Sep 5, 2022 | Customers, Innovation
Some weeks ago, I found myself as a participant in a workshop touted to be one that was focussed on solving a problem by use of ‘design thinking’
Unfortunately, it was a waste of everyone’s time. Partly this was because the problem we were supposed to be solving was inadequately and inaccurately defined, and partly because the person running it had no practical idea of what ‘design thinking’ really was.
Spoiler alert: it has nothing to do with the visual definition of ‘design’
‘Design thinking’ is no more than a process that starts and ends with delivering value to the customer.
The typical stages are:
- Understanding of customer behaviour.
- Ideation based on that understanding
- Prototyping and testing of solutions to the challenges faced by customers
- Continuous and Intense feedback during testing and prototyping
- Integration of the finished prototypes into the final product offering
- ‘Shipping’ the solution to customers.
The greater the involvement of customers during this process the better.
Simple to say, very hard to do well.
PS. The fails in design thinking are rarely as obvious as the example in the header.
Sep 2, 2022 | Marketing, Strategy
Some hard lessons will need to be learnt by the new crop of marketing managers who have never faced the evil of a recession, and even worse, one that has inflation as its bed-fellow.
Stagflation.
This is not supposed to happen, but it is, and we are seeing the first hints of it currently. Inflation growing rapidly, full employment, low interest rates lifting rapidly, we are facing an economic jigsaw that is defying conventional thinking.
Gone are the days when marketing could believe that failure was good, it was a learning opportunity for leveraging in the next round of potential failure. Increasingly the built in tolerance to failure will be tested, with an increased focus on pre experiment due diligence to reduce its incidence.
At last, we will revert to the core of business sustainability: Profit.
The absence of profit means that eventually, depending on the depth of your pockets, you will go broke. Nonetheless, marketing wankers for the last decade have been seduced by the comforting idea of ‘Purpose’. Often this seems to have overridden the old fashioned idea of delivering value to customers that leads to making a profit.
Every brand has a purpose they say. Heavens, I just want my washing soap to be an effective cleaner, my toothpaste to clean my teeth and leave a nice taste, my internet connection to work, and my car to start on cold mornings.
Having an explicit, relevant, and well understood Purpose is great. It provides a focus for the strategic choices that need to be made, and acts as an aligning ‘North Star’ for all stakeholders. However, purpose over profit is stupid, and the price of stupid is extinction.
Header cartoon credit: Thanks again to Scott Adams and Dilbert for clarifying and simplifying a complex question.
Aug 31, 2022 | Innovation, Marketing
Processes are the means by which things get done. From the simplest thing like cleaning the coffee machine in the lunchroom, to launching a major new product, it happens by way of a series of activities culminating in the objective being achieved.
It makes sense to do the same thing the same way every time, assuming you get the desired outcome. Doing so delivers stability, reduced errors, and makes the processes transferrable between people.
Process stability is a fundamental foundation of being able to scale a business.
However, processes do not innovate. They can replicate the past with great productivity benefits, they do not take risks. They squeeze out creativity, as it is variation to the process, and therefore not allowed.
Let’s look more closely at innovation, which can be broken down into a series of repeatable steps, and thus becomes a process.
There are two types.
Incremental. This is where there is continual improvement, the adjustment of processes to deliver benefit. The preconditions of incremental innovation are twofold:
- First, you need stability to be able to execute on CI, and
- Second, you need the culture of experimentation, continuous A/B testing to prevail.
Break-through. This second category is, to me, real innovation. It can create new markets and demand, of the type Apple deployed with iPod, iTunes then the iPhone, and Henry Ford did with the Model T. You need to be able to see where there is new potential, new markets, new demand, and be prepared to throw the baby out.
The culture and processes that support these two types of innovation are very different, effectively mutually exclusive, so you must make a choice. Trying to do both inside the same corporate ‘shell’ rarely works.
The former requires alignment, stability, continuous improvement, and several other popular management cliches.
The latter will die under these constraining circumstances, it requires insulation, a ‘skunk-works’ of some sort to succeed, a culture that enables experimentation and the attendant risk, giving the efforts immunity from corporate ‘sameness’.
Scott Adams reflects this pardox beautifully in this 2012 cartoon used for the header.
Aug 29, 2022 | Change, Innovation, Strategy
For some years academics have been mumbling to themselves about an observed phenomena they generally called ‘Flattening‘. The discussions have been centred around technology, but the impact can be seen in a much wider context.
The idea is that technology acts as the rising tide in the old saying that a rising tide lifts all boats. By rising the average level of the ‘water’ the differences between individual companies and industries are removed, that the offering becomes increasingly homogeneous until a new technology arrives, lifting the owner clear of the competitive debris.
There are numerous examples.
The emergence of the Internal combustion engine wiped out long established industries and companies in the horse drawn wagon, whip, and horse breeding and breaking industries of the time. As they disappeared the automobile industry and its supply chains emerged, now in the early stages of being ‘flattened’ in turn by electric vehicles.
Before the internet, information existed in small silos and did not move much, and then only slowly. Industries that relied on those characteristics were ‘flattened’ out of existence. Yellow pages, classified newspaper ads, and in their place emerged new industries. Google, Facebook, and the plethora of other communication and search platforms.
Let’s consider energy production.
For thousands of years people used wood or coal to heat their houses and water. In 1698 Thomas Savery patented a machine that drew water out of flooded mines by using steam pressure, then in 1784 James Watt patented the steam engine, which for the next 150 years powered most industrial development. In 1831 James Faraday created the first very simple electrical generator that converted mechanical energy to electrical energy.
So what you ask.
Look at the current environment with the concept of ‘Flattening’ in mind.
Internal combustion automobiles are in the early stages of being ‘flattened’. This has been initiated by Tesla, in parallel with the batteries required to run the cars, but which will have huge implications across the energy sector.
Coal, the dominant world source of energy has suddenly become a pariah. It is polluting the atmosphere with the attendant changes in climate, leading to rapid growth of renewables, both personal and commercial scale. New fossil fuel projects, especially coal, are now being locked out of capital markets as they see their investments being stranded. Only idiot governments with an eye to donors is keeping them alive via subsidy and barriers to entry of renewables.
The tide however is inexorable, and fossil fuel will be redundant soon. As Hemingway noted in the Sun also Rises, when one of his characters was asked how they went bankrupt: “Gradually, then suddenly’ was the response.
That is what is happening in power generation.
Renewables have been around for 25 years, slowly evolving as the technology improved. It seems to me we are at, or almost at, the ‘Suddenly’ point. In the absence of being in front of the wave of changes, we will be left behind in the technical race to build the new industries that will emerge, again.
Flattening is also happening in some way in your domain, it is the normal course of development. the challenge is to see the elephant and react to it in time.
Aug 26, 2022 | Governance, Leadership
There is an additional and dangerous downside to former Prime Minister Morrison’s grab for power I have not seen aired anywhere.
Like everyone else, I have watched the emerging revelations with amazement.
The weight of commentary against the actions he took is total, even his supporters in the Liberal party are having trouble even talking about it, let alone justifying it. The solicitor general’s report confirmed what others had assumed. It concluded that there was no illegality in his actions, but that they were ‘inconsistent with the principle of responsible government‘
We live in a highly volatile and complex world, one where the cycle time required of decision makers is contracting, as the need for wise input born of diverse knowledge from different perspectives into decision making is increasing.
This is where I believe the other great threat to good decision making in the nations interest lies.
Our political system is good at weeding out any diversity of view, it demands adherence to the party line, and as a result, decision making suffers, badly. Good people with good ideas and wisdom inconsistent with that party line do not get a say. As a result, we have a parliament and supporting systems filled with careerists who understand the way to progress is to be yes men.
Anyone running any sort of enterprise facing complex problems understands the challenge. The best way to address those complex problems is to seek a variety of views from experts looking at the complexities from different perspectives. You then blend those views into a decision making process that enables clear accountability and continuous improvement of the outcomes as results emerge. This requires a culture that encourages diversity and transparency.
Morrisons power grab is that he removed any sense that there was a valid opinion on any topic other than his own.
Everyone comes to any situation with a perspective of their own, moulded by their life experiences, beliefs, and positions taken in the past. This is entirely normal. It reduces the cognitive load required to get through the day by allowing us to act almost on auto pilot for most of the time, leaving cognitive capacity to deal with the unusual.
Complexity by its nature has all sorts of second and third order impacts when you set about addressing that complexity. No one person can hope to see them all, or even a small proportion of them. It takes a wise group of diverse minds to focus on the problem from differing perspectives to anticipate those second and third order impacts.
So, just at the time when collaboration, diversity of opinion based on fact, and transparency is vital, the former PM goes the other way, looking at the problems faced by the nation only through his own particular version of the truth, an overload of confirmation bias.
He is the one who exhorted a church audience in Perth a few weeks ago not to trust governments, presumably in total ignorance of the reasons why public trust has been trashed, and the blatant hubris and hypocrisy of his words.
Wouldn’t you love to be a fly on the wall the next time he meets some of his former colleagues in private?
