Jan 5, 2024 | Change, Strategy
The Christmas break is a good time to have that delayed conversation with mad Uncle Charlie. Good old Charlie is a Luddite that the originals would have been proud of, we all have one somewhere. The conversation was about AI, a topic in which I claim little expertise beyond the bits I have read, and superficial fiddling I have done.
However, Charlie was adamantly opposed to any notion that AI was anything more than a gimmick used by computer companies to sell their devices.
In trying to make the case for the continued growth of AI, and stuff emerging, I used an old chestnut.
Compounding.
As Einstein observed, compounding is the most powerful force in the universe. The story of the peasant who did a favour for the emperor and was rewarded with anything he wanted and asked for a chess board to be covered with grains of rice, doubling at each square explains it. At casual observation, easy, but the maths is different. There are 64 squares on a chess board. Doubling the gains at each square ends up in billions of grains of rice. The first few are easy, 1,2,4,8,16, but after a modest number of iterations, the numbers really take off.
Digital transformation is similar.
One step compounds on top of the next, and next, and so on, until you recognise it is not a destination, it is a journey.
Fascinating to think we are at the very beginning of the journey.
An idea that has been attributed to many is that we overestimate what can be achieved in the short term, and underestimate what can be achieved over a longer period.
This is compounding at work.
If you think the developments of the last decade have been huge, unpreceded in history, I suspect the next one will make the last one look like it was snail’s pace.
Charlie has his good points, but he really is a devoted Luddite.
Header graphic is via DALL-E. A Luddite trying unsuccessfully to stuff AI back into its box.
Jan 1, 2024 | Governance, Strategy
I cannot believe another year has gone by. The older I get, the faster time seems to go.
As I considered how to articulate the emerging landscape that will be 2024, two headline items screamed at me.
Strategy, and governance.
Without a solid, deeply considered and articulated strategy, you resemble a flock of sheep, moving here and there in response to the latest and closest barrier or threat.
Without a thoughtful governance process, performance measurement and improvement are simply out of reach.
From running the local café to running the country, these two driving parameters remain the guardrails of progress.
A year ago Strategy and Governance were on my mind as I wrote a 2023 new year post that used the removal of Dave Rennie as Wallabies coach, and reinstatement of Eddie Jones as the example.
A lot of water has gone under the bridge since. It seems both strategy and governance were not on the agenda of anyone in the administration of Rugby. The Wannabees were bundled out in the preliminary rounds of the World Cup, then Eddie walking away from a five year contract. The lessons I suggested they learn from tennis Canada ignored. Who knows what is now concerning the new management of Rugby. Whatever it is, there seems to be scant concern at the long term health of the game.
Rugby is in trouble at all levels, in the myriad of ways that a lack of strategy and governance exhibit. Stakeholders shooting off in differing directions, poor competitive performance, the grasping of new shiny things supposed to fix everything, (eg Joseph Suaali) turmoil in leadership ranks, strapped for cash, but long on promises of better times to come, and previously loyal ‘customers’ turning away.
Is this just a failure of strategic intelligence, being able to develop and stick to a challenging long term strategy, an abject failure of governance, or both?
January 1 also sees copyright on a number of major creative works coming to an end. Significant among them is the first cartoon feature that synchronised the sound with the animated visuals. Steamboat Willie, the cartoon that saw the emergence of Mickey Mouse heads the list, with a range of works becoming free of copyright.
The release of Steamboat Willie, while being just 7 minutes long, was one of those seminal moments that led to an explosion of creativity and technical innovation. As it was with the 1991 release of the HTML software that created the www by Tim Berners-Lee, and release of ChatGPT by OpenAI in November 2022, the world crossed an inflection point and nothing would be the same again.
We look back on 2023, and hope that 2024 will be an improvement, coming from what we learnt from the mistakes of 2023.
Sensibly we should ask ourselves a series of questions:
- What did I get right, what did I get wrong, and what were the drivers for those choices?
- What did I miss that I should have seen?
- What did I see that others may not have seen?
- How will I progress personally and professionally in 2024
If you genuinely ask yourself those questions, deeply consider the answers, and act on them, chances are 2024 will be better than 2023.
Happy new year.
Header: Mickey Mouse as depicted in Steamboat Willie in 1928.
Dec 20, 2023 | Analytics, Marketing
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.
Dec 18, 2023 | Leadership, Management
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?
Dec 15, 2023 | Branding, Innovation
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.
