Long term planning is dead, long live long term thinking

Long term planning is dead, long live long term thinking

Jul 3, 2019 | Change, Governance, Strategy

 

Planning for the long term is a game for losers.

In a world where we have difficulty planning what will happen next month, locking yourself into a long term plan, which allocates resources, and makes binding decisions about the required capabilities, and how to build and deploy them, is crazy.
By contrast, long term thinking, retaining your perspective for the longer term, but being able to be agile in the shorter term, makes way more sense.

The makeup of the top 100 companies has changed dramatically in the past 10 years, and is unrecognisable from the top 100 of 1990. This should give us a clue.

Corporations of the 20th century grew by building scale, marketing, operational, geographic and financial. In the quest for scale they also built silos, bureaucracies, and cultures of  personal safety, risk aversity, and dependence on what worked in the past to  continue to work into the future.

Successful corporations now must be much more agile and responsive to change, even when they  are huge. The necessary process of devolving both authority and responsibility down the tree to where the interaction with operations really happens, makes them look more like a collection of smaller businesses than a corporate monolith.

The new model works. Perhaps the greatest example of this management about-face, while not of a commercial corporation, is the change in the US military retold  in Stanley McCrystal’s great book Team of Teams .

It is unstated, but the current political argument in Australia about the tax cuts legislation is an example of the failure of long term thinking. It substitutes a flimsy long term plan for intelligent long term thinking. Even worse, it is long term planning with an objective that is political, rather than economic or responsible. It is a wedge job on the opposition, and is a great example of why we do not trust politicians, and politics. We know such a long term plan, legislating for something as fundamentally important as a tax framework is nonsense. However, we accept the value of long term thinking, recognising the need to consider the manner in which tax rates make us competitive with other economies, at the same time as raising the revenue to deliver the community outcomes we all demand.

 

 

 

5 things you need to change an industry

5 things you need to change an industry

May 27, 2019 | Change, Innovation, Small business

Today, I will be engaged in a workshop with a client who has a small business on the leading edge of a large, conservative, price driven industry, with established supply chains and relationships, that is about to get a kick in the guts.

We have to map out how a bootstrapped small business can be a catalyst for that kick, and ultimately benefit strategically and financially from the changes they will drive.

Not an easy task, with a considerable  number of unknowns.

This session is an exercise in identifying the key business processes required, and starting the process of building them out, while keeping the wolf from the door. It is also an opportunity to consider the modest number of macro factors from which will emerge the drivers of the growth we are planning for.

Strategy.

In order to make good choices at this early stage, we need to be able to see the whole game, at least our version of what it will be. This is making some bets on what the future of this industry might look like, figuring how we might change it, and assembling the resources to make it happen.

Timing.

Timing of the commercialisation of innovations is a critical and under considered factor in every industry that undergoes change. It is often not the first into the game that ends up the winner, but it is always the one who is best able to recognise the  inflexion points as they occur, and shape them to their benefit. Apple did not introduce the first MP3 player, but changed the world when they lunched theirs. Tesla is not the first electric car, to find that you need to go back well over  100 years, to  Thomas Parker’s vehicles, amongst several.

Value chain influence.

Every business operates in an eco-system of some sort, where there are others upon whom they rely for components, communication, services, and all sorts of items that together make up the differentiated product offering being created.  When you are a small business, without financial or technical resources of any great depth, just a vision of the future and a huge dose of passion, the challenge is to exercise influence over your value chain, way out of proportion to the financial and organisational muscle you can assemble.

Deliberate Design.

In this homogeneous world, looking great is essential, but being great is way more than looking great. It is the attention to the detail, certainty and transparency of processes, and emotional engagement that can be generated that really counts. This means that deliberate design of everything you do is a necessity. Deliberate design also involves the characteristic of stability, and creativity evolves out of stability, because you are able to hypothesise, experiment,  and quickly adopt what works, while discarding what does not. 

Audacity and belief.

Actually believing you can change the direction and nature of an established industry, with little more than the shirt on your back is audacious. It is not just thinking big, it is being prepared to do the work, and take the risks to make it happen.

It is going to be fun!!

The header photo is of one of Parkers vehicles outside his home in Wolverhampton, about 1895. Parker is in the middle.

 

Where is Occum when you really need him?

Where is Occum when you really need him?

May 17, 2019 | Change, Leadership, Personal Rant

We need Occum’s Razor to be applied to our deliberations on all sorts of things, from our personal and professional lives, to the  way politics is being practised around the western world.

The term comes from the writings of William of Ockham, a 14th century philosopher monk, and calls for simplicity of logic, the removal of superfluous ingredients when you have a simpler idea that accommodates the facts just as well.

In effect,  strip an argument back to its essential elements, and work with the facts. Conjecture, personality, and status quo of all kinds should play no part in the development of an idea.

Tomorrow is federal election day 2019, the culmination of a campaign that really started back in August last year when Malcolm Turnbull was rolled by his own party.

The ‘campaign’ has been little more than a display of clichés, vague and inconsistent promises,  and pork barrelling to both fragile electorates and interest groups. I guess to be fair, it must be said that the Labor party has at least set out to articulate an agenda of change that does make an offer to voters, but the chief salesman is a dud.  

What appears to be happening more and more is the phenomena of ‘Occum’s Broom’, which suggests that inconvenient facts and unwanted insights are swept under the carpet. Utilising Occums broom is both intellectually dishonest, and way too easy to deploy as a shortcut to some sort of outcome preferred by one group or another, who seek power.  

By Sunday, we will know who wielded the broom to the best effect, at least in the house of Representatives. In the Senate, I suspect there will be a bit of a wait as the dust from the broom settles its way through the myriad of minor ‘parties’ whose primary vote is limited to their families, and a few zealots.

Bob Hawke passed last night, and I cannot help but wonder if his passing will deliver a telling fillip to the Labor vote, as we are confronted by personalities from both sides observing his great contribution to the nation, and to the practice of politics as a means to make positive and lasting change.

The header cartoon is again by Hugh McLeod at www.Gapingvoid.com and represents the question we will all be asking ourselves come Monday.

 

Electric Vehicle manufacturing: The prospects for Australia.

Electric Vehicle manufacturing: The prospects for Australia.

Apr 29, 2019 | Change, Innovation, Leadership

One of the more fanciful of a grab bag of fanciful bullshit surrounding the ‘debate’ on electric cars a fortnight ago was the assertion that South Australia could become a world centre of electric vehicle manufacturing.

It seems superficially logical, all those car assembly and supplier plants sitting idle, and all those manufacturing skills being wasted as the former  employees become unemployed baristas. However the entry barriers to successful manufacturing and export, and infrastructure requirements for domestic market penetration beyond central suburban areas, are significant.

GM in the US is quietly packing its bags on EV development and manufacturing to shore up profits, particularly in the light of the halving of federal Green House Gas ( GHG ) subsidies. The Californian ZEV credits scheme to encourage electric vehicles, which contributed greatly to the initial research momentum may not be enough by itself to maintain the momentum.  Tesla, the poster boy of electric vehicles is walking a financial tightrope, despite its undoubted success in the market.

Labor appears to have done a bit of homework, if reports are correct, so perhaps there is hope. However, it seems to me the core of electric vehicles, where Australia has some level of competitive ability that can be protected and leveraged is the R&D solving the storage problems, subsequent battery production, and lithium mining and processing.

Lithium, the base of current battery technology is not easily available. However, Australia has considerable Lithium resources, well behind Chile and China, but carrying more sovereign certainty despite the regulatory and political hurdles.

Let’s hope the flights of oratorical fancy yet to come in this election campaign are founded on fact and solid strategic thinking, rather than what sounds good in front of a populist audience.

Anyone for a debate on Adani? (some facts and consistency of argument would be nice)

 

 

Managing the Jenga tower of marketing

Managing the Jenga tower of marketing

Apr 3, 2019 | Change, Marketing

Have you ever set up and played with a Jenga tower?

As the game progresses, some blocks can be removed easily, with no impact, others are really sensitive to any movement and can bring the tower down with a crash.

Problem is, the difference is really hard to tell.

This is a  bit like marketing.

There are a lot of variables, all with differing impact on the outcome, and all differing again, depending on the circumstances of what has gone before, and the manner in which the remaining blocks, or variables, are arranged..

What is important for one customer, in one situation, may be irrelevant to another, or even to the same customer in different circumstances.

Experience with Jenga, and careful testing of the ‘stickiness’ of different blocks before you pull them out can deliver you a win. Similarly, in marketing, the more analytical tools you can bring to bear that account for the minor variations, and differing configurations of the variables, the more likely you will be to get a favourable outcome. Increasingly, this task will be done by machine learning and pattern recognition, that accommodates the specific circumstances of the ‘marketing tower’, in this case,  the customer.

However, AI will never completely replace the wisdom of experience, creativity, and domain knowledge, which the truly successful will continue to observe, gather, and ultimately, rely.

 

Photo credit: Wikipedia

Get stronger, then get bigger

Get stronger, then get bigger

Mar 6, 2019 | Change, Customers, Management, Strategy

Most businesses find themselves on the ‘get bigger or get out’ merry go round. Unfortunately, one of the characteristics of merry go rounds is that unless you hold on, centrifugal force  will throw you off.

Also, the faster you go, the more likely you are to be thrown off, and as you slip towards the edge, the momentum grows making it that much harder to reverse the trend.

The alternative choice is to get stronger, rather than just bigger.

This usually means you say ‘No’ to a lot of tempting, but short term ‘opportunities’ that will arise, as most will dilute the focussed and differentiated value you can deliver to your ideal customers.

The dual question therefore is: How do you get ‘stronger,’ and what does stronger actually mean?

To me, strong means a number of things.

  • You are commercially resilient,
  • Customers, employees, and suppliers are all aligned to your values and strategy,
  • You have a strong brand amongst your customer base who want what you have because you are the only one who has it, and
  • Your competitors employees wish they worked for you

In short, you have a ‘moat’ around your business that repels all boarders and pretenders, and resists the siren song that suggests the grass is always greener somewhere else .

When you have all that, you can get bigger, it will happen almost without you driving size, as the strength will attract suppliers, customers, and those great employees with energy and ideas.