Relationships determine business success

Building and maintaining strong relationships with clients and partners is a passion of mine. As such, it would valuable to share some best practices that help get to the next level in organizational health and business success.

The goal is to augment engineering excellence with relationship skills and management. Partners must like you and know that you care. If your partners believe you are the smartest person in the room but they don't like you personally, they may in fact work with someone else.

Stepping back, it’s important to realize that something has happened with your client that has caused them to reach out and pay you to help them. Often clients and partners are in a (real or perceived) crisis situation, brought upon, perhaps, by falling sales, executive board mandates, or perceived competitive disadvantages. They are on the Change Continuum (see figure below) somewhere and our objective is to move each organization further to the right along the Change Continuum.

However, Change is Hard.

  

The companies that hire consultants are most often very successful in their industries (or owning the start of it) and you should not ignore this fact. They have developed internal processes and hired key stakeholders based upon some understanding of their market and history - and their processes have worked until they don’t. One can lead systemic change by first understanding how the company has arrived at its current state and where each key stakeholder fits (or doesn’t) into the current system.

Thus our overarching objective is to cause change within successful companies in such a way that they realize we understand their problems (internal and external) and care about their success.

Here are a few items to get us started:

1. Listen. I know this talked about everywhere, but the reality is a little messy sometimes. You need to hear and understand your partners’ pain. You may have the long term fix to their problem, but if they're asking you to fix a small issue, prove early in the relationship that you understand the little things – then you will be entrusted with the bigger things. You should offer solutions to their perceived problem while also showing that you have expertise to see things they cannot perceive both long term and short term.
1. ACTION: Mentally assume the best. You’re working with successful companies. Their internal culture and processes evolved this way for some reason. Why might they operate how they do today?
2. ACTION: Ask questions - this shows you care deeply about their problem (and by extension - you care about them). Why are they making this change now? What happens if they don’t do this? What do they expect will happen if they do this?
3. ACTION: Respond with, at a minimum, a solution that addresses their pain. If I tell the doctor that my muscles cramped after basketball, and he returns with a cybernetic leg that costs $5 million, I probably won't go back to this guy (as amazing as it would be to dunk from mid-court).

2.              Face-time is paramount. Top competition in the consulting space prioritizes personal contact and for good reason - it works! If I am trying to teach someone to ride a bicycle (or adopt agile methodologies) I'm going to have an easier time learning from someone standing next to me, compared to a Youtube video. And if I am going to learn from a video interaction, I am going to seek out the cheapest video source... which may not be you.

1. ACTION: Make a plan for being on-site at the start of the engagement. Are you in close vicinity when you staff a project? Will you be able to travel easily to maintain critical relationships?
2. ACTION: Work on-site whenever possible. Yes, this is inefficient for managing multiple projects, but your partners need to know they are your highest priority. Within your company, you may need to level-up individual contributors to take on some of this work. We can discuss this process in a later post.

3.              Make plans and revisit them. We make plans not as a box to check, but rather as a place to start and facilitate the conversation. For example, if we make a schedule at the start of a project, we should review that schedule at least once each sprint or month to remind clients of commitments, risks, and expectations. As we move further up the organization with our partners, you will be interfacing with multiple owners/decision makers who are managing multiple initiatives. They may not remember previous commitments and asking them to take on this responsibility is an extra work item.

1. ACTION: Describe what you will do at each step in the engagement. Progress and improvement is rarely in a straight line. We know this as experts in our field, but our partners may not have the benefit of your collective decades in our areas of expertise.
2. ACTION: Set expectations. As soon as your partners see an improvement in their team or business they will seize on this and may tell say "Thanks! We can take it from here!" - even though they have only seen 10% of the gains you provide. It is easier to set expectations up front rather than a few months into an engagement, when anxiety is high and clients may owe a justification for the expense and possibly their continued employment.  

In short, do not neglect the human aspect of software development and its impact on business success. Ultimately, software is built and managed by humans and we’re social creatures. You will not be successful as a change agent in your organization without taking the social and relational aspects of change into account.

Software Total Cost of Ownership

When we talk about how much software costs to purchase or how much it will cost to build a new product from scratch, we often ignore the total cost of ownership. When I bring this up with my clients, the conversation often covers items such as:

• Number of people on the team
• Time to build the product to an agreed upon "Definition of Done" or production-ready state
• Hourly rate for each team member (software developers, quality engineers, designers, product managers, etc)

These are definitely important cost considerations, but if we limit our total cost of ownership to the cost to create the initial product, we're omitting a key component for software cost - the cost to keep the software and system running. What do we mean by "working condition" with regards to software?

Imagine that you need a new car. You have determined the Make, Model, and Year that you need to replace your old 1998 Toyota Corolla. You happily set your budget and pay cash to acquire the car - including Tax, Title, and License, and drive off in your new car. You have successfully purchased a car that allows you to run your business, commute to work, drop off the kids, or whatever you need your car to do today.

Unfortunately, the purchase price is only the start of your car expenses.

• You come home and realize that you need to update your car insurance policy - and your new car costs more to replace than your old one.
• Your car needs gas to run. With your new vehicle you need to fill it with premium fuel vs regular unleaded. And by the way, your new truck has lower miles per gallon than your old car.
• You need to perform ongoing maintenance such as oil changes, new spark plugs, filters, tires, and fixing the seemingly endless number of squeaks, weird starting noises, and battery failures.

I was talking to my mechanic recently (oil change) about the cost to own and maintain a car and he said there was a substantial increase in late model Mercedes-Benz and BMW owners who came looking for used tires during the last recession. Apparently many owners did not budget for new tires when they calculated the lease payments for their cars, and when money was tight during the recession, owners couldn't afford to buy new tires.

As you shop around for a company to make your custom software or license an existing product, make sure you calculate how much it will cost to keep your software running:

• How many people do you need for sustained engineering? 
• Do you have the appropriate skills in-house or will you need to hire?
• Does your recruiting team know how to hire good software people? 
• When you do hire a team, do you have the right people to manage them?

After calculating all the costs associated with new software, including the maintenance or "operate" costs, you can make a better informed decision on whether this is a good plan for your business.

Making sense of unemployment numbers

There is a lot of misinformation and spin going on with regards to unemployment numbers. What does it mean when the government says that unemployment is down? How can the unemployment rate be decreasing when the news is full of stories about young people with college degrees serving lattes at Starbucks? Does that really count as a job?

First of all, there are several numbers that could be called the "unemployment rate". The US Bureau of Labor and Statistics collects data each month via surveys that go out to 60,000 households. When this data is collected and extrapolated for the country as a whole, we get the unemployment rate, or more specifically the U3 number, which is people out of work who are actively looking. As of this blog post, the latest U3 number is 6.1%. But what about these people who have dropped out of the work force? Where do they get counted?

People who have stopped looking for various reasons are counted in the U4 number which is currently 6.5%. If we examine people who have stopped looking for work then we should check the U5 number, which is currently 7.3%. This number includes people who might have been looking over the past year and would like to have a job, but they're taking a break from searching. Perhaps this is someone who is tired of rejections from employers and has decided that the timing is bad.

There are additional numbers rolled into unemployment (U1, U2, and U6) that incorporate younger workers and temporary workers, but those are less representative of what we might consider the unemployment rate. The official government rate is always the U3 number, which might be somewhat misleading - people who want jobs but are waiting for the market to improve should arguably be counted amongst unemployed people.

A common question is "who are these people who have given up looking for employment?" After all, in most states you cannot receive unemployment benefits unless you show that you are actively looking for work - this usually accomplished through weekly phone calls, website log-in, or a visit to an unemployment center. Sometimes people who have given up on searching for a job find work that pays cash only, leaving no records for the IRS to come after. Other people have a partner who continues to work and support the both of them.

Regardless of which unemployment number you consider, the point is not to let the numbers depress you. Consider the fact that even a 10% unemployment rate means that 90% of people who want to work are working. Even in the worst of recessions in the United States, the Great Depression in the 1930s, the unemployment rate never got above 25%, which means 75% of the population was still working.

Do you find monthly unemployment numbers motivating or demotivating during your job search?

When to stay, when to leave

Over 2 million people voluntarily leave their jobs in the United States each month. Do you want to be one of those people who takes a chance and seeks a new job for any of the following reasons?

• Better pay or benefits for the same job
• Increased options for advancement at a growing company
• Cutting back or increasing hours due to life changes (new baby, kids graduated, divorce)
• Current company is struggling - headcount, raises, bonuses, etc.
• Escaping a toxic work environment - bad manager, co-workers, general drudgery in the office

Let's talk about the last two bullet points, because this is really when a judgement call needs to be made. Do you leave a job that may be paying the bills, to take a chance on another company that could be worse? What if you leave your job and end up someplace worse?

A friend of mine went through this experience recently. Let's call him Chris. His company was downsizing his department, and he made it through the first round of lay-offs. Management assured him that  further cuts were unnecessary, but my friend couldn't shake the feeling that more bad things were in store. At this point I should add that Chris was married, had a 2 year old child, and his wife didn't work outside the home. His family was completely dependent upon his income. Needless to say, he was losing sleep over this decision. If he plays it safe and remains with his company, he could end up in the unlucky position where he is forced to find a new job without a job (remember, it's always easier to find a job when you have one; this avoids any unfortunate stigma with hiring managers). But if he "jumped ship" he could end up someplace else worse.

When we met, the first thing we did was agree on his goals. Without a clear goal in mind, career management and advancement is very difficult. Each one of us must determine what we need versus what we want. For example, if your goal is to retire young, you might pursue different jobs and industries than someone who wants work/life balance and a secure job. In order to determine goals, think about your priorities to help get you started. What is important to you? Rank these items in order from most to least important. 

Once we determined his goals (which in his case were a secure position, high salary, close to home) we were able to cull the list of potential companies he should target in his search. When he compares jobs from companies that meet his requirements against his current job, the decision to leave starts to get a little easier. In general, we can reduce anxiety about career changes when we begin comparing apples to apples instead of the abstract "some job could be better/worse."

One key thing to keep in mind during job searching is that we need to keep our heads clear and minimize extra anxiety. When we're anxious we're not going to think as clearly and this will impact our ability to perform in interviews, networking functions, and our current jobs. Always try to sketch out how something looks in reality versus what might be your biggest fear or greatest hope. Staying in either of those two extremes for too long is not going to lead you to your next successful career change.

Are you considering a career change? What is holding you back from starting this process today?

Finding your people: Company culture and values

In a previous post we talked about the importance of cultural fit. Now we assume that you know where you fit in, and you need to find where these people work and how you can meet them. After all, building genuine relationships with people is the key to generating a network that you can leverage throughout your career to find those "unlisted" jobs. How do you find people that match the company culture you are targeting, and how do you find out where they work? Or alternatively, how do you find specific people that you could learn from, and find out what they do?

Let's say that you are targeting a specific company XYZ. You should start your research from the company website, which usually shows some gems like a mission statement, culture, benefits offered, etc. If a company does not have this information readily available, you might want to ask yourself - why not? This could broadcast confused company leadership and an undefined business strategy. This may or may not be a cultural fit for you - some people like to work in a place where things are constantly changing, but some people prefer more of a structured environment. Don't confuse "agile" with "chaotic" - there is a method to remaining flexible in operation to achieve a set goal that everyone understands.

Companies that showcase their employee benefits are telling you that they value their employees and are willing to invest to keep them. Look for things like matching 401k funds, ample vacation, and tuition benefits. These are signs that the company is invested in employee growth over the long term, but this may not interest you if you just want to work for a couple years and then move on.

Next look for the page that shows the company leaders and founders. There should be some information about these people, which should provide some basic information about them and their backgrounds. Would you consider working at any of these other companies? It's likely that these people adopted some of the company cultures from previous workplaces, and some part of those company cultures may be present in their current company.

Now you'll want to move beyond the canned responses on the company website to really see what these people are like. Look them up in Linked In, Facebook, and general Google searches. You'll learn a lot about their careers from the news articles, charitable organizations, photo opportunities, and awards that appear from a simple search. Through Linked In, you can often find the names of their connections, and you should look them up too. What are their hobbies and interests? Are those things that you enjoy or would enjoy? Are they on the boards of other companies or non-profits? Do the values of those groups align with your values?

Let's assume that you find several employees at Company XYZ who enjoy sailing and are active in the Boys and Girls club in your county. How do you feel about sailing or mentoring young people? Either of these activities can be joined for varying amounts of time and money. You don't need to join a Yacht Club to get experience sailing - what about finding some lessons from a local community college? Or what about volunteering a few hours a week at the Boys and Girls club? When do you either of these activities, you'll want to ask yourself:

• Do I enjoy spending time with people who do these activities? 
• Could I work with these people? Why or why not?

Most non-profits have fund-raisers each year, and they are in desperate need of reliable volunteers (stressing the reliable). Getting involved in a non-profit where a sizable amount of employees from Company XYZ spend their time and money is a great way to get to know them in a low pressure environment. Once again, ask yourself those questions above - at this point you might be actively working with these people a few hours a week. What do you think about working with these people 40+ hours a week?

As you spend time with these people, you should also be able answer questions such as:

• Where else do they spend their time?
• What is their day job like? Do they like it? 
• What motivates them to work?

By this point, you should have enough of a connection with these people to add them to your Linked In profile. We'll talk another time about where to go from there.

Networking: Building a network

People like to live and work with people like them. This seems obvious on the surface, but many people neglect to consider how this axiom should influence their job search.

I call this the PLU phenomenon, where PLU is short for "People Like Us". While we can debate the potential merits and pitfalls of this aspect of human behavior, such a discussion is beyond the scope of this blog. We're here today to talk about how to take benefit from this system, and what it can mean for your career.  After all, only 20-30% of jobs are published in any medium - online job boards, Linked In, newspapers, company websites, etc.  How can you use knowledge of PLU to find the majority of positions? Fit with the culture.

Every company has a culture, and good HR departments understand that hiring for "cultural fit" is key to reducing employee turnover and getting the highest performance out of team members. Hiring people who "fit" into a company will also pay ongoing dividends through high quality referrals that will fill new positions without having to hire outside recruiting firms or build up a large in-house recruiting team. For you this means that if you "fit" in, the company is more likely to hire you than someone else who may not fit in as well.

Let's look at some examples:

• Company A has an individualistic culture because the executives believe that "iron sharpens iron" and they review employees individually on a fixed bell curve distribution each year to determine who gets promoted and who gets fired.
• Company B has a team oriented culture because the executives believe that "the whole is more than the sum of the parts" and they review employees each year to determine who has made the greatest contribution to making others great. Non team players are shown the door.

Which company sounds the most interesting to you? There is no right answer here, only what is the best option for you and your personality. I used polar opposites here to make the point that cultural fit can and should affect how you select companies to pursue in your job search. Websites like glassdoor.com provide company reviews that can help you find a company culture that fits you.

Some questions to consider:

1. How do people dress at this company? 
2. What do they do for fun, outside of work? Do they play video games or go sailing?
3. Are they prone to working on weekends? 
4. Do people often work from home, or are they usually in the office?
5. Do they head to a dive bar after work for drink specials or are they more family oriented?

If you do not match the company culture, I do not suggest pretending that you fit in. You will probably tire of the subterfuge at some point, and they will decide that you are a "bad hire"  and either limit your advancement or "manage you out" of the organization.

If you believe that a particular company culture matches your interests and personality, then the next step is to find and connect with the people who work at this company. We'll talk about that in the next post, but in the meantime, remember that companies interview for skills and experience, but they hire and promote for cultural fit.

What networking really means (Part One)

The buzz word in job searching is simply "networking". I often hear the following phrases, expressed by frustrated and bewildered job searchers:

• Everyone tells me that the key to finding a great position is networking. What does that mean?
• Am I supposed to pay $15-$25 to attend these networking events promoted by different organizations?
• Should I contact everyone in my Linked In and Facebook account to ask about jobs? 
• I thought you were never supposed to ask for a job?
• I don't know anyone who can help me. I am stuck!

Today we'll just cover the first bullet point. Before we start, let's explain what networking actually is, and what actually works. We need to adopt the appropriate mindset before we talk about specific techniques.

"Networking" is leveraging the potential of your connections in a mutually beneficial manner. Please note the inclusion of the words "mutually beneficial" because this means that you should be working with your contacts to help each other achieve your goals. If one person is doing all the giving, this will lead to resentment and you can develop a reputation as a "moocher" - and you will quickly see people become less willing to help you. In fact, your connections may passively discourage your endeavors if they feel that they are being "used". If you leave a negative impression on members in your network, how will they respond when a potential employer inquires about possible candidates to fill a new role?

Let's explore how this works. I was talking to a friend the other day, who happens to be a C-level executive at a publicly traded company. I asked him how he found his jobs throughout his successful career, and he thought for a minute before responding that "all the positions I have found were offered to me by someone who knew me." That sounds great! How did he build a network of people who regularly offered him positions with increasingly higher responsibilities and salaries?

Relationships. You must develop and maintain relationships. Of course, this goes back to the "mutually beneficial" descriptor I used above. In the course of his career he sought out opportunities to meet and develop relationships with people - co-workers, hiring managers, subordinates, recruiters, and experts in his field. These relationships would not survive if he was always saying things like "Hi Joe, do you have any leads for me?" or "Can you send my resume to Harry in accounting? I saw a posting on your company site that looks great!" Relationships are a two way street, so remember that your contact probably wants his or her career to progress too - try asking "How can I help?" and then help them solve their problems.


After your contacts tell you what they need, and write it down. Refer back to your list periodically to mentally check if you have seen or heard anything that might be helpful to a member of your network.

Seriously. Write it down and review it. You cannot expect your contacts to remember your needs and act on your behalf if you're not willing to do the same for them. Writing down their help request in front of them has the added benefit of showing that you're serious about helping them, and that you are not simply paying lip service to their needs. Building a strong network of people who will help you find those hidden opportunities will take some time and effort, but the payoffs throughout your career will be tremendous.