Daily Archives: December 25, 2013

General

A Little Christmas Cheer

We want to send to all of our friends and blog readers a little cheer for the holiday season. Wish everyone a very cheerful and productive new year ahead in 2014.

TriStrategy still has a long way to grow its business or firm up its niche offerings. In the past year, it had its ups and downs, but our network of business contacts and friends are continuing to grow, as well as the audiences to our voices on business. TriStrategy has gained more experience and exposures in different industries and various IT areas. Today businesses cannot be done without technologies. The problems facing the IT industry as a whole or IT department in each different company are all very similar in nature. The real differences are at the leadership, at the people and talent level. A company who has the culture of respecting talents, adopting longer term views, with better decision-making process has the edge to move faster and further ahead.

It is also a very encouraging sign to see that people are getting more realistic regarding industry fashions. Less buzz words, more practical considerations and implementations. For example, regarding the suitability of “agile/scrum methodology” in one’s IT department, more questions are being asked. Cloud computing also runs its own adoption course with many companies setting up private clouds first before evaluating and moving to public cloud with some specific position of values.

In industry wide, mergers and acquisitions are more frequently seen; some were done strategically for the purposes of quick modernization of one’s IT infrastructure and process to transform an old-fashioned business. Automation both in business processes and IT processes are more actively discussed and planned. Mobile access and design are included in almost all solution offerings. Efficiency and cost-saving are the primary goals for many IT departments, especially when companies are facing the slow-growing US economy and fast-growing global competitions.

TriStrategy will keep its open and global mindset to lead the flow of business innovations, for ourselves and for our respectful global business clients. We will continue offering smart, effective and creative solutions to businesses’ tough problems.

Business Lessons Learnt

A Strange Coffee Culture

Perhaps no other retail business can better illustrate the small-to-big retail growth process than Starbucks – from a single store in 1975 to 18,000+ stores in 30+ years, limited lines of retail products in the offering, heavy brick-and-mortar dependency, a decent sized corporation, yet trying to grow in global scale with scattered and outdated IT infrastructures and a questionable culture.

Starbucks has long been known for its infamous “consensus building” culture. Seldom the employees who left the company had anything more encouraging to say about its culture. A former Starbucks senior officer, an ivy-league graduate with degrees from both Princeton and Yale Law School, who left the company and now heading a Seattle startup company, said recently “With such a culture, nothing can be done there.” No wonder in their IT department, almost all projects run late or over budget. Yet their culture, on the other hand, is very calculating to the pennies: Most of the coffee beans to the stores are supplied from Mexico or Southeast Asia, the cheapest areas to get those (not Ethiopia as you might think); they drive hard bargains with landlord; every employee has to report allocation and hours; and extremely penny-wise to use consultants/contractors. Inside the company everyday, everyone are running around with lots of meetings, most of them are for those “sync-ups”- almost everyone wants to know what everyone else is doing so that they can have a say. All managers, no matter how remotely related to a project, request to be invited to every project meeting. Even when they can contribute little, they want their presence known and respected. Layers and layers of “sync-ups”, but can never be synced up enough for any meaningful decision to be made timely. Of course prep after prep meetings for one senior management meetup. Every minute thing needs consensus or sync-ups. There is no accountability, only plenty of superficial niceties on the surface.

In such a culture, rarely competent people can tolerate or be tolerated. Then what left are less competent managers and people in survival mode and who do what they can do the best: fear-driven behaviors(for job security), self-serving, cover-one’s-own-butt, micromanagement, in-fights. They have high focus on money saving, but can’t see that the largest costs are right in front of themselves- the penny-wise-pound-foolish ways they run their business, organize people and make decisions.

In November 2013, Starbucks lost an arbitration lawsuit with Kraft for $2.76B for its corner-cutting contract practices. Recently, the company is also over the news on the unfair pricing over the coffee offerings in China, their fastest growing region. One can say these were the results of being cunning. Yet, most of their business are still done in the very old-fashioned manual-labored retail ways. Their IT infrastructures and processes are far from ready to support the needed global efficiency. How far can they go in today’s changing world?

Coffee business is a low-entry business. Starbucks is not the first one who invented the popular combination of “espresso + foamed milk” and they will not be the last to use it. A culture that encourages mediocre dominance, to the best, can only perform mediocrely in the long run. Everything changes and no company will last forever.