Tag: Network

Where’s the Delta?

On Sunday August 7th 2016 Delta airlines suffered an IT outage. Earlier in the summer SouthWest airlines suffered similar.

Delta cancelled at least 740 flights by Monday (I am sure there will be more) and Southwest cancelled 2,300 flights.  (Reference link , BBC link)

My calculation, at the bottom of the post, suggests that this cost DELTA at least 60 Million USD in lost capacity –  not counting the damage to the brand and additional costs associated with handling customer enquiries.

IT and the business are inseparable in the 4th industrial revolution. For many years there have been moves to outsource IT, drive down its cost and to make it standard and commoditised.  For utility IT this made sense. It was a cost of doing business. It was a necessary qualifier attribute but conveyed no competitive advantage.  If your copy of Microsoft Word was slightly faster than mine, it was unlikely that you’d capture more business or be able to charge more.

The outsourcing movement was used to drive this process, often awarding contracts to low-cost service centres in Eastern Europe or India.

In my view cloud based services – such as Microsoft 365 and Salesforce.com will become the norm for utility IT services and remove most of this responsibility from the IT department which will, as a consequence, go the way of the typing pool. In 25 years new entrants to the workforce will scratch their heads wondering what the point of the IT department was.

The world is, however, changing and changing rapidly. IT is becoming embedded into the core operational process of business. And executives that don’t understand IT will not succeed for long. Any company that perpetuates the phrase “IT and the Business” or any IT department that talks of “The Business” as if it were something separate from the IT function will go the way of the dinosaurs.

I don’t know if Delta outsourced its IT, or what the cause of the issue was. But it is clear that the situation was mismanaged before the outage (Reliability and resilience: no hot-backup, or hot disaster recovery ). This calls into question either the competence of those charged with planning operations or the business decision to not invest in technology and systems. Either way this is a failure of management to grasp the importance of IT in the primary operations of the business. Just because you don’t understand it doesn’t make it simple, or mean the problem can be ignored. Airlines are pretty good at maintaining aircraft, there are international standards for how it should be done and inspection audits making sure it is. Perhaps we need something similar for IT?

On this occasion it was a risk management failure where the loss of IT functionality impacted availability and utilisation of assets. My guess would be though that there are many areas where IT could be applied to the primary business to drive increases in efficiency and reliability. If management is unable to understand the business case or appoint competent management for IT resilience it is unlikely that they are exploring these more nuanced applications of IT.

The airline industry is not alone.

Put this into business context

In 2015 Delta operated an average of 5,400 flights per day, so about 15% of flights were grounded on Monday. Assuming that these planes were now in the wrong position some of them would have to reposition empty (let’s say 50%). Passengers rebooked who were scheduled to fly on a grounded flight (and Delta allowed all passengers to rebook any flight scheduled for Monday). Let’s say 30% of all Monday’s passengers (those on grounded flights and a similar number who took the precaution) took the place of fare paying passengers on later days.

Then we have a utilisation impact on aircraft of:

15% of one day capacity for cancellations

7.5% of one day capacity for repositioning

30% of one day capacity for rebooking.

52.5% of one-day’s capacity utilisation (in the height of busy season) was lost due to a systems outage.

Assuming 350 flying days this is then 0.525/350 = 0.15% capacity hit for this outage.

Last year’s revenue for Delta was 40Bln USD.

My “back of the envelope” calculation suggests that this systems outage cost DELTA $60Million USD in lost utilisation.

The brand has been impaired so future passenger numbers are likely to be lower than they would have been (at least for a while, especially as they could not even take bookings on Monday). Add to this the additional cost of media relations and customer complaint handling and we’re looking at a $100m problem.

Oh and if you are a European Union passenger you are entitled to 600 Euro’s in compensation too.

image credit Link

Want to be a consultant?

Introduction

A bit of a topic departure today, rather than write about the Oil and Gas industry I thought I would share some more insights about how I work and why I do it this way – I intend to expand on this topic in future articles. This is quite a long article but there are a lot of points to introduce, so please stick with me. Please let me know what you think either by commenting here or emailing me directly.

So you want to be a consultant, do you?

I have been an independent consultant and an entrepreneur for around 7 years on-and-off and I find that, while  It’s not perfect it works for me.

Many people are curious about what I do, and often will tell me that they are considering becoming an independent consultant. The next question is normally “what’s it like” or “why do you do it?” Most of the people who ask me are disappointed with the position they find themselves in. Many are employees who feel frustrated with their role, some are disillusioned senior staff or partners in consulting firms. Increasingly I get the question from friends in the Oil and Gas industry who feel that their jobs are at risk, or are already seeking new opportunities.

Well the short answer is that a career as an independent consultant is not for everyone. There are some questions that I recommend exploring to see if it’s for you:

  • What’s motivating your research?
  • Is the world of work changing?
  • What is a consultant, really?
  • What skills are needed to be make a living?
  • What will it be like?
  • What does success look like for you?

What’s motivating your research?

If your questions are only from curiosity that’s great – but if you don’t want to become a consultant (or a client) please consider that time is my product. If you are considering becoming one then here is something to consider:

I don’t have a wage, I essentially sell my time. There are 8500 hours in a year. I’ll be asleep for 3000 of them and I’ll spend 1,500, eating, buying groceries, showering, driving places, doing laundry and generally faffing about. That gives me 4000 hours to do things that really matter to me (including work). Traditional consulting firms expect you to account for 2000 billable hours. (They do this because that’s what they have bought this from you in return for a wage).

So if it’s just curiosity that makes you ask about consulting then perhaps we’re wasting time that we could do something more interesting together with instead – like go for a cycle, cook dinner or swap stories.

If, however, you’re seriously interested in this and we enjoy each other’s company then I am delighted spend time with you.

My first advice is – that if you are considering independent consulting as a “stop-gap” until something else comes along – you’d be better looking for a contract position (see later) and spend time tracking down what you really want instead. Consulting is hard and time consuming. It is a profession and requires dedication and a willingness to hone your craft. Don’t start unless you really want to make it work.

Is the world of work changing?

Well of course it is. It always changes. When was the last time you saw a typing pool or an elevator operator. Perhaps this time it really is fundamentally different. I don’t know.

There’s this phenomenon called confirmation bias. This refers to our tendency to instinctively seek out information that supports our view of the world rather than challenge it. You will have experienced comments like “It’s not only me that thinks this – look so does [fill in name of authority figure here]”. So while risking confirmation bias, here are number of articles that I’ve read, most recently in the Economist, exploring how the world of work and how the idea of a company may be changing. Lynda Gratton writes a lot about this and so does Charles Handy and Rob Goffee. My favourite book of the last couple of years “The Second Machine Age” has some views on this too.

But there is a counter argument – if you are building and operating large capital assets then a freelance model is unlikely to work. For some people the psychological strain (not to mention the difficulty in getting a mortgage these days) means they’d rather be an employee. Some people really want someone else to order their day for them. Too much choice in what to do in a day can be overwhelming just as too much choice in a super market can be. Joining a company can (if it is a well-run one) be a way to minimise the decisions needed. Limiting them to just the ones that matter for a role adds clarity. Often an employee can go home at 5 O’Clock. Top that off with an argument around public participation in stock markets that really require a joint enterprise to function, then I think we’re seeing a rise of alternatives not a wholesale destruction of the traditional company and place of work.

In short then – there will be plenty of “jobs” available if you want one, and you can convince someone to choose you to do it. You don’t have to be independent – but, if you choose to be – things have never been better. I am also often approached by organisations claiming that they are “Disrupting the consulting model” and would like me to be part of their new model, in a networked mode I have nothing against this but I don’t go exclusive and certainly am not willing to sell my time as an employee of one.

What is a consultant really?

In my simple view of the world (short of winning the lottery) there are only three ways to make an income. I don’t know about you, but I need an income, so here are the methods I know of.

  1. Own shares in a business or other income producing asset
  2. Lend money to someone who then pays you back with interest
  3. Sell your endeavours by becoming:
    1. an employee;
    2. a contractor;
    3. a freelancer; or
    4. a consultant

I’m only going to deal with 3.

Employees’ time is sold by contract by their employer. Employees do as they are told and the fruits of their labour are owned by their employer. Often banned from working for other people, they can be expected to be loyal to their employer. They may have security of tenure for the length of their notice period and there are laws that stipulate fairness in their treatment.

Contractors are more convenient employees. Hired on a fixed-period basis, usually to fill a temporary gap or provide additional short-term labour. Staffing agencies help broker deals and some consulting companies will hire in temporary contract workers as a way to deliver projects that require additional resources. Tend to work for only one customer at a time. Responsible for making own arrangements and sorting out the interface with the government. Contractors normally assigned specific work to undertake and will have some relationship to line management.

Freelancers undertake specialist work in which they are experts. Tend to deliver a specific piece of work and under their own direction, often building on their prior work. Ownership of output is negotiable, tend to work for more than one client at any one time. Tend not to work under the management control from their clients.

An independent consultant never takes a line-role, and does not perform tasks that should be taken care of within the line. Work is more complex and consists of being paid for opinions, advice and influence. Results through influence (internal and external) and not control. Success comes from coaching an organisation to perform better by itself after you are gone. Work is transitory and comes to a natural conclusion once you are successful –don’t get too attached to a client or expect to stay. It’s worth noting that an independent consultant is not an employee of a firm – in this case income of the firm may be generated from consulting-like activities but he “consultant’s” income won’ be.

What skills are needed to make a living?

Consultants need to achieve results through influence. That means you need to build opportunities and develop the skills to add value for your client.

Creating opportunity relies on building a powerful network, the ability to identify opportunities to help and the wherewithal to generate an invitation to help on a commercial basis.

Influencing relies on persuasion, establishing trust and the ability to work outside normal line management constraints.

In addition to client-facings skills there is an important set of internally focussed skills which relate to structuring your work, maintaining motivation, developing new skills and coping with the psychological pressure of the independent consultant life-style.

I find that the most important action for me is to spend my time with people who make a positive difference. People who create time for me, and people who energise me. This relies on a skill of knowing who these people are and the inner strength to maintain discipline in who I choose to spend time with.

What will it be like?

In short it will be a roller-coaster. The greatest highs and the greatest lows of your working life can be found in this approach. What successful consultants find is that – though they cannot control many of the circumstances in which they operate – they can influence them and they can control their reaction to them. It’s a subtle distinction bear it in mind and it will continue to make more and more sense as your consulting career develops.

What does success look like for you?

This is the most complex of all. Knowing what success is for you – is it to spend more time with your family, to do more cycling (a favourite of mine at the moment), to think deep thoughts, to live in a location you select, choose how much you travel and to where. In short will money make you happy, or will being happy make you money [Link]?

This is complex because as an employee it is a question rarely asked, so you may have little experience answering it. Employees tend to be told what good looks like and rewarded with money, perks or praise when they achieve it (I realise that often the goal-reward structure is misaligned in some companies, but that’s how it should work). As an employee you are, by definition, not meant to consider what time you commit to activities. You are expected to apply your time effectively to the goals of your employer. If you are senior you are expected to spend your time thinking of goals that your employer should consider and then direct others to achieve those that were selected. In none of the normal employee situations is your working identity explicitly tied to your own personal goals.

One exercise I undertake with people who are considering a change is to point them to the definition of wealth proffered by Buckminster Fuller, and then ask them what they would do if money were not a constraint. Start from there and define your own definition of success – until you have it you can’t value anything and therefore you can’t price your work in a meaningful way.

The six rules of networking

Moderne verbindungen

Networking – how business is done

Everywhere I look I hear more and more about networks. Social networks, business networks, networking clubs, networking evenings, etc. etc. ad. Nauseum.

Networking is how real business gets going, how deals get done, how results are achieved. Done properly it is both efficient and effective. It is no coincidence that the most successful businesses and most powerful people turn up for important networking opportunities.

Many definitions of networking rely on collecting contact details from lots and lots of people. I feel this is wrong.

Networking means knowing who’s doing what, what they want to achieve, how to help and – importantly – having their permission to get involved. Likewise a good network also means people knowing what you want and them getting involved to help where they can. Effective networking is about helping each other to succeed. I believe that If you can do this then the universe will provide opportunities for you to create your own success.

Six Rules of Networking

1. Love your contacts

I don’t mean take an unholy fascination in your address book (though bad data should be avoided!). What I mean is to treat your contact list as if the people on it are your oldest and dearest friends. You must truly want the best for these people and gladly do what you can to help. If you can’t like someone on the list and you don’t want them to succeed, frankly, they are not in your network. Make that distinction and look on members of your network with generosity and love.

2. Find and respect boundaries

Respecting boundaries should be obvious. If someone says – don’t call me at home, or don’t use my mobile, or plain please don’t contact me again. Then respect it. Nothing will damage your reputation more than being known as an unwelcome persistent caller.

Likewise establishing where the boundaries are is important. To find out where the boundaries are just ask. I used to be surprised about how willing people were to help once they had been asked for their permission. Be careful as many senior people have mechanisms to stop you contacting them in the first place (PA’s etc). These people cannot grant you permission – so try not to get blocked out before you’ve really found out.

3. Be generous, give without expectation

Networking is sometimes described in terms that imply a trading of favours – I’ll do this if you do that. This is not how it works. You must give help and information to your network without any expectation of return. The successes you create for others will build your reputation and will attract generosity. The reciprocal format of exchange is created automatically by cross-linking from network members and its effect builds over time, it is not a one-on-one trade.

4. Add value every time you meet

The quickest way to have permission withdrawn is to become a persistent caller who brings nothing of value.

When you plan to call or meet someone do your research before you go, put yourself in their shoes and think of ideas that might help them. Give them ideas away for free when you meet.

If you meet someone unexpectedly, make sure that as you catch up on news you ask what sort of help they would appreciate to help them get to their goals. Then go find ways to provide it, don’t forget and follow-up quickly.

5. Don’t waste time (yours or theirs)

If you are building a network it will take time. Time is your only truly fixed resource. You cannot borrow it, or buy more of it. You only have around 2000 working hours a year, so make each one count.

Know how to help the member of your network and get there as efficiently as you can. Look to use group interactions (dinners etc.) where you can achieve increased impact for you and your network within the time allocated.

If a meeting is scheduled for 30 mins and you’re done in 20, then politely find a way to leave and give your contact some time back in their day, they will thank you for it.

6. Build network power

If the intent of your networking efforts is to create business value for members it needs powerful people within it. Power comes from the ability to marshal resources (through ownership, hierarchy, influence, reputation, etc.). The more powerful your network the more resources you can influence to support your agenda.

Spend time thinking and planning to help people with more (or different) power than you have. Be generous with your time to those less powerful than you, but effective (and therefore soon to be powerful people) are the ones that approach and plan to help you. Like you they should invest hours in people more powerful than themselves. It is not in your interests to invest your time to help those less powerful than you – therefore it is their duty to make the moves.

Spend time thinking how to make people in your network more powerful. They should appreciate the effort you are making, and your network will become more powerful as a result.

Conclusion

Networking is an important skill and with more business being done through collaboration it will become increasingly so. It is an activity that you can allocate time to and it’s an activity that you can monitor the success of. Build a good network and opportunities will come to you. You build a good network by giving generously to people that matter.