Friday, December 11, 2009

Managing Innovation and Growth

This is my personal experience in managing innovation, growth and collaboration networks

CASE ACCENTURE FINLAND - CREATING A KNOWLEDGE NETWORK COMPANY

This story is about managing growth of Accenture Finland from 44 people to 1000 people during 1994 - 2007. The backbone of the growth was based on global collaboration and networking as well as competence management and continuous innovation. It was all about individuals and teams working together to create more value by utilizing content, communities and networking technology. We did not call it social media in those days but that's what it was all about. The focus was much in internal collaboration first, but expanding later to customer and partner collaboration.

Andersen Consulting was established in 1989 as a technology consulting division of the accounting firm Arthur Andersen. Andersen Consulting was renamed to Accenture as a result of splitting the two companies in 2001.


FIRST WAVE OF INNOVATION STARTS - IN SEARCH OF GROWTH

When I joined Andersen Consulting (later Accenture) as a CEO in Finland in 1994 the company was focused on delivering customized software for banks and industrial clients. Less than 50 employees of the company had mostly background in software engineering and/or economics. The revenue growth had been flat for a couple of years and the tight financial situation in the market did not help. Competition was offering similar services with discounted prices. There was a need for change.

CREATING NEW COMPETENCIES AND FIRST COMMUNITIES

It was soon clear to us that we would need to differentiate from competition. We would also need to raise the bar and start selling our services to business management rather than client IT managers only. I created a parallel role to my CEO position as a team leader to establish Change Management services. My background as a Training Director at Digital Equipment and a as a Laboratory Engineer at Helsinki University, Department of Psychology, was inspiring me to try something new.

In those days Jouko Hannus had written a book on process management which also gave me good ideas on how to expand our business offerings. I hired Kaj Nordström, my old friend, colleague and ex HR Director at Digital, to help me in establishing the Change Management Services team. Kaj was also coaching us to create teamwork culture for our company.

In the early days our Finnish office with less than 50 people had no real need for social media. People were called to cafeteria when there was something important to be discussed. However, creating new competencies just locally was not so easy. Somehow we had to connect with our global knowledge.

CREATING GLOBAL KNOWLEDGE EXCHANGE ON LOTUS NOTES

At the same time Andersen Consulting (AC) had globally installed Lotus Notes software application platforms and started creating a global Knowledge Exchange environment. In the beginning, it became a huge inventory of databases that contained powerpoint, word and excel documents. Mainly it was a repository of client presentations, proposals, project documents and summary reports.

I became one of the active users of Knowledge Exchange (KE) in the Finnish office. I used evenings for surfing in the databases to find examples in Change Management and Process Re-engineering. I also joined the global community and leadership team of Change Management competence group. We had meetings in Chicago where we decided on global competency development and investment plans. Heavy emphasis was on knowledge management related activities. It was an intensive phase of re-training of myself in few months.

CREATING INTERNAL AND EXTERNAL CREDIBILITY - LEADING BY EXAMPLE

Creating new competencies was challenging locally. Engineers were not so convinced about "softer approaches with people". I had not previous experience in the field, so becoming a guru was not obvious. I "forced" myself to write articles and make public presentations. I created internal pressure through external interest. I wrote a book on "Change Management and Business Process Reengineering in practice" together with professor Göte Nyman from Helsinki University, Department of Psychology, to increase credibility and to summarize our Change Management approach internally and externally. The content of the book was based on our personal experiences with large companies and also on several case studies and presentations in AC Knowledge Exchange database.

I encouraged all our employees to write articles and make presentations in public seminars. We were tracking the numbers. In the late 90's I gave more than 40 public seminar presentations per year. In 2000 I was selected by IIR Finland as the Quality Speaker of the past decade :)

We started selling Change Management services and Business Process Reengineering actively in Finland. We created multi-client research projects with universities to increase our understanding and knowledge. We connected globally through KE with experts in other countries and brought them to Finland to meet and sell our services to clients. In two years we created four competency groups (strategy, process, technology and change management) to become a newly born company globally and locally. Our Business Integration offering was different to competition and adding more business value to clients.

THE FIRST WAVE OF GROWTH BASED ON GLOBAL COLLABORATION

We started to grow rapidly with our new service offerings from 50 people in 1994 to 300 people in 1998. We utilized KE every day for ideas, proposals and project plans as well as connecting with international experts to get their help in sales and service delivery. In 1998 we had people from more than 10 different countries working for Finnish clients. 30% of the chargeable hours were produced by international consultants. Our change management team had expanded to more than 30 people, helping client executives to establish their own change programs, teamwork culture and communication strategies.

REDUCING "TIME TO COMPETENCE" BY USING COMPETENCE DEVELOPMENT TOOLS AND SUPPORT

Our offerings started to include software packages like SAP. We did not have local experience but learning from other cases in KE enabled us to start marketing and selling. By connecting with international experts through KE we found people who helped us through network based discussion forums, expert hot-lines and examples. They came to Finland as needed to finalize the deals and project plans. They delivered also projects together with local people for clients.

We recruited 90% of the new people directly from best universities. Normally they had limited work experience but our training system together with all the methodologies, examples and other knowledge management databases made people very productive in few months. Our client teams consisted of a combination of senior and junior people to be able to deliver against the client expectations and project plans.

QUALITY CONTENT NEEDS STRUCTURE, SUPPORT AND PROCESSES

Knowledge Exchange started to become much more structured compared to the early years of implementation. Databases were supported by Subject Matter Experts who classified the content to best practices and other levels of knowledge. People were also able to ask advice through the KE Expert Discussion Forums. The questions had to be answered based on their criticality level. For urgent enquiries the answers had to be delivered in 24 hours. We created alerts and escalation processes to make sure that the system worked. Knowledge databases had tags to find relevant information based on industry, service area or technology.

ONE GLOBAL COMPANY CULTURE; SHARING KNOWLEDGE CAPITAL IS A COMPANY VALUE

By the year 1997 in the Knowledge Exchange system there were more than 3000 databases, including presentations, best practices, check-lists, consulting methodology, videos etc. The powerpoint empire was growing at a phenomenal speed.

To make it all work on a sustainable basis, the culture, leadership system, incentives had to be aligned to encourage people to share and use global knowledge. People were measured each year on how much they had contributed in the global knowledge base. We had metrics also on how much these contributions were used to win more business for the company.

Knowledge Sharing was also a way to become globally known in the company. We were looking for social credits. New potential partners (owners) were approved by existing partners in a global internet based voting system. If your contributions, presentations or comments had helped people in sales or delivery your chances to get supporting votes were greatly improved.

SECOND WAVE OF INNOVATION - BECOMING THE eCOMPANY

In 1998 internet consulting started to grow rapidly in the world. We almost missed this opportunity because we were so engaged with SAP and other traditional consulting services. Our growth started to slow down fast. We had to re-train all our people in Finland and globally. Internet changed also the way how applications were built. The linear waterfall models were replaced with iterative development models. We had to re-invent our methodologies, tools and best practices. We created hundreds of videos and e-learning offerings. More than 50% of the global training was converted into network based courses. Training became compulsory. We tracked the course participation and tested results. The successful passing of required courses was a prerequisite for a promotion. We were becoming an internet consulting company in few months.

In the end of the year 2000 we were number two internet consulting firm in the world according to IDC, just after IBM. In Finland we were 400 people. We created a mobile internet competence center in Helsinki. We started to build major portals for Finnish telecomm, media and financial companies. We integrated WAP phones to Siebel, SAP and other enterprise applications.

We decided to recruit 100 new people per year. We were once again using Knowledge Exchange to bring new global ideas to clients. We connected with global experts who came to meet Finnish business executives to brainstorm and create business opportunities with internet. Almost 40% of the all chargeable hours for Finnish clients were generated by international consultants. We were also sending many Finnish people abroad to serve global clients.

It all started to get somewhat wild. Clients were queueing up for our services. We selected the best clients. The others had to wait for their turn. Making business had never been so easy. We used Knowledge Exchange to share our greatest ideas. We made proposals from a fast pipeline. New projects were started daily.

ROLE BASED PERFORMANCE PORTALS - RIGHT KNOWLEDGE - AT THE RIGHT TIME

As the business climate was extremely hectic, we had to re-invent our Knowledge Exchange environment. The problem was that our databases had grown exponentially and it became harder and harder to find relevant knowledge fast. We created new version of the role based portals, where people could get more filtered and relevant on-line training, knowledge and expert support, according to their just-in-time business needs. For example a project manager could specify the industry, type of a project and the phase of a project to get relevant support to his/her current needs. This filtering by role and business need made a big difference to traditional search based knowledge environment.

This platform became a base for our Human Performance Portal offering that we started to sell to our clients as well. We delivered several business performance portals for our clients. They were able to increase the productivity and shorten the the time to competence in their critical workforces by utilizing network based internet solutions and by creating collaboration environments for their people.

COMPETENCE AND FUTURE WORK MARKETPLACES - PUSH AND PULL

We started creating on-line, transparent competence profiles for our people. We also listed our sales pipeline and future projects in our network. Project managers were able search people, based on their competencies, calendar availability and future work interests. At the same time people were able to see what kind of projects there is in the pipe-line and contact the responsible project managers and sales people. This helped our utilization and people satisfaction greatly. The best knowledge was matching the client needs.

That helped consultants to find experts and people with previous experience and competence on the same type of issues that they would have in their client projects. Our scheduling system was integrated with competence profile databases and eScheduling became the heart of our production system.

NEW GLOBAL BRAND IN THREE MONTHS

We changed our name from Andersen Consulting to Accenture in 2001. With the court decision we had to stop using Andersen Consulting brand as we disintegrated from Arthur Andersen. We were given three months to find a new name and run our brand change program. It was the world's biggest brand change program in such a short timeframe. With 70.000 people, 20.000 knowledge management databases in 178 offices and 46 countries.

In 2001, according to I.R.O Research Accenture Finland was the most respected IT services consultant and systems integrator. We were number four on the most wanted employer studies. I nominated Fun-managers in the company to keep up the great spirit. I played guitar in the company band. Everybody was rockin'...

IPO WAS OUR ULTIMATUM OF THE GLORY

Accenture was listed in New York stock exchange in July 2001. Life was like a movie. We hired all the good people we were able to find. Partners became millionaires. We thought, we were the best consulting company in the world. We were expensive. We were expecting to have 600 people in Finland very soon.

Cold shower started in 2002. The bubble bursted. Banks and telecomm companies stopped new development. Internet and mobility development was frozen. Consultant was not a popular person anymore. The vendors were put in tough tender process and prices were cut down by 20-30%. Nobody wanted customized projects. It was no fun to be an internet consultant anymore.

Many internet companies went bankrupt. Clients started an outsourcing boom. IBM and TietoEnator signed major outsourcing deals. Accenture had very little outsourcing experience in Nordic. I was appointed to Accenture Nordic CEO in the end of 2002. It was a time for a personal change. In the middle of crisis, as a Finn, I had to make also our Swedish executives excited about the new future :)

TIME TO LISTEN AND TO BECOME A PREFERRED PARTNER

After so many easy and successful years in business it took some time to learn to listen again. We had to be humble in front of our people, clients and business partners. It was a hard change. From proud and sometimes even arrogant behavior to something much more collaborative. We had to learn to ask for help from outside our own organization. We started to re-design our homepages to become marketing engines. We created channels to get more client feedback. As most of RFPs were sent to packaged software vendors, we had to become their friends and preferred business partners.

INTERNAL CULTURE SHOCK

We had to lay-off hundreds of people in Nordic. The first time in history. Very good people and our friends. It was a culture shock. We had local face-to-face meetings and several discussion forums to explain the background and to find new ideas. In few weeks we started to build the Nordic Transformation Program. We decided to stop travel to save costs. Most of our meetings had to be transformed in virtual format. We started using discussion forums, chats and video conferencing daily.

THIRD WAVE OF INNOVATION - FROM INTERNET CONSULTANT TO OFFSHORE OUTSOURCING PARTNER

We decided to become one of the leading outsourcing vendors in Nordic. To be able to cut our prices we also decided to establish offshore centers in India, China and for Nordic clients also in Riga, Latvia. We had to learn to sell 10-100 million euro deals to top management. We decided to establish great business relationships with SAP, Oracle and Microsoft. We decided to establish shared support centers for Nordic support operations like HR, Finance etc.We had to create new version of collaborative systems to support all our business processes virtually. Lotus Notus was replaced by Microsoft applications.

STARTING TO CREATE THE GREAT PLACE TO WORK

We established a future leaders, "shadow", management team which was working in parallel with my traditional management team in Nordic. Future leaders consisted of young potential leaders. They were given open information on our company status and they were expected to come up with their fresh ideas and recommendation on actions. They used collaborative systems in each country to engage people in innovation and discussions about our future. Many of their ideas were excellent and those were implemented. We started several multi-country task forces which came up with proposals for new management concepts, tools, processes etc. We had often parallel management meetings for two days, where future leaders were able to challenge the existing leadership and bring up new views and proposals. It was building a base for a truly collaborative culture.

MEASURING LEADERSHIP BEHAVIOR CHANGE

After our cost cutting actions and with less leaders in the organization, we had to change our leadership practices from daily management of tasks to more empowering people in their work. We were improving the role-based portals to better match the real needs of consultants. We started 360 degrees performance and behavior measurements for leaders. They had to pass certain level of "behavior performance" to be eligible for salary increase, despite of their great sales or financial performance. We "forced" the leadership change to happen. Leaders transformed from managers to coaches and knowledge network builders. People were supported on the field by using on-line training, best-practices, check-lists, peer networks and coaching support when they needed. People became their own masters of their performance.

TRANSFORMATION RESULTS

Our transformation program had clear metrics, schedules, mile-stones, responsibilities etc. We were monitoring the progress in each of the Nordic management meetings. We had to behave as we coached our clients to do :)

Once again, we were training and supporting people in new things. How to sell 10 million euro contract? How to build a five year partnership program? How to sell with business partners? We were sharing daily our learnings through internet. We were asking advice from those who knew better.

                  Our sales in 2003 in Nordic was 340 million dollars.
                
                  Our sales in 2004 in Nordic was 740 million dollars.

Our offshore offerings included daily co-operation through internet to sell and deliver services to clients. Virtual delivery processes became "business as usual" in scale.

Our workforce in Nordic changed from 2400 people in 2003 to 4000 people in 2006. That number included 1000 people in India, China, Riga and other offshore locations.

Accenture Finland became a 1000 people company. It has been a winner (among big companies) four times (now in 2010) in Great Place to Work competition in Finland run by Great Place to Work Institute. Collaboration, teamwork, trust between management and employees has become part of the genetics of the company.

Epilogue

Some people may say that this was not a real social media story because of using Lotus Notus, Microsoft Sharepoint and because of so much internal focus.

However, as a result from our global collaboration on content creation, communities and by using Lotus Notes and Microsoft tools we were able to:

Grow faster than competition (in many years 20-50% per year, when at the same the average market growth was 2-3 %). This was mainly due to the extensive global networking, sharing knowledge and experts.

Maintain very high level of  utilization, which had direct impact on bottom-line

Find and bring new global innovation proactively to Finnish clients to sign deals without competition

Sell and deliver projects in areas where we had very little local competence

Have best experts in the world available for our projects by virtual networking

Change our competencies faster than any competitor by using knowledge networks

Cut down the "time to competence" for new recruits

Save on our travel cost with direct impact on bottom-line

Connect with our people regardless of time and place through network based discussion forums

Have very inspired workforce which was very committed to global teamwork

To me this was all about making better business. We used global collaboration and networking solutions daily to make it all possible. Was it Social Media or not...not so important after all...

END