There’s a great social media story as follow-up to my post on Saturday about getting stuck overnight in Frankfurt but getting great customer service from everyone involved.

First, I have to mention that as I left the Radisson Blu in Frankfurt, I complimented the three young staff members who were at the front desk on the great service that they had provided, telling them that I had blogged and tweeted about it, and they actually high-fived each other with huge smiles on their faces. These people aren’t just providing service according to some playbook, they’re going above and beyond wherever possible, and really enjoying it along the way. That speaks very highly about their management as well as the individuals. So I wasn’t completely surprised to see a tweet this morning from Andreas Stöckli, the GM of the hotel, thanking me for my post and saying that they were putting it on their Facebook fan page. On their Facebook page, they not only linked to my post, they called out Nawid, who I had named in my post, for his “excellent Yes I Can Service”, which means that they are actively rewarding people for providing outstanding service.

This is a really great way to use social media in a business: find mentions of your company on Twitter, blogs or Facebook, then promote those on the social media channels that you’re using (Facebook and Twitter, in the case of the Radisson Blu). While you’re at it, mention members of your own team who did a great job as part of that service interaction with the customer: this makes them feel great and builds morale on your team. Of course, not every online mention of your company will be good, and you need to respond appropriately regardless of the content, but when there’s a good one, you want to make sure that it doesn’t go unnoticed.

In my original post, I didn’t mention how nice the rooms are, or the restaurant and other public spaces, but let me state now that they’re great. The location is convenient to the airport and the city center (although requires a taxi ride to each). And, they have free wifi. I rarely travel to Frankfurt these days, but you can be sure that when I have the opportunity to do so again in the future, I’ll be staying at the Radisson Blu, because Andreas and his team really rock.

Every process blogger loves to write about their own good and bad process experiences, and I’m no exception. This weekend has been a case of incredibly bad processes, but really good customer service that made up for it. I’m stuck in Frankfurt on my way back to Toronto, and I’m actually not unhappy at all, due to the outstanding service that I’ve received all along the way. The short version: my flight out of Oslo was delayed, which caused me to miss my connection in Frankfurt to travel on to Toronto.

Here’s how the process was seriously broken:

• An SAS flight from Oslo to Frankfurt was leaving 15 minutes after my originally scheduled Lufthansa flight, but I was not allowed to switch to that flight because the transfer time in Frankfurt would be below their threshold. As it turns out, if I had taken that flight, which left on time, I would have made my connection, which left 30 minutes late. Instead, I had to take my original flight, which left over 2 hours late, and missed my connection.
• With no Lufthansa or Air Canada presence in Oslo, SAS (which is a partner airline) services their customers. When the SAS agents were working with Lufthansa on the phone to try and rebook me, Lufthansa claimed that they couldn’t access my ticket since it was booked on Air Canada. I called Air Canada in London, who said that any changes had to be done by Lufthansa since the first leg of the journey was on Lufthansa. SNAFU.
• In Frankfurt, it took over 2 hours for the first/business/gold line to process the 6 people ahead of me (luckily I was not in the plebe line, which had 200+ people). When I got up to the agent, I could see how cumbersome her process was: although my flight had already been rebooked, she went through the options for an earlier flight (I would have only been waitlisted, so didn’t bother), had to reprint a new ticket, book me into the hotel, then manually write up hotel and taxi vouchers. Even worse, the taxi voucher was a 4-part carbonless form; she filled it out, then ripped off and discarded 2 of the parts. My time with her, even though I was on a direct flight that had already been rebooked so was presumably the simplest possible case, was more than 20 minutes. People with more complex routing requirements were taking 45-60 minutes each.

I’m pretty sure that SAS/Lufthansa/Air Canada knew that I wasn’t going to make my connection before I left Oslo; they should have just put me up there for the night and flown me out in the morning. It would have taken me about 10 minutes in Olso rather than the 2+ hours in Frankfurt to deal with the rebooking.

There were some successful process bits:

• Someone, somewhere, rebooked me on today’s Air Canada flight when I missed yesterday’s flight, ensuring that I have a seat.
• In cases like this, Lufthansa just puts everyone in a hotel with meal and taxi vouchers, without questions. I may have had slightly better privileges because of my gold airline status, but it appears that everyone was being housed for the night, at least.

What really made the difference for me, however, was the level of service that I received along the way from people who knew that they worked for companies with stupid processes and policies, and did whatever possible to make things better for me:

• The SAS agent in the lounge in Oslo worked diligently on my behalf on the phone for over 30 minutes, and apologized when he couldn’t do more.
• The Lufthansa agent in Frankfurt was cheerful, even though she had been dealing with irate customers for several hours, and told me how nice the hotel was that she was sending me to (she was right).
• The Radisson Blu Frankfurt, in addition to being a lovely hotel, has excellent staff. In particular, when I slept in this morning and missed the breakfast for which Lufthansa had provided a voucher, Nawid at the front desk had a great solution: he ordered me room service breakfast to eat in lobby, even though I had already checked out, and covered it with the voucher. He even thanked me for being tolerant of their rules about using the voucher (it couldn’t be used for lunch, only breakfast), and cajoled me into a much more extravagant breakfast than I would have ordered – I won’t need to eat all the way to Toronto.

To top it off, I also met Graham, an Australian trying to get home, in the line at the airport; we ended up at the same hotel and had dinner and a really interesting chat together. The whole effect – except for the extra stressful hours spent in the airports – has been to have a good dinner, a long restful night and a great breakfast at a nice hotel in Frankfurt, for free. And since I only had carry-on luggage, I even had clean clothes to put on today. Of course, if I weren’t on my way home to a chore-free Saturday, I might not be so sanguine about all this.

Severe delays due to weather don’t happen that often, so I can understand that the processes around them might be a bit inefficient; however, some of these seemed excessively bad. Some things that could have been improved in the Frankfurt rebooking process:

• Email or text customers to tell them when they have been rebooked on a later flight. If I had known that, I would have had much less stress during my long wait. This would also reduce the number of people in the line, and the number that have to be processed manually.
• Email or text electronic vouchers or confirmations for the hotel, with an option to accept (and go straight to the hotel) or decline and wait for individual service. That’s harder to do for taxi vouchers, but I would have gladly paid my own taxi fare to avoid the 2+ hour wait in line.
• Triage the line so that people who can still get out on a flight that day are handled first. Since it was 7pm by the time that I got into line, there were probably very few people in that situation, but they were a bit desperate. Their rebooking would take much less time with no hotel or taxi vouchers, and they would be on their way much more quickly if just pushed to the front of the line, without risking them being delayed overnight. Or, if my first point was implemented, they wouldn’t even be in the line since they’d be automatically rebooked for their next flight.
• Implement a better hotel and taxi voucher system that doesn’t require the agent to write all the information by hand. Once she had booked me at the Radisson online, if the system had printed both the hotel voucher and the taxi vouchers directly, that would have saved 10-15 minutes – it was the single biggest amount of time that I spent with her.

Travel has become so competitive these days that airlines need to make the experience better for their customers. That’s not just the “happy path” experience, when everything goes right, but the exception paths as well. Broken processes will eventually lead to customer attrition, no matter how good your customer service.

I’ve moved from the Gartner BPM summit in Orlando to Forrester’s Business Technology Forum in Chicago, where the focus is on Lean as the new business imperative: how to use Lean concepts and methods to address the overly complex things in our business environment.

Mike Gilpin opened the conference with a short address on how our businesses and systems got to be so bloated that lean has become such an imperative, then Connie Moore took over for the keynote. From the keynote’s description on the event agenda site:

Lean is not a new business concept — but it is enduring. By embracing Lean years ago, Toyota reached No. 1, while rivals GM and Chrysler collapsed into wards of the state. In its broadest sense, Lean seeks to better satisfy customer needs, improve process and information flows, support continuous improvement, and reduce waste. Today’s recession is a clarion call for businesses and government to reexamine and reapply Lean thinking across people, processes, and technology. When maintenance eats 80% to 90% of IT budgets, it’s beyond time to examine Lean approaches — like process frameworks, cloud computing, SaaS, Agile methodologies, open source, or other fresh ideas. And when the sheer complexity of technology overwhelms information workers, it’s time to simplify and understand what workers really need to get their jobs done. And by focusing on Lean now, your organization will be positioned to power out of the recession and move quickly into the next new era of IT: business technology — where business is technology and technology is business.

She started with discussions about how Lean started in manufacturing, and you can see the obvious parallels in information technology. In Lean manufacturing, the focus is on eliminating waste, and everyone owns quality and problems are fixed at the source. Lean software isn’t a completely new idea either, but Forrester is pushing that further to change “information technology” to “business technology”.

Lean is not just operational, however, it’s also strategic, with a focus on understanding value. However, it’s usually easier to get started on it at the operational level, where it’s focused on eliminating waste through improving quality, eliminating non-productive time, and other factors. Lean can be counterintuitive, especially if you’ve been indoctrinated with an assembly line mentality: it can be much more efficient, for example, for individuals or small teams to complete an entire complex task from start to finish, rather than have each person or team perform only a single step in that task.

Moving on to the concepts of Lean software, she started with the results of a recent Forrester survey that showed that 92% think that enterprise software has an excessive cost of ownership (although personally, I’m not sure why they bothered to take a survey on something so incredibly obvious ), and discussed some of the alternatives: SaaS such as Google Apps, open source or free software and other lighter weight tools that can be deployed at much less cost, both in licensing costs and internal resource usage. Like Goldilocks, we need to all start buying what’s just right: not too much or too little, in spite of all those licenses that the vendor wants to unload at a discount before quarter-end.

Looking at the third part of their trifecta, there’s a need to change IT to BT (business technology). That’s mostly about governance – who has responsibility for the technology that is deployed – and turning technology back into a tool that services the business rather than some separate entity off doing technology for its own sake. What this looks like in practice is that the CIO is most likely now focused on business process improvement, with success being measured in business terms (like customer retention) rather than IT terms (like completing that ERP upgrade on time, not that that ever happens). Stop leading with technology solutions, and focus on value, flexibility and eliminating waste. You can’t do this just by having a mandate for business-IT alignment: you need to actually fuse business and IT, and radically change behaviors and reporting structures. We’re stuck in a lot of old models, both in terms of business processes and organizational models, and these are unsustainable practices in the new world order.

There were some good questions from the audience on how this works in practice: whether IT can be Lean even if this isn’t practiced elsewhere in the organization (yes, but with less of an effect), what this means for IT staff (they need to become much more business focused, or even move to business areas), and how to apply Lean in a highly regulated environment (don’t consider required compliance as waste, but consider how to have less assembly-line business processes and look for waste within automated parts of processes).

Jeff Gibson of the Table Group gave the morning keynote based on some of the concepts in his colleague’s book, The Five Dysfunctions of a Team: A Leadership Fable.

He started with the idea that there are two requirements for a company’s success: it has to be smart (strategy, marketing, finance, technology) and it has to be healthy (minimal politics, minimal confusion, high morale, high productivity, low turnover). Although a lot of management courses are focused on the smart side, the healthy side is a multiplier of the smart side, boosting the success far beyond what you can do by being smart alone.

He then moved on to the five dysfunctions of a team:

1. Absence of trust, specifically personal trust and exposing vulnerability to other team members. The role of the leader is to go first in order to show that it’s okay to make mistakes.
2. Fear of conflict, which can lead to misunderstandings because people don’t speak their mind. The role of the leader is to search out conflict amongst team members, draw out the issues and wrestle with them.
3. Lack of commitment, particularly to tough decisions. The role of the leader is to force clarity and closure on those decisions to ensure that everyone is committed to upholding them.
4. Avoidance of accountability. The role of the leader is to confront difficult issues, such as problematic team behaviors.
5. Inattention to results. The role of the leader is to focus on collective outcomes, not allowing a “superstar” on the team to make themselves look good to the detriment of the team result.

Usually I find these external keynotes that are unrelated to the conference subject to be so-so, but I really enjoyed this one, and could have used this advice when I was heading up a 40-person company. I’ll be checking out the book.

Kathleen Barret of the International Institute of Business Analysis discussed how the role of Business Analyst moved from assistant Project Manager and scribe to the focal point for understanding and articulating the business need for a solution or change.

She started by talking about why there is such a strong case now for business analysts. Organizations have been designing solutions for years without proper business analysis, resulting in a spotty success rate; in today’s economy, however, no one can afford the misses any more, prompting the drive towards having solid business analysis built in to any project. There’s also a much stronger focus now on business rather than technology in most organizations, with business strategy driving the big projects.

IIBA was created 5 years ago to help support business analysis practices and create standards for practice and certification. Its goals are to develop awareness and recognition of the BA role, and to develop the BA Body of Knowledge (BABOK) to support BAs.

Business analysis is about understanding the organization: why it exists, its goals and objectives, how it accomplishes those objectives, how it works, and how it needs to change to meet its objectives and future needs. As Barret points out, there’s a big overlap with what business architects do (she posits that they are now the same, or that an enterprise business analyst is the same as a business architect – I’m not sure that IIBA has a well-thought-out position on this yet); the difference may be purely a matter of scope, or of general analysis versus project-specific analysis.

The BA works as a liaison amongst stakeholders in order to elicit, analyze, communicate and validate requirements for changes to processes, policies and systems. This could be at the enterprise level – probably what most of us would refer to as a business architect – or at the project level. This can be a subject matter expert or domain practitioner (which I don’t consider a true BA in many cases) or a consultative BA who works with SMEs to elicit business requirements. In a large, complex organization, there may be several types of BAs: there is a need for both specialists (in terms of business vertical, methodologies and technologies) and generalists.

IIBA will continue to extend the BABOK, and will be releasing a competency model by the end of 2009 to help BAs identify gaps in their capabilities and to help organization to assess current needs and capabilities. In my experience, “business analyst” is one of the most over-used and misused term in business today, so anything that IIBA does to help clarify the role and expected capabilities has to help the situation.

Gartner’s had a good webinar series lately, including one last month with Alexa Bona on software licensing and pricing (link to “roll your own webinar” download of slides in PDF and audio in mp3 separately), as part of their series on IT and the economy. As enterprises look to tighten their belts, software licenses are one place to do that, both on-premise and software-as-a-service, but you need to have flexible terms and conditions in your software contract in order to be able to negotiate a reduction in fees, particularly if there are high switching costs to move to another platform.

For on-premise enterprise software, keep in mind that you don’t own the software, you just have a license to use it. There’s no secondary market for enterprise software: you can’t sell off your Oracle or SAP licenses if you don’t need them any more. Even worse, in many cases, maintenance is from a single source: the original vendor. It’s not that easy to walk away from enterprise software, however, even if you do find a suitable replacement: you’ve probably spent 3-7 times the cost of the licenses on non-reusable external services (customization, training, ongoing services, maintenance), plus the time spent by internal resources and the commitment to build mindshare within the company to support the product. In many cases, changing vendors is not an option and, unfortunately, the vendors know that.

There are a lot of factors in software licensing that can come under dispute:

• Oracle’s (and many other vendors’) definition of “named user” includes non-human processes that interact with the database, not just the people who are running applications. This became a huge issue a few years back when enterprise systems started being connected in some way to the internet: is the internet gateway process a single user, or do all potential users have to have individual licenses?
• Virtualization and multi-core issues need to be addressed; in many cases, these hardware partitioning is often not adequately covered in license contracts, and you need to ensure that you’re not paying for the maximum potential capacity of the underlying hardware, not what you’re actually using.
• Make sure that you have the right to change the platform (including hardware or underlying database) without onerous fees.
• Watch out for license minimums embedded within the contract, or cases where upgrading to a larger server will cost you more even if you don’t have any more users. Minimums are for small organizations that barely meet discounting thresholds, not large enterprises. Vendors should not be actively promoting shelfware by enforcing minimums.

Maintenance fees are also on the increase, since vendors are very reliant on the revenue generated from that in the face of decreasing software sales. Customers who have older, stable versions of a product and don’t generate a lot of support issues feel that costs should be decreasing, especially since many vendors are offshoring support so that it is cheaper for vendor to supply it. Of course, it’s not about what the maintenance actually costs, it’s about what the market will bear. Gartner suggests negotiating maintenance caps, the ability to reduce your maintenance if you use less licenses, and the right to switch to a cheaper maintenance offering. Document what you’re entitled to as part of your maintenance, rather than relying on a link to the vendor’s “current maintenance offering”, to ensure that they can’t decrease your benefits. Watch out for what is covered by maintenance upgrades: sometimes the vendor will release what they call a new product but what the customer sees as just a functional upgrade on their existing product. To get around that, you can try licensing the generic functionality rather than the specific products by name (e.g., stating “word processing functionality” rather than “Microsoft Word”).

When polled, 64% of the audience said that they have been approached by a vendor to do a software audit in the past 12 months. In some cases, vendors may be doing this in order to recover license fees if they have lost a sale to the customer and feel that they might find them out of compliance. Be sure to negotiate how the audit is conducted, who pays for it, and what price that you pay for additional licenses if you are found to be out of compliance. Many software vendors are finding it a convenient time to conduct license audits in order to bolster revenues, and for the first time ever, I’ve heard radio advertisements urging people to blow the whistle on their employer if they are aware of pirated or misused software licenses, which is a sort of crowd-sourced software audit.

Software as a service licensing has its pitfalls as well, and they’re quite different from on-premise pricing issues. Many SaaS contracts have minimums or do not allow for reductions in volumes, leading to shelfware-as-a-service – consider it a new business model for wasting your money on software license fees. There is aggressive discounting going on right now – Gartner is seeing some deals at $70/user/month for enterprise-class software – but there may be much higher fees on renewal (when you’re hooked). There are also some unrecognized fees in SaaS contracts: storage (if beyond some minimum that they provide as part of the service, which is often charged at a rate far above cloud storage on the open market), additional costs for a development and test sandbox, premium maintenance that is more aligned with typical on-premise enterprise software support, non-corporate use (e.g., customers/partners accessing the system), integration, and termination fees including the right to get your data out of their system. Make sure that you know what the SaaS provider’s privacy/security policies are, especially related to the location of the data storage. Most of the Canadian financial services firms that I deal with, for example, will not allow their data to be stored in the United States, and many will not allow it to be stored outside Canada.

Furthermore, SaaS vendor SLAs will only cover their uptime, not your connectivity to them, so there are different points of failure than you would have for on-premise software. You can hardly blame the vendor if your internet connectivity fails, but you need to consider all of the points of failure and establishing appropriate SLAs for them.

Bona finished up with some very funny (but true) reinterpretations of clauses in vendor contracts, for example:

• What the vendor means: “We are going to send you software that you are not licensed to use. If you use this software in error, you will be out of compliance with this contract, and woe to you if we audit.”
• What they actually wrote: “Licensee shall not access or use any portion of the software not expressly licensed and paid for by the licensee.”
• What you probably want to change it to: “Licensor shall not ship any software to licensee that licensee is not authorized to use.”

The summary of all this is that it’s not a task for amateurs. Unless you want to just let the vendor have their way with you on a large contract, you should consider engaging professionals to help out with this. Gartner provides this type of service, of course, but there are also high-quality independents (mostly former analysts) such as Vinnie Mirchandani.

I’m starting to feel like the Perez Hilton of BPM with all the corporate gossip this weekend, but I’ve noticed that Pegasystems’ management roster has been a bit sparse for the past few months:

VPs of marketing and sales seem to be missing, and I don’t see a CIO either. It’s important to have strong technical leadership in a technology company, but who’s driving sales and marketing?

I had a heads up this morning via Shane Schick’s Twitter stream that Gartner was holding a webinar on emergency cost cutting in IT, featuring Kurt Potter, and 20 minutes later I was there.

Gartner’s been talking with a lot of their customers about the impact of the recession, and although most are not in completely dire straits, they are seeing some who are having to deploy emergency measures, and there’s lessons to be learned from the squeezing that is being done.

There are factors in any organization that make it difficult to cut costs:

• Too much customization and complexity: I see this a lot, and it’s a huge money drain to maintain overly complex and over-engineered systems. If you go for a fully customized system, it’s going to cost about 10x as much to maintain it over the long term as it was to build it in the first place, since you’re rewriting code for every minor change.
• Costs weren’t aligned to business metrics, so money has been spent on something that may not have had an economic benefit.
• Difficult to prioritize IT investments properly, so that companies don’t know what to cut first.
• No institutional knowledge of what happened in the last recession.

An economic recession creates some particular leadership challenges, but also opportunities: it’s a chance to make some difficult changes and cuts that would never be allowed in fatter times for political reasons. In particular, when a project (like a BPM implementation) calculates its ROI through a reduction in headcount, those staff are rarely actually cut: they’re redeployed to other areas, or the group affected just runs a bit heavier that it needs to. In today’s climate, you should be going back to see if you can harvest those promised productivity improvements now.

It’s difficult for companies to cut costs if they’ve never had to do it before: it’s not in their culture, and the executives may have made rash statements about things that they will “never” do, such as laying off staff or cutting out perqs. Surviving in this environment, however, requires some change in culture, and that includes changes to IT culture. Has your IT organization said that they would never use open source, or outsource storage, or consider SaaS? If you’re in a pinch, then you can be sure that they’re looking at it now, at least for some functions; if they’re not even considering options like this, then they’re not that serious about cutting costs.

Potter came out with one pretty obvious slide that showed that companies that have spent proportionately more on IT in the past five years have more room to cut costs. Well, duh. It’s hardly a big surprise that those that have spent like drunken sailors on leave now have a lot more that can be cut, like selling off that corporate jet (Citigroup, are you listening?). For some, however, cutting costs further gets a bit closer to the bone, requiring business restructuring, process improvement and innovation: this is why BPM projects (but not necessarily additional license acquisitions) can get some additional interest at times like this.

There are some cost-cutting measures that Potter suggested that I really don’t agree with, since I think that they’re penny-wise and pound-foolish. First of all, cancelling all IT training. Although this may result in a higher level of voluntary turnover (as much as 40-60%), thereby reducing headcount without having to do pesky, lawsuit-provoking layoffs, it runs the risk of having the people who understand the current systems bail out, leaving behind no one who is trained to maintain them. Personally, I wouldn’t want an untrained DBA playing around with my production database: the combined cost of a longer time to get things done plus the time required for someone who knows what they’re doing to fix it later is likely to be much higher than any training course.

Secondly, he suggests that IT abandon SLA guarantees to the business, become reactive rather than proactive, and train IT staff to say “no” to the business unless the funding for that level of service is guaranteed. In my opinion, this would be a huge hint to the business to start looking at outsourcing some of that IT, particularly through the adoption of SaaS applications. Lots of money being spent on running your in-house Exchange servers, and now IT wants to cut your SLA? A recent Forrester report shows that cloud-based email is a no-brainer over hosting your own email servers up to 15,000 users, and the price leader (Google Apps, which allows you to host your domain email on Google) is more cost-effective far beyond that size, while providing additional tools such as collaboration sites as part of the same package. More complex applications, such as customer relationship management and even business process management, have a number of successful cloud vendors. My advice to businesses: if IT cuts your SLAs, start looking for alternatives to your current IT offerings.

Potter suggested some good areas for savings, too: lengthen replacement cycles on hardware and software, cancel maintenance and warranty contracts, consolidate data centers and storage, and just buy less stuff. There’s risks to all this austerity, too. In addition to more voluntary turnover (which may or may not be desired), your vendors will smell the blood in the water and start tightening up on credit.

Of the webinar participants, over 80% said that it would be at least Q1 2010 before they return to a growth strategy rather than cost-cutting mode, so this is here to stay for a while.

Gartner has more than 300 pieces of published research on cost optimization, although some of the ones quoted (“Communicating the Value of EA to CFOs”) are arguably not really on topic. There’s a whole section on the Gartner site on IT and the economy that includes previously recorded podcasts, upcoming webinars and links to related research.

There have been rumors for a few weeks about impending job cuts at IBM, and they’re coming down this week. I’ve heard from people I know within IBM (mostly the old FileNet organization, where I worked in 2000-01) that it’s hitting the software group pretty hard. If you check the Job Cut Status page on a site created by the Communications Workers of America (a part of AFL-CIO that appears to either represent or be trying to unionize IBMers in the US), you’ll see comments like this:

IBM ECM Labs – Costa Mesa, CA – at least 5 that I know of, at all levels. Rumor has it most if not all of the developers will be replaced by India.

Austin Texas, SWG, 28 people out of 45 cut. young and old, top and bottom performers. Never show me great 4Q numbers again. This company doesn’t care about anything anymore.

Got the call today – Mngr said Sales Ops lost 40% of total group.

By my counts about 800 software engineers are selected in the action. 330 Staff, 280 Advisory, 120 senior, and others.

The cuts in SWG are: 25% in Development and 35% in Marketing/ other.

And, most curiously:

my ibm office site is now blocking the alliance web page.

Caveat: most of these comments are made anonymously, so should be considered to be unsubstantiated rumors.

There are two weird things about this. First of all, IBM is completely silent about it so far, although they will have to issue some sort of press release soon as the news is leaking out all over the place. Second, they just announced healthy profits in the software group, which seems to be the group taking the biggest hit.

Microsoft is also starting the cuts: they announced today that they will be laying off up to 5,000 people in the next 18 months.

Don Tapscott is definitely enamored of his kids and their generation: in 1999’s Growing Up Digital: The Rise of the Net Generation, he predicted how their generation would reshape society, and in his latest book, Grown Up Digital: How the Net Generation is Changing Your World, he practically deifies them.

I agree with a lot of what he’s saying, such as the ability of the 11-30 age group — the “Net Generation” — to easily consume information from multiple channels, but I think that he’s ignoring some of the research in this area in order to make his point. He quotes a study from the Oxford Future of the Mind Institute that shows that although Net Geners are better at intensive problem-solving than those 10 years their elders, interruptions such as those from text messages and IM makes the differences in ability disappear. Tapscott pooh-poohs this using the rather unscientific counterpoint of his daughter working on an assignment at the family kitchen table with people and dogs around, multiple windows and chat sessions open, and her iPod playing music. He posits that Net Geners appear to have ADD in class (apparently now a common complaint amongst teachers) because they’re bored. I’m just not sure that I buy that; there’s other factors at work here, many of which have little to do with age, and more with work styles.

From a business standpoint, the real value of Grown Up Digital is the chapter on the Net Generation in the workforce, covering how the expectations of those entering the workforce have changed, and how organizations need to change (in some cases) to accommodate this.

One of the key points is that they expect to be able to work when and where they want, and be quickly rewarded through promotion for their achievements. A year ago, when companies were wailing about how the boomers were all retiring and they didn’t have enough new recruits to replace them, this sense of entitlement may have been a realistic expectation for some people in some job markets; in today’s economy, it seems almost laughable. Reuters recently reported that young graduates are having a hard time finding work in Silicon Valley, and that just any college degree isn’t enough to land them their dream job with a gazillion stock options. Not surprisingly, engineering grads aren’t having that problem, neither are people with some amount of practical experience. Earlier this week, Tom Davenport wrote about whether millennials (another name for the Net Generation) can really change the workplace, echoing similar sentiments. Ron Alsop, in his book The Trophy Kids Grow Up: How the Millennial Generation is Shaking Up the Workplace, quotes a teenage blogger: “We don’t want to work more than 40 hours a week, and we want to wear clothes that are comfortable. We want to be able to spice up the dull workday by listening to our iPods. If corporate America doesn’t like that, too bad.” If the economy stays where it is for the next few years, it might be too bad for the Net Generation.

At some point, however, those 200.5k’s are going to turn back into 401k’s, and the boomers are going to retire, at which time the battle for talent will resume. Banning Facebook — a key networking tool for Net Geners — will no longer be acceptable practice, and companies will have to become more open to the collaborative tools and attitudes that the new workers bring. This isn’t just because that’s the only way to gain those workers, it’s because there’s some valid ideas in there for improving the enterprise by breaking the bonds with traditions of time, place and corporate boundaries. There’s also the issue of customization of tools: the Net Generation expect to be able to configure their working environment the way that they want in order to most effectively complete the tasks at hand, not be forced into someone else’s idea of what might make them productive. There is a lot to be learned from this concept in how we build the user experience for enterprise software in general.

I enjoyed Grown Up Digital, but I took it with a large grain of salt: in part, because economic times have changed dramatically in the few short months between writing and publication, and in part because I think that the average Net Gener may not be as wired as Tapscott’s kids.