Nov 6, 2022 | Change, Customers
Who will miss you when you are gone?
That is a question I often ask clients as they contemplate challenges such as the profile of their ideal customer.
Last week I was gone. Laid low by flu such that for the first time in the almost 15 years of writing and posting on StrategyAudit, averaging 2.5 posts a week, there was nothing.
Nada.
Part of the logic of regular posting is that those who follow you get used to a regular communication, it becomes part of their day to absorb the messages sent. Break the pattern, and you risk losing their almost automatic attention, and once lost, it is a hard pattern to re-establish.
Fair time to ask the question of myself, I thought.
Should not have done that, the answer is a touch depressing.
While StrategyAudit is little more than a pimple on the arse of the blogosphere, I did think there would be a few who missed the experience on strategy, marketing, and business improvement built up over a long commercial career that I put out there.
One person emailed me to let me know a link in a recent post was broken, and one other who I know quite well, rang to accuse me of ‘retiring’ without telling him.
There was the usual level of traffic to those existing posts that typically attract readers, mostly via Dr. Google, but often via referrals, which you can easily pick by the sudden peak of readership.
‘Who will miss you when you are gone’ remains a great question as you contemplate the investment made in marketing. It does pay however to have a thick skin as the answer may not be what you had hoped.
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 16, 2022 | Change, Governance, Strategy
In an economy desperate for productivity, how often does stupid, mindless bureaucracy get in the way?
This is not an argument against bureaucracy, rather it is an argument for strategic common sense. It is a nonsense to apply one standard across a myriad of differing circumstances, allowing no margin for reasonable error, then penalising tiny acts of reasonable noncompliance that do no harm.
A tale of woe.
One of my mates runs a small freight company based in a town in the central west of NSW with his two sons. He carries a range of agricultural goods, from grain to fertilisers to live animals, and has built a successful business by skilfully providing specialised services requiring investment in customised trailers designed to meet these specialised needs.
I spoke to him on the phone yesterday as he fumed at yet another example of bureaucratic stupidity making his life a misery.
One of his sons had been pulled up earlier in the day and fined $600 for being 40kg overweight in a 68,000 kg load of grain, loaded from a farm silo without a weighbridge. This is an error margin of .059%, hardly earth-shattering, presenting no danger to anyone, and absolutely understandable given the lack of expensive public infrastructure at the loading dock. The monitors on his axles, properly calibrated and checked, showed no overweight at the time of loading. His assumption is that one axle was in a very slight depression not visible to the naked eye in the loading area.
This is the second time in a few weeks this has happened.
His solution: get out. He can retire, remove the stress of running a small capital intensive business, and his sons will make more money doing something else. Meanwhile, the grain, and live animals he transports either stay where they are, or the costs of moving them go up dramatically as the haulage contractors either charge more to cover the risk of such tiny errors, or simply take less on board.
These standards are set and enforced by the ‘National Heavy Vehicle Regulator’ which has operations in each state. In NSW, there are 310 admin staff and 250+ compliance inspectors, according to their website. I wonder if any will jump in a truck to move the freight when my mate closes his business?
Who knows how the standards are set.
My assumption is that the big operators, Linfox, Toll, and perhaps a few others sit around with a few bureaucrats, agree some stuff, and go to lunch. The big operators go from weighbridge to weighbridge, they are unlikely to ever go up a muddy track to a paddock to take on a load of cattle or sheep to go to the abattoir, or a load of grain in an isolated silo going to a processor.
Is it any wonder it is getting harder to keep the supply chains moving, when the experienced owner-drivers are being driven from the chain by bureaucratic short sighted stupidity imposed for no good reason. The undertrained and inexperienced drivers being pushed in to fill in the gaps are a greater danger to themselves and everyone else on the road than a truck 0.059% overloaded, driven by an experienced driver with skin in the game.
Update: September 23, 2022. This ABC article dramatically underscores the point made in the post.
Sep 14, 2022 | Change, Management, Strategy
Scaling is the objective of every SME I have ever dealt with; they all want to get bigger. In every case they have the same three challenges.
Which activities do they Eliminate?
Which ones do they Delegate?
Which ones do they Automate?
EDA: the challenge of every SME.
The common challenge in them all is that they require change, and human beings, particularly busy ones, avoid change. This is the case even when they recognise that in the longer term, the change is necessary. The problem is finding the time to invest in figuring out what that the change must be, as that is an investment of time that is at a premium, without an immediate return. Besides, change makes us all uncomfortable.
Elimination.
This should be easy, but is often hard. The test is to define the value of the action, and if it is less than the cost, eliminate it. Before desktops, managers relied on regular printouts from mainframes to give us the information needed. Those under fifty may not remember the big dot matrix printed files that emerged in continuous sheets, often for further analysis by hand. These reports tended to multiply like rabbits on heat. One report responding to a once off information request resulted in that report being produced every time the report cycle ran, weather it was needed or not. In an effort to reduce this tree killing activity, I once put a line through most of the list of reports produced weekly for my department, not telling anyone, waiting for the screams. They did not come, nobody noticed. Eliminated. A simple example of what often needs to be done.
Delegation.
If it cannot be eliminated, can it be delegated? Someone who costs 150/hour doing a task that can be done by someone costing $50 is simply a non-productive use of resources. Again, delegating is easy to say but often hard to do. Everyone has established routines and delegating requires trust and change.
Automation.
When a task is necessary, cannot be delegated, and is done more than once or twice, it should be automated. The opportunity for automating tasks is limited only by imagination, the determination to do it, the time to specify it, and usually a modest investment of time and money. Automation of what used to come to me in huge printed blocks from a mainframe has been done by the advent of personal devices and ‘apps’. Information can easily be consolidated and tailored for the specific needs for which it is required. While the goalposts are continually moving as to what can be done, there is no task in an SME I have seen that cannot be at least partially automated.
EDA should be a standard item on every management improvement agenda.
Sep 7, 2022 | Change, Leadership
‘Business coach’ seems to have suddenly become a go-to moniker for former corporate executives looking for a new gig. For someone who recognises that a coach might be a valuable performance enhancing addition, how do you pick the right person?
I had a conversation on this topic recently in the pub with some colleagues, a beer with a few people who run SME’s, that used ‘networking’ as an excuse for said beer.
(Aside, Christ beer in a popular pub is expensive!)
The conversation was initiated by a ‘techo’ who was just folding his 5 year side gig up, after very considerable investment of time, money, and emotional commitment.
He needed, he said, to learn how to be a ‘businessman’ rather than a ‘techo’, and needed a coach, or mentor, but did not know how to pick the right one.
The response I gave him was
- Been there, walked in your shoes
- Able to relate at a really human level to the coached
- Part psychologist, part headmaster, part collaborator, to drive accountability
- Able to bring together the confusing and fluid interaction of financial management, revenue generation, operations, and all the necessary support and regulatory stuff. They cannot be an expert in all these, nobody can, but they acknowledge their limitations, and have a group of trusted specialists available as needed.
- Ask good questions and happy to be proven wrong.
- Prepared to tell those being coached the ugly truth.
- Leaves you better off after every session, although from time to time, that is hard to see at the time. Bit like going to the gym, the impact is cumulative over time.
- Widely knowledgeable beyond the domain the ‘coached’ is operating in to bring in different perspectives
- Holds themselves and those they coach accountable.
- The coach ensures they dedicate the time to discover ideas and observations from other domains that may be useful, then package them up for those they coach.
- They will always be a great listener and have a keen understanding and appreciation of your point of view.
- They can personalise their own experiences in a way that the coached can relate to
- They make the agreed goals of those being coached their own for that relationship.
- They demonstrate patience and perseverance, while being assertive.
However, there are two problems in all of this. It is highly unlikely you will find all 14 in one person, and there is a further huge catch for you:
A real ‘kicker’
Even if the coach you choose has all these characteristics in spades, it will not be enough.
There is a further absolute requirement for a successful coaching relationship.
You, the one being coached, must be open to change.
Coaching is all about changing behaviour, modifying responses, being more open, and understanding. In short, able to be coached. In the absence of that ‘coachability’, nobody can help you get better, you have to do it yourself and suffer the consequences.
Header credit: Yoda from Star Wars series.
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.
