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Producing Trust

Last time (in the context of being trusted, and what a business must do to re-establish trust), I talked briefly about vendors who announce software years before they plan to ship it, including firms that never ship what they’ve announced and taken payment for.

On occasion, early announcements are a legal requirement for some businesses. IBM and the terms of their consent decree, for example.

Delivery problems can be made worse by substantial changes in market conditions that can make the announced product irrelevant. In some cases, a failure to deliver is irrelevant because the product is so late that it no longer matters. The totally rewritten Netscape is one such example.

Sometimes the product doesn’t meet the expectations it originally set for potential customers even if market conditions havenâ??t changed. On very rare occasions, a failure to deliver is intentional/fraudulent but that’s for legal blogs to discuss.

How do delivery problems happen?

Delivery problems are frequently born months or even years before they reveal themselves. They happen because the firm involved has internal development (yes, management) problems.

While hidden, these problems can lull a business into taking advance payment for a product that they cannot dream of delivering in the short term – even though their intention is to do just that.

Symptoms of a software business with development problems can include:

  • Inability to deliver a consistently high quality product.
  • They can’t name a date and deliver on that date occasionally, much less time after time.
  • They don’t know with any confidence if they will ship on a particular date until that date is too close to do anything about their ability to reach it.
  • They fail to design to a detailed enough level of granularity and get surprised during the development process, finding that something allocated to two days or two weeks instead requires four months of work.
  • They fail to focus on the task at hand and occasionally find themselves chasing a “bright shiny object” that has at best a tangential relationship to their announced product goals.
  • They work in a vacuum (insulated from their industry and/or their client base) and because of a substantial design/strategic product miscalculation, it is months or years before they discover it.
  • If they accept customization work requests for their core products, it tends to appear “duct taped” on, rather than designed-in.

Businesses that experience one or more of these issues simply haven’t decided to do enough enough to ensure compelling levels of consistency in the product they produce. They haven’t decided (or don’t realize they need) to focus only on the things that ensure an on-time delivery of a quality product. In some cases, they may not even be sure what “on-time” will be.

These things are not “just how it is”. They are decided.

Trust that upgrade?

Think about the one software package you use more than any other. Doesnâ??t matter whether itâ??s a development tool (like XCode or Visual Studio), an accounting package (QuickBooks?) or a firmware upgrade for your CNC machine.

  • Will you install the next upgrade without first checking to see if someone else has done the bleeding for you?
  • Are you confident that you can install the next upgrade right away, or do you wait a few days or weeks to see what the fallout is?
  • Do you install new upgrades right away with strong confidence that itâ??ll be solid?
  • Do you install and then spend a pile of time testing obvious things to make sure they still work?
  • Do you routinely wait for someone else to â??do the bleedingâ? for you before you decide to install or not?
  • Is it common to have to “back off” an upgrade because it broke too many things?

Put that hat on your customers.

What do they do?

Do they install what you ship on the day you ship it? Or do they put off updates until they have no choice – such as when industry specification and/or governmental rule changes require use of the upgraded version.

That’s an indicator of their trust in your development and testing process. In YOU.

Problems like this aren’t just about software businesses and aren’t about upscale quality. It’s about management consistently doing the things that create trust. This kind of trust applies to plumbers, coffee roasters, political candidates and construction companies – and many others.

You trust that even the cheapest generic milk from the store won’t have hair or bug body parts floating in it. You trust that when you flip a wall switch, the power will come on.

To produce high levels of trust in your work requires a decision: “We will do what it takes to become (or remain) the trusted party.”

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Lucy and the Aluminum Football

World's Favorite Sport
Creative Commons License photo credit: vramak

Lately, there has been a lot of talk in the news and around the Flathead Valley about the Bonneville Power Administration (BPA) offering a four year power supply deal to Columbia Falls Aluminum Company (CFAC).

The deal is subject to environmental review and other what-ifs, so it isn’t a done deal quite yet.

Given the economic struggles facing Columbia Falls, any news of new jobs is good news. Really good news, in fact.

The topic of CFAC concerns me – it always has. Folks who have lived in Columbia Falls far longer than I know the history of CFAC first hand. To summarize for everyone else: It opens. It lays off / closes. It changes hands. It opens. It lays off / closes. And so on.

Again, Lucy pulls it away
CFAC has at times been our employment Lucy (from the “Peanuts” comic strip). Just as Charlie Brown approaches to kick the football, Lucy pulls it away and Charlie goes flying through the air, screaming and lands flat on his back. Imagine having that done to your career and family -  several times.

No matter how good things are when CFAC is rocking, a shutdown ripples through the financial well-being of our fair town’s families and the businesses that serve them. The impact of the historical ups-and-downs of CFAC on those families is unimaginable.

To their credit, CFAC’s troubles haven’t always been bad news for the valley.

In at least one case, their troubles have generated substantial benefits. Several years back, CFAC paid their people to do what amounted to volunteer work for a number of groups that couldn’t have otherwise afforded the labor. Many organizations benefited big time from the hard work their employees provided back then – and continue to benefit from the work done back then.

Don’t be a commodity
It isn’t as if these troubles were created on purpose (feel free to argue about that in the comments).

While it may not have started that way in the 1950s, the CFAC of modern times is incredibly sensitive to the whims of commodity prices. Many businesses deal with commodity prices somehow affecting some part of their business. CFAC’s business has it as part of their raw materials supply, energy supply and their finished product. As things sit today, it’s a tough, tough business they’re in.

Imagine having someone else setting the prices of every major component of your business. Now imagine that the ingots you ship are not substantially different (speaking very generally here) from those shipped by a Chinese firm using labor that works for $10 a day, ore that’s mined locally by workers paid similarly, and so on.

Advice to everyone else – do whatever you can to avoid getting yourself into a commodity market. If you’re in one, work on your business model to get out of it.

In fact, that’s my advice to CFAC, though they didn’t ask. Let’s call it a wish for the betterment of Columbia Falls and the entire valley.

The Whole Valley
Wait a minute…the whole valley? Absolutely. It’s about airline seats, hotel rooms and rental cars. It’s about cafes and catering. It’s about grocery and clothing stores. It’s about car dealers and construction work. It’s about the schools that get property taxes from an active thriving business instead of the waiver-level taxes of a dead one.

My wish is that in four years no one cares what electricity costs CFAC. Not because they are gone, but because whatever they sell has so much value that people will pay whatever it takes to get it. It worries me deeply that in four years we’ll be right back where we are now.

What I’d like to see is for CFAC to add a ton of value to the aluminum they produce, *before* it hits the rails. I’m told CFAC had some of the best millwrights anywhere who could create “anything”.

I wonder
I wonder what CFAC could make that would allow them to sell a product that doesn’t get sold on commodity markets based on someone else’s price control. I wonder what they can manufacture with the skills and backgrounds of the people who worked there for the last 20-30-40 years.

I wonder what would happen to a community manufacturing valuable products for today’s economy, rather than commodities from my grandfather’s economy.

I wonder what would happen if Charlie got to kick the ball.

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Maker, Taker, Patriot.

Wall Street Journal senior economist Stephen Moore recently wrote a column about “takers and makers“, revealing that “More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined.

Twice as many people (22.5 million) work in government than in manufacturing (11.5 milion).

Upon hearing this, many will launch into their political persuasion’s talking points (regardless of leanings). But it isn’t that simple.

It’s not the 60s anymore

In 1960, about 8.7 million people were government employees. In 51 years, that number has almost tripled. I don’t have a breakdown of the increase in front of me, but a 300% increase is large no matter how you look at it.

Moore derisively calls these 22.5 million “bureaucrats”, which to me coveys the image of the corrupt Daley regime in Chicago or an uncaring, inefficient Department of Motor Vehicles (not what you get in Kalispell’s blue building).

Based on the comments I hear, most don’t view rank and file firefighters, police officers, teachers, train conductors, military personnel and the like as bureaucrats.

In one example, Moore mentions the doubled public school employment between 1970 and 2005, referencing a University of Washington study, as an example of government inefficiency given that standardized test scores haven’t doubled in that time.

Electric shock and cages

In the 1960s, students with Down’s Syndrome, mental deficiencies, autism or physical challenges were treated as second class citizens. Today, they learn as a part of mainstream student populations, just as employers do. Doing this requires increased staff. Some kids have a single staff member dedicated to them. Today we teach topics in school that didn’t exist in 1960, like computers, robotics and computer-aided design (CAD).

I don’t think anyone, with the possible exception of the current Montana Legislature, would wish for a return to the 1960s. Yes, that was sarcasm. Mostly.

If you look at the manufacturing and industrial changes since the 60s, it’s hard not to see the migration of the steel, textile and heavy industries overseas as having a significant impact on employment numbers.

While government numbers have gone up markedly, Moore didn’t address the disappearance of manufacturing and industrial jobs during that same period.

The falloff of employment in those industries didn’t happen in a vacuum.

Blame the third world

The industrial revolution in the U.S. transformed business: Steam, electricity, internal combustion.

In the last 20-30 years, it happened again; fueled by computers, industrial automation and the rise of the third world.

While these changes were decimating U.S. presence in industries like heavy equipment, steel and textiles manufacturing, we retain a reticence to pay anything above 1960s prices for commodities like steel, lumber and textiles.

We kept prices down and competed with cheap overseas labor through industrial automation and computers, but that cost jobs. When someone is laid off from a foundry job, where do they go?

If someone laid off after two decades in one of these industries has an opportunity to share their skills with young people looking to learn a trade, and in doing so, keeps their family off of taxpayer-funded public assistance – are they a maker, a taker or a bureaucrat?

If in that 20 years they didn’t take the initiative (on their personal time) to remain employable by learning a new skill (welding, software, repairing industrial robots, etc), who’s responsible?

Meanwhile…

Industrial automation is replacing cheap third world labor with labor that’s even cheaper. China supplants India, who “stole” the work from US workers. Advances in automation allow us to keep prices low and allow our businesses to avoid paying modern wages for dangerous work now done by machines, but they also eliminate third-world jobs here in the states.

Are those jobs we want? That laid off industrial worker who now teaches…do we *want* them teaching a 1960s or 1970s skill in a 2011 economy?

Businesses of all sizes outsource work because it’s not efficient to keep people on staff to do that work. Business is then more flexible and the jobs we keep are usually more secure, but low-value employment is hammered by it. Is that good or bad?

Nothing is as simple as the politicos and power hungry want you to think.

Want to be patriotic? Invest in yourself, make something that people want/need, and create your own future.

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Honda on Failure

Just had to share this video from Honda on failure.

Good, good stuff to share with your team.

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Election time. Job creation time. Your time.

As I sat in the Montana House District 3 candidate forum last night at Discovery Square, my angle on “fixing” the economy was reinforced repeatedly.

As the candidates talked about the predominant concerns people have these days (jobs, the economy, taxes, education, roads) and, on rare occasion, the things that only politicians seem to care about, they only reinforced what I’ve said previously about the role of government (and the people) when it comes to economic development.

It’s on you. This isn’t their failing, it’s reality.

While there’s no question that the candidates care, and that they as representatives have some ability to impact job creation and retention – their most important role for entrepreneurs, small business owners and their employees comes as connectors and roadblock eliminators.

It’s one reason why I’d like to see them all on Twitter, Facebook or whatever. Not because it gives them yet another mechanism for spouting the party line (how most Congress members use it), but because it gives them the ability – in real time – to say “Hey, I just saw this opportunity”.

Serving that role as a connector might be all the kickstart a community’s economic development needs. Do your rep(s) and Senators connect or just spout?

The reality

I’ve made it clear before that I believe it’s your responsibility to fix your economy. By doing so, you’ll help others fix theirs.

Legislation doesn’t create sustainable jobs. The exceptions to that (like the stimulus) are temporary and require state or Federal money, a finite resource.

To me, a sustainable job creates value for the employer that they can profit from, pays a wage that doesn’t require a responsible person to work two jobs, and doesn’t end when the road, bridge or what not is completed.

Even if they *could* create sustainable jobs, our state house (much like your state or provincial government) has way too many other things to fix – and by that, I mean things they have the ability to address – for them to focus primarily on creating jobs.

I feel their job is to grease the skids. To make it easier for people to start a business. To make it easier to hire employees. To make it easier for communities to transform themselves.

Not to do it for them.

The forum

At a candidate forum where no one yelled and screamed (thank you CFalls), in a year when people ought to be showing incredibly high interest in who will spend four months in Helena next year, I counted 50 people in attendance in a room that has historically proven to hold 300.

Of those, probably 20 were candidates or their family members/friends. There were a few students there, some of whom were present and former students of the forum’s moderator, CFHS’ 10-time state champion speech/debate coach Mike Christensen.

Despite this, I think the forum was quite a success. The questions from the audience were quite good. But still, I wish more folks had been there.

Tax, tax, baby

There were plenty of references to Montana’s oft-reviled business equipment tax. Frequently, candidates spoke of a holiday from it (as an incentive to bring a business to the valley) or of eliminating it altogether.

But one wanted to keep it to discourage replacing people (and thus jobs) with automated equipment.

This is a short-sighted argument even for a third-world country, much less a U.S. state with smart, hard-working people like Montana.

Across the street from Plum Creek in CFalls, there’s a semi-trailer with the names of closed mills painted on the side. How many of those ignored technology and automation advances?

Look, I know that log supply, environmental issues and other things were involved, but I also know that modernization left some of them unable to compete in a price-sensitive commoditized market. Add all those other issues and the results are predictable here just like they are for Blockbuster, who filed bankruptcy this week.

Avoiding automation of (in particular) mundane, repetitive work is a really bad idea. Employees should be adding value to the company’s products and services whenever possible, or their jobs will always be in more jeopardy than the jobs of employees that DO add value.

Make better jobs, not just more of them

Automated equipment completes tasks that 20 years ago were performed by employees, which reduces costs. I’m not insensitive enough to miss that this means jobs and thus impacts on family and community. But how sustainable are those jobs when the company ignores competitive advantages?

Automation / technology has to be a strategic focus for manufacturers these days.

When companies replace jobs with equipment, it should also result in better, higher-value jobs in most cases. Getting rid of industry knowledge by getting rid of employees (rather than giving them a better job) wastes all of the investment you made in those people.

But it isn’t just the responsibility of the employer. Employees need to keep up. The more valuable you make yourself, the more likely you will be prepared to take on different responsibilities when your employer’s world (and thus your world) changes.

Bottom line, it takes two. I suggest you take the lead, no matter which one you are.

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What’s that creature in the water?

Shamu
Creative Commons License photo credit: Jasmic

Is it the Creature from the Black Lagoon or worse… a Humanoid from the Deep? Nah, it’s just me.

Since junior’s Montana summer swim league started back in June, I’ve been going to lap swim at the end of the work day. Aside from the obvious benefits, it’s a great way to “shed the day” and detach from the laptop, phone, etc.

But this is Montana and it is September, which means that the pool has been closed for 2 weeks. It’s still reasonably warm, but the city likes to close the pool when school starts. What’s a guy to do?

I really didn’t want to wait for the pool to open next June so I joined a local club that has an indoor pool.

Of course, that got the gears turning.

One dollar

Even in the little burg of Columbia Falls, there are about 15-20 people doing lap swim during the two daily sessions. Even if only one of them joins your club/gym, you would think that would pay for $1 worth of marketing to those 20 people.

But no one did anything. Not even fliers on windshields at the pool during lap swim. Those might cost $0.05 each, plus some time to work up the flier. They probably have a brochure, worst case they could use that – though I’d recommend something else.

Not long ago, we had “Boogie to the Bank” during our town’s Heritage Days celebration. It’s a 5k run/walk that quite a lot of people participate in, from moms pushing strollers to real athletes who travel to compete in it. Wonder if any of them are the type who like to stay (or get) in shape?

Was there any marketing effort there to pique the interest of the folks inclined to stay active? Not really.

Standing room

I guess maybe these places have all the customers they want.

I wonder if there’s some burly guy at the door who flunked out of “Cool Hollywood Club-of-the-Week bouncer school” and has to keep people out of the gym instead? I haven’t seen him, so maybe I just visit at the wrong times.

Most gyms (athletic clubs, etc) depend on 50% (or some industry standard number) of their members paying but never/rarely showing up.

If 95% of their membership showed up every day, they’d be in trouble because the building would be packed. The fire marshal would be the next visitor, if you know what I mean.

Almost every other business would be thrilled if 95% of their customers showed up every day, but not athletic clubs.

I’ll bet most gym managers/owners can tell you what the average length of membership is for those who don’t visit regularly. I’ll bet some of them can guess with reasonable accuracy which hours of the day are the busiest. With the registration systems in place at many facilities, I’ll bet many of them have hard numbers to back up their guess.

I wonder what effort they put into reducing churn. I wonder what would happen if they spent that same effort on retaining their clients.

Speaking of, is churn an issue for your business?

If so, have you done the math on what it costs you each month? What effort are you putting into maintaining the churn treadmill?

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How to cut costs and eliminate waste in your business

Floating rag picker
Creative Commons License photo credit: Koshyk

Today’s guest post comes from the US Chamber of Commerce, where John Tschohl of the Service Quality Institute offers a smart way to find and eliminate waste from any small business: Ask your staff.

Simple, but effective. Check it out here.

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Measurement and the fine art of bidding

Toon Studio â?? Disney Studios, Paris
Creative Commons License photo credit: eyeSPIVE

Ever messed up a bid?

Even after 25 years in the IT business (much less other stuff), I find that one of the hardest things to do accurately is bid a sizable time and materials-based project.

If you’re in IT, you know all the reasons.

Stuff changes. Requirements aren’t necessarily what they really are. Features get added, removed, changed and re-added.

It can be troubling if you live by (or try to live by) a schedule.

As long as the communication channels are open, it works out. It works out because over the years, you’re zig zagging across the good bid/ouch line with smaller and smaller zigs and zags each time (mostly).

But I deal in atoms not pixels!

Yeah, that’s another reference to Free. I’ll stop with that eventually.

I wonder how big construction, architecture or engineering firms can afford to do that zig/zag thing.

Pixels are cheap. Atoms are not, especially when you’re talking about a project like a mall, a bridge or 23.3 miles of Interstate highway. Which brings us to yesterday’s measurement discussion.

I was talking to a guy in the construction biz a while ago and asked him about this. Based on all the bidding processes for huge municipal (etc) construction projects, are any of them right? It seems like they all go over budget and over time.

Can you imagine what the expense of being wrong is if you’re the construction, engineering or architecture firm?

Parts is parts

And then I was thinking… buildings, roads and bridges break down into finite tasks just like programs do.

In the programming world – or at least in the academic one – there’s something called function point analysis.

The theory is that you can assess the time/complexity/cost of a project simply by counting the function points it contains. Rumor has it that it works if used properly. Guess how many businesses I’ve encountered using it over the last 25 years.

Doughnut. Zippo. None.

Why? Because it’s hard work. For small clients, it may not be worth the effort. Add to that, it means you have to properly plan and spec the work in pretty good detail. Not a lot of people want to put that effort in before handing a job to a programming staff to complete it.

On the other hand, not even Electronic Data Systems used it when I was there back in the Ross Perot days and we checked, rechecked and re-tested *everything*. Twice. Three times after 5pm.

I beam with joy

Let’s get back to the architects and such.

As I noted, buildings, bridges etc break down into components like beams, walls, pillars, etc. (Now you see why I just had to talk about function points, sorta.)

Like programmers (perhaps more so), these folks deal with complex bids with lots of variables.

They bid a bridge job because they have the best bridge designer in the state. Or condo. Or stadium. Whatever.

3 days before the bids are opened and awarded, she gets hit by a bus. Or gets a 3x salary offer from some Middle East engineering firm. Or disappears to find herself by walking the Great Wall.

Regardless of the reason, she’s gone.

It isn’t unusual, but it sure will throw your design time estimate a wicked curve ball and any technically-oriented business might see this.

What if?

What if your design software had the ability to measure how long it took to design an I-beam that will hold a dynamic load (ie: a load that changes/moves). Or how long it takes to design a retention pond at a factory.

So what, right?

OK…Imagine that your design software has the ability to do that for each staffer, broken down for each possible component of a building, screened-in patio, bridge, truss, lake, or other feature.

Like function points in software, the design software might keep track of all this based on complexity – such as by the number of load points and force vectors, or maybe square footage and materials have an impact.

Maybe experience and type of training comes into play. Maybe you learn that the designer’s college choice impacts these numbers.

Speed, Quality, Complexity

Now, imagine that this software can aggregate all this data by employee, by component.

With a little extra effort, you eventually figure out which designers are the best at designing each type of component.

A combination of speed, quality and work complexity ends up telling you exactly who to allocate to a particular piece of design and most likely that comes along with a very accurate estimate of the time needed to do the job.

If you break down the design of the most complex project you ever had, you know how many I-beams, trusses, concrete walls, pillars and so forth there are, as well as what kind of loads they have.

And now – because you have measurements of what the real work takes – you can make a bid that is far more accurate than the guesses those other folks are making.

Now imagine that you make the software that allows for this kind of measurement.

Your customers are the ones who bid more accurately. They win more bids. They become more successful. Your software becomes their secret weapon. You know what that means.

Imagine soft puffy clouds

Now… consider this discussion in the context of the service you provide, from programming to sports writing to graphic arts to small engine repair to architecture to plumbing or whatever.

You may already do some of this assessment by the seat of your pants / gut feel. Is it accurate? Be honest with yourself, it doesn’t matter what you tell me.

But would it be as accurate as an ongoing set of measurement data that is based on your current staff mix? I doubt it.

Would it help? Let’s see.

  • Imagine how much easier it would be to manage a project if you knew exactly what each component required time-wise.
  • Imagine how much easier it would be to manage a project if you knew exactly how to allocate your people to different details of the project.
  • Imagine what your sales staff would face out in the field when they realize they can confidently bid a job and know it’ll come in on time and on budget and they can whip out performance reports to prove it.
  • Imagine how your testimonials would change and the impact that would have on prospects.
  • Imagine how your customer retention numbers would improve.
  • Imagine what something like this could do for your staff’s morale. Never a late project, ever again. Well, maybe almost never.

Measurement. Might be a good idea, ya think?

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DeMint gives CPSIA instructions to small business owners

Look what happens when you step away from the CPSIA bonfire for a couple of days to get some work done…after all, *someone* has to bail out the country, may as well be me.

Senator DeMint from South Carolina is working on some legislative fixes to the CPSIA, but more importantly, in his blog he describes the steps you must take to get support for his changes. 

His common sense proposal to change the CPSIA is also covered in that same blog post. Clarity – a little shocking.

Once again, I’m asking you to call your senator’s WASHINGTON office (not the local, in-state one) as DeMint instructs.

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A slight edge to improve your website’s contact page and calendar

This morning I got a note from Keith Lee at American Retail Supply in Seattle regarding our contact page discussion about Scouting.org from earlier this week. He mentioned that his site’s contact page includes directions to his retail locations.

That’s a simple idea that can save you and your clients a lot of time.

Let me put the cherry on top: Add a Google map showing where your business is located. Give them a page that can be printed that includes both – without all the other baggage your site has.

If you have a calendar of events on your site, speaking engagements, or what not – add clickable iCal links for them.

Those links will allow your customers to click them and automatically add them to your phone’s calendar, your Outlook or whatever calendar tool you use.