en-us http://www.keithwatanabe.net/index.php Keith Watanabe's Website http://www.keithwatanabe.net/blogs/2008/2/9/584ba03f8a7bac00f6b4b7475a9214b4.html
This article relates to an article I read about IAC and how Barry Diller wants to split IAC into more companies. His justification for the split was that each company would provide more value for their investors while being free to make their own decisions. I mean, if you look at the internet properties from IAC in the past, you'd see a number of non-related items like travel with friend invitations or match making or even ticket sales. Obviously, Diller's intent there was to become a major player in the internet by taking over some hot internet properties. But these properties all had distinct brands like CitySearch, Ticketmaster, Ask, Expedia, etc. Having them under one unified, cohesive umbrella was a challenge that Diller wasn't able to meet.

In this case, giving each company a sense of independence honestly to me properly won't make much of an effect in the end. In my employment with Ticketmaster, we had business partners within the company like CitySearch and Evite, but we didn't do much with them. There was a challenge for the employees to come up with an idea of how to link them. So people said something like an event, movie and dinner. Well, great but it's almost like people were having difficulties writing their senior thesis for a university. And for the most part, I think Ticketmaster was fairly independent and agile enough. I did not see much bureaucratic issues. So perhaps at the board level, things were different.

Compare that to some financial companies like CitiGroup or HLIKK where bureaucracy runs rampant. Zero agility exist in those companies. There's a big joke about CitiGroup's international homepage. Did you know that from an organic search point of view, CitiGroup's webpage is one of the lowest in the Hong Kong market? Yet when it comes to paid searches, CitiGroup's is one of the highest. The reason is that all approvals for anything done in CitiGroup must go through the NYC office. So it's completely fine for them to spend tons of money when they could be doing cost if each individual sector could manage their own company independently.

With HLIKK, the common complaint I'd receive would be the lack of direction and vision within some of the departments (IT, etc.). You'd have this constant tug-of-war especially in IT where the international architects would hold some domain of control and the local groups were in some way forced to follow these standards. Yet there was honestly nothing enforcing these rules. Worse yet, the projects suffered from extreme degrees of micro management and unending project management hell. It wouldn't be uncommon to see a project die out before it'd get completed because of bloated cost, times, and resource allocation failures.

But if you look at Google, it remains one of the more (apparently) agile companies around. I think the 20% rule helps a lot and the fact that everyone in the world has access to the code as well as being able to fix it when they need it. With the various range of success stories coming from Google Labs, these elements of company culture are good examples to demonstrate to other companies in being able to expand at rapid rates.

So let's take a look at the areas where large companies can improve upon to allow agility within their organization:

• Flexibility for employees to work on their own projects.
• Allowing brands, departments, geographical regions or companies acquired to operate independently.
• Avoiding micromanagement.
• Removal of bureaucratic project management (e.g. the waterfall methodology for software engineering).
• Eliminating the notion of "cost centers". (You are one business)
• Eliminating the notion that some areas of the business make more money than others, thereby creating interdepartmental competition (which occurs heavily within finance companies)
• Eliminating the notion of the timesheet (most companies use timesheets, in my experience, to budget the hours for projects, which then relate to the dollars per hour for a single employee. But these timesheets do not accurately reflect "incidental" time detractions like coffee breaks, casual conversation, meetings, etc. because in practice most employees don't record nor really give a shit about the "little numbers")
• Emphasizing project cost rather than strategy and the end goal of a project as a determinant of continuing a given project (imagine the look of horror to the team's faces when a project is eliminated after spending their weekends and late nights in the office)
• Eliminating enforced standards across a company. Instead, providing shared areas of expertise and knowledge bases like Wikis to help other groups train members and improve the local areas points of expertise.

This allows groups to tackle projects on a more independent basis. You still need the unified vision of what a company's purpose is to determine whether projects have relevance to a company. I mean, in most cases, companies don't want people aimlessly doing things for no good reason on company time. For instance, you don't want developers working on a physics projects if the company's main products involve selling annuities (unless these people are intending to figure out a way of aging young kids so that they'll be in the mindset of buying an annuity :p). But the main point is that you really want people within the company to take initiative to help improve what a company does. Having restraints from unreasonable costs restrictions, etc. prohibit companies from reacting to the market in time.]]> Sat, 09 Feb 2008 19:37:23 -0700 http://www.keithwatanabe.net/blogs/2008/2/9/584ba03f8a7bac00f6b4b7475a9214b4.html