Friday Five for October 28

It’s interesting to read about the optimism or pessimism of the American consumer. It seems that there are times when the media use reports like this to push their own agenda. I don’t think this particular WSJ article does this, but I have seen it happen in the past. Interestingly enough, at a recent Bernstein event, I learned that Americans have bought down their debt to levels not seen in many years. In other words, due to the recession, Americans have tightened their belts and have paid off their debt. Apparently, they are planning for a long, tough haul on the economy and are shedding debt to help ensure they can make it through this tough time. Even though they might be pessimistic, they are also realistic and seem to be making good financial choices. Yet Fox Business tells us to not believe the polls because consumers continue to spend. Go figure.

This problem with student loan debts is symptomatic of our larger problem with debt in general. While individual Americans have spent the last few years buying down their debt, our government has gone on a spending spree, making promises that it can’t keep and cashing checks it cannot afford. College wouldn’t be so expensive if the government didn’t subsidize it. I had debt too, coming out of college and graduate school. It wasn’t pretty. What colleges need to do is to jettison many of the programs that don’t make money and keep those that do. BTW, having people pay off loans with lower payments over longer periods of time and then forgiving larger portions of the loans is NOT good for the economy. You don’t strengthen the economy by transferring private debt to the government. There is also the larger constitutional point that how Obama is circumventing Congress is not good. The blurring of the separation of powers should be resisted, regardless of who is in power.

Proffered in 1957, this matrix continues to be a useful way of thinking how to grow a business.

Six jobs that are in decline and five people who have great jobs. For some reason, neither story makes me feel better.

Hmmmm…………….not a SharePoint Saturday, but a Small Business Saturday. I like it.

Bill English, CEO

Getting Executives the Data They Need – What Role Does SharePoint Play in This?

I’m reading through an HBR article, Chief Executives Define Their Own Data Needs. (I’ve not linked to the article because you must purchase it to read it; unless you have the back issue the article appeared in.) They go through the four common methods of getting information: By-Product Technique, Null Approach, Key Indicator System and the Total Study Process. Then, the folks who did the study at MIT Sloan offer their own methodology on how Executives should get information: the Critical Success Factors Approach.

The CSF essentially has several parts:

  1. A base set of CSF’s that are determined by the industry in which the business is functioning
  2. Competitive strategies and advantages
  3. Environmental factors such as government or regulatory influences
  4. Temporal factors such as a pending legal action or a major loss of a group of executives

An articulated process is needed to produce the decision points within these four verticals to know what information an executive needs. Note that for each executive, the exact information produced will be different. And depending on environmental and temporal factors, the information produced might be short-lived as well. But this information can’t be produced if it isn’t first organized and filtered in a way that noise is reduced as much as possible as the needed information is gleaned into a report. And not all of the information produced is document-centric, which is SharePoint’s strength. Instead, if you look at what could potentially be included in these four areas, you’ll find that the information needed will be structured and unstructured, web-based, databases, documents, list items, financial and personnel information. Getting the right information in a filtered, secured way across multiple systems – some of which are outside your firewall – is important and essential to getting executives the data they need.

Why would I care about this? Well, because I run a $4M business with 30 employees. We think we can grow to over $12M within the next 2 years. Managing growth can be difficult and the right information is needed. But the other reason I care is because SharePoint can form one of the platforms from which this information is gathered, and then filtered for the executive to digest. For example, Search and Alerts can be used to stay abreast of environmental factors. Right now, I use RSS and Feed Demon to stay up on the various data elements I need to know about. We could use Search and Indexing to this work.

What is even more interesting is that the ECM capabilities of SharePoint could be used to help provide an accurate context for our financial and risk information. Consider this quote from the IBM paper The New Value Integrator: Insights from the Global Chief Financial Officer Study:

If leaders had any lingering doubts about the need for business insight – and the integrated financial and operational data necessary to produce it – the “new normal” has eliminated them. Businesses and governments need more advanced data analyses, scenario planning and even predictive capabilities to contend with rising complexity, uncertainty and volatility and, in certain regions, sustained lower growth. The pressure is evident across the entire C-Suite. Eight out of ten CEOs believe their organizations are being bombarded with externally driven change, with many struggling to keep up.5 Chief Supply Chain Officers cite end-to-end supply chain visibility and risk management as their top two business challenges.6 More than 80 percent of CIOs rank business intelligence and analytics as their top initiative to enhance company competitiveness.7 From every angle, the business is demanding greater breadth, depth and speed of insight – and, now more than ever, these weighty demands are falling on Finance. At the same time, more data is available than ever before. It is flowing from more sources, including vast networks of partners, increasing numbers of intelligent devices across the value chain, and expanding process automation. A significant portion of this data has financial implications and will end up – whether in consolidated or detailed form – in Finance. This presents the Finance function with a tremendous opportunity. With the appropriate analytical capabilities spanning process, technology and talent, Finance can turn this wealth of financial and operational information into business among seemingly unrelated pieces of information and find patterns nearly impossible to detect manually. Adequately equipped, Finance can contribute to significant enterprise value creation. In many ways, Finance’s persuasiveness as strategic advisor hinges on having superior business insight capabilities. As one CFO from the Philippines pointed out, “It is not just about cranking numbers but framing them in a broader context that makes them more relevant to the decision at hand.”

SharePoint could potentially produce the final information that Chief Executives utilize, based on the CSF Approach. But this will require significant forethought in how information is organized – and in envisioning how information might need to be organized in the future. The BI capabilities of SharePoint will need to be exploited in a significant way to produce the information Executives need.

SharePoint can organize documents. It cannot organize monetary information nor can is really maintain connections between data points in an accounting package and its ECM package. When you look at the source-to-report process of selling a product to a customer with a payment on that product order, you’re moving through at least three major software platforms: CRM, ECM and Accounting. Depending on the product that is being produced, if JIT inventory is utilized, then you have a number of other systems that need to produce information that, in turn, needs to be related to surfaced information from other, dissimilar systems. SharePoint will have a very difficult time managing all of this and frankly, I don’t think SharePoint should be or could be the silver bullet to resolve this problem.

Financial information must be placed in a context to provide meaning to those numbers. If there is anything you’ll learn from Finance for Non-Financial Manager classes, you’ll find that you need to look at several financial reports to understand what the state of the business is and that understanding the context of that business is just as important as getting accurate numbers from the accounting system.

As I continue to look at how Executives think and how information arrives on their desk, I’ll continue to refine my thinking here on my blog.

Bill English, CEO

Friday Five for October 7

If you want to access US Census data on businesses, you can start here. There are roughly 640,000 businesses in the United States with 20 or more employees. If you raise the cutoff to 100 employees, there are 107,000 businesses in the United States. The vast majority of the 6M+ businesses in the US have less than 20 employees. Mindsharp’s target market is in those 107,000 companies. Only 0.3% of companies in the US have 500 or more employees.

Here are five cases before the supreme court that could positively or negatively affect how we do business.

The Occupy Wall Street grassroots effort has grown and is growing via social media. Many cities are now experiencing “Occupy” events. I’ve read through their web site. It’s an amazing journey into the minds of those who lack common sense. If this is what our public colleges are turning out, then I’m in favor of defunding public colleges. While this isn’t an official list of demands, this post is indicative of a person who is expressing himself more on emotion than reasoned thinking. Yep, let’s just forgive all debt. Great idea. And everyone who is owed something but doesn’t owe anyone anything will never lend again. And that idea is supposed to create jobs. Another idea that will create jobs? Raise the minimum wage to $20/hour. So, why don’t we go all the way and make everyone wealthy be raising the minimum wage to $200/hour. That way, everyone can afford everything they need and want. You know else? We could give everyone in America $500K/year to live on and that would eliminate poverty today, since the poverty line is somewhere around $24K/year for a family of 4. I would also favor giving away milkshakes on Thursdays as a way to build community spirit and making GM/Ford/Chrysler/Toyota/Honda and other give away entry-level vehicles to those who don’t have jobs. That would spur demand and cause Help Wanted signs to appear in every business in America – especially the dental offices. You’d have to be a moron to not see how the Dentists are in bed with the auto workers. But I suppose if everyone is getting $500K/year, then perhaps they can afford to buy their own card. Anyways, the “resistance continues” but no one is certain what they are resisting. And since they have no official demands or ideas that they all agree to, it’s difficult to articulate what they want to do. Or be. Or…whatever. They don’t even know who they are and they are telling us they are the smartest bunch in America. <sigh>

Compare #OWS to the Tea Party, who is able to articulate what they want to accomplish on their home page. They are organized – not around social media technologies, but around articulated ideas. While #OWA has energy and a 1960’s “feel”, it will crumble and turn to dust if it doesn’t become organized around a coherent and articulated set of ideas.

Enough for this week. I’ll post again next week my Friday Five.

Bill English, CEO

Friday Five for October 1

If your company’s personality is a bit stale, then you might consider using social media to upgrade your company’s social personality.

This is a short, but good article from HBR on new beliefs that CEOs need to incorporate into their mindset. I like the social and long-term aspects of these beliefs.

Here are the top 100 compensation packages for public company CEOs for 2010. The top package is over $84M and the lowest is a mere $17M. This is Forbe’s list on America’s top 100 paid CEOs. Privately held CEOs make far less than their public company counterparts, averaging $405K for a $5M company. 75% of privately held company CEOs make less than $1M.

Here is the Forbes list of the 100 most powerful women. Would it be sexist to have a list like this for men?

Opinion: I continue to fail to see how soaking the rich with more taxes helps the rest of us. You don’t help the poor by hurting the rich.

Bill English, CEO