Looking forward to 2014

Being an entrepreneur is like being a boxer.
We are going in for another round.

It is difficult to sum up an entire year in a few paragraphs.  I take a look back at 2013 and I see lots of lessons learned and plenty of disappointments.  Being an entrepreneur means learning those lessons and making sure you don’t dwell on the disappointments.  This struggle requires arrogance and stubborn determination.  I look at myself in the mirror sometimes and wonder if I am up to it.  In these dark times I pull myself out of this funk like a punch drunk boxer ready to take another round.  E₃ systems is going in for another round in the ring, and we are looking forward to a prosperous 2014.  This week on the blog, I want to review with you where we plan to go in the New Year.

We have two exciting products in 2014; Sully 2.0 our inventory management system and Tony our fleet management system.  Both of these systems leverage Microsoft technologies to give you an easy to use system which can be accessed anywhere on the web with a mobile phone, tablet or PC.  We are looking forward to selling these systems to the business community and seeing how we can help small or medium sized businesses.  We are also looking into further development for the agricultural community and for over the road transportation companies.

We are also poised on graduating from Microsoft BizSpark and taking the next step on our journey as a start-up.   I am very grateful to the organization for their help and support.  They have made us better technology professionals.

2013 was a tough year for E₃ systems but we are going back into the ring in 2014 and after a year of taking our lumps we are going to be dishing out our services with greater strength than ever.

Until next time.

Death to Performance Appraisals!

Performance Appraisals are about as
 helpful as slapping your employees

It is that time of year again.  We are hustling to and fro and feeling like we are running in place.  You may think that I am talking about the holiday season, but the reality is a more grim corporate ritual.  It is the return of performance appraisal season.  I hate performance appraisal season.  I hate it like a young child hates liver or a dog owner despises animal cruelty.  I do not see any benefit to having them in a business environment and I certainly do not see them doing any good in an entrepreneurial environment.  This week on the blog, I would like you to indulge me as I explain why I hate performance appraisals.

At an early age we come in contact with the performance appraisal, it was called a report card.  These pieces of paper and notes home to our parents were necessary to let them know how we were doing in school.  If you were lucky you had parents like mine who were involved in your education and had a fairly good relationship with my teachers.  If you were like other students I knew your parents would be surprised each time you brought back your quarterly report card.  As you grew older report cards were a means to perform educational triage.  Hard working and gifted students were moved to the front of the line for college preparation and scholarships while those who didn't measure up were cast aside like trash.  Grades determined your official status in school and your possible desirability to go to college.

Flash forward four years of high school and another four years of college and when we get into the job world we expect to be free from the tyranny of report cards.  Instead, report cards are replaced by performance appraisals.  Unlike report cards, performance appraisals are not based on objective standards of excellence.  They are based on the economic needs of the company.  So you could have perfect attendance, not miss a deadline, and generate millions of dollars of sales and still receive a “meets expectations” on your appraisal.  For a classic example of this kind of insanity, just take a look at Microsoft and its old stack ranking appraisal process.  I feel very strongly that Microsoft hurt its ability to retain good employees and innovate because of this system; if everyone “meets expectations” and then the company really can’t meet the expectations of the customer.  So good employees leave and mediocre and poor ones stay.

There is another reason I hate that hate performance appraisal and that is because it resembles management by fear.  According to W. Edwards Deming, the godfather of lean manufacturing, one of the seven deadly diseases of management is the use of Evaluation pf performance, merit rating or annual reviews to control employees.  People are not dumb, and if they know the metrics you are using to evaluate them they are going to game the system to get the best rating possible at the expense of the business and customer.  For instance, if you reward a bus driver for on-time drop offs they will avoid picking up more riders during high traffic periods because that will affect their drop off times.  This creates perverse situations where people are rewarded for poor customer service.  People are afraid to do what is right for the customer instead they do what will be appraised in a positive fashion.

I am not against rating people and their performance, but the way we do it now reeks of mental illness.  Managers should be in contact with their line employees daily providing coaching and encouragement.  When a performance issue comes up it needs to be addressed right away instead of during the appraisal process.  Immediate feedback when you screw up is much more helpful then trying to recall what you did during the middle of the fiscal year.  Agile teams need to know how much velocity they can perform and if they are improving it.  Sales people and marketing professionals need to know what is going on the top line of sales and how much margin you are making on the bottom line.  All of this data is important and necessary, however you cannot squash it together into a gooey ball of muck an use it to objectively rate an employee. I would much prefer a manager telling me that the firm could only afford a two percent raise than telling me I met expectations and that is worth two percent.  The honesty would be bracing.

So what do I propose as an alternative?  I am a big fan of development plans.  Every 90 days a manager should tell a person what they can do if they need to improve and what they need to do if they would like to advance to a higher position.  In six month intervals, this information should be written down and then saved for HR purposes.  This way over the life time of the employee there should be a record of the growth and development of the employee without the capricious rating system that most companies use.  This forces managers to manage their employees instead of kissing up to their superiors.

At the end of the day, a business must satisfy the needs of their customers.  I strongly believe that the performance appraisal process as it exists in contemporary companies satisfies neither the needs of the employees or those of customers.  Something must change and I hope that as my business grows I will be one of the people leading this change.

Until next time.

A simple thought

I consider myself very fortunate.  I have a day job and in the evenings and weekends I pursue my dream of being an entrepreneur.  During my life, I have had the good fortune to have people encourage me and help me live up to my potential.  As I continue this journey as an entrepreneur, I understand that I will have to give back. 

This week’s blog is not going to be very long. I just want to reaffirm my statement to everyone who has been following that as we grow we will also use that growth to help others. It is the very least that I can do.  Please reach out to us and find out how we can help your business.

Until next time.

To Big to Succeed

People have a right to get upset about
Healthcare.gov

Like many people in the technology business, I am following the news of the roll out of the Healthcare.gov website with a mixture of horror and disbelief.  It is clear to me that the current occupant of the White House deserves some criticism for this roll out; however, I also think a huge dose of criticism should be leveled at CGI International who is doing the principle development.  In this blog, I want to discuss why consulting companies like CGI International are too big to succeed.

In the book “The Geek Gap,” Bill Pfleging and Minda Zetlin say that technical leaders and business leaders view the world on very different terms; the business leader is interested in control and influence while the technical leader wants to build things which work.  It is clear to me that CGI is more interested in influence and control than building working software.

During congressional hearings with representatives from CGI about the Healthcare.gov roll out, no project managers were discussing the problems encountered.  More aggravatingly the congressmen did not know which questions to ask.  So you had people who negotiate contracts attempting to justify why they should get paid to people who did not understand what they were paying for.  It was depressing.

What makes this even more frustrating is that there are great examples of technology and government working together.  Each year Intuit makes millions of dollars helping people do taxes.  They are able to wade through the income tax regulations and each year release software which helps people do their taxes.  Even if the law changes, they are able to update the software over the internet.  If Intuit can do this each year why can’t CGI?  This answer is that CGI, from the outside looking in, is the antithesis of an agile organization.

They value process and tools over individuals and interactions.  They are more concerned with obeying the letter of a contract that providing collaboration.  Finally, they don’t have working software but they have plenty of documentation of why they should be paid.  Of course, this does not matter because, CGI is highly successful and so deeply embedded into the project that firing them for a poor job would be foolish.  In essence, they are too big to fail.

I had a hunch something was wrong when I reached out to my local congressional representative by e-mail and phone offering to pitch in and author some web services.  The congressional office had a staffer contact me and assure me that everything was under control.  When I asked if there was a way to volunteer for the project, I was instructed to follow the federal procurement process.   As a two person technology start up, I decided that it was not worth the hassle to get further involved.  I am sure that other start-ups felt the same and that is why firms like CGI make money.  They provide lousy service but they understand government procurement so they do not need to excel at fulfilling contracts only closing them and getting paid.

Healthcare.gov could have been a smashing success out of the gate, but thanks to a bad procurement process and a firm like CGI, it began with a thud and is slowly being made functional.  I hope that the November 30th release is a huge success.  I did not go into business to become CGI; I went into business to build things which work and solve problems.  I hope this is an object lesson to our elected leaders being able to win a contract does not mean that they can actually do the work.

Until next time.