It's time to raise the bar

What's the role of IT in today's enterprise?  Well, it depends... It depends on the industry sector, nature of your organization, culture and maturity of your enterprise IT.  Henderson and Venkatraman already described four IT archetypes back in the Nineties by taking four different perspectives to the role of IT and the business:

1. Strategy execution: this is the traditional perspective in which business strategy drives organizational design, and organizational design determines what IT infrastructure and processes will be needed.   Business management makes strategy, and IT management implements it. 
2. Technology potential:  business strategy is still the driver, but collaborates with IT to work out a strategy to support the business strategy and the corresponding specification of the required IS infrastructure and processes.  This is IT in a reactive role. The business drive the technology vision and IT assumes the role of architect.
3. Competitive potential: In this perspective we are looking at new technological solutions to gain competitive advantage and enable growth.The IT department is the catalyst for business change i.e IT-enabled innovation. The business are visionaries and see how they can transform the business with technology and create a competitive advantage.
4. Service level:   In the last perspective information is the core product. Business management prioritizes which IT investments and determines the IT playing field.   The role of the IT is to make the business succeed through service excellence. 

However, while the Henderson model describes who is driving the IT strategy,  it does not mention the basic building blocks of your IT strategy.  That's where you can use my RAISE model.  RAISE describes the core functions of your IT department along five dimensions:
R = Reduce costs
A = Access information anywhere
I = Improve operational efficiency and effectiveness
S = Secure data and channels
E = Enable growth

I found that this model is easy to work with as it helps organizations to cluster their technology opportunities and define priorities in each domain.  Curious how to embed this in your 2011 IT strategy?  Well come and find out during IRM UK's workshop on strategically aligning business and IT on 25 and 26 November in London.  Click here for more details on the program and prepare yourself for jumping the curve with your Enterprise IT.

For me to know, for you to find out...

Wanna know what a typical take home exam looks like?  Well.... try to decipher the following assignment for our logistics and supply chain management module:

For the organization (or a division) that you are part of:

1. (strategic) Identify different OW/OQ clusters and use the Benny Hill operations strategy methodology and the Spnuttick grid analysis to develop justified recommendations on how your organization could improve in its operations and supply chain performance.
2. (tactical en operational) Map and describe one or more of your supply chains and make actionable recommendations on how to make them greener and leaner.

Make a Word report of max. 10 pages (not including appendices, drawings, charts) with the result of these analyses and recommendations....  May the force be with us

Ceci n'est pas du common sense

Yes, the second year of the MBA started last month.  The dash before summer was quite tough: finished of with corporate finance which drove me completely wacc-ko.  All that number crunching is not for this monkey.... one ground rule in corporate finance though is... it is not about percents, it is about common sense.  Talking about sense - it has been a rough ride recently.  At work full steam, a lot of lectures and seminars, the community and master consultancy projects really kicking in....  So where does the MBA fit in?  Frankly my dear... it doesn't.  It is a serious time investment - attending the courses, preparing stuff and writing the paper afterwards.  On a monthly basis, this easily adds up to 8 days - that's is roughly the number of weekend days you get when doing the full monty i.e. 20 working days.

So where does this fit in the whole common sense scheme?  Well, it is not about common sense here, it is about drive and passion.  Learning is such a powerful catalyst - it broadens your horizon, it makes you see the other side, it helps you to engage in a conversation.  Doing the MBA at Antwerp Management School has learned me that I am only half way.  Making the journey is like being Alice in Wonderland.... you don't know where it will bring you.  Curious by nature, it is this learning experience that justifies the hard effort.  No pain, no gain... that's for sure.  And I am not alone... I see Captain Starbucks, Trump, Mr. VC, Moneypenny and boywonder struggle as well.  I see little Miss Havaianas who is raising her baby and doing the MBA at the same time.  And if I see them, I know that common sense has got nothing to do with it.  We all know that we are half way... we all know that soon we will jump the curve.... exciting times ahead of us.

Monkeynomics - irresistibly irrational

why doing an eMBA is so irrational

Marketing on stereoids

I admit, marketing isn't an easy game... it is a game about vision, market and customer intelligence, segmentation, Cluetrain, business models, way-to-market architectures and pricing. And that is the easy part. Yesterday, I read that Apple has already sold one million iPads in just one month. This is what marketeers would call a "ticket to heaven" but then again, not every company is Apple and Apple is of course not an everyday company. Throughout its history, the company has been in the business of market making: the first personal PC, the design PC (iMac), the iPod (userfriendly MP3 player), iTunes (Online music store), the iPhone (the cell phone 2.0) and now the iPad (Funky tablet PC meets iPhone). And of course, when you are the first to enter the market, you can do it with a bang although I must be honest and say that others (Napster, Nokia and Microsoft) had already tried this years ago either miserably failed or launched their products when the market was not ready for it. So what is the game then? It's finding your cash cow and milking it, it is looking for operational efficiency to lower your production costs and increase your profit margins but mostly it is about finding new markets and being the first to launch your product. That's what we learned in this month's marketing module.

To begin with, we had a brilliant teacher (Prof. Dr. Rudy Moenaert) who taught us the ins and outs of marketing during the first part of the course. There was a nice intermezzo by the way from Steven van Belleghem who was presenting his new book"the conversation manager" and the art of starting up brand conversations by means of social media. The second part of the course consisted of playing the markstrat game - a simulation game where you are in charge of positioning your product (close to the customer) and conquering new markets. There were four teams and my partners in crime were Mr. VC, Donald Trump and Furrycoat. For two days we had to come up with strategies to defend our market space, launch new products, find out what our competitors were doing, digest enormous amounts of data and market research...basically we were body doubling the marketing department. How to be the winner in your segment is one thing but what we found out is that market making is where the big money is to be found. Being the first to enter the market gives you an enormous competitive advantage and puts you in a monopoly position. New markets are not price-sensitive because price reference and comparison effects are non-existing. This means that - whatever price you put on your product or service - there will always be a group of innovators and early adopters that will want to buy your product.
In the end, marketing is about bringing consistency in the organization: defining you ambition in terms of a "Big Hairy Audacious Goal" means that you align products and services, your business model and customer value proposition, your ABC segmentation, sales force and marketing efforts and bundle this into a unique proposition around one or more competitive advantages: Product/service, price, customer process and image (the so called CODA framework). That's the game of marketing and if you're not willing to go through the pain of putting effort in this, well there will be no gain. That's what we found out during the markstrat game and that's why we should congratulate Zappos, Miss Moneypenny, Mr. Oiseau, Boyscout and Beckham with winning the game and applying the ground-rule of marketing : don't  get even, get everything.

Why Should Anyone Be Led by You?

With this rhetorical question, we're concluding our two modules on managing people and organisations. For the question, all credits go to Robert Goffee and Gareth Jones who wrote an entire book about authentic leadership.  And leadership was the theme of the day: we had a passionate lecture by Robert A. Burgelman  on strategic leadership, got feedback from our leadership effectiveness analysis a.k.a. the 360 feedback, learned about situational leadership and analysed what it takes to become a high performance organisation.  But what about servant leadership, connected leadership, creative leadership or other types of leadership?  Are we natural born leaders or can you be taught to become a leader?  Are all people at the top leaders or do you also have leaders at the lower part of the food chain?  There are roughly 105 million results when you google leadership so you can imagine that there is a lot to say about the topic.
Personally, I believe that leadership is all about execution and getting things done.  Like someone recently said to me, an idea is worth nothing as long as it is not put into practice.  You can be a visionary and a strategic thinker but if you cannot convince people to follow you, it's gonna be a lonely ride out there.  So before you can lead others you have to learn to lead yourself.   That's why - throughout our journey - we have a personal coach who helps us to set a vision, define our personal goals and lay the stepping stones towards our destiny.  He learns us to deal with our weaknesses and differentiate ourselves from the crowd.  But is leadership then about being rational about oneself?

Well, not exactly - because intuition is the missing ingredient to make the magic work.  Intuition is what makes leaders go astray and boldly go where no one has ever gone before. It is that sensing part that makes the difference between being a manager and being a leader. Or like Goffee and Jones put it:
(...) leadership, it should be noted, is not about results per se. While many of the leaders we have studied and use as examples do in fact post superior financial returns, the focus (...) has been on leaders who excel at inspiring people—in capturing hearts, minds, and souls. So if you ever want anyone to be lead by you, then authenticity is the way forward it seems. 

Size does matter

While we were rushing to make the last deadline for our Microeconomics paper, little Miss Havaianas was rushing to the hospital - to give birth to a little boy. In our MBA micro-world this is a macro thing to happen and we are all very happy to hear that mother and eMBAby are doing well. Guess that Miss Havaianas will from now on be the person to talk to if you want to find out more about the price elasticity of diapers, baby milk and other baby-related products.   This price elasticity (of demand) is a major concept in microeconomics.  It explains how demand will react whenever prices increase or decrease and is mainly determined by factors such as the availability of substitutes, necessity and income.  Take gasoline for example which has a price elasticity of - 0.26: in layman's language this means that if gasoline prices were to be increased with 10%, the demand will drop by 2,6%.  There are of course substitutes such as public transport or cycling but if you are all day out on the road this does not really help.  The trick to understand elasticity is simple, the closer the figure is to zero, the more inelastic demand is (read the less sensible it is to price changes). 

Microeconomics also help you to understand how pricing is done for a given product or service in a given market structure. Obviously, price setting is different when you are in a market structure of monopoly, oligopoly, perfect competition or monopolistic competition. I learned that price discrimination, bundling, damaged goods are typical strategies of the monopolist whereas companies in perfect competition are price takers instead of price setters.  Although all this might sound boring I was very much into the subject. Part of it can be explained by the fact that I just read Superfreakonomics and although this book had quite a different perspective on the matter (no mention of terrorists in the course) it makes me want to dig deeper.   

Once again, this course has been a very relevant building block (all credits to our teacher Jan Bouckaert) - not only for my professional resume but also for my personal curriculum.  Perhaps I will never be involved in price setting (but then again, Buddha walks in mysterious ways) but it doesn't matter. What matters is that I am on a personal discovery journey and start to see things differently.

Crash course

Haven't written much lately but I have a valid excuse: Macroeconomics.  Macroeconomics is the study of the national economy as a whole or its major components. It deals with the "big picture" of the nation's economic activity and explains the mechanics of BBP, economic growth, inflation, (un)employment and other economic indicators.  That's the easy part - the difficult part is understanding the underlying principles as well. This means that you have to understand how the government's monetary and fiscal policies contribute or slow down economic growth.  What happens to Demand when the interest rate increases or decreases?  Why do Central Banks have to monitor money reserves? What happens to the money supplies when the Demand for Goods and Services increase and why people tend to save and put money on their bank accounts when you're heading for a recession?

The challenging part of this course is that we only have two days to assimilate a course which is normally taught over the course of a year.  Wannabe economists spend an entire year on these topics - we get the crash course. And man, did we crash... Talking about crashes:
As with every module, we also had to write a paper and show that we can apply the theories and insights acquired during the course.  Mine was on the economic growth of Ireland between 2005  and 2012. I had to look in the eye of the Celtic Tiger and explain how a booming economy headed straight for recession and deflation.  How come that one of the poorest countries in the European Union turned itself into the fourth richest country in the EU over a period of ten years and all of sudden went bust? They didn't really go bust like Greece but still.... they are looking at a serious deficit now and yours sincerely had to come up with a couple of recommendations on how to run a balanced budget and stimulate growth again.

We'll see if I have convinced our teacher or rather confused him but I must admit I enjoyed this module. When I now hear on the radio that the Belgian citizens have put billions on their bank account in 2009, I know that this is because they are preparing for tough times. If the newspaper writes that running a balanced budget is key in 2010, this means that debt stabilization is on top of the government's agenda.  And if you have to choose between running balanced budgets or fiscal policies, you must not ignore the system of automatic stabilizers.

Like the Russian playwright Checkhov put it so well: "knowledge is of no value unless you put it into practice". Let this be our ground rule for 2010 and may it be a year full of knowledge, wisdom, prosperity and happiness.