Inside BMG – tech talk with Sebastian Hentzschel

Sebastian is Group CTO and EVP of Royalty Processing Shared Services for BMG. The Bertelsmann’s music publishing and recorded music division is headquartered in Berlin and operates in all major music markets in the world. In 2018 it turned around 545 Million Euro according to Wikipedia.

I met Sebastian not so long ago and we immediately had a click – same old, same old – technology, startups, company culture. I thought would be cool to get a sneak peak at BMG’s tech stack and here is the result – my first interview of this kind.

Sebastian, what is your technology stack?

Our primary stack is AngularJS, Java Spring, Elastic, SQL Server. The other two stacks we have is .NET for one of our key data pipelines on top of MSBI, and Hadoop/Spark for our royalty engine and data analytics platform.

What products do you work on?

We’re currently actively working on roughly 15 products. The most prominent is MyBMG, a web and mobile app our clients can use to see their realtime income earned globally from their music and can run data analytics on it. Other products include BMG’s global repertoire licensing platform our teams worldwide use for finding, pitching, quoting and licensing our 2m+ music rights to business clients in the film, TV, advertising and gaming industry. Lastly, we’re currently expanding our rights and royalties platform across all business segments, moving from traditional to big data technology for better scalability.

Which one are you most proud of? Why?

I’m proud of us as a company. We’ve built a business from the ground up, starting in 2008 with minimal revenue and three people in Berlin and growing to more than half a billion in revenues and 800+ people worldwide.

From a tech perspective, the business of music and music rights management is a very data intensive business. We started out with basic off the shelf software and quickly had to build a new technology platform from the ground up while not risking business continuity. We’ve hit new, growth driven inflection points almost every year, and we’ve been able to get through them and come out better on the other end. Also, we’ve integrated acquired companies globally very tightly on to our platform, which is something that wasn’t easy but we’re clearly benefiting from today.

Just curious – are you a Mac or Windows person?

At home I use Mac and Chrome OS. At work I need my Windows, mainly for its keyboard shortcuts.

Which apps you use daily?

Let me check … FT, Koyfin.com, Whatsapp, Evernote, Headspace, Teams, Jira, Confluence, Trello…  well, and Outlook & Excel, of course.

Let’s go back to tech. What is your development process like?

Our application management and product management teams are internal, software engineers are outsourced with a handful of very close development partners of ours. Most of our products are developed in agile mode. As a result of outsourcing, we have a proxy product owner on the vendor side who takes on the agile process ownership and closely collaborates with our internal product owner. Agile doesn’t fit for all projects, however. We run our royalty platform development project in waterfall with monthly releases. For us, this works better for the type of projects with zero acceptable margin of error.

Tell me about your team. What does your team structure look like?

Teams are organized under our VP of applications & infrastructure, VP of technology product, head of data analytics, as well as three regional heads of workplace services for the US/Latam, UK and Europe & Australia. Software engineers, data center infrastructure management, and data engineers are all outsourced to selected vendors, who we work together very closely. We intend to keep the relationships with those vendors consistent so as to leverage learning curves, knowledge and efficiencies. But we do retain a healthy dose of competition between them.

What is your preferred development mix (e.g. in-house, nearshore or offshore)?

Again it really depends. We operate a mix of onsite and offshore. We chose to outsource development primarily for reasons of scalability. We’ve been needing to spin up, or ramp down, new teams rather swiftly. For example, when we started to replatform our royalty engine, we needed a big data team quickly. Our partner was able to put together that team within a month. What works best though is when developers or business analysts are co-located. On the flip side, the higher the time zone difference between your product/business and development teams, the more difficult collaboration gets. Given that offshoring usually involves outsourcing to companies that have their cultural roots outside of European or Anglo-American culture, projects success requires people who understand both cultures very well and can translate between them.

What I found important to look for in a vendor is that they bring their own set of processes, best practices and innovation to the table. That’s a huge value added.

How do your scale your ops when you have to?

With the growth we’ve had as a company, our capacity planning has frequently failed us with data volumes outpacing quickly our “worst case” projections. On the flip side, the nature of our business cycles is rather solid and doesn’t come with massive spikes of usage. This is why we run data-crunching intensive processes in a private-cloud data center on “our own” virtual and physical servers managed by a third party company. This allows us to significantly leverage fix cost/capex investment.

How do you hire? Do you do brainteasers or coding challenges?

I’m trying to maintain a comfortable atmosphere so the candidate has enough space to present him or herself. I may chance pace should I notice the candidate is vague or evasive. Yes, I do case studies and brainteasers. I want to understand how a candidate thinks, the cognitive avenues they’re taking and how they manage challenges in a high-stake situation. I’ve had candidates really stepping up in these situations, or falter, not because they couldn’t find the answer right away but they wouldn’t engage fully.

What makes a candidate stand out?

For the roles we hire for, I am looking for technical experience and intuition, as well as empathy and the ability to make human connections. In product management, the ability to both be empathetic and structured is important for me. In the application dev and ops space I look for a sense of relentlessness when it comes to driving constant improvement. In any case, I look for authenticity and the candidates who stand out are those who are strong in what they know and do, but are humble at the same time.

Let’s talk architecture. How do you see your architecture in 2-3 years?

I would love to move to serverless architecture, although this may still take awhile. Most likely, I’ll be pushing more services to public clouds where the re-architecture and operational model is financially sensible.

Do you measure speed and quality of delivery, and how?

What’s most important to me is that the entire team – business, business owner, product owner, proxy PO and developers – find their own groove and iterate on that. That’s the most sustainable and ultimately fastest model.

If a feature can be implemented either quick and dirty, or slow and perfect, what would you pick?

It depends. For client royalty obligation calculation it’s clearly slow and perfect. We’re trying to use the concept of going live quickly with a minimal viable product a lot though. It does however depend on the readiness and willingness of the respective business function to engage with that concept.

Do you have dashboard and what metrics do you track?

Yes. My weekly capex investment and operational spend. There’s no week that goes by without me looking at it. The non-financial figures I look at are our global incident burndown as an indicator for technology health and a supply and demand balance. I’ll be introducing a weekly team barometer shortly to ensure team health for both projects and operations – previously our team was much smaller and I was able to speak with almost everyone regularly. This has changed.

What mega trends already influence your products? What is coming next?

A few things. A focus on holistic customer experience is something that influences more and more of our products, even internal ones. Big data technology is no longer a strategic vision but operational necessity. My approach is to utilize all data available and automate reporting and data analysis. We’ve also started integrating machine learning in the first product of ours. Not all problems are machine-learning problems but we have identified a few areas in front and back office that would benefit from this technology. Blockchain is something we’re looking into and experimenting with but given what we know it’s a technology that may not have the impact it has long been proclaimed it would have.

Any question I should ask you?

When is our next lunch?

Sure thing, it was a pleasure meeting you and hearing your thoughts. Looking forward to see you soon.

When is the last time you reflected on motivation and how to build lasting perfomance in your team?

Over the last years I have repeatedly encountered 3 words defining the current notion for motivation: 1. Autonomy, 2. Mastery, 3. Purpose. This notion has often appeared in presentations about tech culture, notably at Zalando (thanks Eric Bowman) but also often emerges in company cultures such as the one at Solvemate (thanks Christian Blomberg).

So I carried the notion with me till I felt urgency to go beyound the simple words. Ultimately I landed at presumably the source of it: the book “Drive” by Daniel Pink.

Without telling you too much and spoiling the read here are some of my takeaways for motivation:

  • Motivation 2.0 in the form of carrot and stick (rewards based) is inefficient and unpredicatable.
  • Motivation 3.0 defined by the 3 aforementioned words offers the ruleset for maintaining performance and job satisfaction of a present day person.
    • Meaning of Autonomy – to hold your life/job with your hands and direct it the way you deem necessary.
    • Meaning of Mastery – to constantly learn and improve on a subject that matters.
    • Meaning of Purpose – to dedicate to something bigger than our own self.
  • Motivation 3.0 seems to almost always outeprform Motivation 2.0. Even in the short term.
  • FedEx days at Atlassian. Nowadays called ShipIt this is a day long retreat for evey engineer in the company to create a new solution or fix something that annoys them. Execution matters but best idea wins.
  • The concept of ROWE – results only work environment, or else said no time keeping (check in/out).
  • Super clear and stripped down to the basics insights from Jim Collins (by the way also a great author) about self-motivation – 4 simple rules how to instigate such culture.

On the matter of ROWE quite curious how many companies run this model, it seems to be getting good traction in creative industries. Yet, wondering whether teams do not alienated by not spending time together.

Anyway, I highly recommend this book and plan to revert to it from time to time. Have you read it and what do you think?

IdeaFox – an innovation management platform for teams to co-create and implement solutions

In the process of building new digital business models I often revert to the business canvas template and generate a ton of MS Word/Excel docs and series of email threads in that process.

IdeaFox seems to deal with all that. I knew about the platform quite some years ago but got to lay my hands on it just recently (should have done earlier though). It has managed to put away most of the aforementioned overboard and gave quite an orderly look to my creative chaos.

IdeaFox is cloud based and covers all steps from collective ideation, co-creation and evaluation, to idea realization. It is simple and easy to use platform. I started a new project within minutes and is quite intuitive (whoever knows me, would sigh how rarely I actually say this).

But just in case you need a tutorial, here is one.

It can actually do more than I do with it. IdeaFox allows idea challenges, idea realization in a stage gate processes, or collection of best practices.

Typical users seems to be innovation and digitization teams (like I am), but also teams collecting ideas for operational improvements.

In sum, IdeaFox solves three needs of organizations that want to get better:

  • Get better solutions by efficiently connecting a broad group of participants
  • Improve realization of ideas and get up to 20% quicker (claim by IdeaFox)
  • Increase employee engagement and foster transparent communication

I also tend to know the two lovely people behind the platform so this is yet another argument for me to give IdeaFox a try if you need such a platform.

Meet Dörte and Aron

Looking forward to your feedback and please share your impressions.

If you want to learn more about IdeaFox, check out ideafox.io or follow them on LinkedIn or FB.

You can find the rest of my articles either on LinkedIn or on my website: https://starkfounders.com. Enjoy!

Meet Lytt, the digital assistant that empowers employees to speak up when something is not right

The #Metoo movement and the increasing number of scandals in tech companies and political organisations, evidently became more urging for employers than ever before. But still, employees who experience discrimination and other inappropriate situations in the workplace rarely address these issues. Research shows that more than half of all cases are never reported due to fear of retaliation or career disadvantage.

Employees do not trust in internal incident-resolving processes and as a result rather leave the company than report what happened.

That’s what Lytt aims to tackle. Lytt is an AI-enabled digital assistant that helps employees to talk about inappropriate experiences at work. It guides users through the process of reporting incidents or concerns, can provide first aid, clarify doubts and even give simple legal advice. After talking to Lytt, the employee is in full control of what happens with the report. Lytt can connect them anonymously to a chat with an internal confidant or even an external expert in the field of the incident.

Marvin and Lara, the founders of Lytt.

That enables employees to address difficult topics in a safe and anonymous way, such as cultural issues, unconscious bias, harassment, discrimination or bullying. At the same time, Lytt empowers companies to identify health risks and conflicts early on, reduce personnel costs and prevent financial risk and image damage. Moreover, it provides the employer with a comprehensive KPI dashboard where all cases are anonymously outlined. This helps to create valuable insights on a company’s working climate and gives automated strategic recommendations for improving corporate culture.

To achieve this Lytt harnesses the power of conversational interfaces with deep learning elements – a promising application of AI. Building a smart chatbot with the ability to process natural language allows to provide helpful advice or clarify possible legal steps without revealing the user’s identity.

Below is an overview of the incident management app.

And below is an overview of the resulting consulting.

The digital assistant does not judge or forward a case unless you explicitly ask for it. It is always available and allows access via employer-individual progressive web app to really make sure employees can talk to Lytt with any device and from anywhere, whenever they feel ready for it. Those who experienced an incident are often unsure whether they should bother someone or if their report would even be relevant.

At the present time, Lytt is focused on offering consulting, mediation and workshops for companies in order to effectively counterpart those problems as well. However there is a lot more planned.

If you want to learn more about Lytt, check out www.lytt.de/en or follow them on LinkedIn, FB or Twitter.

How technology champs set goals – the power of OKRs

I find it increasingly challenging to stay aligned with the company and team goals of a modern business organization. The reason is simple, I believe we live in super fast paced times and it has become imperative for a business to make swift turns on its path to success. This is why OKR seems to be an excellent (and proven) system to align and quickly adapt to change while at the same time measuring results.

OKR is an abbreviation for Objective & Key Result. The concept comes initially from Intel Corporation and is well known for being used amongst the biggest technology companies like Google and Uber.

OKRs are meant to set strategy and goals over a specified amount of time for an organization, teams and individuals.

At the end of a set period, the OKRs provide a reference to evaluate how each piece of the organization did in executing the objectives.

If you have an hour and half I recommend to watch Rick Klau’s video on the topic. If you don’t, take a look at my notes on the topic. Credit goes to Rick but there is plenty of examples and resources on the topic.

Rick Klau about OKRs at Google

The OKR starter hints:

  • Works well if OKRs are publicly available to the entire company.
  • Do not turn them into performance evaluation.
  • Set, reviewed, and revised quarterly (and annually).
  • Initiated or at least supported by the management.
  • Try to do with ready tools. There are plenty of them e.g. Perdoo (Made in Berlin), BetterWorks, 7geese.

Objectives (the WHAT you want to achieve):

  • Cannot exceed 5 in total.
  • Must be strategic.
  • Not necessarily measurable (e.g. grow profit margins).
  • Should cascade – relate to the OKRs one level up and same time to what the individual wants to work on.
  • Mostly (60%) set by the individual.
  • Should get a score.

Key results (the HOW you know you have achieved your objective):

  • Must be measurable (e.g. launch a new feature; reduce defects by x%).
  • Should be hard to achieve so there is a substantial effort.
  • Are graded quarterly (should average 0.6 or 0.7 so it is fairly hard to get 1; 0.4 or below is bad, but a learning opportunity, not a failure)
  • Max. 4 key results per objective

Jason Carlin summed it up quite well:

The most useful thing I was ever told about writing effective OKRs is “Key Results must describe outcomes, not activities. If your KRs include words like ‘analyze’, ‘help’, ‘participate’, they’re describing activities. Instead, describe the end-user impact of these activities. ‘Publish latency measurements from ADR ad serving study by March 7th; is better than ‘assess ADR latency’.”

If you want to see further example OKRs just go to 00:07:36 and 00:36:32 of Rick’s video.

As said there is plenty being said about the topic. If you are sensitive on your spend, try to work out your OKRs using tools like the Startup OKR template. For established businesses I would recommend getting a coach and a good tool to get you started (Perdoo, BetterWorks).