Strategy and Tactics – Page 206 – IS Survivor Publishing

A metaphor gone bad (first appeared in InfoWorld)

True story. The scene: Northworst Airlines. Time: 10.5 minutes before flight time. Players: yours truly and a gate agent. “You needed to be here earlier. We’ve reassigned your seat,” said the agent.

“But your brochure says if I’m here 10 minutes before flight time you guarantee a seat,” I protest.

“It’s 10 minutes before flight time right now,” he responds, pointing to his watch.

“So how could you have reassigned my seat?” I ask. “I got here three minutes ago and waited in your line, and still started talking to you before the deadline.”

“You needed to get here earlier.”

When I die, I hope to thank the good lord for making my life a continuous psychedelic experience. Until then, let’s continue our discussion about real customers, internal customers, and the difference.

As you may recall, last week I proposed that “internal customer” is a metaphor that’s gotten out of hand. It’s useful for process design, because that discipline requires an understanding of the inputs and outputs of a system. As a guide to behavior, though, it’s pretty questionable, as anyone who’s been on the receiving end of “I’m your customer so you have to do what I ask you to,” can verify. (“Yeah, buddy. I have 2,500 customers and I have to obey each one of you, plus my boss,” is the usual, subvocal response.)

I learned the right attitude about all of this one week after joining Perot Systems (I generally avoid mentioning my employer in this column, but credit where credit is due). Jeff Smith, who takes care of our “World Area Network” and I were discussing how to link Minneapolis into the company WAN, and I had proposed an alternative Jeff found suboptimal. “Bob, I’m here to help you succeed,” he said before patiently reiterating his preference for using the same kind of frame relay link everyone else uses.

Bingo! If I were Jeff’s customer, he’d have given me what I asked for. That’s not his job. His job is to help me succeed, and that’s an entirely different spool of cable.

The traditional role of Information Systems has been to help the rest of the company succeed. That’s a wonderful role to have. We get involved in everything the company does with an eye to helping the company do it better. That’s a whole lot more satisfying than responding to orders from internal customers, don’t you think?

The process of resolving this issue leads to another useful insight. We humans have an instinctive urge to categorize, and that, in turn, leads us to apply labels to everything we see, and when we’re categorizing the unfamiliar, we try to draw on similarities with the familiar. So physicists had a centuries-long debate over whether to categorize light as a wave or a particle, leading to the famous “wave/particle paradox.”

No paradox at all, explained Albert Einstein. Light is its own kind of stuff. It has some properties similar to those of water waves, others similar to those of pellets. The “paradox” just shows our own intellectual deficiency coming into play.

Physicists understand light – actually, all electromagnetic radiation – by developing descriptions, in the form of mathematical equations, of its behavior. They use those descriptions to predict how electromagnetic radiation will behave in whatever new circumstance comes to mind, which in turn lets engineers design new and better optical devices, like the new Digital Video Disks (DVDs) which many predict will supplant the older, still-pretty-clever CDs and CD-ROMs we’ve been using for the last several years.

And that’s our lesson for today, class: worry less about attaching labels to classes of people, and more about describing the behavior you do see and prescribing the behavior you want to see.

Who defines value (first appeared in InfoWorld)

The collapse of world communism means we no longer get to hear political candidates refer to one another as “commie pinkos”, “communist dupes”, or the ever-popular “Marxist”. Now, we get to hear about the character issue, the term “liberal” is bandied about as an epithet, anyone we don’t like becomes a Nazi, and everyone involved seems to be searching for issues worthy of an attack on their opponents.

I miss the old days.

One of the principle differences between Marxism and Capitalism is their theory of value. Karl Marx proposed the Labor Theory of Value, while Capitalism promotes the Market Theory of Value.

The Labor Theory of Value, typical of Marxist economics, has a curiously ethical flavor to it. Value, says Marx, comes from the effort needed to transform raw materials into finished product – that is, it’s the workers who create value.

Capitalism, pragmatic as always, says that the market, through the dynamics of supply and demand, establishes value. The market, of course, is nothing more or less than the aggregate behavior of all actual and possible customers. Customers define value in a capitalist economic system.

Customers define value, which irritates movie critics (who usually sneer at anything lacking subtitles or including an explosion and car chase), computerphobes (who complain about feature bloat, claiming nobody uses program options I use every other day), and software engineers who deride those who care more about features than internal architecture.

The idea that customers … real paying customers, not “internal customers” … define value is one of the three great rules of management. (The other two? Form Follows Function and Align Everyone to a Common Purpose.)

I’m not a big fan of the internal customer concept. It strikes me as a metaphor that’s been extended past its useful purpose.

When you’re redesigning a process, you need to look at who sends work in and who receives the work you send out. Why? You define the specifications for the work that comes in to you, and the recipient of the work you create defines the specifications you use to define your product. In that sense, whoever receives the work you create is your customer, whether it’s an employee in your company, a department in your company, or an external customer.

So far, so good. “Internal Customer” is a useful shorthand for whoever creates the specifications. Unfortunately, nobody can ever seems to limit the application of a metaphor, so in short order, people started to believe that internal customers are always right, just like external customers. Some people in accounts-payable departments even believe vendors are their customers, since vendors receive the work they create.

Internal customers lack the defining characteristic of real customers. They don’t pay you. That means they don’t define value, nor does a transaction with an internal customer give you the wherewithal (money) to provide the service they ask for. And that, in turn, means they’re not always right.

The internal customer metaphor also violates the third great rule of management: align everyone to a common purpose. It takes companies to the opposite extreme, inducing severe myopia. When employees believe in internal customers, they look no further than the needs of the next person in line. Only a few employees worry about the needs of real paying customers.

Here’s what I recommend as an alternative: everyone in the organization should understand their role in providing value to real paying customers – the big picture. If you’re in Accounts Payable, you’re trying to minimize overhead while maximizing cash flow, thereby helping sell products and services at an affordable price. Human Resources? Help managers develop a motivated, skilled, high-morale workforce.

Information Systems? How does Information Systems provide value to real, paying customers? Traditionally, we do so by helping everyone else in the company be more effective in their roles. That, in turns, helps the company increase the value it can deliver.

The world, however, has changed. Now we have a more direct role to play. Have you started to play that role?