Road Map to the Cloud

How AAA Western and Central New York used cloud technology to plot a winning course for its future Road Map cloud to the

hen a call comes in to AAA Western and Central New York, it may not just be member satisfaction that is on the line. It could be the health and safety of the member, as well. Because of AAA’s promise of emergency roadside assistance 24/7/365, it is critical that the company’s technology perform reliably all the time.

In addition to roadside assistance, AAA Western and Central New York offers a multitude of other services to its 860,000 members: directions, travel booking and travel advice, insurance, and more. The company’s 16 branch offi ces rely on its technology infrastructure to keep them connected and delivering world-class service.

THE STARTING POINT: RELIABILITY In the late 2000s, that infrastructure, along with all of the company’s applications, was supported internally by its own data center. But while business was growing, the technology platform was aging.

“I think it’s a problem for a lot of companies,” says Joe McLaughlin, vice president of information technology. “The business gets ahead of the technology, because technology represents cost. We were at a point where our reliability was, in my mind, threatened.” “Our technology environment is complex,” explains Frank D’Arrigo, director of technology and support.

“Instability in any one component can lead to system performance problems while processing member requests.” The CRM middleware servers were requiring frequent rebooting—once every seven days, on average—because of excessive memory consumption and hung Windows services.

The debate began: to upgrade or outsource?

A QUESTION OF CONTROL Some AAA employees were apprehensive at the thought of moving from an on-premise data center to a remote one, and even more worried about moving data to the cloud. As executives were considering their options, a local accident took down a transformer, and the resulting power outage affected their data center for a week.

“That helped make our decision for us,” D’Arrigo says. “We realized we had to give up the perception of control. The paramount decision point became, who can make sure the lights stay on?” AAA’s meetings with NaviSite, a Time Warner Cable company, convinced them they had found the best partner to ensure reliability.

Internally, the business conversation began to evolve. “We needed to shift the IT discussion from ownership of the physical hardware to service delivery—that is, email, database, CRM, and so on,” D’Arrigo says. “We had to stop thinking about servers and start thinking about services.”

CONCERNS ABOUT COMPLIANCE AAA Western and Central New York regularly conducts PCI DSS [Payment Card Industry Data Security Standard] assessments to ensure that its member data is protected. Not only was NaviSite confi - dent in its controls, it could also provide compliance effi ciencies. “The process of documenting and certifying controls required signifi cant time from various internal teams,” D’Arrigo says. “With NaviSite’s SSAE-16 certifi cation [an audit standard for service organizations], they can provide a single resource to respond to questions, provide documentation, and manage our compliance process.”

THE COST CONSIDERATION AAA made the move to NaviSite for reliability, not for cost savings. However, McLaughlin notes that he is no longer burdened with having to look at purchasing additional servers or refreshing hardware each year. “And when we looked at the numbers, we realized we would need at least two more full-time staff to keep the reliability of our network at the levels that we have by using NaviSite,” he says.

THE RESULT: IMPROVED PERFORMANCE The partnership kicked off in February 2012. Today NaviSite’s NaviCloud Platform hosts nearly all of AAA Western and Central New York’s data servers, including database servers, applications servers, middleware,

IT’S A COMMON PROBLEM. THE BUSINESS GETS AHEAD OF THE TECHNOLOGY.

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the CRM system, and the main ERP system. In the process, AAA made a host of fundamental changes that simplifi ed its entire network infrastructure. Since moving to NaviSite’s managed cloud, AAA Western and Central New York rarely has to reboot the servers that once required weekly rebooting. AAA’s service desk also experienced a 29 percent reduction in service tickets—from about 17,000 to about 12,000—in the year after the move. And AAA personnel, freed from the day-to-day grunt work of managing a data center, can now be deployed more effi ciently.

THE JOURNEY CONTINUES As an organization that is open 24/7, AAA gets full value from its access to NaviSite’s engineers and project managers. “They’ve become our army of experts,” D’Arrigo notes.

The relationship extends to senior leadership. “NaviSite has a road map where they can clearly articulate their plans for expanding their current services and exploring new services,” McLaughlin says. “They have asked for our input on any areas they should explore. That signals that they think of us as a long-term partner.

“Now, I don’t have to think about best-of-breed technology for my customers. I can trust that NaviSite will do that.”

THE SPEED SUCCESS OF

In a connected, rapidly changing world, working faster is critical. How can your business become more nimble and more prepared to jump on new opportunities? Here, smart thinkers share what’s worked for them.

BY GILBERT MAURER Fail Fast to Win Big

THE WORLD IS CHANGING SO FAST that not even the wisest among us dares to forecast one year ahead, much less fi ve. So how should we behave? How can we chart a course that weights the odds of our success more favorably?

In short, how do we build a successful business when we can’t predict the future? The answer, I believe, is this: Fail Fast. Adopt a policy of speed. Innovate and probe in a lot of different directions. Recognize that the only sin in a cloudy marketplace is to stay too long with an effort that doesn’t immediately exhibit Exit Velocity. Know that the most dangerous phrase in today’s business climate is, “Let’s give it another month.” In the 1920s, an MIT scientist, Dr. Norbert Wiener, studied mice in a maze to try to discover why certain mice got the cheese more often than others. Even when they were put in a new and different maze, these mice came out winners. Was there a strategy that could be discerned?

It turned out that the successful mice

never went too far down a blind alley. They probed a direction, but turned back more quickly than others. Because they were able to identify and abandon an unsuccessful direction faster than their cohort, they eventually got the cheese. Time and again.

Business leaders can use the same strategy. Try lots of things and be sensitive, not only to failure, but to the absence of success. Starve ventures that are not quick winners and feed successful ones until they prove they are no longer successful. Never fall in love with an investment of money, time, or energy, because it will only grow heavier and it will never fall in love with you.

Fail Fast is a great organizational strategy that leads to high morale and creates an ideal

atmosphere for innovation. People will not innovate when they feel the rise or fall of a project is going to get hung around their neck. When that is the case, they become conservative and say, “Let’s give it another month.”

But when you have a Fail Fast approach, a new idea that does not work out does not become a blot on

“I created this visual of a new product innovation and testing cycle, which I call ‘The Virtuous Circle,’” Gilbert Maurer says. “Every segment of that circle represents money. The objective is to make the circle spin as fast as you can. Speed equals profi t.” (c) 2014 Gilbert C. Maurer

an employee’s record or reputation. It is small enough to be accommodated in the larger business plan. You will fi nd that employees act like different people when they know they’re operating in a no-fault environment. You’ll start hearing, “What if we did this?” or “How about if we tried that?”

The Toughest Test The key to a successful Fail Fast approach is getting information very quickly from your customers and the market. I’m not talking about focus groups; I’m not a big fan of those. Where the rubber meets the road is in the marketplace, where someone is making a decision about spending money.

In the old days, magazine companies would test new concepts by sending out expensive promotional mailings with invitations to subscribe. Years ago, at Hearst, we realized that was nonsense. You didn’t really know whether you had a hit until 12 months later when it came time to renew, and in the meantime you had been paying salaries, offi ce expenses, and production bills. So we created our own special teams to go out to supermarkets and newsstands and collect sales data within hours, or at most a few days, of when an issue hit the marketplace. Unlike other publishers, we never launched anything. We evolved new product into the marketplace. Some never made it. tunity to analyze why an issue did or did not do well, make product or distribution changes even before a second issue, or drop the effort altogether. That was just one of a number of strategies we have used to get quick feedback. The reason we have so many successful magazines is because you seldom saw the unsuccessful ones. We have been decisive and unemotional in discontinuing the effort and expense of those that did not have Exit Velocity.

Of course, it is easy to make decisions about ventures that are either abject failures or huge winners. The real test of the boss’s mettle is the project that is not making much money or losing much, neither falling to earth nor breaking out of the gravitational pull, but sopping up precious management time.

The question to ask yourself is, “What is the least amount of information I need in order to make a decision?” Recognize that you will never have “enough” information. No matter what you do, you will always be operating in the absence of all the information you want, or need.

You need to be somebody who can call a shot and not lose sleep over it. If you do this regularly, you may eventually realize that yeah, somebody made a success fi ve years later from something that you pulled the plug on.

But by and large, you probably will have more cheese than that other guy because you tried more, failed faster with less consequence, and succeeded faster with bigger reward. You did not know what the future would be like, but you put yourself in a position to let the future choose you.

Gilbert Maurer was president of Hearst Magazines for 14 years and COO of the Hearst Corporation for 8 years. He is currently on Hearst Corporation’s board of directors, is director of the Hearst Foundations, and serves as a director for many business and arts groups.

BLOW UP the BOTTLENECKS

B Y J E R E M Y E D E N AND TERRI LONG

MANY CEOS AND TOP EXECUTIVES believe they are already pushing hard for speed. Asking for “more, faster” will be, they fear, the straw that breaks employees’ backs.

This rationalization is simply not true. If it is like most organizations, your company has developed bottlenecks that stall idea generation and approval. Your employees know what those bottlenecks are, will tell you if you ask, and will be happy to fix them to help work move faster. Begin to replace the “culture of slow” that kills innovation, and realize significant productivity gains, by engaging employees with simple steps like these:

FIX THE PROBLEMS THAT FRUSTRATE THE STAFF. Many of these issues are detrimental to the customer experience, as well. For example, one trading house produced extensive daily research to give their brokers a competitive advantage. However, it took brokers up to 90 minutes each day to digest all the great research, which cut into their client-calling time. Working collaboratively, brokers and the research department came up with a new plan: Research would produce a daily one-page highlight version of its work. If a broker needed more information during a call, he or she could go to the research department for more.

Similarly, one bank had a rule requiring tellers to reconcile their cash drawers based on a certain cash level, even if it meant closing down their stations when lines were

long. This problem was deemed a necessary compliance evil. But when managers were given an opportunity to discuss a solution with their internal audit department, they found that the rules could be altered slightly so that reconciliations were done at slow times. Now the audit and branch operations departments, as well as customers, are all happy.

SET SHORT DEADLINES. “Give us an update at next month’s meeting” practically guarantees procrastination until just before that next meeting. When you create short deadlines, you squeeze out the unimportant but in-your-face activities that slow a company down. Give your teams one week to identify and report on the key cause of the problem. Then give them one more week to identify different ideas that might address the cause. Finally, give teams two weeks to evaluate and recommend which ideas will go forward. Some ideas will be quick wins and some will need a bit more analysis.

REQUIRE THAT PROJECTS, IDEAS, AND PROBLEMS BE PRESENTED TO A “TOP DOG.” The “top dog” may or may not be the CEO, but nothing motivates most people to make progress more than an upcoming meeting with their boss’s boss’s boss. Bonus points for having all three of those bosses in the room together for the presentation.

Jeremy Eden and Terri Long, authors of Low-Hanging Fruit: 77 Eye-Opening Ways to Improve Productivity and Profi ts, are the co-CEOs of Harvest Earnings, an advisory services fi rm.

BY RITA GUNTHER MCGRATH IS YOUR TEAM DOING YESTERDAY’S JOB?

Have someone trustworthy collect the feedback sheets and collate the comments, without attribution, for each individual. Give each person the feedback relating to him or her, then give everybody some time to digest the messages. Next, have a meeting in which each person presents what he or she thinks the feedback is saying, and asks the group for advice and coaching. Make sure you end the meeting with some clear action steps.

Here are a couple of items of feedback that the CFO of a 30-person travel agency that I worked with received from her team: WHAT’S PREVENTING YOUR ORGANIZATION FROM BEING ABLE TO MOVE FASTER AND SEIZE OPPORTUNITIES? It may be the way you and your team are doing your jobs. It is common for habits that arose from early-stage crises to linger as an organization develops. People often continue to perform yesterday’s jobs, even when conditions have changed.

Of course, you cannot ask people to overhaul their personalities or ways of working overnight. What you can do is change how you and your team spend just one hour a week. To help your people shake comfortable but unnecessary habits and focus on the future, try the “one hour more/one hour less” exercise. Here’s ho w it works: Ask every member of your team to provide input about every other member of the team on a form with four headings: Team Member; Should Spend 1 More Hour Per Week; Should Spend 1 Less Hour Per Week; Additional Feedback.

TEAM MEMBER SHOULD SPEND 1 HOUR MORE PER WEEK… SHOULD SPEND 1 HOUR LESS PER WEEK… ADDITIONAL FEEDBACK

Nina Creating two-month leading indicator reports so that we know what action to take now Micro-managing fi nancial reporting of past information We have editors who can check the monthly report; not a good use of your time

Nina Helping connect younger fi nance team members more closely with the sales teams Sitting in meetings with the door closed You need to be more visible and engage the younger staff

As the group discussed the feedback, it became clear that the CFO had brought practices into her current role that were more appropriate to her former, more-junior role and the company’s earlier, more-precarious fi nancial state. Continuing to do her old job was interfering with growth and was slowing things down as her staff waited for her to approve small decisions and create “perfect” reports.

At the meeting, the team decided the following: to authorize other members to handle some of the approvals, delegate proofi ng reports to others, dedicate less time to internal meetings, and resolve to make sure that time for working hands-on with the staff was in the CFO’s calendar every week. The improvement in agility was so substantial that the executive team now repeats this exercise once every quarter.

Rita Gunther McGrath is a globally recognized expert on strategy in uncertain and volatile environments. The author of The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business, she is a consultant, a professor at Columbia Business School, and was named one of the top 10 management thinkers of 2013 by Thinkers50.

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