Values in an Agile/Lean/Innovative company

This is part of my Lean Disruption Series where I’m looking at Lean, Agile, Innovation, and Lean Startup.

None of these methodologies can be adopted for free. They require a great deal of firm introspection. Understanding how processes interaction with people and values is vital to adopting any of these approaches let alone a combination of these approaches.

Metrics are one of the best examples of how there can be conflicts between stated values, values in making decisions, how resources are handled and how processes are structured. The famous saying “You manage what you measure” is right in a lot of ways. Many companies claim that they value customer satisfaction, however many of these companies do not actually do anything with the satisfaction surveys they do get. Comcast is the most obvious example of this. Comcast doesn’t really value customer satisfaction because they measure their customer support on how much they can upsell to the customer anytime they are on the phone. This changes the processes their customer support must use, rather than designing processes to enable single call resolution, their processes are designed to enable selling more products. Their employees, the resources, are rated based on this and if they don’t meet those goals they are unlikely to do well. Considering the Verge’s Comcast Confessions series most of the resources at Comcast do not feel valued. This all points to the true values for Comcast being retention at all costs and more revenue per user measured in Churn and ARPU (Average Revenue per User) respectfully.

Agile Manifesto from ITIL’s blog

For a company to adopt an Agile approach to developing software, the paradigm of what the organization values must radically change to align to the Agile Manifesto. In most software development the concepts on the right are what are valued through a Project Management Office. The concepts on the left are typically considered only at the beginning or the end of the project or not at all. Working product is the goal of a project, while customer collaboration inclusive only in the beginning getting requirements.

Switching from the right to the left creates massive cultural upheaval at an organization, where power is shifted down and out. It is shifted down to the team level, where managers in the past made all the important decisions Product Owners, Scrum Masters, and developers make the decision now with the customers. Power is shifted out through increased collaboration with the customer. Customer centricity forces the company to understand what the customer really wants and more quickly respond to changes in their understanding of their needs. This does mean that the “requirements” change, however, in many cases due to the uncertainty in a technology, interface, or some other aspect it was impossible to properly articulate the actual need until there was an example in front of the customer.

With these value changes there must be process changes to that properly reflect the change in the way the values require work to be completed. In the case where Single Call resolution is the most important metric reflecting the value of true customer satisfaction, processes must be built to enable that – such as training, information repositories, and authority to truly address customer needs at a single point of contact. In software development rapid iteration with continual feedback is a process that must be built to enable that.

This changes are not free and require true commitment from leaders across the organization. Without their commitment any adoption of these frameworks is doomed to failure.

Ethics and Values; Military and Espionage

We didn’t get to have a national conversation about government espionage until Snowden released all those documents and now we’re having a pretty vocal one in 2/3 branches of our government (well all three since Obama seems to contradict himself fairly often). Today on Vice’s Motherboard I read an article claiming the military is going cyberpunk. As the article notes, the military has used flight simulators for years, because crashing in one of those is a lot cheaper than crashing a real plane. The Stealth Bombers cost close to 2 Billion each, so learning how to fly one of those is best done in a simulator than in a real plane, plus it reduces the risk of death in the event of a crash.

How will this trend continue? Apparently the military is investing in virtual reality battle grounds. This will help train soldiers in different combat situations without having to build extremely expensive facilities, use blank rounds, damage guns, and any other types of explosive that would be used in those situations. Never mind the logistics to get the equipment there and all that.

It’s likely that these battle grounds will incorporate things like the Oculus Rift and omnidirectional treadmills. This will allow soldiers to move crouch and actually feel like they are in direct combat. For people at home, it’s not going to be as useful, but it could work well in this type of situation. If they add in the ability to make the environment cold or hot and wet or dry they could simulate a great deal of the virtual environment to build skills of soldiers.

The military is also working on robotics as a way to reduce the number of men we have on a battle field. This of course could be extendable beyond simply having robots like the Boston Dynamics Dog, but we could eventually mix the VR environment with a “robot” to have a remote soldier that is bullet proof, never tires (as you could replace the driver), and moves around like a person. This opens up an entirely new type of warfare. It takes the idea of drone combat and moves it to the next level – foot soldier drones that truly make the battle field imbalanced. Of course the final step would be fully autonomous robotic soldiers – but I think most people wouldn’t accept those.

In any of these cases we need to have a serious national conversation about the application of these technologies. Looking from an ethical standpoint there are conflicting views. First, it’s ethical to protect our soldiers as much as possible when we’re in a justifiable defensible conflict. Second, it’s unethical to enter combat as an aggressor where your military cannot be stopped from the position of the defender. Furthermore, if we’re talking about completely robotic military force it’s even less defensible to be using these forces as we don’t have any human control in the case of a software failure – or a hack and remote theft of the system.

As a society we need to have a conversation about if we think we should allow our military to do this. As it is we already routinely have operations that the citizens aren’t really aware of in countries like Yemen and god knows where else. These put our men and women at risk which no one wants for arguable benefit in taking out terrorists – it’s unclear if it’s working or we’re just making more enemies. If we are able to replace real live Seals with a team robotic bodies controlled by a Seal team remotely, how many more of these missions could we run? How much more of this sort of activity would we believe is an acceptable level?

I believe that this goes back to what we value as a society. If we value privacy, safety, freedom, and true constitutional control over the military then we need to make sure that we control this before the military just morphs without really any thought. The NSA morphed into a data sponge pulling in everything that moves on the internet. As a society, based on the outrage, we do value our privacy and we’re trying to pull back control from the NSA – some people disagree with that, which is fine that’s why we need a conversation.

I believe that having robotic avatar’s will lead to a higher likelihood of abuse – similar to what we’ve seen with the NSA. I think this is what’s happened with the Drone Program, where Obama has a kill list that they are proud of having. Having more humanoid drones that can shoot sniper rifles will reduce the amount of collateral damage, but will be abused. It’s also very debatable if the kill list is even constitutional.

I think that the innovation for reducing our military expenditure is a good thing. However, I think we need to have a conversation around what the end goal of these programs.

Facebook, IPO and valuing a company

This week we’ve been hearing about the debacle that was the Facebook IPO.Which has revealed that some of the underwriters for the IPO were doing shady things. Matt Taibbi believes that this indicates that there are essentially two markets. One for the insiders and one for the schumcks, the every day investors.

Why is this important? Well, based on the discussions I’ve read online, there’s a lot of concern of the validity of the whole IPO process, the valuation methods of companies and how investors think of companies. The valuation of Facebook had a great deal of discussion before the final IPO price of $38/share, this was partially driven by two articles that came out. In the first one it was mentioned that GM was pulling it’s account because “Facebook ads don’t work.” The other article of note relates that researchers found that 44% of Facebook users will NEVER click an ad. This research is important because some of the valuation is based on the conversion rates of ad views to ad clicks. On average Facebook was only able to earn around $4.34 per user. The valuation of $100 billion puts the life time earning potential per user at $100 (at 1 billion users). This is pretty low, but at the same time, if only 560 million users ever click ad, that pushes means the people that do click ads need to be earning Facebook roughly $200.

MIT Technology Review discusses how this is an unsustainable growth model for Facebook. Essentially, Facebook will begin to drive down the cost per view for their advertisers to try to increase their total revenue. This falls into the race to the bottom mentality that crushes industries. Advertisers will be able to say to any website, why should we pay you x amount per ad when we only pay Facebook y there is no way that you can get me more views than Facebook. The only way that a site could get more revenue if they can show data for a higher click through and conversion rates than Facebook. That might be tough. The Review article argues that this will eventually kill Facebook and a lot of the ad driven website business models.

The other aspect of the IPO is a difference in the way that business and technology media are reporting on Facebook. Things have shifted from all the non-business related activities to focusing solely on this aspect of Facebook. This will likely shift over time, but I believe that these considerations will be discussed in any article related to Facebook. If Facebook wants to remain a haven for activists it will be difficult if there are potential suits over people being activists. There will be an increase of risk aversion within the “owners” of the company as there will be influence from investors.

Zuckerberg has said that he plans on doing what is best for the long term and try to ignore the demands of investors. He might be able to do that because he still owns 57% of the voting rights for the company. However, it will be difficult for him to avoid the influence of the discourse of media outlets. Even if he gets all his news from his friends on Facebook, there will likely be articles posted that will give him news about the company and things that he probably won’t want to read.

Essentially, discussions will shift from being about the risk of privacy for users to how changes to Facebook will impact investors bottom line. I don’t think this is healthy for businesses, consumers of Facebook or the general public. There are other things companies do that are unrelated to investors that are important for society as a whole. The Facebook coverage really indicates that we don’t look at businesses in a long term sustainable manner. We need to change this if we want to save capitalism.