2023 top 10 StrategyAudit posts.

2023 top 10 StrategyAudit posts.

 

This is an indulgence, but who cares, it is that time of the year.

I do not spend too much time worrying about numbers, this blog is my personal ‘journal’ of the stuff I am thinking about. If others get some benefit from that great, if not, nobody cares.

However, contrary to the above, there are some lessons for me in the numbers, and learning from the past, and improving is what it is all about.

The obvious skew in numbers that arises from posts early in the year having more time to gather readers than those posted later, has been ignored. Most posts see the vast majority of views in the first week or so, so timing should not be a huge influencer. However, there are a few exceptions to that rule.

Number 8 on the list is a post on the business model of supermarkets written in 2014. This has been in the top 10, usually the top 3 every year since. Number 7 is a thought starter on the budgeting process, that annually added job everyone except accountants hate, which was posted in January 2020. Every other post on the list is from 2023.

There are a few common characteristics of the top posts.

  • Most promise a silver bullet of some sort in the headline. This may attract readers, but sadly, does not make the meat of the post any better. I can only hope that having been attracted, some might take some value out of the post.
  • They are generally shorter than the average. This may reflect the focus and promise of the headline, or alternatively, I just did a better editing job.
  • This characteristic is both a surprise and a worry to me. Apart from the two posts from previous years, and number 10 on the list, all have as a header a ‘Dilbert’ cartoon. Perhaps the presence of Dilbert is a strong motivator to readership? There was no intent here, and that correlation (or is it causation?) came as a complete surprise to me.
  • Almost half the readers come from the subscription list, which is not big, about 35% from LinkedIn, and the balance from search engines, mostly from Google, but a surprising number from random engines. Readers come 70% from Australia, next biggest is the US, followed by (presumably) taxi drivers in Mumbai looking to emigrate, and a few from places I have to consult an Atlas (remember those) to find.
  • Linkedin attracts a varying number on the platform, from a few to in some cases many thousands. The ‘views’ which misleadingly just counts the number of feeds a post has been shown in, bearing no relationship to being read, varies between a few, and many thousands. I only take account of the number of comments and reposts as an indicator of value, with a lesser value on ‘likes’. Linkedin discourages links leading off the platform by sticking offenders in ‘Linkedin gaol’, meaning they squeeze the algorithm so fewer  people on the platform have the chance to see it. Suffice to say, I expect my gaol sentence to be ‘life’.
  • As I run my eye down the full list, there is an increasing number of posts from previous years, some delivering very regular cadence of readership, years after publication. This is gratifying, and indicates that unlike a newspaper, a useful blog post is not just tomorrow’s fish wrapper. One that does continue to amuse is ‘Public Sector Flatulence’ published in 2013. It can go months without any readers, then suddenly, and suspiciously coincidental to some politicians brain-fart, it generates a bunch of views, and the odd comment.

 

For those interested, the list from top to number 10 is:

The simple choice marketers must make.

Plans never reflect what happens, so why bother?

The single key to great success.

Enduring culture change demands action.

The easiest and most effective way to build carbon emission compliance.

How to maximise the return from your investment in sales personnel.

5 Key factors to consider when planning your budgeting process.

3 essential pieces of the supermarket business model.

Equity or loans: The entrepreneurs funding dilemma.

The two key building blocks of strategy.

Thanks to all my readers, have a safe and merry Christmas, or whatever it is you celebrate (a valued friend is a Hindu, and Hindu’s traditionally marry on the last Sunday of the month. Guess  what he and his wife of 30 years are celebrating)

Note: Given the number of links in the post, Linkedin will send me to their gaol for life, ensuring as few as possible casual lookers get to see the posts. So, please encourage those who might be interested to subscribe on the StrategyAudit site. That way they can continue to have the chance of seeing the outcomes of my addled musings.

Header courtesy of Dilbert, and Scott Adams, again.  It just seemed right.

 

How to make incentive programs compulsive

How to make incentive programs compulsive

 

 

At this time of the year, there is much thinking going on in relation to the manner in which incentives will be applied in the coming year, for which you are preparing the budget.

There are many and varied schemes, most of which are geared in one way or another to a threshold, above which the incentive kicks in.

It can be anything from a sliding commission, to share allocations, holidays, and goodies from the local store.

99% of those I see have one common characteristics: they are known, the thresholds are clear, as they are seen as the motivating factor. They can also be gamed in all sorts of ways, particularly by those in sales. When the commission is based on revenue alone, that can be achieved by giving big discounts, the timing of invoices can be varied, ‘channel stacking’ becomes common.

These sorts of incentives are usually ineffective, because they become taken for granted, and are always ‘gamed’ by staff.

In the early 50’s psychologist B.F. Skinner did a series of experiments, using rats and pigeons as subjects, since validated widely. He used a box that became known as a ‘Skinner box’ in which he placed the hungry subjects, and a lever. The rats and pigeons pushed the lever, and could gain an intermittent reward of food. They soon learned that pushing the lever sometimes delivered a reward, so they pushed it more and more, each intermittent reward reinforcing the behaviour.  The variability of the reward when it is intermittent tends to increase the speed with which the subjects pushed the lever, a few will keep pushing despite the calorific value of the intermittent rewards being less than the calories required for life.

This behaviour can be seen in any room containing poker machines. Some players will, despite knowing the odds are against them, keep pushing money into the machines, hanging out for the intermittent reward of the clatter of coins in the tray, and the psychological reassurance that goes with it.

Why not use the same sort of thinking to manage your incentive programs?

 

 

 

Is it only a year since Chattie kicked off the AI party??

Is it only a year since Chattie kicked off the AI party??

 

 

A year ago I stumbled across ChatGPT for the first time, had a poke around, and wrote this post. Over the following few months, I tried to keep up with what was happening, but at addendum 20, called it a day.

Generative AI became the fastest growing product group in history, with ChatGPT the leading runner by several furlongs, a lead that has been cemented over a year of frantic activity.

The release spawned several major competitors from the neighbours, and hundreds of unexpected applications built on top of the core (Large Language Model LLM) technology. This is a trend that will continue to accelerate.

Depending on who you listen to, we are either a year or two from ‘sentience’, the passing of Alan Turing’s test, or at least several decades away, and possibly will never get there.

The corporate rumble at OpenAI is a bit like Mad Uncle Henry turning up at your kids birthday party, drinking all the red cordial, and going bonkers. The structure as it was set up could not absorb the unprecedented growth. One lot wanted a slow orderly, and safe evolution of AI that did not repeat the mistakes of social media, the other basically said ‘stuff it’, let’s make a few billion!!

It seems like order was restored between the warring parties when the landlord stamped and said ‘Enough’. Capitalists won, and Mad Uncle Henry has been carted away to a comfortable retirement. Who would have guessed?

So far, the resurrection at OpenAI, the return of Sam Altmann (it was 3 days) seems to be working, but who knows what is going on in the minds of those in charge. This blended family model was bound to have difficulties, it just happened way faster than anyone anticipated.

Meanwhile, those not invited to the party continue to rave about the output, while complaining that it is wrong a lot of the time. They just do not understand the difference between an answer that is fact checked and therefore accurate, which is what we expect, and one based on probabilities, which is what your ‘artificially intelligent’ probability models are giving them.

There is no list of pre-programmed answers available from a database as is the case now for the various precursors like the Alexa’s of the previous generation. You are based on a huge volume of stuff on the web, which is why they are called LLM’s, and as we know not everything on the web is checked for accuracy. If it was, my bank account would now be in the billions after all those Nigerian princes I have helped.

Your answers are, as I said, based on the probabilities of an approximate answer built up as you trawl the training sets extracted from the web.

Alexa will give you an answer to your question, so long as the question has been anticipated, and the answer programmed in. You by contrast, will give an answer, but it will not necessarily be the ‘right’ answer. Many questions in life have a range of potential answers, sometimes that is all that is needed, they can be helpful, but AI machines cannot give ‘The’ definitive answer, the one and only, to many of the complex questions we are tempted to ask.

No silver bullet there!

This is very difficult territory for many, as the answers given are in natural language, the language we use every day, so they appear to be exactly as expected. This gives confidence in an answer that does not deserve that confidence. Without critical examination any so called Artificial Intelligence will deliver you rubbish as often as not. However, it can be extremely useful rubbish, able to provide a framework, provide ideas, and do much of the ‘grunt-work’ so often shuffled aside.

Smarter people than me are unable to offer much insight into what might happen next, and it is of no use whatsoever to ask Chat or any of his mates. They have no idea either. Two things I do know. It will be fun, and somewhat scary watching. Secondly, our world has changed, and becoming a dinosaur in your market can now happen almost in the blink of an eye.

Don’t blink first.

The header is courtesy of DALL-E, the sibling of Chat. I asked it to give me an impression of the OpenAI logo exploding, with a Gothic/surrealist feel. I chose this one from a pretty scary lot generated in about 15 seconds.

 

 

The second best word to close a sale.

The second best word to close a sale.

 

 

The best word in sales is ‘Free’, it will close more often than any other, by a long stretch. However, being free also implies there is no value to the buyer, and in any event, it is not really a sale, as there is no money involved. At best a ‘freebie’ is a ‘bait’ of some sort that may lead to a sale.

As a freelancer, I am tempted often to give away a lot of time and advice for free, partly to demonstrate expertise, which may lead to a sale, and partly because I am asked, and am able to do so to help. It is also partly because I find it difficult to just say a flat ‘No’

Recently I had some assistance from a professional to address a health problem. It was someone I knew quite well, and have helped a bit in the past. As I turned up for the appointment, I was asked if I had some time afterwards so the professional could, as it was stated, ‘pick your brain‘ in a specific area where I have deep expertise. As it happened, I did have the time, so said it was OK.

The upshot is that I gave away an hour delivering expert advice, while paying full tote odds for the appointment and professional advice I had gone there to obtain.

Stupid me.

I should have used the second most powerful word in Sales.

‘No’

It is hard for us to say ‘No’.

We all like to be liked, we like to be asked, and to be seen as an expert, and we do not like to be seen as ungenerous, or even a jerk.

However, is my time and expertise of any less value than the professional I was talking to?

As humans, we also want what we cannot have, wanting something just out of reach is a driver of behaviour. Saying ‘No’ moves the opportunity to learn something,, or get something that is just out of reach further away, making it more attractive, and adding to the perceived value of that something.

Watch what happens at contested auctions, as the price goes up, those remaining in the bidding become more desperate to win.

There are many ways to say ‘No’, but the essential element is that it must be clear.

If you apologise, say ‘Sorry’, the door remains open, and you feel a little guilty, when there is no need for you to apologise.

If you say ‘I can’t’ does that mean you cannot now, but might at another time?

If you offer a range of excuses, the ‘No’ remains ambiguous, and everyone is confused.

Remembering that ‘No’ makes you more attractive, you do have options.

  • Just be firm and say ‘No’ I do not do that.
  • Redirect. ‘No’ I do not do that, but here is someone you could ask.
  • Redirect back to you. Again, several sub options:
    •  ‘No. However, email me a few simple questions, and I will try to answer them quickly.’
    •  ‘No, but I do offer calls up to 60 minutes for $XXXX fee.
    • ‘That is a complex question, usually only answerable after a detailed examination, for which my project fee is $XXXX.

Use one of these, and the chances of some sort of conversion are real.

Unfortunately, in this case I did not follow my own advice, and so know that the hour I spent outlining the solution to the problem will not be valued and implemented, so we will have both wasted our time.

At least, I got a blog post out of it, so maybe there was some value after all?

 

 

The disruptive impact of information ½ life.

The disruptive impact of information ½ life.

 

 

Following on from a previous post about the value of information, it seems relevant to ask how long any value created lasts.

We are all familiar with the notion of the ‘1/2 life’. The time it takes for radioactivity of an element to decay by 1/2. Uranium 238 has a 1/2 life of several billion years.

What about the 1/2 life of information?

The 1/2 life of a daily newspaper is arguably 1 day, today’s news is ‘tomorrows fish wrapper’. For 99.9% of blog posts, and most other so called ‘content’, it is about 2 seconds. This seems odd in what is supposedly the ‘Information age’, why is the life so short in most cases, and what make the difference for the 0.1%?

The answer seems to be: It depends on the utility of the information, which is partly a function of the ‘friction’ or resistance which is applied to its transmission.

Businesses, and most institutions are structured to be top down in functional silos, a system that evolved before digitisation of information arrived at our inboxes. This enabled the scaling of effort and the most efficient allocation of resources. A 20th century solution to the challenge of information transfer and leverage.

In the 21st century, with digitisation, the structures of the 20th century are redundant. They are simply too slow to be competitive in an environment where the action happens at digital speed on the ‘front lines’ of customer interaction. It takes too long for the siloed decision making processes to work. Customers will now move quickly to someone who is able to satisfy their need on the spot.

We have to turn our power structures upside down, and give the front lines the authority to make on the spot decisions within a much broader remit than was previously the case.

This creates huge complications for organisations, as the status quo is upset. The power people at the top have worked to achieve all their lives is diluted, and for those at the bottom, suddenly they are being tasked to take decisions that last week were being referred up the chain.

There is a driver of activity, always present, but to date well in the background for most. This is the ‘operating rhythm’ of the market in which they compete. When their decision cycles are slower than the operating rhythm of the market, the market will go elsewhere, or at the very least, opportunities will be lost.

Getting ‘inside’ the operating rhythm of your market, being able to respond quicker than the market reacts, is an emerging key to strategic success.

The 1/2 life of information is now in the hands of others, those who really count, by being customers.

That is why the OODA loop, conceived by US fighter pilot John ’40 second’ Boyd in the 60’s is so relevant to 21st century competition.