Saturday, March 26, 2011

Warriors In Transition: A Feature On The White Rhino Report

I have been featured on The White Rhino Report in a post called Warriors In Transition. The White Rhino Report is the blog of Dr. Al Chase, a friend and the founder of White Rhino Partners. White Rhino Partners is an executive recruiting company out of Boston, MA that as Dr. Chase so eloquently puts it"specializes in placing senior executives who are "Renaissance Men and Women," and who are entrepreneurial leaders - many of whom have had a distinguished military career and/or are Service Academy graduates and hold MBA's from top-tier business schools."

I am honored to be featured in the blog and to be working with Dr. Chase. I look forward to working alongside him to find my way into an organization where I can add value through my unique experiences and professional skill set. Below is the piece that was featured, but do yourself a favor and check out The White Rhino Report for a wide range of interesting topics as Al not only places Renaissance men and women, he is a Renaissance man himself.

Periodically in The White Rhino Report, we tell the story of a warrior who has served our nation in the military and is transitioning to a new career in the private sector. Today I am pleased to introduce the readers of the WRP to my good friend, USAF Captain Matt Bader. Matt is a graduate of the United States Air Force Academy, where he excelled as a member of the hockey team. He has recently returned from a deployment to Iraq. In the following paragraphs he shares some of experiences he had while serving with Tiger team in central Iraq.

Tiger Team in Iraq:

When I was deployed to Iraq I led a team of people responsible for providing contracting support to bases throughout central Iraq. There was seemingly more work to be done than could ever be accomplished, but you worked 14 hour days and did your best to prioritize the work to ensure the success of the mission. After I had been there a month or so I began to settle in and feel more comfortable in my role. Then I was assigned an additional duty as the lead of the DFAS Tiger Team. DFAS stands for Defense Finance and Accounting Service and they are the agency responsible for disbursing payments to all contractors doing business with DOD. I was charged with reducing the outstanding payments that the government owed contractors for goods, services, and construction that had been completed.

It was an additional duty that nobody wanted. The problems were multifaceted and complex in nature and each week the General in charge of all contracting for Iraq and Afghanistan got reports on the progress so it was very high stakes as well.

My team members were made up of DFAS liaisons, contracting personnel, and me. Most of them were less than thrilled to be given additional duties on top of the seemingly endless workload they already had. Our starting point was more than $2 million in outstanding invoices across Iraq many of which were accruing interest payments and costing the government thousands of dollars. We had conflicting interests amongst the key players and we were facing systemic wartime problems to include government bureaucracy, the fog of war, and the language/cultural barrier of our contractors. The DFAS Tiger Team on the prior rotation had made little to no progress in reducing the outstanding invoices and the lack of progress was becoming a sore spot for leadership. It was definitely an uphill battle.

I must admit that when I first took over I was feeling a little overwhelmed but I did the only thing you can really do in that environment which is put your head down, work hard, and give it your best shot. I knew that fostering a real team environment and creating buy in was the first thing I needed to do to get anywhere. I recognized that the DFAS liaisons were undermanned and often took the majority of the “blame” with regard to the outstanding invoices so I sought to earn their respect by immediately showing them that I cared about making a difference with the DFAS Tiger Team. I empathized with their situation and asked a ton of questions about the process. I think my humility and genuine desire to improve our current state won them over which was huge because they were the primary knowledge holders for the payment process and the inner workings of DFAS. I then sought to establish a common vision that was aligned with the overarching mission in Iraq. I described that it was building the Iraqi economy that was going to get us out of the war. Enhancing opportunities for the Iraqi people is the goal of counterinsurgency and there is no better way to do that then to put the Iraqi citizens to work. With that being said, huge damage can be done to our relations when the work has been performed and we do not hold up our end of the bargain with proper and prompt payment. I made sure that everyone on the team was aware that our team could have a direct impact on preventing extremism and that letting the current state continue could actually be fostering terrorism. It was clear that tying our additional duty to the mission of the war effort was a big turning point for the buy in and camaraderie of the team.

After I got my feet wet and had fostered a unified team environment I got my 8 member team together for a brainstorming session. I facilitated a mini continuous process improvement event for the team. We came up with the challenges we were facing and eventually came up with a set of action items we thought could improve the state of the payment process in Iraq. It was clear that we needed help from outside organizations such as DFAS Rome back in the states who processed all the payments, the Senior Contracting Official for Iraq, and the Brigadier General of CENTCOM Contracting Command. I knew that simply telling higher ranking people and outside organizations we needed help was a recipe for disaster. So we presented our findings in a very strategic manner. We showcased how we brought different stakeholders together and came up with a consensus of the “big rocks” or issues with payment process in Iraq. We then presented what “we,” Regional Contracting Center Central, were already doing to improve the current state. This included new standard work, re-engineered business processes, and visuals to be used as payment processing templates for contractors and customers. It was after our efforts had been showcased that we had a section detailing the help we needed from outside organizations. We tried to portray our findings as “here is what we are doing to help ourselves, but we could really use your help in these areas to take our successes to the next level.”

I presented our findings to my leadership and they in turn passed them onto the SCO-I, and the General. On a visit stateside the General met with the head of DFAS Rome in New York and began forging a new memorandum of agreement between the Command and DFAS.

Within two months the changes our 8 person DFAS Tiger Team had implemented had reduced the outstanding payments by more than 50%. This was without the help of the outside agencies. As I prepared to depart Iraq, The SCO-I emailed me directly for feedback on the memorandum they were drafting to be implemented in Iraq and Afghanistan.

It was an incredibly rewarding experience to take over a program that nobody wanted to be a part of and to build a highly performing team that achieved amazing results. We went from the Regional Contracting Center with the largest outstanding payment issues to the model for entire theatre in less than six months.

Matt will be leaving the Air force in the next few weeks. He and his wife are committed to returning to the Portland, Oregon area. If you know of an employer in that area who could use a leader with the kind of skills that Matt outlines above, his work ethic, leadership abilities and unimpeachable integrity, have them contact me to get in touch with Matt.

Dr. Al Chase, White Rhino Partners
1 Broadway, 14th floor Kendall Sq.,
Cambridge, MA 02142
office: (617) 401-2113

Sunday, March 20, 2011

Groupon: The Fastest Growing Company Ever…But Will It Be The Fastest Declining Ever?

I have had some interesting discussions with a few friends recently on whether Groupon is “for real” or not. One friend is building an online startup on the side and has connections to the Palo Alto world. The other works in finance and is more well versed in looking into companies’ financial reports. Both are smart but disagree completely on whether the success of Groupon is sustainable. Listening to both sides of the argument, I would say that I fall somewhere in the middle. I think that the fate of Groupon rests within the hands of the leadership of the company.

There is a very well written article in Businessweek that details the rise of Groupon and where it is going. The article, found here, sheds some interesting insight into the company and may have you formulating your own take on the fate of the growing online deal-of-the-day startup.

Mason is the 30-year-old chief executive officer of the digital couponing comet known as Groupon, the Google-spurning, Super Bowl-flopping startup that sends deal-of-the-day e-mails to more than 70 million subscribers around the world. He's wearing a heavy winter coat, a lime-green track jacket embroidered with the Groupon logo, sneakers, and garish red Christmas socks. ("Only clean socks I could find," he says.) Holding his iPhone before him like a tricorder, he logs into the new service, called Groupon Now, and shows off two simple buttons that have the potential not only to transform humankind's lunchtime habits but also to alter the topography of the multibillion-dollar market for local commerce.

The two buttons: "I'm Hungry" and "I'm Bored."

It's only 11 a.m. Mason clicks the "hungry" button, and his phone transmits its location to Groupon's servers and then displays a list of deals from nearby restaurants. Across a bridge spanning the Chicago River, the Asian fusion restaurant Thalia Spice is testing Groupon Now by offering $20 worth of food for $12. A block to the north, an eatery named @ Spot Café is dangling a $10 coupon for $6. Each restaurant has specified that its discount is good only during select hours on that particular day, when a few of their tables would otherwise be empty.

The simple expose detailed above is what CEO Andrew Mason is banking on as the future of Groupon. The vote is out on whether retailers will be on board with a more ‘permanent deal’. In fact the verdict is still unclear on whether retailers are completely satisfied with Groupon’s daily deal approach. Groupon repeatedly advertises a significant return rate for vendors but the media loves to highlight disgruntled users who claim to have lost significant amounts of money through the Groupon imposed deep discounts. What is clear is that there are still plenty of local businesses willing to give Groupon a whirl which should fuel company growth into the future whether it be through traditional daily deals or the new Groupon Now deals.

As I read the article a few things jumped out at me:

1. Easily Replicated Business Model – This is the primary point of contention in the polarized argument between my friends. Anyone can create a daily deal business model and many have. With the flood of players coming into the market, how long will Groupon be able to maintain their incredible growth? More specifically, what if an online player with significant influence (i.e. Facebook, Google) unleashes a similar service? I think that Groupon’s ability to maintain their position as the dominant player in the market segment will hinge on their ability to stay ahead of the competition with regard to where the segment is headed. Is Groupon Now the first step in warding off the competition? Only time will tell.

There were a few things that were discussed in article that I did like about how the company views itself and its challenges ahead. "We had this realization probably a year into launching Groupon that this was highly copy-able," says Lefkofsky. Adds Mason: "We have always been thinking about how to solve these fundamental problems of our model. We have known since very early on that some form of real-time deal optimization is where this had to go." First and foremost, I like that they are aware of the reality facing their business model. Obviously it is much easier to combat your weaknesses and seek new opportunities when you are actually aware of the challenges you face. Mason also made some interesting comments regarding his company idols. "The company I admire most is Netflix," he says, referring to the movie-streaming company that purposefully disrupted its original DVD-by-mail business. "They have figured out a way to be successful and cannibalize their core business. Nothing is more romantic to me." Not only does Mason not mind revolutionizing their business model, he seems to see it as a sign that a company is truly successful. This tells me that they at least have the right mindset for success. Execution is another thing entirely, but one has to look no further than Netflix or Google to see how a business can grow, shift, and change to capitalize on new markets that in many cases have yet to be created. I see the success of Groupon hinging on their ability to do the same.

2. A Battle Against Creative Destruction – The term creative destruction, which was popularized by economist Joseph Schumpeter in the 1950’s, is defined as a “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one." As companies grow they become more bureaucratic, less flexible, and typically less innovative. These growing rigid organizations are destroyed by smaller, more innovative companies who either revolutionize the marketplace they are in or simply create a new one rendering the old way of doing business obsolete. Every company faces these growing challenges. However one would assume that as the ‘fastest growing company in the world,’ Groupon should expect to face these challenges sooner than an organization with a more traditional growth pattern.

There are a few examples within the article that indicate that Groupon, despite its extremely rapid growth, seems to be operating in a similar manner to its early startup days.

Groupon occupies parts of six floors in the former headquarters of Montgomery Ward, the erstwhile catalog retailer and department-store chain that along with another Chicago merchandiser, Sears Roebuck, defined retail during much of the 19th and 20th centuries. Aaron Montgomery Ward might not recognize much of the building he put up in 1908. Groupon employees are jammed in practically elbow to elbow. Doodles and cartoons festoon walls and whiteboards. Shelves are strewn with cartons of bagels and coffee. Adding to the flavor, blue yoga balls, which the company gave to every employee at an all-hands meeting in December, clutter the office and sometimes substitute for desk chairs. A conference room on the sixth floor, the "war room," is the launch pad for Groupon Now. A whiteboard is covered with giant maps of the initial target cities, with tallies of the number of merchants who have signed up in each Zip Code. The company plans to go wide with the service in early April.

Detailing corporate strategy on the walls. Doodles throughout the office. A war room with maps targeting launch cities. People packed together. So what you ask? I think those simple descriptions speak volumes on how the company is currently operating. When you are outlining corporate strategy in brainstorming sessions versus creating bureaucratic point papers and fancy presentations you are doing something right. The idea is what is valuable, not the process to present it. For a company that has grown that much and has had that much capital infusion (i.e. additional vested interests), I think it is pretty cool that they have still managed to operate in that fashion. Perhaps they are taking a page from the Facebook playbook, a company where CEO Mark Zuckerberg is said to sit office-less amongst fellow employees and where conference rooms are nothing but glass rooms without shades.

3. Purposeful And Incremental Strategy Improvement – It is quite clear that from the beginnings of Groupon the leadership has been looking ahead to the next step. When you hear company leadership say things like “We have known since very early on that some form of real-time deal optimization is where this had to go,” you see that they are not just riding the daily deal train mindlessly hoping to cash in. Turning down Google’s estimated $6B buyout dispelled cash in motives as well. In the tech sector I think it is all the more important to continually balance knowing where you want to go and capitalizing on changes that may not even be visible yet.

Mason referenced Netflix in the article and it got me thinking about what they have done. I have known about Netflix forever. They were a consistent case study in disruptive markets throughout college. Their DVD mailing model changed the industry. I haven’t joined Netflix yet but I have been thinking about doing it lately. When I went to the website the other day I was amazed that their DVD mailing model is hardly even traceable on the site. Everything is about streaming media now. Their model has changed entirely. With changes in technology and social trends Netflix has incrementally changed direction over the years, evidently without me fully realizing it. If they had offered the strategy shift in one massive roll out it probably wouldn’t have worked out so well. Yet by having a rough strategy in mind and by reacting to world changes over time they have been able to emerge as the market leader in monetizing streaming online media. Mason undoubtedly sees the parallels to his industry and it looks as though they are trying to do the same.

I would love to see the argument on whether Groupon is the next big thing or next big bust continue in the comments section.

Monday, March 7, 2011

Creative Contradiction & Chaos Theory

Is Michael Jackson an introvert or an extrovert? Well there are countless records of his extreme shyness that would indicate he is an introvert. Yet his on stage performances showcase a completely different and opposite side of his personality. This contradiction of personality is not limited to the late King of Pop. I came across an interesting article on the Huffington Post entitled “After the Show: The Many Faces of the Performer,” which takes an in depth look at the paradoxes entrenched in the personalities of creative people.

One passage particularly caught my attention:

“In the article The confusing legacy of Michael Jackson, Todd Leopold discusses the perplexing combination of seemingly contradictory traits displayed by Michael Jackson. In explaining his many sides, Jackson biographer J. Randy Taraborelli essentially throws his hands up in the air in exasperation as he tries to make sense of the apparent contradictions:

‘I think that when you're talking about Michael Jackson and you try to analyze him, it's like analyzing electricity, you know? It exists, but you don't have a clue as to how it works.’

Creativity researchers aren't so confused. They have long-ago accepted the fact that creative people are complex. Almost by definition, creativity is complex. Creative thinking is influenced by many traits, behaviors, and sociocultural factors that come together in one person. It would be surprising if all of these factors didn't sometimes, or even most of the time, appear to contradict one another.

As creativity researcher Mihaly Csikszentmihalyi notes in his 1996 article for Psychology Today entitled The Creative Personality, creative people ‘show tendencies of thought and action that in most people are segregated. They contain contradictory extremes; instead of being an "individual," each of them is a "multitude.”’

To me, some of the most fascinating contrasts are those found in creative performers -- those who are constantly on stage and in the public eye.

Although I completely agree with the prognosis of the creative personalities described above, I would argue that the great majority of people exhibit these same contradictions. Certainly creativity is complex. However, I think it is more appropriate to say that people in general are complex! Maybe we are more attuned to these contradictions in creative types because the contradictions are presented on a grand stage for all to see. Are you going to notice personality paradoxes more in the guy Mark from ‘Accounting’ at work or Michael Jackson? Or perhaps the opposite ends of the personality spectrum in creative people are just a bit more exaggerated or pronounced. I am not sure. What is certain is that people are complex whether labeled “creative” or not.

The article got me thinking about how the creative contradiction relates to effective team situations. How do you effectively lead a group of people in a creative environment given the various personality idiosyncrasies of each team member that are constantly changing based on the dynamic environment?

That question took me back to college. When I was attending the Air Force Academy as Business Management major I took a Management 303 class which had the reputation of being the weird, touchy feely class. It was described as pretty abstract and ethereal with notoriously low test scores that were salvaged only by the grading curve. Although I too struggled to grasp many of the concepts we learned about, I did hang onto the concepts from our talks regarding chaos theory in management.

Chaos theory seeks to describe the unpredictability of systems. A dynamic system like any organization or team environment is innately complex, erratic, and unpredictable. Chaos theory, however, shows that even the most complex and chaotic systems fall into some natural order. The chaotic inputs are connected and create some form of order through “strange attractors.” Strange attractors essentially create natural boundaries for chaotic, dynamic systems.

Since taking that class, I have always tried to analyze any leadership or team situation with chaos theory in mind. I definitely think chaos theory is an effective way to look as systems. All the external changes that occur coupled with the complexities of human behavior make predictability of even the most simple tasks utterly impossible. Which brings us back to the question discussed above. From my experience here are a few things that may help to answer the question above.

1. Stay Flexible – I have had the opportunity to lead in some very dynamic, ambiguous, and challenging environments. Whether it has been serving as the captain of a division I hockey team, the president of a nonprofit, or as a contracting officer team lead during Operation Iraqi Freedom I have learned to expect the unexpected. You simply cannot, for reasons detailed above, predict what is going to happen in a team environment while seeking to attain a goal. The more comfortable you can become operating amidst ambiguity the more effective you will be at achieving your goals, even if the path is different than you might have hoped.

2. Create Your Own Strange Attractors – Although easier said than done, I think as a leader it is your responsibility to create strange attractors versus allowing them to develop by chance. Although you may not be able to predict how things will unfold for your team, you can help to shape how your team will respond to the ever unfolding chaos. An example could be as simple as establishing shared values amongst team members. You cannot control how each person will respond to a given situation but you may help to ensure that their response does not violate the team’s shared values.

3. Acknowledge Your Powerlessness – Embracing the chaos is acknowledging your powerlessness in a sense. Not to say that your role as a leader is not important and that you do not have influence. As a leader you want people to want to do the "right" thing. In essence you want to create an environment, or a system, where it is most desirable for all parties involved to do the right thing. Not only are you acknowledging reality by operating in this mindset of limited control, but you are also empowering team members to attain your organizations goals in the most innovative and creative manner possible.

I am by no means a guru on the subject of chaos theory in management or the personality contradictions of people. These are just a few observations I have picked up in my leadership experiences thus far. To be honest, half the time my posts serve more as reminders to myself than holier than thou advice columns. I would love to hear your viewpoint on the topics above and thanks for reading.