Jul 20, 2023 | Change, Customers, Innovation
Contrary to the myth, the customer is not always right.
However, the customer should always be heard.
You learn a lot from customers, particularly the ones who leave, are dissatisfied and complain, or who exist at the fringes of your market, or even in a market you had not considered.
As a marketer I have always advocated the notion that the good stuff happens on the fringes. As the saying goes, ‘every good idea starts as a heresy’, so hearing the heresy is a core part of being able to respond to new stuff.
There are a lot of tools the hear what is being said on the fringes, tools to track every interaction with your brands, good and bad, and everyone should be heard.
Years ago, I tried to persuade the people in the pork industry’s peak body that they should be spending some time and marketing resources engaging with those growing organic, and heritage breeds of pigs, and got laughed out of the place. They noted that 99.9% of the pork grown was the result of intensive farming, where cost was the absolute driver.
The real competition to the domestic industry was located in those well-known cheap labour countries of Denmark and Canada, and these fringe Australian organic and heritage growers were irrelevant. Besides, the existing major Australian producers were contributing most of the industry marketing funding via matched levy.
Those few loonies with different ideas out on the fringes with tiny volumes only contributed a dribble to the kitty funding advertising and a nice lifestyle for employees in Canberra. This is close to the sources of part of their funding, and political power, but totally removed from growers and the markets they served, but very comfortable.
As a result, an opportunity for growth and profitability has been missed.
Or has it?
Jul 17, 2023 | Change, Governance, Leadership
Executing a culture change in an organisation is the first port of call in most improvement projects. Sometimes it is a minor task, often it is the major one.
There have been libraries written on the challenges of culture change, from ‘The 10 best ways to’ blog posts to great books that point us to new ways of thinking and dealing with the challenges.
I have contributed my share.
The common feature of all these is that it is very easy to talk about, very hard to do.
However, having done this continually over many years as part of almost every project, changing culture is a task that can be broken down into its component parts, and done bit by bit.
Culture is the word we use to describe the collective ‘The way things are done around here’. The clue is in the word ‘Done’.
Getting things done requires a process.
That process can be as organised and repeatable as a written process that is always followed, to the seemingly random, chaotic scrambling to get the necessary activities completed that I see most often.
Either way, there is a set of activities that must be completed, one way or another, in a sequence that can deliver a product to a customer, for what they are prepared to pay.
Individual activities can be isolated and subjected to improvement techniques. Improving the processes, as a focus of activity of all people involved in them, with the support and engagement of management will over time improve performance, and ultimately culture.
Culture is an outcome of the performance of processes, and how those performing them feel about themselves, and their place on the hamster wheel.
Digitisation makes this a bit easier, as we can track process performance in real time, rather than as in the past, collecting data, doing some analysis and cause and effect thinking, then make another change to test the outcome. This used to take weeks, perhaps months, but in some cases can now be done almost on the fly.
Like almost everything, our view of the time frame necessary for effective culture change has been shortened in most peoples’ minds. However, it seems to me that the time necessary for a robust culture change is one of the few things that has not accelerated in this digitised world.
I wish the incoming Governor of the reserve bank good luck in her culture change challenge, the body politic will be watching with a gimlet eye for early and rapid signs.
Cartoon credit: My thanks to Scott Adams’s avatar Dilbert
Jul 15, 2023 | Governance
The execution of Philip Lowe on Friday displays what is to me a worrying dismissal of the responsibilities the government holds over the fate of the economy.
This is despite the polite words of mutual admiration and respect, that is what it was, an execution. While not unexpected, one party just decided it was not in their interests to have the other around any longer.
It is not just this current government, but the 4 or 5, or is it 6, previous ones that have seeded the field that is now being so bitterly harvested. The rot seems to have started in the latter stages of the Howard government, when the kindergarten defence: ‘it was the other kid‘, became the norm.
Nobody in power seems to be able to shoulder responsibility for anything anymore, always pointing fingers, rarely (if ever) offering thoughtful commentary on alternative choices. Meanwhile, they stand in line for a medal if anything, even well beyond their control goes well, claiming that despite all evidence to the contrary, the good outcome is the result of their farsighted and selfless dedication to the common good.
I am not an economist, and have little beyond common sense and a wide range of commercial experience gained over a long period. However, if I was asked to manage a company while being given only very indirect control over the drivers of revenue and expenditure, I would have to politely decline.
The reserve bank governor is the spokesperson for the bank, an independent body charged with managing the cost of doing business in the economy: the cost of money. That is all it can do. Every other lever of control of economic activity is in the hands of others.
Those others have done a ‘Lady McBeth’ washing their hands of any responsibility for the current difficulties, while celebrating the change. The elevation of the current deputy governor Michele Bullock to the top hot seat and expecting her to fix problems of their making better than her predecessor, is a hollow hope. Meanwhile, on top of the day job, Ms. Bullock is being tasked with the redirection and renewal of the culture that delivered the top job to her, while overseeing the changes in the operational processes recommended by the Reserve bank review.
Good luck with all that herculean set of tasks, but somebody has to be in line to be the fall guy. I keep on having visions of deck chairs and icebergs.
Cartoon credit: John Kudelka ‘Friendly fire’ April 8 2011.
Jul 14, 2023 | Communication, Leadership
Our corporate culture demands that we forecast outcomes in the early stages of almost any project.
Accountants feed on the IRR numbers, and these outcomes find themselves incorporated into all sorts of budgets for which people are held accountable. They change from being a forecast, an assessment of what might happen given a set of assumptions, to become a set of predictions, upon which people careers have become dependent.
Not a good outcome for building a culture that is supportive of innovation, which by its very nature is risky.
Prediction and forecast are often wrongly used as similes.
A prediction is a statement of what will happen.
The sun will rise tomorrow.
A forecast is a statement of what the forecaster believes will happen. It will be subject to all sorts of variables and new information, but it is the best guess given the circumstances.
I have written many business plans that included forecasts, my best guess at what the future would look like. Those best guess forecasts then tend to become the targets, against which performance was measured. This has usually resulted in a balancing act between the IRR numbers, and the forecasts being as low as possible to get a guernsey. Neither is a healthy way to make resource allocation choices.
If you want a prediction about the future, go to the local fair and pay somebody with a crystal ball to tell you. If you want a forecast, find someone who has records, and a routine that updates those records on a fixed timetable, adjusting as they go.
I strongly encourage all my clients to do a weekly 13 week rolling cash forecast. What always happens is that over time, the forecast of the weekly cash balances become increasingly accurate as the many variables become better defined and understood.
Often it is a matter of the choice of words.
Current governor of the Reserve Bank, Philip Lowe chose to set a specific time frame around his forecasts relating to interest rate rises when he said in March 2021 that ‘the cash rate is very likely to remain at its current level until at least 2024‘. This forecast became a prediction upon which people based their decision to buy a house. After all he is the Reserve bank governor so should know.
Had he just altered his words a little to be more specific about the caveat contained in the term ‘very likely’ to something like: ‘the odds are that interest rates will hold steady for some time‘ it would have remained a forecast, and he might have retained his job when it come to the end of his current contract in September.
For what it is worth, in my view, he should retain his job. He is a talented, experienced and highly qualified economist, not a political wordsmith.
Addendum. Within an hour of publishing this post, it was annpounced that Philip Lowe was to be gone. No extension, pick up your money and go. Nice words all round about how great he was, but piss off, here is the gold watch, go away.
The irony, at least it is to me, is that the current deputy has been appointed in his place. Irrespective of the qualities of the deputy, the job description calls for a culture change in the reserve. Appointing someone to lead that change who is now top cocky because they were able to leverage the existing culture to their benefit is an utter nonsence. A failure of any understanding of the basics of leadership and culture change.
For me, it evokes visions of deck-chairs and icebergs.
Jul 12, 2023 | Analytics, Marketing, Operations
Anyone who reads my stuff on any sort of regular basis will know I have been deeply engaged with the potential impact of AI on all of us, since I stumbled across ChatGPT in early December last year. Of particular interest is the apparent potential for efficiency gains, particularly amongst the SME manufacturers I serve.
On one hand, I have been excited by the potential of AI to generate efficiency and expand the operational scale of SME’s. On the other, scared shitless at the potential for bad actors to sneak into our collective pockets and steal everything.
I need to write to think.
It forces me to sort out the stuff swimming around between my ears, as when I can articulate it sufficiently to write about it in some coherent manner, it leads to some level of understanding.
So, here is my list of the good stuff, followed by the bad, as it relates to the core of my business: strategy and marketing, starting with SME’s and the written word.
The good things AI can do for you.
- Summarising large blocks of copy, even when it seems very messy.
- Brainstorming; ideas, subject lines, complementary ideas, headlines.
- Editing and grammar. (I have been using the editing and ‘speak’ functionality of word for years, it is essential to me, and is AI that we now just treat as part of the furniture)
- Assembling descriptions and fact sheets
- Looking for logical holes in an argument
- Repurposing copy from one platform to another
- Research
- Outline and first draft.
- Translation and transcription
The stuff AI is no good at doing.
- Humour
- Reflecting current news and events
- Factual reliability. (Sometimes, it just makes stuff up)
- Finding a good metaphor
- Being creative. The great irony with creativity is that AI opens a whole new set of what is possible with visual tools, which can then combine with verbal cloning tools to completely alter apparent reality.
- Looking ahead
- Breaking complexity down to ‘first principles’
- Pouring another glass when faced by a blank page and a deadline.
Then there is all the other stuff AI will do, and evolve to do in the very near future, that is not writing. Graphic design, integrating currently separate digital systems (API’s on powerful steroids) identifying trends and holes in huge masses of data. The impact on medical technology is already profound. When the human genome was first successfully mapped in 2000, the cost of that first success was in the tens of billions of dollars. Now you can send away a sample and have it returned with your genome map for a few dollars overnight.
The key it seems, is to be very good at explaining to the tool what it is you want, in the detail a 5-year-old will understand. As the header cartoon illustrates, being human while driving this stuff will rapidly become the differentiator.
Header credit: GapingVoid.com.
