…the poet laureate of India, Rabindranath Tagore penned these lines. These are the lines – with one modification towards the end – I wish to leave my readers with as we bring this year to a close. It was a forgettable year by any standard but let this poem, translated into English by W.B. Yeats in 1910, rekindle hopes of a significantly better world when we wake up tomorrow.
Where the mind is without fear and the head is held high;
Where knowledge is free; Where the world has not been broken up into fragments by narrow domestic walls;
Where words come out from the depth of truth; Where tireless striving stretches its arms towards perfection;
Where the clear stream of reason has not lost its way into the dreary desert sand of dead habit;
Where the mind is led forward by thee into ever-widening thought and action
Into that heaven of freedom, my Father, let my country world awake.
I thank all my readers as much as I gratefully acknowledge those who commented the blog and linked my thoughts back into their own writings. I wish you, your friends and families a very happy, lucky, prosperous and peaceful new year.
Some trends I see either emerging or solidifying in the year 2009. I have restricted myself to only areas of financial markets/economics and software – the two domains that professionally interest me
- Touch will become the most important metaphor through which computer hardware will interact with humans. Mobile phones have already evolved to it and now laptops, desktops, media players and media/game controllers will catch up. A vast number of application software will have to be rewritten to better leverage this touch-trend to provide a completely different user experience than before. The lead in this will be taken by software newbies because legacy software applications would not have been architected to handle this stage of evolution
- Cloud computing will truly open up Software as a Service (SaaS). Traditional businesses that never contemplated this business model will warm up to it. Data Center Management skills will suddenly be in demand
- Remote communication paradigms will continue to evolve dramatically, especially in countries where production and consumption (of any kind) is widely dispersed. Personally, I would be extremely keen to see this evolve into a robust telemedicine infrastructure for India
- User generated content, crowdsourcing and such other metaphors of freely associating a larger population of professionals to embellish what earlier would be done internally by a handful will gain traction. Focus on cost containment will drive this phenomenon forward and some companies will evolve truly clever mechanisms of exploiting this trend, finding applications to functions that will be truly disruptive
- 2009 will be no better than 2008 in terms of financial asset performance. Excesses, inflated both in terms of intensity and duration, will take substantial time to unwind. Irrationally exuberant optimists may call for a V shaped recovery, but that is not coming. The much ignored asset class – Treasuries – will provide the best returns (both in absolute terms and most definitely in the risk-adjusted measure) amongst all asset classes.
- The United States of America will undergo changes that will impact its very fundamental structure – mostly the economic mindset at a micro level. The nation needed a wake-up call and the current crisis has provided it. The solid foundation of the economic and entrepreneurial structure of the country will more than adequately ensure that it comes out stellar after the storm weathers out. Pulp economists extrapolating historic growth rates and wealth creation statistics to hypothesize that India/China will overtake the USA as an economic power will have to revisit those flippant analyses. Throughout 2009, we will see the USA metamorphosizing itself through impeccable fiscal and economic prudence, something that the current generation never thought it will have to practice but will thank this crisis two decades down
- Two businesses will be redefined – one positively and the other negatively. Exchanges that trade financial instruments will see a move from OTC instruments to exchange traded instruments, which will impact their businesses profitably. Additionally, these exchanges will spend a fair amount of resources in building investible indices, which will become their high-margin products. On the negative side, Credit Rating Agencies with their battered reputation will see a lot of competition from hitherto unanticipated quarters. The buy-side will either invest in or will copiously consume services from independent agencies providing credit-rating-like services but without the conflict mired association with the sell-side
- Mainstream media companies will start on their journey to oblivion. Ad revenue, subscription revenue will move to the blogs as the difference between mainstream media and the consumer media will be further blurred. Media houses know this as much as everyone else does but their very business models – and mindsets – are very deeply buried in the past for the organizations to quickly adapt to this nimble challenge.
Diminishing (if not disappearing) customers, cost scale-backs both inside the firm and outside, a severely choked supply chain of raw material (money) and an equally choked pipeline – pretty much a representative sliver of the current day investment banking business. Even-yesterday’s true-blue business in the capital markets is struggling to just make its ends meet today. So besides eating a bit of the humble pie, what can these banks do, at strategic, tactical and operational levels, to not just weather this storm but emerge stronger once it has weathered off?
Strategic: Explore new business models: The traditional business of highly geared balance sheets used to create opaque assets is over. Not explicitly, but the Glass-Steagall Act has made a quiet comeback as investment banks mimic commercial banks. All this however does not mean that the business of investment banking is dead – companies will still need money and deal-making will still need to happen. That said, the focus is definitely going to move to favor the boutiques and niche firms that bring about a focused capability model – at least in the short to medium term. The surviving bulge-bracket firms too will move to create sector specializations within their generic asset-class driven organizational structures to counter the boutique model. Doing this analytically will be the key, as the management goes about understanding volume and transaction momentum multi-dimensionally across sectors and asset classes and overlay the internal data with macro-economic prognoses.
Tactical: Explore new revenue opportunities: Decisions at the tactical level will have to be much more analytical for the simple reason that resources will be scarce and competition for them very high. During sunshine days, investment banks splurged on information systems, both internal information and external market data. Smart banks will seize this opportunity to bring the information from these two types of systems together to create a much richer intelligence infrastructure for the decision makers. Additionally, strategy department of banks must now look around the industry more than ever before and tools that allow them analyze market share and wallet share will significantly enhance the bank’s ability to both position its products and services as well as accurately target sectors (could not help a bit of unabashed self promotion – check this really neat thing from Thomson Reuters). Significant amount of internal information in a bank resides in memos and e-mails. Besides being amorphous, such information has been traditionally neglected by information managers who failed to create actionable insights from such unstructured content. This is the right time to correct that huge wrong. Internationally diversified investment banks will realize the benefits of disproportional liquidity and possible decoupling of either economies or sectors. However timely dissemination of geo-dispersed information and creating a global, collaborative information system will still remain a challenge for the banks
Operational: Do more with less: Some amount of downsizing is inevitable but it is worthwhile to remember that now is the time to excel in service quality and deepen client relationships. Operational decision makers in investment banks – mostly relationship managers and Associates – will demand that information intelligence is delivered quicker and in a much more actionable and interactive manner than ever before. Analytics like understanding common attributes between most profitable customers and then creating such clusters across other decision making dimensions will result in more efficient targeting. Pricing pressure is inevitable in such troubled times so banks would want to proactively investigate existing fee structures conjointly with other dimensions like sectors, geography and asset classes to possibly detect under-pricing and over-pricing situations and react before the competition – or worse – the client does. Collaboration will become a huge advantage for banks that are well diversified – across sectors, asset classes and geographies. Information system architects must take cognizance and build systems that allows the banks to reap benefits of collaboration synergies.
2008 has been the annus horribilus for investment banks and 2009 does not promise to redeem any of that pain. On the other hand the banks who had the going just about as stressful as an afternoon at the Hamptons would witness Darwinian pressures to evolve into better information processing and assimilating machine than what the easier times forced them to be. And when the tide turns, these banks will be the ones leading the pack.
- Yes, we’d love to be able to provide that kind of flexibility but our technology platform doesn’t permit that
- Can you explain one more time – slowly please – the exact purpose this technology platform is serving?
- Our method of building products may extend our time-to-market but it certainly brings about better predictability
- I don’t remember when a customer got terribly interested knowing we will get him his must-have product at 8:30am of 19th September of 2010
- Since a lot of our engineering is out-sourced, and the vendor is extremely strict about change-control, we will have to be very cautious about scope-creep (and we will not entertain any bugs versus features discussions)
- Looks like the out-sourcing vendor runs a much better ship…
I don’t know if it is just a problem with me, but I tend to either roll my eyes or shut my mind off the moment I hear these or their cousins. It is alright for an organization to exploit internal efficiencies but unfortunately the zealots who are given such powers turn up as autocratic commander-in-chiefs and completely forget that fraternity for which the company exists. Customers are not incidental to the business, no matter how tightly one would like to run the organization internally.
My friend and colleague Mahesh CR takes a more encompassing (and I daresay circumspect) look at this malaise.
- While hiring a choir singer, you ask the person to sing a carol
- While hiring a chauffeur, you ask that he drives you a couple of miles around town
- While hiring a programer, you ask that the person writes code in the language in question to solve a given problem
The job of a hirer is to essentially make good to excellent guesses of posterior probabilities, almost in the same style as Bayesians. Like in Bayesians, the quality of the P(A/B) (read as “probability of event A given event B) is very dependent on how the two events are correlated in the cause-effect paradigm. In all the examples above, the relationship is very strong a-priori and that is why the tests are a damn good measure of how the incumbent will shape up in the role that is being tested for (little chance of a programer turning out to be Joel Spolsky when he can’t write a recursive string reversal algorithm in C++).
For jobs where the a-priori estimation is inadequate (or non-existent) the challenge of establishing a posterior probability becomes onerous.
So what does one look for when hiring a good Product Manager? In all honesty, I do not know the answer even after spending close to a decade in the profession and hiring several superstars (and the occasional disaster) and rejecting many after long interviews (some of who must have gone on to become superstars elsewhere). However, here is a rough checklist that I tend to carry mentally
- Throw a qualitative problem, deliberately kept vague and observe how the person proceeds towards deriving clarity out of it. Watch out if he makes conclusive assumptions early up (that’s not good. Probability often equal to that of coin-flip). Product definition in the early stage is most definitely very vague and a good product manager has to navigate through this and elicit (sometimes create) clarity
- Find a problem that has elements of cross team communication (doesn’t have to be a workplace problem) and see how the incumbent proposes to proceed with it (like, ask the person to chalk out a plan to communicate the Wall Street bail out plan to Congressmen, to the auto-union at Detroit and to the West Virginia Coal Association to arrive at consensus)
- Get a sense of his bias-for-action. I have often encountered the arm-chair product manager – plenty of theory, powerpoints, boxes-and-arrows and flailing arms – nothing at the end of the budget cycle. It is easy to spot them – they’ll have less verbs like “delivered”, “achieved”, “built” etc on their resume.
- Ask them about a product (preferably software) amongst the ones they use yet find the most disappointing and then engage them to discuss ways of improving the product. Look out for practicality of the ideas, the incremental steps taken to build out the final stage and if the person has an idea of the final stage to start with
- Once the above is done (or while on it) ask the aspirant to create marketing plans for each stage or the final product. The smart product manager always has an eye on the final market value-proposition and should mentally calibrate the product roadmap (the increments) to fit a commercial differentiation proposition
Good luck with the hiring and caveat-emptor just in case you land up a disaster after all this. People still manage to game the interview process.
There are different ways of telling a story. Each way has its own media associated with it. A single story can be articulated through different media with varying effects. Films provide a dynamic audio-visual experience, comic-strips only static visuals, podcasts only audio and the print media places enormous responsibility on the author of careful and detailed articulation. For the same story to be told, the content and presentation varies significantly depending on the choice of the medium of expression.
Brings me to Requirements. I have seen people use Word documents, Excel sheets, Visio diagrams, Powerpoints to provide requirements. Unfortunately not much thought is given while choosing one medium over another. There is no reason why a Use Case be written in Excel, or a tracability matrix crafted in Word. Many organizations create the artifact definition for Requirements but fail to mandate the medium of expression. It may sound trivial but believe me, it is not.
Here is how the thought for this post got triggered. I had made my mind to write about how offshored captive units of global companies struggle to fix their reporting relationships and how this impacts the organization and the employees. It then occured to me that it will be a very different way of expression if I decided to write that post as a presentation. Here is the output (some fonts got messed up, some animations were lost). Very different from what a blog post on the same topic would have looked like.
A fair amount of software products – I would dare say about 70% – have front ends (or User Interface, UI, if you will). Narrow that list to application products and the proportion possibly goes up to about one hundred percent. The final output of the product development process is also a great artifact to start off the initiative. Here is how it moves
The above diagram should be self-explanatory. If your product relies on a visual impact and superior usability as core differentiators then please do not leave that job to your developers. Visual Engineers and Usability teams usually create two important artifacts – a visual representation (from 2) and a fully or quasi-clickable html mock-up (from 4). Do not throw these away. Use the HTML mock up to create an early adapter program (pre-alpha) for your product and create a feedback loop back into the Usability team. Show the clickable model to senior sales folks to excite them about what is coming up as a salable product down the road. Plug the Photoshop based static output into presentation and other non-interactive product collaterals.
Start with the finished product. It is a fantastic place to begin.