Nov 15, 2023 | Collaboration, Leadership
As a kid I was a reasonable tennis player, having been coached by an expert and playing competitively from a relatively young age. Nothing outstanding, just competitive at a district level.
Aged about 16, my father who had been an outstanding player and myself started coaching on a Saturday morning on two local courts for a bit of pocket money. I discovered to my surprise, that breaking down, simplifying, and articulating to others the lessons I had absorbed from my coach, to enable me to communicate with those I was in turn coaching, made me a better player.
Recently in a (business) coaching session with one of my clients, we discussed for the 3rd or 4th time the concept of break even. How a break-even point is calculated, the discrimination between fixed and marginal costs, and the management value it delivers. The conversation started because it became evident that despite the previous conversations, my client did not understand sufficiently well to be able to implement in his business.
Therein lies the secret.
The discussion involved him explaining the concept of break-even back to me, while drawing a typical break-even diagram. It took prompting and discussion, but by the end it was clear he understood the meaning and value of calculating his break-even point.
The secret was him explaining it back to me, and demonstrating that he understood by drawing an illustration of how and why it worked. It required him to break down in his mind the elements of a break even into its simplest form. Then, explaining it back to me, as if I was someone who had absolutely no understanding of the idea. Drawing the diagram, enabled the understanding.
This simple act of writing down an explanation is the value that writing this blog delivers to me. I often start a blog with an interesting idea which requires research and building of understanding before writing it down in its simplest possible form. Through that process, understanding builds.
If you cannot explain something in a way that a 10 year-old can understand, you probably do not understand it well enough yourself. The greatest exponent of this technique of using illustrative metaphors to explain complexity in simple ways was Albert Einstein.
Oct 27, 2023 | Collaboration, Communication
Throughout human evolution, we have existed in small groups, tribes and clans. Individuals have worked together for the common good of the small tribe, and often, perhaps most often, been at odds with the tribe across the river.
British anthropologist Robin Dunbar introduced his theory that humans can maintain stable social relationships with no more than 150 people. This is a theory now so well accepted that ‘Dunbar’s number‘ has almost become a cliché.
The phrase ‘Stable Social Relationships’ has particular relevance in the age of social media platforms. How many friends do you have on Facebook, connections on LinkedIn, followers on Instagram?? For many, it is way beyond 150.
Question: How do you maintain ‘Stable Social Relationships’ with that number of people?
Answer: You cannot.
Social media gets the blame for all sorts of things, rightly so, but it is not the fault of the platforms, it is the fault of evolution.
Our application of technology has run well ahead of our evolutionally capacity to manage it and retain the relationships that made us the most successful species ever.
It seems to me that the growth of private messaging, reversion to personalised even handwritten notes, and emotional engagement of ‘Local’ things is a response to the ‘platformisation’ of our social relationships.
I think it is a trend that will continue and grow.
Now we have the relative unknown of AI coming at us like a train, changing again the basis on which we interact.
Dr Dunbar has little advice on that score.
I wonder if ‘friends’ will ever include Robbie the Robot?
Mar 8, 2023 | Collaboration, Leadership
We are all familiar with Darwin’s theory of natural selection. The forces that drove our evolution drive much of what we do, personally, socially, and professionally.
If you apply the idea to the marketing process, where we are dealing with qualitative factors that are really difficult to turn into numbers, you by necessity implement what is accepted as the ‘scientific method’. Form a hypothesis, test it, and revise the hypothesis to retest in a cyclic process, trying to disprove the hypothesis. In the absence of evidence that the hypothesis is wrong, accept it, at least for the moment.
It is the same process as Natural Selection, with some wrinkles.
In marketing you are entering a world where you have a fair idea of where you want to go, but no concrete roadmap. Therefore, you experiment with different approaches, ideas, treatments, whatever you choose to call them, using a combination of data, instinct, domain knowledge and A/B testing to progressively select the best options and improve on them.
Creative selection.
Every project I have been involved in, of any type, has risks.
On most occasions, the only risk that is really considered in any depth is the business risk. Can we make a bob? The answer to this relies absolutely on the forecasts of cash flow, which are usually on the optimistic side. More often than not, I have seen the other key risks we always face in marketing underweighted or completely ignored. Risk factors such as competitive reaction, failure to closely define the real customer problem you are solving, which product will customers stop buying to buy yours, and many others. Failure to consider these sorts of externalities constitutes a significant and often underrated risk to any project.
Without this sort of rigorous analysis and its countermeasures, you are often just left with a cheaper price as the attraction to a customer, and that is not good for anyone in the long run.
Thinking about our marketing as a risk management tool is a useful way of thinking.
Risk for us is reduced when we reduce the risks facing our potential customers, we can guarantee the outcome of using our products.
Creative selection shares another characteristic with natural selection.
It requires sex.
Not physical sex, but intellectual sex, the type that happens when a range of engaged and creative people collaborate deeply to solve a problem, to map an alternative course. Collaboration, real collaboration, not the organised type where a boss throws together a ‘team’ and instructs for a solution. That is never a real team, it is people working in close proximity. A team is one where minds meet to address what all members see as a truly worthwhile challenge that may deliver something great.
When you have that creative ferment, the focus on outcomes for customers, that is where you find great marketing.
Again, a bit like great sex.
Easier to talk about than to find and participate.
Header cartoon credit Scott Adams and the Dilbert crew.
Mar 1, 2023 | Collaboration, Lean, Operations
Our supply chains are suddenly under great scrutiny given the frailties surfaced by Covid. Calls for a greater proportion of domestic procurement are now more common than ever, but is domestic availability the only answer?
Most supply chains are actually run by procurement and logistics people. While there is senior management oversight, the actual purchase choices are routinely made in lower levels of most organisations. To affect change, this is where we need to start, in the bowels of the organisation.
The KPIs of procurement personnel are generally around invoice cost, as it is easy to track. In future, the decision should be more about security of supply, and total procurement cost, which are much harder to measure, and availability which is relatively easy to measure, but in my experience is often ignored.
The huge caveat of course is that the CEO must give ‘permission’ for the procurement people to go off the reservation, and make the necessary changes, and risk buying other than from ‘IBM’.
We also need deep supply chain mapping that captures the dynamics of the chain, and all the transaction costs that apply, as well as the visible financial costs.
The KPI’s of procurement must change if we are to build the resilience of our supply chains.
- Collaborative DIFOT analyses through the chain
- Switch KPI focus from cost savings, usually measured against the invoice cost, to give greater weight to availability.
- Tracking of the drivers of cost, quality and delivery throughout the supply chain.
- Quantifying transaction and opportunity costs, (particularly of management time) at all points through the chain.
- Measures of resilience such as alternative, qualified, and immediately capable suppliers, utilising differing logistics
Together these measures will give you a measure of the resilience of your supply chain, or its ability to recover competitive performance after a failure. The greater the number of nodes in a chain, the greater the risks, which become amplified as you move further way from direct control.
Local suppliers will have to be prepared for the scrutiny of their sourcing. Company A, procuring from Company B, where there are sub-assemblies necessary will want to stress check the suppliers to company B as part of their procurement processes. This will take supply chain transparency to a whole new level. To this point the concerns have been mostly about cost and the time in the chain. In future, it will go much deeper, digging into a range of items that deliver resilience and reliable quality.
The speed of recovery of your supply chain after the inevitable disruption will be key to competitive performance.
Dec 2, 2022 | Collaboration, Strategy
There are a lot of misconceptions about workshops, and having run many, they are hard work, although participants rarely see that work. ‘Blue sky’ thinking is sometimes necessary, but in the absence of strategic discipline, can become completely disconnected from the real world where implementation occurs.
Here are some things workshop are not:
Workshops are not a democracy.
Someone must lead, show the way, and the bigger the group, the greater the call on the workshop convenor to be a real leader if there is to be any useful outcomes
Workshops are not an unplanned free for all.
Planning is a core part of a successful workshop. Planning the content and the flow of the discussions, having the appropriate breaks and discussions to elicit the creative insights being sought, and in the makeup of the group is essential. As a convenor, you sometimes do not have much control over the participants, and in this case, it is vital to assign ‘roles’ very quickly to participants based on the behaviour in the very early stages, then manage those individuals appropriately.
Workshops are not the same for all participants.
Everyone’s role is different, based on what is assigned to them and what their individual personalities, position in the external hierarchy, domain knowledge, and many other factors. Recognising as a convenor that the participants are all seeing the proceedings through their own eyes is important as a key to gaining collaboration, and developing a set of useable actionable outcomes that are aligned with the objectives sought.
Workshops are not stand-alone activities. Workshops that work are not a day (or three) out of the normal management processes, they should be an integral and rich part of the flow of planning, review and adjustment processes that optimise performance. If not, you just wasted your time, and a lot of money.
Facilitating workshops is not easy, but in the best of them, it just seems so.
Over an extended period of both facilitating and being the ‘facilitated’, it seems there are a small number of characteristics of the best of them.
- The best facilitators are listeners. They do not impose their views on the group, they use what they know to steer from the back
- They have no skin in the game beyond creating an environment for the workshop to generate the best outcomes. When a facilitator has skin in the game, the expectation is that there will be a vested interest that is being pushed.
- There must be a well-rounded knowledge of the context of the questions being examined.
- The ability to put together disconnected ideas and together make them stronger. They see connections that are not obvious to others.
- They are smart enough, and sufficiently well grounded in the key business attributes necessary to the workshop topic to add value to the thinking of those in the group.
- They can clearly articulate different perspectives from the status quo, different ways of seeing the questions and options being examined, and the context in which they will be answered.
- They are willing to serve all interests represented at the tabl. In the case of a business’s workshop, the facilitator needs to be able to assist the individuals, and have the credibility and trust to be able to do so.
- Preparing for a workshop is time consuming when done well, as is the reporting process. A skilled facilitator will spend a lot of time considering the discussion and output that occurred to pull together the fabric of the discussions into a form that can be leveraged.
A successful workshop can be the circuit-breaker so often required when any sort of change is necessary to future success. It is just unfortunate and poor management that most are little more than a pleasant interlude before you get back to the office, and business as usual.
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.
