Donald J. Patti

Archive for the ‘E-Business’ Category

Failed Pilot? Chalk it up as a Win!

In Business, E-Business, management, project management, Software Development, Technology on 14 December 2009 at 8:30 am

You’ve just had a failed pilot, followed by a quick meeting with the Project Management Office (PMO).  Your project was killed and you feel like a failure.

What should you do next?  “Celebrate,” I say, “then chalk it up as a win.”

What? Not the answer you were expecting?  Let me explain…

I spend quite a bit of time in a classroom, whether its to teach a subject or to learn myself.  During one class, the oft-cited Standish Group statistic that measures projects successes reared its ugly head once again, this time citing a roughly 30% project success rate with roughly 45% qualifying as challenged (Standish Group 2009).  Per Standish, roughly 70% of projects fail to meet expectations – a sobering statistic.

A project manager sitting behind me who specialized in pharmaceuticals shocked me when she said, “Gee, I wish our numbers were that good [in our industry].  The odds of a clinical trial resulting in the drug reaching market is 1 in 20, and this is after its cleared a number of internal hurdles to justify a stage I/II trial.”  (A stage I/II trial is early in the process and serves as a pilot).  While I laughed at her comment, I also considered how it related to the Standish statistics and definitions of project success.

By her definition, success meant bringing her product all the way to market, an unlikely outcome by her own estimation and by those of my fellow health sciences colleagues.  But, what if success was defined as, “Accurately determining whether a product should be brought to market,” or “Successfully determining whether a project should continue past the pilot stage”?  Suddenly, many of her projects would be considered successes.  After all, how many drugs don’t work, have ugly side effects, or have the potential to kill their patients?  Isn’t she and her team successful if they keep bad drugs off the market and aren’t we better off for it?

In the software industry, good software methodologies use pilots, proof-of-concepts or prototypes to determine whether a software product is worth fully developing and fully budgeting.  In the Rational Unified Process, the rough equivalent of a pilot is called the Lifecycle Architecture Milestone and its purpose is to confirm that the greatest technical and design hurdles can be overcome before additional funding is provided to the project.  In Rapid Application Development prototyping is embedded in each and every iteration (cycle), while paper prototyping is a part of Agile development.  Regardless of the methodology, these steps are designed to provide results early, but they are also designed to confirm that a project is worth completing, providing an opportunity to change course or shut down the effort when it’s not.

So, maybe it’s time for those of us in the PMO and portfolio management to change they way we measure project success.  Right along side the “projects successfully completed on time/on budget” statistic, there should be two others — “projects successfully killed because their pilots proved they simple weren’t viable,” and “dollars saved by ending unfeasible projects early.”  Because in the end, a pilot’s failure is just as good as a pilot’s success, as long as you listen to its message.

Dead Babies, Dead-tired Staffers and “Leaving the Zone”: Exceeding the Envelope in Software Development

In E-Business, Ethics and ideology, management, Quality, Software Development, Technology on 12 October 2009 at 10:38 am

I know, I know.  “What do dead babies have to do with software development?” you say.  “Are you playing my heart-strings?”

Sensationalism being what it is, I have to admit that I couldn’t avoid leading with nearly everyone’s horror – dead babies.  Yet, there is a critical tie between today’s three attention-grabbing subjects and software development that makes this entry worth reading.  And, it has implications for how you manage your staff, software developers or otherwise, in the days to come.  Read on.

Leaving the Zone

It’s been more time than I care to admit, but during my senior year of college I learned what it means to be “in the zone” as well as what it’s like to leave it – painfully.  A track and cross country athlete at the NCAA Division 1 level, I was the first finisher on my team for my first four races, finishing in the top five for every race and posting two victories.

Old glories aside, it’s far more notable what happened next – my body crashed.  Though I’d trained hard with the rest of my team by posting a full Summer 80+ mile weeks and even two at 100+, I then took on the World when classes started, signing up for a full slate of five courses and tacking on a full time job managing a political campaign in Montecito, California, fifteen minutes south of Santa Barbara.  I slept less than five hours a night and spent nearly all my time racing from one place to another, which is a sure recipe for a wrecked body.

Back then, I had no idea there were limits to the punishment my body could take, but I found out quickly.  After consistent finishes with the lead pack among hundreds of runners, I finished no better than the middle of the pack in my remaining four races.  Even worse, my team went from three victories in four races to middle-of-the-pack as well, in part because I was no longer pacing them to victory.  At the end of the season, the affects of over-work were readily apparent – an MRI showed three stress fractures, one of the femur, our body’s largest and most durable bone.  Clearly, I didn’t recognize when I was “Leaving the Zone” by over-working myself, but had only just come to realize this.

Dead-Tired Staffers

Amazingly, it took an enormous amount of self-abuse for me to finally start listening to the messages my body was sending me about being tired or over-worked, but the lesson has stayed with me since.  As I’ve spent more time at work leading people, I’ve noticed that lesson also to the work world, where tight deadlines and high-pressure work can lead us as leaders to push for overtime again and again.

Consider your last marathon project with brutal deadlines and lots of overtime: Can you remember seeing these signs of over-work in your team members as they pushed themselves beyond their limits:  Irritability; an inability to concentrate; lower productivity; poor quality; at the extreme, negative productivity, when more work was thrown out than is gained?  Looking back, you’ve probably seen at least a few of these, and if you check out your defect logs from the work produced during these times, you’ll notice a spike in the number of defects resulting from your “more overtime” decision.  But, maybe you’re still denying that over-work will threaten the success of your projects, not to mention the long term well-being of your team members, as you run a dedicated team of dead-tired staffers over the edge.

Dead Babies

If this is the case, you wouldn’t be the first manager I’ve met who doesn’t understand how over-work can actually slow your project down rather than speed it up.  Software developers, analysts, engineers and QA team members, these managers argue, are hardly putting in a hundred miles of physical exertion each and every week, though they may be putting in 60 or 70 hours of work.  These managers counter that mental exertion and sleep depravation are not the same as physical exertion on the level of a college athlete. Or, they accept it in theory, until a project falls behind or a key deadline looms.

Though I found a number of excellent articles and blogs on the subject of software development and over-work and I’ve posted at the bottom of this article, the best evidence of the adverse affects of sleeplessness, stress and over-work on our ability to use our minds productively actually comes from the world of parenting.  In the Washington Post article, “Fatal Distraction: Leaving a child in the back seat of a hot car…”, report Gene Weingarten moves beyond the emotion of a very sensitive subject and asks the telling question of what was going on in the lives of parents who leave their children in cars on hot, sweltering days.  The answer?  Stress, sleeplessness, over-work and half-functioning brains – in many cases brought on by us, as managers.

“The human brain is a magnificent but jury-rigged device,” cites Weingarten of David Diamond, a Professor of Molecular Physiology who studies the brain.  (Weingarten and Diamond deserve all of the credit for this research, but I’ll paraphrase).  A sophisticated layer – the one that enables us to work creatively and think critically – functions on top of a “junk heap” of basal ganglia we inherited from lower species as we evolved.  When we over-work our bodies, the sophisticated layer shuts down and the basal ganglia take over, leaving us as stupid as an average lizard.  Routine tasks are possible, like eating or driving to work, but changes in routine or critical-thinking tasks are extremely difficult.  Even the most important people in our lives are forgotten when fatigue and stress are applied, as Weingarten’s article shows.

If an otherwise dutiful, caring parent can’t remember their own child when sufficiently fatigued, what is the likelihood we’ll get something better than a dumb lizard from our software development team when we push them above sixty hours per week again and again?  And when they’re finished, how high will their quality of work actually be?

So, when considering another week of over-time, think twice.  Sometimes, it’s better to just send the team home.

—–

Gene Weingarten’s Washington Post article can be found here: http://www.washingtonpost.com/wp-dyn/content/article/2009/02/27/AR2009022701549.html?wpisrc=newsletter&sid=ST2009030602446

Other good articles on overtime and software development can be found here:

http://xprogramming.com/xpmag/jatsustainablepace/

http://www.uncommonsenseforsoftware.com/2006/06/planned_overtim.html

http://www.systems-thinking.org/prjsys/prjsys.htm

http://www.caffeinatedcoder.com/the-case-against-overtime/

“But They Said They Understood…”: A Common Mistake with Indian Off-shore Teams

In Business, Culture, E-Business, Ethics and ideology, management, off-shore, Technology on 6 February 2009 at 1:23 pm

If you’re a long-time U.S. IT Manager, you’ve probably already led international teams composed of individuals from all over the globe.  I was fortunate, for example, to have one project with team members from England, Germany, Australia, Singapore, India and all four continental U.S. time zones.  While the mix of cultures and talents can cause conflicts, once the team gels, the results can be overwhelmingly positive.  It’s amazing to see what a team working nearly 24X7 can do when you lead it properly.

One mistake I’ve seen made by U.S. IT managers involves managing Indian off-shore teams, in particular, and has been repeated at three different client sites in the last five years, so it’s worth a good blog entry.  First I’ll explain the scenario and then I’ll explain why it is legitimate – NOT bigoted – to point out this common mistake so it can be avoided.

The Mistake

To explain the situation, you’re running a newly formed off-shore team and you’ve just assigned them a particular set of tasks that make up a deliverable. You ask, in front of the group or over a conference call, “Do you have any questions?”  When no questions are heard, you move merrily on and end the meeting, continuing on with your week’s work until you have your next meeting with your team.

“Is the work done?” you ask.  No.

“How much progress did you make?” None.

“Is it not explained clearly?” Yes, comes a response. Then, silence.

It’s at this point that we leaders usually begin our rant that it is not acceptable to complete nothing during a given week.  We consider terminating people, canceling our contract with the entire team, or trying to recoup costs now that the team is one week late.  As much as all of these actions would be acceptable in our culture given the outcome, this neither the way to deal with the problem, nor is it in the long-term best interest of your company.

The Cause

If you thought the problem was with literal understanding of your words, it’s possible, but unlikely.  Most Indians receive a healthy dose of English throughout their education and can understand it even if their pronunciation doesn’t sound like a Hollywood movie. But if you’ve figured out that the situation above occurred because of cultural differences, you’ve come to a more likely conclusion, though it will help to understand it in more detail than to merely say, “it’s cultural”.   Enter Geert Hofstede, a Dutch researcher and author of “Culture’s Consequences and Cultures and Organizations, Software of the Mind”, which can be found by googling the ISBN 9780071439596 or visiting this page on Amazon.com.  

Mr. Hofstede and his son Gert studied different cultures throughout the World but within the same company, IBM, and determined that there are five key differences in World cultures that can be scored across a continuum.

Individualism v. Collectivism: The extent to which a culture emphasizes speaking up for oneself and taking a unique path in life versus belonging to a group and benefiting from group affiliation.

Masculinity v. Femininity: The degree of emphasis on traditional Western male or female roles, such as assertiveness in males and subservience in females.  (If you don’t like the way I’ve phrased this ladies, I’m sorry. I’ve done my best to make it accurate and fair without losing the message. Alternate ideas on how to phrase this are appreciated).

Power Distance: Power distance refers to the social distance placed between people in authority compared to those who are not.  Because authority is relative (I have a supervisor, but I also supervise others), you can expect a middle-manager to behave just as their subordinates to them, but with their own manager.  As one would assume, the greater the power distance in a culture, the more deference and subservience subordinates display to their superiors; the lesser the power distance, the less deference displayed.

Uncertainty Avoidance: The desire or need to avoid uncertainty in relationships or dealings with others.  Cultures that try to avoid uncertainty have lots of rules.

Time Horizon: Some cultures have a short-term time orientation, while others have a long-term time horizon.  As an example, business leaders in the U.S. tend to manage to maximize short term, quarterly profits, while those in Japan and China manage across lifetimes and generations.

If we compare scores between the U.S. and India, we can better understand (or at least speculate) about why our mistake occurred.  While there are similarities in masculinity and uncertainty avoidance scores between the U.S. and Indian cultures, there are dramatic differences in power distance, individualism and time horizon between us.  The specific scores are here, but it’s important in our situation to note that Indian subordinates are far less likely to speak up when talking to a person with more authority and are far less likely to contradict or challenge someone in front of a group.   So, when you asked, “Are there any questions?” it was pretty unlikely you’d hear any from your team – even if they had them.

It’s probably good for me to note, as well, that these are generalizations. Just as all Americans are different, this is equally true with Indians, so you may well see different behavior from your team members.  The Hofstede’s describe the norm within a culture, not the exception.

A Better Response

Having managed over a dozen projects composed of Indian development and quality assurance teams, I have found that there are better ways to avoid the “Understanding Gap” and prevent it from occurring.

  1. The confirmation question. In our situation, we asked, “Does any one have any questions?” to the group as a whole.  Instead, ask each individual slightly different questions, phrased in a way that confirms they understand specific elements of the task.  As an example, one might ask, “<Name here>, I’m a little uncertain how I’d complete your portion of the work, so maybe you can help me understand. How were you thinking you’d test the <insert name> functionality?”  Or, “You’re most likely to find building the <insert name> component challenging.  Have you thought about the steps involved?”  This approach not only confirms the person’s understanding, it results in better design because the person asked may have a better approach than you do (unless you have a monopoly on brilliance?).
  2. The one-on-one. After asking confirmation questions, if you find one or two individuals struggling, schedule a one-on-one to go through their work and answer their questions.  In a one-on-one, they are more likely to feel comfortable asking pointed questions, and may even propose a better way to complete the work.
  3. The follow-up call. This one is simple.  If you’ve assigned a task, don’t wait one week to check on progress.  Check back with the team at least every other day to make sure they’re making progress and understand what you’ve asked.  Over time, this will be needed less and less, but initially, the follow-up call is a true time-saved
  4. The “you’re among family” reminder. Regardless, of culture, everyone has the fear that a “stupid” question or a mistake will threaten their jobs.  In some cases, the fear is warranted.  Particularly with teams that have just formed, remind the team members that “they are among family” when speaking to team members and that team members are here to help each other.  Even more important than saying, “you’re among family” is to live up to that statement. Do not brow-beat subordinates for small mistakes and do not cavalierly fire people because of a single error.  If you do, you’ll find the two-way channel you need to effectively lead a team is suddenly closed.

Possibly, you’re reading this article before you’ve managed your first global, off-shore or Indian team, so it’s been a good primer.  But there’s far more to know about the subject than can be posted in a single blog entry.  Though it’s very academic in the way it’s written, I encourage you to buy and read Hofstede’s book, referring back to the cultural dimensions the book provides on graphs so that you better understand each team member’s cultural before you try to relate to them using a purely American mindset.  I’d also use the following links for quick reference once you’ve read the book through:

http://www.geert-hofstede.com/

http://www.geert-hofstede.com/hofstede_dimensions.php

Doing so could save your company thousands, if not millions of dollars, keep your projects running smoothly and – most importantly – help you to build a harmonious work environment where people look forward to each and every day.  After all, isn’t that what keeps us from burying our heads in the pillow and hitting the snooze button twelve times?

As Gun-Shy Investors Turn Away from Traditional Markets, Banks Face Newest Threat

In Banking, Business, Current Events, E-Business, Finance, Peer-to-Peer Lending, Technology, Trends, United States on 16 January 2009 at 4:55 pm

Earlier today, Bank of America and Citi Group posted huge losses, then stood in line with a tin cup held out for more government loans via TARP (16 January 2009, Washington Post, “Bank of America, Citigroup Post Major Losses”).   It’s clear that, despite an injection of $350 billion, the U.S. banking industry is still reeling nearly four months into the credit crisis that has brought down some of the World’s largest banks and investment houses, leaving carnage in its wake.

Yet, at the same time these titans deal with “toxic” loans and absorbing the remains of their recently departed siblings, another threat grows beneath their giant footsteps and between their toes – Peer-to-Peer Lending.  Fueled by the sour credit market, distrust in traditional banks and fear of continued losses in the stock or bond market, once-wary investors are taking their dollars to upstarts prosper.com, lendingclub.com and even virginmoney.com where they can earn superior returns, diversify their investments and know specifically where their money is going.  Though resources in traditional banks are best directed toward immediate financial crises and folding in the business of recently acquired competitors, it’s time for traditional banks to start planning for the coming onslaught from peer-to-peer.

In only a few years, peer-to-peer lending has sprouted from the more-proven micro-lending practiced in developing countries and pioneered by Dr. Muhammed Yunus and Grameen Bank in 1983 (16 January 2009, http://en.wikipedia.org/wiki/Muhammed_Yunus).  Realizing that the loans needed by low-income individuals were far too small, uncollateralized and therefore “too risky” for traditional banks, he began making many small loans via Grameen to under-privileged entrepreneurs, who took the meager sums and made sizable profits, yielding healthy returns for Grameen.  Not specifically interested in making money, Yunus saw how the concept of pooling small sums of money from borrowers to make larger loans or taking larger sums to make many smaller loans had an enormous positive impact on the poor.  This became his business model for Grameen and other micro-lenders like it.

Operated much like the micro-lending Grameen, peer-to-peer lenders match lenders with borrowers on a relatively small scale – often no more than $25,000 for an entire loan and typically in the $5,000-$15,000 range.  Borrowers meet minimum standards for credit-worthiness and credibility, then they post information about their requested loan on line, stating how the money will be used and how much they need.  For most peer-to-peer sites, borrowers approve each lender’s loan offer and terms until the target loan amount is met.

For their part, lenders can lend out as little as $25 to a specific borrower and spread their money around as they deem fit, minimizing the risk that a single lender’s default will cause a huge personal financial loss.  Most often, payments are received on a monthly basis and doled our proportionately to each of the lenders until the fund are repaid.

Peer-to-peer lending sites like LendingClub.com and Prosper.com make their money in a few ways, though the process isn’t entirely consistent between them:  Peer-to-peer lending sites collect a 1-to-3 point service fee on the loan, much like the spread between the amount banks charge their borrowers and the Federal Funds rate at which they borrow.  They may also collect an on-going loan maintenance fee, late payment fees and collection fees if the borrower defaults.  In return, the peer-to-peer brokers screen the borrowers, process the loan, capture legal signatures and may even assist with collections if the borrowers default.

None of this sounds very threatening to traditional banks as of 2009.  The current market for peer-to-peer lending is about $100 billion (www.business-standard.com) and is dwarfed by the total U.S. market of $2.56 trillion (Federal Reserve, http://www.federalreserve.gov/releases/g19/Current/).  But, consider how the credit crisis has created a fertile environment for peer-to-peer lending:

(1)    The spread on a secured consumer loan for a car is 6.88% (7.13% as listed on Bankrate.com – 0.25% Federal Funds rate), far more than the 1 to 3% charged at peer-to-peer lenders. Though rates a higher of unsecured loans in both environments, the difference in spreads is even more dramatic.  (www.bankrate.com and http://www.federalreserve.gov.)
(2)    The yield on a 5-year government bond is 1.47% while the yield on a loan with a similar commitment, an auto loan, can yield 6-9% for the lender – a 4-to-7 point difference (http://www.bloomberg.com/markets/rates/index.html).  Certainly, risk is a partial factor in the large spread, but the other factor is likely the profit margins of banks.
(3)    Traditional lenders are turning away borrowers on all types of loans at record rates in efforts to shore up their portfolios and reduce risk.  Consumer credit dropped in December 2008 for a third straight month and automakers are citing the credit crunch as a reason car sales were off  by one-third between ’07 and ’08 (http://online.wsj.com/mdc/public/page/2_3022-autosales.html).

Traditional banks have some time to respond to the threat posed by peer-to-peer lending sites, but it can be measured in months and not decades.  They are unlikely to be able to compete with them via traditional methods, because the cost of staff, buildings and infrastructure in the brick-and-mortar is simply too high.  But it is viable

(1)    Ignore peer-to-peer lending and hope it fades away – a dangerous way to deal with a tech-savvy threat.
(2)    Acquire a peer-to-peer lending site once the process is refined and market penetration still low, reaping the largest gains by increasing market penetration.  This can be dicey, especially if the market potential is recognized early, driving up the price.
(3)    Develop their own peer-to-per lending capabilities to compete with the upstarts, keeping one of the smaller players from becoming the next “MySpace” or “YouTube” that fetches an exorbitant price on the open market.

Regardless of the path chosen by traditional banks, their spreads are likely to drop, forcing their business practices to change, as well.  A few will under-assess the threat and act too late, bringing them down in the process.  This does not bode well for the people who work for the titans of banking’ they are likely to see another assault on their jobs, just after the “credit crisis” has already dramatically cut their ranks.