Intellectual Capital – Use it or lose it

What makes an organisation valuable? In the world of consultancy it's the people it employs. Very little distinguishes one organisation from another. They all have access to the same systems, processes and resources. What enables one organisation to outbid the other is the people behind a bid. What makes one project succeed where another fails is the people.

Ok, that's pretty obvious. But what makes the big companies so powerful is the way they harness that. At IBM I have access to a huge back-catalogue of experience on Complex Systems Integration projects. That gives me a massive starting advantage when I come to work on a project.

Younger and smaller companies aren't always so good at this. The charity I'm working with at the moment has absolutely no processes to harness this at all. They have more pressing issues to resolve first, but further down the line it's something they can look to address.

What surprises me more is the lack of some system for storing the knowledge of all the volunteers in the country. There are hundreds of thousands of man-hours that is going missing here.

Let me put this into context. I'm here as an IT consultant. That's my primary role, but I'm already getting into general project management consultancy, that's fine as my role in IBM had progressed down that route. I'm pretty comfortable with the work I'm being asked to do there.

But I'm also being asked to think about putting a HR manual together. And help with writing funding requests. Now I'm out of my comfort zone. I have zero experience here. Now, I'm not completely incompetent, so I reckon I could come up with something that's not completely terrible here. It might even be better than something Srijan would have come up with on their own, but there's no guarantee.

However, I know for a fact that at the moment in India there are people with a huge range of experience in these matters. HR Consultants, people with a background in NGOs and raising funding. BUT I CAN'T FIND THEM. There is no official system for me to make contact with my fellow volunteers and get their advice. There's nowhere for me to upload my new IT strategy document, get people's thoughts on it, or download a sample HR document myself.

Every single volunteer out here is re-inventing the wheel on every single project. And that's a sad state of affairs. Luckily, the volunteers recognise this themselves. There was a Google Group set-up, which unfortunately Google is now phasing out, so I've created a Google Sites repository. It will have a document store, discussion board, contact list and useful links list. The sad thing is that this isn't provided for us. It's also country specific – I have no idea if the volunteers in the other countries have something they can use.

What does your company do about storing and, more importantly, making accessible it's intellectual capital? Can you easily get to the thoughts and deliverables of your companies top people? If not, you're probably letting a huge asset slip through your fingers and you aren't even aware of it....

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I've just had probably the most depressing experience of my time in India. It's really upset me and I just need to get my thoughts out there. I'm cross-posting this as it applies to both my VSO work and my professional life.

The social development sector is growing. There is a definite move to a “more professional” way of working, with knowledge and skills from the private sector coming over the fence all the time. I'm a pretty obvious example of that. I'm trying to instil better project management and MIS processes into a tiny Indian NGO!

I think most of the time this can be seen as a good thing. Better rigour and transparency in these organisations should lead to benefits further down the line. Unfortunately not everything from the corporate sector is necessarily worth bringing across, and sometimes it is absolutely the wrong thing to do.

I met a man today, he works for another NGO. They appear to be very professional and passionate about the work they do (I won't be naming them, obviously). He wanted to talk to me about my background, then suddenly he asks me about Intellectual Capital. Now, first of all, my views on this are not mainstream. I recognise this. But one of the things he said I just flat out had to disagree with....he said “we have to protect our IC (intellectual capital).”

Sit back and think about this for a moment. This is a organisation who's vision statement (according to his business card) stands for “hope, tolerance and social justice” and over-coming poverty. He's talking about using intellectual property to prevent other organisations from using his ideas. Other organisations, i.e. competitors = other Not-For-Profit organisations. Other aid agencies. Other NGOs.

Now maybe I'm being a bit idealistic here, but I want my NGO to work with others. If they have a good idea, I want them to share it with as many people as possible. Not to do an Apple or a Sony and try to build a closed eco-system where no-one else has access to the market. First of all, I hate the idea of using IC to protect a business model in the first place. MySpace vs. Facebook shows you all you need to know about idea vs. implementation. But surely that principle goes completely out of the window in the development sector?

If I (as an NGO) come up with a great way of improving people's lives in India, surely I want as many organisations to know and to copy it all over India as possible? I don't want to patent the idea and force everyone to pay me for the idea or not use it at all! Surely that defeats the entire point of a development agency – we're working for the people we're trying to save, not the profits of shareholders!

I'm going to have to go to lunch with this man in 10 minutes. I just hope that I can get through the meal without offending him – he's from the funding agency of one of our projects! Hopefully he doesn't say anything ridiculous again – otherwise I'm in trouble!

The Importance of Strategy

Why do we do anything? Generally we've got an end result in mind. It's pretty unusual to do something just for the sake of it, right? Well, that's what I thought before I got here!

The organisation I work for have some really talented individuals. They're passionate about their raison d'etre and they know what they're doing once they get out there into the field. So why am I here? Well, let's just say that planning isn't exactly their speciality!

I was quite shocked at first, but after thinking about it, I can understand how they've gotten to this situation. The organisation is young – 10 years old. They've built themselves up fairly quickly to be running a number of projects at the same time, spread across the state of Jharkhand. As with most organisations, in their early days they will not have been picky about projects – in fact it has probably been a bit of “take whatever you can get”.

Now, some people are probably questioning that approach already. Well, in the UK I'd agree, it can be a dangerous tactic and lead to your organisation taking a direction you don't want. However, in India I can completely understand it. These people left relatively high-paid jobs to start an NGO, they had families and the organisation was created by a group of friends – none of them could afford it to fail. If funding was available, that equated to dinner on the table – not something to be turned down.

Today, it's a different story. The organisation is generally well-funded, certainly compared to its peers. Which leads me (in a rambling way) to my point. Strategy. They don't have one. They're still grabbing at any potential funding they hear about, with little regard to whether it really fits with what they want.

Case in point. An industrial company is running a project locally. They want to do their CSR bit and put out an EOI for bids on a project to promote literacy in the area. Now they want to cut the budget by 80% and the aim is now to enable people to sign their name, not be able to read/write. My opinion – this is a worthless exercise, it's a waste of our time and won't achieve anything sustainable or useful. It's now a small amount of funding and doesn't fit into any sort of long-term strategy for Srijan. In fact, it would probably harm our “brand” to be associated with this project. I'm recommending against the project.

This thought never occurred to them. They were looking at how they could cut costs to meet the new budget. 100% coverage was dropping to 40%. The “educators” were being replaced with cheaper alternatives. Teaching people how to read was being replaced with giving them cards with their name on to learn to copy. My organisation were compromising their principles simply to get some funding that they probably didn't even need.

This is the danger of not having a strategy. You lose track of what you're aiming to do. When you're putting together a proposal you need to ask yourself “does this fit to my strategy?” - if the answer isn't a resounding “Yes!” then this project probably isn't the right thing for your organisation.

Twitter and Trotsky (or why Stalin would have hated the Internet....)

I'm reading a book at the moment that I've been planning to read for a long time – The Lacuna by Barbara Kingsolver. I don't think I even realised what it was about, but it's just one that I've seen in the shops again and again and thought that I'd enjoy. So when I got some Amazon vouchers for the Kindle, it seemed like an obvious choice!

Anyway, it's a good book so far (get it from Amazon here if you're interested!), documenting the journals of a young boy growing up in Mexico who, through a series of events, ends up working for the group of people who shelter Trotsky in the late 1930's after he is expelled from the Soviet Union.

I studied history at GCSE and A-Level, but the Russian history that we examined tended to look more at Lenin, Stalin and Khrushchev than Trotsky. I think there was a reference to him moving to Mexico for a while, before he's ultimately murdered (with a pick-axe if my memory serves me). Obviously I haven't reached that bit in The Lacuna yet ;-)

But what does this have to do with Twitter, I hear you ask? Well, in the section of the story I've just been reading, Trotsky is put on trial in Mexico. Up until this point, the dictatorship in Moscow has been able to fabricate charges and falsely accuse Trotsky of all kinds of crimes, most of them blatantly false (e.g. de-railing trains when he wasn't even in the country). It made me think – could that happen now?

We've just seen the power of Twitter with the Egyptian protests. Suppression of the press may still be possible, but it's now incredibly hard to a create a total blanket on information getting out of a country. Even turning off the Internet didn't help the Egyptian authorities. I firmly believe that this can only be a positive thing.

Here's a statistic for you - In India, 11% of people do not have an indoor toilet, but over 85% have access to a mobile phone. I imagine that figure is pretty representative of a number of other developing countries too – I remember even 5 years ago in Ghana this was the case. This prevalence of access to communications makes it so much easier to get information out of and around a country. All of which makes the suppression of “the press” so much harder. You can't just pay off a couple of people now – someone, somewhere, will call you out on it.

Zola (not the former Chelsea and Italy footballer...) “said that the mendacity of the press could be divided into two groups: the yellow press lies every day without hesitating. But others speak the truth on all inconsequential occasions, so they can deceive the public with the requisite authority when it becomes necessary.” - The Lacuna

I don't think in today's age of information freedom that this is anywhere near as true. Wikileaks, twitter, information finds a way to get out into the public domain and once it is there, no-one can stop it.

That can only be a good thing. Unless you're someone like Stalin....

Social Reward Scheme for Check-Ins

Ok, first of all, a hat-tip to Elle, who's original blog post on this got me thinking....

So, we have Facebook Places, which is about to get pretty huge I should imagine. In America they also have FourSquare and GoWalla. All of which allow you to check into venues. What's beginning to happen now is that organisations are able to offer deals based on your check-ins. Lovely.

But what if I want to be a good citizen – am I allowed to exchange this? This “gift” for want of a better word? If I go to Starbucks (ok, I'm a Costa boy, but same difference) and I get an offer of a free coffee, I should be able to pass that onto someone else, right? It's just a voucher at the end of the day...

So what I'm imagining is a marketplace of sorts. I go to Starbucks a certain number of times and because I'm a good Social Media pawn, I check-in lots and get an offer of free coffee. But....I'm also a society conscious SM pawn, so I want something good to come of my latte addiction. I add my “free” coffee to the marketplace. Could be an auction, could be set price, doesn't really matter. Someone else buys this voucher and gets their “free” coffee. Obviously the price would be less than the cost of buying the coffee directly.

So far, so blah. But, imagine the coffee is £1. The website takes a processing cut...whatever it needs to operate, etc. The rest goes to a charity – choice of the original SM pawn. Maybe some sort of link in with JustGiving?

I honestly can't see a problem here. The SM pawn gets to feel that they're doing some good, and all they need to do is check-in to a location they're already visiting. The buyer of the voucher gets some cheap coffee/sandwich/fluffy elephant – woohoo! The advertising organisation...well they potentially actually benefit even more. The original customer is a repeat customer and will keep coming back for the vouchers so they can donate more to charity. The new customer? Well they might not have come in before – there's potential there for a brand spanking new customer. They were already giving the voucher away, so that's a sunk cost...

So now you need to give people an incentive to give their vouchers away (and for others to buy them). Well, you could give away badges. Meh. Boring. Done it. But what about a leaderboard, not of everyone in the country. Not of everyone for that store, but your own personal leaderboard. Just you and your friends group? That's something I'd be interested in seeing. I don't give two hoots if Steve from Grimsby has donated £15,000 somehow, but if my mate Carl is doing better than me, I'm suddenly an interested man.

I don't know if this is something someone is already working on, or maybe there's a good reason it's not possible, but seems like an interesting experiment....

The Consultancy Business Model – Does it need reforming?

Consultancy is big business. I'm not just talking about IT Consulting, the sector I work in, but consultancy in general. Finance, marketing, IT, social media – the consultant is king. Consultancy firms charge huge fees to bring in their expertise, previous experience and support structures to help companies with new projects, restructure their organisation, cut costs or integrate new purchases.

I've only been working with Srijan Foundation for a couple of months, but I'm already wondering whether this business model is scalable. And for once I'm not talking about scaling up. How do you scale consultancy down to the smallest businesses and still make it relevant?

I want to point out straight away that I don't think big consultancy is perfect. Far from it. The charge rates for some people are far too high and there is a lot of wastage, but I think that is true for all large organisations and is unlikely to be a solvable issue. What I think is non-debatable though, is that there is no way a scaled down version of the same model would work at the lower end of the scale.

For one thing, the pricing model is all wrong. Small companies cannot and will not afford the luxury of paying for graduates learning their trade on the job. In large consultancy firms, these graduates are charged at 4x-5x times their cost, to recover the cost of their training. They are the “do-ers” while the higher grades are the decision makers. On smaller projects, the ability to “hide” these graduates becomes much lower.
Large consultancy firms also have large fixed costs to cover. HR, finance, legal, etc. all projects have to contribute to these departments and the associated costs of these rise proportionately.

On large projects there is high consultant turnover and members of the same team have often not worked together before...all introducing additional costs.

Is it surprising then, that most small businesses either forego the luxury of consultants altogether, or simply employ one individual on a short-term basis. While I'm sure these individuals are extremely capable, they cannot possibly have the range of resources and skills that a larger firm could.

So with this in mind, I'm wondering if there is a middle-ground. A small, lean group of consultants (all 5yrs+ into their careers) who work in teams of 3-5 at a time. Projects would be short (3-6 months only) and supremely focussed. The smaller size of the organisation should lower fixed costs allowing the charge rates to be significantly lower than the “Big Consultancy” firms – bringing them more into line with the spending power of smaller organisations. The profit margins on these projects can also be lower than required in the bigger firms.

The central resources, such as finance, etc. will work across all projects, instead of having one per account, allowing costs to be cut there too. The nature of the work reduces the need for large office spaces and the whole venture could realistically be run as a virtual organisation.

There is undoubtedly likely to be an element of “cookie cutter” solutions about these projects. While in larger firms the processes tend to be documented and then ignored, in smaller enterprises these processes are either non-existent or unable to be described.Hence the requirement for short, decisive and focussed projects.
Partnerships with other firms, such as recruitment, market research, etc. would enable cross-selling of services where those are required and outside the domain of the consultants.

I don't know if this is feasible, or even already being done, but I think it's an interesting idea. There must be thousands of small businesses looking for “expert” advice but unable to afford the huge cost of an IBM or a PWC (and let's face it, the profit from these projects wouldn't cover one of their expense bills!). At the same time, the “lone-ranger” consultant model seems to lack a number of the benefits of a consultancy firm.

Something for me to consider when I get back from India ;-) Comments and thoughts, as always, very welcome...