends and pool them to purchase goods and services. This was particularly useful to the college students who couldn’t afford to buy anything useful with their relatively small spend however when pooled they had greater purchase power. This worked most effectively in sorority houses however I’m not sure Chase bargained on beer fridges and inflatable pool toys being their most popular items!

Chase then went on to use Facebook to enable it’s customers to vote on how it should donate it’s money to charities. Rather than being the larger national charities, the facebook platform gave smaller local charities the ability to pitch themselves and try to obtain a slice of the $5M pool. This proved to be a huge success and as of today over 2.5M users “like” this page. It would be great to see more companies take this step and enable money to get to the grass roots charities rather than just the usual suspects.

The key takeout from the presentation was that Facebook are now focusing on commercialising their platform – after all how else is Mr Zuckerberg supposed to justify the price that has been put on his company unless it starts making some serious money.

This event is held on the first Monday of every month and aims to bring together people who are based in Sydney and interesting in mobile technology. The events are sponsored by Blackberry however the speakers and content is typically of interest to those who work on any mobile platform.

The first speaker was Scott OBrien ·Marketing Director at Explore Engage. Explore engage have produced some great augmented reality (AR) applications in the last 12 months – primarily for the purpose of brand advertising. You may have seen the KIA campaign during the Australian Open whereby viewers could hold their phone up to the screen when a KIA logo was shown (or against any image of the KIA logo in magazines etc). The application then showed an interactive AR model of the new KIA  Optima car.

Scott presented an overview of the consumer’s appetite for all things AR and it was particularly amusing to see French Hip Hop artist ‘The Toxic Avenger’ with the music video “N’IMPORTE COMMENT“. Of particular interest was the “AR” way of “adding friends” or “poking” others. The video itself is obviously not using any of the real AR technology but it’s an interesting vision of what the future may look like.

Viewdle was also cited as something that would likely be a game changer in terms of how people may use AR for something other than a gimmick – the website for this looks amazing however it’s still in beta and a week after signing up I’ve still not received my login so can’t comment on how it works.

The key question of whether the use of AR results in any tangible benefits for the client of a campaign was asked however the answer to this focussed on the brand benefits. As with a lot of marketing it’s difficult to put a price on what the cool factor might do for a brand.

Scott left the audience with a teaser that Explore Engage are launching a new product next month and that this would blow away anything that we’d seen to date – hyperbole or not, we’ll have to wait and see.

The second presenter was Laura Chambers Senior Director of Mobile at Paypal who whilst pushing the benefits of Paypal over other payment methods like NFC and credit cards had some great points to consider. The main message was that consumers are really looking for the end to end experience of buying something and don’t really care about the payment method they use. An example of making a payment and the receipt automatically being stored as part of the transaction so that if/when the customer needed to return the item they could simply lookup the payment and show the merchant their receipt. Whilst this sounds like something that will be offered as part of MAMBO I wouldn’t be surprised if it’s something that Paypal will be spruiking in the coming months.

Laura also gave some examples of how you could use Paypal mobile to make purchases in Palo Alto including carrots at a farmers market. Given the tech friendly nature of the area it wasn’t surprising that this would be the case but it makes you think how long it will be before we see this spread down to the “backward” parts of the world like Sydney and London!

The stats that were quoted about the exponential growth of payments via mobile were amazing, likewise were the insights into how consumer habits are chasing so that the busiest time for purchasing from ebay is now a Sunday. Mobile commerce is about to become huge and it’s coming to an armchair, park bench, office, train near you.

Laura also confirmed that Paypal are partnering with a Malaysian Telco to drive payment services in that country – she didn’t provide detail on the model but it will be interesting to see how this looks and whether it will be a template for the rest of the world.

[One final overheard comment was that Westpac’s affiliation with Paypal has led to WBC cancelling any mobile payments development and that they will be utilising a white labelled version of the Paypal platform. We shall see….]

Attending the FST Future of Banking & Financial Services conference in Sydney last week one of the speakers’ examples really hit home with and is something that every business should take note of. The example was provided by Craig Scroggie from Symantec and whilst a lot of the presentation covered the usual scaremongery (albeit true!) from an security solutions provider this one was very different.

Back in April of this year a couple of extremely intelligent (!) Domino’s employees decided that it would be a great idea to film themselves doing filthy things to pizzas before they were sent out to customers and then put the film on YouTube. This is both one of the most powerful, yet scary capabilities that social media channels offer to business and individuals alike – the question is how do companies respond to such an incident when this type of event occurs. The response from Dominos (posted by the President of the company) was posted on YouTube in a bid to communicate to those who may have seen the original video. Here was a great example of a company utilising the channel on which a “message” was posted to respond in kind and whilst it took 3 days for this response to occur (anyone who works for a corporate would understand why!) it was far more effective than the typical approach of issuing a standard press release.

There are a number of further insights into this example http://www.digital-marketing-course.com.au/2sticksDetail.php?Online-PR-Crisis-Example—Dominos-Pizza-31 is one which provides links to the reposted videos.

The question is – how would your company respond to such an incident and would you be able to do this in under 3 days?