This week in the US, the congressional debt committee disbanded. Parties can’t agree on the way forward. So what do we do next? We better find out because debt affects every one of us.

The hope was that the committee (which was granted unprecedented power) would address the tough problems facing the US budget; issues like the growing cost of health care. This failure means that Congress has let the opportunity go to address the long-term financial problems before they get worse.

The REAL problem is that the growing debt still grows, without a clear intervention. Congress has failed US citizens (this time, at least).

But it ain’t just Congress that are burying their heads in the sand. To a certain extent, every single one of us is.

• We still want to drive gas-guzzling autos
• We still want to sit at home in a t-shirt whilst it’s sub-zero temperatures outside
• We still want to eat high-protein, high-fat foods, and delicacies shipped from far-flung corners of the world
• We still want to wear cool apparel from designer labels
• We still want to fly everywhere
• We still want, want, want…

We don’t wanna change our lifestyles, really (do we?)

Until our consumerism is adjusted (I am not suggesting abandonment) we’ll carry on consuming the same old stuff, ignorant of the fact we can’t afford it. Consumer debt will continue to mount up.

There’s no need for revolution, just yet – we can evolve to adjust what we consume appropriately to our economic situation. I hope.

To do that, we’ve got to first admit that we can’t go on as before.

©2012 SimonStapleton.com. All Rights Reserved.

Recession is as certain as death and taxes (I wish taxis were as certain on a cold winter’s night at 3am!). And guess what – so is the upturn. But who is talking about it yet?

Good News people: according to McKinsey’s Quarterly Survey , we are getting close to the bottom of the trough we call recession (although European business leaders say that there is still a longer, bumpier road ahead).

The cycle of boom and bust (which nobody can really stop) will turn full circle and the upturn will be upon us.

There is light at the end of the tunnel…?

But are we looking in that direction yet? My personal experience is No We Are Not .  We are not looking towards recovery.

The current battle with keeping business going is consuming all the energy, all the air-time, and all the focus of management, at least in my industry (Financial Services). I am still seeing cycles of re-plan after re-plan to cope with declining budgets and lackluster sales. Do me and my colleagues see the light yet? No.

Get this though – just because I don’t see the light yet, I know it’s coming.

Not preparing for the upturn will mean that we will be caught with our pants down when it comes… whilst our competitors are running ahead in their jockstraps!

Here’s the rub. Even talk about this evokes comments from blinkered colleagues on the lines of ‘Fiddling Whilst Rome is Burning’.

It could be political suicide to try to initiate new projects with the blind assumption that the upswing will be soon upon us. It takes someone with tremendous courage, political leverage and credibility to sponsor these projects, which will almost certainly disrupt current projects that are aimed at stabilizing core business. Is that you?

This is a major stifler of innovation. The fresh business ideas that would normally emerge in boom-times are being quashed. Growth opportunities are being put on the back-burner. When recovery does start, we’ll all be so beat and scared, we won’t be ready to begin that journey!

Hey, what about our people? The most worrying thing about not preparing for the upturn NOW is what our people will do when it starts. Will they want to stay in an organization still inward looking at the balance sheet, or a competitor that is going places with exciting new products and services? This is a Real Danger which we cannot ignore! I doubt we’ll even have cash to offer as a retention incentive. Our people will be GONE!

I wonder, who is going to be brave and put the first foot forwards into the future?

If you don’t believe in the phrase ’Fortune Favors the Brave!’  – well, there are a few things we can do now to begin preparing for the upturn, without embarking on taboo projects or appearing to meddle whilst Rome is in flames.

Later this week I will be publishing a follow-up post which shares ‘5 Immediate Actions To Begin Preparing For The Upturn, Without Being Found Out ‘. You’ll know when it’s published if you subscribe to my RSS Feed .

Check This Out…

Here is a great clip from the Jeff & Mike radio talk show on the subject of the upturn.

©2012 SimonStapleton.com. All Rights Reserved.

InformationWeek just announced the ‘Top Ten CIO Issues for 2009 ‘ and I was wondering why ‘Staying Employed’ didn’t feature on the list!

If you believed everything you read in the newspapers or watched on TV, then we’ll all be out of work in 3 months. The economy will grind to a halt, so we’ll all have to grow potatoes at home and produce our own energy. So why isn’t the media suggesting that the biggest concern for IT leaders is keeping their job?

What they don’t want you to know, because it doesn’t sell stories, is that people are tougher than that, and that tough people and determination will pull us through the recession. CIOs aren’t afraid of losing their jobs – and like all IT workers, they realize that technology is the answer to economic challenges, not the cause.

All my experience and insight tells me that IT will be the fulcrum of change in 2009 that pulls us through the recession. IT isn’t the cost-center that needs reigning in, it’s the business investment that will pay dividends.

The ‘recession’ has triggered the corporate survival instinct. Business issues aren’t just those concerning customers’ needs and the marketplace; they’re also about the basic hygiene of running an organization – capital, fixed costs, a focus on core activity, and automation.

Just look at the InformationWeek article . The Top Ten issues for CIOs in 2009 are:

1. Customer-Facing Innovation
2. Attacking the 80/20 Ratio
3. The Challenging Economy
4. The Strategic CIO
5. Cloud Computing
6. The SaaS Effect
7. Virtualization
8. Outsourcing
9. Green Computing
10. Radical Desktops

What do you see? Six out of the ten listed are about cost avoidance:

• ‘Attacking the 80/20 Ratio’ challenges the spend on fixed costs and infrastructure, and aims to free up more budget for innovation.
• ‘Cloud Computing’ is a long-term investment to reduce the amount of capital needed by IT and to put the management of technology into hands of experts at lower costs.
• ‘The SaaS Effect’ will continue as CIOs look for higher-value alternatives in software provision, reducing overall cost of ownership.
• ‘Virtualization’ will bring infrastructure costs down, assisting in ‘Attacking the 80/20 Ratio’ too. It enables CIOs to sweat hardware assets and to lower the costs of backup and DR services.
• The goal of ‘Green Computing’ is to reduce energy consumption (and therefore reduce energy costs), as well as encourage recycling.

Looking at the list again, you could say that some of the greatest challenges for IT departments this year is maximizing the value of IT investment, by focusing on efficiency and just as importantly, effectiveness . The two mantras will be:

1. Doing things right (efficiency)
2. Doing the right things (effectiveness)

Haven’t CIOs and IT professionals always been asked to behave this way, though? Haven’t these technologies been around for a while now, but weren’t taken seriously or de-prioritized below more ‘sexy’ innovation?

Good questions (I tell myself), but taking the cynicism away, the point now is that the economic situation we find ourselves in means we have to take the things IT has been talking about FOR YEARS very seriously now. The world has conspired against itself to put these issues, (no) these solutions , at the forefront of the agenda. No longer are there solutions waiting for a problem!

This New Age of realization that we have to take technology innovations seriously, is upon us. The challenge is to make sure it’s a sustainable investment , which is why (quite rightly) a big issue remains on how the CIO becomes (or maintains) the position of a ‘Strategic CIO ‘. Interventions to bring about Efficiency and Effectiveness shouldn’t just be tactical. A long-term plan of continuous innovation in the above areas is needed.

I like what Eric Brown says on his blog, who also comments about InformationWeek’s article. To quote Eric:

If CIO’s focus on the three main areas of Leadership, Strategy and Technology,then the “Top 10 Issues for 2009? or “Top 10 Issues for 2020? will be easy to solve.  Why?  Because the CIO and IT Leadership should have been leading the IT group to a proper technology strategy that aligns with the business strategy.

The twist I’d add is that the recession has brought some forgotten truth’s into business:

We must run efficient and effectives organizations and exploit technologies that enable us to do that AHEAD OF THE ECONOMIC CYCLE.

So a key element of ‘Business Strategy’ should be to always ensure that operations are efficient and effective whilst also pioneering in their market, in whatever the organization does. Doing so means survival and stability in tough times, and the truth is, that’s what customers want – not bells and whistles!

‘Staying Employed’ must the last concern of CIOs right now – there is a lot of work ahead!

©2012 SimonStapleton.com. All Rights Reserved.

The Global Financial Crisis continues, and Managers are being asked to do more with the same, or less. The inevitable ‘Headcount Freeze’ has been mandated in many organizations putting pressure on managers to maximize the return on investment. Holy Cow it’s getting tough!

There are a number of interventions that will ease the pressure. And it’s all about people.

A Headcount Freeze is established to limit costs. It tends to apply across the whole organization indiscriminately, and frozen headcount means that the whole organization must take a look at its people costs and utilization. With recruitment on hold, managers really have to get wise about how they use their people and ensure maximum efficiency and effectiveness. How is this done?

Look at this as Business As Usual

Microsoft recently denied that they had frozen recruitment. Whether that’s true or not, Lou Gellos, a Microsoft spokesman said “What is true is that we are evaluating hiring as we always do and we might make projections that are different than perhaps we had at the beginning of the year.” Microsoft, like many large organizations, understands that we are in a typical business cycle and managers must adapt accordingly.

Assessing resourcing against growth is what business is all about, whether we’re in growth or recession. So remember, this has happened before and as recent as the early ’00s after the dotcom bust. This means that for most organizations there is a track record of coping with a downturn and that this is not the first instance of this challenge.

Action: Dust off the records from the last downturn; bring in the veterans from the dotcom bust (and the recession of the early 90s) and discuss how it was back then and what interventions were made. Use those times as solid lessons and use that experience in strength.

A powerful mechanism is creating the top five lessons learned, assessing your status against each, and putting actions into practise. This may even require you to reshape or reemphasize your organization’s core values if they are in conflict with your new mandates. Don’t forget to make sure that confusion doesn’t arise!

Make your people most effective

Just because there is a hold on recruitment, it doesn’t mean that your people can’t be moved around into the gaps. This is an excellent opportunity for the ambitious to progress. It is a calculated risk to ‘promote’ your people into more responsible roles. This is a time to get support from your HR department in managing this risk. I put the word ‘promote’ in quotes back then because it isn’t always necessary to increase position or grades; it is normal to see structures flatten and to become more collaborative. HR support comes in when agreeing the ‘psychological contract’ you’ll make with your people who are given new opportunities – no doubt an expectation on increased pay and benefits will emerge yet you won’t necessarily be able to honor it.

I remember, following the early ’00s and 9/11, I was put in charge of a department despite my lack of experience. It was a gamble for my boss, and myself. I knew that the promotion was out of necessity, and that there was not extra cash to be put into my pocket. So I looked on the opportunity as a learning experience, a valuable asset for my resume and a way of opening new doors and networking. So I immersed myself into the new role with gusto. The gamble paid off in the end as I eventually gained credibility in the role and emerged triumphant.

One tip to share is that people who are put into more responsible roles without prior experience need all the support they can get, and a key aspect of this support is to provide regular feedback and appraisals. Their new responsibilities will be challenging and also an important learning opportunity, so maximize your investment and manage the risk by helping these people learn from their new experiences.

Times like these require you to limit key-man dependencies in roles that are expensive to recruit for. You’ll also need to limit the impact of absence. How do you do this? Cross-skill – get your people to train up their colleagues in order have stand-by deputies for coverage. Knowledge Transfer, though, is not as easy as saying it will happen! A reality of people management is that workers can often feel threatened when they’re asked to share their knowledge. This often happens before roles are outsourced or made redundant. Knowledge is power, and it isn’t always shared. Requests to share knowledge need to be preceded by positioning of the organization’s challenges, and where possible, commitments that jobs are safe (but if this isn’t true, don’t say it). Consider incentives and rewards to encourage knowledge sharing.

One word of caution (and this is where HR support comes back in), be careful of ‘constructive dismissal’, or the perception of it. In a nutshell, this is when people are put into roles in which they will underperform, and then sacked. The perception that this happens is far greater than genuine instances! Conversations about new responsibilities need to be carefully managed because of this.

Action: Look at the roles you were looking to recruit for, and then consider who in your current workforce could fill them. Flatten the structure if need be, and use collaboration instead of singular accountabilities. Cross-train people to give yourself greater coverage for key roles and use appropriate incentives to make it happen. Remember that people need support in adapting to new roles and give them regular feedback.

Renegotiate Service-Level Agreements

Do more with the same is a great management mantra, but it isn’t always possible. Let’s face it, SLAs are agreed with the assumption of a steady state. Reality bites when you’re asked to make do, and so should your customers. If you believe that meeting SLAs is genuinely under threat then it’s best to come clean and renegotiate. It’s better to do this now rather than wait and see red warning lights on your management console.

If you don’t have SLAs for services you’re providing, then perhaps curiously it is a time to implement them. Setting the standard means you’re setting clear expectations. It’s often the case that when a service doesn’t have a SLA associated with it then the expectations of that service are the most unreasonable!

The alternative option is to increase recharges for these services. Presenting the option, at least, may help build the case for relaxing the SLAs.

Outsource ad-hoc, discretionary work

Even though you can’t recruit because of a Headcount Freeze, you can still make discretionary projects happen. If you have the budget but not the headcount, consider offering the work outside your organization by outsourcing it.

I wrote about Freelancer Marketplaces such as Elance and Rentacoder last week – these are labor exchanges where jobs are posted and then bid for on a platform. What I like about them is the breadth of potential suppliers of professional services.

Freelancer Marketplaces create genuine opportunities to do more whilst maintaining your headcount levels. Because you can buy services at a fixed cost, you can set budgets. The number of people it takes to deliver the project by the supplier is irrelevant (providing you get the results.)

All kinds of work can be commissioned through these platforms. I do recommend though that only standalone solutions are purchased that require little or no integration into existing technology.

Tips for using external suppliers through Freelance Marketplaces are:

• Appoint a manager from your organization to buy and manage these services. This person might be a Project Manager, or a Vendor Manager already. Or try a Subject Matter Expert in the appropriate field with support from yourself.
• The more complete and accurate your job posting is, the higher the quality of bids and finished product you will receive. Consider a job posting as a functional specification and business requirement, and include any restrictions on the choice of technologies.
• If you need to use a local supplier, say this in the job posting. Elance, for example, allows you to specify the geographies in which you need supply from. Sometimes a face to face meeting is the best way of initiating projects, so specify this as a requirement.
• Consider very small projects to start with, such as building an intranet application, whilst you build up your confidence in buying services this way. It limits the risk too.
• Make the project completion contingent on successful testing!
• Support your supplier as much as possible, but be wary of your own internal costs in managing the relationship.
• Very important: remember that your organization has to maintain solutions after they have been built! Full documentation must be secured as a deliverable of the project, including the source if the solution has been programmed. Avoid solutions where your organization is then dependent on the supplier.

Action: Take a look at the discretionary yet high-value projects in your portfolio and consider whether you can lift and drop them onto an external supplier. The best ones are those which stand alone and don’t require extensive integration into your existing technology stack. Provide as much of existing documents (such as requirements and design) as possible. Appoint a manager whose responsibility will be to manage the purchasing of services from suppliers and be a single point of contact for them. Remember ongoing maintenance!

In conclusion a Headcount Freeze creates a management challenge but it isn’t an insurmountable situation. It is business, after all. These situations are typical in an economic downturn, so the lessons of the past can come to bear. The key is people effectiveness, so get your people doing the highest value activities, and if possible, outsource the rest.

• Learn more about Elance
• Learn more about Rentacoder

©2012 SimonStapleton.com. All Rights Reserved.