Business colleagues working in team

A Small External Enterprise Development Team is Cheaper than Your Own

Business colleagues working in team

Time is money in the application development business. We have to get to market sooner so someone else does not gazump us, and pip us at the post. We increase the likelihood of this with every delay. Moreover, the longer your in-house team takes to get you through the swamp, the higher the project cost to you.

Of course, in theory this should not be the case. Why bring in a team from outside, and pay more to support their corporate structure? Even going for a contract micro team ought not to make financial sense, because we have to fund their mark-up and their profit taking. Our common sense tells us that this is crazy. But, hold that thought for a minute. What would you say if a small external enterprise development team was actually cheaper? To achieve that, they would have to work faster too.

The costs of an Enterprise Internal Development Team

Even if you were able to keep your own team fully occupied – which is unlikely in the long term – having your own digital talent pool works out expensive when you factor in the total cost. Your difficulties begin with the hiring process, especially if you do not fully understand the project topic, and have to subcontract the hiring task.

If you decide to attempt this yourself, your learning curve could push out the project completion date. Whichever way you decide to go, you are up for paying advertising, orientation training, technical upskilling, travel expenses, and salaries all of which are going to rob your time. Moreover, a wrong recruitment decision would cost three times the new employee’s annual salary, and there is no sign of that changing.

But that is not all, not all by far. If want your in-house team to keep their work files in the office, then you are going to have to buy them laptops, plus extra screens so they can keep track of what they are doing. Those laptops are going to need desks, and those employees, chairs to sit in. Plus, you are going to need expensive workspace with good security for your team’s base.

If we really wanted to lay it on, we would add software / cloud costs, telephony, internet access, and ongoing technical training to the growing pile. We did a quick scan on PayScale. The median salary of a computer programmer in Ireland is €38,000 per year and that is just the beginning. If you need a program manager for your computer software, their salary will be almost double that at €65,000 annually.

Advantages of R&D outsourcing

The case for a small externally sourced enterprise development team revolves around the opportunity cost – or loss to put in bluntly – of hiring your own specialist staff for projects. If you own a smaller business with up to 100 people, you are going to have to find work for idle digital fingers, after you roll out your in-house enterprise project. If you do not, you head down the road towards owning a dysfunctional team lacking a core, shared objective to drive them forward.

Compared to this potential extravagance, hiring a small external enterprise development team on an as-needed basis makes far more sense. Using a good service provider as a ‘convenience store’ drives enterprise development costs down through the floor, relative to having your own permanent team. Moreover, the major savings that arise are in your hands and free to deploy as opportunities arise. A successful business is quick and nimble, with cash flow on tap for R & D.

Want to find out more?

Contact Denizon today to find out how we can your organisation overcome business challenges.

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Operational Reviews

IT OPERATIONAL REVIEWS DEFINED
An IT operational review is an in-depth and objective review of an entire organisation or a specific segment of that organisation. It can be used to identify and address existing concerns within your company such as communication issues between departments, problems with customer relations, operating procedures, lack of profitability issues, and other factors that affect the stability of the business.
Operational reviews allow the organisation members to evaluate how well they are performing, given that they perform appropriately according to the procedures set by them, allocating their resources properly, and performing such tasks within time frame set and using cost-effective measures. More importantly, it also shows your company how well it is prepared to meet future challenges.
Simply put, the goals of an operational review are to increase revenue, improve market share, and reduce cost.

THE BENEFITS OF AN IT OPERATIONAL REVIEW
The main objective of IT operational reviews is to help organisations like yours learn how to deal with and address issues, instead of simply reacting to the challenges brought about by growth and change.
In such review, the information provided is practical from both a financial and operational perspective. Using these data, the management can then come up with recommendations, which are not only realistic, but more importantly, can help the organisation achieve its goals. The review recognises the extent to which your internal controls actually work, and enables you to identify and understand your strengths, weaknesses, opportunities and threats

To be more specific, let’s list down the ways wherein an effective operational review can contribute to the success of the organisation.

The review process can:
– assess compliance within your own organisational objectives, policies and procedures;
– evaluate specific company operations independently and objectively;
– give an impartial assessment regarding the effectiveness of an organisation’s control systems;
– identify the appropriate standards for quantifying achievement of organisational objectives;
– evaluate the reliability and value of the company’s management data and reports;
– pinpoint problem areas and their underlying causes;
– give rise to opportunities that may increase profit, augment revenue, and reduce costs without sacrificing the quality of the product or service.
Thus, each operational review conducted is unique, and can be holistic or specific to the activities of one department.

Our Operational Efficiencies cover the entire spectrum:

  • What to buy
  • Optimising what you’ve already bought e.g. underutilised servers, duplicate processes, poorly managed bandwidths
  • Making your team comfortable with the changes
  • Instilling Best Practices

UNCOVER WAYS TO DRIVE YOUR PROFITS UP, THROUGH OPERATIONAL REVIEWS

More Operational Review Blogs

Finding the Best Structure for Your Enterprise Development Team

An enterprise development team is a small group of dedicated specialists. They may focus on a new business project such as an IoT solution. Members of microteams cooperate with ideas while functioning semi-independently. These self-managing specialists are scarce in the job market. Thus, they are a relatively expensive resource and we must optimise their role.

Organization Size and Enterprise Development Team Structure

Organization structure depends on the size of the business and the industry in which it functions. An enterprise development team for a micro business may be a few freelancers burning candles at both ends. While a large corporate may have a herd of full-timers with their own building. Most IoT solutions are born out of the efforts of microteams.

In this regard, Bill Gates and Mark Zuckerberg blazed the trail with Microsoft and Facebook. They were both college students at the time, and both abandoned their business studies to follow their dreams. There is a strong case for liberating developers from top-down structures, and keeping management and initiative at arm’s length.

The Case for Separating Microteams from the Organization

Microsoft Corporation went on to become a massive corporate, with 114,000 employees, and its founder Bill Gates arguably one of the richest people in the world. Yet even it admits there are limitations to size. In Chapter 2 of its Visual Studio 6.0 program it says,

“Today’s component-based enterprise applications are different from traditional business applications in many ways. To build them successfully, you need not only new programming tools and architectures, but also new development and project management strategies.”

Microsoft goes on to confirm that traditional, top-down structures are inappropriate for component-based systems such as IoT solutions. We have moved on from “monolithic, self-contained, standalone systems,” it says, “where these worked relatively well.”

Microsoft’s model for enterprise development teams envisages individual members dedicated to one or more specific roles as follows:

  • Product Manager – owns the vision statement and communicates progress
  • Program Manager – owns the application specification and coordinates
  • Developer – delivers a functional, fully-complying solution to specification
  • Quality Assurer – verifies that the design complies with the specification
  • User Educator – develops and publishes online and printed documentation
  • Logistics Planner – ensures smooth rollout and deployment of the solution

Three Broad Structures for Microteams working on IoT Solutions

The organization structure of an enterprise development team should also mirror the size of the business, and the industry in which it functions. While a large one may manage small microteams of employee specialists successfully, it will have to ring-fence them to preserve them from bureaucratic influence. A medium-size organization may call in a ‘big six’ consultancy on a project basis. However, an independently sourced micro-team is the solution for a small business with say up to 100 employees.

The Case for Freelancing Individuals versus Functional Microteams

While it may be doable to source a virtual enterprise development team on a contracting portal, a fair amount of management input may be necessary before they weld into a well-oiled team. Remember, members of a micro-team must cooperate with ideas while functioning semi-independently. The spirit of cooperation takes time to incubate, and then grow.

This is the argument, briefly, for outsourcing your IoT project, and bringing in a professional, fully integrated micro-team to do the job quickly, and effectively. We can lay on whatever combination you require of project managers, program managers, developers, quality assurers, user educators, and logistic planners. We will manage the micro-team, the process, and the success of the project on your behalf while you get on running your business, which is what you do best.

The General Data Protection Regulation & The Duty to use Encryption

The General Data Protection Regulation, abbreviated to GDPR, raised a storm when it arrived. In reality, it merely tightened up on existing good practice according to digital security specialists Gemalto. The right to withhold consent and to be forgotten has always been there, for example. However, the GDPR brings a free enforcement service for consumers, thus avoiding the need for third party, paid assistance.

The GDPR Bottom Lines for Data Security
Moreover, the GDPR has penalties it can apply, of the order that might have a judge choking on his wig. Under it, data security measures such as pseudonymisation (substitution of identifying fields) and encryption (encoding including password protection) have become mandatory. Businesses must further respect their client data by:

a) Storing it in a secure environment supported by robust services and systems
b) Having proven measures to restore availability and access after a breach
c) Being able to prove frequent effectiveness testing of these measures.

The General Data Protection Regulation places an onus on businesses to report any data breaches. This places us in a difficult situation. We must either face at least a wrist slap upon reporting failures. Alternatively, pay a fine of up to €10 million, or 2% of total worldwide annual turnover.

The Engineered Weak Link in the System
Our greatest threat of breach is probably when the data leaves our secure environment, and travels across cyberspace to an employee, stakeholder, collaborator, or the client themselves. Since email became open to attack, businesses and individuals have turned to sharing platforms like Dropbox, Google Drive, Skydrive, and so on. While these do allow an additional layer of password protection, none of these has proved foolproof. The GDPR may still fine us heavily, whether or not we are to blame for the actual breach.

How Hacking is Approaching Being a Science
We may make a mistake we may regret, if we do not take hacking seriously. The 10 worst data hacks Identity Force lists are proof positive that spending lots of money does not guarantee security (any more than having the biggest stock of nuclear weapons). We have to be smart, and start thinking the way that hackers do.

Hacker heaven is finding an Experian or a Dun & Bradstreet that may have shielded 143 million, and 33 million consumer records respectively, behind a single, flimsy cyber-security door. Ignorance is no excuse for them. They should simply have known better. They should have rendered consumer data unreadable at individual record level. The hackers could have found this too demanding to unpick, and have looked elsewhere.

How Data Encryption Can Help Prevent Hackers Succeeding
Encrypting data is dashboard driven, and businesses need not concern themselves about it works. There are, however, a few basic decisions they must take:

a) Purge the database of all information held without explicit permission
b) Challenge the need for the remaining data and purge the nice-to-haves
c) Adopt a policy of encrypting access at business and customer interfaces
d) Register with three freemium encryption services that seem acceptable
e) After experimenting, sign up for a premium service and be prepared to pay

Factors to Consider When Reaching a Decision
Life Hacker suggests the following criteria although the list is a one-size-fits-all

a) Is the system fast, simple, and easy to operate
b) Can you encrypt hidden volumes within volumes
c) Can you mass-encrypt a batch of files easily
d) Do all other files remain encrypted when you open one
e) Do files automatically re-encrypt when you close them
f) How confident are you with the vendor, on a scale of 1 to 10

It may be wise to encrypt all the files on your system, and not just your customer data. We are always open to a hack by the competition after our strategic planning. If we leave the decision up to IT, then IT, being human may take the easy way out, and encrypt as little as possible.

How Small Irish Businesses Avoid the GDPR Sting

Accountants providing chartered accounting services and tax advice are alerting smaller Irish companies to the consequences of the pending General Data Protection Regulation (GDPR). They believe these are going to feel the most pain come 25 May 2018, if they do not implement GDPR by then. We are trying our best to help avoid this situation by providing advice.

How to Kick the GDPR Ball into Play

The Irish Information Commissioner’s Office has produced a toolkit regarding where’s best to start. They suggest beginning with an information security assessment to determine the gaps companies need to close. Once quantified, this leads naturally to a plan of action, and resources needed to fulfil it. Here’s how to go about it:

1. Start by assessing your current ability to identify, assess, and manage threats to customer data security. Have you done anything at all to date? You must be holding some customer information surely, and it is highly likely the GDPR applies to you.

2. Next, review your company’s current customer data security policies. Are they documented and approved, or do new employees discover them sitting next to Nellie? Rate yourself on a scale where ten is successful implementation.

3. Now consider how well you have pinned responsibilities on individuals to implement policies and take the lead on GDPR. The latter should be the business owner, or a board member with clout to make things happen.

4. By now, you should have a grasp of the scale of work ahead of you, remembering the EU deadline is 25 May 2018. If this sounds overwhelming, consider outsourcing to your accountant or a specialist provider.

5. Under the General Data Protection Regulation you have only 72 hours to report a breach of customer data security to the Information Commissioner’s Office. Do you have a quality assurance mechanism to oversee this?

Tangible Things to Bring Your Own People on Board

With all the changes going on, there is a risk of your employees regarding GDPR as ‘another management idea going nowhere.’ Thus, it is important to incorporate the new EU regulations in staff training, particularly with regard to data security generally. They may fully come on board only once they see tangible signs of progress. You should in any case put the following measures in place unless you already have them:

1. A secure area for your servers and for any paperwork your customers provided. This implies access control on a need-to-know basis to protect the information against loss, damage, and theft.

2. A protocol for storage media and record disposal when you no longer require them or something supersedes them. You are the custodian of other people’s information and they deserve nothing less.

3. Procedures to secure customer data on employee mobile devices and computers: This must extend to work done at home, at consultant sites, and by remote workers.

4. Secure configuration of all existing and new hardware to minimise vulnerability and storage media crashes. These quality assurance measures should extend to removable media and remote backups.

So Is This the Worst of the Pain?

We are at the heart of the matter, although there is more to tell in future articles. You may be almost there, if you already protect your proprietary information. If not, you may have key company information already open to malware.We should welcome the EU General Data Protection Regulation as a notice that it is time to face up to the challenges of data protection and security generally. The age of hacking and malware is upon us. The offender could be a disgruntled employee, or your competition just down the street. It is time to take precautions.

Is the GDPR Good or Bad News for Business

The European Union’s General Data Protection Act (GDPR) is a new data authority coming into force on 25 May 2018. It replaces the current Data Protection Directive 95/46/EC, while extending the remit to include the export of personal data outside the EU. It aims to give EU citizens and residents living there more control over their personal information. It also hopes to make regulatory compliance simpler for participating businesses.

The Broad Implications for Business
The GDPR puts another layer of accountability on businesses falling within its remit. It requires them to implement ‘comprehensive but proportionate governance measures’ including recording how they make decisions. The long-term goal is to reduce privacy infringements. In the short run, businesses without good governance may find themselves writing new policies and procedures.

Article 5 of the European Union’s General Data Protection Act lays down the following guidelines for managing personal data. This shall be …
• Processed transparently, fairly, and lawfully
• Acquired for specific, legitimate purposes only
• Adequate, relevant and limited to essentials
• Not used for any other, incompatible purpose
• However it may be archived in the public interest
• Kept up to date with all inaccuracies corrected
• Ring-fenced when the information becomes irrelevant
• Adequately protected against unauthorised access
• Stored in a way that prevents accidental loss
Furthermore, affected businesses shall appoint a “controller responsible for, and able to demonstrate, compliance with the principles.”

Implementing Accountability and Governance
The UK Information Commissioner’s Office has issued guidelines regarding provisions to assure governance and accountability. These are along the lines of the ‘don’t tell me, show me’ management approach the office has generally been following. In summary form, a business, and its controller must:
• Implement measures that assist it to ensure demonstrated compliance
• Maintain suitable, relevant records of personal data processing activities
• Appoint a dedicated data protection officer if scale makes this appropriate
• Implement technologies that ensure data protection by design
• Conduct data protection assessments and respond to results timeously

Implementing the General Data Protection Act in Ireland
The Irish Data Protection Commissioner has decided it is unnecessary to incorporate the GDPR into Irish law, since EU regulations have direct effect. The office of the Commissioner is working in tandem with data practitioners, and industry and professional bodies to raise awareness in business through 2017. It has produced a document detailing what it considers the essentials for business compliance. Briefly, these pre-requisites are:
• Ensure awareness among key personnel, and make sure they incorporate the GDPR into their planning
• Conduct an early assessment of quality management gaps, and budget for additional resources needed
• Do an audit of personal data held, to determine the origin, the necessity to hold it, and with whom shared
• Inform internal and external stakeholders of the current status, and your future plans to implement the GDPR
• Examine current procedures in the light of the new directive. Could you ‘survive’ a challenge from a data subject?
• Determine how you will process requests for access to the data in the future from within and outside your organization
• Assess how you currently obtain customer consent to store their data. Is this “freely given, specific, informed and unambiguous”?
• Find how you handle information from underage people. Do you have systems to verify ages and obtain guardian consent?
• Implement procedures to detect, investigate, and report data breaches to the Data Protection Commissioner within 72 hours
• Implement a culture of always assessing the effect on individual privacy before starting new initiatives

So Is the GDPR Good or Bad for Business
The GDPR should be good news for business customers. Their personal data will be more secure, and they should see their rate of spam marketing come down. The GDPR is also good news for businesses currently investing resources to protect their clients’ interests. It could however, be bad news for businesses that have not been focussing on these matters. They may have a high mountain to climb to come in line with the GDPR.
Disclaimer: This article is for information only and not intended as a comprehensive guide.

Which KPI’s to Use in CRM

Customer relationship management emerged in the 1980’s in the form of database marketing. In those tranquil pre-social media days, the possibility of ‘managing’ clients may have been a possibility although Twitter and Facebook took care of that. Modern managers face a more dynamic environment. If you are one, then what are the trends you should be monitoring yourself (as opposed to leaving it to others).

If you want to drip feed plants, you have to keep the flow of liquid regular. The same applies to drip-feed marketing. Customers are fickle dare we say forgetful. Denizon recommends you monitor each department in terms of Relationship Freshness. When were the people on your list last contacted, and what ensued from this?

Next up comes the Quality of Engagements that follow from these efforts. How often do your leads respond at all, and how many interfaces does it take to coax them into a decision? You need to relate this to response blocks and unsubscribes. After a while you will recognise the tipping point where it is pointless to continue.

Response Times relate closely to this. If your marketing people are hot then they should get a fast response to sales calls, email shots and live chats. It is essential to get back to the lead again as soon as possible. You are not the only company your customers are speaking too. Fortune belongs to the fast and fearless.

The purpose of marketing is to achieve Conversions, not generate data for the sake of it. You are paying for these interactions and should be getting more than page views. You need to drill down by department on this one too. If one team is outperforming another consider investing in interactive training.

Finally Funnel Drop-Off Rate. Funnel analysis identifies the points at which fish fall off the hook and seeks to understand why this is happening. If people click your links, make enquiries and then drift away, you have a different set of issues as opposed to if they do not respond at all.

You should be able to pull most of this information off your CRM system if it is half-decent, although you may need to trigger a few options and re orientate reporting by your people in the field. When you have your big data lined up speak to Denizon. We have a range of data analysts brimming over with fresh ideas.

Technology and process improvement

six sigma

Technology and process improvement – Six Sigma

Tightening organisational flow to improve productivity and minimise costs is a growing concern for many businesses post the Global Financial Crisis. Businesses can no longer afford to waste time and personnel on inefficient processes. Organisations using either Six Sigma or Lean techniques better manage their existing resources to maximise product out-put. Both of these techniques involve considerable evaluation of current processes.

What is Six Sigma?

Six Sigma is an organisational management strategy that evaluates processes for variation. In the Six Sigma model, variation equates waste. Eliminating variation for customer fulfilment allows a business to better serve the end-user. In this thought model, the only way to streamline processes is to use statistical data. Each part of a process must be carefully recorded and analysed for variation and potential improvements. The heart of the strategy embodied by Six Sigma is mathematical. Every process is subject to mathematical analysis and this allows for the most effective problem solving.

What is a Lean Model?

Lean businesses do not rely on mathematical models for improvement. Instead, the focus is on reducing steps in the customer delivery cycle, which do not add value to the final deliverable. For example, maintaining excess inventory or dealing with shortages would both be examples of waste behaviour. Businesses that operate using Lean strategies have strong cash flow cycles. One of the best and most famous examples of Lean in action is the Toyota Production System (TPS). In this system, not only is inventory minimised, but physical movement for employees also remains sharply controlled. Employees are able to reach everything needed to accomplish their tasks, without leaving the immediate area. By reducing the amount of movement needed to work, companies also remove wasted employee time.

Industry Applications for Lean and Six Sigma

Lean businesses reduce the number of steps between order and delivery. The less inventory on hand, the less it costs a business to operate. In industries where it is possible to create to order, Lean thinking offers significant advantages. Lean is best utilised in mature businesses. New companies, operating on a youthful model, may not be able to identify wasteful processes. Six Sigma has shown its value across industries through several evolution’s. Its focus on quality of process makes it a good choice for even brand new businesses. The best use is the combination of the two strategies. With the Lean focus on speed and the Six Sigma focus on quality combined, the two organisational processes create synergy. By itself, Lean does not help create stable, repeating success. Six Sigma does not help increase speed and reduce non value-added behaviours. Combined, these two strategies offer incredible value to every business in cost savings.

Using Technology to Implement Lean Six Sigma

Automation processes represent an opportunity for businesses to implement a combination of both Lean and Six Sigma strategies. Any technology that replaces the need for direct human oversight reduces costs and increases productivity. A few examples of potentially cost saving IT solutions include document scanning, the Internet, and automated workflow systems.

* Document Scanning – Reducing dependency on paper copies follows both Lean and Six Sigma strategies. It is a Lean addition in that it allows employees to access documents instantly from any physical location. It is Six Sigma compliant in that it allows a reduction on process variation, since there is no bottleneck on the flow of information.

* The Internet – The automation potential offered by the Internet is limitless. Now, businesses can enter orders, manage logistics and perform customer service activities from anywhere, through a hosted portal. With instant access to corporate processes from anywhere, businesses can manage workflow globally, allowing them to realise cost savings from decentralisation.

* Automated Work Systems – One of the identified areas of waste in any business is processing time. The faster orders are processed and delivered, the greater the profits for the company and the less the expense per order. When orders sit waiting for attention, they represent lost productivity and waste. Automated work systems monitor workflow and alert users when an item sits longer than normal. These systems can also reroute work to an available employee when the original worker is tied up.

Each of these IT solutions provides a method for businesses to either reduce the number of steps in a process or improve the quality of the process for improved customer service.

Identifying Areas for Lean Six Sigma Implementation

Knowing that improved processes result in improved profits, identifying areas for improvement is the next step. There are several techniques for creating tighter processes with less waste and higher quality. Value Stream Mapping helps business owners and managers identify areas of waste by providing a visual representation of the total process stream. Instead of improving single areas for minimal increases in productivity, VSM shows the entire business structure and flow, allowing management to target each area of slow down for maximum improvement in all areas.

Seeing the areas of waste helps management better determine how processes should work to best obtain the desired outcomes. Adding in automated processes helps with improved process management, when put in place with a complete understanding of current systems and their weaknesses. Start with mapping and gain a bird’s-eye view of the situation, in order to make the changes needed for improvement.

The Child at Work: Fun Team Builds with LEGO SERIOUS PLAY

There is a child just below the surface in all of us. When were kids, adults lopped off the sharp bits that intruded into their ‘genteel’ society. Schools, to their everlasting shame sanded away our unique free spirits, as they stuck us into uniforms and imposed a daily classroom discipline. We received badges and prizes if we obeyed, and strict sanctions when we did not. This produced a generation of middle-age managers who no longer know how to play.

Life can be so deadly serious …

Things work pretty much the same in business. Life is deadly serious. If we want to keep our jobs, we must deliver on the bottom line in our departments. There is little time for fun outside the Christmas party, when we may, within the limits of decorum engage in activity for enjoyment and recreation, rather than a serious or practical purpose.

Team builds (and strategic planning sessions) can be deadly boring affairs that proceed down narrow funnels defined by human resource facilitators. No matter how hard HR they may try, the structural hierarchy will remain intact, unless they find a way to set it aside during the program. Injecting fun into the occasion liberates independent thought, and this is why.

… But not for a little child at play

Next time you dine out at a branded family restaurant, select a seat that allows you observe the kiddies’ play zone. Notice how inventive children become, when the family hierarchy is not there to tell them what to do (although parents may try from the wrong side of the soundproof glass). The ‘serious play’ side of fun team-builds aims to liberate managers by releasing their child for the duration. Shall we dig a little deeper into this and discover the dynamics?

Many of us have less than perfect oral communication skills. This is one of the great impediments to modern business meetings. We may not have sufficient time to formulate our thoughts for them to remain relevant when we speak. When we express them, we sense the group’s impatience for us to hurry up, so other members can have their opportunity to contribute.

Sharing better thinking with LEGO® bricks

Most of us feel an urge to click the brightly coloured plastic bricks together that carpenter Ole Kirk Christiansen released into a war-weary world in 1949. The basic kit is a great leveller because the blocks are all the same, and the discriminators are the colours and the power of our imagination. Watching a free-form LEGO builder in action is equally fascinating, as we wonder ‘what they will do next’ and ‘what is happening in their mind.’

Examples of LEGO Serious PLAY in action

Instead of asking team members to describe themselves in a minute, a LEGO® SERIOUS PLAY® facilitator may gather them around a table piled high with LEGO bricks instead, and ask them to each build a model of themselves. The atmosphere is informal with interaction and banter encouraged. It is still serious play though, as team members get to know each other, and their own personalities better

The system is equally effective in strategic sessions, where the facilitator provides specially selected building blocks for the team to experiment with as they learn to listen, and share. This enables them to deconstruct a problem into its component parts, and share solutions regardless of seniority, culture, and communication skills.

Creating problem- and solution-landscapes three dimensionally this way, enables open conversations that keep the focus on the problem. Participants at these team builds do not only reach effective consensus faster. They are also busy building better communication skills as they do.

Why Executives Fail & How to Avoid It

The ‘Peter Principle’ concerning why managers fail derives from a broader theory that anything that works under progressively more demanding circumstances will eventually reach its breaking point and fail. The Spanish philosopher José Ortega y Gasset, who was decidedly anti-establishment added, “All public employees should be demoted to their immediately lower level, as they have been promoted until turning incompetent”.

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The Peter Principle is an observation, not a panacea for avoiding it. In his book The Peter Principle Laurence J. Peter observes, “In a hierarchy every employee tends to rise to his level of incompetence … in time every post tends to be occupied by an employee who is incompetent to carry out its duties … Work is accomplished by those employees who have not yet reached their level of incompetence.”

Let’s find out what the drivers are behind a phenomenon that may be costing the economy grievously, what the warning signs are and how to try to avoid getting into the mess in the first place.

Drivers Supporting the Peter Principle

As early as 2009 Eva Rykrsmith made a valuable contribution in her blog 10 Reasons for Executive Failure when she observed that ‘derailed executives’ often find themselves facing similar problems following promotion to the next level:

The Two Precursors

  • They fail to establish effective relationships with their new peer group. This could be because the new member, the existing group, or both, are unable to adapt to the new arrangement.
  • They fail to build, and lead their own team. This could again be because they or their subordinates are unable to adapt to the new situation. There may be people in the team who thought the promotion was theirs.

The Two Outcomes

  • They are unable to adapt to the transition. They find themselves isolated from support groups that would otherwise have sustained them in their new role. Stress may cause errors of judgement and ineffective collaboration.
  • They fail to meet business objectives, but blame their mediocre performance on critical touch points in the organization. They are unable to face reality. Either they resign, or they face constructive dismissal.

The Warning Signs of Failure

Eva Rykrsmith suggests a number of indicators that an individual is not coping with their demanding new role. Early signs may include:

  • Lagging energy and enthusiasm as if something deflated their ego
  • No clear vision to give to subordinates, a hands-off management style
  • Poor decision-making due to isolation from their teams’ ideas and knowledge
  • A state akin to depression and acceptance of own mediocre performance

How to Avoid a ‘Peter’ in Your Organization

  • Use succession planning to identify and nurture people to fill key leadership roles in the future. Allocate them challenging projects, put them in think tanks with senior employees, find mentors for them, and provide management training early on. When their own manager is away, appoint them in an acting role. Ask for feedback from all concerned. If this is not positive, perhaps you are looking at an exceptional specialist, and not a manager, after all.
  • Consider the future, and not the past when interviewing for a senior management position. Ask about their vision for their part of the organization. How would they go about achieving it? What would the roles be of their subordinates in this? Ask yourself one very simple question; do they look like an executive, or are you thinking of rewarding loyalty.
  • How to Avoid Becoming a ‘Peter’ Perhaps you are considering an offer of promotion, or applying for an executive job. Becoming a ‘Peter’ at a senior level is an uncomfortable experience. It has cost the careers of many senior executives dearly. We all have our level of competence where we enjoy performing well. It would be pity to let blind ambition rob us of this, without asking thoughtful questions first. Executives fail when they over-reach themselves, it is not a matter of bad luck.