Environmental research: A commercial necessity.

Environmental research: A commercial necessity.

Aug 29, 2016 | Change, Leadership, Strategy

Last week I was fortunate enough to be invited to a session that outlined the latest Roy Morgan research focussing on Mortgage stress and superannuation.

The data presented by Morgans CEO Michele Levine  was both informative and disturbing in a number of ways. I recommend you have a look at  the slides, and the report, and give some thought to the problems that will evolve over the next few  years that this country will have to address, somehow.

As I considered the data and the implications, it got me thinking more broadly  about one of my long term hobby horses.

Environmental research.

Not the tree hugging type, although there are significant commercial questions and opportunities there, but the sort of research that informs thinking about the long term trends and behavioural changes that will impact the competitive environment in which we all have to live.  Understanding the direction of change has proved time and again to be more important in successful commercial development than the more common stuff that just tests the reactions to a specific proposition. It provides the context for  the varying value propositions reflected in commercial and social offerings, and creates the framework from which you can learn.

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A sensible framework includes an ongoing process to scan the trends, focus on those that will have a long term impact on the community, generate alternative responses, execute responses in a trial format, test , measure and iterate.

 

In the fortunate circumstances that we had a political climate that encouraged and enabled the sort of decision making that a society needs if it is to optimise the mix of economic and social policy outcomes over the long term, this sort of ‘environmental research’ would act as a valuable input to the debate.

Pity we do not have that sort of political environment, our children will pay a high price for our failure in that regard.  The best I think that we can hope for is to rely on the collective common sense of the electorate, but I sense that cynicism and the resulting self interest are dominating.

Not much of long term community value seems to be coming from the current politics, although the participants all claim to represent the mood and values of the community. They should be publicly considering the implications of research such as that done by Morgan, and we would all be better off in the long run for the informed debate founded on facts rather than supposition, suspicion and hyperbole.

There is however considerable meat in the data useful for the development and informing of commercial strategies and priorities. This ‘meat’ should assist you to optimise your returns while our so-called leaders fiddle.

 

10 steps to world class excellence

10 steps to world class excellence

Aug 25, 2016 | Change, Leadership, Strategy

Watching Michael Phelps  weave his magic in the pool at Rio has been more than a sporting feast, it was a lesson in superior performance that has required solid foundations and enormous hard work over a very long period.

Where does that drive, determination, and ability to maintain a focus for so long come from?

Clearly Phelps is a hugely talented individual, but we all know those people who do not make the best of what they have naturally by doing the work. A colleague directed me to a recently published book, ‘Golden rules: Steps to world class excellence‘ by Phelps’s coach, Bob Bowman.

The ‘Golden rules set out apply to virtually everything we do, certainly everything I set out to do as someone who helps business owners get the most out of their emotional and financial investment in their businesses.

Following are Bowmans rules, with a few anecdotes from the businesses  I have been involved with, and life.

A champion sets a ‘Dream Big’ vision.

About 16 years ago I worked with David and Dooley Bellamy to map out a plan for their organic produce business,  that envisioned the launch of organic baby foods. At that time Bellamy’s was a modest organic farm at Longford, just outside Launceston in Tasmania. David & Dooley had a dream to produce organic babyfood they would be happy to feed their kids, that would sit on supermarket shelves, opening up what was then a non existent new category in the market. While there has been many changes since that time, and I can claim little credit for the success that has been realised, Bellamy’s is now a public company that has become a significant exporter of organic baby food, after being the first on shelf in Australian supermarkets.

Adopt an ‘All in’ attitude, not a ‘Get out’  one.

Several of my kids achieved great athletic success, while falling just short of the Olympics, to continue the sporting theme. My now 30 year old daughter was one of the top 4 or 5 gymnasts in the country as a girl, lined up by the AIS as a ‘likely’ for the Sydney games. At the ‘nationals’ in Sydney she missed her footing on the beam, falling and badly damaging her breastbone, making it excruciatingly painful to do anything that stretched her chest, difficult to avoid in gymnastics. She did not pull out of the competition, but climbed back up on the beam, finished her routine, then completed the remainder of  the disciplines despite the excruciating pain and knowing she could not do some of  the skills she had trained so hard to perfect, and as a result could not score well. Today she practises Physiotherapy, and makes me proud every day.

Take risks then enjoy the rewards

An acquaintance of mine is a professional in nuclear medicine, a really smart guy who is also a serial entrepreneur. Over 20 years or so, he and his wife have ‘bet the farm’ on several occasions and are now in a position to enjoy the rewards, while still scratching their entrepreneurial itch on a wider scale. The rewards for them are not counted in the bank, but in the freedom and lifestyle delivered by their successes.

Short term goals lead to long term success.

Long term success is made up of many small steps, and the cliché that every journey starts with the first step is a cliché because it is  correct. Way back in march 2009, I wrote my first blog post, and had no idea where the second one was coming from, or what it would be about. However, I had come to the conclusion that committing to a post every couple of days was a good way to both articulate and record my thoughts, and be a marketing tool for my consulting practice.  My goal at first was just to impose on myself the discipline to write a couple of posts a week, and lo and behold, close to 1500 posts later, it is way more than a marketing tool, it is a repository of ideas, processes and a few rants about the things I care deeply  about, that together have great value, at least to me. It does also seem that some of those in those market segments where I choose to concentrate my efforts, weather they become clients or not, also see the value

Live the vision every day

As an Aussie, I love the success story of Atalssian, the local tech startup that has become a world standard in technical project management.  One of the founding visions was and remains, “Don’t f*** the customer”. A bit brash, perhaps not the usual polished wording of a corporate value statement, but nevertheless absolutely clear, memorable, and I bet nobody in the business has any doubt about the focus of their activity. That is what a vision, or purpose, or Mission, whichever of the management clichés you choose to apply, are all about: giving a clear objective to everyone. Any journey over a long period has its ups and downs, stuff that does not work. Having a guiding principal that dictates behaviour on a day to day basis, even one as unconventional as Atlassians, enables the short term reverses to be turned into improvement opportunities, rather than being destructive.

A team approach can bring individual success

Some time in the nineties I read Ricardo Semmlers book “Maverick“. At the time I thought it was the exception that made the rule, the business that became more successful with less, and bottom up management. However, as time passes, the importance of teams, not just to commercial management success, but to success in every arena is becoming more and more obvious, and libraries have now been written that recognise the role of teams in individual success. It is no coincidence that the emergence of digital tools that enable the co-ordination and collaboration of teams has led to an explosion of success in every facet of life, and the inverse also applies. The Australian swimming team was very successful in Beijing, failed comprehensively in London, and from the Rio results, is on the way back, while still experiencing growing pains.

Stay motivated over the long haul

One of my school mates is a musician, at least on the side, as he had to make a living being more conventional. However, over the 40 years I have watched him practise, play and perform, he stuck  to the dream of making a living albeit modest, out of music. He never gave up, and over the last few years has suddenly become successful, making a very good living after a long apprenticeship. Not quite an overnight sensation after 20 years of obscurity, more like a moderate financial but hugely rewarding personally success after 35 years of sticking to the job.

Adversity will make you stronger.

I have told the story of the early days of the General Products division of Dairy Farmers as I found it when I joined as it was spun out of the then regulated milk business to compete unfettered by the past. It was nothing short of a financial and operational disaster, which if not difficult enough was beset with industrial turmoil inherited from  the decades of operating in a regulated and highly unionised  ‘cost-plus’ environment.  During a strike, a deliberately lit fire destroyed much of the warehouse capacity, which could have led to the gates just being closed for good.  Instead, the fire was a catalyst for change, the final straw after which everyone recognised that we had hit rock bottom, and the choice was stark; change attitudes, work hard and together, or go home for good. Within a relatively short space of time, after some herculean effort, you would not have recognised the place.

When the time comes perform with confidence.

Most people feel some level of apprehension at the prospect of speaking in front of a crowd, for some it is  overwhelming. Jerry Seinfeld’s observation that many would rather be in the box than delivering the eulogy resonates deeply with many. Around 1985 I was asked to present at the ‘Foodweek’ conference, a then annual food industry gabfest that was the ‘must-attend’ event of the year for everyone in the industry.  To prepare I spent a lot of time writing and perfecting the presentation, hired some  professional AV assistance, and had some presentation coaching, but to call what I felt nervous would be like calling Everest a ‘hill’. On the day, I figured I could  have done no more, so went out there in front of still the biggest crowd I have ever presented to, relaxed and did a pretty good job, I am told.

Celebrate your achievements, then decide what is next

Success, no matter what it is in should be celebrated as an acknowledgement of the effort, as well as the achievement. The celebration when managed well becomes hugely motivating to everyone concerned. A client of mine has in their main office an old ships bell, been there for as long as anyone can remember. At any time, any person who believes something of value has been achieved that everyone should know about has the right to ring the bell, at which time everything stops, and the ringer is able to tell the story. It started, I am told in the 50’s as a device to let everyone know when a big order was secured, but has since evolved to enable achievements of any kind to be celebrated, and a part of  the celebration is that the ringer has to commit to the next objective, what ever that may be. It sometimes still records a big order, but these days more often records the success of a factory  improvement team, or  the successful trialling of a new piece of equipment, and occasionally a personal achievement like the passing of an exam. The bell has become a symbol of the culture of celebration and commitment that drives the performance of the whole business.

A great framework for us all.

 

 

How desperately does politics need a strategic makeover?

How desperately does politics need a strategic makeover?

Jul 27, 2016 | Change, Leadership

The train smash that doubled as the recent Australian  federal election, and more tellingly, the ‘cluster-intercourse’ (politeness overcame me) that is the US presidential race have something in common.

They both lack any sort of the foundations for prosperity that we demand, indeed, regulate for, in our corporations.

In a corporation, when you do  not deliver the results, shareholders move their money elsewhere. Not so in Government.

In a corporation, when the leadership fails to deliver promised results they  get fired. Not so in Government, although some do carry the can for the rest, usually on a Last In First Out basis.

In a  corporation, if you tell a lie to shareholders, you can go to gaol. Not so in government.

In a corporation, when you do  not adequately articulate a realistic and achievable financial plan, bankers will not lend you money. Not so in Government.

In a corporation, when there is a noisy minority mouthing nonsense, you ignore them, or make polite fun of  them. Not so in Government, indeed, it seems that the noisy minority often successfully drives the agenda.

How have we allowed this to happen, after all it is supposed to be a democracy, although sometimes I wonder, as who in their right mind would vote for any of the above.

A year ago, the notion that an ego driven billionaire with no experience in government, little affinity to anything beyond his own interests, and little apparent relationship with the truth would be the US President was a laughable prospect. Now he is one of two in a race to the finish.

No laughing matter anymore is it?

How has this happened?

It seems to me that Trump has succeeded wildly where the Liberal party in Australia failed.

He has mastered the tools of immediacy marketing, social media platforms, particularly Twitter, and leveraged the fact that our journalistic capacity has been so  gutted, along with the attention span of the electorate, that the capacity for sensible and measured comment and debate has been removed. Have you noticed that everything anyone on the Democratic party side says gets a Trump response, often an outrageous one, on twitter within 5 minutes. The media picks it up, and in the absence of anyone on the newsrooms not playing Pokemon Go, reprints it in entirety as news. Then a few huff and puff for 24 hours and it is  forgotten or replaced by the next piece of shambolic inconsistent nonsense. By contrast, the Democrats take a day or so when they are awake to comment on the next of Mr Trumps blatherings, and are not nearly as colourful and entertaining when they do so.

And I have not even mentioned Britain’s new Foreign Minister Boris Johnson, whose mastery of the entertaining absurd rivals that of Mr Trump.

The simple fact is that you do not get headlines with measured, thoughtful analysis of the facts, together with projections that are never favourable to everyone, but you do get headlines with sensational brain-farts that disappear almost as fast as they are produced.

Headlines are now news, there seems to be no demand for substance in excess of 140 characters.

However, that current state is no excuse for not trying. Without the effort to reform from the grass roots the way we select our leaders, and demand from them some level of quality in the political and economic debate, on top of a reasonable degree of integrity and transparency, we are all in deep doo-doo, and it is getting progressively deeper the longer we allow this to keep happening.

4 questions every business owner should ask themselves. Now.

4 questions every business owner should ask themselves. Now.

Jul 25, 2016 | Change, Governance, Leadership, Strategy

In principal, business is simple, sell something for more than it costs you too produce it. After that it gets more complicated, but is always tangled up with the word “Value”

It is a word with many meanings to different people in different contexts.

How do we create value?

Value, like beauty in the eye of the beholder, is in the eye of the user. Value means different things to different people in different circumstances, and figuring out how to add value to that customer under those circumstances is the secret sauce of success. The key to value identification is always to be able to see the offer you are making through the eyes of the customer.

How do we deliver value?

‘Value’ is only valuable when it delivers a benefit. If you have the only part in town that will fix a problem, that part only has value installed, it is no good in your toolbox.

The means by which you deliver value varies, and the business models available have exploded. Supermarkets have an entirely different model to a grocery home delivery service. While the products may be the same, and from time to time the customers the same, the circumstances under which they are used will never be he same.  AirbnB would not have been possible 10 years ago, two sided markets were simply too cumbersome except in capital intensive applications like a stock exchange. Similarly, the availability of digital versions of books, along with the spoken and traditional print versions deliver the value of a book in different ways.

How do we capture value?

Business is about getting paid for  the value delivery more than it cost you to provide it. Again, digital changed the game, just ask anyone in the newspaper business. Deep consideration of the most appropriate business model is required if you are to capture all the available value, and leave your customers happy enough  to go again.

Will it be the same tomorrow?

Almost certainly not.

And the day after tomorrow, there will have been substantial change. How you react to or better, anticipate the change will be the measure of how commercially sustainable your business really is.

One more really important thing to remember.

Businesses are inanimate collections of assets and processes that can do nothing by themselves. They need people to make them work, to create the environment that accommodates the four factors above. The old cliche of people being our most important asset has never been truer than in this current environment of accelerating change.

When template business plans are useless

When template business plans are useless

Jul 4, 2016 | Change, Innovation, Marketing, Small business

In Australia, only around 5% of new businesses survive past the 5 year mark, and make money in excess of the cost of capital.

Scary, because most of them had a business plan, certainly if they ever borrowed any money from a bank, they had one that probably doubled as a door stopper.

50 pages of assumptions, rosy projections and financial outcomes delivered via by a suite of complex excel files to the wazoo. It is essential to recognise that the purpose of a business plan of the lender is to ensure that they get their money back with interest commensurate with the risk, and to weed out the dreamers. That is why banks insist on Directors personal guarantees, mortgages over personal assets, simply to ensure that you do not risk their money.

So much for business plans.

Seriously, why would you waste the time and energy?

Most start with what they think is a great product, without realising that a product is just the starting point.

You also need at least a hypothesis about who the customers are, how you will find them, what sort of prices they may pay, how do you deliver the product, what the competitive reaction might be, and on, and on, and on.

Finding a way to turn all this stuff into a business model that makes sense is challenging, but it is what turns a product idea into a business.

A traditional, templated business plan makes sense when there are a lot of knowns, there is an existing market, ruling prices, you know who and where the customers are, and how they might be reached, and there is not much going on. Then plan to deploy resources for productivity and efficiency, but this is rarely the situation with start-ups with an innovation to bring to the market.

Being an entrepreneur setting about marketing a product with few direct competitors is experimental, requiring iteration, practice, persistence, and preferably mentoring from someone who has been there, seen the traps and is able to navigate around at least some of them.

Planning for the unknown is a touch different from planning for the known.

 

 

Required understanding if you are to succeed

Required understanding if you are to succeed

Jun 6, 2016 | Change, Governance, Strategy

Mary Meeker has again produced a report that should be required reading for all who seek to engage with an audience, with the 2016 update of the Kleiner Perkins Caufield Byers Internet trends report.

Disregard the previous statement.

It should not be required reading, it should be required understanding.

The 213 slides are filled with data driven insights, some with scary implications for the laggards, and offering some ideas for what is about to come. Ms. Meeker delivers the 213 slides in 20 minutes, no time to dig the detail, she is delivering a series of trends, and leaving the deck for you to ponder the implications and dig where you wish.

  • At some point, Google will set about increasing the returns on the investments so far in the Android operating system, now it has +80% share of mobile systems. Astonishing numbers as Apple is still making all the money.
  • Digital advertising is exploding, but the share of legacy media is way greater than it should be. Mobile advertising is particularly underweighted. However, the use of ad blockers is also exploding, so the creative challenge is a huge one. While it is not in this report, I have seen others that estimate the amount of digital advertising fraud at over 30%, and I suspect that is on the light side. Add in the fact that many advertisers just translate their TV ads into something digital and you will find billions more being wasted.
  • Hyper-targeting of advertising is a fact of life now, privacy be dammed. Strange thing is that our kids, and grandkids are way less sensitive to this that we digital geriatrics who make many of the decisions.
  • Video is exploding, in all its forms, particularly live streaming, and all on mobile. We always knew we are a visual species, but digital is opening an entirely new door to communication, and we have barely had time as yet to make a rudimentary exploration.
  • There is a whole section on China in the report, and the numbers are astonishing. Uber is extolled as one of the poster boys of the exponential growth enabled by the double sided platforms emerging, so look at slide 181 to see how the growth in China dwarfs the growth in other markets. This is just emblematic of  the digital growth occurring in China and across the Asia Pacific generally, with the exception of Australia, that struggles to deliver upload speeds that would embarrass Nigeria. (In the middle of an election campaign, perhaps this is something that should get an airing? Perhaps not, a bit embarrassing for both sides)
  • The last 20 or so slides concentrate on the implications for business. Read and understand, then take some positive action. The only thing you know for sure is that staying still  is not good enough.

Thanks Mary, and crew!