21 October 2007

The Internal Customer

I am sure you have encountered the concept of the “internal customer” in your organizations (especially if you are in delivery organizations). This happens when one group or team in an organization believes that they essentially serve to another group/team internally which in its turn, exist to serve to another team and so on till the last team actually serves up the real customer.

This happens when Development thinks Product Management is their customer or when Product Management thinks Sales is the customer and so on. A few weeks back I overheard a variation of the same concept in a meeting “we will completely outsource this to you – let’s agree on the budget and SLAs”.

The theory is if each team performs to its best level in delivering to the next team and the chain continues in that fashion, the real customer will get the best performance.

In reality, this is a very simplistic view at best and delinquency to the real customer at worst. The fallacy of the thought process are many. To name a couple,

• This gives rise to “buffer bloat”. Each team, in its desire to meet the agreed upon SLAs and metrics, will build in its own “safety” buffer. (also known as sandbagging). By the time these buffers are compounded across the chain, it can be scary.
• This also loses the straight line of sight to success. Which means you will find situations where the customer and organizations closer to the customer are not meeting success critieria but other organizations (usually further away from the customer) meeting their numbers and declaring success.
The best culture to grow is recognition that there is only one customer. And that is the person who pays up the money.
Nobody else is the customer. Everbody else is part of a team that delivers to that one customer. To compare with a football (soccer) team, no one player passes the ball to the player ahead of team and declare his/her job is done. Everybody has a position to play – even when they do not have the ball. But they have only one common goal to meet – no interim internal goals.
To mix the metaphor a little, to compare with the American football team, everybody plays on the same game plan. No doubt there is going to be one quarterback (I like to think of that as the sales organization). But there are running backs, tight ends, punters, wide receivers each playing their own position in tandem with each other to meet exactly one goal. But nobody in the team is trying to “satisfy” some other player in the team. Nobody is measured on any other term than the one score that everybody else is measured on.
In summary, dissuade people from thinking they serve some internal teams.
Establish a clear line of sight for each team to the one real customer – one goal.
Align metrics such that no one of the teams can be successful if they whole chain is not successful.
Would like to hear about your experiences…

16 September 2007

Not all functions are equally difficult

It has been almost a year and half since I jotted down my learnings. Clearly, my learnings have not stopped. What had stopped was my discipline of putting it to pen and paper after reflecting on them. I also realized that in the meanwhile, Google had changed some of the setups of Blogger – due to which I was not getting notifications for any of the comments. I cleared and published all of them today.

In the last 15 years, I was fortunate enough to have run all the 4 critical functions of a software company – Global Engineering (R&D), Global Consulting (Professional Services), Global Marketing and Global Sales. As you can imagine, there are lots of learnings that I had to go thru. I am sure some of you have gone thru this too. It would be great to hear from you about what you have learnt. I also want to point out that I did not have the pleasure (yet) of running any of the other organizations like HR, Finance, Legal etc. (I sure hope to run HR someday)

Some of my observations:

1. Everybody thinks they have the short end of the stick: R&D always felt that sales sold without understanding what is there in the product and what is not. And now they have to slog it out to meet completely unfair deadlines. In fact R&D’s opinion about sales personnel has not been too different in any of the software organizations that I have seen (worked or was on the board or just had good visibility into).

Consulting, on their part, always thought that they were stuck between the fire and the frying pan. Sales set them up with all sorts of expectations and R&D takes their own sweet time to deliver anything – needless to say it is going to be buggy. And now they have to face the music in front of their customers.

For sales, it was they never got a good healthy qualified lead list and in any case, they never figured out what they heck R&D really does for a living. Sure enough the competitors seem to be developing much better products than us.

Marketing groups were a little more interesting. Most of the complaints I heard revolved around budgets than anything else.

2. I do believe some things are more difficult than others: I am sure you realize that nobody has a cake walk – everybody has a tough job to do given that the market dynamics and customer expectations keep getting tougher and tougher. But allow me not to shy away from speaking my mind – based purely on my experience.

Of all the jobs, I think the sales person has the toughest one. There are two metrics I use to judge the toughness of a job – how measurable is the success of a job and how much can a person control the variables to make the job a success. I absolutely am convinced that sales has the tightest measure – pure dollar numbers – it is totally in black and white. Sure R&D has to deliver to deadlines, Consulting has to deliver to customer sat, marketing has to deliver to pipeline, branding etc but if you think a little more carefully – and I mean this without any disrespect to any profession – it is possible to cut some corners to meet a deadline, it is possible to smooth out some satisfaction issues with personal relationships, it is difficult to nail down exact pipeline quality / branding ROI etc. Not to say there are not established measure for this – but nothing compares to the exactness of the green dollars either being there or not.
As a double bind, sales has the least control over the variables. A salesperson has to do with parameters which are mostly external – prospect’s budget, prospect’s political alignment, prospect’s timeline, sense of urgency etc. etc. The best sales person of course tries to influence these but, at the end of the day, these are external variables. Marketing has a similar issue too (see below).

3. Marketing is something else: Of all the jobs, marketing is the most amorphous. It is very difficult to nail down a straight line of sight from what you do in marketing today and what you actually get. The lead time of doing something in marketing (by the way – this is not true in the consumer side of the world – I am talking about enterprise software only) – be it branding, be it a new message, be it a new segmentation strategy – and actually getting the results from such is so high (typically a year and a half) that most people (notably CEOs) lose patience on it. This makes the marketing job somewhat easy (difficult to pin down what is wrong with one is doing) as well as difficult (you always have to fight your point without results).

BTW, somebody once threw me this data that an average CMO lasts for a year and a half. I am not sure how true it is – but if it is, I completely understand why.

In short, my respect for sales people is the highest. So much so, that I always return all telemarketing calls and email marketing (not the spams :-)). I tell them that there is no chance of doing business. Having been on the other side, I understand the value of being at least told a polite “No”.

Would love to hear from you…


3 December 2006

Dallas Family

We were in Dallas for the better part of 14 years. This slideshow captures some of the most memorable moments we had with our Extended Family in Dallas – the Bengali friends that made the stay so much worthwhile. We wish our friends form Dallas the very best.