All Posts By

Jon Gatrell

MediaTemple Outage – lemons into lemonade…

I like nice companies, [tag]Media Temple[/tag] had an outage/slowdown which impacted nearly all protocols and caused time outs and unfriendly latency. Not a good thing, but up to their usual good service here is what they did:

—–Original Message—–
From: (mt) Media Temple [mailto:no-reply@mediatemple.net]
Sent: Thursday, October 04, 2007 3:36 PM
To:
Subject: One month credit has been applied to your account

As per the last incident update on (mt) Media Temple‘s incident tracker system, 24 hours have passed and we have seen no further latency issues on (gs) Cluster.2

(mt) Media Temple is issuing 1 month’s credit to customers affected by this issue (INC# 285). We would like to take this opportunity to once again apologize for the unexpected access problems. We understand that our customers run web dependent businesses on our systems and that slow or inaccessible websites or email are simply unacceptable. We would also like to convey once more that this incident has spawned numerous internal reviews, new monitoring points and new adjustments to our cluster growth formulas. The primary aim for (mt) Media Temple is for this to never happen again.

We thank you for patience and your continued business.

Regards,

Demian P. Sellfors

CEO

(mt) Media Temple, Inc.

You may review the full history of the incident log at the special incident URL:

Very cool, take care of the customer – a novel thought, perhaps the customer IS always right! The other cool thing about this scenario is they proactively notified me and continuously updated me on the status – now this is good [tag]customer support[/tag]. I know I lost some revenue, but the $0.82 I would have made on google ads pales in comparison to the $40 I’m going to get.

Wait does it include the container or just the hosting – maybe it’s only the base service, thats ok too. Getting greedy is not good, but [tag]Demian Sellfors[/tag] isn’t really specific. I doubt he just blew away 1/12 of his revenue, if so he’s way cool.

Lessons Learned: Net Present Value

So a concept which is seldom put into most models and business plans is NPV. NPV is the concept/construct for evaluating long term projects and investments. Every company does it slightly differently in respect to the defining the acceptable discounting values to use in a NPV analysis. Why is [tag]NPV[/tag] beneficial?

It provided a barometer for a given investment which then allows you to overlay the opportunity costs to provide a holistic view of an investment. Here is the general formula (wiki) and overview from [tag]excel[/tag]:

\mbox{NPV} = \sum_{t=1}^{n} \frac{C_t}{(1+r)^{t}} - {C_0}

Where

t – the time of the cash flow
n – the total time of the project
r – the discount rate
Ct – the net cash flow (the amount of cash) at time t.
C0 – the capital outlay at the beginning of the investment time ( t = 0 )

But [tag]microsoft[/tag] has made it simple for us:

NPV(rate,value1,value2, …)

Rate is the rate of discount over the length of one period.

Value1, value2, … are 1 to 29 arguments representing the payments and income.

Value1, value2, … must be equally spaced in time and occur at the end of each period.
NPV uses the order of value1, value2, … to interpret the order of cash flows. Be sure to enter your payment and income values in the correct sequence.
Arguments that are numbers, empty cells, logical values, or text representations of numbers are counted; arguments that are error values or text that cannot be translated into numbers are ignored.
If an argument is an array or reference, only numbers in that array or reference are counted. Empty cells, logical values, text, or error values in the array or reference are ignored.
Remarks

The NPV investment begins one period before the date of the value1 cash flow and ends with the last cash flow in the list. The NPV calculation is based on future cash flows. If your first cash flow occurs at the beginning of the first period, the first value must be added to the NPV result, not included in the values arguments.

Value of NPV from Wikipedia

What NPV tells

NPV is an indicator of how much value an investment or project adds to the value of the firm. With a particular project, if Ct is a positive value, the project is in the status of discounted cash inflow in the time of t. If Ct is a negative value, the project is in the status of discounted cash outflow in the time of t. Appropriately risked projects with a positive NPV may be accepted. This does not necessarily mean that they should be undertaken since NPV at the cost of capital may not account for opportunity cost, i.e. comparison with other available investments. In [tag]financial theory[/tag], if there is a choice between two mutually exclusive alternatives, the one yielding the higher NPV should be selected.

I’m not sure I agree with the general construct of decision making, as sometimes projects are just required and other project valuation methodologies from [tag]Net Present Value[/tag] analysis might be best, like the general payback period approach or cost-benefit – cost benefit is great for internal projects which aren’t revenue centric.

Multiple views of any project may help better understand the shape of the project and if each produce favorable metrics then even better.

Kill the cheerleader – improve communications

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Despite multiple people informing me to the contrary – I consider myself a man of the people, with that comes some union stewardship activities within the organization. Not a true beat people up with baseball bats union role, more of a “hey, I’m noticing “X” in the organization and blah, blah….”. Essentially I’m always willing to hint “maybe we should look at X” to management kinda guy. I know, how un-[tag]proletariat[/tag] of me – but I do think [tag]middle management[/tag] has the best position to drive change and improvement.

th-4.jpg

Nevertheless – so what is the cheerleader? It’s both a persona and a group mentality, at some point, I’ll write on the persona as part of Stuck in the Middle, but it’s the Corporate Cheer Culture which represents an erosion of corporate-wide execution and what I want to rant about today which may help middle managers be more effective and improve corporate communications.

The cheerleader mentality can easily be recognized: it’s when just doing your job – the job for which you are paid for – becomes a corporate-wide messaging platform from which senior executives send ad-hoc, real-time blackberry-driven snippets to the organization to prove who is the most transparent and dedicated member of the leadership team. Let’s put it in context of [tag]Bring it On[/tag]:

Isis: Where we come from, ‘cheer’ is not a word you hear very often…
Lava: They should call us ‘inspiration leaders’ instead.
Jenelope: Ooo, that’s deep… I like that

Often it starts with the line executive who feels the need to send a “who’s awake” message and prove that they are not really sleeping in their bed, with the initial non-global email that declares project completion at 2 am on a Saturday, which get escalated to the whole organization due to him/her having global distribution list sending rights.   The two word “GREAT JOB!!!!” [tag]email[/tag]s lack originality….

Missy: You ripped off those cheers!
Torrance Shipman: Excuse me, Missy, our cheers are 100% original. Count the trophies!
Missy: Well, your trophies are bullshit, and you’re a sadass liar.
Torrance Shipman: All right, that’s it! Get out of the car, I’m gonna kick your ass!

Communication of project accomplishments should typically remain internal to the group participants or team and leverage a more formal vehicle for corporate-wide communications to be done by the CEO or a similar GM level role.   Not all projects are worthy of corporate-wide communication, and some departments, by their nature have more “projects,” which if the communications plan and policies aren’t well managed, could ultimately suggest a preferred team over another.  For example, IT has all kinds of projects, but Collections…not so much.

Unbalanced, ad-hoc and unstructured communications to an entire organization does not solve for the “you don’t communicate enough” complaint which is never satiated by more communication – really!

Effective communication should start with middle management and be group-oriented. While not an article on general communication on a Hill and Knowlton blog, it is still an important framework to use for the “great job team” stuff, paraphrased:

  • How do you manage culture change/improvement?
  • Where are the middle managers in the communication process?
  • How can you increase your credibility as communicators and the credibility of your communication channels?
  • How can we better use measurement to bolster our communication?

If a “great job” communications plan for the whole company doesn’t address the items above, then it basically degrades to promoting and public recognition for a team which is essentially doing what they are paid for.

If, however, middle management institutes a post-completion, “lessons learned” step into the project plan that promotes coaching and further growth, the company will be better off – every project has coaching opportunities, and global “great job” emails minimize the opportunity to strengthen individual teams and eliminate the effectiveness of more strategic corporate-wide communications which leverage formal or established channels.

Think about it – if the VP of Human Resources sends a 1 line great job email and the line Executive rights a missive on great execution, a little hard to coach most people. Everyone has an ego and an artifact in their inbox to PROVE they did well, regardless of the opportunity for improvement.

Corporate cheerleaders need to determine when and how they will communicate encouragement and appreciation to the entire team.   Again another Bring it On thought:

Sparky: I am a choreographer. That’s what I do. You are cheerleaders. Cheerleaders are dancers who have gone retarded.

Perhaps group email love-fests for the whole organization are just bad choreography from a limited leader who wants folks to know what they are doing and how important THEY were in organizing/leading the effort.  There are more sparky’s than one would think on most [tag]leadership[/tag] teams.

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The Chris Brogan Effect – An Unproven Model

So Brogan wrote on the [tag]Scoble[/tag] Effect, well let me tell you there is a Brogan effect as well. I posted appreciatively to his blog for some great content, from which I took his direction and blogged on one of his 100 topic. So Brogan has a technorati authority of over 600 and Scoble over 6100.

Easy math indicates a direct article on Scoblizer would be about 100X views, views than Brogan. I’ve tested it against some low authority blogs and high authority referrers as well, 119 blog sources. [tag]Digg[/tag] does however send some reasonable traffic my way. It’s not a linear scale, it appears to have tiers of disproportionate impact, with a lessening number of visits per authority as you go up in scale.

This appears to map out fairly well against a gizmodo baseline which I have had a direct post on one of the properties I manage, Gizmodo is worth 134 views. So I estimate the scoble effect at about 90-105 visitors. Is that close?