Steve Shu on Management, Consulting, and Leadership

Candid Interview With Will Weider On Consulting (From A Customer Point Of View)

This past week, I had the opportunity to speak with Will Weider, CIO of Ministry Health Care and Affinity Health System, about using consultants. His perspectives are interesting because they are from a customer’s vantage point – not from a consultant’s viewpoint. Will Weider is author of the one of the earliest CIO blogs on the Internet, the famed “Candid CIO” blog.

Steve: Will, thanks for talking with me. As a management consultant myself, I’ve approached you for a “candid” view on using consultants. I am interested in constantly improving the practice of consulting and management. Hopefully this interview will shed light for both consultants to improve their practices and peer organizations of yours to improve their selection and use of consultants. To that end, when do you look to consultants, and what do you look for in consultants?

Will: There has to be a specific reason for using a consultant, and my philosophy is to use consultants as little as possible. A couple of thoughts immediately come to mind. The first is that consultant costs can give me heartburn (e.g., when comparing loaded hourly rates of internal staff against the consultant). Now as context, it is infrequent that my organization does not have the skillset to either get a project done or solve a particular problem.  A second perspective is that I have had some disappointing consulting engagements where the results have fallen short of my expectations. Part of the blame may fall on the consulting firm which may oversell themselves in order to get a deal done. Some of the missed expectations may be in part that the buyer has elevated expectations when using a consultant.

Steve: Do you have any thoughts on aligning an organization and its expectations when using consultants?

Will: I’ve found that the worst time to use consultants is when my organization is saturated. A client organization needs capacity to bring the consultant on board, ramp them up, manage them, provide feedback, etc. As an example, if I have estimated a project at requiring 100 hours to do internally, then I may need to allocate 125 hours when accounting for budget and overhead of managing the consultant. As far as aligning expectations, I have mostly seen consultants provide incremental value as opposed to exponential value and miraculous benefits as marketed. Consultants can get oversold on their value proposition too easily. I also wanted to note that some consultant agreements have unacceptable terms, rivaling those of my software vendors.  These include such terms as up-front payment, termination clauses and advance notice requirements, etc. Where these terms go in the new environment we are in is still to be determined, but they have to be more client-favorable.

Steve: What kind of advice can you provide on using consultants?

Will: For me, the best time to use a consultant is when you need a 3^rd party advisor. For example, suppose there is a big, multimillion dollar project going off course. A consultant with the right background can provide an independent project audit. Our needs are aligned when using the consultant in this manner. We need a specific skillset (perhaps not a scarce resource), we don’t have time (e.g., because we have 60-70 projects going on), we need a fresh look, and we need an independent view. This is the perfect type of situation for a consultant because the scope is well-defined, the scope is narrow and the timetable is short.

Steve: Great insights, thank you. Changing gears bit, I think readers may be interested in your views on the federal stimulus package and its impacts on consultants.

Will: The package has clear intent, but everyone is still waiting for the clinical IT requirements to be defined on both the medical group and hospital/ambulatory side. Less than 2% of hospitals have real Computer Physician Order Entry (CPOE), so once the requirements are defined, there may be a flood of work for implementation consultants with CPOE and specific Hospital Information Systems (HIS) expertise. I’ve estimated tens of millions of dollars of eligibility for our provider organizations (medical groups and hospitals). We are working with a number of vendors and suppliers to plan for various scenarios so we qualify for these funds and deliver on the President’s vision for a more efficient and effective health care system. It’s all a new process – I’m not sure that anyone has an “inside track” as to how to get these funds.

Steve: Terrific info. Let’s change gears again and cover social media. How have things changed since 2005 when we first met via the blogging world?

Will: These days I use both Twitter and blogging, although there has been some shift towards using Twitter. I will say that consultants that I use have connected with me via social media. Some of these consultants demonstrate their expertise to me for free before I use them. These consultants may be those that are helping me with technology, preparing for swine flu impacts on my organization, or other dynamic areas. Consultants that are confident in their abilities to provide value are not afraid to pursue either risk-free or non-traditional models for engaging me.

Steve: Will, this has been a great dialogue, and I appreciate your candor for the benefit of the business community. Thanks for your time.

Will: Steve, thanks for the opportunity to be interviewed.

Will Weider is CIO of Ministry Health Care and Affinity Health System, and his blog is at the Candid CIO at http://candidcio.com.

Steve Shu is a management consultant focusing on organizations that use technology, and his blog is at http://steveshu.typepad.com.

For My Blog Diary: Whirlwind Notes On Blogs In 2007

For a snapshot of what I am sensing in 2007:

• Growth in blogs slowing, growth in blog posts slowing (and mainstream media more in balance and cognizant of blogs)
• Corporate blogs growing, but many companies still on the fence with no plans to use blogs (and even if they did would they be effective?)
• Companies seem much more aware of monitoring blog frenzies (e.g., iPhone, Sprint)
• Newer web constructs like Squidoo growing (but does the average person have a clue about this?)
• Personal attention crash looming (if not already here)

Compare this to what we saw in 2003-2004 and the rise of the blog in 2004.

On "Busyness" In An Increasingly Global And Technology-Oriented World

It's results that matter - not activities.

That statement encapsulates a "widely-held" management perspective that managers should evaluate workers based on the effectiveness of output produced and not by how much they are working. But is it such a widely-held belief? Dr. Andrew McAfee writes in an older post (and in the context of E2.0 technologies such as blogs, wikis, etc.):

Companies that are full of knowledge workers and that have built cultures that value busyness face a potentially sharp dilemma when it comes to E2.0. These companies stand to benefit a great deal if they can build emergent platforms for collaboration, information sharing, and knowledge creation. But they may be in a particularly bad position to build such platforms not because potential contributors are too busy, but because they don't want to be seen as not busy enough.

Dr. McAfee's post made me back up and think more generally about busyness and cases such as the following:

• where managers use instant messaging and presence to monitor whether employees are at their computers (as a proxy for work activity)
• how those in Western cultures may tend view someone just sitting at their desk and thinking as being lazy and unproductive whereas those in Eastern cultures may potentially view such people as being productive
• where consultants or analysts generate tons of paper or analyses (and which may vary by geography), but fail to tie things together into a set of cohesive key learnings or recommendations
• how some workaholics may criticize or think less of the Levis 501 worker types (those that line up at 5:00pm and leave at 5:01pm)
• where salespeople are viewed as wasting their time by sending cute emails to people or talking constantly about non-work matters with colleagues in their network

So I dunno. It seems plausible that busyness might be valued both to the detriment of productivity and with insufficient respect for technology limitations and global cultures. Are times and contexts changing?

World Wild Web

Some of the wildest technology news I noted from the past year:

• Green glowing pigs
• Researchers slowing down light with possible usage as storage technology
• 500Ghz frozen computer chips with the possibility of 1 Terahertz computer chips

The last one really hits close to home for me. I remember when I was a younger engineer designing computer chips perhaps seventeen years ago or so when state of the art chips were running at like 33Mhz. At the time, I recall that the DEC Alpha chip was running at like 50-60Mhz and people were saying that it was pretty much impossible to go faster. The clock signals simply couldn't propagate fast enough or something like that (basically a limitation of physics). Well I guess we were wrong about technology progress slowing down. To put things in perspective, 1 Terahertz equals 1,000,000Mhz.

So as a message to those young engineers out there, in less than two decades one can see a tremendous amount of change in technologies. But more generally I suppose, in that period of time a lot can change in life too. Makes me reflect upon the kind of life we want to leave for future generations.

Edit (2/15/07): And as another technology one, I don't if some people remember the early nineties. The World Wide Web was just developing then. I think I remember someone showing me the web, and there might have been something like 2 or 3 websites out there (well perhaps there were only a few interesting ones out there). No graphics at all from what I remember. Maybe a dozen hyperlinks or something. Now were are at a point where there are tens of millions of blogs out there, not to mention websites. Wild.

Nortel CTO Starts Blog

John Roese, CTO of Nortel, launched his Nortel blog earlier this week.

Update (1/26/07): Nortel also placed a video on YouTube.

For My iPhone Diary

The sneezers are singing the praises of the iPhone today:

• Om Malik (communication and telecom blog) here on the end of an era (or mark of a new era) and here on form factor and packaging
• Mark Evans (Canadian telecom blogger) here
• Paul Kedrosky (finance, VC, and tech blogger) here on capital market reactions of Apple, Nokia, Motorola, Palm, and RIM/Blackberry to iPhone showing
• Matt Marshall (at VentureBeat) here
• Esme Vos (Muniwireless blog specializing in municipal wireless coverage) says here that we need more muni WiFi just for the iPhone
• Kottke (uber independent blogger) here

Some of the competitors are shrugging or more lukewarm:

• Microsoft's pre-emptive pooh-pooh
• Nokia VP's statements that the iPhone confirms convergence but that 2G device slant (versus 3G device) was a surprise

Other notes:

• Cingular has 58.7 million subscribers (see here)
• "iPhone will be available in the U.S. beginning in June 2007 in a 4GB model for $499 and an 8GB model for $599, and will work in combination with Apple's iTunes running on either a PC or Mac." (Cingular news release)
• Note that I am not clear whether the prices above are retail or inclusive/net of typical handset subsidies that are borne by carrier as part of subscriber acquisition costs. There have been reports that a 2-year contract is required, but it is still not clear whether the prices mentioned are net of subsidy.
• Apple wants to sell 10 million in 2008 (here). (Note: That's a lot of subscribers and/or channel pumping given my first bullet point above in this section and given an exclusive carrier relationship)
• Random history on iPod pricing (post includes graphs)

It will be interesting to see what the mavens of the world uncover about the iPhone specs. It looks like a cool device presentation-wise for sure. I am curious how the battery life will be though. I am used to running my iPod down on power, but I don't like running my cell phone down on power.

Updates (1/11/07):

• Paul Kedrosky on the stock market the day after and on the five biggest issues with iPhone
• How iPhone was kept a secret (article also answers the question about why they disclosed so early)
• Comments by Orange (an international operator)
• Tom Evslin on how Apple failed to reinvent telecom
• LG lookalike

For My Google YouTube Diary

My short roundup of articles and posts covering the Google acquisition of YouTube:

• CNN reports Google buying YouTube for $1.65 billion. YouTube founded in February 2005. Steve's note to self on another billion(s) dollar acquisition with a short total life as an independent company: Skype acquired for $2.6 billion. Some of my older notes here. I am neither following Skype nor YouTube that closely, but I expect that Skype had both more revenue and more of its revenue model "proven out" relative to YouTube.
• Why Mark Cuban thinks Google is crazy (and here). Too much hidden liability. Steve's note to self: The $1.65 billion "in theory" has liability priced into the deal. Additional note to self: the Kazaa damages were on the order of $100 million (? - here). Could potentially calibrate size of liability from this and other data.
• Excellent post by Susan Mernit which outlines what Google didn't buy in such a way that provides much deeper insight on Google's strategy and the leverage of the web.
• Fred Wilson's great summary of what YouTube did right - really right. Provide some micro-level insight about what can be tapped into using the web, viral mechanics, and great user interfaces (while keeping it simple).

Update (10/18/06): Also make sure to check out David Dalka's post here. Thanks, David!

For My Vonage Diary

Steve has to try out the VoIP thing because of network flexibility it offers.
Steve has some problems with Vonage service quality compared to landline. Or not?
Vonage hits 1 million lines.
Skype, the much different P2P VoIP player, is acquired for $2.6 billion.
Vonage leads the VoIP pack in terms of number of subs.
Vonage files for IPO.
Jeff Nolan tips me that Vonage is offering customers a piece of the IPO action, but Steve has already cancelled service (was it for qualified investors only though, even though "everyone" got email?)
Zoli Erdos calls the Vonage IPO like he sees it and provides some other good background links.
Vonage pricing/market capitalization seems similar to the Skype exit value.
Vonage IPO off to the year's worst start (also here).
However this turns out, it will be an interesting lesson in venture capital money, stock markets, and pure play vendor versus bundled offering versus P2P play versus ...

Update (6/1/06): Crazy stuff. Om reports on angry customers (plus some stats on number of takers) that took Vonage up on getting a piece of the IPO deal.

Update (6/5/06): Kedrosky points to and sums up the pre- and post-money valuations of each round so one can estimate how much each tranche participant "made out" with (note no down rounds). As another recent link to fill out the story, here is a recent class action lawsuit filed by shareholders.

Update (6/19/06): Vonage is half the IPO price.

Update (4/12/07): CEO resigns. Situation at Vonage goes from bad to worse.