Southern BITS of Technical Goodness

I have worked at AmMed Diabetic Care Supply company for four years (since 2005).

Nashville Business Journal awarded AmMed as the fastest growing company in Nashville over the period 2005 – 2008.

See the write-up: [article]

Comparative Growth Rates (putting things in perspective)

• AmMed grew in excess of 1,150% in that period.
• Vaco (recruiting) came in at #2 with around 350% growth.
• My department, Home Pharmacy, grew by 6,000% in that same period.

AmMed grew 300% faster than Vaco (#2). AmMed Pharmacy grew 1,700% faster than Vaco (#2), and AmMed Pharmacy grew 500+% faster than AmMed as a whole.

Growth is good, but growth comes with risks. Very fast growth should be considered equal parts opportunity and risk. The faster the growth, the higher the risk (or certainly growing pains).

[Graphs of relative growth]

Growing Pains

Growing pains come in 2 flavors Business & Technical. IT folk can *NOT* merely look at technical problems that arise from fast growing businesses. They *MUST* understand the business, look at business process (esp. as provided in requirements).

Questions IT should ask:

1. What is the REAL problem business is trying to solve? Often business asks for applications that don’t solve the problem.
2. Does business understand the scope of the problem? In my experience, business units/departments often exhibit target blindness where they lose sight over other issues by focusing on one aspect of the problem. They want to turn away from the iceberg without concern for the ice shelf.
3. Is there a better solution? With a different perspective & skill set, IT has the opportunity to suggest solutions that may be superior (perhaps vastly superior) to what is being offered.

What IT should do:

1. Be outspoken – IT has a voice in the business. We are not drones incapable & unwilling to learn and better the business model.
2. Sell your ideas – In fast paced environments, good ideas need to be loud & persistent. In start-ups, everyone must chip in, stretch beyond their roles and take responsibility for making the company better.
3. Think as an entrepreneur – Don’t just think about code, features, technology – consider the business problem, solve the issue (even if that is a process change).
4. Seek value (profitability, savings, productivity gains) – at the end of the day, companies are about making & saving money.
5. Do Not Fight the Employees – this is such a big point, it deserves it’s own section.

Do not fight the employees – align the employee performance goals with the business objective (usually profit)

When companies grow quickly and are understaffed, processes change (or need to change) so quickly that software can not keep up. For that matter documentation, training and formalized business processes can not keep up. You have to rely on the employee to do the right thing.

How do you get an employee to do the right thing? [ 2 ways ]

1) Prescriptive mechanisms coupled with policing measures to force them to do the right thing. Often this uses disaggregated performance metrics – something I strongly disagree with (explained below).

First an example: You open an omelet shop to make a great omelets. You have a 5 step recipe for the perfect omelet.

Disaggregated performance metric: Chefs will be measured by how many omelets they make using the 5 step process

1. Take 2 eggs, break & beat them
2. Put in skillet
3. Add cheese
4. Fold egg
5. Serve on plate

• Posit: This works so well, you open 5 more stores.
• Problem: New stores fail to add salt, something store 1 did w/out being told
• Solution: You decide to add a 6th step – SALT

6. Salt

• Posit: All goes well until…
• Problem: Also need pepper, something store 1 did w/out being told
• Solution: Add 7th step – Pepper

7. Pepper

• Posit: Now everything is working! Except chef#1 quits & you hire new chef #6
• Problem: Chef 6 realizes that he can get a very HIGH performance rank by following steps 1-6 w/out cooking the omelet at all.
• Solution: You police this by adding step 8

8. Cook Omelet

This begins the nasty cycle:

1. Employee does the WRONG thing
2. WRONG thing is discovered
3. New rule is created & added to disaggregated performance metric

So what’s the problem? Your chefs don’t care about making great omelets. They care only about the steps!

2) Empower the employee, make them responsible & align their goals with the company – by all means use AGGREGATED METRICS!

Let’s do that example again: Have 1 aggregated (high level) metric to judge employee performance.

Aggregated metric: profitability of the store.

Why choose profitability of the store? B/c that one metric is what we really care about, it encompasses making good omelets, not wasting ingredients, having good customer service… etc. So if the employee has good performance, the company as a whole is performing well.

But how do we know our employee will do the right thing? B/c if they don’t, the store’s profit will go down due to lower sales.

1. Trust your employees
2. Empower your employees
3. Make them responsible!

Give them directions but empower & trust them to find the best way to cook the omelet. That is their responsibility, not to mention keeping the customer happy, store clean – all the various little things that it takes to have a successful omelet store

To be continued in future blogs….

alan.huffman Business, Business Growth Business Growth, leadership, management