Sep 29, 2022 | Collaboration, Leadership
A business is like a money machine.
Put a dollar in, and get 2, or 5, or 10 back, and you have a good business.
Put a dollar in and get 0.90 back, is a big red sign that the machine is broken.
The caveat is that it may be a start-up, in which case, a dip before returns start is both inevitable and foreseeable.
Put simply, it is the return on Investment. ROI.
However, when you get the money back is almost as important as how much you get back.
The value of a dollar returned in a years’ time is less than the value of a dollar today. In a decade, it will probably be almost worthless.
It is also important to note that you must put the money in the machine before there is any chance of getting anything back, which is the chicken, and which is the egg is very clear.
In a world increasingly dominated by intangibles, what is inside people’s heads, the equation becomes much more complex.
To what extent do you need to invest in stakeholders heads, as distinct from investing in the tangible assets of the business, or are they increasingly the same thing?
In which case, the challenge is to figure out how to maximise the content of your stakeholders heads, and how best to leverage that content to mutual benefit.
Sep 27, 2022 | Change, Operations
The world of manufacturing is in a state of perpetual change. The rate of which is accelerating at a scary pace, and Australia is falling further behind.
Manufacturing moved from being powered by steam to powered by electricity, a process that took over a hundred years from the early 1800’s to the 1920’s, but we did not notice it due to the time. It took 50 years for the internal combustion engine to go from early iterations to general use in affordable cars, and the telephone took even longer before it was standard in most homes. The dominant business model was based on Industry ‘verticals’ that usually included controlled supply chains.
By contrast, we moved into the age of digital in the early 90’s, and everything changed in a generation.
Suddenly we are seeing ‘ecosystems’ of manufacturers who compete in some things, and collaborate on others, people who do not have one employer only, industry boundaries are not just blurred, they are becoming seamless.
Amazon is a great example. It is a retailer, wholesaler, provider of systems and technology, newspaper publisher, technology investor, space explorer. Not an industry vertical in sight, rather a web of interconnected interests and cash generators.
The architecture upon which our manufacturing has been built for 100 years has broken down, and we seem unsure of what has replaced it.
If we are truly now in a ‘knowledge economy,’ it follows logically that we should be competing on the rate of learning we can achieve. Sadly, this is inconsistent with the way most Australian organisations are structured and run. The application of digital technology is evolving daily at a rate at which we must learn or be left behind. Algorithms that learn are increasingly intruding, while reflecting and building on patterns of behaviour, without us recognising it is happening.
Manufacturing is a physical process, increasingly being driven by digital, and that rate is accelerating, making it necessary to be competent in both the physical and digital, or fail competitively.
Manufacturing is becoming a hybrid beast.
It seems to me that future survival increasingly depends on our strategic priorities moving from the trends in our physical and competitive environment, to those in our relationships and learning environments.
These are much harder to measure and anticipate, so it is easier to ignore them until too late. Don’t be caught with a blindfold.
Sep 23, 2022 | Branding, Communication, Management, Marketing, Small business
In 1960, E. Jerome McCarthy published his idea of the four foundations of marketing. Price, Promotion, Product, and Place. The world has changed in the intervening 62 years, so you must wonder if this idea is still relevant, let alone a foundation.
To my mind, they are not only relevant, but retain their place as a seminal part of the marketing process, it is just that the context in which we think about marketing has changed radically, so the role the 4 P’s plays has also evolved.
This used to be simple, there was a product, and there was a price. Whether it was a consumer product, or one sold to another business, it was simple, and uncongested with notions of service.
Life, and the environment in which we compete has completely changed. Let’s see.
Product.
The idea of ‘product’ has changed along with everything else. We used to buy a car, increasingly, we are now buying the means to get from point A to point B, and discovering new ways to pay for it beyond the options of cash, or some sort of loan from a bank.
Product rather than being a singular physical product or service delivered has become a system that delivers value. The scope of ‘produc’t has also changed from the immediate geography to global, and the channels by which this is achieved look nothing like those available 62 years ago.
Price.
The exchange of money is how the economy goes round; money is the fuel. However, the articulation of the ‘Price’ of a product/service bundle has changed as much as everything else. Along with the product and delivery options now available are the pricing options. There are now many ways to be paid, only a few of which were available 62 years ago.
In all developed economies to differing degrees, the taxi industry has been regulated over time. Nothing changed from 1962 when the ‘Four P’s were articulated until along came Uber and disrupted the cosy taxi environment. Uber eliminated the uncertainty of how long you had to wait for a ride, creating great psychological value, and introduced surge pricing that would entice more supply into the system at times of high demand.
Surge and subscription pricing have changed the face of commerce globally. Amazon uses both in their operations, adding the willingness of a buyer to pay higher prices based on their browsing and purchase history.
Place.
We used to buy products at a defined place, in a defined manner. No longer. The notion of ‘Place’ has been replaced by one of ‘How’ you buy rather than ‘where you buy’.
The old model of a set of mechanically driven distribution channels has been replaced by a melange of ‘omni channels’ that deliver value in a wide variety of ways.
Control of the channels, formerly in the hands of the sellers has moved into the hands of the buyers, who demand and are given in increasing amounts of transparency backwards into the supply chain. All this is enabled by the explosive growth of digital technology.
Promotion.
If the other factors have changed radically, there are no words to describe the magnitude of the change to the ways promotional activity has evolved.
It used to mean the way we gained attention of potential customers via a limited number of options, engaged them, then sold product through whichever stable distribution channel was available. While the core process is unchanged, how we promote out products has exploded.
This brings us back to the question posed: are the for ‘P’s’ of marketing still relevant.
My answer is ‘Yes’, but the clothes they wear have changed radically and therefore the way we think about then must change.
My response to the change necessary is to look at the marketing process more from the perspective of the customer. This brings me to the view that both customer and supplier can look at the process from within the framework of Objectives, Value proposition, Ideal customer, and the Current state. Each party to a transaction sees these four parameters differently, but they are all relevant to the way the transection and relationship proceeds.
Sep 21, 2022 | Innovation, Operations
Yesterday, Tuesday Sept 19, 2022, I went along to the Modern Manufacturing Expo at the Sydney showground.
Expectations were high that I would be able to see the emerging technologies, techniques, product, and service innovations that might support the re-emergence of manufacturing in this country. Specifically, I was also looking for ideas for my clients.
Perhaps I was too focussed, and saw just what I wanted to see when I registered some time ago.
It took a bit to find the expo, as there was no signage at all. Instead, there was signage for the ‘Workplace Health and Safety show’. Confused, I wandered in to ask directions to the manufacturing show to find they were the one and the same.
So, I went into the pavilion hoping to find some of the inspiration and conversation I was looking for.
The manufacturing part of the show was in the back corner. A discarded program I found indicated the manufacturing part had 25% of the floorspace, but it seemed more like 15%, and then, there was not much to see.
My question, hopefully not too frivolous is, do we not need a vibrant and successful manufacturing sector in order to support the plethora of OH&S products, services, and associations? Where are their revenues going to come from if the manufacturing sector remains as constrained as it is currently? Judging from the exhibitors yesterday, OH&S has become the end, rather than a vital means to the end, which should be a vibrant, innovative, globally oriented manufacturing sector.
This is not to throw rocks at those who turned up, made the investment, and were there to generate awareness and leads from those in attendance, in addition to the obvious networking opportunities. It is simply a commentary on the lack of support from across the broad base of manufacturers and their suppliers, education, government, and service providers.
Perhaps it was just a lousy marketing effort by the organisers, the costs were too high (although the OH&S crowd fronted), or maybe it was just one too many expos?
At least my effort was rewarded by running into someone with whom I had a useful conversation about a topic that had nothing to do with manufacturing, and as he lives two streets away, I tend to see him around a bit anyway.
To my mind, the old question of which needed to come first was clearly answered yesterday, and sadly, we seem to have it the wrong way round.
Sep 19, 2022 | Analytics, Communication
Social media platforms all compete for your attention, not just with other platforms, but with the rest of your life. Then, once you have given it, the real test begins.
What do you do with it.
The nature of social media is almost instantaneous. When something comes through your feed, an increasingly rare event for unadvertised material, it has a second, occasionally a couple, to grab and hold your attention, and encourage you to take the next step, whatever that might be.
It is not the long slow romancing of that great looking person in a bar, or at dinner party with friends, it is more like Tinder.
Swipe left, or swipe right. In or out. More information please or no thanks.
Your marketing task on social media, if you are to use it effectively, is to pass the initial tinder test, and have the other party look for more, and then pass on the post to their networks.
So how do you achieve that end, the referral of your material to others?
Most of the advice around is pretty accurate:
- Promise an explicit outcome to a specific cohort of potential customers.
- Photos of people should be front lit, and eyes not looking directly at the camera. This is to avoid the photo looking like a mug shot from the local cop-shop.
- Simplicity and consistency of design
- Make a clear and explicit call to action
- Make it easy for them to contact you
Remember always you only have a second to make the impact that will encourage them to swipe left, then the challenge is to add value, so they stay.
Better make that first second count.
