Sep 4, 2023 | Change, Innovation, Strategy
If strategy is all about choice, and I strongly contend that is so, the challenge for responsible management is to imagine first what those choices may be.
This ambiguous mindset requiring choices to be made with less than full information never happens by itself, as it makes people uncomfortable. It must be pushed, being uncomfortable must be made a significant part of the status quo, making change along with its risks and downsides a normal part of the culture.
Ask yourself what could be true in five years?
Chances are you will not get much right, but the process of thinking about and resetting the status quo to a state ready and able to welcome change will be immensely valuable.
In 1985, few predicted that microprocessors would be everywhere, from rockets to fridges, from phones to toys.
In 1995 few predicted the Internet would become ubiquitous, and in 2005 few predicted their kids would get all the news they could consume, and wanted to consume, from social platforms.
Ask yourself what could be true that would alter the shape and dynamics of your industry.
Step forward and embrace the possibility of those changes occurring in the way you manage your business. By so doing irrespective of how accurate you have been, the business will be much better able to respond to and leverage the change.
Aug 30, 2023 | Branding, Marketing
Marketers have outsourced creative development to specialists from the beginning of media advertising in the late 1800’s. Correctly, there was a realisation that it was a specialist skill, not easily found, nurtured, and leveraged.
Amongst the daily advertising dross have been creative gems that have built great brands. At least they were great for a while before stupid management cut the creative advertising budgets in favour of short-term sales activation, a quantitative dead end.
Over the last 8 months another monster has emerged, and suddenly the conversations I hear about are all how to get A.I. to do your creative for you, and save a heap.
Well, here is the news: It cannot.
AI should be called EI. Enhanced Intelligence, not Artificial. All it does is build on what we already have, make connections, do drafts, take what has happened in the past and extrapolate.
Creativity has no role in AI, at least not yet.
Would AI have come up with the great 1964 Volkswagen “Snowplough‘ ad, the one voted the best ad of all time by the Cannes panel? Could AI have maintained that creative standard culminating in the 2012 Darth Vader series?
If there was anything that pushed the disastrous Volkswagen software rort off the front pages, it was this 50 years of brand equity built up by the brilliant, creative advertising.
A.G. Laffey when CEO of P&G recognised that the creativity had been stifled by the rules set in place by a right brained organisation. As a result, everything was stale and boring, as were P&G’s results. He removed the quantitative hurdles, and challenged their agencies to break the rules they had previously been bound by, and demanded that P&G marketing personnel became less risk averse. A new age of creative advertising supported by a tsunami of new products emerged. P&G doubled in size from the early 2000’s, $US44 to 85 billion revenue, increased margins, and earnings/share increased fourfold.
A few months ago in a SME workshop that had a decidedly older demographic, every person in the room knew the brand when prompted by: ‘you ought to be congratulated’. It is 35 years since Meadow Lea was advertised using that piece of creative genius.
Could AI have come up with that?
Header cartoon credit: Gapingvoid.com
Aug 28, 2023 | Innovation, Marketing, Small business
Many of the impediments to starting a new business have been removed over the last 20 years.
You no longer have to hire an accountant to register the business, hunt around for premises, hire a bookkeeper, find an advertising agency, build a product prototype, spend days designing the letterhead, understanding the regulations and weaving your way through them, and doing the hundreds of other tasks necessary to start a business.
They can all be done with digital tools from your kitchen table, or outsourced to someone who has the specific expertise necessary, from their kitchen table.
What used to take time, money and most importantly the energy of budding entrepreneurs can no longer be used as an excuse for not moving forward.
The wheat has been sifted from the chaff by the digital winds.
That just leaves the toughest challenge, the one that in most cases motivated the thinking in the first place, the one that separates the dreamers from the ‘doers’.
How do you identify and generate traction with those prepared to part with their money to buy your product or service?
When they have bought from you once, how do you keep them coming back, or better still, turning your product into a subscription service?
This always was the hardest part of the entrepreneurial journey.
It always will be.
However, these days there are far less excuses not to have a go than there were 20 years ago.
Aug 25, 2023 | Branding, Communication, Marketing
Context. The word is ‘Context’
Marketing is a fundamental contributor to our commercial lives.
It is about defining and leveraging the value you create for another, for which they are prepared to pay, while not being about the transaction.
The beach and Heineken experiment as told by behavioural psychologist Richard Thaler describes beautifully the importance of context.
Two blokes on a beach, very hot, and desperate for a beer.
If they are told there is a shack a kilometre down the beach from which they can buy a Heineken, how much would they pay for the beer?
Same situation exactly, except the shack becomes a 5-star hotel.
The price they are prepared to pay for a Heineken from the 5-star hotel is roughly double the price they expect to pay for the same product from the shack.
This is a classic case of context and expectation; people expect to pay more for the identical product from the 5-star hotel than from the shack.
The utility they get from the beer is identical, only the context of the purchase is different.
How do you leverage the context in which your product is presented to potential customers to maximise your revenue generation?
Aug 23, 2023 | Strategy
The libraries written about strategy, the advice, templates, ‘revolutionary’ ideas, and all the rest, have made ‘strategy’ a cliché that means little to most of those trying to run a small business.
How do you get the time to understand, let alone implement all the sage advice given?
The absence of an explicit strategy, something against which you can measure the impact of decisions being made, means you are always at the mercy of immediacy.
Decisions are almost always taken in the absence of full information, and therefore lack certainty. The best we can do is consider probabilities, based on data, domain knowledge, and experience. Having an unambiguous strategy which is understood by all who need to make operational and tactical decisions, irrespective of the level and type of those decisions, removes at least some of the uncertainty. Importantly, it also gives you a means to measure the impact of the choices being made.
The presence of an explicit strategy offers a framework against which to measure any decision being contemplated. This applies equally to the ‘corner office’ decisions, as it does to the operational decisions daily on a factory floor, or office.
‘Will this choice deliver a result that adds to the achievement of the long-term goal?
When the answer is ‘yes’: proceed, with the appropriate due diligence. When the answer is ‘No,’ irrespective of how attractive the opportunity appears in the short term, you should not proceed.
So, how do you fashion a robust strategy?
There are many tools and templates around that will help the thought processes. However, relying on them to give you the answers is a mistake. The best they can do is prompt the questions that need to be answered. Developing a robust strategy, requires a measure of ‘Strategic thinking’, not an easy skill to develop.
Such thinking evolves from consideration of the interaction of the capabilities and aspirations of your business, those of the opposition and potential opposition, and trends in the marketplace likely to impact demand, supply, and how it is satisfied.
‘Strategic thinking’ should not be a once in a year exercise, as it often is. The most successful enterprises find ways to build such thinking into their every-day activities. While the strategic objectives should not change much, they are the core of long-term resource allocation choices that drive the direction of the enterprise. The means by which they are achieved can change as the conditions and context of the market evolve.
As a framework for such thinking, the following six questions should be regular agenda items, and subjected to critical analysis on an ongoing basis.
- Which markets are we focussed on, and spending resources to reach?
- Which products and services are we delivering to customers?
- How are we going to deliver those products to customers, and receive payment?
- Why would a customer buy from us and not someone else?
- What are the few capabilities at which we need to excel to be able to deliver unique value in that market?
- How do we improve operational and financial performance over time?
Each of these six questions have many layers that a diligent and strategically aligned management will pursue.
Success, as well as failure, generally comes incrementally, bit by bit. However, both are also compounding, each outcome building on the back of the previous. Having a framework against which to measure the outcomes of decisions, and then adjust and/or double down quickly, makes a huge difference to the long-term outcome.
Decisions all compound until reversed, and as Einstein observed: ‘Compounding is the most powerful force in the universe.’
To simplify even further, every operative in an SME should ask themselves 3 simple questions every day, as they make the daily tactical choices necessary to get the work done.
- To whom will this action add value?
- How will it add that value?
- By what means do we get a return from that value?
There, Strategy development in a blog post.
Header credit: a very old cartoon by Hugh McLeod before he became famous and corporatised.
