An Interview with Vaughan Merlyn on Management

Ubiquity, Volume 2008 Issue April | BY Ubiquity staff

Full citation in the ACM Digital Library

Vaughan Merlyn, who is a management consultant, researcher, and author, has had as his primary focus for more than three decades now has been the use of information and information technology for business value creation. He was interviewed about software consulting and management.

MERLYN:	I originally grew up in England, and moved to the United States - actually exactly 30 years ago today. I can't believe that. That's half my life I have been here! I came here for 12 months and here I am 30 years later! I spent the earliest part of my career as an electrical engineer working on computer hardware design. I very quickly moved into the software space. I found that more interesting, as the hardware field had shifted to integrated circuitry. And about 25 years ago, I moved into the consulting space because I was very frustrated about the way all of the great software that was available to automate software development, for example, which had been my focus in the software industry, wasn't getting used. I got very interested in why people buy all this software and then don't use it.
UBIQUITY:	And that led you into management consulting?
MERLYN:	Yes. I established a small consulting firm specializing in research and consulting around software development automation. It was acquired by and ultimately merged into Ernst & Young, and I became a partner in their Center for Business Innovation in Boston, leading the firm's research into IT effectiveness and organizational change. That came out of some of the research programs I was driving at Ernst & Young. Anyway, I left Ernst & Young and joined The Concours Group (as it was known then) just after it was formed about 10 years ago. More recently, Concours was acquired by BSG Alliance. So my background for much of my career has been in management consulting. I consider that the space I operate in is where technology, business and people meet, that sort of sweet spot in the middle.
UBIQUITY:	Is it always sweet there?
MERLYN:	One would hope it would be! So I spend probably - I don't know - more than half my time with clients as a management consultant, and about a quarter of my time on multi-client research. In our multi-client research model there are typically between 15 to 30 companies that sponsor the research. And we try to understand what we refer to as "future leading practices." We're not trying to predict market shares or vendor performance or growth rates. We're really looking into practices. And the balance of my time is spent in our executive education and executive insight programs, in other words talking to our member companies, often about the things that we're surfacing in our research.
UBIQUITY:	Yes. Such as? Give us an example or two.
MERLYN:	Let me answer that by bringing some of these threads together. I was with a client last week. This is a global health sciences company that we have done a lot of work with over the years. And they were beginning a strategy refresh for the group within this company that is responsible for their global IT infrastructure. And they were thinking about the future and where should they be changing what they do and how they do it over the next three years? So one of the things that had surfaced out of our research is that companies are using information technology to enable business platforms. So that got us into an interesting discussion about the nature of IT-enabled business platforms, and the relationship between IT infrastructure and an IT enabled platform, and what impact that relationship would that have for the organization responsible for infrastructure. What would they need to do in terms of competencies, skill sets, organization structure, and so on and so forth to grow into an organization that is really enabling business platforms? So there is a very current example that highlights how the kind of issues that we are surfacing in the research help to inform our consulting work.
UBIQUITY:	And which would be what?
MERLYN:	The notion of a business platform as a growth driver, and then the IT implications of the business platform. The kind of competencies that IT professionals need in order to be successful in enabling and shaping platforms. And it also ties into a lot of the work that we have done over the years in terms of IT organization structure, operating model and governance and so on. And most importantly again, where our firm does a lot of its work is in what we would refer to broadly as the relationship management space - where business and IT meet.
UBIQUITY:	Yes. In what way do you think consulting has changed most over the years that you have been a consultant?
MERLYN:	That's a very interesting question. And you know that when a consultant says that's an interesting question, it usually means one of two things. Either it is the perfect question and they have got a slide teed up in the deck ready to go, or it is a question they have never thought of before and they want to kind of mull on it. Actually - it's neither in this case. I don't think in reality consulting has changed very much at all. But I think it is about to. There are minimal changes, for example, post 9/1, though not just because of 9/11. For example, I do much more of my work with clients via WebEx and NetMeeting. So I am actually traveling somewhat less than I used to. And that is not only for my benefit, it is good for the clients. Typically more and more we are dealing with global clients, with global teams working with us on an engagement, so they don't want to bring their global teams physically together for a workshop if they can avoid it.
UBIQUITY:	How might that work?
MERLYN:	I could be facilitating a workshop with team members that could be in Singapore, Tokyo, Brussels, and in New Jersey. So that really forces you to be more creative in doing things via the Web. The kind of high bandwidth infrastructure and tools like WebEx didn't exist a few years ago. So that is a change. But I don't consider those to be fundamental changes - I think of them as peripheral. But I do think most of us consultants probably travel a little less and do more work online using collaborative technology than we sued to. I think a much more fundamental change is coming. Today, people talk about Web 2.0 compared with Web 1.0 (although it was never called that). The kind of hybrid of web-based and live consulting process I just described might be described as "consulting 1.0." I do think we're going to see a move to consulting 2.0, which is much more technology enabled, which will take advantage of all of the emerging Web 2.0, social networking platforms, and what have you. So I do actually believe, and BSG Alliance is committed to a radical change to the traditional consulting model.
UBIQUITY:	Do you find using Web technology now before you get into the Web 2.0 kinds of things? Do you find that any conspicuously frustrating things in collaborating with people around the world using Web 1.0?
MERLYN:	Yes I do. I don't want take too much time talking about that because I am afraid it is going to be trite - I think it is now fairly well known. For example, we learned the lesson that if you are working with a new team, you can't go straight to a Web enabled approach. The team needs to come together and spend some time - especially if they haven't met before. So typically we structure an engagement to bring the team together for a kick-off, to bring the team together half way through the engagement, and typically to bring the team together at the end of the engagement. Then everything else we will do via the Web. You asked about frustrations - some of the inevitable frustrations and challenges are culture and language. We are privileged in the world of IT because English is kind of the lingua franca. So in theory that is OK. In practice, English as we know takes on many, many different forms. Often we have people on the phone with extremely heavy accents, or should I say difficult to understand for those of us without a well-trained ear. So I think those are the frustrations. In fact for this call I switched from my speakerphone to my handset when I realized that you were recording the call because we know that most speakerphone technology is inadequate. Then, of course there are the time zone differences. We try to take it in turns to be the one to get up in the middle of the night. And to not always assume that the U.S. is the center of the universe. Again, nothing I have said here is anything new. But by and large I find that Web-based facilitation works quite well. Sometimes works extremely well and actually enables you to do things that you may not be able to do as easily in a live fashion.
UBIQUITY:	Such as what?
MERLYN:	Anonymous polling for example. Just throwing an idea out there and having the group vote on it. Now in theory you could do that in the live session, but it is actually quite cumbersome to do.
UBIQUITY:	Yes. And let me ask you this: What do you find clients most mystified by when they think of consulting advice? What do they have the hardest time dealing with?
MERLYN:	Yes again, another interesting question. Because I often find that what they think is the problem they are looking for help with is quite different from the actual problem they are experiencing. And very often I find some of the most important work that we do happens before the engagement begins. I think it was Jerry Weinberg, one of the great wise men of the early IT days pointed out that one of the problems with project management is when a project officially starts, it's already been going several months. It just hasn't yet been called a project. So there is a lot of baggage already there. I think similarly, when you sit down with a client to frame up an engagement, I find the actual act of getting clarity on what is the issue, what would the outcomes be if we successfully solved this issue, that often is enormously helpful for the client - obviously it's important for the consultant because you can easily spin wheels trying to solve the wrong problem. But I have seen the light bulbs go on with my clients - not just little glimmers of Christmas tree lights. I mean massive flashbulbs go off as you take them through a process of issue clarification. And they realize that perhaps the problem that thought they had isn't the real problem. So I think that is a value that a good consultant brings to the table - helping to clarify what the real issues might be. We like to think that we are being brought in for problems that appear to be so complex to the client, that they need help. Now having said that, there are also many situations where the client believes they really understand the problem. They really understand the solution. They are looking for someone from outside almost as an impartial endorsement. "It must be true, the consultants told us so." I think that is less true nowadays than it was say 10 years ago when ...
UBIQUITY:	And why is that?
MERLYN:	Oh I think that a lot of consultants, and a lot of consulting has probably you know lost some of its implied burnish and credibility. I think there was a time where almost literally if someone was operating as a management consultant, they really knew a lot of stuff, and were constantly bringing value. However, with all due respects to my colleagues in the industry, I think, a fair amount of consulting has not been effective. Sometimes that is not necessarily due to any fault of the consultant, but I don't think that consulting today automatically carries with it the credibility and the weight that people will bring them in just to be able to say, "Look, this isn't my idea - it's what the consultant suggested." I think there is some of that maybe today, but I don't think there is as much as there was say 10 years ago.
UBIQUITY:	Is that true for all the consulting firms?
MERLYN:	Yes, I think so - for some firms more than others. I think McKinsey still carries a fine brand for the kinds of consulting it does. But I think by and large most clients have had less than perfect experiences from time-to-time with most consulting firms, no matter how blue ribbon the brand is.
UBIQUITY:	Yes. Now when you use the word 'client' I am sure it means different things in different companies that are your clients. I mean sometimes it is Joe, and sometimes it is Charlie, and sometimes it is Mary Ann.
MERLYN:	Yes.
UBIQUITY:	And what kind of difference does that make? In other words, what are the important things to think about when you deal with specific people within specific companies? Or is that too vague a question?
MERLYN:	No, it is not too vague a question. In my domain, I am most often hired by a CIO, or if not by a CIO then by a CEO or a member of the executive committee, so. And typically we're doing this for a global 500 class company. So by and large, you are dealing with very seasoned - very smart people.
UBIQUITY:	Yes.
MERLYN:	Some clients really want you to be as accessible as accessible can be. They don't like formally planning out all the touch points - you're going to call me at 8:00 a.m. on next Tuesday. They want to communicate in a very ad hoc way. Other clients are the complete opposite - they want a schedule of touch points with a lot of formality and long lead times. So, just getting to know their personal rhythm and preferred method of communicating is probably something that is almost second nature I think. But other than that, again, you know we are typically dealing with pretty senior and seasoned people. They are usually very direct and focused on finding a solution, so I don't have a lot of challenge with that.
UBIQUITY:	Yes. What are the worst kinds of problems that you have had? I don't mean specific war stories, but what are the major of the kind of horror that strikes your heart when you think of ...
MERLYN:	So again, with the caveat that this applies very much to the space that I work in, the most frustrating kinds of situation and the most intractable are where you have a CIO with a pretty good sense of what is possible with technology for the firm. And a CEO or an executive team that just doesn't get it, and doesn't want to get it. And that's the status quo. So to translate that into terminology that we tend to use, you have a pretty capable CIO, and potentially a capable IT organization. But demand maturity from the business side is extremely low.
UBIQUITY:	Yes.
MERLYN:	And that is always frustrating because it is a tough one to solve. It can take time. It is not solved overnight. And it's not that the problem itself creates a lot of negatives. It's not like this is a burning platform to use the well overused change management analogy. The pain is that you know there are likely significant opportunities that are just being missed. And that is always frustrating to know there are things that you could be doing that could really make a significant difference to a company's futures, and its competitive advantage and so on and so forth. And the executive leadership team just doesn't want to go there.
UBIQUITY:	Would you be prepared to or reluctant to generalize to the extent of saying that IT management is typically a little bit ahead of the management team or not?
MERLYN:	That is a good point. I would say not. In fact, this is a topic that we deal with in great length. In fact we are just wrapping up one of our multi-company research projects called Reaching Level Three, which is an indicator of business IT maturity. When I say business IT maturity, that is a short hand way of saying business demand maturity and IT supply maturity. I think that in the majority of cases, i.e., more than a half of the situations we see - there is a reasonable degree of similarity between the business ambition and the IT ambition. For perhaps a quarter of the cases, there is a CIO who is well ahead of business. And those are the most frustrating cases. The other case is where the business is well ahead of the CIO. And that usually sorts itself out pretty quickly because sooner or later there is a change of CIO.
UBIQUITY:	Do you help facilitate that change?
MERLYN:	I have done so, yes. Not one of my favorite things to do. But sometimes we are hired by the executive team, or the CEO who does have a sense that IT is just not stepping up to the plate. And occasionally that will result in our validating their sense that there is a failure of IT leadership.
UBIQUITY:	When you visit a client, do you typically work - and not when it comes to the filing part - but typically work with both management and IT management together?
MERLYN:	Yes ideally, again it depends upon the particular problem that we are dealing with. But I don't think there are many things you can do with and around information technology that you shouldn't be doing in collaboration with your business partners, and even - and we are seeing more of this - with your end customers. So I won't say all engagements look like that. But more and more of them do today.
UBIQUITY:	Yes.
MERLYN:	By the time you have got to somewhere on the level two Business-IT maturity scale, most of the issues are not internal to IT. They are something about the relationship and the interplay between business and IT.
UBIQUITY:	Yes.
MERLYN:	So any problems you have there typically must be solved with the involvement of both business and IT executives. And even that language will get some people upset because a good IT executive is of course a business executive.
UBIQUITY:	Yes. Why don't you say what the three levels are?
MERLYN:	Yes so there is many ways of describing them. Level one essentially is a focus on efficiency. So the quick summary would be that from the business perspective, what they demand from IT is takeout costs. You know replace human effort with silicon.
UBIQUITY:	Yes.
MERLYN:	And that is a pretty low level of ambition. The middle level is more about effectiveness that efficiency. So level two, the demand typically shifts from don't just take out costs. Help us improve the effectiveness of our processes. And often a characteristic of the shift from level one to level two - level one tends to be very functionally and business unit driven. The demand is coming from finance, from HR, from Northeast sales, from Southwest sales. It is all very stovepiped, siloed kind of demand.
UBIQUITY:	Yes.
MERLYN:	By the time they get to level two, there is a recognition of end-to-end business process.
UBIQUITY:	Yes.
MERLYN:	But now I am looking at processes that cross and transcend organizational boundaries. And I can really get into the whole process of reengineering, and ERP kind of solutions. So that is the characteristic of level two. By the way, it is a maturity model. So the level one stuff never goes away. But now I have got a higher appetite. And to meet that appetite I may need a more sophisticated ability to supply against that appetite.
UBIQUITY:	Yes.
MERLYN:	So level one was efficiency. Level two was effectiveness. Level three is about innovation and growth. That is where things get quite exciting. That is where we are really beginning to re-conceptualize business model, potentially creating IT enabled products and services, using information technology to collaborate with customers and suppliers, and just a much more mature approach to the role of IT and the business. In fact, in level three, the notions of IT versus the business become very hard to distinguish.
UBIQUITY:	Yes. Let me ask whether you have experienced different levels of acceptance or ability in different industries?
MERLYN:	Yes. Excellent point. So, as I described the Business-IT Maturity Model, it doesn't take long to speculate, and our research reports this, that if you want to find level three business IT maturity companies, you're going to find that most of them in the high end of the financial services industry. Especially investment banking, brokerage houses, where information is the factory, and there's a lot of money at stake - potentially in the ability to make a decision in a nanosecond, along some price spread or what have you. So you find a lot of level three in financial services. You find it in contemporary high technology and information firms. Think about Google and Amazon.com or even the Dell's and the Cisco's of this world. So, industry is a big factor. Now the one trap there is, for example, the discount retail business. That for years was the classic level one business. Low, low margin. So the CEO attitude to IT is, "I don't care what you do, just, you know, don't add anything to my costs." Margin is everything. So, they see IT as a necessary expense. "We have to have it, but don't go overboard, because it's just all about margins." That was the nature of the discount retail business for years and years, until Sam Walton came out of the shower one day, and said, "I wonder what would happen if we turned inventory into information?" And the rest, as they say, is history. So, in any industry you can get a visionary business leader with a visionary CIO, and they can change the game for that entire industry. And, suddenly you're either very fast to catch up or you fall by the wayside, as so many of Wal-Mart's competitors have done.
UBIQUITY:	Is there an industry at the moment that you think is the hottest, or a couple of industries?
MERLYN:	Yes. That's a great question. With Web 2.0 and related changes, I think all industries are ripe for information and IT-enabled transformation. Suddenly everyone is saying that Enterprise 2.0, and technologies such as Web 2.0 are really important. But they're trying to understand, so what does this mean to my business? So, I do think that we are in a major discontinuity in terms of available technology, and I know that a lot of people get sort of sick of the Enterprise 2.0 and Web 2.0. But, I think this is very real. And, I think any industry now is able to reinvent itself in the way it engages with its customers, and its suppliers, and its ability to be innovative and agile. I think this is appropriate to anyone. I think it could well be five years from now, you ask me that same very excellent industry question, and it could be, that would be a silly question.
UBIQUITY:	I see what you're saying.
MERLYN:	People used to talk about the fact that sometimes these things come along and they're great levelers - you know, put everybody on a level playing field.
UBIQUITY:	What do you think of critics and cartoonists who poke fun at consultants for coming up with new buzz words all the time?
MERLYN:	I have to say, I've empathize with them, and I think it's an extremely valid criticism. Which is why when I start talking about Enterprise 2.0, I do it with some reluctance, because you'd be quite within your rights to cry foul, and say, "Vaughan, I've heard people saying every two years that there's this great revolution coming." So, yes, I think the criticism is fair. I think we are inclined to get excited by some new technology, and to see it as a game changer. I will say in defense of that, often although the changes don't feel as seismic while they're going on, if you look back over five years, a lot of changes really happen. I wouldn't want anyone to think that there's been so much crying wolf in the past, that this change isn't real. Because I think they're going to miss out.
UBIQUITY:	Yes. Well, and there are certainly a number of industries that really have changed radically, in just the last few years.
MERLYN:	Yes, indeed. - Almost beyond belief. I remember the ridicule in the press about Amazon.com, when they started. And people saying what a lunatic Jeff Bezos was. That you could never make a profit selling books over the Web. And, what everyone missed is that's not what Amazon.com was about at all. It looked like it to begin with, but take a look now at how many companies leverage the Amazon platform to do their trading. You know, it's like Apple. You know, Apple getting into the iPod business wasn't about selling iPods. Again, it's about creating an entertainment platform.
UBIQUITY:	Yes.
MERLYN:	Again, by the way, note the connection back to the platform thinking, we had earlier in this conversation. So, yes, again I think those changes, we're so steeped in them that we almost don't notice them.
UBIQUITY:	Yes. How the consulting group you're part of, the BSG Alliance, look at the future?
MERLYN:	Steve Papermaster, our chairman is assembling a set of capabilities, wrapping them around electronic tools, such that we become a next generation enterprise. He sees that this is going to be where the action is going to be in the foreseeable future. And, if we're going to operate in that space, we have to be a 'next generation enterprise'.
UBIQUITY:	Yes.
MERLYN:	In the last year we've gone about literally reshaping the way we operate, the way we collaborate, the way we think of ourselves. And, it's very, very exciting. For example, in the past we wrote up our research reports by assigning sections to members of the research team, writing and editing in Microsoft Word, and finally combining the sections and editing the final document. For our latest report, we have been doing our writing collaboratively on a Wiki. And, we'll be publishing a Wiki to the members, which could give them much more power in terms of hyper-links and the ability to comment and edit in line. So, again, you know, it's an interesting time to be an old timer, being dragged screaming and kicking into the Web 2.0 world.

END

See Vaughan Merlyn's blog, http://itorganization2017.wordpress.com/about/

Source: Ubiquity Volume 9, Issue 17 (April 29, 2008 - May 5, 2008)

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An Interview with Vaughan Merlyn on Management