Posted on July 15, 2009 by Paul Ritchie
Second-guessing oneself is a risk when deciding to leave a leading company, so I needed to ensure that I had no regrets when I left SAP. In particular, I didn’t want short-term personal or “micro” stumbling blocks to obscure great “macro” opportunities in the rest of SAP. Unfortunately, there were too many big picture concerns that nagged at me, at least from my less-than-exalted perch:
- The “Post-Shai” Backlash: The reaction to Shai’s departure was almost giddy in many quarters, which wasn’t a surprise. The real surprise was the scale, scope, and snarkiness of the reaction. A lot of non-Palo Alto folks minimized Shai’s contributions when it was convenient — see Peter Zencke on Shai’s “second tier” involvement with BYD — and blamed him when it wasn’t convenient (e.g, BYD didn’t perform because of NetWeaver).
- Condition of SAP’s Product Portfolio: For those familiar with the BCG Matrix, IMO the SAP portfolio is unbalanced. Nearly all of the SAP portfolio can be classed as either cash cows or pets. I just don’t see enough “stars” on the solution horizon.
- Confronting the Reality of Business ByDesign: Speaking of pets, there was way too much happy talk about BYD for far too long. The funding that was poured into BYD — while SAP increased its margins — came out of the hides of other parts of the company.
This last point highlights the fundamental doubt I had about the validity of SAP’s strategy: Was it still able to produce “stars” organically? A “not-invented-here” mindset only works when you’re still able to invent. It is one thing to miss on product development, it is another to deny the miss.
Leo is certainly aware of this issue, but this unwillingness confront reality has continued to spread IMO. I’m not sure that SAP understands just how much damage it has done to itself by running some sides of the company with a gimlet eye, while other sides seems to be living in the best of all possible worlds.
Filed under: Communications, Leadership, Organizational Change Management, Strategy Management | Tagged: Business ByDesign, Dennis Howlett, Leo Apotheker, Pangloss, Peter Zencke, SAP, Shai Agassi | 1 Comment »
Posted on July 14, 2009 by Paul Ritchie
As promised, I’d like to outline some of the reasons why I moved to Mead Johnson. There are several big picture or macro reasons why the move appealed to me:
- Engagement in standing up an “new” company. MJN just had an IPO as a carve out of Bristol Myers Squibb. While I’ve had a bit of experience integrating acquisitions, I’ve not been part of a divestiture. Ironically, many of the activities are quite similar, especially the process and application rationalization work on the IM side.
- Mead Johnson’s strategy: When you look at our vision, it is explicitly a premium strategy – “Our vision is to be the world’s premier pediatric nutrition company. ” There is a real research, quality, and product differentiation between the MJN brands and everyone else.
- Mead Johnson’s growth prospects: What surprised me most about MJN was how much growth there is in the pediatric nutrition market. In particular, there are great prospects globally. We’re already rolling in China and India is on the horizon.
Filed under: Strategy Management | Tagged: acquisitions, Bristol Myers Squibb, divestitures, IPO, Mead Johnson, Strategy | Leave a comment »
Posted on May 5, 2009 by Paul Ritchie
A leader, a manager, and a business person?
An illustration of the manager/leader gap discussed earlier (here) is drawn in this back-and-forth among Glenn Whitfield (here), Andrew Meyer (here), and others. All good stuff, though the last two comments on Glenn’s post — from Long Huynh at CIO Assistant and Glenn himself — get closest to my perpsective.
The idea that a CIO can perform well by operating with one style is pernicious. Unfortunately, many reinforce this idea — see this State of the CIO 2007 feature from CIO Magazine that identifies CIO archetypes (and even offers a “self-assessment” tool for self-archetyping).
I wonder…how can a single-archetype CIO be successful when his/her IT portfolio must contain very disparate types of projects and programs (e.g., “stay in the game” vs. “win the game” vs. “change the game” initiatives)?
Filed under: Innovation, IT special interests, IT Strategy, Leadership, Portfolio Management, Strategy Management | Tagged: Andrew Meyer, Glenn Whitfield, Long Huynh, manager-leader gap | 1 Comment »
Posted on April 27, 2009 by Paul Ritchie
I’ve been working on an initiative called “Value Delivery,” which will incorporate value management into our various PMO methods, tools, etc. These activities are often listed as typical PMO functions, but this really only honored in the breach. Value management never seems to take off given a PMO’s traditional emphasis on implementing project management methods, tools, training, etc.
In our approach, we will ensure that value management has its own identity, especially when it comes to training. While value and benefit management is baked into the various program and portfolio standards around, it isn’t part of the typical project manager’s skill set. Rolling out value management separately should emphasize the organizational and personal changes required to be successful.
What is value management’s objective? To ensure that execution remains focused on delivering against executives’s and stakeholder expectations. How does value management happen? Maybe the best way to illustrate is to briefly lay out the lifecycle we’re using below:
- Value Discovery: Establish a performance baseline
- Value Realization: Identify required process improvements and KPIs
- Value Optimization: Review and steer benefit attainment
Filed under: Performance Management, PMO, Portfolio Management, Program Management, Project Management, Strategy Management | Tagged: alignment, business alignment, Value Management | 6 Comments »
Posted on April 24, 2009 by Paul Ritchie
Glen Alleman and a number of commenters contributed to a great thread on math, PM, and complexity (here).
I try to keep the ideas of complexity “science” in mind when planning strategy and its execution. In particular, I have a deep respect for the power of self-organization and the need to create flexible rather than brittle management systems.
However, I’m not sure how powerful CAS really is as a theory, at least w/r/t/ project management. For example, how do its predictions advance my estimation approach beyond what we’re doing w/ probability distributions (e.g., Monte Carlo simulations via Crystal Ball)? To I really need math beyond that to get “good enough” estimates?
Filed under: Complexity, Portfolio Management, Program Management, Project Management, Strategy Management | Tagged: complex adaptive systems, complexity theory, Glen Alleman, Herding Cats | 3 Comments »
Posted on April 10, 2009 by Paul Ritchie
Posted on February 24, 2009 by Paul Ritchie
Posted on January 29, 2009 by Paul Ritchie
Per earlier posts (here. here, and here), I’ve been thinking about what goes into taking over a new organization. This post takes a look at competitive analysis via benchmarking. Benchmarking is always useful, though I’m always wary of getting too hung up on one’s competitors. I don’t have any particular comment on the eight questions from the HBR New Leader article, but you might want to look at the strategy outline on the QuickMBA site (here):
- How do you and your competitors compare in terms of returns on assets and relative market share?
- How are the leaders making money, and what is their approach?
- What is the full potential of your business position?
- How big is your market?
- Which parts are growing fastest?
- Where are you gaining or losing share?
- What capabilities are creating a competitive advantage for you?
- Which ones need to be strengthened or acquired?
Filed under: Leadership, Strategy Management, Turnarounds | Tagged: benchmarking, Harvard Business Review, Hernan Saenz, John Shank, Mark Gottfredson, Market Analysis, New Leaders, Steve Schaubert, Succession | Leave a comment »
Posted on January 28, 2009 by Paul Ritchie
Per earlier posts (here and here), I’ve been thinking about what goes into taking over a new organization. In my last post on this topic, I may have given the impression that costs and prices should be one’s main focus.
To that end, this area is one that I’ve neglected — the HBR New Leader article wisely emphasizes looking at customers up front. In a past role, I spent too much time working cost, price, and process issues. When I finally got to the customers I realized that I had left considerable revenues and profits on the table.
- Which are the biggest, fastest-growing, and most profitable customer segments? This should tell you whether you’re in the right segments.
- How well do you meet customer needs relative to competitors and substitutes?
- What proportion of customers are you retaining?
- How does your Net Promoter Score track against competitors? There are a number of doubts about this specific methodology, but a systematic look at loyalty scores — and the reasons behind loyalty or switching behaviors — is essential.
- How much of the profit pool do you have today? How is the pool likely to change in the future? Again, the authors are from Bain and are referencing a Bain-aligned approach. On the same topic, I recommend this book on Strategic Cost Management by a business school professor of mine. Shank and Govindarajan introduce some great tools for looking at the value chain.
- What are the opportunities and threats? Opportunities and threats to WHAT? Use the preceding questions to focus the SWOT analysis.
Filed under: Leadership, Strategy Management, Turnarounds | Tagged: customer loyalty, Harvard Business Review, Hernan Saenz, John Shank, Mark Gottfredson, Market Analysis, Net Promoter Score, New Leaders, profit pools, Profitability Analysis, Steve Schaubert, Succession, SWOT, Vijay Govindarajan | Leave a comment »
Posted on January 26, 2009 by Paul Ritchie
Per an earlier post (here), I’ve been thinking a lot about what goes into taking over a new organization. Considering the economy these days, this may happen to more of us!
Anyway, the principle that costs and prices almost always decline over time is a reasonable foundation for looking at one’s competitive and operations health. Below are six questions from the HBR New Leader article I originally referenced which help to focus the analysis:
- How does your cost slope compare with your competitors? In other words, are your costs lowering or rising more or less quickly than your competitors?
- What is the slope of price change in your industry right now, and how does your cost curve compare?
- What are your costs compared with competitors? I’d also look at prices as well… competitors with prices eroding faster/slower than me should tell me something about the sweet spots in the value chain, offerings most valued by the market, etc.
- Who is most efficient and effective in priority areas? A pretty generic suggestion. Looking at relative pricing and what that tells you about the market should give hints about “priority areas.”
- Where can you improve most, relative to others? Look hard at the capabilities you actually have or could build quickly. Avoid immediate focus on topics that you can’t change.
- Which of your products or services are making money (or not) and why? Don’t automatically trust the received wisdom on who makes and loses money. Invest some time and money is getting REAL numbers and answers.
Filed under: Leadership, Strategy Management, Turnarounds | Tagged: Cost Management, Costing, Harvard Business Review, Hernan Saenz, Mark Gottfredson, New Leaders, Pricing, Steve Schaubert, Succession | 2 Comments »