DirDem comes to Europe - Time for technology-enabled Democracy 2.0

As luck would have it I arrived in Madrid on June 12,
the very  last day of this two-month-old grassroots
movement occupation of the Puerta del Sol square.
But as the sign says, "we are not going away,
we are moving to your conscience." 

MADRID

While in Madrid on business, I took the opportunity that I was staying downtown to visit the nearby Puerta del Sol camping ground of the Indignados  or "Outraged Citizens." These are the protesters who have taken over the Spanish capital's main square and, just like the Cairenes did in Tahrir Square earlier this year, the Madrilians are making themselves heard, rejecting a political-cum-economic system which has left the youth with a staggering unemployment rate of 45%. Most analysts forecast that it will take Spain a decade to get back to where it was prior to the crisis.

What a far cry from the three years when I lived in Madrid in the mid-1990's when the square, the heart and pulse of the city, was mainly congregated on for festive occasions such as New Year's Eve, to gulp down as many grapes as you could while the clock would chime the twelve strokes of midnight. The clock is attached to the building which houses the Madrid regional government whose president,  Esperanza Aguirre, clearly irritated at these noisy neighbors, said on TV, " If people aren't happy with the current political parties, they should constitute themselves into a new party and run for office at the next election." Sounds reasonable except that Ms. Aguirre, who belongs to the Conservative People's Party, is just not getting it. 

The issue issue is not whether it's party A or B which is in power, or a third party, it's the whole political system which is being challenged by citizens who realize that the old system might have had its use in the past but clearly it is now broke as it can't deliver the goods and therefore needs to be jettisoned. The same message is being broadcast every evening on Bastille Square, down the street from where I live in Paris, by fellow protesters who use the same slogan: "Real Democracy Now."  The financial meltdown and its aftermath of debt-related and construction boom-to-bust crises have brought home the realization that the political system is no longer here to serve the interests of the majority but those of a well-off minority (the bankers who creates the mess and demanded that average taxpayers bail them out) and a privileged group of self-serving politicians. (You can read a post I wrote a few months ago on what the debt crisis really means.)

A placard held by a woman protester in the Puerta del Sol encapsulates people's outrage: Crisis? Robos! (Crisis? Theft!) it loudly claims. How come that jails are full of people whose crime is "just" to have pushed or consumed drugs when those who are responsible for sending millions into unemployment, emptying the retirement nest eggs of millions more and almost destroyed the livelihood of entire countries, how come that those bankers and their regulators are still allowed to walk around free? How come that while millions are still hurting, losing their homes and seeing their living standards plummet, that banks are reaping billions in profits and awarding their executives indecently fat bonuses? How come that the political class, supposedly voted into office by citizens to represent them, perpetuates itself in power and does nothing to alleviate the majority's suffering while clinging to its privileges and that of its sponsors, mainly in the financial industry? 

How else can you explain that billions of dollars' in taxpayers' money were handed over to the banks when they made losses, but their profits are still being kept by the few? Citizens' sense of outrage with the public losses/private profits arrangement is understandable. It reminds me of the pre-revolutionary situation in France when over 95% of the wealth was in the hands of less than 5% of the population (the aristocracy and the clergy) and yet they were exempt from paying taxes, a "privilege" reserved to the poor. Small wonder that when the economic crisis became more acute people rose up and overthrew the old political system. Small wonder that two hundred years on, their descendants are going back to where it all began in July 1789 and protesting at a similar situation: privileges for the few and hardships for the many.

The reason the political system has become so dysfunctional is that it is based on representative democracy (or RepDem, for short) invented in the 18th century. While there is little doubt that it has served the West well for two centuries, it is no longer fit for the 21st century.  Much of the gridlock in the US political system can be ascribed  to the Americans' absurd adherence to the principles edicted in the Constitution by aristocratic gentlemen farmers wearing breeches and wigs. Direct Democracy (DirDem for short) was not practical when England, France, and even more so the United States, were large countries with big populations scattered all over the land. How could you summon all of your country's voters in your capital to vote on a  policy or a leader? So we had to settle for a proxy: smaller and more manageable constituencies would vote for a congressman/Member of Parliament/deputy and send him (then there was no "her") to the capital (Washington, London, Paris) to represent our interests. Except that two centuries on, as the current crisis shows all too clearly, that "representative" represents other interests and when those conflict with the voters' it is clear to all whose interests prevail.

Look at Obama, about to become a brilliant failure. He is a politician who came to power through a grass-roots movement. On Inauguration Day he announced (and signed) the closing of Guantanamo Bay camp, a blot on America's conscience, where hundreds of men have been kept in jail for a decade without any due process of law, no trial, let alone any conviction, a complete violation of the lofty principles those bewigged 18th-century gentlemen bequeathed to the nation. Also, Obama supporters expected tougher regulation and sanctions on those who, through their greed, fraud and incompetence, provoked the crisis. On the foreign-policy front, Obama promised a new dawn for the Middle East by promoting democracy and putting pressure on Israel to pull out from occupied Palestinian lands.

And what did we get? Zilch. Guantanamo is still shamefully open for its ghastly business; the Middle East peace process has resulted in neither peace nor a meaningful process, Obama caves in to the pro-Israeli lobby; Bahrain has instituted a reign of terror against its Shiite majority to America's silent acquiescence; and as for bringing the bankers to account for their (mis)deeds and reforming the system that produced the crisis from which the US is still reeling, two words summarize the situation: full impunity. In case you think I am exaggerating just read this report on the financial crisis by nobody else than the U.S. Senate or the one published by Stanford University. Both show unequivocally that the financial crisis was largely criminal and yet  none of the perpetrators has been made to pay for their crimes. Could it be that after the "military-industrial complex" of Eisenhower's days we have now entered the age of the "political-financial complex"?

Today outrage spread to the cradle of Western democracy with thousands of Greeks battling police in Athens while protesting against those who put them in that situation: the rent-seeking and maximizing elite. The Socialist Prime Minister George Papandreou's offer to form a national unity government with the Conservative opposition is not going to change much since it is exactly the same situation I alluded to earlier: Party A or Party B will not change anything. They have both been in power and turned a blind eye, when they didn't actively encourage, the behavior that led to the current mayhem. In Barcelona, Spain's second city, what Gore Vidal would call the ruling class has resorted to tactics which we associate more with the Arab dictatorships in Libya and Syria than a  Western pseudo-democracy: planting plainclothes police as violent elements in an otherwise peaceful demonstration of the Outraged Citizens, in order to sabotage and delegitimize the movement. You can watch the video on YouTube (comments in Catalan.)

So, enough of describing the disease which we are all aware of. What can be done? The RepDem political system has shown its limitations and is increasingly losing its legitimacy as people lose faith in it. Citizens are no longer willing to elect a politician and then give them carte blanche for four or five years since that will just entrench them and their moneyed sponsors. What is needed is to move to a DirDem system.

If, as I said earlier, in the 18th century it already was not feasible to gather all voters in one place, in the 21st century it is even less so. But is it?  Maybe physically, but what about virtually? Technology, which has become so pervasive through every nook and cranny of society, can help bring people together in ways unthought of before ― in many countries now you can fill your income-tax return, and pay your taxes, online. If internet is good enough for my taxes, why can't it be used to get my opinion as a citizen and my vote? Why can't I vote directly on proposed laws? a privilege hitherto reserved for an elite that has done such a dreadful job of it. Any citizen should be able to suggest an initiative or law through a Facebook-like tool where its pros and cons could be discussed by the electorate at large (your user name would be your unique national identifier such as Social Security number, with maybe some biometric identification to prevent voters from selling their votes.) Such discussion of the proposed laws through comments would enlighten and enrich the political process and at the end of this debating process (akin to a political campaign) all interested voters could cast their vote online and, if a majority supports the initiative it becomes law. No more need for parliament or congress, half of which (the upper chambers) were completely useless anyway as they just served to provide cushy jobs for the well-heeled (case of the Senates in many countries such as France and Spain; in the case of the British House of Lords it is just indefensible that almost 100 members of this body are there just because they inherited the seat from some distant ancestor.) As for the other half (for example, the Chamber of Deputies in France) they often tend to just rubber-stamp whatever decisions the executive branch has decided on.

With technology we can get rid of the political middleman who served only his interests or powerful interest groups and lobbies, rarely the average citizen. This disintermediation process which has radically changed many businesses (brick-and-mortal travel agencies and  bookstores are on their way out as people buy directly from producers such as publishers and airlines) can be applied to politics as well. With the legislative branch technologized out of existence and the people finally regaining what has been until now a nominal sovereignty, we can shift our attention to another class of politicians: those in the executive branch of government, whose function will be maintained since somebody will have to implement laws and administer policies.

Bringing executive-branch politicians to heel is even more important since elected parliaments have anyway always be supine and deferring to the unelected administration of the day. One typical example in this pseudo-democracy that France is  can be seen through the use of décrets d'application whereby a law, although voted on by the people's "representatives," cannot be enforced until the government has decreed so. As an HR person I have always been shocked that the law voted on by the elected French Parliament in 2006 on anonymous CV's is still not enforceable (and therefore not adopted by companies) because the unelected government has yet to give it its stamp of approval And you call this a democracy?

The same technology used to bypass lawmakers can be used to keep executive-branch politicians and officials in check. For one thing, not only presidents and prime ministers  (I'd call them "Chief Executive") could be elected directly online but also any citizen would be free to run for office (with, of course, some conditions such as the number of certified friends they would have on Facebook to make the process manageable.) Why should politics be reserved to professional politicians? I don't remember who said that "the business of politics should be everybody's business" but they were damn right, and a public social media allows just that. For efficiency reasons, the members of a cabinet or administration would still be chosen by the Chief Executive but confirmed by the people (the way the US Senate confirms ambassadors and other officials) after hopefully vigorous online hearings. This should help weed out incompetence, nepotism and dishonesty, because, and this would be a marked departure with RepDem practice, at any moment citizens would be able to recall any official, starting from the Chief Executive down. That carte blanche given for several years to politicians to do as they please would thus be a thing of the past.

By the same token, every policy (war, taxes, budget etc.) will start with an online discussion and end with a formal vote where citizens sign off on it ― or not! By the way, if you think this is a novel approach, a little historical perspective is in order. In Republican Rome, during Cicero's time, decisions by the Senate were then read out on the Field of Mars to gathered citizens who would then vote them up or down. If it worked for ancient Romans, why can't it work for us int he 21st century?

Debating society's ills in central Madrid.
I was impressed at how peaceful,
well-organized and disciplined
the protesters were

Finally, technology is only an enabler as I have discussed in so many of my posts, articles, presentations and speaking engagements (mainly in the business arena.) There are also other cultural symbolic measures that can be taken to keep politicians and public officials on their toes and remind them that they are supposed to serve the people, and not the other way round. To go back to ancient Rome, when a general was granted a triumph after a big victory, he would parade through Rome in full glory but there was a slave standing next to him and whispering repeatedly in his ear, "Remember you are mortal." Our politicians need a similar type of reminder: You are here to serve the people. 

I have always been flabbergasted by the total lack of accountability of politicians in our pseudo-democracies. When  you give instructions to your cleaning lady, you can pretty much expect her to carry them out as well as show some respect to you. Same thing with your employees at work. Why? For a simple reason: you are the one who have hired them, you are the one describing their duties, paying them a salary and if you are not happy with them you can always fire them. That's why you usually tend to get from them what you need. But not with politicians. You are the one hiring them, because you vote them into office; you give them their job description, by choosing their political program over their adversaries' (I almost wrote partners in crime); you pay their salaries through your taxes; and you can fire them when you vote them out of office. And yet politicians behave as if they were the boss and you the employee, or the servant.

I would therefore suggest some symbolic changes to remind politicians who the real boss is and that the word public servant should mean what it means. One way would be to have direct access to them ―say, one day a week. Every public official from the Chief Executive down to a small-town mayor, should set aside a day a week where any citizen can come and talk to them. Since obviously it would not be feasible to see all citizens, the lucky visitors could be selected on a first-come, first-served basis or, after signing up online, be selected at random. Then, during the meeting, the citizen could ask any question they want, have access to any document (why did you pick this supplier? what was this expense for?)  and film with their smartphone the whole proceedings to be posted then on YouTube for the whole electorate to view, post comments on and, if they feel like it, initiate a recall procedure.

I can already see my detractors shouting down my proposals on the grounds that they would lead to chaos, demagoguery and populism. If you ask people whether they want their taxes raised, you can be sure they would vote it down. Ask them if they want welfare spending to be raised and you can expect them to click yes enthusiastically. How could you then ever be able to balance a budget? True, DirDem could lead to some messy outcome, but then many governments have been running deficits for years (the French government has NOT presented a balanced budget for over 30 years!) DirDem can't be worse. And then, I am pretty sure that most people would rather live with a mess of their own than one imposed on them by self-serving politicians and greedy bankers.

Other critics might point out that in Europe many legislative and executive functions have moved one level up to the European Union institutions. My proposals are even more valid since most people, not less national politicians (who see the mote in somebody else's eye) have always decried "Europe's" democratic deficit. For issues that are a country's responsibilities (for instance taxes or labor relations) only national voters would participate in the Facebook-like voting system. For issues that are dealt with at European level (including the appointment of European commissioners) all European voters would participate. And as for the European Parliament it will join the national ones in the graveyard of history.

This is the longest blog post I have ever written, and I doubt I will soon be able to match its length. But then the stakes described here are higher than any other I have tackled in my one-year-old blog. My sincerest hope is that it would generate a lot of positive debate to fix what has become an untenable system. I still have confidence in my fellow humans and believe that many of my ideas make sense and, if implemented, could solve many of the current issues in our 21st-century polity.

What do you think?

PeopleSoft vs Workday - Old vs New

ROME (Updated March 5, 2012)

While in the Eternal City to evangelize European HR leaders on the joys of a modern HR system at a Talent and Mobility Conference, I was asked by the Head of HR of an Italian bank  running PeopleSoft and considering alternatives to present  to their board of directors the pros and cons of PeopleSoft versus Workday. Here is the takeaway I left the board members with at the end of my presentation:

• PeopleSoft has over 3,000 customers, and the number is decreasing* − Workday  has less than a tenth of that but the number is increasing fast.

• PeopleSoft runs the whole gamut of HCM − Workday has yet to plug some big holes in its product scope (global payroll, recruiting, learning, time.)

• When PeopleSoft grew and went international, it took Europe by storm − Workday is taking much longer  to grow overseas.

• To run PeopleSoft will cost you several hundred dollars per year per user − Workday will cost you a fraction of that.

• PeopleSoft is based on a technology that is 30 years old - Workday has the most modern object-oriented technology found in enterprise software.

It looked great at the end of last millennium...

...but this is clearly what companies require in the 21st century

• When you meet a fellow PeopleSoft user and discuss your respective projects, you are comparing apples and oranges as many are either on Releases 7.5, or 8.3 or 9.0 − Workday customers can have a more meaningful discussion as they all are on the same product release.

• You buy PeopleSoft − you rent Workday.

• You install PeopleSoft on your computers − you access Workday over the internet.**

• To meet your requirements you can (and sometimes have to) customize PeopleSoft to your heart’s content - and your system integrator’s great financial satisfaction − Configuring Workday may be enough.***
• PeopleSoft, which covers all industries, has a strong offering for, and a large customer base in, the public sector  −  Workday so far is targeting mainly private businesses****

• You upgrade PeopleSoft every three and a half years *****  − you get a regular update from Workday several times a year.

• PeopleSoft HCM is part of an ERP offering itself just another of several other business applications belonging to Oracle whose sprawling portfolio includes hardware and its flagship database system − Workday is first and foremost an HCM system branching out into the ERP world.

• Both PeopleSoft and Workday are the brainchild of one of our industry’s legendary and visionary leaders, Dave Duffield − he built the former in his middle age and the latter as he nears his sunset years.

PeopleSoft is the past − Workday is the future.

*Companies that have recently discontinued PeopleSoft HR include: Johnson &Johnson, Hershey (both gone to SAP), Flextronics, T. Rowe Price, McKee Foods (all three switched to Workday). Many more have moved to local providers (LG Systems in Brazil, Meta4 or HR Access in Europe.) And an even greater number of customers are considering the move for 2012/2013, with Workday featuring in many shortlists. 


**There are many reasons why a SaaS system can cost less, but one of the most obvious ones is that you do not need to purchase any hardware NOR any database either when you start out or when you upgrade to a new release as is the case with on-premise systems such as PeopleSoft. 


***This is one of the most interesting aspects in a PeopleSoft vs Workday comparison. Many companies throughout the years have acquired the very bad habit of over-customizing their systems when configuring the system as the setup stage was in many cases enough to meet corporate requirements. It is therefore difficult for many to accept to "lose" that possibility. This being said, if  after careful analysis there are some mission-critical requirements which cannot be met neither through configuration nor with coming functionality, then I would agree that a SaaS system like Workday cannot be envisaged.


****Directly linked to the previous point. Government organizations whether in the US or in Europe were the last to move from home-made system to package software. The reason is the unique and complex requirements they have (try understanding how to move somebody from one step to another and onto a different grade while ensuring their payroll is on track.) Customization eased the pain to move to package software. Localization (especially of payroll) is also an issue: may of  SOP's (SAP, Oracle, PeopleSoft) localizations were achieved through customization, not as part of the standard offering. How will a SaaS system deal with a Saudi Arabia customer that wants to use a lunar-based calendar rather than the Western (Gregorian) one? I do not expect a Workday for the Federal Government soon to replace the PeopleSoft equivalent.
Companies in other industries are also sitting on the fence and not rushing to SaaS because of this issue. An HR executive from a major US-based computer-equipment company told me last week that although they want to move away from PeopleSoft, their experience with Taleo is not encouraging them to adopt Workday. Retail companies, because of their complex time management requirements, also fall within this category. SaaS vendors, of which Workday is the standard bearer, will have to make quick and serious progress in configurability to meet these challenges.

This being said, before jumping to the conclusion that customization is key, careful analysis and questioning of one's business processes are in order. In my (increasingly and frighteningly long) experience, it feels like many heads of HR use vanilla software the way few Californians (especially of the Angeleno variety) order their food without dismembering the menu as it is printed out ("Instead of the coleslaw, could I have a serving of mashed potatoes?") more out of habit and because it is possible rather than based on a true need.


*****The average time for a new release when PeopleSoft was an independent company was less than two years (PeopleSoft came out with 4 releases between early 2000 and end 2004). Since Oracle took it over in January 2005, that is for the past SEVEN years, there have been only 2 releases. 

Can Infor's acquisition of Lawson deliver on great HR technology?

PARIS

The compulsive blogger that I am is going to be quite busy with the dizzying speed of M&A activity in the HR technology space.  In a lively LinkedIn discussion (registration is required) it was reported that serial acquirer Infor, which last week bought Lawson, had great plans to consolidate its multiple offerings, maybe  à la Oracle Fusion. My first reaction was, “Yeah, right!” since Infor’s business model has never been premised on innovation or consolidation. Just consider the history of its multiple acquisitions:

1.     Anael HR: this one is my favorite as it exemplifies the amazing M&A movement in our industry. It was developed (along with a payroll product called Sysper) in the 1980’s by a French company called Presys (itself the resulting merger of two small IT companies) which in turn was bought by UK-based ERP company JBA in the late 1990’s (which also bought a small French HR-cum-payroll vendor called Logi-Soft).  Anybody remembers JBA? They were quite big in the 1990’s (I attended their users' conference at their Birmingham, UK, HQ and it was quite impressive) but then they just vanished into thin software air. Then, when the 2000 dotcom bubble burst, JBA was sold to Canadian company GEAC.  Anael was an AS/400 offering that targeted construction and staffing companies, although I recall they also had a Windows version that came from the Logi-Soft product. The functional scope was basic HR and payroll, no workflow (at least when I saw it a decade ago), English was limited to payroll and there was no multi-currency (even though it was already part of a global offering!)

2.      In 2005, private equity firm Golden Gate Capital bought GEAC and breaking it up moved its ERP products to Infor (one of its companies) which thus found itself with two HR systems : French Anael and Canadian SmartStream. SmartStream had tried to expand in Europe – I remember meeting several of GEAC executives in the late 1990’s/ early 2000’s and they swore to me they were going to take Europe by storm. Well, I guess they found a way around perjury since SmartStream never went “continental.”

3.      Infor also has Infinium, a run-of-the-mill self-service offering they sell in the US though I’m not sure what payroll/HR system it runs off of. Maybe the previous, though for the life of me I can’t see US companies running Anael HR which is still part of Infor’s active portfolio.

4.      Now, with last week’s acquisition of Lawson, Infor finds itself with three "new" HCM products: Lawson HCM, recently acquired Enwisen  and whatever is left of Movex, the Swedish AS/400-based product Lawson had bought several years ago and which was a limited payroll and HR system targeting the retail and manufacturing industries. When I was an analyst/consultant with CXP in the second half of the 1990's both Movex and Anael were demoed to me and, truth be told, I was underwhemed. It does not seem that things have improved markedly since then.

5.      In addition to these seven HR products, there may well be other HR products tucked away in the sprawling Infor offering (I think they have a time-tracking system as part of their ERP or manufacturing software.)

It is therefore quite uplifting to hear that, like St. Paul on the road to Damascus, Infor has suddenly seen the light and is planning on bringing about big changes in their offering. This is all the more surprising since, as I described it above, nothing in Infor's record suggests it has ever been interested in innovation or consolidation. Infor, in its  business model, is similar to Sage which, in some geographies, has more revenue than giants Oracle and SAP, because it has a multitude of products it sells, often through resellers, to different segments of the mid-market with little product innovation. Investing little in R&D and selling to many makes you profitable. Why would Infor want to change this model and go down an unknown road? Have they stumbled upon a unique vision? I have yet to hear it articulated. Do tigers shed their stripes and sprout feathers? With all the innovation coming only from SaaS and talent management vendors, our industry is in sore need of a next-generation HCM system. Could Infor deliver that? To quote another saint, Thomas this time, “I’ll believe it when I see it.”

Abolish the monarchy or reinvent it?

Let's hope for Catherine Middleton
that she escapes the fate of the three
Catherines Heny VIII married (out
of a total of six wives) :

he divorced one (Catherine of Aragon),

beheaded another (Catherine Howard)

with the last one, Catherine Parr,
surviving  a similar fate only by the
King's timely death.

PARIS

Unless you've been living on planet Mars for the past couple of weeks, you are unlikely to have missed yesterday's wedding of the heir to the heir to the British throne. The occasion has sparked some lively debate on the monarchy's future and I was surprised at the disappointing quality of The Economist's column on the topic.

I remember an excellent article they wrote a good 15 years ago called "An idea whose time has passed" which made cogently the case against the monarchy. Last week's column, on the other hand, is one of the worst I’ve read in The Economist in a long time. Although I don’t disagree with its main tenet, abolishing the monarchy, the arguments used are so convoluted that Bagehot does a disservice to the republican cause. With people attacking the monarchy this way, the House of Hanover (a.k.a Windsors)  is safe for another three centuries.  In theory I would always prefer a republic to a monarchy for the simple reason that why should the highest post in the land, that of head of state, be reserved to a single family? In a truly democratic and egalitarian society anybody should be allowed to reach that exalted position.

All the talk about modernizing the monarchy is simply absurd: how can you "modernize" an institution created in and for the Middle Ages? Its idea has just passed its time. The only way to "modernize" the monarchy is surely to abolish it.

Now, to the real world. Monarchies fall only in periods of crisis: war, revolutions and other political/social upheavals. There is no case of a peacetime “pensioning off” of the royals since, at least in European monarchies which are democratic societies, people realize that the royal family does little harm and therefore why fix what ain't broke? Instead of bothering about who should be on the throne (with limited political power) or even whether there should be a throne in the first place, people realize that there are a lot of other more serious issues  to deal with: unemployment, global warming, reforming bankers –now here’s a group of people who should head straight to the guillotine and yet our so-called democracies dare not touch them; maybe they are the true royals, our undisputed masters. And when a democracy does go to the polls to decide whether to keep the monarchy, in the only recent case (Australia), they voted to keep it (regardless of the fact that the monarch lives thousands of miles away and is now too old to visit them.) And for good reason. Look at the French model which isn’t one: the French president is for all intents and purposes an elected monarch who wields enormous power (proportionately even more than the US president) and yet we can’t say that the French are better off with him (we have yet to have a “her.”)

And why should the alternative to the current monarchical system be a republic only? One can be creative and use an intermediate system which would be more in consonance with the country’s political and institutional history. For instance, why not make the queen or king an elected position? The much-beloved (by the British and tourists) pageantry, coronation and titles will still be maintained but any British citizen could aspire to the position which they will hold for life (just like judges and some other officials in many republican democracies.) This life term wouldn’t be a democratic issue since the monarch would not hold executive power, the Prime Minister would continue with his functions. 

Actually, if it sounds like a novel idea, historically it isn’t. As recently as the 18^th century, Poland chose its kings this way. Polish kings came to the throne not through inheritance but because they had been selected by the Diet (Polish parliament.) Actually, the Poles didn’t even show too nationalistic a streak as they would cast the net wider  and along with representatives from prominent Polish families include European candidates. Thus in the 16^th century Henry of Valois, brother to the King of France, was elected king of what for most people then was faraway Poland.  Now that would be a great way for Britain to enhance its European credentials. And who knows? A couple of centuries from now latter-day Britons may well wonder how retarded it was to reserve the crown to a single family.

Can outsourcing providers deliver innovation in technology?

ATLANTA
They say that remarriage is the triumph of hope over experience. Something similar can be said about outsourcing corporate functions such as Finance or HR.  Why would you ask another company to take over your recruitment or your payroll, if you were happy with them in the first place?  And what are the chances that this HR outsourcing (HRO) provider would be more successful than your own folks who, after all, are located physically within the walls of your company as well as know its culture, and over whom you have stronger control as employees than over a vendor?

The rationale for outsourcing , and which has made it grow over the past decades (even if taking into account the slowdown of the last couple of years) is well known:  it can bring about substantial cost reductions while at least maintaining the same quality level (the famous “your mess for less”) thus allowing management to focus on its core business without the distraction of overseeing other departments, their workforce or the IT systems that underpin the corporate processes that are being outsourced.  More recently, however, access to expertise and innovation have become key reasons for companies to go down the outsourcing road.

But is this faith in their HRO provider’s ability to provide access to innovation, especially when IT-based,  warranted? To provide an answer we have to distinguish between the "old" or "all-or-nothing" outsourcing and the "new" or "à la carte" outsourcing. 

"All-or-nothing" (or traditional) outsourcing refers to the first HR functions to be historically outsourced, usually payroll and benefits where all the tasks from from data entry to process running to reports are managed by the vendor. In this case most of the IT innovation is done behind the scenes with the customer rarely aware of how innovative the proprietary systems are. And to a large extent why should they care? As long as the gross-to-net is calculated correctly and payslips and deposits are produced on time, the existence of  innovative tools is largely immaterial to end users. What if the payroll software does not have a wizard and makes the creation of earnings and deductions a nightmare? Well, since payroll processing is the provider's responsibility and a customer's contact with the system is limited to the few times a month when HR data (compensation, new hires, absences, benefit enrollment) are updated and sent from the master HR system to the vendor's payroll there is no reason for the client to worry about how innovative such a tool is, unless employees find the self service transaction to check their payslip online so horrid that it works as a disincentive - something extremely rare.  

Things are quite different with the new forms of outsourcing (what I'd call "à la carte outsourcing") where, with the HR function moving more into strategic HR or talent management, the system  (a) touches on many or all of your  employees  but also (b) in a quasi-permanent fashion.  A recruitment tool may not be used much by HR (since it’s outsourced ) but it will be used extensively by hiring managers ( admittedly a minority within your employees) AND,  since applicants can come from inside as well as outside the company, then everybody in the company becomes a user of the system.  And since one can update one’s skills or apply for a new position at any moment, then the system is on permanent use by most or all employees even if the process is managed by an outsourcing provider. 

In the case of HR/talent management, where usage frequency and number of users touched by the system can be more important, as well as the fact that those are functions not systematically outsourced, the traditional HRO providers have scrambled to come up with a new offering, usually through acquisitions. Thus ADP, the industry's behemoth, has embarked on a shopping spree aimed at plugging the various holes in its HR offering such as recruitment with VirtualEdge or compensation with Workscape, about which I wrote a post last summer. If Workscape is considered as one of the best compensation tools (especially in the US), it is still unclear what value the integration with ADP's other products brings. And Workscape's performance management was simply ignored in favor of the Cornerstone OnDemand partnership: if ADP prefers to resell a partner's product rather than its own, then don't expect much innovation to come from it. As for VirtualEdge, it was never considered a star product and since its acquisition it seems to have become a Cinderella application. Little innovation is therefore expected to come from it either.

The Indian giants (Wipro, Infosys, TCS and new kid on the block Genpact) are just happy to use whatever platform their customers have and so far have not developed or acquired any other system of their own. Accenture and IBM use a similar approach enriched with strategic consulting and reengineering, but do not innovate on the technology front since they, too, use standard package tools. Actually IBM even got out of the HR software market when it sold HR Access to Fidelity which, after almost a decade with it, has yet to deliver cutting-edge HR technology whether as an outsourcing provider or a software vendor (you can read here my post last year on Fidelity and its HR services.)

NorthgateArinso (NGA), the challenger for the HRO leader's spot, has also gone down the acquisition road. Based on their record they are as much of a serial acquirer as ADP, but most of the HR software companies they have bought have joined their software portfolio more for their country-specific functionality than for their  HR-rich content. However, another evolution of their offering, SAP-based euHReka, is a different story. Here NGA has  innovated by enhancing the SAP product quite substantially with context-and role-based actions and by reducing the number of screens, something that customers used to the cluttered SAP screens and poor navigation can only appreciate. (A client once complained to me that to create an employee in SAP they had to go through an amazing 12 screens!) Sure, some of the enhancement have been for the vendor's own benefit rather than the customer's (such as multi-tenanting SAP so as to be able to run several customers on a single instance), but the creation of an additional user layer which has brought much improved self-service capability has turned the SAP product into a more user friendly system, something it had never been accused of before. Sure, this is not on a par with the usability excellence of a Sonar6, or even of a Workday, but those SAP customers who have upgraded from their own SAP implementation to  euHReka have definitely gained from it.


Unfortunately this latter example is a rare one: outsourcing providers seem to be happy to buy software vendors (when they do) just for the customer base and to be able to tell their own customer, "Hey, look, we too have a talent management offering" (even if limited in depth and breadth) rather than to foster truly innovative features. Don't expect the next revolutionary social HR,  mobile HR or user interface to come from these quarters. Maybe that an outsourcing company is too different a business to understand how to make software, even if they had been using some since Day 1. 


To be fair to the vendors, one must point out that many customers do not have particularly innovative HR practices to start with (many of them wouldn't have gone down the BPO road in the first place if they had) and therefore don't pressure their vendor to be more innovative. But for those forward-looking and -thinking companies, and which have't been burned out by experience, hope for innovation may well lead them to a third marriage with another provider. Let's wish them "third time lucky". 


(The blogger was in Atlanta attending the Analyst and Advisor Summit held by Northgate Arinso. It was also the blogger’s 20^th anniversary of his graduation from the nearby University of Georgia.) 

Shakespeare and the debt crisis

PARIS
In Shakespeare's most famous play, Hamlet, one of  the characters, Laertes, is about to embark for Paris and receives from his father some wise advice:

Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.   

Hamlet, Act I, Sc. 3, 75-77.

Had our rulers heeded this sound advice proffered by the Bard half a millennium ago we would have been spared the disastrous budget crisis which many countries are suffering from. So many pixels have bounced on our screens on this topic that I feel I must bring my  own contribution to the debate.

There's something wrong when people's livelihood is directly decided upon by the financial markets' diktats: cut people's wages and pensions so that you can repay us, bankers and bondholders tell our governments who fall over themselves to accommodate their (and our) true masters. Aren't these modern-day Shylocks (another Shakespearean reference) fat enough? or are they so greedy that they won't stop until they have sucked us dry?

If the weight of debt has become so intolerable that governments can't pay their loans back, well, then don't. I can hear some of my detractors shriek that debts are sacred and should be honored. This is disingenuous and pure hogwash (if hogwash can ever be considered as pure.) Every day companies and people go bankrupt and their creditors don't get paid, why should government be different? After all, the interest rates charged by bondholders reflect the risk they may not be paid: a country deemed solvent (such as Germany) can borrow at a low interest rate, a very risky one such as the PIGS (Portugal, Ireland, Greece and Spain) have to pay much higher rates because they are deemed a riskier investment. So, investors have already been largely repaid by the bigger amounts they extract from governments. Isn't that enough? If I decide to invest in a bakery and customers don't show up, I lose my investment, right? Will anybody come and rescue me? Certainly not the government. That's the purest expression of the market, and I have no problem with that. Why then should bankers and bondholders, who are much wealthier than I, be spared this basic tenet of capitalism? They made a bad investment and should suffer the consequences remembering Shakespeare's words: "loan oft loses itself."

Of course, the consequence for governments is that after they default they will be unable to borrow money in the future. Well, that doesn't strike me as a bad thing at all. After all, wasn't the crisis precipitated by borrowing in the first place? I would argue that we should remove the cause of the problem, and the problem will be solved. As any household knows it's never a good idea to borrow, at least for a long period of time. Sure, when you face an emergency (an unexpected health bill, or a house renovation or student fees for your children) I can understand that you should borrow on an exceptional basis and pay back as soon as you can. But keep on borrowing and pay your debt through even more borrowing and we all know how it will end: in tears. "Never a borrower be," said the man from Stratford.

Now, in my first paragraphs I've been very critical of the financial markets, especially bankers and bondholders, and their responsibility in the current crisis. But intellectual honesty dictates that a big mitigating factor be acknowledged: they have not forced governments to borrow. Criticizing bankers for being leeches and greedy is like badmouthing Dracula for hanging around the blood bank. What else do you expect? But the point is that they haven't held a gun to government's head in order to force them to borrow. Governments have willingly thrown themselves into this vicious cycle which, like its private-consumer variety, is now ending in tears.

Why do governments borrow? If for exceptional reasons, such as a war, a natural disaster, or economic crisis such as a recession, that would be fine. But look at France, a country that has been blessed with no natural disaster in living memory, nor a war for 60 years, and just a few mild recessions. Why then has the French government been unable to balance the books for over 30 years? Yes, you've read right: the French government has been spending more than it's earned since the 1970's, and tears time has come: wage freezes, longer retirement date, cuts in valuable public services such as education, health (I still cannot understand why we are spending €60 billion in defense with no threat from any of our neighbors.) Look around you and most other governments in Europe are in a similar situation (at least, Germany had to pay for the huge one-off cost of Reunification; what has the French government to show for its big debt?)

They say that one should not waste a good crisis. Let's hope that our rulers finally heed the great Will's words that "borrowing dulls the edge of husbandry" and enforce a very simple and common-sense principle: if you cannot have the means of your ambitions, then have the ambitions of your means. If this precept is good for my family, it should be good for the government.  

The unbearable dullness of the Academy Awards

RIO DE JANEIRO
One of life's greatest mysteries is how come that Hollywood, which churns out some of the best entertainment for the world to consume, consistently fails with the annual Academy Awards presentation. The show is a long, tedious, boring affair that drags on for hours. I stopped watching it in the last millennium as I could think of other "pleasures" to inflict on myself, for example corporate PowerPoint presentations (which unfortunately come minus the glamour of Tinseltown.)  News reports keep apprising me of how right my decision was, with last week's presentation no marked enhancement on the usual fare.

To make matters worse, the winners are often largely undeserving with some choices utterly puzzling, so we cannot even give the Academy the mitigating circumstance of having picked the truly best, to make up for the horrid show.  The prizes (also known as Oscars), awarded by the somewhat grandiosely styled Academy of Motion Picture Arts and Sciences, aim at honoring "outstanding achievement in filmmaking" as its mission statement says. Well, as you could tell from last year's two main contenders (dreadful Avatar and pointless The Hurt Locker) "outstanding" is not exactly the word that comes to mind. In the runup to the Oscars last week I watched some of the most nominated movies and candidate for top honors. 


Christopher Nolan’s Inception was interesting, even intriguing  in its major concept: can we control people’s minds through their dreams? What about interferences by people’s projections, fantasies and traumas? And dreams within a dream? This attractive idea is served well by impressive sound and visual special effects but in the end it fails to deliver as it is basically all a pretext to just one action stunt after another. Disappointing. 


The same adjective applies to The King’s Speech, the winner for Best Picture, Director, Actor and Original Screenplay. The British movie clearly tries to capitalize on the Queen precedent: take royalty, the British variety never ceasing to fascinate, mix the big historical events with an intimate look at the players and you have a crowd pleaser. What was astonishing in The Queen because never done before (along with a brilliant script, assured direction and first-rate performance by Helen Mirren) becomes a bit déjà vu here.  Or, to be more accurate, déjà entendu when you hear hackneyed lines such as “These doctors are idiots” – “But they’ve been knighted” – “Which makes it official.” Or “It’s Ma’am as in palm not as in ham” (actually used in The Queen), the marbles trick used in My Fair Lady etc. The  desire to humanize the royals at times is absurd: who would believe that the Duchess of York would go on her own to visit a doctor or that she tucks her daughters in bed without the help of a nanny. I almost expected her to start fixing scrambled eggs for her husband in the morning. 


Now, I know that films, even based on true events, don't have to be a copycat version of reality, but at least they should have some credibility to them. Who would believe that the father of the Queen of England played the penguin (especially when seeing how stuck up she turned out to be) or that he would use a full range of expletives such as the F word? The latter apart, everything about the four- member Royal Family seems to come straight  from a Disney movie (did they produce it?- I checked and the answer is no.) Again such a stark difference with The Queen, which showed that you can express admiration for the monarch while being critical. Sorry, although The King’s Speech is a well made, amiable movie with fine performances, The Queen was definitely a superior movie and this is just another example of the Academy's famous failures at recognizing great cinematic achievement. (It also clear that after Charles Laughton in The Life of Henry VIII in the 1930's, Katharine Hepburn as Eleanor of Aquitaine in the 1960's, Judy Dench as Elizabeth I  and Helen Mirren as her 20th century namesake and successor, playing a British monarch gives you a leg up over your Oscar competition.) 


The Social Network, another of the major nominees, with a great storyline (sorry for my lack of modesty, but the way they depicted Facebook's founder was very similar to the Silicon Valley CEO I describe in my book, High-Tech Planet). The dialogue at the beginning was quite brilliant and I felt it was a better movie than The King's Speech and therefore should have won.  


Actually the best movie-watching experience of these past weeks turned out to be neither of these three but two excellent productions from the 1940's and  which I had never seen before.  The first one is a 1946 film noir by Richard Siodmak: The Killers, starring Burt Lancaster in his first role and a dazzlingly beautiful Ava Gardner, truly one of the most beautiful animals to have graced the silver screen. Based on a short story by Hemingway, which must have been substantially adapted as I always found the great man a powerful bore, it has all the ingredients of the genre: femme fatale, crime, corruption and unexpected ending, all woven together brilliantly. The other one, The Man Who Came to Dinner, a delightful comedy with Bette Davis in a  surprisingly smaller role than usual, was made in 1941, an amazing 70 years ago, and is more enjoyable than most of last year's productions. 


These two movies are proof again that only a handful of movies  a year are worth spending time on and that if you want quality cinema, then go back to the oldies. As I always tell whomever cares to listen, it is much more satisfying to see a great old film than a mediocre new one. 2010, like 2009 before it, will not remain as a vintage celluloid year.  


(Now I can go back to Carnival revelries, today being Mardi Gras is the last day of the annual Rio bacchanalia.)

Arab Revolution - Phase 2: Pharaoh Falls

BOGOTA
Even from the other side of the world there is no escaping the momentous news, which explains why for the second time in a row I am posting on political developments in the Arab world. Last time, a month ago, when I wrote on the  Tunisian uprising which ended the dictatorial rule of Ben Ali, I predicted that Egypt, the heart of the Arab world, would be next. Last Thursday I emailed an old friend of mine: "This is the end of the game for Mubarak.  Following his refusal to leave power, the Egyptian people will mount an even bigger rally and protests after Friday prayers in now world-famous aptly named Liberation Square  and there is no way the military will allow him to stay. So by next week, and maybe even this weekend, he'll be gone." I was gratified to see I was right: the next day, as the weekend started, Hosni Mubarak, the last pharaoh, the absolute ruler of 80 million Egyptians for 30 decades, resigned in ignominy and fled to his home in the Red Sea resort of Sharm-al-Sheikh probably on his way to Saudi Arabia where, like an elephant cemetery, dictators retire to die.

What does this purport for the region, the world and US foreign policy? Well, much has been written, said, pontificated, hollered about by more knowledgeable people than I, so I don't need to expostulate at length. I would just like to lay to rest some myths.

Myth # 1. A lot is being said about the respect in which the Egyptian armed forces (which are taking over  during a transition period) are held. Well, if respect it is, it is the respect spawned by fear, not admiration. What is respectable or admirable about the Egyptian army? Abroad, they waged war against Israel three times, and were defeated three times. At home, they have been the backbone of the dictatorship for decades. Mubarak himself was a general, as have been all Egyptian presidents since the military (yes, they again) overthrew the monarchy in 1952 in what was a coup and not a popular uprising. How ironic that they got rid of King Farouk because he was too subservient to British interests (the power of the day) and they ended up just doing America's bidding.

Myth # 2: Don't believe a single word of all the lofty talk of Obama and Clinton about "the voice of the Egyptian people". Until this week they were backing newly appointed Vice-President Oman Suleyman to take over a vaguely defined transition. But Suleyman is as bad as Mubarak: as head of the intelligence services he has overseen every repressive policy of the last decades including torture, brutal crackdown, censorship, arbitrary arrests, rigged elections and stifling dissent. How can that be a change? Well, it isn't, and that's what America was/is after: to keep the same regime in place under a veneer of pseudo-democracy so that it can continue to implement America's policies in the region. But Vox populi, vox dei. Sometimes you just can't go against the people when they rise in their millions.


Myth #3: The free and responsible media. Yeah, right! I was mesmerized by CNN's coverage  which turned shrilly anti-Mubarak referring to him as the dictator at the height of the protests. And yet for decades you never heard anything like that. Had the Egyptian people not risen against the oppressive regime, CNN would have been glad to continue reporting on "Egyptian elections won by the president's party" and leave it at that when it was obvious that last November's elections had been rigged beyond belief. But that didn't seem to bother CNN unduly nor the US government who was quite happy as long as their buddy stayed in power. It was mind-boggling to hear US Vice-President Joe Biden refer to Mubarak as "not a dictator" and this ...as recently as two weeks ago when he was sending his armed thugs against peaceful demonstrators. Just like French minister Frédéric Mitterand protesting on TV channel Canal+ Sunday program that "Ben Ali is not a dictator" when his police was shooting his own people, and five days before he was to flee. The hypocrisy and duplicity of both mainstream media and politicians are seemingly endless. (Do I need to remind my readers about the New York Times endorsing Bush's Iraq war?)


Myth # 4: The Arabs are happy with their lot and never rise up. True, the last major Arab uprising was almost a century ago, in 1916 when they rose against their Turkish overlords in what was to be known as the Arab Revolt (with the help of legendary Lawrence of Arabia) and would lead to the creation of the modern Arab states that we know today and which are in deep crisis. Tunisia then showed the way and the Egyptians were so shamed by this little country to have done what they hadn't dared do that it galvanized them into taking their fate into their own hands. After all, don't Cairenes call their city Umm-ad-Dunia, center of the world? How could they fail where a small Arab country succeeded, they the heart of the Arab world, its most populous country?


Three more points are worth mentioning:



- Technology and especially social media were instrumental in mobilizing protesters and getting the word and pictures out. When Zuckerberg created Facebook in his dorm room several years ago I guess that if he never suspected it would quickly be worth billions of dollars, it is a safe bet to say that it never crossed his mind that it would have such political impact in countries on the other side of the globe. In the tug between the immovable object represented by Mubarak and the Egyptian protesters' irresistible force the latter won because it has Facebook on its side. 


- US foreign policy in the region is in complete disarray. It tried under Bush to foment democracy (or so it pretended) for nothing. So when Obama came to power he soon went realpolitik accepting Arab autocrats (but then did he really ever want that to change?) and, bang, Arab democracy explodes in his face. It is too early to make a definite judgment, but I believe that the maturity and commitment of the Egyptian people have shown that they will not accept anything less than a free society and democratically elected leaders. And representative government in Egypt means that US policy (especially as regards Israel) will never be the same, because "Egypt will never be the same again" in Obama's words. 
  
- So, who's next? As (bad) luck would have it, the longest ruling dictator in the Arab world, buffoon Qaddafi (he came to power two months after Armstrong walked on the moon, that is 42 long years ago) just happens to be wedged between Tunisia and Egypt, the two countries  which have just chucked their dictators. You can bet that the Libyan dictator is not getting much sleep these days. And today Mahmoud Abbas, the Palestinian president, announced presidential and legislative elections for next September. Considering that his term ended in January 2009 and he decided to stay on without bothering to ask his people how they felt about it, not too soon you might think. And yet CNN has yet to call him a dictator nor does the US administration criticize him for not being elected. Algeria is another low-hanging fruit with its explosive mixture of emergency laws, repressive gerontocratic single-party government and economic. The Saudi king who rules like a medieval monarch supported Mubarak to the hilt until his last moments in office understanding very well what it would mean for his family's shocking and continuing  control of a major and wealthy Arab country if Egypt went democratic. Another same-name Middle Eastern monarch, Jordan's Abdallah II, would be well advised to stop appointing the Prime Minister and leave it to elections to decide the makeup of a government. Of course, that means that the Palestinian majority in his country and probably the Islamists would come to power, something the US (as a sponsor of  Israel) would hate to happen. But isn't democracy about letting the people choose freely their leaders, whether you like them or not?


- A lesson for US foreign policy is to accept Islamist parties, realizing that (a) the US can't anymore force its will on the Arabs, an ancient and proud people (b) that just like not all Socialist governments in democratic Europe or Latin America mean rabidly anti-American policies, some Islamist parties such as the Muslim Brotherhood may well turn out to be people the US can do business with (along the lines of the AKP government in Turkey.) And remember, most of these opponents of the US became so only after the US engaged in anti-Arab policies. Be more friendly to the Arabs, and the Arabs will be friendly to you. 


Finally, to close my thoughts on this truly remarkable and historical achievement, let me share with you  three jokes making the rounds in Cairo.


1. Why did it take Mubarak three decades to appoint a vice-president? − Because he couldn't find anybody as stupid a he is.

2. Where does the $1.5 billion in US military aid to Egypt go? − Half is spent on military equipment and half on black dye for Mubarak's hair.

3. As Pharaoh-Mummy Mubarak lies on his (political) deathbed, his counselors gather by and tell him: "Excellency, the Egyptian people are here to bid you farewell." − "Farewell?", the dying man says, "but where are they going?"